In any fiscal year, AmeriCorps will award AmeriCorps subtitle C program grants as follows:

(a) Grants to State Applicants. (1) For the purposes of this section, the term “State” means the fifty States, Puerto Rico, and the District of Columbia.

(2) One-third of the funds available under this part and a corresponding allotment of AmeriCorps educational awards, as specified by AmeriCorps, will be distributed according to a population-based formula to the 50 States, Puerto Rico and the District of Columbia if they have applications approved by AmeriCorps.

(3) At least one-third of funds available under this part and an appropriate number of AmeriCorps awards, as determined by AmeriCorps, will be awarded to States on a competitive basis. In order to receive these funds, a State must receive funds under paragraphs (a)(2) or (b)(1) of this section in the same fiscal year.

(4) In making subgrants with funds awarded by formula or competition under paragraphs (a)(2) or (3) of this section, a State must ensure that a minimum of 50 percent of funds going to States will be used for programs that operate in the areas of need or on Federal or other public lands, and that place a priority on recruiting participants who are residents in high need areas, or on Federal or other public lands. AmeriCorps may waive this requirement for an individual State if at least 50 percent of the total amount of assistance to all States will be used for such programs.

(b) Grants to Applicants other than States. (1) One percent of available funds will be distributed to the U.S. Territories 1 that have applications approved by AmeriCorps according to a population-based formula. 2

(2) One percent of available funds will be reserved for distribution to Indian tribes on a competitive basis.

(3) AmeriCorps will use any funds available under this part remaining after the award of the grants described in paragraphs (a) and (b)(1) and (2) of this section to make direct competitive grants to subdivisions of States, Indian tribes, public or private nonprofit organizations (including religious organizations and labor organizations), institutions of higher education, and Federal agencies. No more than one-third of the these remaining funds may be awarded to Federal agencies.

(c) Allocation of AmeriCorps educational awards only. AmeriCorps will determine on an annual basis the appropriate number of educational awards to make available for eligible applicants who have not applied for program assistance.

(d) Effect of States' or Territories' failure to apply. If a State or U.S. Territory does not apply for or fails to give adequate notice of its intent to apply for a formula-based grant as announced by AmeriCorps and published in applications and the Notice of Funds Availability, AmeriCorps will use the amount of that State's allotment to make grants to eligible entities to carry out AmeriCorps programs in that State or Territory. Any funds remaining from that State's allotment after making such grants will be reallocated to the States, Territories, and Indian tribes with approved AmeriCorps applications at AmeriCorps' discretion.

(e) Effect of rejection of State application. If a State's application for a formula-based grant is ultimately rejected by AmeriCorps pursuant to § 2522.320 of this chapter, the State's allotment will be available for redistribution by AmeriCorps to the States, Territories, and Indian Tribes with approved AmeriCorps applications as AmeriCorps deems appropriate.

(f) AmeriCorps will make grants for training, technical assistance and other special programs described in part 2524 of this chapter at AmeriCorps' discretion.