(a) Within the limits of funds, and upon such review and recommendation as may be required by law, the Director shall award a grant to those applicants whose approved projects will in the Director's judgment best promote the purposes of this part.
(b) An institution described in § 52i.3 that receives a grant under this part or an institution described in section 464z-4(f) of the Act authorized to use grant funds for endowment purposes shall follow the spending rules under the law of the state in which the institution is located and the spending rules/policies adopted by the recipient institution, provided that such spending rules are not inconsistent with applicable federal regulations/policies.
(c) Grants awarded under this part or grant funds designated for endowment purposes as described under section 464z-4(f) of the Act must be invested no later than 90 days after the start date of the grant.
(d) The institution, in investing the endowment fund established under this section, shall exercise the judgment and care, under the circumstances then prevailing, that a person of prudence, discretion, and intelligence would exercise in the management of such person's own affairs and avoid all appearances of conflict of interest in the management of this fund.
(e) The total amount of an endowment grant under this part or the designated amount of the grant under section 464z-4(f) of the Act must be maintained as corpus by the institution for 20 years from the end of the project period.
(f) In the case of situations in which investment conditions result in the corpus referred to in paragraph (e) of this section having a net market value less than the value of the funds at the time of their receipt, appropriate actions must be taken (e.g., careful review of the investment strategy) in order to preserve the value of the endowment corpus.
(g) An institution described in § 52i.3 receiving an endowment grant under section 464z-3(h) of the Act may not simultaneously receive endowment funds under section 464z-4(f) of the Act.
(h) Consistent with section 464z-4(f) of the Act, the Director, NIMHD, may designate for a research endowment some of the funds awarded to a Center of Excellence for research education and training.