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###### Department of Education

# AGENCY:

Department of Education.

# ACTION:

Notice of arbitration panel decision under the Randolph-Sheppard Act.

# SUMMARY:

                        The Department of Education (Department) gives notice that on October 1, 2010, an arbitration panel rendered a decision in the matter of                         *James Swartz*                         v.                        *Alaska Department of Labor and Workforce Development, Division of Vocational Rehabilitation, Case no. R-S/08-11.*                         This panel was convened by the Department under 20 U.S.C. 107d-1(a), after the Department received a complaint filed by the petitioner, James Swartz.                    

# FOR FURTHER INFORMATION CONTACT:

You may obtain a copy of the full text of the arbitration panel decision from Suzette E. Haynes, U.S. Department of Education, 400 Maryland Avenue, SW., Room 5022, Potomac Center Plaza, Washington, DC 20202-2800. Telephone: (202) 245-7374. If you use a telecommunications device for the deaf (TDD), call the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.

                        Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or computer diskette) on request to the contact person listed under                         **FOR FURTHER INFORMATION CONTACT**                        .                    

# SUPPLEMENTARY INFORMATION:

                    Under section 6(c) of the Randolph-Sheppard Act (Act), 20 U.S.C. 107d-2(c), the Secretary publishes in the                     **Federal Register**                     a synopsis of each arbitration panel decision affecting the administration of vending facilities on Federal and other property.                

## Background

                    James Swartz (Complainant) alleged that the Alaska Department of Labor and Workforce Development, Division of Vocational Rehabilitation, the State licensing agency (SLA), violated the Act and its implementing regulations in 34 CFR part 395. The Complainant alleged that the SLA improperly administered the transfer and promotion policies and procedures of the Alaska Randolph-Sheppard Vending Facility Program in violation of the Act, the implementing regulations under the Act, and State rules and regulations in considering Complainant's bid to manage a snack bar vending facility at the Nesbett Courthouse (Nesbett), a State court building, located in Anchorage, Alaska.                          ( print page 21873)    

Specifically, the Complainant, a blind vendor, challenged the SLA's selection of a nonblind severely disabled vendor to operate the snack bar vending facility at Nesbett. In March 2006, the SLA issued a vacancy announcement for Nesbett. Both vendors applied for the Nesbett snack bar vending facility. At that time, the nonblind vendor had been operating the snack bar vending facility at Nesbett as a secondary vending site on a temporary basis, in addition to his primary vending site. Meanwhile, Complainant was operating a vending facility on Federal property as his primary location.

During the selection interview process, the nonblind vendor indicated that he was willing to give up his current primary location and he intended, if selected, to operate the Nesbett snack bar vending facility as his primary site. At the same time, the Complainant indicated that he did not intend to relinquish his primary site, but would manage the Nesbett snack bar vending facility as a secondary vending facility site. After the interview and evaluation of the two vendors according to the SLA's transfer and promotion policies and procedure, the selection committee chose the nonblind vendor for the Nesbett snack bar vending facility.

Complainant then requested a full evidentiary hearing from the SLA on this matter, which was held. On May 29, 2008, the Administrative Law Judge (ALJ) issued a decision ruling that (1) The Nesbett snack bar vending facility is not “other” property as defined by the Federal Randolph-Sheppard Act; (2) The Alaska Chance Act granted blind persons and persons with severe disabilities a priority when seeking a license to operate vending facilities on certain properties, but the Chance Act gave blind persons a first priority or prior right over a nonblind disabled person to operate a vending facility on public property; (3) The SLA's interpretation of its regulations that a vending license is site specific and a qualified vendor may only have one license to operate a facility is reasonable; and (4) The SLA was correct when it granted the nonblind vendor a license to operate the Nesbett snack bar vending facility as his primary site, when there was no blind vendor seeking to operate the Nesbett snack bar vending facility as a primary site.

On July 7, 2008, the SLA issued a decision as final agency action adopting the ALJ's decision. Subsequently, Complainant filed with the Department a request for Federal arbitration seeking an appeal of the State fair hearing decision. On July 31, 2009, the SLA sent a letter to the Department stating that Complainant's request was a “State-only matter” and it did not involve the Federal Randolph-Sheppard Program as the ALJ had ruled that the Nesbett snack bar vending facility was not “other property,” as defined under the Act and its implementing regulations.

On August 24, 2009, the Department responded to the SLA's letter stating that this is a Randolph-Sheppard matter under the Act and its implementing regulations and it is up to a Federal arbitration panel to decide on the issue of whether the Nesbett snack bar vending facility is or is not “other property.”

A Federal arbitration panel was convened. Prior to the arbitration hearing, the SLA filed with the arbitration panel a Motion for Summary Disposition, arguing that the Nesbett snack bar vending facility was State property not subject to the Act and its implementing regulation. Therefore, the arbitration panel lacked jurisdiction to hear the complaint.

By order dated April 9, 2010, the arbitration panel concluded that there was insufficient evidence before the panel to determine whether the Nesbett snack bar vending facility was “other property” under the Act, but that there were issues of material fact requiring a hearing and, therefore, the panel denied the SLA's motion. The central issue before the arbitration panel was whether the Nesbett State courthouse snack bar vending facility qualified as “other property” within the meaning of the Act and its implementing regulations.

## Arbitration Panel Decision

The panel heard testimony and concluded that Federal regulations implementing the Act defined “other property” as “property which is not Federal property and on which vending facilities are established or operated by the use of any funds derived in whole or in part, directly or indirectly, from the operation of vending facilities on any Federal property.” See 34 CFR 395.1(n).

Then, the panel determined that in order for Complainant's claim to prevail, he must prove that the Nesbett snack bar vending facility was established or operated with funds derived directly or indirectly from the operation of vending facilities on Federal property. If Complainant was able to meet that burden, the SLA would concede that the Act applied to the Nesbett snack bar vending facility and the Complainant would be entitled to the priority in operating the Nesbett snack bar vending facility over the claim of the nonblind severely disabled vendor.

After reviewing the entire record, the panel found that the evidence presented at the arbitration hearing demonstrated that the Nesbett State courthouse snack bar vending facility was not established or operated with any funds derived directly or indirectly from the operation of vending facilities on Federal property. Thus, the arbitration panel ruled that the Nesbett State courthouse was not “other property” subject to the Randolph-Sheppard Act and its implementing regulations and, therefore, the SLA's decision did not violate the Act. Accordingly, the arbitration panel denied Complainant's Federal arbitration appeal.

The views and opinions expressed by the panel do not necessarily represent the views and opinions of the Department.

*Electronic Access to This Document:*                     The official version of this is the document published in the                     **Federal Register**                    . Free Internet access to the official edition of the                     **Federal Register**                     and the Code of Federal Regulations is available via the Federal Digital System at:                     *http://www.gpo.gov/​fdsys.*                     At this site you can view this document, as well as all other documents of this Department published in the                     **Federal Register,**                     in text or Adobe Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at this site.                

Dated: April 14, 2011.

Alexa Posny,

Assistant Secretary for Special Education and Rehabilitative Services.

[FR Doc. 2011-9477 Filed 4-18-11; 8:45 am]

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