35792 Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Rules and Regulations

DEPARTMENT OF EDUCATION

34 CFR Part 361

RIN 1820–AB14

The State Vocational Rehabilitation

Services Program

AGENCY: Office of Special Education and

Rehabilitative Services, Department of

Education.

ACTION: Final regulations.

SUMMARY: The Secretary amends the

regulations governing The State

Vocational Rehabilitation Services

Program (VR program). These

amendments are needed to implement

changes in the Rehabilitation Act of

1973, as amended (Act). These changes

establish evaluation standards and

performance indicators for the VR

program.

DATES: These regulations are effective

July 5, 2000.

FOR FURTHER INFORMATION CONTACT:

Beverlee Stafford, Policy, Planning and

Evaluation Service, Rehabilitation

Services Administration, U.S.

Department of Education, 400 Maryland

Avenue, SW., room 3014 Mary E.

Switzer Building, Washington, DC

20202–2550. Telephone: (202) 205–

8831.

Individuals with disabilities may

obtain this document in an alternate

format (e.g., Braille, large print,

audiotape, or computer diskette) on

request to Katie Mincey, Director of the

Alternate Format Center, at (202) 205–

8113.

If you use a telecommunications

device for the deaf (TDD), you may call

the Federal Information Relay Service

(FIRS) at 1–800–877–8339 to reach

either Beverlee Stafford or Katie

Mincey.

SUPPLEMENTARY INFORMATION: The VR

program is authorized by Title I of the

Act (29 U.S.C. 701–751). This program

provides support to assist States in

operating a comprehensive,

coordinated, effective, efficient, and

accountable program to assess, plan,

develop, and provide vocational

rehabilitation (VR) services to

individuals with disabilities to enable

them to prepare for and engage in

gainful employment, consistent with

their strengths, resources, priorities,

concerns, abilities, capabilities, and

informed choice. Section 106 of the Act

requires that the Secretary establish and

publish evaluation standards and

performance indicators for the program.

These final regulations implement that

requirement.

Pursuant to section 106(a)(3) of the

Act and Executive Order 12866, which

encourages Federal agencies to facilitate

meaningful participation in the

regulatory development process, the

Secretary, through the Rehabilitation

Services Administration (RSA) of the

U.S. Department of Education

(Department)—(1) consulted with the

rehabilitation community during the

development of the evaluation

standards and performance indicators;

(2) published a ‘‘notice of intent to

regulate’’ to solicit comments on the

development of the proposed evaluation

standards and performance indicators;

(3) held a public meeting to discuss

several issues related to the

development of proposed evaluation

standards and performance indicators;

(4) discussed the development of the

proposed indicators on numerous

occasions with various members of the

rehabilitation community; and (5)

published for review and comment a

notice of proposed rulemaking (NPRM)

for this program in the Federal Register,

63 FR 55292 (October 14, 1998). In

response to the NPRM, we received 62

comments, each of which we reviewed

and considered in the development of

the final regulations. These final

regulations reflect the input received

through these efforts.

These final regulations amend 34 CFR

part 361, which contains the VR

program regulations, by adding a

Subpart E entitled ‘‘Evaluation

Standards and Performance Indicators.’’

These final regulations implement

certain requirements of the

Rehabilitation Act Amendments of 1992

(1992 Amendments), Pub. L. 102–569

(October 29, 1992), and the

Rehabilitation Act Amendments of 1998

(1998 Amendments), which are in Title

IV of the Workforce Investment Act of

1998 (WIA), Pub. L. 105–220 (August 7,

1998). The 1992 Amendments added

section 106 to part A of Title I of the

Act, which requires the Secretary to

establish and publish evaluation

standards and performance indicators.

The 1998 Amendments modified

section 106 of the Act to require that, to

the maximum extent practicable, the VR

standards and indicators be consistent

with the core indicators of performance

(Core Indicators) established under

section 136(b) of WIA.

Section 106 of the Act also includes,

among other things, the following

requirements: (1) The Secretary

establishes and publishes in the Federal

Register evaluation standards and

performance indicators for the VR

program. (2) The evaluation standards

and performance indicators must

include outcome and related measures

of program performance that facilitate

the accomplishment of the purpose and

policy of the VR program. (3) The

Secretary develops the evaluation

standards and performance indicators

with input from State VR agencies (or

the designated State unit), related

professional and consumer

organizations, recipients of VR services,

and other interested parties. (4) Each

designated State unit (DSU) must report

to the Secretary after the end of each

fiscal year the extent to which it is in

compliance with the evaluation

standards and performance indicators.

(5) The Secretary provides technical

assistance to any DSU that performs

below the established evaluation

standards and develops jointly with the

DSU a program improvement plan

outlining the specific actions to be taken

by the DSU to improve program

performance. (6) If a DSU that performs

below the established evaluation

standards fails to enter into a program

improvement plan, or is not complying

substantially with the terms and

conditions of such a program

improvement plan, the Secretary

reduces or makes no further payments

under the VR program to the DSU until

the DSU has entered into an approved

program improvement plan or is

complying substantially with the terms

and conditions of such a program

improvement plan. (7) The Secretary

provides an annual report to Congress

containing an analysis of program

performance, including relative State

performance, based on the evaluation

standards and performance indicators.

The NPRM contained two evaluation

standards, each of which had at least

two or more implementing performance

indicators by which to measure DSU

performance. The NPRM also contained

specific proposed performance levels for

each indicator that identified the

minimum level of performance that a

DSU would need to achieve to pass a

given indicator. Under the NPRM, a

DSU would have had to pass a

minimum of five of the seven proposed

performance indicators, including at

least two of the three proposed primary

indicators, for Evaluation Standard 1

and both proposed performance

indicators for Evaluation Standard 2.

These final regulations contain a

limited number of significant changes to

what we proposed in the NPRM. These

changes are based on both public

comment and interdepartmental review.

A detailed description of these changes

is contained in the ‘‘Analysis of

Comments and Changes’’ section. In

addition, we reviewed and revised the

final regulations in accordance with the

Department’s ‘‘Principles for

Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Rules and Regulations 35793

Regulating,’’ which were developed as

part of the Administration’s regulatory

reinvention initiative under the

‘‘National Performance Review II.’’ The

principles are designed to ensure that

we regulate in the most flexible, most

equitable, and least burdensome way

possible.

Analysis of Comments and Changes

In response to our invitation in the

NPRM, we received 62 comments on the

proposed regulations. Our analysis of

the comments and of the changes in the

regulations since publication of the

NPRM follows.

We group major issues according to

subject under appropriate sections of

the regulations. We discuss other

substantive issues under the sections of

the regulations to which they pertain.

Generally, we do not address technical

and other minor changes—and

suggested changes the law does not

authorize the Secretary to make. Please

note also that, in the NPRM, we

requested comments on several issues

regarding performance standards and

indicators that are currently under

consideration for regulatory

development, including draft proposed

Evaluation Standard 3 (Consumer

Satisfaction), draft proposed Evaluation

Standard 4 (Retention of Employment

and Earnings), and draft proposed

Evaluation Standard 5 (Adequate Use of

Resources). We received many

comments on these draft proposed

evaluation standards and will give each

comment serious consideration during

the development of additional standards

and indicators. We thank all individuals

and organizations for their input.

Section 361.81 Applicable Definitions

Definition of ‘‘Full-time Employment’’

Comments: Five commenters stated

that requiring a minimum of 35 hours

per week for a position to be considered

‘‘full time’’ is not realistic and

recommended that the number of hours

be lowered to 30 or 32 hours as a more

accurate reflection of existing workplace

conditions. Other commenters objected

to any minimum for the number of

hours worked per week required to

constitute ‘‘full-time employment’’ and

stated that the determination of whether

the work is ‘‘full time’’ should be

consistent with the implementation of

the individual’s Individualized Plan for

Employment (IPE).

Discussion: The proposed definition

of ‘‘full-time employment’’ applied only

to proposed Performance Indicator 1.7,

which would have measured the

percentage of individuals in ‘‘full-time,’’

competitive employment who would

have been eligible to enroll in a medical

insurance program. Because we have

deleted proposed Performance Indicator

1.7 (for reasons discussed later in this

preamble), a definition of the term ‘‘fulltime employment’’ is no longer

necessary.

Changes: We have deleted the

proposed definition.

Definition of ‘‘Individuals From a

Minority Background’’

Comments: None.

Discussion: We have adopted the

designations mandated by the Office of

Management and Budget (OMB) for

reporting and recording race and

ethnicity, as mandated in the ‘‘Revisions

to the Standards for the Classification of

Federal Data on Race and Ethnicity’’

(Revisions), 62 FR 58, 781–85, and 790

(October 30, 1997). These designations

are mandatory for all new and revised

recordkeeping or reporting requirements

that include racial or ethnic information

after the publication date of the

‘‘Revisions.’’

Changes: Because OMB designates

‘‘individuals from a minority

background’’ differently from the

definition included in the NPRM, we

have changed the proposed regulatory

definition to conform to OMB’s

designation.

Definition of ‘‘Non-minority Individual’’

Comments: Eight commenters

disagreed with the proposed definition

of ‘‘non-minority individual’’ and

recommended that the term be defined

as those individuals whose ethnicity or

race is reported as White who are nonHispanic.

Discussion: As we previously

discussed, we have adopted the race

and ethnicity designations mandated by

OMB for recording and reporting race

and ethnicity. The NPRM proposed to

identify as ‘‘non-minority individuals’’

those individuals who designate

themselves as both non-Hispanic and

White using the OMB-mandated

designations.

The ‘‘Revisions’’ mentioned

previously— (a) require the data

collector to request that the individual

identify himself or herself; and (b)

explicitly allow the individual to

identify as many race or ethnicity

designations as the individual believes

apply. The data collector is to accept the

individual’s designation or designations

and may not make any independent

judgment regarding the individual’s

choice.

Changes: We have revised the

definition of ‘‘non-minority

individuals’’ to be consistent with

OMB’s definition.

Definition of ‘‘Service Rate’’

Comments: Two commenters

requested clarification of this term.

These commenters stated that it was not

clear whether the computation would be

based on the rate services are accessed

or the rate employment outcomes are

achieved.

Discussion: The term ‘‘service rate’’

reflects the rate at which services were

received by individuals who exited the

VR program and is not based on the rate

at which the individuals achieve

employment. (The response to

comments regarding Performance

Indicator 2.1 includes an expanded

discussion of this issue.)

The numerator for the service rate

calculation is the number of individuals

whose records are closed after they have

received services under an IPE, whether

or not they achieved an employment

outcome. The denominator of the ratio

is the number of all individuals whose

records are closed after they had applied

for services, whether or not they had an

IPE. The denominator includes those

individuals who— (1) applied for VR

services but were not accepted into the

program for any reason (including

failure to cooperate, moved, etc.); (2)

had been accepted for VR services but

did not receive services for any reason

(including those individuals who

withdrew from the program while on a

waiting list where the DSU is under an

order of selection for services); (3)

received services under an IPE but did

not achieve an employment outcome;

and (4) received services under an IPE

and achieved an employment outcome.

RSA will calculate the service rate for

both minority and non-minority VR

consumers.

Changes: None.

Section 361.82 Evaluation Standards

Comments: Two commenters

expressed concern that the evaluation

standards and performance indicators

do not assess whether the employment

outcome is consistent with the

individual’s informed vocational choice.

Discussion: While these final

regulations do not contain a

performance indicator for measuring

informed choice, we want to emphasize

our commitment to ensuring that each

individual applicant and eligible

individual is able to exercise informed

choice throughout the VR process. We

also want to emphasize that we expect

to develop an indicator to measure the

extent to which informed choice is part

of the provision of services. As

discussed in the preamble to the NPRM,

we have proposed development of an

evaluation standard for consumer

35794 Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Rules and Regulations

satisfaction (draft proposed Evaluation

Standard 3 (Consumer Satisfaction))

that, in part, would measure the level of

informed choice given to consumers

during the VR process. We are in the

process of reviewing the comments

received on draft proposed Evaluation

Standard 3. However, until an

evaluation standard for measuring

informed choice is formally proposed

through the regulatory process, the

requirement for informed choice will

continue to be enforced through the

monitoring and review process

mandated in section 107 of the Act.

Changes: None.

Section 361.84(c) Performance

Indicators

Section 361.84(c)(1)(i) Performance

Indicator 1.1

Comments: One commenter suggested

that Performance Indicator 1.1 be

changed to measure the number of

people who ‘‘enter employment’’ to

make this indicator consistent with Core

Indicator I under section 136(b) of WIA.

The commenter notes that Core

Indicator I measures the extent to which

individuals ‘‘enter unsubsidized

employment,’’ while Performance

Indicator 1.1 will measure the extent to

which individuals ‘‘exiting the VR

program * * * achieved an

employment outcome.’’ The commenter

questioned the need for the differences

between the two measures and also

questioned whether Performance

Indicator 1.1—under which individuals

with disabilities must maintain

employment for at least 90 days to be

considered to have ‘‘achieved an

employment outcome’’—establishes a

more restrictive standard for the VR

program than that which applies to

programs under Title I of WIA.

Discussion: As the commenter

correctly points out, the Act requires

that the standards and indicators for the

VR program be consistent, to the

maximum extent practicable, with the

four Core Indicators established under

section 136(b) of WIA. To that end,

Performance Indicator 1.1 is consistent

with the general objective of the WIA

Core Indicators, which is to examine the

success in achieving employment

outcomes for individuals receiving

services, but also accounts for the range

of employment outcomes available

under the VR program. ‘‘Employment

outcomes’’ under the VR program

include the full scope of employment

options available to persons receiving

VR services (e.g., competitive

employment, employment in nonintegrated settings, homemaker, and

unpaid family worker), whether those

‘‘employment outcomes’’ are

‘‘subsidized’’ or ‘‘unsubsidized.’’ Thus,

in assessing success in achieving

employment outcomes under the VR

program, it is necessary to consider the

full range of outcomes contemplated by

the Act.

Performance Indicator 1.1 also reflects

other requirements that are specific to

the VR program. In addition to making

VR services available to individuals

with disabilities entering the job market,

the VR program authorizes VR services

for eligible individuals who need those

services to retain their current job. Thus,

measuring only the number of

individuals ‘‘entering’’ employment

under the VR program, as done under

WIA Core Indicator I, would not

account for those individuals who

receive VR services to maintain or

continue their employment.

More generally, determining whether

a VR program participant has

successfully achieved an employment

outcome depends on many factors in

addition to the individual’s ability to

start or enter a job. For example, under

the VR program regulations, the

individual’s employment must be

consistent with the individual’s

strengths, resources, priorities,

concerns, abilities, capabilities, and

informed choice, and the individual

must be performing well on the job.

Success in meeting these requirements

cannot be accurately measured at the

time the individual enters employment.

Therefore, the determination of whether

a VR program participant has

successfully achieved an employment

outcome is best made at a later point.

The 90-day retention period from the

time the individual begins working or

no longer receives VR services is

designed to ensure that the particular

job is appropriate to the individual and

has at least some measure of stability.

We believe that using this and the other

requirements for achieving an

employment outcome under 34 CFR

361.56 to measure whether an

individual’s participation in the VR

program was successful is much more

accurate than focusing solely on the

ability of an individual to enter

employment. Thus, the differences

between proposed Performance

Indicator 1.1 and WIA Core Indicator I

are necessary, and further alignment of

the two measures would not result in an

accurate measure of the extent to which

States are successful in assisting people

with disabilities achieve employment

outcomes under the VR program.

Nevertheless, we recognize that the

WIA Core indicators represent

important measures for all programs,

including the VR program, that are part

of the One-Stop service delivery system

established under Title I of WIA.

Section 136(b)(2)(A)(i)(II) and (III) of

WIA (WIA Core Indicators II and III)

measure retention of unsubsidized

employment 6 months after entry into

employment and earnings 6 months

after entry into employment,

respectively. Consequently, we

developed Draft Proposed Evaluation

Standard 4 and its attendant draft

performance indicators and presented

those draft measures for public

comment in the preamble to the

proposed regulations, in an effort to

ensure that future measures for the VR

program reflect Core Indicators II and

III. Since the proposed regulations were

published, however, we have been

working with the Department of Labor

to further modify that draft Standard

and its Indicators to better align those

measures with each of the first three

Core Indicators under Title I of WIA (the

fourth WIA core indicator—attainment

of a recognized credential—is not

reflected in our drafts since the success

of the VR program is judged solely on

the basis of achievement of employment

outcomes, particularly high-quality

outcomes).

The new draft Standard, which we

would implement through a separate

rulemaking effort (i.e., an NPRM seeking

public comment and final regulations)

would measure the extent to which

participants in the VR program: (1)

achieve an employment outcome with

wages after receiving VR services

(analogous to WIA Core Indicator I—

entry into unsubsidized employment),

(2) retain their employment 6 months

after exiting the VR program with a job

(WIA Core Indicator II), and (3) increase

their earnings from the time they enter

the VR program to the point 6 months

after they exit the program with a job

(WIA Core Indicator III). We are also

working closely with the Department of

Labor to adopt a common data base,

specifically, the Unemployment

Insurance (UI) Wage Data system

maintained by State Employment

Security Agencies, for purposes of

measuring performance under the new

draft Standard.

Consequently, this new measure

under the VR program would be very

closely aligned with the performance

measures under WIA on key

performance items that are common to

all employment programs, i.e., helping

unemployed persons become employed,

working to ensure that participants are

able to retain their jobs, and assisting

persons to obtain or maintain

employment in which their earnings

increase over time. We expect to publish

this new Standard and supporting

Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Rules and Regulations 35795

indicators for public comment once we

have completed our assessment of the

extent to which State VR units can

obtain and use UI wage record

information in support of the draft

Standard and have determined the types

of assistance State VR units might need

to complete those tasks. We are giving

a high priority to these efforts in order

to better streamline the systems for

measuring performance across partner

programs of the One-Stop delivery

system.

Available data collection methods and

instruments enable us to implement

only Standards 1 and 2 of the final

regulations at this time. However, once

we have confirmed that State VR

agencies are able to report on the draft

standard, we will determine what

combination of evaluation standards

and performance indicators (e.g., adding

the draft Standard and indicators to the

performance measures in these final

regulations, using the draft Standard as

a substitute for one or more of the final

regulatory measures, or implementing

some other combination of measures)

should be implemented in the future.

Therefore, the future performance

system for the program will include that

combination of measures that best

accounts for the uniqueness of the VR

program and the need for a universal

system for measuring performance of

the State One-Stop system.

Changes: None.

Section 361.84(c)(1)(ii) Performance

Indicator 1.2

Comments: Twelve commenters

recommended that Performance

Indicator 1.2 should measure only the

percentage of individuals who obtain

employment after the individual is

determined eligible and an IPE has been

established. These commenters further

recommended that Performance

Indicator 1.2 should not measure the

percentage of individuals whose cases

were closed (either as ineligible or after

an eligibility determination was made)

before any services were received.

Discussion: We agree with the

comments and want to clarify that those

individuals whose cases were closed

(either as ineligible or after an eligibility

determination) before any services were

received will not be included in the

percentage of individuals measured by

Performance Indicator 1.2. As

recommended by the commenters,

Performance Indicator 1.2 will measure

only the percentage of individuals who

exit the VR program after they have

been determined eligible and an IPE has

been implemented.

Changes: None.

Section 361.84(c)(1)(iii) Performance

Indicator 1.3

Comments: Five commenters

recommended that those individuals

who achieve an employment outcome of

‘‘self-employment’’ be eliminated from

consideration under Performance

Indicator 1.3 until a means to measure

the true wages of self-employed

individuals is developed. These

commenters believe that the concept of

‘‘wages’’ is not applicable to selfemployed individuals because wages

apply to what one person must pay

another and not what someone may be

willing to earn if they are self-employed.

Discussion: Performance Indicator 1.3

is not dependent on measuring ‘‘wages’’

per se. The measure is of an individual’s

‘‘earnings’’ and whether those

‘‘earnings’’ are equivalent to at least the

minimum wage. Although selfemployed individuals may not earn

‘‘wages’’ per se, they do have

‘‘earnings,’’ and their ‘‘earnings’’ can be

calculated on an hourly basis.

In addition, ‘‘self-employment’’ is

specifically included within the

definition of ‘‘employment outcome’’ in

section 7(11) of the Act. Congress has

recognized the importance of including

all possible employment outcomes for

individuals with disabilities. The VR

program regulations and these

indicators should be consistent with the

Act and congressional intent. Therefore,

we believe that self-employment

outcomes for individuals with earnings

comparable to at least the minimum

wage should be included in the

percentage of individuals who exit the

VR program with earnings comparable

to at least the minimum wage.

Changes: None.

Section 361.84(c)(1)(v) Performance

Indicator 1.5

Comments: Some commenters were

concerned about comparing the earnings

of VR consumers exiting the VR

program to the State’s average hourly

earnings. Their concern was based on

their belief that most VR consumers

achieve employment outcomes that are

at the level of workers newly entering

the work force while the State’s average

hourly wage is computed for all workers

in the State, including workers with

years of employment. These

commenters believed that a more

appropriate comparison would be to the

average entry level worker in the State’s

work force.

Discussion: The assumption that most

VR consumers achieve only

employment comparable to that of new

workers is inconsistent with the

available data. The ‘‘Third Interim

Report’’ of the ‘‘Longitudinal Study of

the Vocational Rehabilitation Service

Program,’’ published in August 1998

(‘‘Third Interim Report’’), reported that

over 96 percent of VR consumers who

achieved employment outcomes had

prior work experience. Specifically, the

report stated the following: 36.9 percent

of VR consumers were working at the

time they applied for VR services; 37.8

percent of VR consumers had worked in

the 2 years prior to applying for VR

services; and 21.7 percent of VR

consumers had worked previously, but

not in the 2 years prior to applying for

VR services. Additionally, the

performance indicator includes only

those individuals earning at least the

minimum wage (necessarily excluding

those individuals who earn less than the

minimum wage at placement and whose

inclusion would lower the ratio), and

the minimum performance level is set at

a ratio of less than .6 (an earnings level

for VR consumers of less than 60

percent of the ‘‘State Average Annual

Pay’’). We believe the performance level

for Performance Indicator 1.5 is

consistent with the Act’s emphasis on

high-quality employment outcomes.

Therefore, we do not believe a change

is needed in this performance indicator.

Changes: None.

Section 361.84(c)(1)(vii) Performance

Indicator 1.7

Comments: Fourteen commenters

expressed concern that proposed

Performance Indicator 1.7 was not a fair

measure of DSU performance because

the provision of medical insurance by

the employer is outside the DSU’s

control. In addition, they felt that this

proposed measure does not account for

variability among States with regard to

the availability of insurance programs

and the changing nature of the labor

market where employment-related

benefits are less available. Three

commenters were concerned that this

proposed indicator would negatively

impact VR consumers obtaining jobs

with small employers who are less

likely to provide medical insurance as a

benefit option.

Discussion: Performance Indicator 1.7

would have addressed what research

indicates is a major impediment to

individuals with disabilities entering

the workforce—the unavailability of

adequate health insurance. The growing

number of employers that do not

provide health insurance worsens this

problem. If this trend continues, DSUs

will have reduced opportunities to place

individuals with disabilities into jobs

that provide health insurance. This

would cause their performance on

Indicator 1.7 to erode.

35796 Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Rules and Regulations

However, many individuals are

covered by Medicaid, Medicare, and

private insurance provided by their

spouses, families, or other means. Also,

all employees are covered by workers’

compensation for injuries and illnesses

that occur while on the job. In addition,

the ‘‘Ticket-to-Work and Work

Incentives Improvement Act of 1999,’’

Pub. L. 106–170 (December 17, 1999),

allows Medicaid recipients to keep their

coverage even if they find employment.

Because approximately one quarter of

all individuals served by the VR

program receive Supplemental Security

Income (SSI) and Social Security

Disability Insurance (SSDI), we expect

that a growing number of individuals

served by the DSUs will be eligible to

retain Medicaid after they find

employment. This will reduce the need

for employer-provided health insurance

for individuals served by DSUs.

Despite this limited availability of

health insurance for some individuals

served by DSUs, the problem persists.

Of the nearly 34.67 million poor people

in the U.S., only approximately 14

million are covered by Medicaid. Of the

remaining 20.67 million poor, only

approximately 9.47 million have health

insurance. The remaining 11.2 million

poor do not have health insurance and

will not be helped by the new law.

In proposing this indicator, we

assumed that health insurance was

evenly distributed across the income

spectrum and was reasonably available

at all levels of income. However, further

examination of the data provided in the

‘‘Third Interim Report’’ indicates the

difficulty in finding jobs that offer

health insurance at the wages earned by

the majority of individuals with

disabilities who are served by VR

agencies.

For example, nearly 31.5 percent of

individuals who are placed in

competitive employment by a VR

agency make $5 or less per hour.

However, only 13 percent of jobs that

pay $5 or less per hour offer health

insurance.

In addition, nearly 31 percent of

individuals who are placed in

competitive employment by a VR

agency make more than $5 but less than

$7 per hour. However, only 35 percent

of jobs that pay more than $5 but less

than $7 per hour offer health insurance.

For slightly higher paying jobs, the

percentage that offer health insurance

increases significantly, although the

percentage is still barely more than 50

percent. For example, 52.1 percent of

jobs that pay more than $7 but less than

$9 per hour offer health insurance.

However, only 16.6 percent of

individuals who are placed in

competitive employment by a VR

agency make more than $7 but less than

$9 per hour.

The increase in jobs that offer health

insurance is not as dramatic as wages

increase. Only 54.9 percent of jobs that

pay more than $9 but less than $11 per

hour offer health insurance. However,

only 8.8 percent of individuals who are

placed in competitive employment by a

VR agency make more than $9 but less

than $11 per hour.

Finally, at the highest wage level for

which we have data, 65 percent of jobs

that pay more than $11 per hour offer

health insurance. However, only 12.1

percent of individuals who are placed in

competitive employment make more

than $11 per hour.

The data show that nearly 62.5

percent of individuals who achieve

competitive employment earn $7 or less

per hour and that only a small

percentage of jobs at these low wage

levels offer health insurance. Therefore,

we believe that the burden associated

with satisfying this proposed indicator

does not justify the extra resources,

time, and effort DSUs would have to

devote to finding those few jobs that

offer health insurance for the majority of

individuals served by DSUs.

In addition, even if we did believe

finding the few jobs with health

insurance was worth the extra burden,

we believe that this proposed indicator

would not have encouraged DSUs to

assist individuals with disabilities to

acquire health insurance from other

sources, even though those other

sources may be more appropriate for

many individuals with disabilities. This

proposed indicator also would have

served as a disincentive to recruiting

and accepting individuals with little or

no education or work experience.

Instead, this proposed indicator would

have provided an incentive for

recruiting and accepting those

individuals with disabilities who

already are well-educated, have

extensive job experience, or are more

likely to be candidates for community

college or university training. We do not

believe this would be a desirable result.

The data from the ‘‘Third Interim

Report’’ also indicate that part-time

workers, who are a significant

percentage of individuals with

disabilities who are employed, are less

likely to find jobs that offer health

insurance. Finally, the data indicate that

firms with fewer than 25 employees are

least likely to offer health insurance.

These data show the difficulty in

finding jobs that offer health insurance

for individuals with disabilities, who

are more likely to end up in low-paying,

part-time jobs with smaller employers.

We believe DSUs should make every

reasonable effort to find those

employers who will provide health

insurance to their employees who are

not covered by Medicaid or some other

health insurance. However, we

recognize the difficulty in finding those

employers. For this reason we believe

this proposed indicator is not

appropriate at this time.

Changes: We have deleted proposed

Performance Indicator 1.7.

Section 361.84(c)(2)(i) Performance

Indicator 2.1

Comments: One commenter suggested

that Performance Indicator 2.1 does not

include enough variables to adequately

assess DSU services to individuals from

minority backgrounds. This commenter

suggested that comparing minority

versus non-minority numbers by type of

closure would be more statistically

significant. Another commenter

suggested that a better measurement

than service rate would be to compare

the employment outcome rate of

individuals from minority backgrounds

to the employment outcome rate of nonminority individuals. Still another

commenter suggested that this indicator

should compare the employment

outcome rate, the average hourly wages,

and availability of medical insurance

benefits of individuals from minority

backgrounds to those of non-minority

individuals. One commenter questioned

the need for this indicator if it can be

satisfied through an examination of the

DSU’s policies and procedures.

Discussion: At this time, we do not

have any data on which to compare the

employment outcome rates, the average

hourly wages, types of closures, or

availability of medical insurance

benefits of individuals from minority

backgrounds to those of non-minority

individuals. We believe that the

comparison of service rates between

individuals from minority backgrounds

and individuals from non-minority

backgrounds as the performance

indicator for this evaluation standard is

the appropriate starting point to

determine whether individuals with

disabilities from minority backgrounds

have equal access to VR services. As we

continue to collect additional data, we

may determine in the future that

comparing minorities and nonminorities by the type of closure, rate of

employment outcomes, average hourly

wages, or availability of medical

insurance benefits is also necessary.

Until we collect that additional data, we

will not be able to develop an indicator

to measure these factors.

We believe that requiring a DSU to

describe the policies it has adopted and

Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Rules and Regulations 35797

the steps it has taken to ensure that

individuals with disabilities from

minority backgrounds have equal access

to VR services is the best performance

indicator for this evaluation standard.

The two-step approach in

§ 361.86(b)(2)(i) and (ii) for measuring

compliance with Performance Indicator

2.1 ensures that DSUs will make

appropriate efforts to ensure equal

access to services for minority

individuals.

Changes: None.

Section 361.84(c)(2)(ii) Performance

Indicator 2.2

Comments: Nine commenters

suggested that proposed Performance

Indicator 2.2 should be eliminated

because it is invalid to compare

individuals with significant disabilities

who self-report to the Census a

disability that prevents them from

working to individuals with significant

disabilities who are eligible to receive

VR services. Four commenters

recommended deleting this proposed

indicator if the 2000 Census does not

include the data necessary to measure

how to comply with it. Three

commenters suggested that comparing

the percentage of DSU consumers who

are from minority backgrounds to the

percentage of minority individuals in

the general population is a more valid

and reliable indicator. One commenter

suggested that data on SSDI

beneficiaries and SSI recipients may be

used as an alternative to Census data.

Discussion: In addition to the

comments opposed to this proposed

indicator, the Bureau of the Census has

decided not to continue to collect the

data necessary to perform the proposed

comparison. We will give serious

consideration to the comments on the

proposed indicator in the development

of a new indicator.

Changes: We have deleted proposed

Performance Indicator 2.2.

Section 361.86 Performance Levels

Comments: Three commenters stated

that establishing different performance

levels for agencies that serve only blind

or visually impaired individuals

implied incorrectly that those

individuals were more significantly

disabled than individuals served by

general or combined DSUs. Two

commenters were concerned that the

lower performance levels for agencies

serving only blind or visually impaired

individuals were in conflict with the

Act’s commitment to competitive

employment outcomes above the

minimum wage. These two commenters

recommended raising the level of

performance for these agencies over a

reasonable period of time so that they

are eventually at the same performance

level as general and combined DSUs.

One commenter suggested that we

create a separate performance level for

combined DSUs because many States

are considering creating a separate

agency serving blind and visually

impaired individuals. The commenter

also suggested that the transition for

those combined DSUs will be easier if

different performance levels are in effect

when the transition occurs.

Discussion: We believe that agencies

serving only individuals who are blind

or visually impaired should continue to

have different levels of performance

from combined DSUs (those agencies

that serve individuals who are blind or

visually impaired and individuals with

other disabilities) and general DSUs

(those agencies that do not serve

individuals who are blind or visually

impaired). Individuals served by

agencies for the blind are, in many (if

not most) cases, totally blind. Total

blindness is a significant disability that

often places more limitations on an

individual than other types of

disabilities. As a result, the services

provided by agencies that serve

individuals who are blind or visually

impaired are generally more

comprehensive and take longer to

provide than the services provided to

many individuals who receive VR

services from a general or combined

DSU. In addition, because of the

significance of their disability, a much

smaller number of individuals who are

blind or visually impaired achieve a

competitive employment outcome. The

greater significance of their disability

also results in generally lower wage

levels for the majority of individuals

served by agencies that serve

individuals who are blind or visually

impaired. These factors and the

challenges faced by individuals who are

blind or have visual impairments

require that we establish different

performance levels for agencies serving

these individuals.

The performance levels established in

these final regulations are only the first

step in ensuring improved DSU

performance. The Act requires that the

standards and indicators be reviewed

every 3 years. Section 361.86(a)(2) of

these final regulations allows us to

establish new performance levels

through the regulatory process, which

includes the opportunity for public

comment. We intend to adjust

performance levels in the future to

ensure that all agencies—general DSUs,

combined DSUs, and agencies serving

individuals who are blind and visually

impaired—provide the highest quality

of services to eligible individuals.

Changes: None.

Comments: Five commenters

recommended that the availability of

resources and whether a DSU is

operating under an order of selection for

services under section 101(a)(5) of the

Act be included as factors in

determining minimally acceptable

levels of performance.

Discussion: We agree that the

availability of resources belongs in the

performance equation. However, we do

not agree that the availability of

resources should be included in

measuring whether a DSU has achieved

a minimally acceptable level of

performance. Given that DSUs with the

same amount of resources may perform

quite differently, the proper criterion for

measuring performance under an

outcome-based standards and indicators

system is whether a DSU is successfully

assisting individuals with disabilities to

achieve employment outcomes. If a DSU

fails to meet the indicator for achieving

a minimally acceptable level of

performance (e.g., achieving

employment outcomes), the Act and the

regulations require that the Secretary

and DSU jointly develop a program

improvement plan that outlines the

specific actions the DSU will take to

improve program performance. In

developing the program improvement

plan, we will consider, pursuant to the

Act and these final regulations, all

available and relevant data and

information related to the DSU’s

performance. Because the availability of

resources greatly affects what actions

may be taken to improve performance,

we believe that the time to properly

consider the availability of resources

will be during the development of the

program improvement plan.

In reviewing data concerning the past

performance of all DSUs, we found that

the performance of DSUs operating

under an order of selection did not,

overall, vary significantly from the

performance of DSUs not operating

under an order of selection. Thus,

whether or not a DSU is operating under

an order of selection should not be a

factor in determining a minimally

acceptable level of performance.

However, the yearly analysis of program

performance based on the standards and

indicators (to be included in the Annual

Report to Congress) will indicate

whether a DSU is operating under an

order of selection.

Changes: None.

Comments: Two commenters were

concerned that meeting the performance

level for Performance Indicator 2.1 may

35798 Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Rules and Regulations

result in quotas because the level is set

too high.

Discussion: We disagree that

Performance Indicator 2.1 requires a

DSU to impose quotas. If the service rate

for minority individuals is less than 80

percent of the service rate for nonminority individuals or if fewer than

100 individuals from a minority

population have exited the VR program

during the reporting period, the DSU

only needs to describe the policies it has

adopted or will adopt and the steps it

has taken or will take to ensure that

individuals with disabilities from

minority backgrounds have equal access

to VR services. In these instances, RSA

will examine a DSU’s existing or

proposed policies and the steps it has

taken or proposes to take to determine

their effectiveness in achieving equal

access for minority individuals with

disabilities.

A greater than 20 percent racial

disparity in service rates will trigger a

review of a DSU’s seemingly neutral

practices to determine whether they are

having the effect of racial

discrimination. This approach is wellestablished within the Department and

in desegregation case law. Its use in the

education context dates to the early

1970’s when the Department of Health,

Education, and Welfare, the predecessor

to the Department of Education, was

actively involved in the desegregation of

public school districts pursuant to the

Supreme Court’s decision in Swann v.

Charlotte-Mecklenburg Board of

Education, 91 S.Ct. 1267 (1971). In that

case, the Court held that a ‘‘substantial

disproportion’’ in the racial composition

of schools warranted an examination of

the school district’s policies and

practices to determine if remedial action

was necessary. In adopting this measure

of performance, and in response to the

commenters’ concern that the measure

may require quotas, we are guided by

the Federal case-law established

pursuant to Swann. Courts have held

that the law does not require a racial

balance reflecting the composition of

the community. However, courts have

ruled that limited use of mathematical

ratios may serve as a starting point in

identifying whether a racial imbalance

is the result of racial discrimination that

requires remedial action.

Changes: None.

Section 361.88 Reporting

Requirements

Comments: None.

Discussion: Our decision to delete

proposed Performance Indicators 1.7

and 2.2 (discussed previously)

eliminates a DSU’s need to report data

measuring its performance on those

indicators.

Changes: We have deleted the

requirements to report the number of

individuals exiting the VR program in

full-time, competitive employment

(proposed § 361.88(a)(7)); health

insurance data (proposed § 361.88(a)(8));

and the number of individuals from

minority backgrounds with significant

disabilities who exit the program after

receiving VR services under an IPE

(proposed § 361.88(a)(13)).

Therefore, we have correspondingly

renumbered the remaining reporting

requirements (numbered (9), (10), (11)

and (12) in the NPRM) as §§ 361.88(a)(7)

through (10), respectively.

Goals 2000: Educate America Act

The Goals 2000: Educate America Act

(Goals 2000) focuses the Nation’s

education reform efforts on the eight

National Education Goals and provides

a framework for meeting them. Goals

2000 promotes new partnerships to

strengthen schools and expands our

capacities for helping to exchange ideas

and obtain information needed to

achieve the goals.

These final regulations address the

National Education Goal that every

adult American will possess the

knowledge and skills necessary to

compete in a global economy and

exercise the rights and responsibilities

of citizenship. The regulations further

the objectives of this Goal by

implementing a program that affords

individuals with disabilities

opportunities for job training, job

placement, placement in competitive

employment, and career advancement.

Executive Order 12866

We have reviewed these final

regulations in accordance with

Executive Order 12866. Under the terms

of this order, we have assessed the

potential costs and benefits of this

regulatory action.

The potential costs associated with

the final regulations are those resulting

from statutory requirements and those

we have determined to be necessary for

administering this program effectively

and efficiently. This preamble identifies

and explains any burdens that may be

specifically associated with information

collection requirements.

In assessing the potential costs and

benefits—both quantitative and

qualitative—of these final regulations,

we have determined that the benefits of

the final regulations justify the costs.

We also have determined that this

regulatory action does not unduly

interfere with State, local, and tribal

governments in the exercise of their

governmental functions.

Summary of Potential Costs and

Benefits

We summarized the potential costs

and benefits of these final regulations in

the preamble to the NPRM under the

following headings: Executive Order

12866 (1. Potential Costs and Benefits)

and Paperwork Reduction Act of 1995.

(63 FR 55292 and 55301) We include

additional discussion of potential costs

and benefits in the section of this

preamble titled Analysis of Comments

and Changes.

We believe the changes in these final

regulations will improve the VR

program and will yield substantial

benefits in terms of improved

accountability and performance. We

also believe the final regulations will

improve accountability by focusing on

the most critical areas of DSU

performance. Therefore, we have

determined that the potential benefits of

these changes justify the potential costs.

Paperwork Reduction Act of 1995

The Paperwork Reduction Act of 1995

does not require you to respond to a

collection of information unless it

displays a valid OMB control number.

We display the valid OMB control

number assigned to the collections of

information in these final regulations at

the end of the affected sections of the

regulations.

Intergovernmental Review

This program is subject to the

requirements of Executive Order 12372

and the regulations in 34 CFR part 79.

The objective of the Executive order is

to foster an intergovernmental

partnership and a strengthened

federalism by relying on processes

developed by State and local

governments for coordination and

review of proposed Federal financial

assistance.

In accordance with the order, we

intend this document to provide early

notification of our specific plans and

actions for this program.

Assessment of Educational Impact

In the NPRM, we requested comments

on whether the proposed regulations

would require transmission of

information that any other agency or

authority of the United States gathers or

makes available.

Based on the response to the NPRM

and on our review, we have determined

that these final regulations do not

require transmission of information that

any other agency or authority of the

Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Rules and Regulations 35799

United States gathers or makes

available.

Electronic Access to This Document

You may view this document, as well

as all other Department of Education

documents published in the Federal

Register, in text or Adobe Portable

Document Format (PDF) on the Internet

at either of the following sites:

http://ocfo.ed.gov/fedreg.htm

http://www.ed.gov/news.html

To use the PDF you must have the

Adobe Acrobat Reader Program with

Search, which is available free at either

of the previous sites. If you have

questions about using the PDF, call the

U.S. Government Printing Office (GPO),

toll free, at 1–888–293–6498; or in the

Washington, DC area at (202) 512–1530.

Note: The official version of this document

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 on GPO

Access at: http://www.acess.gpo.gov/nara/

index.html

(Catalog of Federal Domestic Assistance

Number: 84.126 The State Vocational

Rehabilitation Services Program)

List of Subjects in 34 CFR Part 361

Reporting and recordkeeping

requirements, State-administered grant

program—education, Vocational

rehabilitation.

Dated: March 6, 2000.

Richard W. Riley,

Secretary of Education.

For the reasons discussed in the

preamble, the Secretary amends Title

34, Chapter III, part 361, of the Code of

Federal Regulations as follows:

1. The authority citation for Part 361

continues to read as follows:

Authority: 29 U.S.C. 711(c), unless

otherwise noted.

2. Subpart E, consisting of §§ 361.80

through 361.89, is added to read as

follows:

PART 361—THE STATE VOCATIONAL

REHABILITATION SERVICES

PROGRAM

Subpart E—Evaluation Standards and

Performance Indicators

Sec.

361.80 Purpose.

361.81 Applicable definitions.

361.82 Evaluation standards.

361.84 Performance indicators.

361.86 Performance levels.

361.88 Reporting requirements.

361.89 Enforcement procedures.

Subpart E—Evaluation Standards and

Performance Indicators

§ 361.80 Purpose.

The purpose of this subpart is to

establish evaluation standards and

performance indicators for the Program.

(Authority: 29 U.S.C. 726(a))

§ 361.81 Applicable definitions.

In addition to those definitions in

§ 361.5(b), the following definitions

apply to this subpart:

Average hourly earnings means the

average per hour earnings in the week

prior to exiting the vocational

rehabilitation (VR) program of an

eligible individual who has achieved a

competitive employment outcome.

Business Enterprise Program (BEP)

means an employment outcome in

which an individual with a significant

disability operates a vending facility or

other small business under the

management and supervision of a

designated State unit (DSU). This term

includes home industry, farming, and

other enterprises.

Exit the VR program means that a

DSU has closed the individual’s record

of VR services in one of the following

categories:

(1) Ineligible for VR services.

(2) Received services under an

individualized plan for employment

(IPE) and achieved an employment

outcome.

(3) Received services under an IPE but

did not achieve an employment

outcome.

(4) Eligible for VR services but did not

receive services under an IPE.

General or combined DSU means a

DSU that does not serve exclusively

individuals with visual impairments or

blindness.

Individuals from a minority

background means individuals who

report their race and ethnicity in any of

the following categories: American

Indian or Alaska Native, Asian, Black or

African American, Native Hawaiian or

Other Pacific Islander, or Hispanic or

Latino.

Minimum wage means the higher of

the rate specified in section 6(a)(1) of

the Fair Labor Standards Act of 1938, 29

U.S.C. 206(a)(1), (i.e., the Federal

minimum wage) or applicable State

minimum wage law.

Non-minority individuals means

individuals who report themselves

exclusively as White, non-Hispanic.

Performance period is the reporting

period during which a DSU’s

performance is measured. For

Evaluation Standards 1 and 2,

performance data must be aggregated

and reported for each fiscal year

beginning with fiscal year 1999.

However, DSUs that exclusively serve

individuals with visual impairments or

blindness must report each year the

aggregated data for the 2 previous years

for Performance Indicators 1.1 through

1.6; the second year must coincide with

the performance period for general or

combined DSUs.

Primary indicators means

Performance Indicators 1.3, 1.4, and 1.5,

which are specifically designed to

measure—

(1) The achievement of competitive,

self-, or BEP employment with earnings

equivalent to the minimum wage or

higher, particularly by individuals with

significant disabilities; and

(2) The ratio between the average

hourly earnings of individuals who exit

the VR program in competitive, self-, or

BEP employment with earnings

equivalent to the minimum wage or

higher and the State’s average hourly

earnings for all employed individuals.

RSA–911 means the Case Service

Report that is submitted annually by a

DSU as approved by the Office of

Management and Budget (OMB).

Self-employment means an

employment outcome in which the

individual works for profit or fee in his

or her own business, farm, shop, or

office, including sharecroppers.

Service rate means the result obtained

by dividing the number of individuals

who exit the VR program after receiving

one or more services under an IPE

during any reporting period by the total

number of individuals who exit the VR

program (as defined in this section)

during that reporting period.

State’s average hourly earnings means

the average hourly earnings of all

persons in the State in which the DSU

is located.

(Authority: 29 U.S.C. 726(a))

§ 361.82 Evaluation standards.

(a) The Secretary establishes two

evaluation standards to evaluate the

performance of each DSU that receives

funds under this part. The evaluation

standards assist the Secretary and each

DSU to evaluate a DSU’s performance in

serving individuals with disabilities

under the VR program.

(b) A DSU must achieve successful

performance on both evaluation

standards during each performance

period.

(c) The evaluation standards for the

VR program are—

(1) Evaluation Standard 1—

Employment outcomes. A DSU must

assist any eligible individual, including

an individual with a significant

disability, to obtain, maintain, or regain

high-quality employment.

35800 Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Rules and Regulations

(2) Evaluation Standard 2—Equal

access to services. A DSU must ensure

that individuals from minority

backgrounds have equal access to VR

services.

(Approved by the Office of Management and

Budget under control number 1820–0508.)

(Authority: 29 U.S.C. 726(a))

§ 361.84 Performance indicators.

(a) The performance indicators

establish what constitutes minimum

compliance with the evaluation

standards.

(b) The performance indicators

require a DSU to provide information on

a variety of factors to enable the

Secretary to measure compliance with

the evaluation standards.

(c) The performance indicators are as

follows:

(1) Employment outcomes.

(i) Performance Indicator 1.1. The

number of individuals exiting the VR

program who achieved an employment

outcome during the current performance

period compared to the number of

individuals who exit the VR program

after achieving an employment outcome

during the previous performance period.

(ii) Performance Indicator 1.2. Of all

individuals who exit the VR program

after receiving services, the percentage

who are determined to have achieved an

employment outcome.

(iii) Performance Indicator 1.3. Of all

individuals determined to have

achieved an employment outcome, the

percentage who exit the VR program in

competitive, self-, or BEP employment

with earnings equivalent to at least the

minimum wage.

(iv) Performance Indicator 1.4. Of all

individuals who exit the VR program in

competitive, self-, or BEP employment

with earnings equivalent to at least the

minimum wage, the percentage who are

individuals with significant disabilities.

(v) Performance Indicator 1.5. The

average hourly earnings of all

individuals who exit the VR program in

competitive, self-, or BEP employment

with earnings levels equivalent to at

least the minimum wage as a ratio to the

State’s average hourly earnings for all

individuals in the State who are

employed (as derived from the Bureau

of Labor Statistics report ‘‘State Average

Annual Pay’’ for the most recent

available year).

(vi) Performance Indicator 1.6. Of all

individuals who exit the VR program in

competitive, self-, or BEP employment

with earnings equivalent to at least the

minimum wage, the difference between

the percentage who report their own

income as the largest single source of

economic support at the time they exit

the VR program and the percentage who

report their own income as the largest

single source of support at the time they

apply for VR services.

(2) Equal access to services.

(i) Performance Indicator 2.1. The

service rate for all individuals with

disabilities from minority backgrounds

as a ratio to the service rate for all nonminority individuals with disabilities.

(Approved by the Office of Management and

Budget under control number 1820–0508.)

(Authority: 29 U.S.C. 726(a))

§ 361.86 Performance levels.

(a) General.

(1) Paragraph (b) of this section

establishes performance levels for—

(i) General or combined DSUs; and

(ii) DSUs serving exclusively

individuals who are visually impaired

or blind.

(2) The Secretary may establish, by

regulations, new performance levels.

(b) Performance levels for each

performance indicator.

(1)(i) The performance levels for

Performance Indicators 1.1 through 1.6

are—

Performance indicator

Performance level by type of DSU

General/combined Blind

1.1 .............................................................. Equal or exceed previous performance period ............................................................. Same.

1.2 .............................................................. 55.8% ............................................................................................................................ 68.9%

1.3 .............................................................. 72.6% ............................................................................................................................ 35.4%

1.4 .............................................................. 62.4% ............................................................................................................................ 89.0%

1.5 .............................................................. .52 (Ratio) ..................................................................................................................... .59

1.6 .............................................................. 53.0 (Math. Difference) ................................................................................................. 30.4

(ii) To achieve successful performance

on Evaluation Standard 1 (Employment

outcomes), a DSU must meet or exceed

the performance levels established for

four of the six performance indicators in

the evaluation standard, including

meeting or exceeding the performance

levels for two of the three primary

indicators (Performance Indicators 1.3,

1.4, and 1.5).

(2)(i) The performance level for

Performance Indicator 2.1 is—

Performance indicator Performance

levels

2.1 ...................................... .80 (Ratio)

(ii) To achieve successful performance

on Evaluation Standard 2 (Equal access),

DSUs must meet or exceed the

performance level established for

Performance Indicator 2.1 or meet the

performance requirement in paragraph

(2)(iii) of this section.

(iii) If a DSU’s performance does not

meet or exceed the performance level

required for Performance Indicator 2.1,

or if fewer than 100 individuals from a

minority population have exited the VR

program during the reporting period, the

DSU must describe the policies it has

adopted or will adopt and the steps it

has taken or will take to ensure that

individuals with disabilities from

minority backgrounds have equal access

to VR services.

(Authority: 29 U.S.C. 726(a))

§ 361.88 Reporting requirements.

(a) The Secretary requires that each

DSU report within 60 days after the end

of each fiscal year the extent to which

the State is in compliance with the

evaluation standards and performance

indicators and include in this report the

following RSA–911 data:

(1) The number of individuals who

exited the VR program in each closure

category as specified in the definition of

‘‘Exit the VR program’’ under § 361.81.

(2) The number of individuals who

exited the VR program in competitive,

self-, or BEP employment with earnings

at or above the minimum wage.

(3) The number of individuals with

significant disabilities who exited the

VR program in competitive, self-, or BEP

employment with earnings at or above

the minimum wage.

(4) The weekly earnings and hours

worked of individuals who exited the

VR program in competitive, self-, or BEP

employment with earnings at or above

the minimum wage.

(5) The number of individuals who

exited the VR program in competitive,

self-, or BEP employment with earnings

at or above the minimum wage whose

primary source of support at the time

Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Rules and Regulations 35801

they applied for VR services was

‘‘personal income.’’

(6) The number of individuals who

exited the VR program in competitive,

self-, or BEP employment with earnings

at or above the minimum wage whose

primary source of support at closure

was ‘‘personal income.’’

(7) The number of individuals exiting

the VR program who are individuals

from a minority background.

(8) The number of non-minority

individuals exiting the VR program.

(9) The number of individuals from a

minority background exiting the VR

program after receiving services under

an IPE.

(10) The number of non-minority

individuals exiting the VR program after

receiving services under an IPE.

(b) In lieu of the report required in

paragraph (a) of this section, a DSU may

submit its RSA–911 data on tape,

diskette, or any alternative electronic

format that is compatible with RSA’s

capability to process such an

alternative, as long as the tape, diskette,

or alternative electronic format includes

the data that—

(1) Are required by paragraph (a)(1)

through (10) of this section; and

(2) Meet the requirements of

paragraph (c) of this section.

(c) Data reported by a DSU must be

valid, accurate, and in a consistent

format. If a DSU fails to submit data that

are valid, accurate, and in a consistent

format within the 60-day period, the

DSU must develop a program

improvement plan pursuant to

§ 361.89(a).

(Approved by the Office of Management and

Budget under control number 1820–0508.)

(Authority: 29 U.S.C. 726(b))

§ 361.89 Enforcement procedures.

(a) If a DSU fails to meet the

established performance levels on both

evaluation standards as required by

§ 361.82(b), the Secretary and the DSU

must jointly develop a program

improvement plan that outlines the

specific actions to be taken by the DSU

to improve program performance.

(b) In developing the program

improvement plan, the Secretary

considers all available data and

information related to the DSU’s

performance.

(c) When a program improvement

plan is in effect, review of the plan is

conducted on a biannual basis. If

necessary, the Secretary may request

that a DSU make further revisions to the

plan to improve performance. If the

Secretary establishes new performance

levels under § 361.86(a)(2), the Secretary

and the DSU must jointly modify the

program improvement plan based on the

new performance levels. The Secretary

continues reviews and requests

revisions until the DSU sustains

satisfactory performance based on the

current performance levels over a period

of more than 1 year.

(d) If the Secretary determines that a

DSU with less than satisfactory

performance has failed to enter into a

program improvement plan or comply

substantially with the terms and

conditions of the program improvement

plan, the Secretary, consistent with the

procedures specified in § 361.11,

reduces or makes no further payments

to the DSU under this program until the

DSU has met one of these two

requirements or raised its subsequent

performance to meet the current overall

minimum satisfactory level on the

compliance indicators.

(Approved by the Office of Management and

Budget under control number 1820–0508.)

(Authority: 29 U.S.C. 726(b) and (c))

[FR Doc. 00–13948 Filed 6–2–00; 8:45 am]

BILLING CODE 4000–01–U