Federal Register / Vol. 80, No. 73 / Thursday, April 16, 2015 / Proposed Rules 21059 

DEPARTMENT OF EDUCATION 

34 CFR Parts 361, 363, and 397 

RIN 1820–AB70 

[Docket ID ED–2015–OSERS–OOO1] 

State Vocational Rehabilitation 

Services Program; State Supported 

Employment Services Program; 

Limitations on Use of Subminimum 

Wage 

AGENCY: Office of Special Education and 

Rehabilitative Services, Department of 

Education. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Secretary proposes to 

amend the regulations governing the 

State Vocational Rehabilitation Services 

program and the State Supported 

Employment Services program in order 

to implement changes to the 

Rehabilitation Act of 1973, as amended 

by the Workforce Innovation and 

Opportunity Act (WIOA) enacted on 

July 22, 2014. The Secretary also 

proposes to update, clarify, and improve 

the current regulations. 

Finally, the Secretary proposes to 

issue new regulations regarding 

limitations on the use of subminimum 

wages that are added by WIOA and 

under the purview of the Department. 

DATES: We must receive your comments 

on or before June 15, 2015. 

ADDRESSES: Submit your comments 

through the Federal eRulemaking Portal 

or via postal mail, commercial delivery, 

or hand delivery. We will not accept 

comments submitted by fax or by email 

or those submitted after the comment 

period. To ensure that we do not receive 

duplicate copies, please submit your 

comments only once. In addition, please 

include the Docket ID at the top of your 

comments. 

• Federal eRulemaking Portal: Go to 

www.regulations.gov to submit your 

comments electronically. Information 

on using Regulations.gov, including 

instructions for accessing agency 

documents, submitting comments, and 

viewing the docket, is available on the 

site under ‘‘Are you new to the site?’’ 

• Postal Mail, Commercial Delivery, 

or Hand Delivery: If you mail or deliver 

your comments about these proposed 

regulations, address them to Janet 

LaBreck, U.S. Department of Education, 

400 Maryland Avenue SW., Room 5086, 

Potomac Center Plaza (PCP), 

Washington, DC 20202–2800. 

Privacy Note: The Department’s 

policy is to make all comments received 

from members of the public available for 

public viewing in their entirety on the 

Federal eRulemaking Portal at 

www.regulations.gov. Therefore, 

commenters should be careful to 

include in their comments only 

information that they wish to make 

publicly available. 

FOR FURTHER INFORMATION CONTACT: 

Janet LaBreck, U.S. Department of 

Education, 400 Maryland Avenue SW., 

Room 5086, PCP, Washington, DC 

20202–2800. Telephone: (202) 245–7488 

or by email: Janet.LaBreck@ed.gov. 

If you use a telecommunications 

device for the deaf (TDD) or a text 

telephone (TTY), call the Federal Relay 

Service (FRS), toll free, at 1–800–877– 

8339. 

SUPPLEMENTARY INFORMATION: 

Executive Summary 

Purpose of This Regulatory Action: 

The Secretary proposes to amend the 

regulations governing the State 

Vocational Rehabilitation Services 

program (VR program) (34 CFR part 361) 

and State Supported Employment 

Services program) (Supported 

Employment program) (34 CFR part 

363), administered by the Rehabilitation 

Services Administration (RSA), to 

implement changes to the Act made by 

WIOA (P.L. 113–128), enacted on July 

22, 2014. In so doing, the Secretary also 

proposes to update and clarify current 

regulations to improve program 

function. Finally, the Secretary proposes 

to promulgate regulations in 34 CFR 

part 397 that implement the limitations 

on the payment of subminimum wages 

to individuals with disabilities in 

section 511 of the Act that fall under the 

purview of the Secretary. 

For a more detailed description of the 

purpose of these proposed regulatory 

actions, see the Background section in 

this notice of proposed rulemaking 

(NPRM). 

Summary of the Major Provisions of 

This Regulatory Action: We summarize 

here those proposed regulatory changes 

needed to implement the amendments 

to the Act made by WIOA. Under the 

Proposed Changes section of this 

NPRM, we provide a more complete 

summary of these changes and a 

detailed description of the substantive 

proposed regulations for each part in the 

order it appears in the Code of Federal 

Regulations (CFR). We also describe in 

detail under the Proposed Changes 

section the amendments to each part to 

update, clarify, and improve the 

regulations. 

The Secretary proposes to implement 

the following changes to the VR 

program and Supported Employment 

program made by WIOA. 

State Vocational Rehabilitation 

Services Program 

People with disabilities represent a 

vital and integral part of our society, 

and we are committed to ensuring that 

individuals with disabilities have 

opportunities to compete for and enjoy 

high quality employment in the 21st 

century global economy. Some 

individuals with disabilities face 

particular barriers to high quality 

employment. Giving workers with 

disabilities the supports and the 

opportunity to acquire the skills that 

they need to pursue in-demand jobs and 

careers is critical to growing our 

economy, ensuring that everyone who 

works hard is rewarded, and building a 

strong middle class. To help achieve 

this priority for individuals with 

disabilities, the Rehabilitation Act of 

1973, as amended by WIOA, seeks to 

empower individuals with disabilities 

to maximize employment, economic 

self-sufficiency, independence, and 

inclusion and integration into society. 

The VR program is authorized by title 

I of the Act, as amended by WIOA (29 

U.S.C. 720 et seq.), to provide support 

to each State to assist in operating a 

statewide comprehensive, coordinated, 

effective, efficient, and accountable 

State program as an integral part of a 

statewide workforce development 

system; and to assess, plan, and provide 

vocational rehabilitation (VR) services 

to individuals with disabilities so that 

those individuals may prepare for and 

engage in competitive integrated 

employment consistent with their 

unique strengths, priorities, concerns, 

abilities, capabilities, interests, and 

informed choice. The Department last 

published regulations for this program 

in part 361 on January 17, 2001 (66 FR 

4382), to implement amendments made 

by the Workforce Investment Act of 

1998. 

WIOA makes significant changes to 

title I of the Act that affect the VR 

program. First, WIOA strengthens the 

alignment of the VR program with other 

components of the workforce 

development system by imposing 

unified strategic planning requirements, 

common performance accountability 

measures, and requirements governing 

the one-stop delivery system. This 

alignment brings together entities 

responsible for administering separate 

workforce and employment, 

educational, and other human resource 

programs and funding streams to 

collaborate in the creation of a seamless 

custom-focused service delivery 

network that integrates service delivery 

across programs, enhances access to the 

program’s services, and improves longVerDate Sep<11>2014 23:53 Apr 15, 2015 Jkt 235001 PO 00000 Frm 00001 Fmt 4701 Sfmt 4702 E:\FR\FM\16APP6.SGM 16APP6

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term employment outcomes for 

individuals receiving assistance. In so 

doing, WIOA places heightened 

emphasis on coordination and 

collaboration at the Federal, State, and 

local levels to ensure a streamlined and 

coordinated service delivery system for 

job-seekers, including those with 

disabilities, and employers. Therefore, 

the Departments of Education and Labor 

propose to issue a joint NPRM to 

implement jointly administered 

activities under title I of WIOA (e.g., 

those related to Unified or Combined 

State Plans, performance accountability, 

and the one-stop delivery system), 

applicable to the workforce 

development system’s core programs 

(Adult, Dislocated Worker and Youth 

programs; Adult Education and Literacy 

programs; Wagner-Peyser Employment 

Service program and the Vocational 

Rehabilitation program). These joint 

proposed regulations are set forth in a 

separate NPRM published elsewhere in 

this issue of the Federal Register. 

WIOA also makes corresponding 

changes to title I of the Act. 

Consequently, we propose to make 

conforming changes throughout part 361 

and align the VR program-specific 

regulations with the joint proposed 

regulations to ensure consistency among 

all core programs. 

Second, WIOA places heightened 

emphasis throughout the Act on the 

achievement of competitive integrated 

employment. The foundation of the VR 

program is the principle that 

individuals with disabilities, including 

those with the most significant 

disabilities, are capable of achieving 

high quality, competitive integrated 

employment when provided the 

necessary skills and supports. To 

increase the employment of individuals 

with disabilities in the competitive 

labor market, the workforce system must 

provide the opportunity for such 

individuals to participate in job-driven 

training and pursue high-quality 

employment outcomes. The 

amendments to the Act—from the stated 

purpose of the Act, to the expansion of 

services designed to maximize the 

potential of individuals with 

disabilities, including those with the 

most significant disabilities, to achieve 

competitive integrated employment, 

and, finally, to the inclusion of 

limitations on the payment of 

subminimum wages to individuals with 

disabilities—reinforce the congressional 

intent that individuals with disabilities, 

with appropriate supports and services, 

are able to achieve the same kinds of 

competitive integrated employment as 

non-disabled individuals. 

As a result, we propose to amend part 

361 throughout to emphasize the key 

role that the VR program plays in 

employment outcomes and preparing 

individuals with disabilities to achieve 

competitive integrated employment in 

the community. We propose, among 

other things, to amend the definition of 

‘‘employment outcome’’ to include only 

those outcomes in competitive 

integrated employment or supported 

employment, thereby eliminating 

uncompensated employment from the 

scope of employment outcomes for 

purposes of the VR program. We also 

propose to amend numerous other 

provisions throughout part 361 to 

address the expansion of available 

services, requirements related to the 

development of the individualized plan 

for employment, and order of selection 

for services, all of which are intended to 

maximize the potential for individuals 

with disabilities to prepare for, obtain, 

retain, and advance in the same highquality jobs, and high demand careers as 

persons without disabilities. 

Third, WIOA places heightened 

emphasis on the provision of services to 

students and youth with disabilities to 

ensure that they have meaningful 

opportunities to receive the training and 

other services they need to achieve 

employment outcomes in competitive 

integrated employment. The Act, as 

amended by WIOA, expands not only 

the population of students with 

disabilities who may receive services 

but also the kinds of services that the 

VR agencies may provide to youth and 

students with disabilities who are 

transitioning from school to 

postsecondary education and 

employment. 

Most notably, the Act, as amended by 

WIOA, requires States to reserve 15 

percent of their VR allotment to provide 

pre-employment transition services to 

students with disabilities who are 

eligible or potentially eligible for VR 

services. These pre-employment 

transition services are designed to 

provide job exploration and other 

services, such as counseling and selfadvocacy training, in the early stages of 

the transition process. 

With the addition of these early preemployment transition services, the VR 

program can be characterized as 

providing a continuum of VR services, 

especially for students and youth with 

disabilities. To that end, we propose to 

amend numerous sections of part 361 to 

implement new definitions for the terms 

‘‘student with a disability’’ and ‘‘youth 

with a disability’’ and new requirements 

related to pre-employment transition 

services and the provision of transition 

services to students and youth with 

disabilities. All of the proposed changes 

demonstrate the continuum of services 

available to students and youth with 

disabilities under the VR program to 

maximize their potential to transition 

from school to postsecondary education 

and employment. 

Supported Employment Program 

WIOA makes several significant 

changes to title VI of the Act, which 

governs the Supported Employment 

program. All of the amendments to title 

VI are consistent with those made 

throughout the Act, namely to maximize 

the potential of individuals with 

disabilities, especially those with the 

most significant disabilities, to achieve 

competitive integrated employment and 

to expand services for youth with the 

most significant disabilities. 

First, WIOA amends the definition of 

‘‘supported employment’’ to make clear 

that supported employment outcomes 

must be in competitive integrated 

employment or, if in an integrated 

setting that is not competitive integrated 

employment, then in an integrated 

setting in which the individual is 

working on a short-term basis toward 

competitive integrated employment. By 

adding a timeframe to this definition, 

Congress reinforces its intention that 

individuals with disabilities should not 

be allowed to languish in subminimum 

wage jobs under the Supported 

Employment program. Thus, the 

Secretary proposes to amend part 363 to 

implement the revised definition of 

‘‘supported employment.’’ The 

Secretary proposes to define ‘‘short-term 

basis’’ in this context to mean no longer 

than six months. We believe this 

proposed change is consistent with the 

Act, as amended by WIOA, in its 

entirety as well as the stated 

congressional intent. 

Second, WIOA requires States to 

reserve at least 50 percent of their 

supported employment program 

allotment for the provision of supported 

employment services to youth with the 

most significant disabilities. With these 

reserved funds, States may provide 

extended services, for a period up to 

four years, to youth with the most 

significant disabilities. Prior to the 

enactment of WIOA, extended services 

were not permitted under either the VR 

program or the Supported Employment 

program. In addition, States must 

provide a non-Federal share of 10 

percent of the funds reserved for the 

provision of supported employment 

services to youth with the most 

significant disabilities. By requiring that 

States use half of their supported 

employment program funds and provide 

a match for these reserved funds, 


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Congress reinforces the heightened 

emphasis on the provision of services to 

youth with disabilities. Congress makes 

clear that youth with significant 

disabilities must be given every 

opportunity to receive the services 

necessary to ensure the maximum 

potential to achieve competitive 

integrated employment. Accordingly, 

the Secretary proposes to amend part 

363 to implement new requirements 

regarding the reservation of funds, and 

the services to be provided with those 

funds, to youth with the most 

significant disabilities. 

Limitations on the Payment of 

Subminimum Wages 

Section 511 of the Act, as added by 

WIOA, imposes requirements on 

employers who hold special wage 

certificates under the Fair Labor 

Standards Act (FLSA) that must be 

satisfied before the employers may hire 

youth with disabilities at subminimum 

wage or continue to employ individuals 

with disabilities of any age at the 

subminimum wage level. Section 511 

also establishes the roles and 

responsibilities of the designated State 

units (DSU) for the VR program and 

State and local educational agencies in 

assisting individuals with disabilities, 

including youth with disabilities, to 

maximize opportunities to achieve 

competitive integrated employment 

through services provided by VR and 

the local educational agencies. 

The addition of section 511 to the Act 

is consistent with all other amendments 

to the Act made by WIOA. Throughout 

the Act, Congress makes clear that 

individuals with disabilities, including 

those with the most significant 

disabilities, can achieve competitive 

integrated employment if provided the 

necessary supports and services. The 

limitations imposed by section 511 

reinforce this belief by requiring 

individuals with disabilities, including 

youth with disabilities, to satisfy certain 

service-related requirements in order to 

start or maintain, as applicable, 

subminimum wage employment. To that 

end, the Secretary proposes to develop 

new regulations at part 397 that would 

implement requirements of section 511 

that fall under the purview of the 

Department. 

Costs and Benefits: The potential 

costs associated with this regulatory 

action are those resulting from statutory 

requirements and those we have 

determined as necessary for 

administering the Department’s 

programs and activities. Further 

information related to costs and benefits 

may be found in the Regulatory Impact 

Analysis section later in this NPRM. 

Invitation to Comment: We invite you 

to submit comments regarding these 

proposed regulations. To ensure that 

your comments have maximum effect in 

developing the final regulations, we 

urge you to identify clearly the specific 

section or sections of the proposed 

regulations that each of your comments 

addresses and to arrange your comments 

in the same order as the proposed 

regulations. 

We invite you to assist us in 

complying with the specific 

requirements of Executive Orders 12866 

and 13563 and their overall requirement 

of reducing regulatory burden that 

might result from these proposed 

regulations. Please let us know of any 

further ways we could reduce potential 

costs or increase potential benefits 

while preserving the effective and 

efficient administration of the 

Department’s programs and activities. 

During and after the comment period, 

you may inspect all public comments 

about these proposed regulations by 

accessing Regulations.gov. You may also 

inspect the comments in person in room 

5093, Potomac Center Plaza, 550 12th 

Street SW., Washington, DC, between 

8:30 a.m. and 4:00 p.m., Washington, 

DC time, Monday through Friday of 

each week except Federal holidays. 

Please contact the person listed under 

FOR FURTHER INFORMATION CONTACT. 

Assistance to Individuals with 

Disabilities in Reviewing the 

Rulemaking Record: On request we will 

provide an appropriate accommodation 

or auxiliary aid to an individual with a 

disability who needs assistance to 

review the comments or other 

documents in the public rulemaking 

record for these proposed regulations. If 

you want to schedule an appointment 

for this type of accommodation or 

auxiliary aid, please contact the person 

listed under FOR FURTHER INFORMATION

CONTACT. 

Background 

The Workforce Innovation and 

Opportunity Act (WIOA) (Pub L. 113– 

128), enacted July 22, 2014, made 

significant changes to the Rehabilitation 

Act of 1973 (hereafter referred to as the 

Act). As a result, the Secretary proposes 

to amend parts 361 and 363 of title 34 

of the CFR. These parts, respectively, 

implement the: 

• State Vocational Rehabilitation (VR) 

Services program; and 

• State Supported Employment 

Services program. 

In addition, WIOA added section 511 

to title V of the Act. Section 511 limits 

the payment of subminimum wages to 

individuals with disabilities by 

employers holding special wage 

certificates under the FLSA. Although 

the Department of Labor administers the 

FLSA, some requirements of section 511 

fall under the purview of the Secretary. 

Therefore, the Secretary proposes to add 

a new part 397 to title 34 of the CFR to 

implement those particular provisions. 

These proposed changes are further 

described under the Summary of 

Proposed Changes and Significant 

Proposed Regulations sections of this 

NPRM. WIOA also makes changes to 

other programs authorized under title I 

of the Act, including the Client 

Assistance Program and the American 

Indian Vocational Rehabilitation 

Services (AIVRS) program, as well as 

discretionary grant programs authorized 

under title III, the Protection and 

Advocacy of Individual Rights program 

under title V, and the Independent 

Living Services for Older Individuals 

Who are Blind program under title VII. 

The Secretary proposes regulatory 

changes to implement the amendments 

to these programs and projects made by 

WIOA through a separate, but related, 

NPRM published elsewhere in this issue 

of the Federal Register. 

Summary of Proposed Changes 

The Secretary proposes to implement 

the following changes to the VR 

program and Supported Employment 

program made by WIOA. 

State Vocational Rehabilitation 

Services Program 

The VR program is authorized by title 

I of the Act, as amended by WIOA (29 

U.S.C. 720 through 731, and 733), to 

provide support to each State to assist 

in operating a statewide comprehensive, 

coordinated, effective, efficient, and 

accountable State VR program as an 

integral part of a statewide workforce 

development system; and to assess, 

plan, and provide VR services to 

individuals with disabilities so that 

those individuals may prepare for and 

engage in competitive integrated 

employment consistent with their 

unique strengths, priorities, concerns, 

abilities, capabilities, interests, and 

informed choice. 

The Department last published 

regulations for this program in part 361 

on January 17, 2001 (66 FR 4382), to 

implement amendments made by the 

Workforce Investment Act of 1998 

(WIA). 

In implementing the amendments to 

the VR program made by WIOA, the 

numerous proposed regulatory changes 

to part 361 improve employment 

outcomes for individuals with 

disabilities by: (1) Strengthening the 

alignment of the VR program with other 

components of the workforce 


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21062 Federal Register / Vol. 80, No. 73 / Thursday, April 16, 2015 / Proposed Rules 

development system through unified 

strategic planning requirements, 

common performance accountability 

measures, and requirements governing 

the one-stop delivery system; (2) 

emphasizing the achievement of 

competitive integrated employment by 

individuals with disabilities, including 

individuals with the most significant 

disabilities; and (3) expanding services 

to support the transition of students and 

youth with disabilities to postsecondary 

education and employment. 

To implement jointly administered 

activities under title I of WIOA (e.g., 

those related to Unified or Combined 

State Plans, performance accountability 

and the one-stop delivery system), the 

U.S. Departments of Labor and 

Education are proposing a set of joint 

regulations applicable to the workforce 

development system’s core programs, 

including the VR program. Through 

these proposed joint regulations, we lay 

the foundation for establishing a 

comprehensive, accessible, and high 

quality workforce development system 

that serves all individuals in need of 

employment services, including 

individuals with disabilities, and 

employers in a manner that is customerfocused and that supports an integrated 

service design and delivery model. 

These joint proposed regulations are in 

a separate NPRM published elsewhere 

in this issue of the Federal Register. 

WIOA makes corresponding changes 

to title I of the Act regarding the 

submission, approval, and disapproval 

of the VR services portion of the Unified 

or Combined State Plan; the standards 

and indicators used to assess VR 

program performance; and the 

involvement of the VR program in the 

one-stop delivery system. Consequently, 

we propose to amend current § 361.10 to 

require that all assurance and 

descriptive information previously 

submitted through the VR State plan 

and supported employment supplement 

be submitted through the VR services 

portion of the Unified or Combined 

State Plan under sections 102 and 103 

of the Act, respectively, of WIOA. We 

also propose to implement changes 

specific to the content of the VR services 

portion of the Unified or Combined 

State Plan by amending current 

§ 361.29(a) to require that the 

comprehensive statewide needs 

assessment include the results of the 

needs of students and youth with 

disabilities for VR services, including 

pre-employment transition services. 

Additionally, we propose to clarify in 

current § 361.29 that States will report 

to the Secretary updates to the statewide 

needs assessment and goals and 

priorities, estimates of the numbers of 

individuals with disabilities served 

through the VR program and the costs 

of serving them, and reports of progress 

on goals and priorities at such time and 

in such manner determined by the 

Secretary, thereby resolving 

inconsistencies in reporting 

requirements within section 101(a) of 

the Act. Finally, we clarify in proposed 

§ 361.20 when designated State agencies 

must conduct public hearings to obtain 

comment on substantive changes to 

policies and procedures governing the 

VR program. 

We propose to implement the changes 

to section 106 of the Act made by WIOA 

through proposed § 361.40, by replacing 

the current standards and indicators 

used to assess the performance of the 

VR program under current § 361.80 

through § 361.89 with a cross-reference 

to the joint regulations for the common 

performance accountability measures 

for the core programs of the workforce 

development system. Similarly, we 

propose to provide a cross-reference in 

current § 361.23, regarding the roles and 

responsibilities of the VR program in the 

one-stop delivery system, to the joint 

regulations implementing requirements 

for the one-stop delivery system. 

WIOA makes extensive changes to 

title I of the Act to improve the VR 

services provided to, and the 

employment outcomes achieved by, 

individuals with disabilities, including 

those with the most significant 

disabilities. Embedded throughout the 

provisions of WIOA and the 

amendments to the Act is the principle 

that individuals with disabilities, 

including those with the most 

significant disabilities, are capable of 

achieving competitive integrated 

employment when provided the 

necessary skills and supports. As a 

result, we propose to adopt a definition 

of ‘‘competitive integrated employment’’ 

in § 361.5(c)(9) that combines, clarifies, 

and enhances the two separate 

definitions of ‘‘competitive 

employment’’ and ‘‘integrated setting’’ 

for the purpose of employment in 

current § 361.5(b)(11) and (b)(33)(ii). 

We propose to incorporate this 

principle throughout part 361, from the 

statement of program purpose in 

proposed § 361.1, to a requirement in 

proposed § 361.46(a) that the 

individualized plan for employment 

include a specific employment goal 

consistent with the general goal of 

competitive integrated employment. 

This principle is most evident in the 

definition of ‘‘employment outcome’’ in 

proposed § 361.5(c)(15), which 

specifically identifies customized 

employment as an employment outcome 

under the VR program, and requires that 

all employment outcomes achieved 

through the VR program be in 

competitive integrated employment or 

supported employment, thereby 

eliminating uncompensated outcomes, 

such as homemakers and unpaid family 

workers, from the scope of the 

definition for purposes of the VR 

program. We will provide guidance and 

technical assistance to VR agencies to 

assist them in implementing this 

proposed change. 

We propose additional regulatory 

changes to ensure that individuals with 

disabilities are provided a full 

opportunity through the VR program to 

participate in job-driven training and 

pursue high-quality employment 

outcomes. Proposed § 361.42(a)(1)(iii) 

would clarify that an applicant meeting 

all other eligibility criteria may be 

determined eligible if he or she requires 

services to advance in employment, not 

just obtain or maintain employment. We 

also propose to clarify in proposed 

§§ 361.48(b)(6)and 361.49, that VR 

services are available to assist 

individuals with disabilities to obtain 

graduate level education needed for this 

purpose. We clarify in proposed 

§ 361.42(c)(1) the prohibition against a 

duration of residency requirement and 

in § 361.42(c)(2) those factors that 

cannot be considered when determining 

the eligibility of VR program applicants. 

We propose removing the option to use 

extended evaluations, as a limited 

exception to trial work experiences, to 

explore an individual’s abilities, 

capabilities, and capacity to perform in 

work situations by deleting paragraph (f) 

from current § 361.42. To enable 

individuals with disabilities, including 

students and youth with disabilities, to 

receive VR services in a timely manner, 

proposed § 361.45(e) would require the 

individualized plan for employment of 

each individual to be developed within 

90 days following the determination of 

eligibility. Finally, if a State VR agency 

is operating under an order of selection 

for services, it would have the option 

under proposed § 361.36 to indicate in 

its portion of the Unified or Combined 

State Plan that it will serve eligible 

individuals with disabilities outside 

that order who have an immediate need 

for equipment or services to maintain 

employment. 

WIOA enhances the VR agency’s 

focus on coordination and collaboration 

with other entities by emphasizing 

coordination with employers, noneducational agencies working with 

youth, AIVRS programs, and other 

agencies and programs providing 

services to individuals with disabilities 

to support the achievement of 

competitive integrated employment. 


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Proposed § 361.24 reflects the 

enhancements. The collaboration with 

employers is essential to the success of 

VR program participants and proposed 

§ 361.32 would describe the training 

and technical assistance services that 

can be provided to employers hiring, or 

interested in hiring, individuals with 

disabilities. 

We propose to implement the 

emphasis on serving students and youth 

with disabilities contained in the 

amendments to the Act made by WIOA 

in many regulatory changes to part 361. 

We propose new definitions of ‘‘student 

with a disability’’ and ‘‘youth with a 

disability’’ in § 361.5(c)(51) and (c)(59), 

respectively. These definitions would 

assist VR agencies to determine the 

appropriate transition and other services 

that may be provided to each group. We 

propose in § 361.48(a) to implement the 

requirements of new sections 110(d) and 

113 of the Act requiring VR agencies to 

reserve at least 15 percent of the Federal 

allotment, to provide and arrange, in 

coordination with local educational 

agencies, for the provision of preemployment transition services to 

students with disabilities. We propose 

in § 361.49 to clarify the technical 

assistance VR agencies can provide to 

educational agencies and to permit the 

provision of transition services for the 

benefit of groups of students and youth 

with disabilities. To enable VR agencies 

and local educational agencies to better 

determine their respective 

responsibilities for the provision of 

transition services, including preemployment transition services, through 

greater interagency collaboration, we 

propose in § 361.22(c) to clarify that 

nothing in this part is to be construed 

as reducing the responsibility of the 

local educational agencies or any other 

agencies under the Individuals with 

Disabilities Education Act to provide or 

pay for transition services that are also 

considered to be special education or 

related services necessary for the 

provision of a free appropriate public 

education to students with disabilities. 

So that VR agencies can recruit the 

qualified personnel needed to provide 

the services and engage in the activities 

summarized here, we propose in 

§ 361.18 changes to the requirements for 

a comprehensive system of personnel 

development. The proposed regulations 

would establish minimum educational 

requirements and experience and 

eliminate the requirement to retrain staff 

not meeting the VR agency’s personnel 

standard for qualified staff. 

Finally, we propose changes to part 

361 to improve the fiscal administration 

of the VR program. Proposed § 361.5(b) 

would make applicable to the VR 

program the definitions contained in 2 

CFR part 200, Uniform Administrative 

Requirements, Cost Principles, and 

Audit Requirements. We also propose to 

make numerous conforming changes to 

align with 2 CFR 200 to ensure 

consistency. 

We propose three changes to current 

§ 361.65 regarding the allotment of VR 

program funds. First, we propose adding 

a new paragraph (a)(3) to § 361.65 that 

would require the State to reserve not 

less than 15 percent of its allotment for 

the provision of pre-employment 

transition services described in 

proposed § 361.48(a). Second, we 

propose to amend current § 361.65(b)(2) 

to clarify that reallotment occurs in the 

fiscal year the funds were appropriated; 

however, the funds may be obligated or 

expended during the period of 

performance, provided that matching 

requirements are met. Finally, we 

propose to add a new paragraph (b)(3) 

to § 361.65 that would describe the 

Secretary’s authority to determine the 

criteria to be used to reallot funds when 

the amount requested exceeds the 

amount of funds relinquished. We 

provide a full discussion of these and 

other changes to part 361 in the 

Significant Proposed Regulations 

section of this notice. 

State Supported Employment Services 

Program 

Under the Supported Employment 

program authorized under title VI of the 

Act (29 U.S.C. 795g et seq.), the 

Secretary provides grants to assist States 

in developing and implementing 

collaborative programs with appropriate 

entities to provide supported 

employment services for individuals 

with the most significant disabilities, 

including youth with the most 

significant disabilities, to enable them to 

achieve supported employment 

outcomes in competitive integrated 

employment. Grants made under the 

Supported Employment program 

supplement grants issued to States 

under the VR program (34 CFR part 

361). 

The regulations in 34 CFR part 363, 

governing the Supported Employment 

program, were last updated February 18, 

1993 (59 FR 8331). Therefore, the 

changes proposed in part 363 would 

incorporate statutory changes made by 

WIOA, as well as update the regulations 

to improve the program and ensure 

consistency with changes proposed for 

part 361 governing the VR program. 

The changes made to the Supported 

Employment program by WIOA are 

intended to ensure that individuals with 

the most significant disabilities, 

especially youth with the most 

significant disabilities, are afforded a 

full opportunity to prepare for, obtain, 

maintain, advance in, or re-enter 

competitive integrated employment, 

including supported or customized 

employment. Proposed § 363.1 would 

require that supported employment be 

in competitive integrated employment 

or, if not, in an integrated setting in 

which the individual is working toward 

competitive integrated employment on a 

short-term basis not to exceed six 

months. Proposed § 363.50(b)(1) would 

extend the time from 18 months to 24 

months for the provision of supported 

employment services. Proposed § 363.22 

would require a reservation of 50 

percent of a State’s allotment under this 

part for the provision of supported 

employment services, including 

extended services, to youth with the 

most significant disabilities. Proposed 

§ 363.23 would require not less than a 

10 percent match for the amount of 

funds reserved to serve youth with the 

most significant disabilities. Proposed 

§ 363.51 would reduce the amount of 

funds that may be spent on 

administrative costs. 

Limitation on Use of Subminimum 

Wages 

The Secretary proposes to promulgate 

new regulations in part 397 to 

implement new requirements for 

designated State units (DSUs) and 

educational agencies under the purview 

of the Department that are imposed by 

section 511 of the Act, which was added 

by WIOA. Section 511 imposes 

limitations on employers who hold 

special wage certificates, commonly 

known as 14(c) certificates, under the 

FLSA (29 U.S.C. 214(c)) that must be 

satisfied before the employers may hire 

youth with disabilities at subminimum 

wage or continue to employ individuals 

with disabilities of any age at the 

subminimum wage level. The proposed 

regulations in part 397 focus exclusively 

on the related roles and responsibilities 

of educational agencies and DSUs for 

the VR program. The proposed 

regulations in part 397 are consistent 

with the changes proposed for parts 361 

and 363, which govern the VR program 

and Supported Employment program, 

respectively. 

Through amendments to the Act, 

WIOA prioritizes, and places 

heightened emphasis upon, the 

provision of services that maximize 

opportunities for competitive integrated 

employment for individuals with 

disabilities, including those with the 

most significant disabilities, consistent 

with their unique strengths, resources, 

priorities, concerns, abilities, 

capabilities, interests, and informed 


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choice. WIOA also places heightened 

emphasis on the provision of services 

necessary to assist youth with 

disabilities to achieve competitive 

integrated employment in the 

community, including supported or 

customized employment. To that end, 

amendments to the Act require DSUs to 

reserve specified percentages of their VR 

or supported employment allotments for 

the provision of services to students or 

youth with disabilities, as applicable. 

These amendments, along with the 

addition of section 511, demonstrate the 

intent that individuals with disabilities, 

especially youth with disabilities, must 

be afforded a full opportunity to prepare 

for, obtain, maintain, advance in, or reenter competitive integrated 

employment. 

Section 511 places limitations on the 

payment of subminimum wages by 

entities (e.g., employers) holding special 

wage certificates under the FLSA. In 

particular, such employers are 

prohibited from hiring youth with 

disabilities at a subminimum wage level 

unless the youth are afforded 

meaningful opportunities to access 

services, including transition services 

under the Act or IDEA, so they may 

achieve competitive integrated 

employment in the community. For the 

purposes of these requirements, a 

‘‘youth with a disability’’ is anyone who 

is 24 years or younger. This age range 

is consistent with the definition of a 

‘‘youth with a disability’’ in section 

7(42) of the Act. Additionally, 

employers are prohibited from 

continuing to employ individuals with 

disabilities, regardless of age, at the 

subminimum wage level unless other 

requirements are satisfied. Specifically, 

the individual with a disability, or the 

individual’s parent or guardian if 

applicable, must receive certain 

information and career counselingrelated services from the DSU every six 

months during the first year of such 

employment and annually thereafter for 

as long as the individual receives 

compensation at the subminimum wage 

level. 

In addition to the requirements 

imposed on employers holding special 

wage certificates, section 511 of the Act 

requires DSUs to provide certain career 

counseling services. Further, 

educational agencies and the DSUs must 

develop a process, or use an existing 

process, for the timely provision of 

documentation necessary to 

demonstrate completion of required 

activities, as appropriate, to youth 

seeking employment, at a subminimum 

wage level. Finally, DSUs must provide 

documentation of the provision of 

career counseling and information and 

referral services to individuals with 

disabilities, regardless of age, who are 

currently employed at a subminimum 

wage level. 

The proposed regulations in this part 

focus exclusively on those requirements 

under the purview of the Department of 

Education. To that end, we propose in 

part 397: (1) Documentation 

requirements that local educational 

agencies and DSUs would be required to 

satisfy; and (2) information and career 

counseling-related services DSUs would 

be required to provide. Requirements 

imposed on employers are under the 

purview of the Department of Labor, 

which administers the FLSA. 

Significant Proposed Regulations 

The Secretary proposes to amend the 

implementing regulations for the VR 

program (part 361) and the Supported 

Employment program (part 363). The 

Secretary also proposes to issue new 

regulations in part 397 to implement 

limitations on the payment of 

subminimum wages to individuals with 

disabilities. We discuss substantive 

issues within each subpart, by section or 

subject. 

Generally, we do not address 

proposed changes that are technical or 

otherwise minor in effect, such as 

changes to the authority cited in the 

Act. 

Part 361—State Vocational 

Rehabilitation Services Program 

Organizational Changes 

Although the proposed regulations 

maintain the current structure of 

subparts A, B, and C, we propose 

organizational changes to other subparts 

within this part. First, we propose to 

reserve subparts within part 361 where 

we plan to incorporate the three 

subparts we are proposing in a separate, 

but related, NPRM (the joint regulations 

proposed by the Departments of 

Education and Labor implementing 

changes to title I of WIOA) published 

elsewhere in this issue of the Federal 

Register. Please see that NPRM for more 

information about how these subparts 

will be incorporated into part 361. 

Second, we propose to remove §§ 361.80 

through 361.89, since the VR-specific 

standards and indicators are no longer 

applicable given amendments made by 

WIOA. Finally, we propose to eliminate 

Appendix A to current part 361— 

Questions and Responses. We will 

consider issuing guidance after the 

publication of the final regulations. 

Purpose (§ 361.1) 

Statute: Section 100(a)(1)(C) of the 

Act, as amended by WIOA (29 U.S.C. 

720(a)(1)(C)), highlights competitive 

integrated employment as the type of 

employment that individuals with 

disabilities, including individuals with 

the most significant disabilities, are 

capable of achieving if appropriate 

supports and services are provided. This 

section, as revised, also incorporates 

economic self-sufficiency as a criterion 

to consider when providing VR services 

to an individual. The focus on 

competitive integrated employment is 

also reflected in changes made to 

section 100(a)(3)(B) of the Act. 

Current Regulations: Current 

§ 361.1(b) refers only to gainful 

employment, not competitive integrated 

employment. It also does not include 

economic self-sufficiency as a criterion 

to consider when providing VR services. 

Proposed Regulations: We propose to 

amend current § 361.1(b) by: (1) 

Replacing the term ‘‘gainful 

employment’’ with ‘‘competitive 

integrated employment’’; and (2) 

incorporating ‘‘economic selfsufficiency’’ as a new criterion that must 

be considered to ensure that the VR 

services provided are consistent with 

the individual’s unique circumstances. 

Reasons: The regulatory changes are 

necessary to implement statutory 

amendments to section 100 of the Act 

that emphasize the ability of individuals 

with disabilities, including individuals 

with the most significant disabilities, to 

achieve competitive integrated 

employment, not ‘‘gainful 

employment,’’ the term previously used 

under the Act, as amended by WIA. We 

believe this change is significant given 

that section 7(5) of the Act, as amended 

by WIOA, includes a new term, 

‘‘competitive integrated employment,’’ 

that includes mandatory criteria related 

to, among other things, compensation, 

advancement, and the integrated nature 

of the workplace. We also believe it is 

significant that Congress added 

economic self-sufficiency to the list of 

areas that must be considered when 

providing VR services to an individual 

because it reinforces a key element of 

‘‘competitive integrated employment,’’ 

namely requirements related to 

compensation and benefits. 

See the discussion of the term 

‘‘competitive integrated employment’’ 

in this Significant Proposed Regulations 

section of the notice for a full 

explanation of this term for purposes of 

the VR program. 

Applicable Definitions (§ 361.5) 

Definitions in 34 CFR 77.1 

Statute: None. 


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Current Regulations: Current 

regulations highlight only a few terms 

contained in 34 CFR 77.1. 

Proposed Regulations: In paragraph 

(a) of § 361.5, we propose to incorporate 

by reference all definitions contained in 

34 CFR 77.1. 

Reasons: This change is necessary to 

clarify that all definitions in 34 CFR 

77.1 are applicable to part 361. 

Adoption of 2 CFR Part 200 

Statute: None. 

Current Regulations: Current § 361.5, 

which contains definitions relevant to 

the VR program and was last updated in 

2001, does not include definitions from 

2 CFR part 200 since those regulations 

were promulgated in 2014. 

Proposed Regulations: We propose 

redesignating current paragraph (b) as 

paragraph (c) and adding a new 

paragraph (b) that incorporates by 

reference all definitions in 2 CFR part 

200, subpart A (Uniform Administrative 

Requirements, Cost Principles, and 

Audit Requirements). Proposed 

substantive changes to paragraph (c) 

will be discussed throughout this NPRM 

in conjunction with the relevant topical 

discussion. 

Reasons: OMB issued the Uniform 

Administrative Requirements, Cost 

Principles, and Audit Requirements for 

Federal Awards on January 1, 2014. The 

new regulations supersede and 

streamline requirements from OMB 

Circulars A–21, A–87, A–89, A–102, A– 

110, A–122, and A–133, as well as the 

guidance in Circular A–50 on Single 

Audit Act follow-up. These regulations, 

codified in 2 CFR part 200, have been 

adopted by the Secretary in 2 CFR part 

3474, which took effect on December 26, 

2014. Consequently, terms and 

definitions that previously were not 

used in the VR program, such as 

‘‘subaward’’ (2 CFR 200.92), will be 

applicable given the Department’s 

adoption of 2 CFR part 200. 

Administrative Cost 

Statute: Section 7(1) of the Act, which 

defines ‘‘administrative costs,’’ remains 

unchanged by WIOA. 

Current Regulations: The current 

definition in § 361.5(b)(2) mirrors the 

statute and defines ‘‘administrative 

costs’’ as including, among other things, 

the costs of operating and maintaining 

DSU facilities, equipment, and grounds. 

Proposed Regulations: We propose to 

amend § 361.5(c)(2)(viii), as 

redesignated by other changes made in 

this part, by clarifying that operating 

and maintenance expenses, for purposes 

of the definition of ‘‘administrative 

costs’’ for the VR program, do not 

include capital expenditures, as defined 

in 2 CFR 200.13. 

Reasons: The proposed change is 

necessary to clarify the scope of 

administrative costs, with regard to 

operating and maintenance 

expenditures, thereby ensuring 

consistency with 2 CFR part 200. There 

has been confusion among VR grantees 

as to whether operating or maintenance 

expenses, in the context of 

administrative costs, include capital 

expenditures. Operating or maintenance 

expenses in the context of 

administrative costs under the VR 

program are those costs incurred to 

maintain facilities, equipment, and 

grounds in good working order; 

whereas, capital expenditures, as 

defined in 2 CFR 200.13, are those 

expenditures that ‘‘materially increase 

their value or useful life.’’ We want to 

make clear that capital expenditures are 

permitted under the VR program in 

accordance with 2 CFR 200.439, but not 

as an administrative cost. 

Assessment for Determining Eligibility 

and Vocational Rehabilitation Needs 

Statute: Section 7(2)(B)(v) of the Act, 

as amended by WIOA (29 U.S.C. 705(2)), 

adds a new requirement that VR 

agencies must, to the maximum extent 

possible, rely on information from the 

individual’s experiences obtained in an 

integrated employment setting in the 

community or in other integrated 

community settings when using existing 

information or conducting a 

comprehensive assessment for 

determining eligibility and the need for 

VR services for an individual with a 

disability. 

Current Regulations: Current 

§ 361.5(b)(6) defines ‘‘assessment for 

determining eligibility and vocational 

rehabilitation needs,’’ but does not 

include the requirement related to 

reliance on information about the 

individual’s experiences in integrated 

settings because this is a new statutory 

requirement. 

Proposed Regulations: We propose to 

amend the current regulations to 

conform to the statute in section 7(2)(B) 

of the Act by adding language to the 

definition of ‘‘assessment for 

determining eligibility and vocational 

rehabilitation needs’’ in proposed 

§ 361.5(c)(5)(ii)(E) that would make 

clear that a comprehensive assessment, 

to the maximum extent possible, relies 

on information obtained from the 

eligible individual’s experiences in 

integrated employment settings in the 

community and other integrated settings 

in the community. 

Reasons: WIOA places a heightened 

emphasis on the achievement of 

competitive integrated employment by 

individuals with disabilities. To that 

end, amendments made by WIOA 

require that assessments for determining 

eligibility and VR needs of individuals 

with disabilities must rely on 

information about the individual’s 

experiences in integrated employment 

and in other integrated community 

settings. The Act clearly places an 

emphasis on integrated settings by 

requiring that VR agencies rely on 

information learned from the 

individual’s experiences in these 

settings, to the maximum extent 

possible, when conducting an 

assessment. Nonetheless a DSU is not 

precluded from determining an 

individual’s eligibility for VR services 

based on other information obtained 

through the assessment process when 

the individual cannot participate in 

integrated community-based work 

experiences. 

Assistive Technology Terms 

Statute: Section 7(3) of the Act, as 

amended by WIOA (29 U.S.C. 705(3)), 

adds a new definition of ‘‘assistive 

technology’’ and combines the previous 

definitions of ‘‘assistive technology 

device’’ and ‘‘assistive technology 

service’’ under the heading ‘‘assistive 

technology terms.’’ 

Current Regulations: Current 

§ 361.5(b)(7) defines ‘‘assistive 

technology device’’ and current 

§ 361.5(b)(8) defines ‘‘assistive 

technology service.’’ There is no 

definition for ‘‘assistive technology’’ 

since this is a new statutory term. 

Proposed Regulations: We propose to 

add the heading ‘‘assistive technology 

terms’’ in proposed § 361.5(c)(6), under 

which we would incorporate definitions 

for the new term ‘‘assistive technology’’ 

and for the existing terms ‘‘assistive 

technology device’’ and ‘‘assistive 

technology service.’’ We also propose to 

delete current § 361.5(b)(7) and (b)(8), as 

these separate definitions would no 

longer be necessary. 

Reasons: The proposed changes are 

necessary to implement the new 

statutory definition in section 7(3) of the 

Act, as amended by WIOA. The 

proposed definition streamlines the 

definitions of the various terms by 

referencing the Assistive Technology 

Act of 1998. 

Competitive Integrated Employment 

Statute: WIOA adds a new term, 

‘‘competitive integrated employment,’’ 

in section 7(5) of the Act (29 U.S.C. 

705(5)). Although this is a new statutory 

term, the term and its definition 

generally represent a consolidation of 

two separate definitions and their terms 


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in current regulations—‘‘competitive 

employment’’ and ‘‘integrated setting.’’ 

In addition, the new statutory definition 

incorporates a criterion related to 

advancement in employment that is not 

included in either of the two current 

regulatory definitions. 

Current Regulations: Current 

§ 361.5(b)(11) defines ‘‘competitive 

employment’’ and current § 361.5(b)(33) 

defines ‘‘integrated setting.’’ Current 

regulations do not define ‘‘competitive 

integrated employment’’ since this is a 

new statutory term. 

Proposed Regulations: We propose to 

replace the term ‘‘competitive 

employment’’ in current § 361.5(b)(11) 

with the new term ‘‘competitive 

integrated employment’’ in proposed 

§ 361.5(c)(9). The proposed definition of 

‘‘competitive integrated employment’’ 

would mirror the statutory definition in 

section 7(5) of the Act, as amended by 

WIOA, as well as provide two 

clarifications with respect to the criteria 

for integrated work locations. 

First, proposed § 361.5(c)(9)(ii)(A) 

would clarify that the employment 

location must be in ‘‘a setting typically 

found in the community.’’ Second, 

proposed § 361.5(c)(9)(ii)(B) would 

clarify that the employee with a 

disability’s interaction with other 

employees and others, as appropriate 

(e.g., customers and vendors), who are 

not persons with disabilities (other than 

supervisors and service providers) must 

be to the same extent that employees 

without disabilities in similar positions 

interact with these same persons. This 

interaction must occur as part of the 

individual’s performance of work duties 

and must occur both in the particular 

work unit and the entire work site, as 

applicable. We further propose to 

amend the definition of ‘‘integrated 

setting’’ in proposed § 361.5(c)(32)(ii) to 

conform to the clarifications provided in 

the proposed definition of ‘‘competitive 

integrated employment’’ in proposed 

§ 361.5(c)(9)(ii) to ensure consistency 

between the two terms. 

Finally, we propose to replace the 

terms ‘‘competitive employment’’ and 

‘‘employment in an integrated setting,’’ 

as appropriate, with ‘‘competitive 

integrated employment’’ throughout this 

part. 

Reasons: These proposed changes are 

necessary to implement and to clarify 

statutory amendments made by WIOA. 

Because the proposed definition of 

‘‘competitive integrated employment’’ 

reflects, for the most part, a 

consolidation of two existing regulatory 

definitions, the substance of this 

proposed definition is familiar to DSUs 

and does not represent a divergence 

from current regulations, long-standing 

Department policy, practice, and the 

heightened emphasis on competitive 

integrated employment throughout the 

Act, as amended by WIOA. 

In implementing these proposed 

regulations and determining whether an 

individual with a disability has 

achieved an employment outcome in 

‘‘competitive integrated employment,’’ a 

DSU must consider, on a case-by casebasis, each of the criteria described in 

the proposed definition of ‘‘competitive 

integrated employment.’’ While most of 

the criteria are familiar and selfexplanatory, we believe additional 

guidance is warranted here to explain 

those few new criteria contained in the 

statutory and proposed regulatory 

definitions, especially with regard to the 

criteria for an integrated employment 

setting. As a result, we further explain 

these criteria, highlighting those aspects 

that historically have raised the most 

questions from DSUs. 

Competitive Earnings: The 

compensation criteria of the proposed 

definition of ‘‘competitive integrated 

employment,’’ which mirror the 

statutory definition, are consistent with 

those found in the current regulatory 

definition of ‘‘competitive employment’’ 

in § 361.5(b)(11). Proposed 

§ 361.5(c)(9)(i)(A) would continue to 

require that, to be considered 

‘‘competitive integrated employment,’’ 

the individual must perform full- or 

part-time work in which he or she earns 

at least the higher of the minimum wage 

rate established by Federal or applicable 

State law. Because several jurisdictions 

have established minimum wage rates 

substantially higher than those provided 

for under Federal or State law, the 

statutory definition and proposed 

§ 361.5(c)(9)(i)(A) would require that the 

individual’s earnings be at least equal to 

the legally established local minimum 

wage rate if that rate is higher than both 

the Federal and State rates. Also, as has 

been the case under the current 

definition of ‘‘competitive 

employment,’’ section 7(5) of the Act 

requires and proposed § 361.5(c)(9)(i)(D) 

would require that the individual with 

the disability must be eligible for the 

same level of benefits provided to 

employees without disabilities in 

similar positions. In implementing the 

statute, the proposed definition would 

establish additional criteria with respect 

to competitive earnings. First, proposed 

§ 361.5(c)(9)(i)(B) would require that the 

DSU take into account the training, 

experience, and level of skills possessed 

by the employees without disabilities in 

similar positions. Second, the proposed 

definition recognizes that individuals, 

with or without disabilities, in selfemployment may not receive an income 

from the business equal to or exceeding 

applicable minimum wage rates, 

particularly in the early stages of 

operation. Hence, proposed 

§ 361.5(c)(9)(i)(C) would clarify that selfemployed individuals with disabilities 

can be considered to be receiving 

competitive compensation if their 

income is comparable to that of 

individuals without disabilities in 

similar occupations or performing 

similar tasks who possess the same level 

of training, experience, and skills. 

Finally, to ensure consistency with the 

American Indian Vocational 

Rehabilitation Services program under 

part 371, we interpret subsistence 

employment as a form of selfemployment common to cultures of 

many American Indian tribes. 

Integrated Location: While the 

integrated setting criteria of the 

proposed definition of ‘‘competitive 

integrated employment’’ are consistent 

with the statutory definition in section 

7(5)(B) of the Act, as amended by 

WIOA, and the current definition of 

‘‘integrated setting’’ in § 361.5(b)(33)(ii), 

the proposed definition would provide 

important clarifications that are 

necessary to ensure consistency with 

expressed congressional intent and 

current Departmental guidance. 

First, we propose to require that the 

work location be in ‘‘a setting typically 

found in the community’’ as required by 

current § 361.5(b)(33)(ii), meaning that 

an integrated setting must be one that is 

typically found in the competitive labor 

market. This particular criterion is 

included in the current definition of 

‘‘integrated setting’’ and, thus, its 

incorporation in the proposed definition 

of ‘‘competitive integrated employment’’ 

would ensure consistency between the 

two terms. Furthermore, this longstanding Department interpretation is 

consistent with the expressed 

congressional intent throughout the Act, 

as well as with past legislative history. 

Specifically, integrated setting ‘‘. . . is 

intended to mean a work setting in a 

typical labor market site where people 

with disabilities engage in typical daily 

work patterns with co-workers who do 

not have disabilities; and where workers 

with disabilities are not congregated 

. . .’’ (Senate Report 105–166, page 10, 

March 2, 1998). Therefore, we continue 

to maintain the long-standing 

Department policy that settings 

established by community rehabilitation 

programs specifically for the purpose of 

employing individuals with disabilities 

(e.g., sheltered workshops) do not 

constitute integrated settings because 

these settings are not typically found in 

the competitive labor market. We 

believe this criterion of the integrated 


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setting component of the proposed 

definition of competitive integrated 

employment is the first of two 

thresholds that must be satisfied. 

Second, once the first threshold is 

met, we believe it is essential, consistent 

with the current definition of 

‘‘integrated setting,’’ that individuals 

with disabilities have the opportunity to 

interact with non-disabled co-workers 

during the course of performing their 

work duties to the same extent that their 

non-disabled co-workers have to 

interact with each other when 

performing the same work. To that end, 

proposed § 361.5(c)(9)(ii)(B) would 

clarify that ‘‘other persons’’ as used in 

the statutory definition means other 

employees without disabilities with 

whom the employee with the disability 

works within the specific work unit and 

from across the entire work site. We 

want to make clear that this proposed 

clarification is contained, more 

generally, in the current definition of 

‘‘integrated setting.’’ Furthermore, we 

believe this clarification is consistent 

with congressional intent, past 

legislative history, current Departmental 

guidance, and current regulations. 

Historically, this element regarding 

integrated settings has raised many 

questions; therefore, we provide specific 

clarity with regard to certain job settings 

in which employees primarily interact 

with persons from outside the work 

unit, such as vendors and customers, 

rather than each other, while performing 

their job duties. We believe the focus of 

whether the setting is integrated should 

be on the interaction between 

employees with and without 

disabilities, and not solely on the 

interaction of employees with 

disabilities with people outside of the 

work unit. For example, the interaction 

of individuals with disabilities 

employed in a customer service center 

with other persons over the telephone, 

regardless of whether these persons 

have disabilities, would be insufficient 

by itself to satisfy the definition. 

Instead, the interaction of primary 

consideration should be that between 

the employee with the disability and his 

or her colleagues without disabilities in 

similar positions. 

Nonetheless, we recognize that 

individuals who are self-employed or 

who telecommute may interact more 

frequently with persons such as vendors 

and customers than with other 

employees. Since these persons often 

work alone from their own homes rather 

than together in a single location, and 

may have little contact with fellow 

employees, we have long maintained 

that self-employment and 

telecommuting are considered to meet 

the criteria for an integrated location, so 

long as the employee with the disability 

interacts with employees in similar 

positions and other persons without 

disabilities to the same extent that these 

persons without disabilities interact 

with others, though this interaction 

need not be face-to-face. 

The proposed definition of 

‘‘competitive integrated employment’’ 

would further clarify, consistent with 

the general principles contained in the 

current definition of ‘‘integrated 

setting,’’ that the DSU is to consider the 

interaction between employees with 

disabilities and those without 

disabilities that is specific to the 

performance of the employee’s job 

duties, and not the casual, 

conversational, and social interaction 

that takes place in the workplace. As a 

result, it would not be pertinent to its 

determination of an integrated setting 

for a DSU to consider interactions in the 

lunchrooms and other common areas of 

the work site in which employees with 

disabilities and those without 

disabilities are not engaged in 

performing work responsibilities. This 

determination, particularly with regard 

to the level of interaction, would be 

applicable regardless of whether the 

individual with a disability is an 

employee of the work site or a 

community rehabilitation program hires 

the individual with a disability under a 

service contract for that work site. 

Specifically, individuals with 

disabilities hired by community 

rehabilitation programs to perform work 

under service contracts, either alone or 

in groups (e.g., landscaping or janitorial 

crews), whose interaction with persons 

without disabilities (other than their 

supervisors and service providers) is 

with persons working in or visiting the 

work locations (and not with employees 

of the community rehabilitation 

programs without disabilities in similar 

positions) would not be performing 

work in an integrated setting. In 

summary, the DSU must determine, on 

a case-by-case basis, that a work 

location is in an integrated setting if it 

both is typically found in the 

community, and is one in which the 

employee with the disability interacts 

with employees and other persons, as 

appropriate to the position, who do not 

have disabilities to the same extent that 

employees without disabilities interact 

with these persons. Finally, the DSU is 

to consider the interaction between the 

employee with the disabilities and these 

other persons that takes place for the 

purpose of performing his or her job 

duties, not mere casual and social 

interaction. 

Opportunities for Advancement: To 

ensure that the employment of persons 

with disabilities is equivalent in all 

respects to that of persons without 

disabilities, section 7(5) of the Act, as 

amended by WIOA, establishes a new 

criterion not contained in current 

regulations. Proposed § 361.5(c)(9)(iii) 

mirrors the language in section 7(5) of 

the Act and would require that the 

employee with the disability have the 

same opportunities for advancement as 

employees without disabilities in 

similar positions. We believe this new 

criterion is consistent with current 

definitions of ‘‘competitive 

employment’’ and ‘‘integrated settings’’ 

and should pose no hardship on DSUs 

to implement. 

As explained here, the definition of 

‘‘competitive integrated employment’’ 

in section 7(5) of the Act, as amended 

by WIOA, and as proposed in 

§ 361.5(c)(9) establishes three essential 

criteria of employment—income 

(earnings and benefits), integration, and 

advancement—thereby ensuring that 

individuals with disabilities are 

provided through the VR program the 

full opportunity to participate in the 

same jobs available to persons without 

disabilities in the public. 

Again, we want to make clear that two 

of the criteria—those related to 

compensation and the integrated nature 

of the worksite—are similar, if not 

identical, to criteria contained in the 

current definitions of ‘‘competitive 

employment’’ and ‘‘integrated setting.’’ 

Thus, the substance of this definition is 

familiar to the DSUs and should pose no 

hardship to implement. 

Customized Employment 

Statute: Section 7(7) of the Act, as 

amended by WIOA (29 U.S.C. 705 (7)), 

adds and defines the term ‘‘customized 

employment,’’ which means, in general, 

competitive integrated employment 

designed to meet both the specific 

abilities of the individual with a 

significant disability and the business 

needs of an employer. 

Current Regulations: None. 

Proposed Regulations: We propose to 

add § 361.5(c)(11), to define 

‘‘customized employment’’ to mirror the 

statute. 

Reasons: The proposed regulation is 

necessary to implement the new 

statutory term and definition because 

the Act, as amended by WIOA, uses the 

term in a variety of contexts, including 

incorporating it into definitions of 

employment outcome and supported 

employment, and incorporating it into 

the list of individualized services 

permissible under the VR program. 

Customized employment provides 


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flexibility in developing individualized 

and customized strategies that are 

specific to an individual with a 

significant disability’s unique needs, 

interests, and capabilities, through the 

use of flexible strategies that meet the 

needs of both the individual and the 

employer. 

Employment Outcome 

Statute: Section 7(11) of the Act, as 

amended by WIOA, revises the 

definition of ‘‘employment outcome’’ to 

include customized employment within 

its scope. 

Current Regulations: Current 

§ 361.5(b)(16) defines ‘‘employment 

outcome,’’ but does not include 

customized employment since this is a 

new statutory requirement. 

Proposed Regulations: We propose to 

amend the definition of ‘‘employment 

outcome’’ in § 361.5(c)(15), as 

redesignated by other changes made in 

this part, to specifically identify 

customized employment as an 

employment outcome under the VR 

program. We also propose to amend the 

definition to require that all 

employment outcomes achieved 

through the VR program be in 

competitive integrated employment or 

supported employment, thereby 

eliminating uncompensated outcomes 

from the scope of the definition for 

purposes of the VR program. 

Furthermore, we propose to amend 

current § 361.37(b) to expand the scope 

of those circumstances when the DSU 

must provide referrals to other programs 

and service providers for individuals 

who choose not to pursue an 

employment outcome under the VR 

program. Similarly, we propose to 

amend current § 361.43(d) to expand the 

requirement for the referral of 

individuals found ineligible for VR 

services or determined ineligible 

subsequent to the receipt of services to 

also include appropriate State, Federal, 

and local programs, and community 

service providers better suited to meet 

their needs. 

Reasons: The proposed changes are 

necessary, in part, to implement 

statutory changes to the definition of 

‘‘employment outcome’’ that include 

reference to ‘‘customized employment.’’ 

See the discussion of ‘‘customized 

employment’’ earlier in this preamble 

for further information regarding this 

type of employment outcome. 

The proposed change that would limit 

the scope of employment outcomes 

under the VR program to competitive 

integrated employment or supported 

employment is necessary to implement 

the heightened emphasis of the Act on 

the achievement of competitive 

integrated employment. The Act, as 

amended by WIOA, makes clear—from 

the stated purpose of the Act, the 

addition of new requirements governing 

the development of individualized 

plans for employment and the transition 

of students and youth from school to 

post-school activities, and new 

limitations on the payment of 

subminimum wages—that individuals 

with disabilities, particularly those with 

significant disabilities, are able to 

achieve the same high-quality jobs in 

the competitive integrated labor market 

as persons without disabilities if they 

are provided appropriate services and 

supports. The amendments made by 

WIOA are consistent with and further 

other changes made over the past four 

decades, with each reauthorization, that 

have placed increasing emphasis on the 

achievement of competitive 

employment in an integrated setting 

through the VR program. See the 

discussion regarding ‘‘competitive 

integrated employment’’ earlier in this 

preamble. 

It is in this context that we propose 

to amend the definition of ‘‘employment 

outcome,’’ for purposes of the VR 

program, to include only those 

outcomes that meet the requirements of 

competitive integrated employment 

(including customized employment, 

self-employment, telecommuting or 

business ownership), or supported 

employment, thereby eliminating from 

the scope of the definition, under the 

VR program, uncompensated outcomes, 

such as homemakers and unpaid family 

workers. We believe this proposed 

change is consistent with the statutory 

definition of ‘‘employment outcome’’ in 

section 7(11) of the Act, as well as the 

pervasive emphasis in the Act on the 

achievement of competitive integrated 

employment by individuals with 

disabilities, including those with the 

most significant disabilities. Given this 

emphasis, we believe the proposed 

change, not to include, within the scope 

of employment outcomes, 

uncompensated outcomes, such as 

homemakers and unpaid family 

workers, is consistent with the 

provisions of the Act. 

We believe the proposed changes to 

the definition, while essential to 

fulfilling the expectation in the Act that 

individuals with disabilities, 

particularly individuals with significant 

disabilities, are capable of pursuing 

competitive integrated employment, 

should not cause significant difficulty 

for most State VR units in their 

administration of the VR program. 

Nationally, only a relatively small 

number of individuals currently exit the 

VR program as homemakers or unpaid 

family workers. Over the past 35 years 

the percentage of such outcomes has 

steadily and significantly decreased. For 

example, in FY 1980 homemaker 

outcomes as a percentage of all 

employment outcomes reported 

nationally to the Department by VR 

agencies through the VR program Case 

Service Report for the years FY 1980 

through FY 2013 approximated 15 

percent. This percentage dropped to 5.2 

percent in FY 1999, and to 3.4 percent 

in FY 2004. By FY 2013, the most recent 

year for which data is available, this 

percentage had declined to 1.9 percent. 

There has been a similar decline in 

reported unpaid family workers. 

According to data reported by VR 

agencies through the VR program Case 

Service Report, in FY 2000, 642 

individuals were reported in the 

category of unpaid family worker. By FY 

2013, the most recent year for which we 

have data, only 135 individuals were 

reported to have obtained an unpaid 

family worker outcome. National data 

indicates that approximately 0.2 percent 

or less of all the outcomes reported 

annually by DSUs are unpaid family 

worker outcomes. 

While we recognize that some VR 

agencies have a greater percentage of 

homemaker and unpaid family worker 

outcomes than others, particularly those 

agencies serving individuals who are 

blind and visually impaired, it is also 

evident that the majority of DSUs have 

been placing increased importance and 

emphasis on competitive employment 

outcomes, in their policies and 

procedures, as the optimal employment 

outcome and deemphasizing 

uncompensated outcomes. This shift in 

practice has been the product of the 

DSUs responding to the intent of the Act 

and translating that intent into their 

administration of the VR program. 

Nevertheless, we recognize that this 

proposed change could represent a 

significant shift in practice for a few VR 

agencies, particularly those with high 

percentages of individuals achieving 

employment outcomes as homemakers 

or unpaid family workers. These 

agencies may be providing services to 

assist individuals to obtain homemaker 

and unpaid family worker outcomes at 

the time the final regulations become 

effective. To allow these agencies to 

complete the VR process for these 

individuals, we are considering a 

transition period of six months 

following the effective date of the final 

regulations for the implementation of 

this proposed change. We are interested 

in receiving comments about providing 

such a transition period. 

Since FY 2004, through monitoring of 

the VR program, we have reviewed the 


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attainment of homemaker outcomes and 

have found that VR agencies sometimes 

assist individuals to exit the program as 

homemakers to provide an alternate 

resource for the provision of 

independent living services that are 

otherwise available from the State 

Independent Living Services, Centers 

for Independent Living, and 

Independent Living Services for Older 

Individuals Who Are Blind programs. 

To ensure that individuals who choose 

to pursue homemaker and unpaid 

family worker outcomes, or who are 

determined ineligible for VR services 

either at the time of application or 

following the provision of services, are 

able to access independent living and 

other rehabilitation services, we propose 

to expand the scope of §§ 361.37(b) and 

361.43(d) so that these circumstances 

would be among those when DSUs must 

refer these individuals to public and 

private agencies better suited to meet 

their needs. These current regulatory 

provisions are limited to those 

individuals who choose to pursue 

extended employment, which does not 

constitute an employment outcome 

under the VR program. As proposed, 

§§ 361.37(b) and 361.43(d) would be 

more broad, thus encompassing those 

individuals who choose to pursue 

uncompensated employment, such as 

homemakers and unpaid family 

workers, as well as those who choose to 

pursue extended employment. 

The resources available through the 

independent living programs have 

expanded exponentially since FY 1992. 

Specifically, the number of Part Cfunded centers for independent living 

has tripled since FY 1993, from 120 to 

356 presently, including 20 new centers 

for independent living established in FY 

2010 through funding under the 

American Recovery and Reinvestment 

Act of 2009. In addition, funding for the 

Independent Living Services for Older 

Individuals Who Are Blind program has 

increased since FY 1992, from 

$6,500,000 to approximately 

$33,000,000 in FY 2014. While we 

recognize that this proposed change 

would place the responsibility for 

making these referrals on DSUs, we 

believe that any burden associated with 

these requirements is outweighed by the 

benefit that individuals with disabilities 

would gain by having access to 

programs and services that can more 

appropriately meet their individualized 

needs. 

Extended Services 

Statute: Section 604(b) of the Act, as 

amended by WIOA, permits the 

expenditure of supported employment 

funds authorized under title VI, and the 

VR funds authorized under title I, on the 

provision of extended services to youth 

with the most significant disabilities for 

a period not to exceed four years. 

Current Regulation: Current 

§ 361.5(b)(20) defines ‘‘extended 

services,’’ but does not mention that 

these services may be provided to youth 

with the most significant disabilities 

since this is a new statutory 

requirement. 

Proposed Regulations: We propose to 

amend the definition in § 361.5(c)(19), 

as redesignated by other changes made 

in this part, to make clear that extended 

services may be provided to youth with 

the most significant disabilities for a 

period not to exceed four years. The 

changes proposed herein are consistent 

with those proposed for the Supported 

Employment program in part 363. 

Reasons: The revisions are necessary 

to implement statutory changes to the 

Supported Employment program made 

by WIOA that also relate to the VR 

program since VR funds may be used to 

pay for allowable supported 

employment services. These proposed 

changes are consistent with those 

proposed in part 363 and discussed in 

more detail later in this NPRM. 

Indian; American Indian; Indian 

American and Indian Tribe 

Statute: Section 7(19) of the Act, as 

amended by WIOA, revises the 

definition of ‘‘Indian,’’ ‘‘American 

Indian,’’ ‘‘Indian American,’’ and 

‘‘Indian tribe’’ to further clarify those 

terms. 

Current Regulations: Current 

§ 361.5(b)(3) defines ‘‘American Indian’’ 

to mean an individual who is a member 

of an Indian tribe. Current § 361.5(b)(26) 

defines ‘‘Indian tribe’’ to mean any 

Federal or State Indian tribe, band, 

rancheria, pueblo, colony, or 

community, including any Alaskan 

native village or regional village 

corporation (as defined in or established 

pursuant to the Alaska Native Claims 

Settlement Act). 

Proposed Regulations: We propose to 

combine the definitions of ‘‘American 

Indian’’ and ‘‘Indian tribe’’ currently in 

§ 361.5(b)(3) and (b)(26), respectively, to 

be consistent with the definition in 

section 7(19) of the Act, as amended by 

WIOA. To that end, the proposed 

definition in § 361.5(c)(25) would make 

clear that the term ‘‘American Indian’’ 

includes a Native and a descendant of 

a Native, as defined in the Alaska Native 

Claims Settlement Act (43 U.S.C. 1602), 

and expands the term ‘‘Indian tribe’’ to 

include a tribal organization, as defined 

in the Indian Self-Determination and 

Education Assistance Act (25 U.S.C. 

450(b)(1)). 

Reasons: These changes are necessary 

to implement the revised statutory 

definition in section 7(19) of the Act. 

These changes also are necessary to 

ensure consistency with changes 

proposed to part 371, implementing the 

American Indian Vocational 

Rehabilitation Services program, 

contained in a separate, but related, 

NPRM published elsewhere in this issue 

of the Federal Register. 

Local Workforce Development Board 

and Other Workforce Development 

Terms 

Statute: Sections 7(25), 7(35), and 

7(36) of the Act, as amended by WIOA, 

define the terms ‘‘Local workforce 

development board,’’ ‘‘State workforce 

development board,’’ and ‘‘Statewide 

workforce development system,’’ 

respectively. 

Current Regulations: Current 

§§ 361.5(b)(34), (b)(49), and (b)(50) 

define ‘‘Local workforce investment 

board,’’ ‘‘State workforce investment 

board,’’ and ‘‘Statewide workforce 

investment system,’’ respectively. 

Proposed Regulations: We propose to 

amend part 361 throughout, including 

the definitions for ‘‘Local workforce 

development board’’ in § 361.5(c)(33), 

‘‘State workforce development board’’ in 

§ 361.5(c)(49), and ‘‘Statewide 

workforce development system’’ in 

§ 361.5(c)(50), to substitute the word 

‘‘development’’ for ‘‘investment’’ 

wherever those terms appear. 

Reasons: These changes are necessary 

to implement revised terms used 

throughout WIOA. The amendments are 

technical in nature and do not represent 

a substantive change to the definitions 

themselves. 

Supported Employment 

Statute: Section 7(38) of the Act, as 

amended by WIOA, revises the 

definition of supported employment to, 

among other things, reference 

competitive integrated employment and 

customized employment, and requires 

that an individual who is employed in 

an integrated setting, but not in 

competitive integrated employment, 

must be working toward such an 

outcome on a short-term basis for such 

work to qualify as supported 

employment. 

Current Regulation: Current 

§ 361.5(b)(53) defines ‘‘supported 

employment’’ as the term was defined 

prior to the enactment of WIOA. There 

is no reference to ‘‘competitive 

integrated employment’’ or ‘‘customized 

employment’’ since these are new 

statutory requirements. 

Proposed Regulation: We propose to 

amend the definition in § 361.5(c)(53), 


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as redesignated by other changes made 

in this part, to require that supported 

employment means competitive 

integrated employment, including 

customized employment, or 

employment in an integrated setting in 

which the individual is working on a 

short-term basis toward competitive 

integrated employment. We also 

propose, in this context, that an 

individual be considered to be working 

on a ‘‘short-term basis’’ toward 

competitive integrated employment if 

the individual reasonably expects 

achieving a competitive integrated 

employment outcome within six months 

of achieving an employment outcome of 

supported employment. These proposed 

changes are consistent with those 

proposed in part 363 for the Supported 

Employment program, discussed later in 

this NPRM. 

Reasons: The revisions are necessary 

to implement the new statutory 

definition in section 7(38) of the Act, as 

amended by WIOA, which reflects the 

heightened emphasis on the 

achievement of competitive integrated 

employment. 

We also propose to include a 

definition of ‘‘short-term basis,’’ in the 

context of supported employment, to 

give meaning to the phrase and ensure 

congressional intent. By limiting the 

timeframe, we ensure that individuals 

do not remain in subminimum wage 

employment for the purpose of 

achieving supported employment 

outcomes. The proposed changes also 

ensure consistency with the 

amendments proposed in part 363, 

implementing the Supported 

Employment program, discussed later in 

this NPRM. 

Supported Employment Services 

Statute: Section 7(39) of the Act, as 

amended by WIOA, revises the 

definition of ‘‘supported employment 

services’’ to extend the allowable 

timeframe for the provision of these 

services from 18 months to 24 months. 

The statute also makes other technical 

changes to the definition. 

Current Regulation: Current 

§ 361.5(b)(54) defines ‘‘supported 

employment services’’ to include a 

timeframe of 18 months. 

Proposed Regulations: We propose to 

revise the definition in § 361.5(c)(54), as 

redesignated due to other changes made 

in this part, to extend the allowable 

timeframe for the delivery of these 

services from 18 months to 24 months. 

We also propose to make changes that 

clarify the individualized and 

customized nature of supported 

employment services. 

Reasons: The revisions are necessary 

to implement the new definition of 

‘‘supported employment services’’ in 

section 7(39) of the Act, as amended by 

WIOA. Most importantly, the proposed 

definition extends the allowable 

timeframe for the provision of 

supported employment services from 18 

to 24 months. The proposed changes 

also ensure consistency with revisions 

proposed in part 363, implementing the 

Supported Employment program, 

discussed later in this NPRM. 

Submission, Approval, and Disapproval 

of the State Plan (§ 361.10) 

Statute: Section 101(a)(1) of the Act, 

as amended by WIOA, requires that, a 

‘‘vocational rehabilitation services 

portion’’ be included in a State’s 

Unified State Plan in accordance with 

section 102, or a Combined State Plan 

in accordance with section 103, of 

WIOA. The ‘‘vocational rehabilitation 

services portion’’ must contain all State 

plan requirements under section 101(a) 

of the Act. 

Section 101(b) of the Act, as amended 

by WIOA, makes conforming changes 

with regard to the submission, approval, 

and modification process for the VR 

services portion of the Unified or 

Combined State Plan. 

Current Regulations: Current § 361.10 

includes requirements for the 

submission and approval process for the 

VR State plan. Although current 

§ 361.10(c) permits States to submit the 

VR State plan as part of the Unified 

State Plan, there is no requirement to do 

so. 

Proposed Regulations: First, we 

propose to amend current § 361.10(a) to 

require the State to submit a VR services 

portion of a Unified or Combined State 

Plan in accordance with sections 102 or 

103, respectively, of WIOA to be eligible 

to receive its VR allotment. 

Second, we propose to clarify that the 

VR services portion of the Unified or 

Combined State Plan includes all 

information required under section 

101(a) of the Act. 

Third, we propose to amend 

§ 361.10(d) by providing a crossreference to subpart D of part 361, 

which is reserved for the joint 

regulations implementing requirements 

for the Unified and Combined State Plan 

proposed jointly by the Departments of 

Education and Labor. The proposed 

joint regulations that would implement 

jointly-administered activities under 

title I of WIOA are published elsewhere 

in this issue of the Federal Register. We 

also propose to remove current 

paragraph (e) and redesignate current 

paragraph (f)(3) as paragraph (e), and we 

propose to remove the remainder of 

current paragraph (f) and current 

paragraph (g). We propose to 

redesignate current paragraph (h) as 

paragraph (f) and rename it ‘‘Due 

Process.’’ 

Finally, we propose to make other 

conforming changes throughout 

§ 361.10. 

Reasons: The proposed revisions to 

§ 361.10 are necessary to: (1) Implement 

the VR-specific amendments to sections 

101(a)(1) and (b) of the Act made by 

WIOA; and (2) align VR-specific 

requirements with those contained in 

the joint regulations, developed by the 

Departments of Education and Labor, 

regarding the submission, approval, and 

modification of Unified or Combined 

State Plans. Taken together, these 

statutory amendments and proposed 

regulatory changes recognize that the 

VR services portion of the Unified or 

Combined State Plan is to be an integral 

part of the Unified or Combined State 

Plan, and provide the foundation for the 

seamless, effective, and efficient 

delivery of services through the 

collaboration and combined funding, to 

the extent allowable under relevant 

program requirements, of the workforce 

development system that will enable 

individuals with disabilities to obtain 

the skills necessary to participate in the 

high-demand jobs of today’s economy. 

To further the integrated nature of the 

VR services portion of the Unified or 

Combined State Plan, we request that 

comments to proposed revisions to 

§ 361.10 be limited to VR-specific 

requirements and that more general 

comments about the Unified or 

Combined State Plan be submitted in 

response to the proposed joint 

regulations published elsewhere in this 

issue of this Federal Register. 

Requirements for a State Rehabilitation 

Council (§ 361.17) 

Statute: Section 105(b)(1) of the Act, 

as amended by WIOA, makes a 

technical amendment to the 

composition requirement of the State 

Rehabilitation Council (SRC) related to 

section 121 projects. WIOA also amends 

section 105(b)(6) by requiring the SRC to 

include programs authorized under the 

Assistive Technology Act of 1998 

among those agencies and organizations 

with which it must coordinate. 

Current Regulations: Current 

§ 361.17(b)(1)(ix) requires that, in a State 

with projects carried out under section 

121 of the Act, a representative of the 

directors of these projects must serve on 

the SRC, but it does not use the new 

statutory term ‘‘funded’’ in place of 

‘‘carried out.’’ Current § 361.17(h)(6) 

requires the SRC to collaborate with 

various other entities, but does not 


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include programs authorized under the 

Assistive Technology Act of 1998 since 

this is a new statutory requirement. 

Current § 361.17(h)(3) also requires the 

SRC to partner with the VR agency in 

establishing State goals and priorities 

and to assist in the preparation of the 

State plan. 

Proposed Regulations: We propose to 

amend current § 361.17(b)(1)(ix) to 

substitute ‘‘funded’’ for ‘‘carried out’’ in 

the State to mirror the statute. 

Additionally, we propose to amend 

current § 361.17(h)(6) to include 

programs established under the 

Assistive Technology Act of 1998 in the 

list of entities with which the SRC must 

coordinate its activities. Finally, we 

propose to clarify in § 361.17(h)(3) that 

the SRC is only required to assist in the 

preparation of the VR services portion of 

the Unified or Combined State Plan, not 

the entire Unified or Combined State 

Plan. 

Reasons: The proposed changes are 

necessary to implement statutory 

amendments to section 105 of the Act 

made by WIOA. We believe the 

proposed change in § 361.17(b)(1)(ix) is 

more technical than substantive in the 

context of the American Indian 

Vocational Rehabilitation Services 

program. Unlike most programs in 

which funds are awarded to a State or 

an entity in a State, the Department 

awards section 121 grant funds to tribes, 

whose reservations may cross State 

lines. In that context, the distinctions 

between ‘‘funded,’’ as used in WIOA, 

and ‘‘carried out,’’ as had been used 

previously, provides no substantive 

differences in practical meaning. For 

that reason, we believe this proposed 

change is primarily technical in nature. 

The proposed inclusion in 

§ 361.17(h)(6) of the programs 

authorized under the Assistive 

Technology Act of 1998 among the 

entities with which the SRC must 

coordinate its activities would 

underscore the integral role that 

assistive technology plays in the ability 

of individuals with disabilities to obtain 

and maintain employment. Through the 

coordination of SRC and assistive 

technology program activities, SRC 

members would be better informed of 

the resources and services available in 

the State for the provision of assistive 

technology devices and training, 

enabling the members to more 

effectively advise the DSU in the State. 

Finally, as discussed in proposed 

§ 361.10, title I of WIOA requires the VR 

program in each State to participate in 

a Unified or Combined State Plan with 

the other core programs or partner 

programs within the workforce 

development system. By replacing the 

term ‘‘State plan’’ with the ‘‘vocational 

rehabilitation services portion of the 

Unified or Combined State Plan,’’ we 

believe that members of the SRC would 

be responsible only for participating in 

the development of the goals and 

strategies contained in, and providing 

input on, the VR services portion of the 

Unified or Combined State Plan in 

accordance with the mandated activities 

of the SRC as set forth in proposed 

§ 361.17(h). 

Comprehensive System of Personnel 

Development (§ 361.18) 

Statute: Section 101(a)(7) of the Act, 

as amended by WIOA, makes several 

changes to the comprehensive system of 

personnel development (CSPD) that 

each DSU must establish to ensure its 

personnel are adequately trained. In 

particular, the amendments add specific 

educational and experiential criteria 

that must be met by VR personnel. The 

statute also makes other technical 

changes throughout this section. 

Current Regulations: Current § 361.18 

requires a DSU to establish a CSPD that 

is based on either a national or State 

licensing or certification standard. 

Current regulations do not specify 

specific educational or experiential 

criteria since these are new statutory 

requirements. 

Proposed Regulations: We propose to 

revise § 361.18(c)(1)(ii) to mirror the 

statute with regard to education and 

experience requirements for VR 

personnel. Accordingly, we would 

ensure that personnel have a 21stcentury understanding of the evolving 

labor force and needs of individuals 

with disabilities. In addition, we 

propose to add a new § 361.18(c)(2)(ii) 

in which we would describe what we 

mean by personnel having a 21stcentury understanding of the evolving 

labor force and needs of individuals 

with disabilities. We would provide 

examples of the skills that would 

demonstrate that personnel hired are 

appropriately qualified. 

Further, we propose to amend 

§ 361.18(d)(1)(i) to require that the CSPD 

include training implemented in 

coordination with entities carrying out 

State programs under section 4 of the 

Assistive Technology Act of 1998. 

Finally, we propose to delete those 

provisions that are no longer applicable 

given statutory changes, such as those 

related to steps the State will take when 

personnel do not meet the highest 

standard in a State. 

Reasons: The proposed changes are 

necessary to implement statutory 

changes made by WIOA. The changes 

we propose in § 361.18(c)(1)(ii) would 

ensure that DSU staff are well-qualified 

to assist individuals with disabilities to 

achieve competitive integrated 

employment in today’s demanding labor 

market. The proposed regulations would 

describe education and experience, as 

applicable, requirements at the 

bachelor’s, master’s, and doctoral level, 

in fields related to rehabilitation that 

prepare the individual to work with 

individuals with disabilities and 

employers. For individuals hired at the 

bachelor’s level, there also would be a 

requirement for at least one year of paid 

or unpaid experience. These proposed 

CSPD requirements would further the 

heightened emphasis throughout the 

Act on employer engagement and 

affording individuals with disabilities 

every opportunity to achieve 

competitive integrated employment. 

In order to further clarify what types 

of skills we intend for personnel to 

demonstrate, we propose some 

illustrative examples in 

§ 361.18(c)(2)(ii), which are by no means 

all-inclusive but which are typically 

required of rehabilitation professionals 

hired by the DSU. Finally, in proposing 

to amend current § 361.18(d)(1)(i) to 

require that the CSPD include training 

implemented in coordination with 

entities carrying out State programs 

under section 4 of the Assistive 

Technology Act of 1998, we are 

reflecting a new statutory requirement 

that is consistent with the emphasis on 

coordination throughout the Act. 

Public Participation Requirements 

(§ 361.20) 

Statute: Section 101(a)(16)(A) of the 

Act requires that the State plan provide 

that the designated State agency, prior 

to the adoption or amendment of any 

policies or procedures governing the 

provision of VR services under the State 

plan, must conduct public meetings 

throughout the State to provide the 

public, including individuals with 

disabilities, an opportunity to comment 

on the policies or procedures, and 

actively consult with agencies and 

organizations involved in the vocational 

rehabilitation of individuals with 

disabilities. This requirement remains 

unchanged by WIOA. 

Current Regulations: Current § 361.20 

implements section 101(a)(16)(A) of the 

Act. 

Proposed Regulations: We propose to 

clarify that the public participation 

requirements under current § 361.20 

pertain to the VR services portion of the 

Unified or Combined State Plan. We 

also propose to add paragraphs (a)(1) 

and (a)(2) to clarify through descriptive 

examples the distinction between 

substantive changes that would require 

the designated State agency to conduct 


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a public hearing, and administrative 

changes for which a public hearing need 

not be conducted. All other 

requirements for public participation as 

described in current § 361.20(b) through 

(e), to the extent they are consistent 

with public participation requirements 

proposed in the joint regulations, 

remain unchanged in the proposed 

regulations, except for technical 

modifications to the language required 

by WIOA. Public participation 

requirements related to Unified or 

Combined State Plans generally are 

addressed through the NPRM jointly 

published by the Departments of Labor 

and Education elsewhere in this issue of 

the Federal Register. 

Reasons: These proposed changes to 

current § 361.20 are necessary to reflect 

statutory changes that require what 

previously was a stand-alone VR State 

plan to be submitted as a VR services 

portion of the Unified or Combined 

State Plan under WIOA. Additionally, 

by clarifying what is meant by a 

substantive change—that is, a change 

that would have a direct impact on the 

nature and scope of the VR services 

provided to individuals with disabilities 

or the manner in which these 

individuals interact with the State VR 

program, as opposed to a change that is 

purely administrative or technical in 

nature—State VR agencies would better 

understand when they must conduct a 

public hearing, specific to the VR 

program. The ability to provide 

comments and input at public hearings 

is an important mechanism for 

strengthening the voice of community 

stakeholders and ensuring that any 

changes to the implementation of the 

VR services portion of the Unified or 

Combined State Plan reflect concerns 

and interests of those whom the 

program serves. 

Requirements Related to the Statewide 

Workforce Development System 

(§ 361.23) 

Statute: Section 121(b)(1)(B)(iv) of 

WIOA includes the VR program as a 

core partner of the workforce 

development system. 

Current Regulations: Current § 361.23 

outlines a VR program’s roles and 

responsibilities in the workforce 

investment system, as required under 

WIA. 

Proposed Regulations: We propose to 

amend current § 361.23(a) by crossreferencing to subpart F of part 361. We 

also propose to remove the remainder of 

this section because the substance of 

these requirements is contained in joint 

regulations developed by the 

Departments of Education and Labor. 

Reasons: The changes are necessary to 

implement amendments to title I of 

WIOA and ensure consistency with joint 

regulations proposed by the 

Departments of Education and Labor, 

which are published elsewhere in this 

issue of the Federal Register. We ask 

that you submit any comments 

regarding the VR program’s role in the 

one-stop delivery system in conjunction 

with related provisions contained in the 

joint proposed regulations, rather than 

in connection with this particular 

section of the proposed VR programspecific regulations. 

Cooperation and Coordination With 

Other Entities (§ 361.24) 

Statute: WIOA amends section 

101(a)(11) of the Act by expanding the 

scope of entities with which the DSU 

must collaborate and coordinate its 

activities under the VR program. The 

new entities include, among others, 

employers, non-educational agencies 

serving out-of-school youth, programs 

authorized under the Assistive 

Technology Act of 1998, the State 

agency administering the State 

Medicaid plan, the agency responsible 

for serving individuals with intellectual 

and/or developmental disabilities, 

agencies responsible for providing 

mental health services, and other 

agencies serving as employment 

networks under the Ticket to Work and 

Self-Sufficiency program. 

Current Regulations: Current § 361.24 

requires that the State plan include 

assurances and descriptions, as 

applicable, of the DSU’s interagency 

cooperation with various entities, but 

does not include the new entities 

required by the WIOA amendments 

since these are new statutory 

requirements. 

Proposed Regulations: We propose to 

amend § 361.24 to include the 

additional agencies and entities with 

which the DSU must coordinate its 

activities under the VR program, as 

required by section 101(a)(11) of the 

Act, as amended by WIOA. 

Reasons: The proposed changes are 

necessary to implement new statutory 

requirements regarding the DSU’s 

coordination with other entities. The 

changes are designed to ensure DSU 

collaboration and coordination with 

employers and State and Federal 

agencies to increase access by 

individuals with disabilities, especially 

youth and individuals with the most 

significant disabilities, to services and 

supports to assist them in achieving 

competitive integrated employment. 

Third-Party Cooperative Arrangement 

Requirements (§ 361.28) 

Statute: None. 

Current Regulations: Current § 361.28 

includes requirements related to thirdparty cooperative arrangements, a 

mechanism by which a DSU may work 

with another public agency to provide 

VR services. 

Proposed Regulations: We propose to 

amend § 361.28(a) by removing the 

words ‘‘administering’’ and 

‘‘furnishing’’ and providing more 

accurate descriptions of the cooperating 

agency’s responsibilities. Proposed 

§ 361.28(a) also would clarify that the 

non-Federal share provided by the 

cooperating agency must be consistent 

with the requirements in proposed 

§ 361.28(c). Proposed § 361.28(a)(4) and 

361.28(b) change references to 

‘‘cooperative programs’’ and 

‘‘cooperative agreements’’ to 

‘‘cooperative arrangements’’ to make the 

language consistent throughout this 

section. We propose to insert a new 

paragraph (c) to clarify the manner in 

which other public agencies may 

contribute toward the non-Federal share 

under a third-party cooperative 

arrangement. 

Reasons: With the exception of 

§ 361.28(c), the changes to this section 

are editorial and the minor clarifications 

would ensure consistent language and 

interpretation. Proposed § 361.28(c) 

would list the manner in which a State 

agency or a local public agency could 

provide part or all of the non-Federal 

share under a third-party cooperative 

arrangement. Under the proposed 

§ 361.28(c) the DSU could utilize cash 

transfers or certified personnel 

expenditures for the time cooperating 

agency staff spent providing direct VR 

services pursuant to a third-party 

cooperative arrangement to meet part or 

all of the non-Federal share. Given the 

prohibition in § 361.60(b)(2) against 

using third-party in-kind contributions 

for match purposes under the VR 

program, we have not included certified 

expenditures for equipment and 

supplies as an allowable source of 

match under the VR program. In so 

doing, we avoid potential third-party inkind contributions that could arise with 

such certified expenditures. 

Statewide Assessment; Estimates; State 

Goals and Priorities; Strategies; and 

Progress Reports (§ 361.29) 

Statute: Section 101(a)(15) of the Act, 

as amended by WIOA, makes several 

technical and conforming changes, as 

well as expands the scope of estimates 

that the DSUs must report and the areas 

of focus the States must consider in 


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conducting their triennial needs 

assessment. 

Section 101(a)(23) requires DSUs to 

assure that the State will submit to the 

Secretary reports required by section 

101(a)(15) at such time and in such 

manner as the Secretary may determine 

to be appropriate. This statutory 

requirement remains unchanged by 

WIOA. 

Current Regulations: Current § 361.29 

implements the requirements of section 

101(a)(15) of the Act, but does not 

include the new statutory requirements. 

The current regulations also require that 

the State submit reports regarding goals, 

strategies, and estimates annually. 

Proposed Regulations: We propose to 

amend current § 361.29 by requiring 

that reports and updates related to 

assessment, estimates, goals and 

priorities, and reports of progress, be 

submitted to the Secretary, in such time 

and such manner as determined by the 

Secretary, rather than annually. We also 

propose to amend the regulations to 

require DSUs to report estimates of the 

number of individuals not receiving 

services because of the implementation 

of an order of selection. We also propose 

to make several technical and 

conforming changes throughout. See 

related discussion of this section in the 

context of transition services later in 

this NPRM, for proposed changes 

related to students and youth in 

transition. 

Reasons: The proposed changes are 

necessary, in part, to implement the 

statutory amendments to section 

101(a)(15) of the Act made by WIOA. 

The proposed changes also would 

ensure consistency in the reporting 

requirements imposed throughout 

section 101(a) of the Act, as well as in 

title I of WIOA since the VR State plan 

will be incorporated into the State’s 

Unified or Combined State Plan as a 

portion of that plan. 

To date, we have collected the 

required information through the annual 

submission of the VR State plan (now 

known as the VR services portion of the 

Unified or Combined State Plan), rather 

than through the submission of separate 

reports. Because the VR services portion 

will be submitted with all other 

components of the Unified or Combined 

State Plan every four years with 

modifications submitted every two 

years, there would be no vehicle for the 

submission of these annual reports 

without imposing additional reporting 

requirements on the State separate from 

the State plan. 

By permitting the submission of the 

required information at a time and in a 

manner determined by the Secretary, 

rather than annually, the Secretary 

exercises the statutory flexibility to 

establish reporting requirements 

consistent with those for the VR services 

portion of the Unified or Combined 

State Plan under section 101(a)(1) of the 

Act, as amended by WIOA, and section 

102(c) of WIOA, and avoid any 

additional burden that would be 

imposed on DSUs through the 

submission of separate reports. 

Provision of Training and Services for 

Employers (§ 361.32) 

Statute: Section 109 of the Act, as 

amended by WIOA, expands the types 

of training, technical assistance, and 

other services DSUs may provide under 

the VR program, to employers, who 

have hired or are interested in hiring 

individuals with disabilities. In 

addition, WIOA repealed the Projects 

with Industry program, previously 

authorized at title VI, part A of the Act. 

Current Regulations: Current § 361.32 

implements requirements regarding 

coordination between the VR program 

and the Projects with Industry program. 

There are no current regulations that 

implement section 109 of the Act. 

Proposed Regulations: We propose to 

amend § 361.32 in its entirety by 

eliminating all requirements related to 

the Projects with Industry program since 

those requirements are no longer 

applicable. In its place, we propose to 

implement requirements regarding the 

types of activities DSUs may engage in 

with employers, pursuant to section 109 

of the Act. 

Reasons: The changes are necessary to 

implement new statutory requirements 

in section 109 of the Act, as amended 

by WIOA, as well as remove 

requirements that are no longer 

applicable to the VR program due to the 

repeal of the Projects with Industry 

program. Section 109 of the Act, as 

amended by WIOA, authorizes the DSU 

to expend VR funds for training and 

services for employers who are 

interested in hiring individuals with 

disabilities, thereby assisting those 

individuals in achieving competitive 

integrated employment. This training 

could assist employers in providing 

opportunities for work-based learning 

experiences; training employees who 

are individuals with disabilities; and 

promoting awareness of disabilityrelated obstacles to continued 

employment. 

The amendments made throughout 

WIOA place heightened emphasis on 

the collaboration between DSUs and 

employers to improve and maximize 

opportunities for individuals with 

disabilities, including those with the 

most significant disabilities, to achieve 

competitive integrated employment. 

Innovation and Expansion Activities 

(§ 361.35) 

Statute: Section 101(a)(18) of the Act 

sets forth requirements regarding 

innovation and expansion activities for 

DSUs. This statutory provision remains 

unchanged by WIOA. 

Current Regulations: Current § 361.35 

requires the State plan to assure that the 

State will reserve and use a portion of 

its VR funds to support, among other 

things, the resource plans for the State 

Rehabilitation Council and the 

Statewide Independent Living Council. 

Proposed Regulations: Proposed 

§ 361.35 would clarify that the State 

must reserve a portion of its VR program 

funds to support the resource plan for 

the Statewide Independent Living 

Council, but it may choose not to use 

these funds if the Statewide 

Independent Living Council and the 

State decide to use other available 

resources to fund the resource plan for 

the Statewide Independent Living 

Council. 

Reasons: This proposed change is 

consistent with the Department’s 

longstanding interpretation of section 

101(a)(18) of the Act and current 

§ 361.35. In the case of the State 

Rehabilitation Council, there is no other 

funding source available under the Act 

to support its resource plan. The funds 

for the State Rehabilitation Council 

must come from this section. On the 

other hand, the Statewide Independent 

Living Council has multiple funding 

sources that may be used to support the 

resource plan, including independent 

living funds under title VII, part B, of 

the Act; State-appropriated independent 

living funds; and other public and 

private sources, to the extent allowable 

by those sources. Therefore, our 

interpretation of the requirement has 

been that the State and the Statewide 

Independent Living Council may decide 

in the resource plan of the Statewide 

Independent Living Council to use 

funds under this section, but do not 

have to use these funds. They can use 

other sources of available funding to 

fund the Statewide Independent Living 

Council resource plan. This 

interpretation would have minimal 

impact on States since not all States use 

innovation and expansion funds to 

support the resource plan of the 

Statewide Independent Living Council. 

Ability To Serve All Eligible Individuals; 

Order of Selection for Services (§ 361.36) 

Statute: Section 101(a)(5) of the Act, 

as amended by WIOA, permits DSUs to 

serve eligible individuals who require 

specific services or equipment to 

maintain employment, regardless of 


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whether they are currently receiving VR 

services. The DSUs may serve these 

individuals regardless of any order of 

selection the State has established. 

Current Regulations: Although current 

§ 361.36(a)(3) sets forth criteria a State 

must follow in establishing an order of 

selection, there is no mention of this 

particular discretionary exemption 

because this is a new statutory 

requirement. 

Proposed Regulations: We propose to 

amend current § 361.36(a)(3) by adding 

a new paragraph (v) that would require 

DSUs implementing an order of 

selection to indicate in the VR services 

portion of the Unified or Combined 

State Plan if they have elected to serve 

eligible individuals in need of specific 

services or equipment for the purpose of 

maintaining employment, regardless of 

their assignment to a priority category in 

the State’s order of selection. 

Reasons: This change is necessary to 

implement the amendments to the Act. 

Prior to the enactment of WIOA, DSUs 

who were on an order of selection were 

not permitted to serve eligible 

individuals who did not meet the 

criteria of that order, which was 

designed to ensure that individuals with 

the most significant disabilities received 

a priority for services when resources 

were limited. Section 101(a)(5) of the 

Act, as amended by WIOA, allows 

greater flexibility by permitting DSUs to 

serve eligible individuals, regardless of 

any order of selection that has been 

established by the State, if those 

individuals require specific services or 

equipment to maintain employment 

(e.g., because the individual’s disability 

has progressed or the individual’s job 

duties have changed). 

This statutory change, as well as the 

proposed regulatory change, is 

significant because, in effect, it creates 

an exemption from order of selection for 

eligible individuals who need a specific 

service or equipment in order to 

maintain employment. Prior to the 

passage of WIOA, these individuals 

would have been placed in the order, 

depending on the severity of their 

disability, which could have resulted in 

a placement on a waiting list. With the 

proposed regulatory change, DSUs may, 

at their discretion, elect to serve these 

individuals outside of the order of 

selection criteria that are otherwise in 

place in order to serve these individuals 

who could be at risk of losing 

employment if such services or 

equipment is not received. In this way, 

DSUs could assist these individuals, 

including those with significant 

disabilities, to maintain economic selfsufficiency, thereby reducing their 

potential need for publicly-funded 

services or benefits. 

We want to make four points clear. 

First, proposed § 361.36(a)(3)(v) is 

discretionary. DSUs would have the 

ability to serve these individuals outside 

of the established order and should 

consider doing so if financial and staff 

resources are sufficient. Second, if a 

DSU elects to do so, it must, in 

accordance with proposed 

§ 361.36(a)(3)(v), its plans in the VR 

services portion of the Unified or 

Combined State Plan before 

implementing this authority. Third, the 

services and equipment provided under 

this authority must be consistent with 

an individual’s individualized plan for 

employment, in the same manner as any 

other service or equipment provided 

under the VR program. Finally, 

proposed § 361.36(a)(3)(v) would apply 

to those specific services or equipment 

that the individual needs to maintain 

employment, not to other services the 

individual may need for other purposes. 

Reports; Evaluation Standards and 

Performance Indicators (§ 361.40) 

Statute: Section 101(a)(10)(C) of the 

Act, as amended by WIOA, expands the 

data that DSUs must report to include 

data about: Students with disabilities 

who are receiving pre-employment 

transition services; individuals with 

open service records and the types of 

services they are receiving; individuals 

referred to the VR program by one-stop 

operators; and individuals referred to 

these one-stop operators by DSUs. In 

addition, section 106 of the Act, as 

amended by WIOA, requires the VR 

program to be subject to the common 

performance accountability measures, 

established in section 116 of WIOA, 

applicable to core programs of the 

workforce development system. 

Current Regulations: Current § 361.40 

addresses the data that a DSU must 

report, but does not include the new 

data elements since these are new 

statutory requirements. Current 

§§ 361.81 through 361.89 implement 

current evaluation standards and 

performance indicators applicable to the 

VR program. These standards and 

indicators do not incorporate the 

common performance measures since 

these are new statutory requirements. 

Proposed Regulations: We propose to 

reorganize current § 361.40 into two 

paragraphs. Proposed paragraph (a) 

would retain all existing provisions in 

current § 361.40, as well as incorporate 

requirements regarding new VR-specific 

data related to individuals with open 

service records and the types of services 

they are receiving; students with 

disabilities receiving pre-employment 

transition services; and individuals 

referred to the State VR program by onestop operators and those referred to 

these one-stop operators by the State VR 

program. 

In proposed paragraph (b), we provide 

a cross-reference to subpart E of this 

part, which will include the joint 

regulations implementing common 

performance measures. In so doing, we 

also propose to remove current 

§§ 361.80 through 361.89, as the current 

standards and indicators are no longer 

applicable to the VR program. 

Reasons: The proposed changes to 

current § 361.40 are necessary to 

implement amendments to the Act 

made by WIOA. Specifically, we 

include VR-specific data regarding, 

among others, individuals with open 

service records and the types of services 

they are receiving, as well as students 

with disabilities who are receiving preemployment transition services, to 

ensure that the Secretary has the 

information needed to assess the 

performance of the VR program. 

It is significant to note that the VR 

program will no longer be subject to its 

own set of performance standards and 

indicators established by the 

Department. Section 106 of the Act 

requires that the VR program comply 

with the common performance 

accountability measures established 

under section 116 of WIOA, which 

apply to all core programs of the 

workforce development system. To that 

end, the Departments of Labor and 

Education have developed proposed 

joint regulations to implement these 

requirements. The proposed joint 

regulations regarding the performance 

accountability system, which will be 

incorporated in subpart E of this part, 

will be presented in a separate NPRM 

published elsewhere in this issue of the 

Federal Register. Given this significant 

statutory change in section 106 of the 

Act, we have determined that most of 

the provisions we had in current 

§§ 361.80 through 361.89 are no longer 

applicable and, therefore, we propose to 

remove them. We ask that you provide 

only comments specific to the VR 

program with respect to this section. 

Any comments regarding the common 

performance measures or data 

requirement, applicable to all core 

programs, should be provided in 

connection with the relevant provisions 

of the joint proposed regulations. 

Assessment for Determining Eligibility 

and Priority for Services (§ 361.42) 

Eligibility Criteria 

Statute: Section 102(a)(1) of the Act, 

as amended by WIOA, makes clear that 


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an individual with a disability, whose 

physical or mental impairment 

constitutes a substantial impediment to 

employment, may be determined 

eligible for VR services if he or she 

requires services to advance in 

employment. 

Current Regulations: Current 

§ 361.42(a)(1)(iii) specifies that the 

applicant may be determined eligible if 

he or she meets all other eligibility 

criteria and requires VR services to 

prepare for, secure, retain, or regain 

employment. Current regulations do not 

reference advancing in employment 

since this is a new statutory 

requirement. 

Proposed Regulations: We propose to 

amend current § 361.42(a)(1)(iii) to 

clarify that an applicant, who meets all 

other eligibility criteria, may be 

determined eligible if he or she requires 

VR services to advance in employment. 

We also propose to clarify in current 

§ 361.42(c)(2) that a DSU must not 

consider an applicant’s employment 

history, current employment status, 

level of education or educational 

credentials when determining eligibility 

for services. 

Reasons: The proposed changes are 

necessary, in part, to implement 

statutory amendments to section 

102(a)(1) of the Act made by WIOA. The 

proposed changes also would ensure 

that individuals with disabilities are 

able to obtain through the VR program 

the skills necessary to engage in the 

high demand jobs available in today’s 

economy. It has been the Department’s 

long-standing policy that the VR 

program is not intended solely to place 

individuals with disabilities in entrylevel jobs, but rather to assist them to 

obtain employment that is appropriate 

given their unique strengths, resources, 

priorities, concerns, abilities, 

capabilities, and informed choice. The 

extent to which DSUs should assist 

eligible individuals to advance in their 

careers through the provision of VR 

services depends upon whether the 

individual has achieved employment 

that is consistent with this standard. 

Furthermore, the proposed additional 

factors that a DSU must not consider 

when determining an applicant’s 

eligibility for VR services in proposed 

§ 361.42(c)(2) would be consistent with 

longstanding policy. By specifically 

proposing the additional factors related 

to employment and education history in 

the regulation, we reinforce the 

requirement in section 102(a)(1)(iii) of 

the Act and proposed § 361.42(a)(1)(iii). 

Residency 

Statute: Section 101(a)(12) of the Act 

requires that the State plan will include 

an assurance that the State will not 

impose a residence requirement that 

excludes from services provided under 

the plan any individual who is present 

in the State. This provision remains 

unchanged by WIOA. 

Current Regulations: Current 

§ 361.42(c)(1) requires that the State 

plan must assure that the State unit will 

not impose, as part of determining an 

applicant’s eligibility for VR services, a 

duration of residence requirement that 

excludes from services any applicant 

who is present in the State. 

Proposed Regulations: We propose to 

amend current § 361.42(c)(1) to clarify 

that a DSU must not require the 

applicant to demonstrate a presence in 

the State by the production of 

documentation that would, under State 

or local law, or practical circumstances, 

result in a duration of residency. 

Reasons: The proposed clarification 

in § 361.42(c)(1) is consistent with our 

long-standing interpretation of this 

statutory requirement, as expressed in 

monitoring reports and other guidance. 

Many State VR agencies require 

individuals applying for VR services to 

provide documents that substantiate 

that the individual is present in the 

State and, hence, available to participate 

in the eligibility determination process 

and to receive VR services. Some forms 

of documentation, however, such as a 

driver’s license or voter registration 

card, may require a significant amount 

of time to obtain. Moreover, States or 

local jurisdictions may impose 

durational requirements prior to the 

issuance of some forms of 

documentation or identification. By 

proposing these changes, we would 

clarify that the requirement of such 

forms of documentation to demonstrate 

presence in the State constitutes a de 

facto duration requirement, which is 

prohibited by the Act. Although 

documents that take time to obtain may 

be accepted as proof of an applicant’s 

presence in the State if available at the 

time of application, the DSU must 

permit the use of other documentation 

that includes sufficient information to 

demonstrate presence in the State, such 

as documentation that includes a 

residential address in the State. 

Extended Evaluation 

Statute: WIOA amends section 

102(a)(2)(B) of the Act by removing the 

limited exception to trial work 

experiences, whereby VR agencies made 

extended evaluations available to 

applicants, prior to determining that an 

individual is unable to benefit from VR 

services due to the severity of the 

individual’s disability and, thus, is 

ineligible for VR services. Although the 

term ‘‘extended evaluation’’ was not 

referenced in the Act, this is the term 

used in current regulation to describe 

the process by which the DSUs assess 

an individual’s ability to benefit from 

VR services due to the severity of 

disability, when the individual, under 

limited circumstances, is unable to 

participate in trial work experiences. 

Current Regulations: Current 

§ 361.42(f) permits, in limited 

circumstances, the provision of 

extended evaluations to individuals 

with disabilities who cannot take 

advantage of trial work experiences, or 

for whom trial work experiences have 

been exhausted. 

Current § 361.41(b)(1)(ii) permits the 

exploration of an individual’s abilities, 

capabilities, and capacity to perform in 

work situations in accordance with 

§ 361.42(e) or, if appropriate, an 

extended evaluation in accordance with 

§ 361.42(f). 

Proposed Regulations: We propose to 

remove paragraph (f) from current 

§ 361.42 and redesignate (g) as (f). 

Proposed § 361.41(b)(1)(ii) would 

remove reference to extended evaluation 

and only permit an exploration of the 

individual’s abilities, capabilities, and 

capacity to perform in work situations 

carried out in accordance with current 

§ 361.42(e). 

Reasons: These changes are necessary 

to implement the amendments to 

section 102(a)(2)(B) of the Act made by 

WIOA. The proposed changes also 

would ensure that before a DSU make 

an ineligibility determination, it must 

conduct a full assessment of the 

capacity of the applicant to perform in 

realistic work settings, without the 

exception of extended evaluations. 

Development of the Individualized Plan 

for Employment (§ 361.45) 

Timeframe for Completing the 

Individualized Plan for Employment 

Statute: Section 102(b)(3)(F) of the 

Act, as amended by WIOA, mandates 

that the individualized plan for 

employment be developed as soon as 

possible but no later than 90 days after 

the date of determination of eligibility, 

unless the DSU and the eligible 

individual agree to an extension of that 

timeframe. 

Current Regulations: Current 

§ 361.45(e) requires the DSU to establish 

and implement standards for the prompt 

development of individualized plans for 

employment for eligible individuals; 

however, the 90-day timeframe is not 

included because this is a new statutory 

requirement. 

Proposed Regulations: We propose to 

amend current § 361.45(e) to require 


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that the DSU develop the individualized 

plan for employment for each eligible 

individual as soon as possible, but no 

later than 90 days following 

determination of eligibility, unless the 

DSU and the individual agree to a 

specific extension of that timeframe. 

Reasons: This change is necessary to 

implement the statutory requirement 

made by WIOA that VR agencies 

develop the individualized plan for 

employment within 90 days following 

determination of eligibility. The intent 

is to move all eligible individuals 

through the VR process with minimal 

delay in order to efficiently and 

effectively serve these individuals, 

resulting in the achievement of 

employment outcomes in competitive 

integrated employment. While the 

majority of DSUs have already adopted 

the 90-day timeframe, some DSUs have 

adopted extended timeframes that 

impede the efficient and effective 

movement of individuals through the 

VR process, therefore, resulting in the 

delay of services, and ultimately 

delaying the achievement of 

employment outcomes. Additionally, 

some DSUs have established interim 

steps or plans prior to the development 

of the individualized plan for 

employment or have adopted longer 

timeframes for transition-age youth or 

other specific populations. The 

establishment of a 90-day timeframe by 

WIOA ensures consistency across the 

VR program nationally and sets the 

expectation that all eligible individuals 

receive timely services through an 

effective and efficient VR program with 

an outcome of improved VR agency 

performance and resulting in 

employment outcomes for individuals 

with disabilities. 

Options for Developing the 

Individualized Plan for Employment 

Statute: WIOA amends section 

102(b)(1)(A) of the Act by clarifying that 

the DSU must provide eligible 

individuals with information regarding 

the availability of assistance in 

developing all or part of the 

individualized plan for employment 

from disability advocacy organizations. 

In addition, WIOA amends section 

102(b) to require a DSU to provide to 

eligible individuals entitled to Social 

Security benefits under titles II or XVI 

of the Social Security Act, general 

information on additional supports, 

such as assistance with benefits 

planning. 

Current Regulations: Current 

§ 361.45(c)(1) requires that the DSU 

provide eligible individuals information 

regarding the options for developing the 

individualized plan for employment, 

but does not reference disability 

advocacy organizations since this is a 

new statutory requirement. Current 

§ 361.45(c)(2) requires the DSU to 

provide additional information to 

eligible individuals relevant to the 

development of the individualized plan 

for employment, but does not mention 

benefits planning or other information 

specific to Social Security beneficiaries 

with disabilities since this is a new 

statutory requirement. 

Proposed Regulations: We propose to 

amend current § 361.45(c)(1) by 

requiring a DSU to provide eligible 

individuals information about the 

option of requesting assistance from a 

disability advocacy organization when 

developing the individualized plan for 

employment. We also propose to amend 

current § 361.45(c)(2) by adding a new 

paragraph (v) that would require a DSU 

to provide eligible individuals entitled 

to Social Security benefits under titles II 

or XVI of the Social Security Act 

information on assistance and supports 

available to individuals desiring to enter 

the workforce, including benefits 

planning. 

Reasons: The proposed changes are 

necessary to implement the 

amendments to section 102(b) of the Act 

made by WIOA. The inclusion of 

disability advocacy groups as a specific 

source of assistance, as appropriate, for 

eligible individuals in the development 

of the individualized plan for 

employment supports, and 

acknowledges the important role that 

these groups may play in mentoring an 

eligible individual through the VR 

process and in designing the plan of 

services that will successfully lead to an 

employment outcome. In coordination 

with the expertise of the qualified 

rehabilitation counselor, the experience 

of advocacy groups may lend a 

perspective and understanding of the 

disability-related needs, responsibilities, 

and services that are required to achieve 

the individual’s employment goal. The 

inclusion of advocacy groups as a 

resource also recognizes and 

emphasizes the importance of selfdetermination, empowerment, and selfadvocacy as cornerstones in 

rehabilitation. 

By requiring that a DSU provide 

eligible individuals entitled to Social 

Security benefits under titles II or XVI 

of the Social Security Act with 

information on benefits planning, we 

intend that the individuals understand 

the implications of employment for 

continued receipt of their benefits so 

that they can make a fully informed 

choice of an employment goal. 

Content of the Individualized Plan for 

Employment (§ 361.46) 

Statute: WIOA amends section 

102(b)(4) of the Act to require that the 

description of the specific employment 

goal chosen by the eligible individual, 

required as a mandatory component of 

the individualized plan for 

employment, be consistent with the 

general goal of competitive integrated 

employment. 

Current Regulations: Current 

§ 361.46(a)(1) establishes the content 

requirements for the individualized 

plan for employment and requires that 

the plan include a specific employment 

goal based upon the unique strengths, 

resources, priorities, concerns, abilities, 

capabilities, interests, and informed 

choice of the eligible individual. The 

regulation does not contain the new 

statutory requirement. 

Proposed Regulations: We propose to 

amend current § 361.46(a)(1) to require 

that the vocational goal selected by the 

individual in accordance with this 

section be consistent with the general 

goal of competitive integrated 

employment. 

Reasons: The proposed revision to 

current § 361.46(a)(1) is necessary to 

implement the statutory requirements 

under WIOA, and is consistent with the 

purpose of the VR program, which is to 

assist individuals with disabilities, 

including those with significant 

disabilities, to prepare for and engage in 

competitive integrated employment. 

Transition of Students and Youth With 

Disabilities 

The Act, as amended by WIOA, places 

heightened emphasis on the provision 

of services to students and youth with 

disabilities to ensure that they have 

meaningful opportunities to receive the 

training and other services they need to 

achieve employment outcomes in 

competitive integrated employment. To 

that end, the Act expands not only the 

population of students with disabilities 

who may receive services but also the 

kinds of services that the VR agencies 

may provide to youth and students with 

disabilities who are transitioning from 

secondary school to postsecondary 

education and employment. 

Most notably, section 110(d) of the 

Act, as amended by WIOA, requires 

States to reserve 15 percent of their VR 

allotment to provide pre-employment 

transition services to students with 

disabilities who are eligible or 

potentially eligible for VR services. 

Section 113 of the Act, as added by 

WIOA, outlines the services that must 

be provided with these reserved funds. 

These services are designed to be an 

early start at job exploration. 


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With the addition of these preemployment transition services, and 

expansion of services to youth, the VR 

program can be characterized as 

providing a continuum of VR services, 

especially for students and youth with 

disabilities. Specifically, it can provide 

pre-employment transition services to 

any student with a disability who needs 

these services, regardless of whether the 

student has applied for or been 

determined eligible for VR services. In 

addition, section 103(b) of the Act 

permits the VR agency to provide 

transition services to groups of youth 

with disabilities, regardless of whether 

they have applied for or been 

determined eligible for services. If either 

a student or youth with a disability 

requires more intensive services, he or 

she would apply for VR services. Once 

determined eligible, an individualized 

plan for employment would be 

developed, which would outline the 

specific services that he or she may 

need in order to achieve an employment 

outcome. In sum, the VR program 

provides a range of services, from most 

basic to the most individualized and 

intensive service, thereby meeting the 

evolving needs of a student or a youth 

with a disability who is transitioning 

from school to post-school life. 

This portion of the NPRM will 

describe the key regulatory changes we 

propose to implement statutory 

amendments related to transition 

services. The major substantive changes 

relate to certain key definitions and the 

provision of pre-employment transition 

services and transition services to 

groups of youth with disabilities. 

Throughout this section of the NPRM, 

we will provide additional guidance for 

those areas that we expect will generate 

significant comments. The proposed 

changes are presented by relevant 

section of the regulations. 

Transition-Related Definitions 

(§ 361.5(c)) 

Statute: Section 7 of the Act includes 

several new definitions related to 

transition services. In particular, section 

7 adds new definitions for the terms: 

‘‘pre-employment transition services’’ in 

section 7(30); ‘‘student with a 

disability’’ in section 7(37); and ‘‘youth 

with a disability’’ in section 7(42). 

WIOA also deleted the term, ‘‘transition 

services,’’ which had been defined 

previously in section 7(37). 

Current Regulations: Current 

§ 361.5(b) contains definitions for terms 

relevant to the VR program, but does not 

define ‘‘pre-employment transition 

services,’’ student with a disability, or 

youth with a disability since these are 

new statutory terms. 

Proposed Regulations: We propose to 

add new definitions to current 

§ 361.5(c), as redesignated elsewhere in 

this NPRM, for ‘‘pre-employment 

transition services’’ in proposed 

§ 361.5(c)(42); ‘‘student with a 

disability’’ in proposed § 361.5(c)(51); 

and ‘‘youth with a disability’’ in 

proposed § 361.5(c)(59). We also 

propose to retain the current definition 

for ‘‘transition services’’ in 

§ 361.5(c)(55), despite its removal from 

the statute as a defined term, since it is 

still used throughout the Act and the 

regulations in part 361. In retaining this 

definition, we propose to clarify that 

this particular service is available to 

both students and youth with 

disabilities. 

Reasons: These changes are necessary 

to implement the amendments to the 

Act. Given the heightened emphasis 

throughout the Act on students and 

youth with disabilities, especially with 

regard to the provision of preemployment transition services and 

other transition-related services, it is 

essential that stakeholders understand 

the definitions for these terms and how 

they can be distinguished from other 

terms commonly used. 

For example, pre-employment 

transition services are those specific 

services specified in section 113 of the 

Act and implemented in proposed 

§ 361.48(a). These services, paid for 

with a percentage of funds reserved 

from the State’s VR allotment, are 

available only to those individuals who 

meet the definition of a student with a 

disability. On the other hand, other 

transition-related services, including 

those that could be similar to preemployment transition services, may be 

provided to students or youth with 

disabilities and do not require a specific 

reservation of funds (e.g., either as an 

individualized VR service pursuant to 

section 103(a) or as a service to groups 

pursuant to section 103(b) of the Act). 

It also is important to distinguish 

between the terms ‘‘student with a 

disability’’ and ‘‘youth with a 

disability’’ because, as just described, 

different services are available for 

different populations. A student with a 

disability is an individual with a 

disability in school who is (1) 16 years 

old, or younger, if determined 

appropriate under the Individuals with 

Disabilities Education Act (IDEA), 

unless the State elects to provide preemployment transition services at a 

younger age, and no older than 21, 

unless the State provides transition 

services under IDEA at an older age; and 

(2) receiving transition services 

pursuant to IDEA, or is a student who 

is an individual with a disability for the 

purposes of section 504 of the Act (29 

U.S.C. 794). However, it is important to 

note that we have interpreted a student 

with a disability, given the plain 

meaning of the statutory definition, as 

not including an individual with a 

disability in postsecondary education. A 

youth with a disability, on the other 

hand, is anyone who has a disability as 

defined in section 7(20) of the Act and 

is aged 14 to 24, regardless of whether 

they are in school. The terms ‘‘student 

with a disability’’ and ‘‘youth with a 

disability’’ do not affect coverage under 

section 504. All individuals with 

disabilities regardless of whether they 

meet the definition of ‘‘student with a 

disability’’ and ‘‘youth with a 

disability’’ continue to be covered under 

section 504. 

Therefore, all students with 

disabilities would meet the definition of 

a youth with a disability, but not all 

youth with disabilities would satisfy the 

definition of a student with a disability. 

For example, an 18-year-old individual 

with a disability who is in secondary 

school and receiving services under 

IDEA meets both the definition of a 

student with a disability as well as the 

definition of a youth with a disability. 

However, an 18-year-old with a 

disability who is not in school would 

meet only the definition of a youth with 

a disability. 

The distinctions between these two 

terms are critical for purposes of the 

various authorities for providing 

transition-related services. For example, 

pre-employment transition services 

provided under proposed § 361.48(a) are 

only available to students with 

disabilities; whereas transition services 

provided for the benefit of a group of 

individuals may be provided to both 

students and youth with disabilities 

under proposed § 361.49(a). 

Despite the removal of the definition 

of ‘‘transition services’’ from the Act, we 

believe it is important to retain this 

definition in part 361 given that the 

term continues to be used throughout 

the Act and these regulations. Therefore, 

we propose to retain the definition of 

‘‘transition services.’’ However, we 

propose to clarify that this service is 

available to both students and youth 

with disabilities in order to be 

consistent with proposed regulations in 

§§ 361.48(b) and 361.49(a) governing the 

provision of transition services. 

Specific guidance about these terms 

and how they relate to various 

transition-related services will be 

provided in this NPRM in conjunction 

with the relevant proposed regulation. 


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Coordination With Education Officials 

(§ 361.22) 

Statute: Section 101(a)(11)(D) of the 

Act, as amended by WIOA, clarifies two 

points: (1) Interagency coordination 

between the DSUs and educational 

agencies must include coordination 

regarding the provision of preemployment transition services; and (2) 

DSUs may provide consultation and 

technical assistance to education 

officials through alternative means, such 

as conference calls and video 

conferences. This section also includes 

other technical changes. 

In addition, WIOA adds a new section 

101(c) to the Act that makes clear that 

nothing in the Act is to be construed as 

reducing the responsibility of the local 

educational agencies or any other 

agencies under IDEA to provide or pay 

for any transition services that are also 

considered to be special education or 

related services necessary for providing 

a free appropriate public education to 

students with disabilities. 

Finally, section 511 of the Act, as 

amended by WIOA, imposes several 

requirements, particularly related to 

documentation of services for DSUs and 

State and local educational agencies 

with regard to youth with disabilities 

seeking subminimum wage 

employment. Unlike the rest of the Act, 

which took effect upon enactment, 

section 511 does not take effect until 

July 22, 2016. 

Current Regulations: Current § 361.22 

requires VR agencies to develop policies 

and procedures for coordinating with 

education officials to facilitate the 

transition of students with disabilities 

from education services to the provision 

of VR services. However, current 

regulations do not reference preemployment transition services or the 

option of providing consultation 

services through alternative means since 

these are new statutory requirements. 

Current regulations also do not 

reference the statutory construction 

clause or the statutory requirements 

contained in section 511, as these are 

new statutory requirements. 

Proposed Regulations: We propose to 

amend current § 361.22(a) to incorporate 

reference to pre-employment transition 

services as an area that must be 

included during inter-agency 

coordination of transition services. 

We propose to amend current 

§ 361.22(b)(1) to clarify that VR agencies 

may use alternative means, such as 

video conferences and conference calls, 

for providing consultation and technical 

assistance to education officials. We 

also propose to amend current 

§ 361.22(b) by adding new clauses (5) 

and (6) to incorporate, by reference, 

certain requirements from section 511 

into the formal interagency agreement 

between the DSU and the State 

educational agency. 

Finally, we propose to add a new 

paragraph (c) under § 361.22 to 

incorporate the construction clause in 

section 101(c) of the Act. 

We also propose other technical or 

conforming changes throughout this 

section. 

Reasons: The proposed changes to 

current § 361.22 are necessary to 

implement the amendments to the Act 

made by WIOA. While most of the 

proposed changes are self-explanatory, 

we believe additional guidance is 

necessary to clarify a few of the 

proposed provisions. 

First, section 511 of the Act, as added 

by WIOA, imposes certain requirements 

on DSUs and State and local 

educational agencies with regard to 

youth with disabilities seeking 

subminimum wage employment. 

Specifically, DSUs and local 

educational agencies must provide these 

youth with disabilities documentation 

demonstrating that the youth completed 

certain activities, such as receipt of 

transition services under IDEA and preemployment transition services under 

the VR program, as applicable. Section 

511 also requires the DSU, in 

consultation with the State educational 

agency, to develop a process, or utilize 

an existing process, to document 

completion by youth with disabilities of 

the required activities, as applicable, 

under section 511. We believe the 

formal interagency agreement that is 

required by section 101(a)(11)(D) of the 

Act, and current § 361.22(b) is the 

appropriate mechanism for ensuring the 

consultation necessary to develop and 

implement the documentation process 

required by section 511 and 34 CFR 

397.10. 

Second, section 511(b)(2) of the Act 

prohibits a State or local educational 

agency from entering into a contract or 

other arrangement with an entity for 

purposes of operating a program in 

which youth with disabilities are 

employed at subminimum wage. Again, 

we believe the formal interagency 

agreement, required by section 

101(a)(11)(D) of the Act, and current 

§ 361.22(b), between the State 

educational agency and the DSU, is the 

appropriate mechanism whereby State 

and local educational agencies will 

assure that they will comply with the 

prohibition imposed by section 

511(b)(2) of the Act and proposed 34 

CFR 397.31. We believe that 

incorporating both of these 

requirements from section 511, and 

proposed part 397, into an existing 

formal interagency agreement will 

reduce burden on the States so new 

mechanisms for requirements are 

unnecessary. 

Third, we want to provide additional 

clarification regarding proposed 

§ 361.22(c) given questions that have 

arisen over the years as to which entity, 

the local educational agency or DSU, is 

responsible for providing transition 

services to students with disabilities 

(who are also VR consumers) when such 

services fall under the purview of both 

entities. The following examples 

illustrate the types of scenarios that 

have been at the heart of questions 

posed by DSUs in the past: 

1. A VR-eligible student who is blind 

is participating in a work-experience 

placement after school hours as part of 

her individualized education program. 

Because that activity takes place in a 

location outside of school, the student 

needs travel training in order to travel 

independently from school to work and 

then home. 

2. A VR-eligible student is enrolled in 

an apprenticeship program in 

construction trades as part of his 

individualized education program 

under IDEA. The program requires the 

student to have special gloves, clothing, 

equipment, and footwear to attend the 

program. 

3. A VR-eligible student is 

participating in a work experience 

activity during school hours as part of 

her individualized education program. 

The school has arranged for several 

IDEA-eligible students to participate in 

this same work activity and is providing 

a school bus to transport the IDEAeligible students to and from the 

worksite. The VR-eligible student needs 

transportation to the worksite and a 

uniform. 

While neither the Act nor IDEA is 

explicit as to which entity, the VR 

agency or the local education agency, is 

financially responsible for providing 

transition services, which are not 

considered solely special education or 

related services under IDEA, both 

proposed § 361.22(c) and current 34 

CFR 300.324(c)(2)) make clear that 

neither the local educational agency nor 

the VR agency may shift the burden for 

providing a service, for which it 

otherwise would be responsible, to the 

other entity. We want to make clear that 

the Act and IDEA, along with their 

implementing regulations in proposed 

§ 361.22(c) and 34 CFR 300.324(c)(2), 

are to be read in concert. 

Therefore, we believe decisions 

related to which entity will be 

responsible for providing transition or 

pre-employment transition services that 


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can be considered both a special 

education and a VR service must be 

made at the State and local level as part 

of the collaboration between the VR 

agencies, State educational agencies, 

and local educational agencies. This 

coordination and collaboration is 

crucial to successful transition planning 

and service delivery. Both the IDEA and 

the Rehabilitation Act require State 

educational agencies and VR agencies to 

plan and coordinate transition services 

for students with disabilities. This 

occurs through an interagency 

agreement or other mechanism for 

interagency coordination, such as 

described in section 612(a)(12) of IDEA 

(20 U.S.C. 1412(a)(12))). Coordination, 

including clearly articulated roles and 

responsibilities for the provision of 

transition services and for activities 

under section 511 of the Act, as well as 

mechanisms to resolve disputes 

between the State educational agencies 

and the VR agencies ensures a seamless 

delivery of transition services that 

enable eligible students with disabilities 

to make a smooth transition from school 

to post-school education and 

employment. Moreover, under IDEA, 

this interagency coordination may be 

necessary to ensure the provision of 

transition services that are necessary for 

the provision of a free appropriate 

public education to students with 

disabilities (see section 612(a)(12) of 

IDEA and 34 CFR 300.154). States have 

the flexibility to include local 

educational agencies as parties to the 

State-level agreement. 

Since the ultimate decisions related to 

financial responsibility for the provision 

of transition services must be 

established at the State and local level 

during the collaboration and 

coordination of transition and preemployment transition services, a 

State’s formal interagency agreement or 

other mechanism for interagency 

coordination can provide a foundation 

for addressing these issues by including 

criteria to be used by the VR agencies 

and local educational agencies when 

considering and assigning the financial 

responsibility of each agency for the 

provision of transition services to 

students with disabilities on an 

individualized basis. For example, the 

criteria could include: 

1. The purpose of the service—Is it 

related more to an employment outcome 

or education (i.e., is it considered a 

special education or related service (e.g., 

rehabilitation counseling that is 

necessary for the provision of a free 

appropriate public education))? 

2. Customary Services—Is the service 

one that the school customarily 

provides under IDEA part B? For 

example, if the school ordinarily 

provides job exploration counseling to 

its eligible students with disabilities, the 

mere fact that such a service is now 

authorized under the Rehabilitation Act 

as a pre-employment transition service 

does not mean the school should cease 

providing that service and refer those 

students to the VR program. 

3. Eligibility—Is the student with a 

disability eligible for transition services 

under IDEA? As stated earlier, the 

definition of a ‘‘student with a 

disability,’’ for purposes of the VR 

program, is broader than that under 

IDEA because the definition in the 

Rehabilitation Act includes those 

students who are individuals with a 

disability under section 504 of the 

Rehabilitation Act. It is possible that 

these students do not have an 

individualized education program 

under IDEA and, therefore, would not 

be eligible for or receiving special 

education and related services under 

IDEA. As a result, VR agencies are 

authorized to provide transition services 

under the VR program to a broader 

population than local educational 

agencies are authorized to provide 

under IDEA. 

We believe that criteria such as these 

could be beneficial as DSUs and local 

educational agencies and State 

educational agencies collaborate and 

coordinate the provision of transition 

services, including pre-employment 

transition services to students with 

disabilities, and resolve disputes related 

to the provision of these services. 

Cooperation and Coordination With 

Other Entities (§ 361.24) 

Statute: Section 101(a)(11) of the Act 

makes several changes that highlight the 

importance of transition and other 

matters affecting students and youth 

with disabilities with regard to the 

coordination of services between the VR 

program and other non-educational 

programs. 

Current Regulations: Current 

regulations in § 361.24 address only the 

cooperation and coordination between 

the State VR agency and Federal, State 

and local agencies that are not carrying 

out activities through the workforce 

development system. Current 

regulations do not address the 

coordination that must occur with the 

section 121 projects in a State, if 

applicable, with regard to the provision 

of pre-employment transition services or 

non-educational agencies serving out-ofschool youth because these are new 

statutory requirements. 

Proposed Regulations: Proposed 

§ 361.24(a) would incorporate noneducational agencies serving out-ofschool youth as another entity with 

which the VR agency must coordinate. 

We also propose to amend current 

§ 361.24(c) and (d), which govern 

coordination between the DSUs and 

employers and section 121 projects, 

respectively, to include transition 

services among the matters that must be 

included in coordination efforts. 

Reasons: These changes are necessary 

to implement the amendments to the 

Act made by WIOA, all of which are 

designed to improve relationships and 

coordination between the VR agencies, 

employers, and all other agencies (e.g., 

workforce development, child welfare 

and juvenile justice agencies) serving 

individuals with disabilities, especially 

youth with disabilities, to ensure they 

have meaningful opportunities to 

achieve employment outcomes in 

competitive integrated employment. 

While DSUs have been required to 

coordinate with American Indian 

Vocational Rehabilitation Services 

projects in the State, if any, the 

coordination now must also include 

pre-employment transition services. 

Statewide Assessment; Estimates; State 

Goals and Priorities; Strategies; and 

Progress Reports (§ 361.29) 

Statute: Section 101(a)(15) of the Act, 

as amended by WIOA, requires the 

comprehensive needs assessments to 

include: a review of the needs of youth 

and students, especially with regard to 

pre-employment transition services and 

the coordination of services with 

educational agencies; and the methods 

used to improve the provision of VR 

services, especially transition services. 

Current Regulations: Current § 361.29 

requires that the State plan include the 

results of a statewide assessment, but 

does not contain new statutory 

requirements related to transition and 

pre-employment transition services. 

Proposed Regulations: Proposed 

§ 361.29(a)(1)(i)(D) reflects the addition 

of the new statutory requirement for the 

statewide needs assessment to identify 

the vocational rehabilitation needs of 

youth and students with disabilities, 

including their need for preemployment transition services as 

defined under proposed § 361.5(c)(42) 

or other transition services. Proposed 

§ 361.29(a)(1)(i)(D)(2) would require that 

the State plan include an assessment of 

the needs for transition services and 

pre-employment transition services and 

the extent to which VR services are 

coordinated with services provided 

under IDEA in order to meet the needs 

of individuals with disabilities. The 

proposed § 361.29(d)(4) would require 

that the State plan include strategies to 


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provide pre-employment transition 

services. 

Reasons: These proposed changes are 

necessary to implement the 

amendments to the Act made by WIOA. 

These proposed changes reflect the 

Act’s emphasis on transition-related 

issues affecting students and youth with 

disabilities. 

Development of the Individualized Plan 

for Employment (§ 361.45) 

Statute: None. 

Current Regulations: Current 

§ 361.45(d)(9) requires that an 

individualized plan for employment be 

developed in consideration of a student 

with a disability’s individualized 

education program under IDEA. There is 

no reference to 504 services in this 

context. 

Proposed Regulations: We propose to 

amend current § 361.45(d)(9)(i) to 

incorporate consideration of a student’s 

section 504 services. 

Reasons: This proposed change is 

necessary to implement the 

amendments to the Act made by WIOA 

with regard to the addition of a 

definition of ‘‘student with a disability.’’ 

Because a student with a disability 

could be an individual who is receiving 

services under section 504 rather than 

under an individualized education 

program pursuant to IDEA, we believe 

this proposed change is essential to 

ensure consistent implementation of all 

requirements affecting students with 

disabilities. 

Content of the Individualized Plan for 

Employment (§ 361.46) 

Statute: As amended by WIOA, 

section 102(b)(4)(A) of the Act permits 

an individualized plan for employment 

to contain a specific post-school 

employment outcome or a more general, 

projected outcome. Section 102(b)(4)(B) 

requires the individualized plan for 

employment for a student with a 

disability to include the specific 

transition services needed by the 

student for the achievement of the 

employment goal. 

Current Regulations: Current § 361.46 

outlines the components of an 

individualized plan for employment, 

but does not contain specific 

requirements related to transition since 

these are new statutory requirements. 

Proposed Regulations: We propose to 

revise current § 361.46(a)(1) to permit, 

in lieu of a specific employment goal, a 

description of an eligible student’s or 

youth’s projected post-school 

employment outcome. 

Proposed § 361.46(a)(2)(ii) would 

require that the description of the 

specific VR services under proposed 

§ 361.48 include the specific transition 

services and supports needed for an 

eligible student with a disability or 

youth with disability to achieve an 

employment outcome or projected postschool employment outcome. 

Reasons: These changes are necessary 

to implement the amendments made to 

the Act by WIOA. By permitting the 

individualized plan for employment for 

a student or youth with a disability to 

include a projected, or generally 

described, rather than a specific 

employment goal, we recognize that 

some students and youth with 

disabilities, particularly those of a 

younger age, may not have formulated a 

specific employment goal when they 

begin the VR process. As a result, VR 

agencies may find it necessary to amend 

the individualized plan for employment 

to reflect career exploration consistent 

with vocational growth and 

development and the resulting 

evolution in the student’s or youth’s 

employment goal. However, VR 

agencies should continue to work with 

students and youth who have identified 

a specific employment goal, especially 

those who are older, to develop 

individualized plans for employment 

that contain a specific goal. For students 

and youth who have yet to identify a 

specific employment goal, this change 

would remove the need for these 

frequent amendments. However, the 

inclusion of a projected employment 

goal in the individualized plan for 

employment would not eliminate the 

responsibility of the VR counselor and 

student to amend the individualized 

plan for employment and the VR 

services needed to achieve that goal as 

the employment goal changes. 

Scope of Vocational Rehabilitation 

Services for Individuals With 

Disabilities (§ 361.48) 

Pre-Employment Transition Services 

Statute: WIOA amends the Act by 

including a new section 113 that 

requires VR agencies to coordinate with 

local educational agencies in providing, 

or arranging for the provision of, preemployment transition services to 

students with disabilities who are 

eligible or potentially eligible for VR 

services and in need of such services. 

Section 110(d) requires States to reserve 

15 percent of their VR allotment to 

provide these services. 

Current Regulations: None. 

Proposed Regulations: We propose to 

add regulations implementing the 

provision of pre-employment transition 

services in a new paragraph in proposed 

§ 361.48(a). The current regulations will 

be moved to a new paragraph (b) in 

§ 361.48. 

Proposed § 361.48(a)(1) would permit 

pre-employment transition services to 

be provided to all students with 

disabilities regardless of whether they 

have applied for VR services and would 

clarify that similar transition services 

are available to youth with disabilities 

under proposed § 361.48(b) when 

specified in an individualized plan for 

employment. 

Proposed § 361.48(a)(2) would specify 

the required pre-employment transition 

services that are provided directly to 

students with disabilities. 

Proposed § 361.48(a)(3) would 

describe the authorized activities that 

the State may provide, if sufficient 

funds are available, to improve the 

transition of students with disabilities 

from school to postsecondary education 

or an employment outcome. 

Proposed § 361.48(a)(4) would 

describe the responsibilities for preemployment transition coordination to 

be carried out by VR agencies. 

Finally, proposed § 361.48(a)(5) 

would support DSUs in providing preemployment transition services, 

consulting with other Federal agencies, 

and identifying best practices of the 

States for the provision of transition 

services to students with a variety of 

disabilities. 

Reasons: The proposed regulations in 

§ 361.48(a) would implement the 

requirements of section 113 of the Act, 

which were added by WIOA. This new 

section presents an innovative approach 

to providing pre-employment transition 

services to students with disabilities. 

The services required by this section 

are those that would be most beneficial 

to an individual in the early stages of 

employment exploration. These services 

are designed to provide job exploration 

and other services, such as counseling 

and self-advocacy training, in the early 

stages of the transition process. To that 

end, we believe Congress intended these 

services be provided to the broadest 

population of students with disabilities 

to ensure that as many students with 

disabilities as possible are given the 

opportunity to receive the services 

necessary in order to achieve an 

employment outcome. Therefore, the 

proposed regulation clarifies that preemployment transition services would 

be available to all students with 

disabilities. However, it is important to 

note that a student with a disability in 

this instance does not mean an 

individual with a disability in 

postsecondary education. We believe 

this interpretation is consistent with the 

statutory language ‘‘all students with 

disabilities who are eligible or 


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potentially eligible’’ for VR services and 

intent, as well as the definition of a 

‘‘student with a disability.’’ As an 

individual with a disability, every 

student with a disability satisfies at least 

one of the eligibility criteria for VR 

services in current § 361.42(a)(1). 

In so doing, we would ensure that the 

broadest possible group of students with 

disabilities is able to receive the services 

they need to better identify and prepare 

for post-school activities, including 

postsecondary education and 

competitive integrated employment. We 

do not believe that a student with a 

disability would have to apply for, or be 

determined eligible for, VR services 

prior to receiving pre-employment 

transition services under proposed 

§ 361.48(a). However, if the student does 

apply for VR services, he or she would 

be subject to all relevant requirements 

for eligibility and order of selection, as 

applicable, for purposes of receiving 

other VR services. 

It is important to point out, in this 

context, that the definition in proposed 

§ 361.5(c)(51) of a ‘‘student with a 

disability,’’ for purposes of the VR 

program, is broader than the definition 

used under IDEA. For that reason, the 

VR agency may provide preemployment transition services under 

this section to a broader group of 

students than could receive such 

services under IDEA since VR agencies 

may provide these services to students 

eligible for or receiving section 504 

services, not all of whom may be 

eligible for or receiving special 

education or related services under 

IDEA. 

We are particularly interested in 

receiving comments and alternative 

suggestions about the interpretation of 

‘‘potentially eligible’’ as used in section 

113(a) of the Act to mean all students 

with disabilities as defined under 

proposed § 361.5(c)(51). 

In providing pre-employment 

transition services, a DSU may consider 

providing these services to students 

with disabilities in group settings or on 

an individual basis. When provided in 

group settings, these services are general 

in nature and are not typically 

customized to an individual student’s 

disability-related or vocational needs. 

For example, job exploration counseling 

provided in group settings may include 

the presentation of general local labor 

market composition and information, 

administration of vocational interest 

inventories, and instruction regarding 

self-advocacy and self-determination. 

On the other hand, job exploration 

counseling provided on an individual 

basis might include discussion of the 

student’s vocational interest inventory 

results and discussion of local labor 

market information that applies to those 

interests. 

The manner in which preemployment transition services are 

delivered (e.g., either in a group setting 

or on an individual basis) will most 

likely depend on the amount of 

information the DSU has available 

regarding the student with a disability at 

the time services are provided. As a 

student progresses through the VR 

process by applying, and being 

determined eligible, for VR services, the 

DSU would obtain the information 

necessary to provide individually 

tailored services that address the 

student’s particular disability-related 

and vocational needs. This aspect of 

pre-employment transition services, the 

fact that they can be either generalized 

or individualized, further highlights the 

continuum of services available under 

the VR program. 

We want to make clear that if a 

student with a disability requires 

services that are beyond the limited 

scope of pre-employment transition 

services, the student would have to 

apply for and be determined eligible for 

VR services and develop an 

individualized plan for employment for 

the receipt of those services as would be 

true for any other applicant. To that 

end, we encourage DSUs to work with 

the local educational agencies and State 

educational agencies to develop a 

process whereby individuals expressing 

interest in VR services are able to access 

the program and apply for services in a 

timely manner. VR agencies are 

encouraged to develop a referral process 

that is simple and engaging, especially 

for students with disabilities and their 

families who could become discouraged 

or disinterested in VR services by 

needlessly complex and prolonged 

procedures. An individual may initiate 

the application process by requesting 

individualized pre-employment 

transition services and other VR 

services. Current § 361.41(b)(2) permits 

a student or the student’s representative, 

as appropriate, to apply for VR services 

through a variety of means, including a 

simple request for VR services, such as 

submitting a form consenting to the 

provision of VR services or even a 

telephone call, so long as the request 

contains the limited demographic and 

other information necessary to begin an 

assessment for the determination of 

eligibility and the student is available to 

participate in the assessment. 

Services for Individuals Who Have 

Applied for or Been Determined Eligible 

for VR Services (§ 361.48(b)) 

Statute: Section 103(a)(15) of the Act, 

as amended by WIOA, adds preemployment transition services among 

the scope of VR services that may be 

provided in accordance with an 

individual’s individualized plan for 

employment. 

Current Regulations: Current § 361.48 

includes transition services among the 

list of authorized activities. Preemployment transition services are not 

specifically mentioned because this is a 

result of statutory changes. 

Proposed Regulations: As discussed 

earlier, we propose to reorganize current 

§ 361.48 so that all current provisions 

are retained in proposed § 361.48(b). We 

also propose to incorporate along with 

those transition services already 

provided for, pre-employment transition 

services among the authorized list of 

individualized services a VR agency 

may provide under proposed 

§ 361.48(b)(18). 

Reasons: This change is necessary to 

implement the amendments to the Act 

made by WIOA. Under the VR program, 

any allowable service may be provided 

as a transition service to an individual 

transitioning from secondary school to 

postsecondary education or 

employment, who has been determined 

eligible and for whom an individualized 

plan for employment has been 

developed and approved. Services most 

commonly provided as transition 

services to students with disabilities 

under an individualized plan for 

employment include, but are not limited 

to, assessments, counseling and 

guidance, assistive technology, job 

coaching, orientation and mobility 

training, vocational counseling and 

guidance, and vocational and other 

training services, such as personal and 

vocational adjustment training. 

It is important to note that many of 

the services described as preemployment transition services in 

proposed § 361.48(a) were previously 

provided as transition services, as 

defined in proposed § 361.5(c)(55), or 

other individualized services, including 

community-based work experiences and 

other career exploration services, even 

though no specific category of preemployment transition services was 

mentioned in the Act or current 

§ 361.48. 

Scope of Vocational Rehabilitation 

Services for Groups of Individuals With 

Disabilities (§ 361.49) 

Statute: Section 103(b)(7) of the Act 

expands the scope of allowable services 


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for the benefit of groups of individuals 

with disabilities to include transition 

services for youth and students with 

disabilities. Other technical changes 

were made in section 103(b)(6). 

Current Regulations: Current 

§ 361.49(a) includes allowable services 

for the benefit of groups of individuals 

with disabilities, but does not include 

transition services since this is a new 

statutory requirement. 

Proposed Regulations: We propose to 

amend current § 361.49(a)(6) to clarify 

that educational agencies referenced in 

current regulations mean State or local 

educational agencies. 

We also propose to add a new 

§ 361.49(a)(7) to incorporate transition 

services to students and youth with 

disabilities as a permissible service for 

the benefit of groups of individuals with 

disabilities. This service would be 

provided in coordination with other 

relevant agencies and providers. 

Reasons: These changes are necessary 

to implement the amendments to the 

Act made by WIOA. Under this new 

provision, VR agencies would be able to 

engage in transition activities with some 

entities that have not typically been 

involved in transition planning. As a 

service to groups, these transition 

services would be provided in group 

settings in a manner that benefits a 

group of students or youth with 

disabilities, rather than being 

customized for any one individual. 

Individualized transition services are 

provided under proposed § 361.48(b). 

Examples of group transition services 

may include, but are not limited to, 

class tours of universities and 

vocational training programs, employer 

or business site visits to learn about 

career opportunities, career fairs 

coordinated with workforce 

development systems and employers 

where students and youth participate in 

resume writing classes and mock 

interviews. Additionally, these services 

are not limited to those individuals who 

are still in school since section 103(b)(7) 

of the Act includes youth with 

disabilities between the ages of 14–24 

who may or may not be enrolled in 

secondary education. 

DSUs will need to be mindful of the 

authority they are using when providing 

these services since requirements differ 

for those transition services provided 

under services to groups (see proposed 

§ 361.49) or pursuant to an 

individualized plan for employment 

(see proposed § 361.48(b)) or as a preemployment transition service under 

proposed § 361.48(a). 

Services for Individuals Who Have 

Applied for and Been Determined 

Eligible for Vocational Rehabilitation 

Services (§ 361.48(b)) 

Scope of Vocational Rehabilitation 

Services for Individuals With 

Disabilities 

Statute: WIOA amends section 103(a) 

of the Act by adding customized 

employment to the list of VR services 

that may be provided to eligible 

individuals under an individualized 

plan for employment. The amendments 

also encourage qualified individuals 

who are eligible for VR services to 

pursue advanced training in specified 

fields. 

Current Regulations: Current § 361.48 

provides a non-exhaustive list of VR 

services available to assist an individual 

with a disability in preparing for, 

securing, retaining, or regaining an 

employment outcome. Neither 

customized employment nor advanced 

training is specified in this list because 

these are new statutory requirements. 

Proposed Regulations: We propose to 

reorganize current § 361.48. Proposed 

§ 361.48(a) incorporates new regulations 

governing pre-employment transition 

services to students with disabilities, 

which are required by section 113 of the 

Act. Proposed § 361.48(b) contains all of 

the services that are listed in current 

§ 361.48 and that are available to an 

eligible individual under an 

individualized plan for employment. 

Proposed § 361.48(b)(6) would specify 

that advanced training in a field of 

science, technology, engineering, or 

mathematics (including computer 

science), medicine, law, or business 

may be provided to an eligible 

individual receiving vocational and 

other training services under an 

individualized plan for employment. 

Finally, we propose to include 

customized employment as an available 

VR service in proposed § 361.48(b)(20). 

We also propose to make other 

conforming changes throughout this 

section. 

Reasons: These changes are necessary 

to implement amendments to section 

103(a) of the Act made by WIOA. It has 

been our long-standing policy that VR 

services are available to individuals 

with disabilities to enable them to 

advance in employment and that 

financial support for the graduate-level 

degrees specified in proposed 

§ 361.48(b)(6), may be provided to 

eligible individuals when necessary to 

achieve employment. The specific 

mention of this service in section 103(a) 

of the Act and the proposed regulation 

underscores the importance of advanced 

training when preparing individuals 

with disabilities for high demand 

careers in today’s economy. 

Prior to enactment of WIOA, 

customized employment was an 

available service under the VR program 

when necessary to assist the eligible 

individual to achieve an employment 

outcome. See the discussion of 

customized employment in the 

Applicable Definitions section for 

further information. 

Scope of Vocational Rehabilitation 

Services for Groups of Individuals With 

Disabilities (§ 361.49(a)) 

Statute: Section 103(b) of the Act 

makes several changes with regard to 

the services to groups that VR agencies 

may provide, including those related to 

technical assistance to businesses, 

assistive technology, and advanced 

training in specific fields of study. 

Current Regulations: Current 

§ 361.49(a) describes the services that 

VR agencies may provide for the benefit 

of groups, but they do not specifically 

address services related to assistive 

technology or advanced training, or 

other changes made by WIOA. 

Proposed Regulations: We propose to 

amend current § 361.49(a)(1), regarding 

the establishment, development, or 

improvement of a community 

rehabilitation program, to clarify that 

services provided under this authority 

must be used to promote competitive 

integrated employment, including 

customized and supported employment. 

We propose to amend current 

§ 361.49(a)(4) to incorporate statutory 

changes that expand a VR agency’s 

authority to provide technical assistance 

to all businesses who are considering 

hiring individuals with disabilities. 

We propose to add new § 361.49(a)(8) 

and (9) regarding services related to 

assistive technology and advanced 

training, respectively, to reflect new 

statutory authorities for these services. 

We also propose to make other 

conforming changes throughout this 

section. 

Reasons: These changes are necessary 

to implement statutory changes, which 

both expand the types of services that a 

VR agency may provide for the benefit 

of groups of individuals with 

disabilities and provide clarification as 

needed. 

The proposed changes in 

§ 361.49(a)(1) regarding the 

establishment, development, or 

improvement of a community 

rehabilitation program are primarily for 

clarification purposes. Services 

provided under this authority have 

always been for the purpose of 

promoting integration into the 

community with respect to 


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employment. However, the proposed 

changes highlight the statute’s 

heightened emphasis on competitive 

integrated employment, supported 

employment, and customized 

employment. 

Proposed changes to current 

§ 361.49(a)(4) would permit VR agencies 

to provide technical assistance to all 

businesses who are considering hiring 

individuals with disabilities. This 

technical assistance could assist 

businesses with recruitment, hiring, 

employment, and retention, including 

resources and tools to help with 

accessing and use of assistive 

technology, workplace accessibility, and 

accommodations for individuals with 

disabilities. VR agencies can work with 

businesses to develop systems for the 

matching and training of qualified 

workers with job requirements. 

Previously, a VR agency could provide 

such services only to those businesses 

that are not subject to title I of the 

Americans with Disabilities Act of 1990. 

This proposed change is also consistent 

with the heightened emphasis 

throughout WIOA on employer 

engagement, especially with regard to 

assisting individuals with disabilities to 

enter competitive integrated 

employment. 

Proposed new § 361.49(a)(8) would 

incorporate a new statutory authority for 

VR agencies to provide assistive 

technology-related services for the 

benefit of groups of individuals with 

disabilities. VR agencies may now 

establish, develop, or improve assistive 

technology programs. This new 

authority would expand access to 

assistive technology for individuals 

with disabilities and employers in 

recognition of the critical role it plays in 

the vocational rehabilitation and 

employment of individuals with 

disabilities. However, we believe that 

this authority should be implemented in 

a manner that is consistent with the 

authority to establish, develop, or 

improve a community rehabilitation 

program in proposed § 361.49(a)(1) in 

that the services provided under this 

authority should be limited to 

applicants and eligible individuals 

receiving VR services. In so doing, this 

authority would be used in coordination 

with, rather than to supplant, the 

activities otherwise provided under the 

Assistive Technology Act. 

We also want to make clear that the 

assistive technology services provided 

under this authority would be 

distinguished from those provided 

under proposed § 361.48(b), which are 

individualized and provided pursuant 

to an individual’s plan for employment. 

The assistive technology services 

provided under proposed § 361.49(a)(8) 

are for the benefit of a group of 

individuals and are not tied to the 

individualized plan for employment of 

any one individual. For example, a DSU 

may, in coordination with the State’s 

assistive technology grant program, use 

VR funds to support an assistive 

technology lending library in proportion 

to the benefit received by applicants and 

eligible individuals. Once an eligible 

individual needs a specific assistive 

technology device to participate in VR 

services or the employment outcome, 

the DSU could provide the device as an 

individualized service under an 

individualized plan for employment 

pursuant to proposed § 361.48(b). 

Proposed § 361.49(a)(9) would 

implement a new authority for VR 

agencies to provide support for 

advanced training in a manner that 

benefits groups of eligible individuals. 

Before WIOA was enacted, a DSU could 

provide this service only on an 

individualized basis, pursuant to an 

individual’s individualized plan for 

employment, in accordance with 

proposed § 361.48(b), which remains 

unchanged in this context. This new 

authority is in addition to that provided 

under proposed § 361.48(b) and is not 

intended to replace such services as 

being provided on an individualized 

basis. 

Under this new authority, VR 

agencies may provide support services 

to eligible individuals who meet 

specific criteria and are pursuing 

advanced training in specific fields, as 

a service for the benefit of a group of 

individuals with disabilities. Examples 

of when a DSU may consider providing 

such support services, not directly 

related to an individualized plan for 

employment, could include the 

enrollment of multiple students 

determined eligible for VR services in 

the same training, or the development 

and implementation of specific 

programming for eligible individuals 

with an institution of higher education 

or community provider. Furthermore, 

VR agencies could consider establishing 

a scholarship fund for advanced training 

in science, technology, engineering or 

mathematics (STEM) or other fields as 

described in section 103(b)(9) of the Act. 

These funds may support the costs of 

graduate level training not covered by 

any other source for those services, 

including support provided by the VR 

program under proposed § 361.48(b). If 

a DSU establishes such scholarships, it 

should consider establishing criteria 

governing the receipt of such support, 

including merit and other competitive 

criteria. 

We want to make clear that DSUs 

should continue to provide any 

individualized advanced training 

support that an eligible individual 

requires in order to achieve an 

employment outcome in competitive 

integrated employment, and that is 

consistent with the individual’s plan for 

employment, under proposed 

§ 361.48(b), not under the services to 

groups authority discussed here. For 

that reason, we believe there would only 

be limited circumstances in which it 

would be appropriate for a DSU to 

provide support for advanced training 

under proposed § 361.49(a)(9). Given 

that this service may be provided as 

either an individualized service under 

proposed §§ 361.48(b) or 361.49(a)(9), 

DSUs would have to keep in mind the 

distinctions between the two different 

authorities to ensure proper 

implementation and record-keeping for 

reporting purposes. 

Comparable Services and Benefits 

(§ 361.53) 

Statute: Section 101(a)(8) of the Act 

clarifies that accommodations and 

auxiliary aids and services are included 

in the requirement to determine 

whether comparable services and 

benefits are available prior to the DSU 

providing most VR services. In addition, 

section 101(a)(8)(B) is amended to 

clarify that interagency agreements for 

coordination of services between the 

DSU and other public entities in the 

State, including institutions of higher 

education, should specifically address 

accommodations and auxiliary aids and 

services among the services to be 

coordinated. 

Current Regulations: Current § 361.53 

sets forth the requirements related to 

comparable services and benefits, as 

well as requirements related to 

interagency agreements, without 

specifically identifying accommodations 

and auxiliary aids and services. 

Proposed Regulations: We propose to 

add language to §§ 361.53(a) and 

361.53(d)(1) and (3) that would include 

accommodations and auxiliary aids and 

services among the VR services that 

would require the determination of the 

availability of comparable services and 

benefits prior to the provision of such 

services to an eligible individual. The 

proposed changes also would address 

interagency coordination of the 

provision of these services. 

Reasons: The proposed changes 

reflect the clarifications in section 

101(a)(8) of the Act made by WIOA. 

WIOA reinforces the Department’s 

longstanding position that 

accommodations and auxiliary aids and 

services are considered to be part of the 


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determination of the availability of 

comparable services and benefits and 

the services to be coordinated through 

the required interagency agreements 

with public entities should include 

accommodations and auxiliary aids and 

services. The changes to section 

101(a)(8) of the Act and proposed 

§ 361.53 make this interpretation 

explicit. 

The need for the DSU to coordinate 

the provision of accommodations and 

auxiliary aids and services often occurs 

when serving eligible individuals 

attending institutions of higher 

education for postsecondary training 

and education. Both DSUs and public 

institutions of higher education must 

adhere to the requirements of title II of 

the Americans with Disabilities Act and 

section 504 of the Rehabilitation Act to 

ensure access to their services for 

individuals with disabilities. 

Additionally, private institutions of 

higher education must adhere to 

requirements of section 504 of the Act 

to ensure access to their services for 

individuals with disabilities. 

Accordingly, the responsibilities of each 

entity for the provision of 

accommodations and auxiliary aids and 

services to individuals served by each 

must be determined at the State level. 

Therefore, the interagency agreement 

under proposed § 361.53(d) would 

ensure interagency coordination and 

describe the responsibilities of the DSU 

and the institutions of higher education 

for the provision of VR services, 

including accommodations and 

auxiliary aids and services, and would 

provide a vehicle for resolving 

interagency disputes. To that end, 

Governors could assist the DSUs and 

institutions of higher education, in 

accordance with section 101(a)(8)(B) of 

the Act, to develop these agreements to 

ensure they are sufficient for ensuring 

individuals with disabilities receive the 

services they need, including 

accommodations and auxiliary aids and 

services, to enable them to achieve 

competitive integrated employment. 

The Rehabilitation Act requires DSUs to 

enter into interagency agreements for 

coordination of services (including each 

agency’s financial responsibilities) with 

institutions of higher education, as well 

as other public entities. DSUs have 

experienced difficulty engaging with 

institutions of higher education, and 

other public agencies, for the purpose of 

developing the required interagency 

agreements. In addition, DSUs and 

institutions of higher education have 

often executed interagency agreements 

that do not clearly describe the manner 

in which services will be coordinated, 

particularly the accommodations and 

auxiliary aids and services that each 

agency will be responsible to provide. 

The lack of specificity in these 

agreements, in turn, does not provide 

adequate guidance to higher education 

or VR personnel responsible for carrying 

out their responsibilities to provide 

such aids and devices to assist 

individual students with disabilities. 

Such guidance is crucial when a 

particular service could be provided by 

either the DSU or institution of higher 

education in accordance with their 

mutual obligations under the Americans 

with Disabilities Act and section 504 of 

the Act to ensure the ability of 

individuals with disabilities to 

participate in educational programs and 

activities, and the timely delivery of VR 

services. 

We believe that the terms of the 

interagency agreement should take into 

account State laws and the resources of 

each party. For example, an interagency 

agreement could include a term that 

could require institutions of higher 

education to provide auxiliary aids and 

services (e.g., interpreters) to VR eligible 

individuals in the classroom and the 

DSUs could provide these aids and 

services during educational activities 

outside the classroom. In States where 

students who are deaf or blind and 

attend a State university tuition-free, the 

interagency agreement could specify 

that the DSU provide auxiliary aids and 

services, such as reader and interpreter 

services, both in and out of the 

classroom, since the school is 

responsible for the full cost of tuition. 

Greater specificity in the terms of the 

interagency agreements at the State level 

will promote consistency across the 

State in the coordination of services and 

in the provision of accommodations and 

auxiliary aids and services to eligible 

individuals attending institutions of 

higher education. 

Finally, we want to make clear that 

accommodations and auxiliary aids and 

services, for purposes of implementing 

the requirements of section 101(a)(8) 

and these proposed regulations, do not 

include personally prescribed devices, 

such as eye glasses, hearing aids, 

wheelchairs, or other such individuallyprescribed devices and services. 

Semi-Annual Review of Individuals in 

Extended Employment and Other 

Employment Under Special Certificate 

Provisions of the Fair Labor Standards 

Act (§ 361.55) 

Statute: Section 101(a)(14) of the Act, 

as amended by WIOA, increases the 

frequency of reviews that the DSUs 

must conduct when individuals with 

disabilities, who have been served by 

the VR program, obtain subminimum 

wage employment or extended 

employment. 

Current Regulations: Current § 361.55 

requires the DSU to conduct an annual 

review and re-evaluation annually for 

the first two years after an individual 

obtains subminimum wage employment 

or extended employment. 

Proposed Regulations: We propose to 

amend § 361.55 to incorporate the new 

statutory requirement that these reviews 

be conducted semi-annually for the first 

two years of the individual’s 

employment and annually thereafter. 

We also propose to make other technical 

and conforming changes throughout. 

Reasons: The proposed changes are 

necessary to implement new statutory 

requirements and ensure individuals 

with disabilities do not languish in 

subminimum wage employment or 

extended employment. Prior to the 

passage of WIOA, DSUs conducted 

these reviews annually for two years. 

With the amendments made by WIOA, 

DSUs must conduct these reviews twice 

a year for two years and then annually 

thereafter for as long as the individual 

remains employed at the subminimum 

wage level or in extended employment. 

These changes are consistent with the 

heightened emphasis throughout WIOA 

that individuals with disabilities, 

including those with the most 

significant disabilities, be given every 

opportunity to achieve competitive 

integrated employment. 

Matching Requirements (§ 361.60) 

Statute: Section 101(a)(3) of the Act 

requires the State to pay a non-Federal 

share in carrying out the VR program. 

Section 7(14) of the Act defines 

‘‘Federal share’’ as 78.7 percent. These 

statutory provisions remain unchanged 

by WIOA. 

Current Regulations: Current 

regulations in § 361.60(b) outline the 

requirements for satisfying the nonFederal share requirement under the VR 

program. 

Proposed Regulations: We propose to 

amend current (b)(3) to clarify that nonFederal expenditures, for match 

purposes under the VR program, from 

private contributions must be made 

from cash contributions that have been 

deposited in the VR agency’s account 

prior to their use for this purpose. We 

also propose to make conforming 

changes throughout current § 361.60 to 

refer to 2 CFR part 200, as applicable 

and to new terms, such as the 

‘‘vocational rehabilitation services 

portion of the Unified or Combined 

State Plan’’ and ‘‘subaward.’’ 

Reasons: Proposed § 361.60(b)(3) 

makes no substantive changes but 


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would clarify existing regulatory 

requirements pertaining to expenditures 

made from private contributions and 

used for match purposes under the VR 

program. Specifically, we would clarify 

that contributions by private entities 

must be in cash and that the funds must 

be deposited into the State agency’s 

account before they are used for match 

purposes under the VR program. In so 

doing, we make two points clear: (1) 

Certified expenditures made by private 

entities or individuals may not be used 

by the VR agency for match purposes 

under the VR program; and (2) a 

contract, budgeted projection, or any 

other promise by a private entity or 

individual to make a contribution may 

not be used, on its face, by the VR 

agency for satisfying its match 

requirement. The VR agency must 

actually receive the cash contribution 

before it may be used for match 

purposes under the VR program. We 

believe these clarifications are necessary 

to ensure VR agencies have a better 

understanding of, and comply with 

these existing requirements. Finally, 

other revisions proposed throughout 

this section are necessary to conform to 

other changes proposed throughout part 

361. 

Maintenance of Effort Requirements 

(§ 361.62) 

Statute: Section 111(a)(2)(B) of the 

Act, as amended by WIOA, requires the 

Secretary to reduce a grant in a fiscal 

year for any prior fiscal year’s 

Maintenance of Effort (MOE) shortfall. 

Current Regulations: Current 

§ 361.62(a) requires the Secretary to 

reduce the grant in the fiscal year 

immediately following the fiscal year 

with the MOE deficit. In the event that 

the MOE deficit is discovered after the 

next fiscal year’s grant was awarded, the 

Secretary is required to seek a remedy 

for the MOE violation pursuant to the 

disallowance process. 

Proposed Regulations: We propose to 

amend current § 361.62(a) in four ways: 

(1) By amending current § 361.62(a)(1) 

to require the Secretary to reduce a grant 

in any fiscal year by the amount of any 

prior fiscal year’s MOE shortfall; (2) by 

removing the example in current 

§ 361.62(a)(1) as it is no longer 

applicable, given statutory amendments; 

(3) by removing current § 361.62(a)(2) 

since it is no longer necessary given 

new statutory requirements t; and (4) by 

redesignating current § 361.62(a) to 

reflect the removal of current 

§ 361.62(a)(2). 

We propose to amend current 

§ 361.62(b) by removing the requirement 

for the Secretary to recover the MOE 

deficit through an audit disallowance 

process. 

We propose to amend the current 

§ 361.62(d)(3) to clarify that a request for 

a waiver or modification of the MOE 

requirement must be submitted as soon 

as the State has determined that it has 

failed to satisfy the requirement due to 

an exceptional or uncontrollable 

circumstance. Finally, we propose to 

make conforming changes throughout 

current § 361.62 to reflect the 

restructuring of paragraph (a). 

Reasons: The proposed changes to 

current § 361.62(a) are necessary to 

implement the amendments to the Act 

made by WIOA. Previously, the 

Secretary could reduce the State’s VR 

award to satisfy a MOE deficit only in 

the fiscal year immediately following 

the fiscal year in which the MOE deficit 

occurred. In the event the MOE deficit 

was discovered after the next fiscal 

year’s grant was awarded, the Secretary 

was required to seek recovery for the 

MOE deficit pursuant to a disallowance 

process, whereby, the State was 

required to make payment for that 

recovery action with non-Federal funds. 

Under the proposed regulations the 

Secretary would no longer be limited to 

reducing only the next fiscal year’s 

grant, but rather could reduce any 

subsequent fiscal year’s grant to satisfy 

the MOE deficit. Therefore, in the event 

that a MOE shortfall is revealed after the 

next fiscal year’s grant has been 

awarded, the Secretary would reduce 

the Federal grant in another subsequent 

fiscal year. Consequently, it is no longer 

necessary for the Secretary to seek 

recovery through a disallowance process 

and for a State to use non-Federal funds 

to satisfy the deficit. The proposed 

change to current § 361.62(b) is 

necessary to ensure consistency with 

paragraph (a) for purposes of satisfying 

a MOE deficit. 

The change in proposed § 361.62(d)(3) 

is necessary for clarification purposes. 

The proposed change would not 

substantively revise the requirements 

related to submitting a request for a 

MOE waiver or modification, but rather 

would add clarifying language to 

existing requirements. Some States have 

interpreted the existing regulation as 

meaning that the request should be 

submitted as soon as they anticipate that 

they would be unable to satisfy the MOE 

requirement, even if that was years in 

advance. We have always interpreted 

paragraph (d)(3) as meaning that the 

request should be submitted as soon as 

the State has determined it has not 

satisfied the MOE requirement. The 

proposed change provides further 

clarification. 

Program Income (§ 361.63) 

Statute: None. 

Current Regulations: Current § 361.63 

defines program income and lists 

potential sources of program income 

and uses for purposes of the VR 

program. 

Proposed Regulations: We propose to 

amend current § 361.63(a) to make the 

definition of program income consistent 

with 2 CFR 200.80. 

We propose to amend current 

§ 361.63(b) by providing additional 

examples of common sources of 

program income generated by the VR 

program. 

We propose to amend current 

§ 361.63(c)(1) to clarify that program 

income must be disbursed during the 

period of performance of the award to 

be consistent with 2 CFR 200.77, which 

defines the period of performance of the 

award as the time during which the 

non-Federal entity may incur new 

obligations to carry out the work 

authorized under the Federal award. 

We propose to amend current 

§ 361.63(c)(2) to reflect statutory 

restructuring of title VI of the Act. 

Finally, we propose to amend current 

§ 361.63(c)(3) to be consistent with 2 

CFR 200.307(e)(1) and (2). 

Reasons: The proposed changes to 

current § 361.63 are necessary for 

clarification purposes and to ensure 

consistency with other relevant 

requirements, especially those 

contained in 2 CFR part 200. 

Allotment and Payment of Federal 

Funds for Vocational Rehabilitation 

Services (§ 361.65) 

Statute: Section 110(d) of the Act, as 

amended by WIOA, requires VR 

agencies to reserve not less than 15 

percent of the State’s VR allotment for 

the provision of pre-employment 

transition services, in accordance with 

section 113 of the Act. Section 110(d)(2) 

of the Act prohibits a State from using 

these reserved funds to pay for 

administrative costs or any other VR 

service. 

Current Regulations: Current § 361.65 

specifies the process the Secretary uses 

to allot and reallot Federal funds, but 

does not address the reservation by 

States of funds for the provision of preemployment transition services since 

this is a new statutory requirement. 

Proposed Regulations: We propose to 

amend current § 361.65(a) by adding a 

new paragraph (3) to implement the 

new statutory requirement for a State to 

reserve not less than 15 percent of its 

VR allotment for the provision of preemployment transition services. The 

proposed provision would make clear 


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that such reserved funds must be used 

only for services authorized in proposed 

§ 361.48(a), and must not be used to pay 

for administrative costs associated with 

the provision of such services or for any 

other VR service. 

We propose to amend current 

§ 361.65(b)(2) by revising the language 

to clarify that reallotment would occur 

in the fiscal year the funds were 

appropriated; however, the funds may 

be obligated or expended during the 

period of performance, provided 

matching requirements are met. We 

propose to add a new paragraph (b)(3) 

to current § 361.65 that would give the 

Secretary the authority to determine the 

criteria to be used to reallot funds when 

the amount requested exceeds the 

amount of funds relinquished. 

Finally, we propose other technical 

and conforming changes throughout this 

section. 

Reasons: The proposed changes to 

current § 361.65(a) are necessary to 

implement new statutory requirements 

related to the reservation of Federal 

funds for the provision of preemployment transition services. We 

make clear that the funds to be reserved 

are those awarded to the State pursuant 

to section 110 of the Act and do not 

refer to an allotment of State funds 

awarded by the State. 

None of the funds reserved for the 

provision of pre-employment transition 

services in accordance with section 

110(d) may be used to pay for 

administrative costs or any other VR 

service. These funds must be used 

solely for the provision of services 

described in § 361.48(a) of this part. We 

want to make clear that States must use 

the entire amount reserved solely for the 

provision of pre-employment transition 

services in accordance with section 113 

of the Act and § 361.48(a) of this part. 

The proposed change to current 

§ 361.65(b)(2) is necessary to ensure 

consistency with 2 CFR 200.77. 

The change in proposed § 361.65(b) is 

necessary to inform grantees about the 

reallotment process in the event there 

are more requests for reallotment funds 

than are available to satisfy those 

requests. 

Part 363—The State Supported 

Employment Services Program 

Proposed substantive changes to part 

363 are presented in a format that 

highlights topical areas in the order that 

the relevant sections appear in this part. 

Competitive Integrated Employment 

(§ 363.1) 

Statute: Section 7(38) of the Act, as 

amended by WIOA, revises the 

definition of ‘‘supported employment’’ 

to mean, in pertinent part, employment 

with supports in competitive integrated 

employment or, if not in competitive 

integrated employment, employment in 

an integrated setting in which the 

individual is working toward 

competitive integrated employment on a 

short-term basis, not to exceed six 

months. Other key relevant statutory 

provisions include section 7(5), which 

defines competitive integrated 

employment; section 602, which makes 

clear the purpose of the Supported 

Employment program is to enable 

individuals with the most significant 

disabilities, including youth with the 

most significant disabilities, to achieve 

supported employment in competitive 

integrated employment; and section 

604, which authorizes the services to be 

provided under the Supported 

Employment program to enable 

individuals to achieve supported 

employment in competitive integrated 

employment. Title VI contains 

references to this requirement 

throughout. 

Current Regulations: Current § 363.1 

sets out the purpose of the Supported 

Employment program, which is to assist 

States in developing and implementing 

collaborative programs with entities to 

provide supported employment services 

for individuals with the most severe 

disabilities who require such services to 

enter or retain competitive employment. 

Current regulations do not reference 

competitive integrated employment or 

working towards competitive integrated 

employment since these are new 

statutory requirements. 

Proposed Regulations: We propose to 

amend current § 363.1 to reflect the 

revised statutory definition of 

‘‘supported employment,’’ namely that 

the employment be in competitive 

integrated employment or, if it is not, 

that the employment be in an integrated 

setting in which the individual with a 

most significant disability is working 

toward competitive integrated 

employment on a short-term basis. 

As proposed, the regulations would 

make clear that the purpose of the 

Supported Employment program is to 

enable individuals with the most 

significant disabilities, with on-going 

supports, to achieve competitive 

integrated employment (i.e., 

employment in an integrated setting that 

is compensated at or above the 

minimum wage). 

The proposed definition of 

‘‘supported employment’’ would take 

into account that under some 

circumstances an individual’s 

employment, which must always be in 

an integrated setting, may not meet all 

of the criteria for competitive integrated 

employment initially. In those 

circumstances, an individual with a 

most significant disability would be 

considered to have achieved an 

employment outcome of supported 

employment if he or she is working in 

an integrated setting, on a short-term 

basis, toward competitive integrated 

employment. In the proposed definition, 

we would interpret ‘‘short-term basis’’ 

in this context to mean within six 

months of the individual entering 

supported employment. 

We also propose to amend current 

§ 363.50(b)(3) and (b)(4) to state that the 

collaborative agreements developed 

with other relevant entities for 

providing supported employment 

services and extended services may 

include efforts to increase opportunities 

for competitive integrated employment 

for individuals with the most significant 

disabilities, including youth with the 

most significant disabilities. 

Finally, we propose to amend the 

balance of current § 363.50 to reflect in 

the States’ required collaborative 

agreements the new scope and purpose 

of supported employment, as well as the 

new time limits for providing services 

that are discussed in detail under the 

sections ‘‘Services to Youth with the 

Most Significant Disabilities’’ and 

‘‘Extension of Time for the Provision of 

Supported Employment Services.’’ 

Reasons: The proposed revisions are 

necessary to implement in part 363 the 

statutory changes made by WIOA. We 

believe these proposed changes are 

consistent with the purpose of the 

Supported Employment program, as 

expressed throughout title VI of the Act. 

The proposed changes are also 

consistent with proposed changes to 

part 361, which governs the vocational 

rehabilitation (VR) program, since the 

supported employment program is 

supplemental to that program. In 

particular, we propose to establish a 

specific time frame—e.g., six months— 

for ‘‘short term basis’’ in the context of 

‘‘supported employment,’’ because we 

believe it is necessary to limit the time 

allowed for individuals to work in noncompetitive employment in order to be 

consistent with the clear intention of the 

Act, as amended by WIOA, which 

places heightened emphasis on 

competitive integrated employment 

throughout. 

Services to Youth With the Most 

Significant Disabilities (§§ 363.6 and 

363.54) 

Statute: Section 603(d) of the Act, as 

amended by WIOA, requires each State 

to reserve and use 50 percent of its 

allotment under the Supported 


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Employment program to provide 

supported employment services, 

including extended services, to youth 

with the most significant disabilities. 

Other relevant statutory provisions are 

found in section 602, which highlights 

services to youth with the most 

significant disabilities in the purpose 

section of title VI; section 604, which 

authorizes services specifically for 

youth with the most significant 

disabilities; section 605, which 

identifies youth with the most 

significant disabilities as eligible for 

supported employment services; and 

section 606, which establishes certain 

State plan requirements specific for 

services to youth with the most 

significant disabilities. 

Current Regulations: None. 

Proposed Regulations: We propose to 

amend multiple sections in part 363 to 

incorporate these new requirements for 

providing supported employment 

services, including extended services, to 

youth with the most significant 

disabilities. 

We propose to amend current § 363.1 

to state that a purpose of the Supported 

Employment program is to provide 

individualized supported employment 

services, including extended services in 

an integrated setting, to youth with the 

most significant disabilities in order to 

assist them in achieving supported 

employment in competitive integrated 

employment. 

We propose to amend current § 363.3 

to clarify that youth with the most 

significant disabilities are eligible to 

receive supported employment services. 

It is important to note that youth have 

always been eligible to receive 

supported employment services; 

however, amendments made by WIOA 

emphasize this population in the 

context of the Supported Employment 

program. 

In proposed § 363.4(a) and (b), we 

would implement new statutory 

provisions permitting the expenditure of 

supported employment program funds, 

reserved for the provision of supported 

employment services to youth with the 

most significant disabilities on extended 

services to youth with the most 

significant disabilities for up to four 

years following the transition from 

support from the designated State unit 

(DSU). We propose to amend current 

§ 363.4(c) to clarify that nothing in this 

part is to be construed as prohibiting the 

VR program from providing extended 

services to youth with the most 

significant disabilities with funds 

allotted under part 361. 

In proposed § 363.4(d), we would set 

out the statutory requirement that a 

State must coordinate its supported 

employment services with its VR 

services provided under part 361 in 

order to avoid duplication. 

We propose to amend current § 363.11 

to incorporate supported employment 

services, including extended services, 

for youth with the most significant 

disabilities into the existing 

requirements for the VR services portion 

of the Unified or Combined State Plan 

supplement. 

We propose a new § 363.22, which 

would implement the new statutory 

requirement that a State must reserve 

and use half of its allotment under the 

supported employment program for the 

provision of supported employment 

services, including extended services, to 

youth with the most significant 

disabilities. 

We propose changes throughout part 

363 to conform to new statutory 

nomenclature, such as referring to ‘‘the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plans’’ in §§ 363.10 and 363.11, 

instead of just ‘‘the State plan,’’ and 

‘‘the most significant disabilities’’ 

instead of ‘‘severe disabilities.’’ 

Reasons: The proposed revisions are 

necessary to implement in part 363 

statutory changes made by WIOA. The 

proposed changes are also consistent 

with proposed changes to part 361, 

which governs the VR program, since 

the Supported Employment program is 

supplemental to that program. 

Specifically, the proposed changes are 

consistent with the heightened 

emphasis throughout the Act, as 

amended by WIOA on the provision of 

services to youth with disabilities, 

especially those with the most 

significant disabilities, to ensure they 

receive the services and supports 

necessary to achieve competitive 

integrated employment. Accordingly, 

the proposed changes would implement 

the statutory requirement that States 

must reserve half of their supported 

employment allotment for the provision 

of supported employment services, 

including extended services, to youth 

with the most significant disabilities. 

This new statutory requirement reflects 

the fact that this particular population 

may need more intensive services for a 

longer period of time in order to achieve 

competitive integrated employment. It is 

important to note that, prior to the 

passage of WIOA, States were not 

permitted to use supported employment 

and/or VR program funds to provide 

extended services under any 

circumstance. States still are prohibited 

from providing extended services to 

individuals who are not youth with the 

most significant disabilities. 

Extension of Time for the Provision of 

Supported Employment Services 

(§§ 363.6 and 363.54) 

Statute: Section 7(39) of the Act, as 

amended by WIOA, revises the 

definition of ‘‘supported employment 

services’’ to mean those on-going 

supports provided for a period of time 

not to exceed 24 months. 

Current Regulations: Current § 363.6 

defines ‘‘supported employment 

services’’ as ongoing services provided 

by the DSU for a limited period of time 

to achieve job stabilization and assist an 

individual with the most severe 

disability before the transition to 

extended services. The current 

regulations do not reference the 24- 

month time limit for the provision of 

services since this is a new statutory 

requirement. 

Proposed Regulations: We propose to 

amend the definition of ‘‘supported 

employment services’’ in part 361, 

which will be incorporated by reference 

throughout part 363. The proposed 

definition would extend the time 

allowed for the provision of supported 

employment services from 18 months to 

24 months. 

We also propose to update and 

streamline current § 363.6 by removing 

the current set of definitions and 

inserting, instead, cross-references to 

relevant definitions from other parts of 

the Department’s regulations. 

We propose to amend current § 363.53 

to require that an individual must 

transition to extended services within 

24 months of starting to receive 

supported employment services unless a 

longer time period is agreed to in the 

individualized plan for employment. 

The proposed regulation would specify 

conditions that must be met before a 

DSU assists an individual in 

transitioning to extended services, such 

as ensuring the individual is engaged in 

supported employment that is in 

competitive integrated employment, or 

in an integrated work setting in which 

the individual is working on a shortterm basis toward competitive 

integrated employment, and the 

employment is customized for the 

individual consistent with his or her 

strengths, abilities, interests, and 

informed choice. Administratively, the 

State unit would also have to identify 

the source of extended services and 

meet all requirements for case closure. 

Reasons: The proposed revisions are 

necessary to implement in part 363 

statutory changes made by WIOA. The 

proposed changes are also consistent 

with proposed changes to part 361, 

which governs the VR program, since 


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the Supported Employment program is 

supplemental to that program. 

Match Requirements for Funds Reserved 

for Serving Youth With the Most 

Significant Disabilities (§ 363.23) 

Statute: Section 606(b)(7)(I) of the 

Act, as amended by WIOA, requires that 

a State provide non-Federal 

contributions in an amount not less than 

10 percent of the costs of providing 

supported employment services, 

including extended services, to youth 

with the most significant disabilities. 

States are also authorized to leverage 

public and private funds. 

Current Regulations: None. 

Proposed Regulations: We propose to 

add a new § 363.23 to implement these 

new statutory requirements. In the event 

that a designated State agency uses more 

than 50 percent of its allotment to 

provide supported employment services 

to youth with the most significant 

disabilities as required by § 363.22, 

there is no requirement that a 

designated State agency provide nonFederal expenditures to match the 

excess Federal funds spent for this 

purpose. In this proposed new section, 

we would clarify, to ensure consistency 

with part 361, that third-party in-kind 

contributions are not permitted, but 

contributions by private entities are 

permitted, for match purposes under the 

Supported Employment program. 

We propose to amend § 363.4(a)(3) to 

implement the new statutory provision 

authorizing States to use funds reserved 

for youth with the most significant 

disabilities to leverage other public and 

private funds to increase resources for 

extended services and expand 

supported employment opportunities 

for youth with the most significant 

disabilities. 

We also propose to amend 

§ 363.11(g)(9) to incorporate both the 

new match requirement and the 

description of the activities surrounding 

how the State will leverage funds 

reserved for youth with the most 

significant disabilities into the 

assurances that a State must submit as 

part of its supported employment State 

plan supplement. 

Reasons: The proposed revisions are 

necessary to implement in part 363 

statutory changes made by WIOA. The 

proposed changes are also consistent 

with proposed changes to part 361 

governing the VR program since the 

Supported Employment program is 

supplemental to that program. Given the 

new statutory requirement that States 

provide a 10 percent match on the funds 

reserved for providing supported 

employment services to youth with the 

most significant disabilities, coupled 

with the fact that States may use VR 

funds to supplement the provision of 

supported employment services, we 

believe it is important to ensure the 

match requirements under the 

Supported Employment program are 

consistent with those under the VR 

program. To that end, we propose that 

third-party in-kind contributions would 

not be a permissible source of match 

under the Supported Employment 

program, since it is not permitted under 

the VR program. In so doing, we reduce 

the administrative burden on States 

from having to distinguish whether a 

match source is applicable to the 

supported employment funds verses the 

VR funds. 

Program Income (§ 363.24) 

Statute: Section 19 of the Act governs 

the carryover of funds, including 

program income, received by the 

Supported Employment program. In 

addition, section 108 of the Act permits 

the VR program to transfer payments 

received by the Social Security 

Administration under part 361 to the 

Supported Employment program. These 

statutory provisions remained 

substantively unchanged by WIOA. 

Current Regulations: None. 

Proposed Regulations: We propose to 

create a new § 363.24 that would define 

program income, identify its uses, and 

clarify that program income may be 

treated as either an addition or 

deduction to the award. 

In addition, we propose including 

requirements related to the carry-over of 

program income in proposed § 363.25. 

This provision would clarify that 

program income may be carried over 

into the succeeding fiscal year. 

Reasons: These regulations are 

necessary to govern the use and 

treatment of program income, consistent 

with sections 19 and 108 of the Act. 

Although statutory requirements 

governing program income have always 

applied to the Supported Employment 

program, we have found, through 

monitoring, that confusion exists among 

States as to how and when program 

income should be reported under the 

Supported Employment program as 

opposed to under the VR program. We 

believe this proposed change would 

minimize such confusion and result in 

more accurate reporting of program 

income. Furthermore, these proposed 

changes are consistent with those 

proposed in part 361, which governs the 

VR program, since the Supported 

Employment program is supplemental 

to that program. 

Carryover (§ 363.25) 

Statute: Section 19 of the Act permits 

States to carry funds over to a 

succeeding fiscal year to the extent the 

State has satisfied any applicable match 

requirements. 

Current Regulations: None. 

Proposed Regulations: We propose to 

add a new § 363.25 that mirrors the 

carryover requirements under part 361, 

which governs the VR program. 

Although section 19 of the Act has 

always applied to the Supported 

Employment program, the amendments 

made by WIOA change the effect of this 

requirement since States, for the first 

time, have a match requirement under 

this program. Therefore, a State would 

be permitted to carry over the 50 

percent of the allotment reserved for 

serving youth with the most significant 

disabilities only if it has met the 10 

percent match for those funds in the 

fiscal year in which the funds were 

awarded. A State would be able to 

continue to carry over the other half of 

the allotment, to serve all other 

individuals, without having to satisfy a 

match requirement since the statute 

does not impose a match requirement 

on that portion of the supported 

employment allotment. 

Reasons: The proposed revisions are 

necessary to implement in part 363 

statutory changes made by WIOA. The 

proposed changes are also consistent 

with proposed changes to part 361, 

which governs the VR program, since 

the Supported Employment program is 

supplemental to that program. 

Limitations on Administrative Costs 

(§ 363.51) 

Statute: Section 603(c) of the Act, as 

amended by WIOA, reduces the limit 

allowed for administrative costs from 5 

percent of the allotment to 2.5 percent. 

In addition, section 606(b)(7)(H) 

requires the State to assure in its State 

plan supplement for the Supported 

Employment program within the VR 

section of the Unified or Combined 

State Plan, that it will not expend more 

than 2.5 percent of the allotment for 

administrative costs. 

Current Regulations: Current 

§ 363.51(b) contains a 5 percent limit. 

The current regulations do not reference 

the 2.5 percent limit since this is a new 

statutory requirement. 

Proposed Regulations: We propose to 

amend § 363.51(b) to implement the 

reduced administrative cost limit of 2.5 

percent. We also propose to amend the 

State plan requirements in § 363.11 

accordingly. 

Reasons: The proposed revisions are 

necessary to implement in part 363 

statutory changes made by WIOA. 


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Miscellaneous Changes for Clarity 

Statute: Section 603 of the Act, as 

redesignated by WIOA, sets forth the 

procedures for allotting and reallocating 

funds under the Supported Employment 

program. This statutory provision 

remained substantively unchanged by 

WIOA. 

Current Regulations: Current 

§§ 363.20 and 363.21 merely crossreference to statutory provisions 

regarding procedures for allocating and 

reallocating funds that are obsolete 

given revisions made to title VI of the 

Act by WIOA. 

Proposed Regulations: We propose to 

amend §§ 363.20 and 363.21 to mirror 

the statutory text regarding procedures 

for allocating and reallocating supported 

employment funds. 

Reasons: The proposed changes are 

necessary to conform to statutory 

amendments made by WIOA that 

restructure title VI. The proposed 

changes would also outline the 

procedures for allocating and 

reallocating funds, rather than merely 

cross-referencing the Act, thereby 

making the proposed sections more 

user-friendly. 

Limitation on Use of Subminimum 

Wages (Proposed 34 Part 397) 

Our discussion of part 397 is 

presented by subject in the order in 

which relevant sections appear in this 

part. 

Purpose and the Department’s 

Jurisdiction 

Statute: Section 511 of the Act, as 

added by WIOA, imposes limitations on 

employers who hold special wage 

certificates under the Fair Labor 

Standards Act (FLSA) that must be 

satisfied before the employers may hire 

youth with disabilities at subminimum 

wage or continue to employ individuals 

with disabilities of any age at 

subminimum wage. Section 511 of the 

Act also establishes the roles and 

responsibilities of the designated State 

units (DSU) for the vocational 

rehabilitation (VR) program and State 

and local educational agencies, in 

assisting individuals with disabilities, 

including youth with disabilities, who 

are considering employment, or who are 

already employed, at a subminimum 

wage, to maximize opportunities to 

achieve competitive integrated 

employment through services provided 

by VR and the local educational 

agencies. 

Current Regulations: None. 

Proposed Regulations: Proposed 

§ 397.1 establishes the purpose of the 

regulations in this part, which is to set 

forth requirements the DSUs and State 

and local educational agencies must 

satisfy to ensure that individuals with 

disabilities, especially youth with 

disabilities, have a meaningful 

opportunity to prepare for, obtain, 

maintain, advance in, or regain 

competitive integrated employment, 

including supported or customized 

employment. 

This proposed section also states that 

these regulations should be read in 

concert with: Part 300, which 

implements requirements under part B 

of the Individuals with Disabilities 

Education Act; part 361, which 

implements requirements for the VR 

program; and part 363, which 

implements the State Supported 

Employment Services program. We 

believe this clarification is necessary to 

ensure all stakeholders understand that 

nothing in this part is to be construed 

as altering any requirement under parts 

300, 361, or 363. 

Other relevant proposed regulations 

in this part include: § 397.2, regarding 

the Department’s jurisdiction; § 397.3, 

regarding rules of construction; § 397.4, 

regarding other applicable regulations; 

and § 397.5, regarding applicable 

definitions. 

Reasons: These proposed regulations 

are necessary to ensure stakeholders 

understand the purpose of section 511 

of the Act, as added by WIOA, and the 

Department’s authority and jurisdiction 

under this section, as well as the interrelationship of these requirements with 

those under the Individuals with 

Disabilities Education Act and the VR 

program and Supported Employment 

program. 

Coordinated Documentation Process 

Statute: Section 511(d) of the Act, as 

added by WIOA, requires the DSU and 

the State educational agency to develop 

a coordinated process, or use an existing 

process, for providing youth with 

disabilities documentation 

demonstrating completion of the various 

actions required by section 511 of the 

Act. Other relevant statutory provisions 

include section 511(a) of the Act, 

regarding the actions that a youth must 

complete prior to beginning 

subminimum wage employment, and 

section 511(c) of the Act, regarding the 

actions that individuals with disabilities 

of any age must complete in order to 

continue employment at subminimum 

wage. 

Current Regulations: None. 

Proposed Regulations: Proposed 

§ 397.10 would require the DSU, in 

consultation with the State educational 

agency, to develop a process that 

ensures individuals with disabilities, 

including youth with disabilities, 

receive documentation demonstrating 

completion of the various activities 

required by section 511 of the Act, such 

as, to name a few, the receipt of 

transition services by eligible children 

with disabilities under the Individuals 

with Disabilities Education Act and preemployment transition services under 

section 113 of the Act, as appropriate. 

Proposed §§ 397.20 and 397.30 would 

establish the documentation that the 

DSUs and local educational agencies, as 

appropriate, must provide to 

demonstrate completion of the various 

activities, required by section 511(a)(2) 

of the Act, by a youth with a disability. 

These would include completing preemployment transition services under 

proposed § 361.48(a) and the 

determination of eligibility or 

ineligibility for VR services under 

proposed § 361.42 and § 361.43. 

Proposed § 397.40 would establish the 

documentation that the DSUs must 

provide to individuals with disabilities 

of any age who are employed at a 

subminimum wage upon the completion 

of certain information and career 

counseling-related services, as required 

by section 511(c) of the Act. 

Reasons: These proposed regulations 

are necessary to implement new 

statutory requirements. In so doing, 

these proposed regulations would 

inform DSUs, State, and local 

educational agencies of their specific 

responsibilities related to 

documentation required under section 

511 of the Act and would ensure that 

individuals with disabilities have 

sufficient information available to make 

informed choices. 

Contracting Prohibition 

Statute: Section 511(b)(2) of the Act, 

as added by WIOA, prohibits a local or 

State educational agency (as defined in 

section 9101 of the Elementary and 

Secondary Education Act of 1965 (20 

U.S.C. 7801)) from entering into a 

contract or other arrangement with an 

entity, which holds a special wage 

certificate under 14(c) of the FLSA for 

the purpose of operating a program for 

a youth under which work is 

compensated at a subminimum wage. 

Current Regulations: None. 

Proposed Regulations: Proposed 

§ 397.31 would prohibit a local 

educational agency or a State 

educational agency from entering into a 

contract with an entity that employs 

individuals at subminimum wage for 

the purpose of operating a program 

under which a youth with a disability 

is engaged in subminimum wage 

employment. Although section 511(b)(2) 

of the Act refers to youth in general, the 


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proposed regulation is limited to youth 

with disabilities in order to be 

consistent with all other provisions of 

section 511 of the Act. 

Reasons: This proposed section is 

necessary to implement new statutory 

requirements. In so doing, this proposed 

regulation is consistent with the 

heightened emphasis in the Act, as 

amended by WIOA, on ensuring that 

individuals with disabilities, especially 

youth with disabilities, are given the 

opportunity to train for and obtain work 

in competitive integrated employment. 

While some State and local educational 

agencies contract with employers who 

hold special wage certificates under 

FLSA, others contract with employers 

who pay minimum wage, to create job 

training and other work experiences for 

students with disabilities. Through 

these training and work experience 

programs, students with disabilities gain 

knowledge and skills that transfer into 

eventual jobs similar to those in which 

they receive their training, not only with 

regard to the type of duties performed, 

but also the wages earned. In the context 

of this proposed regulation, State and 

local educational agencies are not 

employers, but rather partners that 

facilitate entry of students with 

disabilities into training programs that 

are implemented by employers holding 

special wage certificates under the 

FLSA. We believe this statutory 

prohibition, which is contained in the 

proposed regulations, will result in 

fewer students with disabilities, 

participating in training programs at the 

subminimum wage level. As a result, we 

believe more students with disabilities, 

especially those with the most 

significant disabilities, will have the 

opportunity to gain work experiences in 

competitive integrated employment 

settings which, in turn, will lead to 

eventual employment outcomes in those 

settings rather than at the subminimum 

wage level. With regard to this proposed 

provision, the Secretary specifically 

seeks comments regarding the 

Department’s role and jurisdiction with 

respect to these provisions. 

Review of Documentation Process 

Statute: Section 511(e)(2)(B) of the 

Act, as added by WIOA, permits DSUs, 

along with the Department of Labor, to 

review individual documentation held 

by entities holding special wage 

certificates under the FLSA to ensure 

the required documentation for 

individuals with disabilities, including 

youth with disabilities, who are 

employed at the subminimum wage 

level, is maintained. 

Current Regulations: None. 

Proposed Regulations: Proposed 

§ 397.50 would authorize a DSU to 

review individual documentation, 

required by this part, for all individuals 

with disabilities who are employed at 

the subminimum wage level, that is 

maintained by employers, who hold 

special wage certificates under the 

FSLA. 

Reasons: This proposed provision is 

necessary to implement new statutory 

requirements. In this context, the DSU’s 

role is one of review not enforcement. 

The Department of Labor retains 

enforcement authority with respect to 

these employers under the FLSA. 

Executive Orders 12866 and 13563 

Regulatory Impact Analysis 

Under Executive Order 12866, the 

Secretary must determine whether this 

regulatory action is ‘‘significant’’ and, 

therefore, subject to the requirements of 

the Executive order and subject to 

review by the OMB. Section 3(f) of 

Executive Order 12866 defines a 

‘‘significant regulatory action’’ as an 

action likely to result in a rule that 

may— 

(1) Have an annual effect on the 

economy of $100 million or more, or 

adversely affect a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local, or tribal governments or 

communities in a material way (also 

referred to as an ‘‘economically 

significant’’ rule); 

(2) Create serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; 

(3) Materially alter the budgetary 

impacts of entitlement grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or 

(4) Raise novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

stated in the Executive order. 

This proposed regulatory action is a 

significant regulatory action subject to 

review by OMB under section 3(f) of 

Executive Order 12866. 

We have also reviewed these 

regulations under Executive Order 

13563, which supplements and 

explicitly reaffirms the principles, 

structures, and definitions governing 

regulatory review established in 

Executive Order 12866. To the extent 

permitted by law, Executive Order 

13563 requires that an agency— 

(1) Propose or adopt regulations only 

upon a reasoned determination that 

their benefits justify their costs 

(recognizing that some benefits and 

costs are difficult to quantify); 

(2) Tailor its regulations to impose the 

least burden on society, consistent with 

obtaining regulatory objectives and 

taking into account—among other things 

and to the extent practicable—the costs 

of cumulative regulations; 

(3) In choosing among alternative 

regulatory approaches, select those 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety, 

and other advantages; distributive 

impacts; and equity); 

(4) To the extent feasible, specify 

performance objectives, rather than the 

behavior or manner of compliance a 

regulated entity must adopt; and 

(5) Identify and assess available 

alternatives to direct regulation, 

including economic incentives—such as 

user fees or marketable permits—to 

encourage the desired behavior, or 

provide information that enables the 

public to make choices. 

Executive Order 13563 also requires 

an agency ‘‘to use the best available 

techniques to quantify anticipated 

present and future benefits and costs as 

accurately as possible.’’ The Office of 

Information and Regulatory Affairs of 

OMB has emphasized that these 

techniques may include ‘‘identifying 

changing future compliance costs that 

might result from technological 

innovation or anticipated behavioral 

changes.’’ 

We also have determined that this 

regulatory action would not unduly 

interfere with State, local, and tribal 

governments in the exercise of their 

governmental functions. 

We have assessed the potential costs 

and benefits of this regulatory action. 

The potential costs associated with the 

proposed regulations are those resulting 

from statutory requirements and those 

we have determined as necessary for 

administering these programs effectively 

and efficiently. Elsewhere in this 

section under Paperwork Reduction Act 

of 1995, we identify and explain 

burdens specifically associated with 

information collection requirements. 

In assessing the potential costs and 

benefits—both quantitative and 

qualitative—of these proposed 

regulations, we have determined that 

the benefits would justify the costs. 

Need for Regulatory Action 

Executive Order 12866 emphasizes 

that ‘‘Federal agencies should 

promulgate only such regulations as are 

required by law, are necessary to 

interpret the law, or are made necessary 

by compelling public need, such as 

material failures of private markets to 

protect or improve the health and safety 

of the public, the environment, or the 

well-being of the American people.’’ 

The Department’s goal in regulating is to 


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incorporate the provisions of the Act, as 

amended by WIOA, into the 

Department’s regulations governing the 

VR program and Supported 

Employment program at parts 361 and 

363, respectively, as well as to clarify, 

update and improve these regulations. 

This regulatory action is also necessary 

to establish a new part 397 to 

implement specific the provisions of 

section 511 of the Act, as added by 

WIOA, which places limitations on the 

use of subminimum wages for 

individuals with disabilities. 

Summary of Potential Costs and 

Benefits 

The Secretary believes that the 

proposed changes would substantially 

improve the programs covered in this 

NPRM, and would yield substantial 

benefits in terms of program 

management, efficiency, and 

effectiveness. The Secretary believes 

that the proposed regulations represent 

the least burdensome way to implement 

the amendments to the Act made by 

WIOA. Due to the number of proposed 

regulatory changes, our analysis focuses 

solely on new requirements imposed by 

WIOA, organized in the following 

manner. First, we discuss the potential 

costs and benefits related to the VR 

program under section A that 

specifically address: competitive 

integrated employment and 

employment outcomes, pre-employment 

transition services and transition 

services, and additional VR program 

provisions. Second, we discuss the 

potential costs and benefits related to 

the Supported Employment program 

under section B. Finally, we discuss the 

costs and benefits pertaining to the 

establishment of proposed part 397 

under section C. 

Where possible The Department 

derived estimates by comparing the 

existing program regulations against the 

benefits and costs associated with 

implementation of provisions contained 

in this WIOA-required NPRM. The 

Department also made an effort, when 

feasible, to quantify and monetize the 

benefits and costs of the NPRM. When 

we were unable to quantify them—for 

example, due to data limitations—we 

describe the benefits and costs 

qualitatively. In accordance with the 

regulatory analysis guidance contained 

in OMB Circular A–4 and consistent 

with the Department’s practices in 

previous rulemakings, this regulatory 

analysis focuses on the likely 

consequences (benefits and costs that 

accrue to individuals with disabilities) 

of the WIOA-required NPRM. In this 

analysis, the Department also considers 

the transfer of benefits from one group 

to another that do not affect total 

resources available to the VR program 

and Supported Employment program. 

However, in a number of service records 

the Department is unable to quantify 

these transfers due to limitations of the 

data it currently collects. In estimating 

costs, we used wage rates from the 

Bureau of Labor Statistics’ Mean Hourly 

Wage Rate for State employees. 

A. Vocational Rehabilitation Program 

Competitive Integrated Employment 

and Employment Outcomes 

The Act, as amended by WIOA, places 

heightened emphasis on the 

achievement of competitive integrated 

employment by individuals with 

disabilities, including those with the 

most significant disabilities. In so doing, 

Congress added a new term and 

accompanying definition to the Act— 

‘‘competitive integrated employment.’’ 

While this is a new statutory term, it 

represents, in general, a consolidation of 

two existing regulatory definitions— 

‘‘competitive employment’’ and 

‘‘integrated setting.’’ As a result of the 

statutory amendments, we propose to 

replace the existing regulatory 

definition of ‘‘competitive 

employment,’’ with the new term 

‘‘competitive integrated employment,’’ 

by mirroring the statute and 

incorporating critical criteria from the 

existing regulatory definition of 

‘‘integrated setting.’’ Because this 

proposed change is more technical than 

substantive, and given that the 

substance of the proposed definition 

already exists in two separate 

definitions, we believe this particular 

change will have no significant impact 

on the VR program. 

In addition to proposing to implement 

the new definition of ‘‘competitive 

integrated employment,’’ we also 

believe it is necessary to propose 

changes to the current regulatory 

definition of ‘‘employment outcome.’’ 

While the Act, as amended by WIOA, 

made only technical changes to the 

statutory definition of ‘‘employment 

outcome,’’ we believe a regulatory 

change is necessary in light of the 

heightened emphasis throughout the 

Act on the achievement of competitive 

integrated employment under the VR 

program and Supported Employment 

program. To that end, we propose to 

define ‘‘employment outcome’’ as an 

outcome in competitive integrated 

employment or supported employment, 

thereby eliminating uncompensated 

employment (e.g., homemakers and 

unpaid family workers) from the scope 

of employment outcomes for purposes 

of the VR program. 

To date, the Department has exercised 

the Secretary’s statutory discretion to 

permit types of employment not 

specified in the Act as ‘‘employment 

outcomes’’ under the VR program. In so 

doing, the Department has permitted 

uncompensated employment, such as 

work as homemakers and unpaid family 

workers, to constitute as an employment 

outcome under the VR program. 

However, given the heightened 

emphasis on competitive integrated 

employment in the Act, as amended by 

WIOA—from the purpose of the Act to 

the addition of section 511, the 

Secretary proposes to amend the current 

regulatory definition of ‘‘employment 

outcome’’ to include only compensated 

employment within its scope for 

purposes of the VR program. Thus, the 

Secretary intends to ensure that VR 

funds are no longer diverted for the 

provision of services that can be 

appropriately provided, in many cases, 

by independent living and other 

programs. 

It is difficult to quantify the extent to 

which the proposed change to the 

definition of ‘‘employment outcome,’’ 

which has the effect of eliminating 

homemakers and unpaid family workers 

from its scope, will affect VR program 

costs nationally due to a number of 

highly variable factors. For example, it 

is not known whether individuals who 

previously achieved homemaker 

outcomes will choose to pursue 

competitive integrated employment 

through the VR program in the future, 

or seek out other resources, such as 

those available from independent living 

programs. Based on data reported by VR 

agencies through the VR Case Service 

Report (RSA–911) for the period 

beginning in FY 1980 and ending in FY 

2013, the percentage of individuals 

exiting the VR program as homemakers 

nationally declined significantly from 

15 percent of all individuals achieving 

an employment outcome in fiscal year 

(FY) 1980 to 1.9 percent in FY 2013 

(representing 3,467 of the 182,696 total 

employment outcomes that year). While 

the national percentage of homemaker 

outcomes compared to all employment 

outcomes is small, some designated 

State units (DSU) have a greater 

percentage of homemaker outcomes 

than others, particularly those serving 

only individuals who are blind and 

visually impaired. In FY 2013, the 24 

DSUs that only provided services to 

individuals who are blind and visually 

impaired reported that 10.5 percent of 

the 6,121 employment outcomes in that 

year were homemaker outcomes (or 645 

outcomes). DSUs that serve individuals 

with disabilities other than those with 


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blindness and visual impairments 

reported 656 homemaker outcomes in 

that year, or 0.8 percent of the 84,238 

employment outcomes. In addition, the 

32 DSUs that serve individuals with all 

disabilities reported 2,166 homemaker 

outcomes in FY 2013, representing 2.3 

percent of their total 92,337 

employment outcomes. 

The average cost per employment 

outcome, including the average cost per 

homemaker outcome, can be calculated 

based on data reported by DSUs in the 

RSA–911 on the cost of purchased 

services for individuals exiting the VR 

program with an employment outcome. 

In FY 2013, the average cost per 

homemaker outcome for the VR program 

was $6,626, while the comparable 

average cost per employment outcome 

for all individuals exiting the VR 

program with an employment outcome 

that year was $5,672. It is possible that 

this higher average cost is because 

individuals obtaining a homemaker 

outcome generally require more 

intensive services or costly equipment 

because the nature or severity of their 

disabilities have prevented them from 

pursuing competitive integrated 

employment. However, there may be 

other factors that drive up the average 

cost of these outcomes. For example, it 

may be that some of these individuals 

originally had a goal of competitive 

employment, but after receiving services 

for an intensive or long period of time 

without obtaining such an outcome, 

they may have chosen to change their 

goal. Further analysis is needed to 

identify the factors that contribute to the 

average higher cost of homemaker 

closures. 

Given current information reported to 

the Department by DSUs, we are not 

able to predict how many individuals 

who would have possibly had a 

homemaker outcome might now choose 

to seek competitive employment. 

However, for the purpose of providing 

a gross estimate of these costs, we 

assume that approximately one-fourth 

(867) of the number of individuals who 

exited the VR program with a 

homemaker outcome will choose a goal 

of competitive integrated employment 

and continue to seek services through 

the VR program. We also assume that 

obtaining competitive integrated 

employment for these individuals may 

be more expensive than the current cost 

for obtaining a homemaker outcome, but 

also assume it is unlikely that the 

average costs for providing services to 

these individuals would exceed more 

than 150 percent of their current costs 

(or approximately 175 percent of the 

average cost per employment outcome 

for all agencies in FY 2013). As such, we 

estimate the additional cost to DSUs to 

provide VR services to those individuals 

who previously would have exited the 

program with a homemaker outcomes 

would not exceed $3,313 per outcome, 

or about $2,872,370 per year. 

Alternatively, assuming that about 75 

percent of the number of individuals 

who would have otherwise attained a 

homemaker outcome no longer seek 

services from DSUs (2,600) at an average 

cost of $6,626, there would be a net 

savings of $17,227,600 to the VR 

program. Based on these assumptions, 

we estimate an overall savings to the VR 

program of approximately $14,355,230. 

We recognize that the proposed 

change in the definition of employment 

outcome could potentially increase the 

demand for services from independent 

living and other programs that can 

provide services similar to those that 

such individuals would have previously 

sought from the VR program and that 

some of these savings for the VR 

program could result in a cost transfer 

to other Federal, State, and local 

programs. The Department plans to 

provide guidance and technical 

assistance to: (1) Facilitate the transition 

to the new definition of employment 

outcome; and (2) minimize the potential 

disruption of services to current VR 

program consumers who do not 

currently have a competitive integrated 

employment or supported employment 

goal reflected in their individualized 

plan for employment. The Department 

also plans to provide guidance and 

technical assistance to assist both VR 

agencies and potential service providers 

in the referral and acquisition of 

services for individuals with disabilities 

seeking services for outcomes other than 

those covered under the proposed 

revised definition of employment 

outcome. 

Finally the Department plans to work 

with other Federal agencies, such as the 

Administration for Community Living at 

the Department of Health and Human 

Services, in identifying any impact of 

the proposed change on independent 

living and other related programs and 

developing strategies to address 

potential problems. 

Pre-Employment Transition Services 

and Transition Services 

The Act, as amended by WIOA, places 

heightened emphasis on the provision 

of pre-employment transition services 

and other transition services to students 

and youth with disabilities, as 

applicable. As a result, the Secretary 

proposes to make numerous 

amendments to the VR program 

regulations to implement new statutory 

requirements. A few of those proposed 

changes are relevant to this regulatory 

impact analysis discussion. 

Foremost among these proposed 

changes is the requirement that DSUs 

reserve at least 15 percent of the State’s 

VR allotment for the provision of preemployment transition services to 

students with disabilities who are 

eligible or potentially eligible for VR 

services. Additionally, States may not 

include administrative costs associated 

with the provision of pre-employment 

transition services in the calculation of 

that 15 percent. 

The proposed regulation would 

require DSUs to dedicate resources to: 

(1) Ensure that the 15 percent is 

reserved from the State’s VR allotment; 

(2) track the provision of preemployment transition services to 

ensure funds were spent solely on 

authorized services and not on 

administrative costs; and (3) provide for 

administrative costs related to preemployment transition services with 

non-reserved VR funds. 

Second, section 113 of the Act, as 

added by WIOA, requires VR agencies to 

provide pre-employment transition 

services to students with disabilities 

who are eligible or potentially eligible 

for VR services. We propose to interpret 

the term ‘‘potentially eligible’’ to mean 

all students with disabilities, as defined 

in proposed § 361.5(c)(51). Prior to the 

enactment of WIOA, VR agencies were 

only permitted to provide preemployment transition services or any 

other transition services to individuals 

who had been determined eligible for 

the VR program and who had an 

approved individualized plan for 

employment. In developing the 

proposed regulation, the Department 

considered limiting the provision of preemployment transition services to those 

students with disabilities who have 

applied for VR services. However, this 

alternative interpretation is not 

proposed because we believe that 

Congress intended these services to 

reach a broader group of individuals 

than those who are eligible under 

current VR program regulations. The 

Department’s proposed interpretation, 

which is the broadest possible given the 

plain meaning of the statute, is 

consistent with Congressional intent 

and the stated desires of some VR 

agencies and other stakeholders. 

Although pre-employment transition 

services are a new category of services 

identified in the Act, many of these 

services historically were provided 

under a more general category of 

transition services. Therefore, the 

provision of these services is not new to 

VR agencies. However, until the 

enactment of WIOA, all such services 


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were provided only to those students 

with disabilities who had been 

determined eligible for the VR program. 

Consequently, providing preemployment transition services to all 

students with disabilities could increase 

staff time and resources spent on the 

provision of these services. 

We are unable to estimate the 

potential increase in DSU 

administrative costs that may arise from 

implementation of new section 113 of 

the Act or the required 15 percent 

reservation of funds at this time. 

However, we have attempted to estimate 

the impact that this 15 percent 

reservation could have on the VR 

program as a whole. 

Assuming that States are able to 

match all of the funds provided for the 

VR program in the FY 2015 VR 

appropriation, $3,052,453,598, the total 

aggregate amount of VR funds that 

would be required to be reserved for 

pre-employment transition services 

from all 80 State VR agencies would be 

$457,868,040. Because each State VR 

agency must reserve a portion of its 

allotment, it will now have fewer funds 

available to use for all other authorized 

activities, thereby reducing the available 

resources for services other than preemployment transition services. The 

extent of the impact of the reservation 

on a particular State will depend largely 

on the extent to which it has been 

providing transition services to students 

with disabilities that are now specified 

under section 113 as pre-employment 

transition services. States that currently 

provide extensive transition services to 

students with disabilities, including 

services that would meet the definition 

of pre-employment transition services, 

are likely to see less transfer of benefits 

among eligible individuals served by 

their agency. For States that have not 

provided such services or have only 

provided such services to this 

population to a small extent, there may 

be more extensive transfers of services 

and benefits of the VR program among 

individuals (i.e., to students with 

disabilities and away from other 

individuals who otherwise would have 

been served). 

Ultimately, the total value of the 

benefits transfer is equivalent to the 

difference between the amount reserved 

by States under this provision (we 

assume here $457,868,040) and the cost 

of providing pre-employment transition 

services to students with disabilities 

who have such services outlined in their 

individualized plan for employment 

(i.e., those who would receive such 

services in the absence of the mandated 

reservation). 

Based on data reported through the 

RSA–911 for FY 2013, the service 

records for 206,050 transition-age youth 

(individuals ages 14 to 24 at the time of 

application) were closed, of which 

123,119 received services. A portion of 

those served may qualify as students 

with a disability that would be able to 

receive pre-employment transition 

services. In FY 2013, of the 123,119 

transition-age individuals who received 

services, 98,212 were aged 16 through 

21, and most closely represent the 

population of ‘‘students with a 

disability’’ as defined under proposed 

regulations. DSUs expended a total of 

$503,208,438 on the purchase of VR 

services for these individuals, for an 

average cost of $5,124 per individual. 

Recognizing that the 98,212 students 

include only those who have applied for 

VR services and that under proposed 

regulations DSUs would provide preemployment transition services to 

students with disabilities prior to their 

application for VR services, we 

anticipate that DSUs will be providing 

these services to a potentially larger 

number of students with disabilities 

with the reserved funds. 

We emphasize that this is an estimate 

based on assumptions and that we 

cannot more definitively project the 

transfer of benefits across the VR 

program related to the provision of preemployment transition services due to 

both the unknown number of students 

in each State and nationally who may 

receive these services and the specific 

services that will be provided. 

Third, section 103(b)(7) of the Act, as 

added by WIOA, permits VR agencies to 

provide transition services to groups of 

youth and students with disabilities. To 

that end, we propose to add 

§ 361.49(a)(7) to implement this 

requirement. In so doing, DSUs would 

be permitted to provide transition 

services to groups of students and youth 

with disabilities, who may not have 

applied, or been determined eligible, for 

VR services. 

The proposed regulation benefits VR 

agencies in two significant ways: (1) It 

would give them the ability to serve 

groups of youth and students with 

disabilities simultaneously, who may 

need only basic generalized services, 

thereby reducing the amount of cost 

expended per individual; and (2) it 

would reduce administrative burden on 

the VR agencies, as well as the burden 

on students or youth with disabilities 

and their families, by not having to 

engage in processes for determining 

eligibility, conducting assessments, and 

developing individualized plans for 

employment. However, we have not 

attempted to quantify the impact of this 

provision due to the variability in the 

number of individuals that may seek out 

these services nationally, the degree to 

which individuals would require these 

services within each State, and the 

services that would be provided in each 

State. 

Additional Vocational Rehabilitation 

Program Provisions 

VR Services Portion of the Unified or 

Combined State Plan 

WIOA requires the VR State plan, 

which has been a stand-alone State 

plan, to be submitted as a VR services 

portion of a State’s Unified or Combined 

State Plan for all six core programs of 

the workforce development system. 

Requirements related to the submission 

of Unified or Combined State Plans do 

not take effect until July 2016. 

In preparing for the transition to the 

submission of Unified or Combined 

State Plans every four years, with 

modifications submitted every two 

years, we propose to amend regulations 

governing the annual submissions of 

certain reports and updates. In so doing, 

we would no longer require the 

submission of these particular reports 

and updates annually, but rather, they 

would be included in the VR services 

portion of the Unified or Combined 

State Plan and would be submitted at 

such time and in such manner as 

determined by the Secretary. This 

flexibility would allow for VR programspecific reporting to be done in a 

manner consistent with those for the 

Unified or Combined State Plan under 

sections 102 or 103 of WIOA, thus 

avoiding additional burden or costs to 

DSUs through the submission of 

separate reports annually or whenever 

updates are made. 

Section 101(a) of the Act, as amended 

by WIOA, requires DSUs to include 

additional descriptive information in 

the VR services portion of the Unified 

or Combined State Plan. Therefore, we 

propose to amend part 361 by requiring 

that DSUs describe in the VR services 

portion of the Unified or Combined 

State Plan the results of the 

comprehensive statewide needs 

assessment with respect to the needs of 

students and youth with disabilities for 

pre-employment transition services and 

other transition services, as appropriate; 

to identify goals and priorities to 

address these needs; and to describe 

strategies for the achievement of these 

goals. We also propose that the VR 

services portion of the Unified or 

Combined State Plan include a 

description of how the DSU will work 

with employers to identify competitive 

integrated employment opportunities 


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and career exploration opportunities, in 

order to facilitate the provision of VR 

services, and transition services for 

youth with disabilities and students 

with disabilities, such as preemployment transition services. We also 

propose that the VR services portion of 

the Unified or Combined State Plan 

contain a description of collaboration 

with the State agency responsible for 

administering the State Medicaid plan 

under title XIX of the Social Security 

Act, the State agency responsible for 

providing services for individuals with 

developmental disabilities, and the 

State agency responsible for providing 

mental health services, to develop 

opportunities for community-based 

employment in integrated settings, to 

the greatest extent practicable. As a 

result, DSUs would be required to 

expend additional effort in the 

development of these descriptions 

beyond the 25 hours currently estimated 

for the development and submission of 

the entire State plan, now the VR 

services portion of the Unified or 

Combined State Plan. We estimate that 

DSUs will require an additional five 

hours for the development of these 

descriptions, for a total of 30 hours per 

agency. At an average hourly rate of 

$39.78 (based on data obtained from the 

Bureau of Labor Statistics for State 

government management occupations), 

a rate more consistent with State rates 

of pay than the $22.00 per hour used to 

calculate current costs, each DSU would 

expend $1,193 in the development of 

and submission of the VR services 

portion of the Unified or Combined 

State Plan, resulting in a total of $95,472 

for all 80 DSUs. Although these costs 

are significantly higher than the current 

estimate of $2,000 incurred by all 80 

DSUs in the development and 

submission of the State plan, we believe 

that the additional burden is more 

accurate and outweighed by the benefit 

to the public through a more 

comprehensive understanding of the 

activities DSUs engage in to assist 

individuals with disabilities to obtain 

the skills necessary to achieve 

competitive integrated employment in 

job-driven careers. 

Order of Selection 

Section 101(a)(5) of the Act, as 

amended by WIOA, permits DSUs, at 

their discretion, to serve eligible 

individuals who require specific 

services or equipment to maintain 

employment, regardless of whether they 

are receiving VR services under an order 

of selection or their assignment to a 

priority category. Therefore, we propose 

to amend part 361 to implement this 

new statutory requirement. It is 

important to note that DSUs 

implementing an order of selection are 

not required to use this authority; 

rather, they may choose to do so based 

upon agency policy, or the availability 

of financial and staff resources. DSUs 

implementing an order of selection 

would be required to state in the VR 

services portion of the Unified or 

Combined State Plan whether they have 

elected to exercise this discretion, 

thereby signaling a decision to serve 

eligible individuals who otherwise 

might have been placed on a waiting list 

under the State’s order of selection, and 

who are at risk of losing their 

employment. This proposed change 

would increase flexibility for a State 

managing its resources. If a State were 

to implement this flexibility, it could 

prevent an individual from losing 

employment by avoiding a delay in 

services. On the other hand, DSUs that 

elect to implement this option would 

potentially need to reallocate resources 

to cover expenditures for services or 

equipment for individuals who meet the 

qualifications of this provision, and fall 

outside the open priority category of a 

DSU’s order of selection. 

For FY 2015, the State Plans of 34 of 

the 80 DSUs documented that the 

agency had established an order of 

selection, one agency more than in FY 

2014. This total includes 8 percent of 

the 24 DSUs serving only individuals 

who are blind and visually impaired 

and 57 percent of the 56 other DSUs. 

Based on data reported through the 

RSA–911 in FY 2013, 17 percent of the 

individuals whose service records were 

closed and who received services were 

employed at application, with an 

average cost of purchased services 

$4,744. In addition, according to data 

reported through the VR program 

Cumulative Caseload (RSA–113) report, 

33,856 individuals were on a waiting 

list for VR services at the close of FY 

2013 due to the implementation of an 

order of selection. Assuming that 17 

percent of the 33,856 individuals on the 

waiting list could potentially benefit 

from the provision of services and 

equipment to maintain employment, a 

possible 5,756 individuals could benefit 

from the proposed regulatory change for 

a total cost of $27,306,464. This figure 

represents the potential reallocation of 

resources to cover the cost of services 

for individuals who, prior to enactment 

of WIOA, may have not received them, 

and away from eligible individuals who 

would have received services based on 

a VR agency’s order of selection policy. 

However, the implementation of an 

order of selection by individual DSUs 

may differ from year to year, as well as 

within a given fiscal year. In fact, not all 

DSUs that indicate they have 

established an order of selection as part 

of their State Plan actually implement 

that order or report that they had 

individuals on a waiting list during the 

year. In addition, we are unable to 

predict which DSUs on an order of 

selection would choose this option. The 

degree to which individuals will be 

referred for this service will also vary 

widely, as will the level of services or 

equipment that an individual could 

need to maintain employment. 

Reports, Standards, and Indicators 

As a result of amendments to the Act 

made by WIOA, we propose to revise 

§ 361.40 to reflect changes to reporting 

requirements in section 116(b) in title I 

of WIOA and amendments to section 

101(a)(10) of the Act. Section 361.40, as 

proposed, does not list the actual data 

to be reported, but rather requires the 

collection and reporting of the 

information specified in sections 13, 14, 

and 101(a)(10) of the Act. New 

requirements under section 101(a)(10) 

include the reporting of data on the 

number of: Individuals with open 

service records and the types of services 

these individuals are receiving 

(including supported employment); 

students with disabilities receiving preemployment transition services; and 

individuals referred to State VR 

programs by one-stop operators and 

individuals referred to such one-stop 

operators by State VR programs. The 

RSA–911 would be revised as described 

in the information collection published 

for comment elsewhere in this issue of 

the Federal Register, consistent with the 

requirements in proposed § 361.40. 

Proposed 361.40 also would require 

States to report the data necessary to 

assess VR agency performance on the 

standards and indicators subject to the 

performance accountability provisions 

described in section 116 of WIOA. The 

common performance accountability 

measures apply to all core programs of 

the workforce development system and 

will be implemented in joint regulations 

set forth in subpart E of part 361. The 

impact analysis of these regulations are 

addressed in the joint regulations. 

We estimate that each DSU will need 

an additional 15 minutes per VR 

counselor to collect the new VR-specific 

data required by Section 101(a)(10) of 

the Act. Estimating an average of 125 

counselors per DSU, the number of 

hours per DSU would increase by 31.25 

for a total increase of 2,500 hours for all 

80 DSUs. The estimated cost per DSU, 

using an hourly wage of $22.27 (based 

on data from the Bureau of Labor 

Statistics for State-employed VR 

counselors), would result in an increase 


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of $695.94 per DSU and a total increase 

of $55,675 for all 80 DSUs. 

In addition, we estimate the burden 

hours for submission of the entire RSA– 

911 data file per DSU would increase 

from 50 hours per agency to 100 hours 

per agency, representing an increase of 

50 hours due to the need to report all 

open case data on a quarterly basis 

(rather than only data for closed service 

records on an annual basis). The total 

number of hours needed for the 

submission of the data file for 80 

agencies would increase from 4,000 to 

8,000 hours. Using an average hourly 

wage rate of $33.63 (based on data from 

the Bureau of Labor Statistics Stateemployed database administrators), the 

estimated cost per DSU would be 

$3,363, and the estimated cost for all 80 

DSUs would be $269,040. The total 

burden hours for both collection and 

submission would be 131.25 hours per 

DSU or a total of 10,500 hours for all 80 

DSUs. The estimated total burden cost 

for both collection and submission per 

DSU would be $4,059, with a total 

burden cost of $324,715 for all 80 DSUs. 

Finally, DSUs will incur expenses 

related to programming and 

modifications of data retrieval systems 

as a result of the revisions to the RSA– 

911 and its instructions due to the new 

VR-specific data required under section 

101(a)(10) of the Act. The costs are onetime, first-year costs. The burden on the 

DSUs related to the programming of 

their case management systems as a 

result of the redesigned RSA–911 will 

vary widely because agencies 

themselves range in size and the 

sophistication of their information 

technology systems. Roughly half of the 

80 DSUs use case management and 

reporting systems purchased from 

software providers who are responsible 

for maintaining and updating software. 

We estimate those DSUs would 

experience no or minimal increases in 

cost burden. The remaining DSUs have 

developed their own case management 

systems for which changes will be made 

by their information technology staff or 

outside contractors. Approximately, half 

of these DSUs would make the changes 

internally and half would contract for 

the changes to be made. 

We estimate those 20 DSUs that own, 

maintain, and update internal case 

management and reporting systems will 

expend an average of 240 hours at 

$44.72 (based on data from the Bureau 

of Labor Statistics for State-employed 

computer and information systems 

managers), for a total of $10,732.80 per 

DSU. The estimated total burden hours 

for all 20 DSUs would be 4,800 hours 

and at a cost of $214,656. We estimate 

that contractors who provide 

maintenance and system updates to the 

20 DSUs with internal case management 

systems would need 500 hours per DSU 

to accomplish the reprogramming of 

these systems, for a total of 10,000 

hours, as a result of the proposed 

changes to the RSA–911 data file. Using 

an average hourly wage rate of $39.21 × 

100 hours for private sector computer 

programmers, and a wage rate $67.32 × 

400 hours for private sector computer 

and information system managers 

(based on Bureau Labor Statistics data 

for 2013), we estimate these 20 DSUs 

will incur expenses of $30,849.00 per 

DSU, or a total cost of $616,980.00. 

We believe that these costs are 

outweighed by the benefits to the VR 

program because the new information to 

be reported and having access to more 

timely information on individuals 

currently participating in the VR 

program will better enable the 

Department and its partners to assess 

the performance of the program and 

monitor the implementation of WIOA, 

particularly as it relates to key policy 

changes, such as pre-employment 

transition services and its integration in 

the workforce development system. 

Extended Evaluation 

In implementing amendments to the 

Act made by WIOA, we propose to 

amend current §§ 361.41 and 361.42 by 

removing requirements related to 

extended evaluation. Instead, a DSU 

would be required to use trial work 

experiences when conducting an 

exploration of an individual with a 

significant disability’s abilities, 

capabilities, and capacity to perform in 

work situations. These proposed 

revisions would streamline the 

eligibility or ineligibility determination 

process for all applicants whose ability 

to benefit from VR services is in 

question. 

VR program data collected by the 

Department do not distinguish between 

individuals who had a trial work 

experience and those that had an 

extended evaluation. However, data 

show that 5,205 individuals exited from 

the VR program during or after trial 

work experiences or extended 

evaluations in FY 2013. DSUs expended 

a total of $4,385,963 on the provision of 

services to these individuals for an 

average cost of $843 per individual. 

Because we are unable to estimate how 

many of the 5,205 individuals were in 

extended evaluation, we cannot 

quantify either the current or the 

potential change in costs for this 

specific group of individuals. Based on 

the monitoring of VR agencies, it should 

be noted that the use of these services 

varies among DSUs, mainly due to 

variations in opportunities for 

individuals to participate in trial work 

experiences, and the extent to which 

DSUs historically utilized extended 

evaluation. We believe that the benefits 

of streamlining the eligibility 

determination process for applicants 

whose ability to benefit from VR 

services is in question and ensuring that 

ineligibility determinations are based on 

a full assessment of the capacity of an 

applicant to perform in realistic work 

settings outweighs the costs of removing 

the limited exception to trial work 

experiences. 

Timeframe for Completing the 

Individualized Plan for Employment 

Section 102(b) of the Act, as amended 

by WIOA, requires DSUs to develop 

individualized plans for employment 

within 90 days of date of eligibility 

determination. Consequently, we 

propose to amend § 361.45 to 

implement this 90-day requirement. Due 

to variations in current DSU timelines 

for the development of the 

individualized plan for employment, 

the establishment of a 90-day timeframe 

by WIOA would ensure consistency 

across the VR program nationally and 

the timely delivery of services, thereby 

improving DSU performance and 

successful employment outcomes for 

individuals with disabilities. 

We are unable to quantify potential 

additional costs to DSUs nationwide 

due to the variance in timelines 

currently in place. It is likely that States 

with prolonged timelines beyond 90 

days could experience an increase in 

outlays. For example, an increase in 

outlays could occur as a result of larger 

numbers of individuals, with approved 

individualized plans for employment, 

beginning to receive VR services at an 

earlier time than had historically been 

the case. However, while the overall 

cost per individual served are not likely 

to be affected by this proposed 

provision, the average time before some 

DSUs incur expenses related to the 

development of, and provision of 

services under, individualized plans for 

employment may be shortened, 

resulting in a shift of VR program 

outlays for services sooner than has 

been experienced. Therefore, in any 

given fiscal year outlays for these DSUs 

could be higher. While costs over the 

life of the service record should not be 

affected, some VR agencies could find it 

necessary to implement an order of 

selection due to the shifting of cost that 

would have been incurred in a 

subsequent fiscal year to a prior fiscal 

year as the result of a larger number of 

individuals with individualized plans 

for employment developed within 90 


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days. As always, DSUs are encouraged 

to conduct planning that incorporates 

programmatic and fiscal elements to 

make projections and assessments of VR 

program resources and the number of 

individuals served, utilizing 

management tools including order of 

selection, as appropriate. 

Services to Groups of Individuals With 

Disabilities 

Section 103(b)(8) of the Act, as added 

by WIOA, permits a DSU to establish, 

develop, or improve assistive 

technology demonstration, loan, 

reutilization, or financing programs 

designed to promote access to assistive 

technology. To that end, we propose to 

amend § 361.49 to implement this new 

authority. In so doing, we propose to 

limit the population to be served to 

individuals with disabilities who have 

applied, or been determined eligible, for 

VR services, thereby maintaining 

consistency with the authority to 

establish, develop, or improve a 

community rehabilitation program. We 

anticipate that this provision will 

benefit individuals with disabilities and 

employers through expanded access to 

assistive technology, reflecting the 

integral role assistive technology plays 

in the vocational rehabilitation and 

employment of individuals with 

disabilities. However, by limiting the 

use of this authority to services and 

activities that benefit applicants and 

eligible individuals, we ensure that this 

authority is used in coordination with, 

rather than to supplant, services and 

activities provided under the Assistive 

Technology Act. We have not attempted 

to quantify additional costs associated 

with this provision due to the variable 

nature of the specific assistive 

technology needs of VR program 

participants, and the availability of 

assistive technology demonstration, 

loan, reutilization, or financing 

programs within each State. 

Maintenance of Effort Requirements 

Section 111(a) of the Act, as amended 

by WIOA, requires the Secretary to 

reduce any subsequent fiscal year VR 

award to satisfy a maintenance of effort 

(MOE) deficit in a prior year. As a 

result, we propose to amend § 361.62 to 

implement this new requirement. Prior 

to the enactment of WIOA, the Secretary 

could only reduce the subsequent year’s 

grant to satisfy an MOE deficit from the 

preceding fiscal year. If a MOE deficit 

was discovered after it was too late to 

reduce the succeeding years grant, the 

Secretary was required to seek recovery 

through an audit disallowance, whereby 

the State repaid the deficit amount with 

non-Federal funds. 

Because the Secretary is now able to 

reduce any subsequent year’s VR grant 

for any prior year’s MOE deficit, DSUs 

benefit as they are no longer required to 

repay MOE shortfalls with non-Federal 

funds, thereby increasing the 

availability of non-Federal funds, in 

those instances, for obligation as match 

under the VR program. Since FY 2010, 

two States were required to pay a total 

of $791,342 in non-Federal funds 

related to MOE penalties because their 

MOE shortfall was not known at the 

time the reduction in Federal funds 

would have been authorized. As a 

result, these funds were unavailable to 

be used as matching funds for the VR 

program in the year they were paid. On 

the other hand, the new authority could 

have resulted in the deduction of the 

$791,342 MOE penalties from a future 

Federal award. 

B. The Supported Employment Program 

Services To Youth With the Most 

Significant Disabilities in Supported 

Employment 

Section 603(d) of the Act, as amended 

by WIOA, requires DSUs to reserve 50 

percent of their supported employment 

State grant allotment to provide 

supported employment services, 

including extended services, to youth 

with the most significant disabilities. 

This new statutory requirement is 

consistent with the heightened 

emphasis throughout the Act on the 

provision of services to youth with 

disabilities, especially those with the 

most significant disabilities. To that 

end, we propose to amend part 363 to 

implement this new requirement. The 

proposed changes are consistent with 

proposed changes to the VR program 

regulations, since the Supported 

Employment program is supplemental 

to that program. 

After setting aside funds to assist in 

carrying out section 21 of the Act, the 

FY 2015 Federal appropriation provides 

$27,272,520 for distribution to DSUs 

under the Supported Employment State 

Grants. Assuming that States are able to 

provide the required 10 percent nonFederal match for the available 

Supported Employment formula grant 

funds in FY 2015, the 50 percent 

reservation would result in the 

dedication of $13,636,260 for supported 

employment services to youth with the 

most significant disabilities. Conversely, 

the reserved funds would not be 

available for the provision of supported 

employment services to individuals 

who are not youth with the most 

significant disabilities. 

Match Requirements for Funds Reserved 

for Serving Youth With the Most 

Significant Disabilities in Supported 

Employment 

Section 606(b) of the Act, as amended 

by WIOA, requires States to provide a 

ten percent match for the 50 percent of 

the supported employment allotment 

reserved for providing supported 

employment services, including 

extended services, to youth with the 

most significant disabilities. We propose 

to implement this requirement in part 

363. To date, the supported program has 

not had a match requirement. 

As stated above, $27,272,520 is 

available for formula grants to States 

under the Supported Employment 

program for FY 2015. The 10 percent 

match requirement would generate 

$1,515,140 in non-Federal funds for 

supported employment services that 

will benefit youth with the most 

significant disabilities. In addition, if 

the appropriation increases in future 

years, the match requirement would 

result in additional supported 

employment resources for youth with 

the most significant disabilities. 

However, States will have to identify 

additional non-Federal resources in 

order to match the Federal funds 

reserved for this purpose. 

Extended Services 

Title VI of the Act, as amended by 

WIOA, permits DSUs to provide 

extended services to youth with the 

most significant disabilities, using the 

funds reserved for the provision of 

supported employment services to this 

population. These services may be 

provided for a period up to four years. 

To that end, we propose to amend part 

363 to implement this requirement. 

Prior to the enactment of WIOA, DSUs 

were not permitted to provide extended 

services to individuals of any age. 

Under the Act, as amended by WIOA, 

DSUs still may not provide extended 

services to individuals with the most 

significant disabilities who are not 

youth with the most significant 

disabilities. Since extended services 

have not previously been an authorized 

activity with the use of VR or supported 

employment funds, this proposed 

change could have significant impacts 

on States. 

Nonetheless, we want to make clear 

that DSUs are not required to provide 

extended services to youth with the 

most significant disabilities, but rather 

are permitted to do so, thereby creating 

a funding source for the services that 

previously was not available. 


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Extension of Time for the Provision of 

Supported Employment Services 

We propose to amend the definition 

of supported employment services in 

§ 361.5(c)(54) to implement the statutory 

change made by WIOA that extends the 

provision of supported employment 

services from 18 to 24 months. The 

definition of supported employment 

services applies to both the VR program 

and Supported Employment program. In 

addition, under both current and 

proposed regulations, DSUs have the 

authority to exceed this time period 

under special circumstances if jointly 

agreed to by the individual and the 

rehabilitation counselor. 

The statutory change implemented in 

these proposed regulations would 

benefit individuals with the most 

significant disabilities who require 

ongoing support services for a longer 

period of time to achieve stability in the 

employment setting, prior to full 

transition to extended services. This 

provision could result in DSUs using 

more resources under both the VR 

program and Supported Employment 

program to provide ongoing services. 

DSUs typically have not provided 

ongoing support services for a full 18 

months. In FY 2013, 15,458 individuals 

achieved supported employment 

outcomes within 21 months following 

the development of the individualized 

plans for employment, which period we 

assume could include the provision of 

supported employment services for a 

full 18 months and a minimum period 

of 90 days prior to case closure. Of these 

individuals, 10,608, or approximately 

69 percent, achieve supported 

employment outcomes within 12 

months. While we anticipate that most 

individuals may not need supported 

employment services for the full period 

of 24 months, in FY 2013, 1,759 

individuals achieved supported 

employment outcomes within a period 

ranging from 21 months to 27 months of 

the development of the individualized 

plan for employment. DSUs expended 

$13,257, 816 on purchased services for 

these individuals, or an average of 

$7,537 per individual. Assuming this 

period includes the provision of 

supported employment services for a 

full 24 months and a minimum period 

of 90 days prior to case closure we 

estimate that an approximate number of 

individuals would benefit from the 

provision of supported employment 

services for an additional six months 

and that DSUs would incur similar costs 

for the provision of these services as a 

result of the proposed regulatory 

change. 

Limitations on Supported Employment 

Administrative Costs 

We propose to amend part 363 to 

implement a new requirement in the 

Act, as amended by WIOA, that reduces 

the maximum amount of a State’s grant 

allotment under the Supported 

Employment program that can be used 

for administrative costs from 5 percent 

of the State’s grant allotment to 2.5 

percent. As a result, a larger portion of 

Federal supported employment funds 

must be spent on the provision of 

supported employment services, 

including extended services to youth 

with the most significant disabilities, 

rather than administrative costs. 

However, any administrative costs 

incurred beyond the 2.5 percent limit on 

the use of Supported Employment funds 

may be paid for with VR program funds. 

Based upon the $27,272,520 available 

for formula grants to States under the 

Supported Employment program in FY 

2015, the total allowable amount of 

these Federal funds that can be used to 

support administrative costs would be 

reduced by half, from $1,363,626 to 

$681,813. Thus, for those DSUs that 

have typically used more than 2.5 

percent of their allotment to cover 

program administrative costs, the new 

requirement would provide a small 

increase in the amount of funds 

available for the provision of services to 

individuals with the most significant 

disabilities pursuing a supported 

employment outcome. DSUs will be 

able to shift these excess costs to the VR 

State grants program since it does not 

have a cap on the amount of 

administrative funds that can be spent 

under that program. 

C. Limitations on the Use of 

Subminimum Wage 

The Act, as amended by WIOA, 

imposes limitations on the payment of 

subminimum wages by employers who 

hold special wage certificates under the 

Fair Labor Standards Act. The 

requirements imposed by section 511 

and thus proposed in part 397, do not 

take effect until July 22, 2016. 

Pursuant to statutory requirements 

contained in section 511 of the Act, as 

added by WIOA, we propose to create 

a new § 397.10 that would require the 

DSU, in consultation with the State 

educational agency, to develop a 

process, or utilize an existing process, 

that ensures individuals with 

disabilities, including youth with 

disabilities, receive documentation 

demonstrating completion of the various 

activities required by section 511. 

Proposed §§ 397.20 and 397.30 would 

establish the documentation that the 

DSUs and local educational agencies, as 

appropriate, must provide to 

demonstrate an individual’s completion 

of the various activities required by 

section 511(a)(2) of the Act. These 

include completing pre-employment 

transition services under proposed 

§ 361.48(a) and the determination under 

an application for VR services under 

proposed §§ 361.42 and 361.43. 

Proposed § 397.40 would establish the 

documentation that the DSUs must 

provide to individuals with disabilities 

upon the completion of certain 

information and career counselingrelated services, as required by section 

511(c) of the Act. We have not 

attempted to quantify the costs to the 

DSUs related to the provision of this 

required documentation because the 

number of youth and other individuals 

who potentially could receive services 

under proposed part 397 will vary 

widely from State to State. In addition, 

there exists no reliable national data on 

which to base a calculation of costs. 

However, DSUs generate documentation 

throughout the vocational rehabilitation 

process that may meet the requirements 

of §§ 397.20 and 397.30, including 

written notification of a consumer’s 

eligibility or ineligibility, copies of 

individualized plans for employment 

and subsequent amendments, and 

written notification when the 

consumer’s case record is closed. As a 

result, the utilization of this 

documentation to meet section 511 

requirements should not result in 

significant additional burden to DSUs. 

Clarity of the Regulations 

Executive Order 12866 and the 

Presidential memorandum ‘‘Plain 

Language in Government Writing’’ 

require each agency to write regulations 

that are easy to understand. The 

Secretary invites comments on how to 

make these proposed regulations easier 

to understand, including answers to 

questions such as the following: 

• Are the requirements in the 

proposed regulations clearly stated? 

• Do the proposed regulations contain 

technical terms or other wording that 

interferes with their clarity? 

• Does the format of the proposed 

regulations (grouping and order of 

sections, use of headings, paragraphing, 

etc.) aid or reduce their clarity? 

• Would the proposed regulations be 

easier to understand if we divided them 

into more (but shorter) sections? (A 

‘‘section’’ is preceded by the symbol 

‘‘§ ’’ and a numbered heading: For 

example, § 361.1 Purpose.) 

• Could the description of the 

proposed regulations in the 

SUPPLEMENTARY INFORMATION section of 


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this preamble be more helpful in 

making the proposed regulations easier 

to understand? If so, how? 

• What else could we do to make the 

proposed regulations easier to 

understand? 

To send any comments that concern 

how the Department could make these 

proposed regulations easier to 

understand, see the instructions in the 

ADDRESSES section. 

Regulatory Flexibility Act Certification 

The Secretary certifies that these 

proposed regulations would not have a 

significant economic impact on a 

substantial number of small entities. 

The 80 entities that administer the VR 

program and Supported Employment 

program are State agencies, including 

those in the 50 States, the District of 

Columbia, the Commonwealth of Puerto 

Rico, the United States Virgin Islands, 

Guam, American Samoa, and the 

Commonwealth of the Northern Mariana 

Islands. States and State agencies are 

not defined as ‘‘small entities’’ in the 

Regulatory Flexibility Act. 

Paperwork Reduction Act of 1995 

As part of its continuing effort to 

reduce paperwork and respondent 

burden, the Department provides the 

general public and Federal agencies 

with an opportunity to comment on 

proposed and continuing collections of 

information in accordance with the 

Paperwork Reduction Act of 1995 (PRA) 

(44 U.S.C. 3506(c)(2)(A)). This helps 

ensure that: The public understands the 

Department’s collection instructions, 

respondents can provide the requested 

data in the desired format, reporting 

burden (time and financial resources) is 

minimized, collection instruments are 

clearly understood, and the Department 

can properly assess the impact of 

collection requirements on respondents. 

The following sections contain 

information collection requirements: 

• Sections 361.10, 361.12, 361.13, 

361.15, 361.16, 361.17, 361.18, 361.19, 

361.20, 361.21, 361.22, 361.23, 361.24, 

361.25, 361.26, 361.27, 361.29, 361.30, 

361.31, 361.32, 361.34, 361.35, 361.36, 

361.37, 361.40, 361.46, 361.51, 361.52, 

361.53, and 361.55, as well as §§ 363.10 

and 363.11, pertaining to the VR 

services portion of the Unified or 

Combined State Plan and Supplement 

for Supported Employment Services; 

and 

• Sections 361.40 and 363.52, related 

to the VR program Case Service Report. 

As a result of the amendments to the 

Act made by WIOA, we propose 

changes to some of these sections and 

their corresponding information 

collection requirements. Under the PRA 

the Department has submitted a copy of 

these sections to OMB for its review. 

A Federal agency may not conduct or 

sponsor a collection of information 

unless OMB approves the collection 

under the PRA and the corresponding 

information collection instrument 

displays a currently valid OMB control 

number. Notwithstanding any other 

provision of law, no person is required 

to comply with, or is subject to penalty 

for failure to comply with, a collection 

of information if the collection 

instrument does not display a currently 

valid OMB control number. In the final 

regulations, we will display the OMB 

control numbers assigned by OMB to 

any information collection requirement 

proposed in this NPRM and adopted in 

the final regulations, including: 1820– 

0013 (Cumulative Case Report), 1820– 

0017 (Annual Vocational Rehabilitation 

Program/Cost Report), 1820–0500 (VR 

State Plan), 1820–0508 (VR Case Service 

Report), 1820–0563 (Annual Report of 

Appeals), 1820–0693 (Program 

Improvement Plan), and 1820–0694 (VR 

Program Corrective Action Plan). 

VR Services Portion of the Unified or 

Combined State Plan and Supplement 

for Supported Employment Services 

(1820–0500) 

Section 101(a) of the Act, as amended 

by WIOA, adds new content 

requirements to the State plan, which is 

now to be submitted as the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan under 

section 102 or 103 of title I of WIOA. As 

a result, proposed §§ 361.10, 361.18, 

361.24, 361.29, and 361.36, along with 

proposed §§ 363.10 and 363.11, would 

cause substantive changes to the active 

and OMB-approved data collection 

under 1820–0500 (VR State Plan). In 

addition, the VR State Plan form 

includes previously approved 

information collection requirements 

related to a number of current 

regulations that remain unchanged as a 

result of the amendments to the Act. 

There are also several proposed 

regulations related to this data 

collection that necessitate primarily 

conforming or technical changes to the 

form. 

These current and proposed sections 

that contain already approved 

information collection requirements or 

that do not cause substantive changes to 

the form include: §§ 361.12, 361.13, 

361.15, 361.16, 361.17, 361.19, 361.20, 

361.21, 361.22, 361.23, 361.25, 361.26, 

361.27, 361.30, 361.31, 361.34, 361.35, 

361.37, 361.40, 361.46, 361.51, 361.52, 

361.53, and 361.55. The proposed 

regulations and other adjustments 

described here would change the 

current OMB-approved annual aggregate 

burden of 1,002,000 hours at $22.00 per 

hour and estimated total annual costs of 

$22,044,000.00 for all 80 respondents. 

The currently OMB-approved 

estimated annual burden of 1,002,000 

hours for all 80 VR agencies includes a 

total of 2,000 hours (25 hours per 

agency) for the preparation and 

submission of the VR State Plan and a 

total of 1,000,000 hours (12,500 hours 

per agency) for record keeping 

associated with the case management of 

the individuals who apply for and 

receive services from the VR program, 

and Supported Employment program. 

However, we have determined that the 

time associated with this record keeping 

(1,000,000 hours annually for all 80 

respondents) is part of the customary 

and usual business practices carried out 

by VR agencies, and thus, should not be 

included in the estimated annual 

burden for this form. 

As previously stated there are a 

number of proposed regulations in parts 

361 and 363 that necessitate substantive 

changes to the State plan. The most 

significant of these changes is in 

proposed § 361.10 and would require 

VR agencies to submit the VR services 

portion of the Unified or Combined 

State Plan to be eligible to receive 

Federal VR program funds. Proposed 

§ 361.18 would require the VR services 

portion of the Unified or Combined 

State Plan to describe the procedures 

and activities the State agency will take 

to ensure it employs qualified 

rehabilitation personnel, including the 

minimum academic and experience 

requirements as amended by WIOA. 

Proposed § 361.24 would require VR 

agencies to describe their coordination 

with employers to increase awareness 

and employment opportunities for 

individuals with disabilities, as well as 

coordination with non-educational 

agencies serving out-of-school youth, 

and the lead agency and implementing 

entity for the coordination of activities 

available under section 4 of the 

Assistive Technology Act of 1998. 

Proposed § 361.24 also would require 

VR agencies to describe in the plan their 

collaboration, to develop opportunities 

for community-based employment in 

integrated settings, to the greatest extent 

practicable, with the State agency 

responsible for administering the State 

Medicaid plan under title XIX of the 

Social Security Act, agencies providing 

services and supports for individuals 

with developmental disabilities, and the 

State agency responsible for providing 

mental health services. Proposed 

§ 361.29 would require VR agencies to 

include in the VR services portion of the 

Unified or Combined State Plan the 


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results of the comprehensive statewide 

assessment regarding the needs of 

students and youth with disabilities for 

pre-employment transition services and 

other transition services. In addition, 

proposed § 361.29 would require the 

plan to include an estimate of the 

number of eligible individuals who are 

not receiving VR services due to the 

implementation of an order of selection. 

This proposed section also would 

require the plan to contain strategies to 

improve VR services for students and 

youth with disabilities, to address their 

needs as identified through the 

statewide needs assessment, and to 

provide pre-employment transition 

services. Proposed § 361.36 would 

require VR agencies implementing an 

order of selection to indicate in the plan 

if they elect to provide services or 

equipment to individuals with 

disabilities to enable them to maintain 

employment, regardless of whether 

these individuals are receiving services 

under the order. 

There are also proposed regulations in 

part 363 governing the State Supported 

Employment Services program that 

necessitate changes to the VR State Plan 

form. Proposed § 363.10 would require 

the State to submit with the VR services 

portion of the Unified or Combined 

State Plan a supplement that meets the 

requirements of § 363.11 to receive a 

grant under the State Supported 

Employment Services program. 

Proposed § 363.11 would require the VR 

services portion of the Unified or 

Combined State Plan to describe the 

quality, scope, and extent of supported 

employment services to eligible 

individuals (including youth with the 

most significant disabilities), the State’s 

goals and priorities with respect to the 

distribution of funds received under this 

section, the provision of extended 

services for a period not to exceed four 

years, and an assurance to expend no 

more than 2.5 percent of the award 

under this part for administrative costs. 

The regulations proposed under these 

sections of parts 361 and 363 would 

increase the time needed by each VR 

agency to prepare and submit the VR 

services portion of the Unified or 

Combined State Plan and its supported 

employment supplement from 25 to 30 

hours annually. 

In addition, the total cost of this data 

collection may increase due to the 

proposed adjustment to the average 

hourly wage rate of State personnel used 

to estimate the annual burden for this 

data collection from $22.00 to $39.78, so 

that wage rates are consistent with data 

reported by the Bureau of Labor 

Statistics. 

In summary, our new information 

collection estimate for the VR State plan 

reflects the removal of the burden 

associated with the maintenance of case 

management records for individuals 

served through the VR program and 

Supported Employment program, 

adjustment of the average hourly wage 

rate for State VR personnel responsible 

for preparing the VR State plan form, 

and the increase in the estimated 

number of hours needed to prepare and 

submit this data collection due to 

proposed regulatory changes. As a result 

of these changes, we estimate a total 

annual burden of 2,400 hours (30 hours 

for each of the 80 respondents), at 

$39.78 per hour, for a total annual cost 

of $95,472.00. 

VR Case Service Report 1820–0508 

The VR Case Service Report is used to 

collect annual individual level data on 

the individuals that have exited the VR 

program, including individuals 

receiving services with funds provided 

under the Supported Employment 

program. Sections 101(a)(10) and 606 of 

the Act contain data reporting 

requirements under the VR program and 

Supported Employment program, 

respectively. WIOA amends these 

sections to require States to report 

additional data describing the 

individuals served and the services 

provided through these programs. In 

addition, WIOA amends section 106 of 

the Act by eliminating the current VR 

evaluation standards and indicators and 

requiring that the standards and 

indicators used to assess the 

performance of the VR program be 

consistent with the performance 

accountability measures for the core 

programs of the workforce development 

system established under section 116 of 

WIOA. Consequently, we propose 

changes to §§ 361.40 and 363.52 that 

would cause substantive changes to the 

active and OMB-approved data 

collection under 1820–0508—the VR 

Case Service Report (RSA–911). 

Specifically the proposed regulations 

described here would change the 

current OMB-approved annual aggregate 

burden of 4,000 hours at $40.00 per 

hour and estimated total annual costs of 

$160,000.00 for all 80 respondents. 

The most significant proposed change 

to this data collection affects the time at 

which data is collected as well as the 

frequency with which data is collected. 

Under the current approved form, VR 

agencies annually report data on each 

individual whose case file is closed after 

exiting the VR program in that fiscal 

year. However, new statutory 

requirements would necessitate the 

reporting of data for both current 

program participants (open service 

records), as well as individuals who 

have exited the program (closed records) 

on a quarterly basis. Specifically, 

proposed § 361.40 would require a State 

to ensure in the VR services portion of 

the Unified or Combined State Plan that 

it will submit reports, including reports 

required under sections 13, 14, and 

101(a)(10) of the Act. New reporting 

requirements under section 

101(a)(10)(C) of the Act include data on 

the number of: Individuals currently 

receiving services (open records) and 

the types of services they are receiving, 

students with disabilities receiving preemployment transition services, and 

individuals referred to the State VR 

program by one-stop operators and 

those referred to such one-stop 

operators by the State VR program. In 

addition, proposed § 363.52 would 

require States to report separately data 

regarding eligible youth receiving 

supported employment services under 

parts 361 and 363. 

Proposed § 361.40 also would require 

States to report the data necessary to 

assess VR agency performance on the 

standards and indicators subject to the 

performance accountability provisions 

described in section 116 of WIOA. The 

common performance accountability 

measures established under section 116 

of WIOA apply to all core programs of 

the workforce development system and 

will be implemented in joint regulations 

set forth in subpart E of part 361. 

Because these new requirements 

would necessitate the reporting of data 

for both current program participants 

(open service records) as well as 

individuals who have exited the 

program (closed service records) on a 

quarterly basis, estimated data 

collection and reporting burden will 

increase. However, we propose to 

reduce the burden to respondents by 

eliminating redundant elements and 

reorganizing some existing elements of 

the form. The regulations proposed 

under this section will increase the total 

annual burden for the 80 respondents by 

4,000 hours. We estimate the total 

annual reporting burden to be 8,000 

hours at $33.63 per hour (a rate more 

consistent with the rate reported 

through the Bureau of Labor Statistics 

for State-employed database 

administrators), for a total annual cost of 

$269,040.00. 

Related OMB-Approved Data 

Collections That Remain Unchanged 

The regulations proposed through this 

NPRM do not cause substantive changes 

to the OMB-approved annual burden, 

respondents, or costs for the following 

OMB-approved data collections: 


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1820–0013 Cumulative Caseload 

Report 

In the Cumulative Caseload Report 

State VR agencies report cumulative 

aggregate data on individuals served in 

the various stages of the VR process and 

services provided. Proposed regulations 

related to this data collection would not 

cause substantive changes to the current 

OMB-approved annual burden of 320 

annual burden hours at $30.00 per hour 

with 80 respondents reporting quarterly 

for a total of 320 responses, and total 

annual costs of $9,600.00. 

1820–0017 Annual Vocational 

Rehabilitation Program/Cost Report 

Proposed regulations related to this 

data collection would not cause 

substantive changes to the current OMBapproved annual burden of 320 annual 

burden hours at $30.00 per hour with 80 

respondents and annual costs of 

$9,600.00. 

1820–0563 Annual Report of Appeals 

In this report, State VR agencies 

submit data on the number of 

individuals who have requested appeals 

for decisions made by the DSU 

pertaining to the provision of services, 

the types of dispute resolutions used to 

resolve these appeals, and the outcomes 

of these appeals. Proposed regulations 

related to this data collection would not 

cause substantive changes to the current 

OMB-approved annual burden of 160 

annual burden hours at $30.00 per hour 

with 80 respondents and annual costs of 

$4,800.00. 

1820–0693 Performance Improvement 

Plan (PIP) 

A Performance Improvement Plan is 

developed when a VR agency has failed 

to achieve the required performance 

level for the evaluation standards and 

indicators established under section 106 

of the Act. Proposed regulations related 

to this data collection would not cause 

substantive changes to the current OMBapproved annual burden of 125 annual 

burden hours at $30.00 per hour with 5 

respondents reporting quarterly for a 

total of 20 responses, and annual costs 

of $3,750.00. 

1820–0694 VR Program Corrective 

Action Plan 

A Corrective Action Plan is required 

when a DSU is found to be out of 

compliance with the Federal 

requirements governing the 

administration of the VR program 

through monitoring activities engaged in 

pursuant to section 107 of the Act. 

Proposed regulations related to this data 

collection would not cause substantive 

changes to the current OMB-approved 

annual burden of 975 annual burden 

hours at $30.00 per hour with 15 

respondents reporting quarterly for a 

total of 60 responses, and annual costs 

of $29,250.00. 

Note that in accordance with the 

Uniform Administrative Requirements, 

Cost Principles, and Audit 

Requirements for Federal Awards 

published at 2 CFR 200, we require an 

authorized certifying official for each 

data collection to certify that the data is 

true, accurate and complete to the best 

of his or her knowledge or belief. This 

requirement does not cause any change 

to the estimated annual burden related 

to the preparation and submission of the 

data collections described in this 

section of the NPRM. 

We have prepared an Information 

Collection Request (ICR) for these 

collections. If you want to review and 

comment on the ICR please follow the 

instructions listed under the ADDRESSES

section of this notice. Please note the 

Office of Information and Regulatory 

Affairs (OMB) and the Department 

review all comments on an ICR that are 

posted at www.regulations.gov. In 

preparing your comments you may want 

to review the ICR in 

www.regulations.gov or in 

www.reginfo.gov. The comment period 

will run concurrently with the comment 

period of the NPRM. When commenting 

on the information collection 

requirements, we consider your 

comments on these collections of 

information in— 

• Deciding whether the collections 

are necessary for the proper 

performance of our functions, including 

whether the information will have 

practical use; 

• Evaluating the accuracy of our 

estimate of the burden of the 

collections, including the validity of our 

methodology and assumptions; 

• Enhancing the quality, usefulness, 

and clarity of the information we 

collect; and 

• Minimizing the burden on those 

who must respond. 

This includes exploring the use of 

appropriate automated, electronic, 

mechanical, or other technological 

collection techniques. 

OMB is required to make a decision 

concerning the collections of 

information contained in these 

regulations between 30 and 60 days 

after publication of this document in the 

Federal Register. Therefore, to ensure 

that OMB gives your comments full 

consideration, it is important that OMB 

receives your comments by May 18, 

2015. This does not affect the deadline 

for your comments to us on the 

proposed regulations. 

ADDRESSES: Comments submitted in 

response to this notice should be 

submitted electronically through the 

Federal eRulemaking Portal at 

www.regulations.gov by selecting 

Docket ID ED–2015–OSERS–0001 or via 

postal mail commercial delivery, or 

hand delivery. Please specify the Docket 

ID number and indicate ‘‘Information 

Collection Comments’’ on the top of 

your comments if your comment relates 

to the information collection for this 

rule. Written requests for information or 

comments submitted by postal mail or 

delivery should be addressed to the 

Director of the Information Collection 

Clearance Division, U.S. Department of 

Education, 400 Maryland Avenue SW., 

Mailstop L–OM–2–2E319LBJ, Room 

2E115, Washington, DC 20202–4537. 

Comments submitted by fax or email 

and those submitted after the comment 

period will not be accepted. FOR

FURTHER INFORMATION CONTACT: 

Electronically mail ICDocketMgr@

ed.gov. Please do not send comments 

here. 

Intergovernmental Review 

These programs are subject to 

Executive Order 12372 and the 

regulations in 34 CFR part 79. One of 

the objectives of the Executive order is 

to foster an intergovernmental 

partnership and a strengthened 

federalism. The Executive order relies 

on processes developed by State and 

local governments for coordination and 

review of proposed Federal financial 

assistance. 

This document provides early 

notification of our specific plans and 

actions for these programs. 

Assessment of Educational Impact 

In accordance with section 411 of the 

General Education Provisions Act, 20 

U.S.C. 1221e–4, the Secretary 

particularly requests comments on 

whether these proposed regulations 

would require transmission of 

information that any other agency or 

authority of the United States gathers or 

makes available. 

Federalism 

Executive Order 13132 requires us to 

ensure meaningful and timely input by 

State and local elected officials in the 

development of regulatory policies that 

have federalism implications. 

‘‘Federalism implications’’ means 

substantial direct effects on the States, 

on the relationship between the 

National Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. The proposed 

regulations in §§ 361, 363, and 397 may 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 80, No. 73 / Thursday, April 16, 2015 / Proposed Rules 21101 

have federalism implications. We 

encourage State and local elected 

officials to review and provide 

comments on these proposed 

regulations. 

Accessible Format: Individuals with 

disabilities can obtain this document in 

an accessible format (e.g., braille, large 

print, audiotape, or compact disc) on 

request to the person listed under FOR

FURTHER INFORMATION CONTACT. 

Electronic Access to This Document: 

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 via the Federal Digital System 

at: 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 the site. 

You may also access documents of the 

Department published in the Federal 

Register by using the article search 

feature at: www.federalregister.gov. 

Specifically, through the advanced 

search feature at this site, you can limit 

your search to documents published by 

the Department. (Catalog of Federal 

Domestic Assistance Numbers: 84.126A 

State Vocational Rehabilitation Services 

program; and 84.187 State Supported 

Employment Services program) 

List of Subjects 

34 CFR Part 361 

Administrative practice and 

procedure, Grant programs-education, 

Grant programs-social programs, 

Reporting and recordkeeping 

requirements, Vocational rehabilitation. 

34 CFR Part 363 

Grant programs-education, Grant 

programs-social programs, Manpower 

training programs, Reporting and 

recordkeeping requirements, and 

Vocational rehabilitation. 

34 CFR Part 397 

Individuals with disabilities, 

Reporting and recordkeeping 

requirements, Students, Vocational 

rehabilitation, Youth. 

Dated: March 6, 2015. 

Arne Duncan, 

Secretary of Education. 

For the reasons discussed in the 

preamble, the Secretary of Education 

proposes to amend title 34 of the Code 

of Federal Regulations as follows: 

■ 1. Part 361 is revised to read as 

follows: 

PART 361—STATE VOCATIONAL 

REHABILITATION SERVICES 

PROGRAM 

Subpart A—General 

Sec. 

361.1 Purpose. 

361.2 Eligibility for a grant. 

361.3 Authorized activities. 

361.4 Applicable regulations. 

361.5 Applicable definitions. 

Subpart B—State Plan and Other 

Requirements for Vocational Rehabilitation 

Services 

361.10 Submission, approval, and 

disapproval of the State plan. 

361.11 Withholding of funds. 

Administration 

361.12 Methods of administration. 

361.13 State agency for administration. 

361.14 Substitute State agency. 

361.15 Local administration. 

361.16 Establishment of an independent 

commission or a State Rehabilitation 

Council. 

361.17 Requirements for a State 

Rehabilitation Council. 

361.18 Comprehensive system of personnel 

development. 

361.19 Affirmative action for individuals 

with disabilities. 

361.20 Public participation requirements. 

361.21 Consultations regarding the 

administration of the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan. 

361.22 Coordination with education 

officials. 

361.23 Requirements related to the 

statewide workforce development 

system. 

361.24 Cooperation and coordination with 

other entities. 

361.25 Statewideness. 

361.26 Waiver of statewideness. 

361.27 Shared funding and administration 

of joint programs. 

361.28 Third-party cooperative 

arrangements involving funds from other 

public agencies. 

361.29 Statewide assessment; annual 

estimates; annual State goals and 

priorities; strategies; and progress 

reports. 

361.30 Services to American Indians. 

361.31 Cooperative agreements with 

private nonprofit organizations. 

361.32 Provision of training and services 

for employers. 

361.33 [Reserved] 

361.34 Supported employment State plan 

supplement. 

361.35 Innovation and expansion 

activities. 

361.36 Ability to serve all eligible 

individuals; order of selection for 

services. 

361.37 Information and referral programs. 

361.38 Protection, use, and release of 

personal information. 

361.39 State-imposed requirements. 

361.40 Reports; Evaluation standards and 

performance indicators. 

Provision and Scope of Services 

361.41 Processing referrals and 

applications. 

361.42 Assessment for determining 

eligibility and priority for services. 

361.43 Procedures for ineligibility 

determination. 

361.44 Closure without eligibility 

determination. 

361.45 Development of the individualized 

plan for employment. 

361.46 Content of the individualized plan 

for employment. 

361.47 Record of services. 

361.48 Scope of vocational rehabilitation 

services for individuals with disabilities. 

361.49 Scope of vocational rehabilitation 

services for groups of individuals with 

disabilities. 

361.50 Written policies governing the 

provision of services for individuals with 

disabilities. 

361.51 Standards for facilities and 

providers of services. 

361.52 Informed choice. 

361.53 Comparable services and benefits. 

361.54 Participation of individuals in cost 

of services based on financial need. 

361.55 Annual review of individuals in 

extended employment and other 

employment under special certificate 

provisions of the Fair Labor Standards 

Act. 

361.56 Requirements for closing the record 

of services of an individual who has 

achieved an employment outcome. 

361.57 Review of determinations made by 

designated State unit personnel. 

Subpart C—Financing of State Vocational 

Rehabilitation Programs 

361.60 Matching requirements. 

361.61 Limitation on use of funds for 

construction expenditures. 

361.62 Maintenance of effort requirements. 

361.63 Program income. 

361.64 Obligation of Federal funds. 

361.65 Allotment and payment of Federal 

funds for vocational rehabilitation 

services. 

Subpart D—[Reserved] 

Subpart E—[Reserved] 

Subpart F—[Reserved] 

Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c), unless otherwise noted. 

Subpart A—General 

§ 361.1 Purpose. 

Under the State Vocational 

Rehabilitation Services Program, the 

Secretary provides grants to assist States 

in operating statewide comprehensive, 

coordinated, effective, efficient, and 

accountable vocational rehabilitation 

programs, each of which is— 

(a) An integral part of a statewide 

workforce development system; and 

(b) Designed to assess, plan, develop, 

and provide vocational rehabilitation 

services for individuals with 


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disabilities, consistent with their unique 

strengths, resources, priorities, 

concerns, abilities, capabilities, 

interests, and informed choice so that 

they may prepare for and engage in 

competitive integrated employment and 

achieve economic self-sufficiency. 

(Authority: Section 100(a) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 720(a)) 

§ 361.2 Eligibility for a grant. 

Any State that submits to the 

Secretary a vocational rehabilitation 

services portion of the Unified or 

Combined State Plan that meets the 

requirements of section 101(a) of the Act 

and this part is eligible for a grant under 

this program. 

(Authority: Section 101(a) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)) 

§ 361.3 Authorized activities. 

The Secretary makes payments to a 

State to assist in— 

(a) The costs of providing vocational 

rehabilitation services under the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan; and 

(b) Administrative costs under the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan. 

(Authority: Section 111(a)(1) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 731(a)(1)) 

§ 361.4 Applicable regulations. 

The following regulations apply to 

this program: 

(a) The Education Department General 

Administrative Regulations (EDGAR) as 

follows: 

(1) 34 CFR part 76 (StateAdministered Programs). 

(2) 34 CFR part 77 (Definitions that 

Apply to Department Regulations). 

(3) 34 CFR part 79 (Intergovernmental 

Review of Department of Education 

Programs and Activities). 

(4) 34 CFR part 81 (General Education 

Provisions Act—Enforcement). 

(5) 34 CFR part 82 (New Restrictions 

on Lobbying). 

(b) The regulations in this part 361. 

(c) 2 CFR part 190 (OMB Guidelines 

to Agencies on Governmentwide 

Debarment and Suspension 

(Nonprocurement)) as adopted in 2 CFR 

part 3485. 

(d) 2 CFR part 200 (Uniform 

Administrative Requirements, Cost 

Principles, and Audit Requirements for 

Federal Awards) as adopted in 2 CFR 

part 3474. 

(Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c)) 

§ 361.5 Applicable definitions. 

The following definitions apply to 

this part: 

(a) Definitions in EDGAR 77.1. 

(b) Definitions in 2 CFR part 200 

subpart A. 

(c) The following definitions: 

(1) Act means the Rehabilitation Act 

of 1973, as amended (29 U.S.C. 701 et 

seq.). 

(2) Administrative costs under the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan means expenditures incurred 

in the performance of administrative 

functions under the vocational 

rehabilitation program carried out under 

this part, including expenses related to 

program planning, development, 

monitoring, and evaluation, including, 

but not limited to, expenses for— 

(i) Quality assurance; 

(ii) Budgeting, accounting, financial 

management, information systems, and 

related data processing; 

(iii) Providing information about the 

program to the public; 

(iv) Technical assistance and support 

services to other State agencies, private 

nonprofit organizations, and businesses 

and industries, except for technical 

assistance and support services 

described in § 361.49(a)(4); 

(v) The State Rehabilitation Council 

and other advisory committees; 

(vi) Professional organization 

membership dues for designated State 

unit employees; 

(vii) The removal of architectural 

barriers in State vocational 

rehabilitation agency offices and Stateoperated rehabilitation facilities; 

(viii) Operating and maintaining 

designated State unit facilities, 

equipment, and grounds, but not 

including capital expenditures as 

defined in 2 CFR 200.13; 

(ix) Supplies; 

(x) Administration of the 

comprehensive system of personnel 

development described in § 361.18, 

including personnel administration, 

administration of affirmative action 

plans, and training and staff 

development; 

(xi) Administrative salaries, including 

clerical and other support staff salaries, 

in support of these administrative 

functions; 

(xii) Travel costs related to carrying 

out the program, other than travel costs 

related to the provision of services; 

(xiii) Costs incurred in conducting 

reviews of determinations made by 

personnel of the designated State unit, 

including costs associated with 

mediation and impartial due process 

hearings under § 361.57; and 

(xiv) Legal expenses required in the 

administration of the program. 

(Authority: Sections 7(1) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(1) and 709(c)) 

(3) Applicant means an individual 

who submits an application for 

vocational rehabilitation services in 

accordance with § 361.41(b)(2). 

(Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c)) 

(4) Appropriate modes of 

communication means specialized aids 

and supports that enable an individual 

with a disability to comprehend and 

respond to information that is being 

communicated. Appropriate modes of 

communication include, but are not 

limited to, the use of interpreters, open 

and closed captioned videos, 

specialized telecommunications 

services and audio recordings, Brailled 

and large print materials, materials in 

electronic formats, augmentative 

communication devices, graphic 

presentations, and simple language 

materials. 

(Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c)) 

(5) Assessment for determining 

eligibility and vocational rehabilitation 

needs means, as appropriate in each 

case— 

(i)(A) A review of existing data— 

(1) To determine if an individual is 

eligible for vocational rehabilitation 

services; and 

(2) To assign priority for an order of 

selection described in § 361.36 in the 

States that use an order of selection; and 

(B) To the extent necessary, the 

provision of appropriate assessment 

activities to obtain necessary additional 

data to make the eligibility 

determination and assignment; 

(ii) To the extent additional data are 

necessary to make a determination of 

the employment outcomes and the 

nature and scope of vocational 

rehabilitation services to be included in 

the individualized plan for employment 

of an eligible individual, a 

comprehensive assessment to determine 

the unique strengths, resources, 

priorities, concerns, abilities, 

capabilities, interests, and informed 

choice, including the need for 

supported employment, of the eligible 

individual. This comprehensive 

assessment— 

(A) Is limited to information that is 

necessary to identify the rehabilitation 

needs of the individual and to develop 

the individualized plan of employment 

of the eligible individual; 

(B) Uses as a primary source of 

information, to the maximum extent 

possible and appropriate and in 


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accordance with confidentiality 

requirements— 

(1) Existing information obtained for 

the purposes of determining the 

eligibility of the individual and 

assigning priority for an order of 

selection described in § 361.36 for the 

individual; and 

(2) Information that can be provided 

by the individual and, if appropriate, by 

the family of the individual; 

(C) May include, to the degree needed 

to make such a determination, an 

assessment of the personality, interests, 

interpersonal skills, intelligence and 

related functional capacities, 

educational achievements, work 

experience, vocational aptitudes, 

personal and social adjustments, and 

employment opportunities of the 

individual and the medical, psychiatric, 

psychological, and other pertinent 

vocational, educational, cultural, social, 

recreational, and environmental factors 

that affect the employment and 

rehabilitation needs of the individual; 

(D) May include, to the degree 

needed, an appraisal of the patterns of 

work behavior of the individual and 

services needed for the individual to 

acquire occupational skills and to 

develop work attitudes, work habits, 

work tolerance, and social and behavior 

patterns necessary for successful job 

performance, including the use of work 

in real job situations to assess and 

develop the capacities of the individual 

to perform adequately in a work 

environment; and 

(E) To the maximum extent possible, 

relies on information obtained from 

experiences in integrated employment 

settings in the community and in other 

integrated community settings; 

(iii) Referral, for the provision of 

rehabilitation technology services to the 

individual, to assess and develop the 

capacities of the individual to perform 

in a work environment; and 

(iv) An exploration of the individual’s 

abilities, capabilities, and capacity to 

perform in work situations, which must 

be assessed periodically during trial 

work experiences, including 

experiences in which the individual is 

provided appropriate supports and 

training. 

(Authority: Sections 7(2) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(2) and 709(c)) 

(6) Assistive technology terms. 

(i) Assistive technology has the 

meaning given such term in section 3 of 

the Assistive Technology Act of 1998 

(29 U.S.C. 3002). 

(ii) Assistive technology device has 

the meaning given such term in section 

3 of the Assistive Technology Act of 

1998, except that the reference in such 

section to the term individuals with 

disabilities will be deemed to mean 

more than one individual with a 

disability as defined in paragraph 

(20)(A) of the Act. 

(iii) Assistive technology service has 

the meaning given such term in section 

3 of the Assistive Technology Act of 

1998, except that the reference in such 

section to the term— 

(A) Individual with a disability will be 

deemed to mean an individual with a 

disability, as defined in paragraph 

(20)(A) of the Act; and 

(B) Individuals with disabilities will 

be deemed to mean more than one such 

individual. 

(Authority: Sections 7(3) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(3) and 709(c)) 

(7) Community rehabilitation program 

(i) Community rehabilitation program 

means a program that provides directly 

or facilitates the provision of one or 

more of the following vocational 

rehabilitation services to individuals 

with disabilities to enable those 

individuals to maximize their 

opportunities for employment, 

including career advancement: 

(A) Medical, psychiatric, 

psychological, social, and vocational 

services that are provided under one 

management. 

(B) Testing, fitting, or training in the 

use of prosthetic and orthotic devices. 

(C) Recreational therapy. 

(D) Physical and occupational 

therapy. 

(E) Speech, language, and hearing 

therapy. 

(F) Psychiatric, psychological, and 

social services, including positive 

behavior management. 

(G) Assessment for determining 

eligibility and vocational rehabilitation 

needs. 

(H) Rehabilitation technology. 

(I) Job development, placement, and 

retention services. 

(J) Evaluation or control of specific 

disabilities. 

(K) Orientation and mobility services 

for individuals who are blind. 

(L) Extended employment. 

(M) Psychosocial rehabilitation 

services. 

(N) Supported employment services 

and extended services. 

(O) Customized employment. 

(P) Services to family members if 

necessary to enable the applicant or 

eligible individual to achieve an 

employment outcome. 

(Q) Personal assistance services. 

(R) Services similar to the services 

described in paragraphs (A) through (Q) 

of this definition. 

(ii) For the purposes of this definition, 

program means an agency, organization, 

or institution, or unit of an agency, 

organization, or institution, that 

provides directly or facilitates the 

provision of vocational rehabilitation 

services as one of its major functions. 

(Authority: Section 7(4) of the Rehabilitation 

Act of 1973, as amended; 29 U.S.C. 705(4)) 

(8) Comparable services and benefits. 

(i) Comparable services and benefits 

means services and benefits, including 

accommodations and auxiliary aids and 

services, that are— 

(A) Provided or paid for, in whole or 

in part, by other Federal, State, or local 

public agencies, by health insurance, or 

by employee benefits; 

(B) Available to the individual at the 

time needed to ensure the progress of 

the individual toward achieving the 

employment outcome in the 

individual’s individualized plan for 

employment in accordance with 

§ 361.53; and 

(C) Commensurate to the services that 

the individual would otherwise receive 

from the designated State vocational 

rehabilitation agency. 

(ii) For the purposes of this definition, 

comparable services and benefits do not 

include awards and scholarships based 

on merit. 

(Authority: Sections 12(c) and 101(a)(8) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 721(a)(8)) 

(9) Competitive integrated 

employment means work that— 

(i) Is performed on a full-time or parttime basis (including self-employment) 

and for which an individual is 

compensated at a rate that— 

(A) Is not less than 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)) or the rate required 

under in the applicable State or local 

minimum wage law; 

(B) Is not less than the customary rate 

paid by the employer for the same or 

similar work performed by other 

employees who are not individuals with 

disabilities and who are similarly 

situated in similar occupations by the 

same employer and who have similar 

training, experience, and skills; and 

(C) In the case of an individual who 

is self-employed, yields an income that 

is comparable to the income received by 

other individuals who are not 

individuals with disabilities and who 

are self-employed in similar 

occupations or on similar tasks and who 

have similar training, experience, and 

skills; and 

(D) Is eligible for the level of benefits 

provided to other employees; and 

(ii) Is at a location— 


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(A) Typically found in the 

community; and 

(B) Where the employee with a 

disability interacts for the purpose of 

performing the duties of the position 

with other employees within the 

particular work unit and the entire work 

site, and, as appropriate to the work 

performed, other persons (e.g., 

customers and vendors), who are not 

individuals with disabilities (not 

including supervisory personnel or 

individuals who are providing services 

to such employee) to the same extent 

that employees who are not individuals 

with disabilities and who are in 

comparable positions interact with these 

persons; and 

(iii) Presents, as appropriate, 

opportunities for advancement that are 

similar to those for other employees 

who are not individuals with 

disabilities and who have similar 

positions. 

(Authority: Sections 7(5) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(5) and 709(c)) 

(10) Construction of a facility for a 

public or nonprofit community 

rehabilitation program means— 

(i) The acquisition of land in 

connection with the construction of a 

new building for a community 

rehabilitation program; 

(ii) The construction of new 

buildings; 

(iii) The acquisition of existing 

buildings; 

(iv) The expansion, remodeling, 

alteration, or renovation of existing 

buildings; 

(v) Architect’s fees, site surveys, and 

soil investigation, if necessary, in 

connection with the acquisition of land 

or existing buildings, or the and 

construction, expansion, remodeling, or 

alteration of community rehabilitation 

facilities; 

(vi) The acquisition of initial fixed or 

movable equipment of any new, newly 

acquired, newly expanded, newly 

remodeled, newly altered, or newly 

renovated buildings that are to be used 

for community rehabilitation program 

purposes; and 

(vii) Other direct expenditures 

appropriate to the construction project, 

except costs of off-site improvements. 

(Authority: Sections 7(6) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(6) and 709(c)) 

(11) Customized employment means 

competitive integrated employment, for 

an individual with a significant 

disability, that is— 

(i) Based on an individualized 

determination of the unique strengths, 

needs, and interests of the individual 

with a significant disability; 

(ii) Designed to meet the specific 

abilities of the individual with a 

significant disability and the business 

needs of the employer; and 

(iii) Carried out through flexible 

strategies, such as— 

(A) Job exploration by the individual; 

and 

(B) Working with an employer to 

facilitate placement, including— 

(1) Customizing a job description 

based on current employer needs or on 

previously unidentified and unmet 

employer needs; 

(2) Developing a set of job duties, a 

work schedule and job arrangement, and 

specifics of supervision (including 

performance evaluation and review), 

and determining a job location; 

(3) Using a professional representative 

chosen by the individual, or if elected 

self-representation, to work with an 

employer to facilitate placement; and 

(4) Providing services and supports at 

the job location. 

(Authority: Section 7(7) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(7) and 709(c)) 

(12) Designated State agency or State 

agency means the sole State agency, 

designated, in accordance with 

§ 361.13(a), to administer, or supervise 

the local administration of, the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan. The term includes the State 

agency for individuals who are blind, if 

designated as the sole State agency with 

respect to that part of the Unified or 

Combined State Plan relating to the 

vocational rehabilitation of individuals 

who are blind. 

(Authority: Sections 7(8)(A) and 101(a)(2)(A) 

of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 705(8)(A) and 

721(a)(2)(A)) 

(13) Designated State unit or State 

unit means either— 

(i) The State vocational rehabilitation 

bureau, division, or other organizational 

unit that is primarily concerned with 

vocational rehabilitation or vocational 

and other rehabilitation of individuals 

with disabilities and that is responsible 

for the administration of the vocational 

rehabilitation program of the State 

agency, as required under § 361.13(b); or 

(ii) The State agency that is primarily 

concerned with vocational 

rehabilitation or vocational and other 

rehabilitation of individuals with 

disabilities. 

(Authority: Sections 7(8)(B) and 101(a)(2)(B) 

of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 705(8)(B) and 

721(a)(2)(B)) 

(14) Eligible individual means an 

applicant for vocational rehabilitation 

services who meets the eligibility 

requirements of § 361.42(a). 

(Authority: Sections 7(20)(A) and 102(a)(1) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 705(20)(A) and 722(a)(1)) 

(15) Employment outcome means, 

with respect to an individual, entering, 

advancing in, or retaining full-time or, 

if appropriate, part-time competitive 

integrated employment, as defined in 

§ 361.5(c)(9) (including customized 

employment, self-employment, 

telecommuting, or business ownership), 

or supported employment, that is 

consistent with an individual’s unique 

strengths, resources, priorities, 

concerns, abilities, capabilities, 

interests, and informed choice. 

(Authority: Sections 7(11), 12(c), 100(a), and 

102(b)(3)(A) of the Rehabilitation Act of 

1973, as amended; 29 U.S.C. 705(11), 709(c), 

720(a), and 722(b)(4)(A)) 

(16) Establishment, development, or 

improvement of a public or nonprofit 

community rehabilitation program 

means— 

(i) The establishment of a facility for 

a public or nonprofit community 

rehabilitation program, as defined in 

paragraph (c)(17) of this section, to 

provide vocational rehabilitation 

services to applicants or eligible 

individuals; 

(ii) Staffing, if necessary to establish, 

develop, or improve a public or 

nonprofit community rehabilitation 

program for the purpose of providing 

vocational rehabilitation services to 

applicants or eligible individuals, for a 

maximum period of four years, with 

Federal financial participation available 

at the applicable matching rate for the 

following levels of staffing costs: 

(A) 100 percent of staffing costs for 

the first year; 

(B) 75 percent of staffing costs for the 

second year; 

(C) 60 percent of staffing costs for the 

third year; and 

(D) 45 percent of staffing costs for the 

fourth year; and 

(iii) Other expenditures and activities 

related to the establishment, 

development, or improvement of a 

public or nonprofit community 

rehabilitation program that are 

necessary to make the program 

functional or increase its effectiveness 

in providing vocational rehabilitation 

services to applicants or eligible 

individuals, but are not ongoing 

operating expenses of the program. 

(Authority: Sections 7(12) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(12) and 709(c)) 


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(17) Establishment of a facility for a 

public or nonprofit community 

rehabilitation program means— 

(i) The acquisition of an existing 

building and, if necessary, the land in 

connection with the acquisition, if the 

building has been completed in all 

respects for at least one year prior to the 

date of acquisition and the Federal share 

of the cost of acquisition is not more 

than $300,000; 

(ii) The remodeling or alteration of an 

existing building, provided the 

estimated cost of remodeling or 

alteration does not exceed the appraised 

value of the existing building; 

(iii) The expansion of an existing 

building, provided that— 

(A) The existing building is complete 

in all respects; 

(B) The total size in square footage of 

the expanded building, notwithstanding 

the number of expansions, is not greater 

than twice the size of the existing 

building; 

(C) The expansion is joined 

structurally to the existing building and 

does not constitute a separate building; 

and 

(D) The costs of the expansion do not 

exceed the appraised value of the 

existing building; 

(iv) Architect’s fees, site survey, and 

soil investigation, if necessary in 

connection with the acquisition, 

remodeling, alteration, or expansion of 

an existing building; and 

(v) The acquisition of fixed or 

movable equipment, including the costs 

of installation of the equipment, if 

necessary to establish, develop, or 

improve a community rehabilitation 

program. 

(Authority: Sections 7(12) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(12) and 709(c)) 

(18) Extended employment means 

work in a non-integrated or sheltered 

setting for a public or private nonprofit 

agency or organization that provides 

compensation in accordance with the 

Fair Labor Standards Act. 

(Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c)) 

(19) Extended services means ongoing 

support services and other appropriate 

services that are— 

(i) Needed to support and maintain an 

individual with a most significant 

disability including a youth with a most 

significant disability, in supported 

employment; 

(ii) Organized or made available, 

singly or in combination, in such a way 

as to assist an eligible individual in 

maintaining supported employment; 

(iii) Based on the needs of an eligible 

individual, as specified in an 

individualized plan for employment; 

(iv) Provided by a State agency, a 

private nonprofit organization, 

employer, or any other appropriate 

resource, after an individual has made 

the transition from support from the 

designated State unit; and 

(v) Provided to youth with the most 

significant disabilities by the designated 

State unit in accordance with 

requirements set forth in this part and 

part 363 for a period not to exceed 4 

years. The designated State unit may not 

provide extended services to 

individuals with the most significant 

disabilities who are not youth with the 

most significant disabilities. 

(Authority: Sections 7(13), 12(c), and 604(b) 

of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 705(13), 709(c) and 795i) 

(20) Extreme medical risk means a 

probability of substantially increasing 

functional impairment or death if 

medical services, including mental 

health services, are not provided 

expeditiously. 

(Authority: Sections 12(c) and 

101(a)(8)(A)(i)(III) of the Rehabilitation Act of 

1973, as amended; 29 U.S.C. 709(c) and 

721(a)(8)(A)(i)(III)) 

(21) Fair hearing board means a 

committee, body, or group of persons 

established by a State prior to January 

1, 1985, that— 

(i) Is authorized under State law to 

review determinations made by 

personnel of the designated State unit 

that affect the provision of vocational 

rehabilitation services; and 

(ii) Carries out the responsibilities of 

the impartial hearing officer in 

accordance with the requirements in 

§ 361.57(j). 

(Authority: Sections 12(c) and 102(c)(6) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 722(c)(6)) 

(22) Family member, for purposes of 

receiving vocational rehabilitation 

services in accordance with 

§ 361.48(b)(9), means an individual— 

(i) Who either— 

(A) Is a relative or guardian of an 

applicant or eligible individual; or 

(B) Lives in the same household as an 

applicant or eligible individual; 

(ii) Who has a substantial interest in 

the well-being of that individual; and 

(iii) Whose receipt of vocational 

rehabilitation services is necessary to 

enable the applicant or eligible 

individual to achieve an employment 

outcome. 

(Authority: Sections 12(c) and 103(a)(19) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 723(a)(19)) 

(23) Governor means a chief executive 

officer of a State. 

(Authority: Section 7(15) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(15)) 

(24) Impartial hearing officer. (i) 

Impartial hearing officer means an 

individual who— 

(A) Is not an employee of a public 

agency (other than an administrative 

law judge, hearing examiner, or 

employee of an institution of higher 

education); 

(B) Is not a member of the State 

Rehabilitation Council for the 

designated State unit; 

(C) Has not been involved previously 

in the vocational rehabilitation of the 

applicant or eligible individual; 

(D) Has knowledge of the delivery of 

vocational rehabilitation services, the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan, and the Federal and State 

regulations governing the provision of 

services; 

(E) Has received training with respect 

to the performance of official duties; 

and 

(F) Has no personal, professional, or 

financial interest that could affect the 

objectivity of the individual. 

(ii) An individual is not considered to 

be an employee of a public agency for 

the purposes of this definition solely 

because the individual is paid by the 

agency to serve as a hearing officer. 

(Authority: Section 7(16) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(16)) 

(25) Indian; American Indian; Indian 

American; Indian Tribe. 

(i) In general. The terms ‘‘Indian’’, 

‘‘American Indian’’, and ‘‘Indian 

American’’ mean an individual who is 

a member of an Indian tribe and include 

a Native and a descendant of a Native, 

as such terms are defined in subsections 

(b) and (c) of section 3 of the Alaska 

Native Claims Settlement Act (43 U.S.C. 

1602). 

(ii) Indian tribe. The term ‘‘Indian 

tribe’’ means any Federal or State Indian 

tribe, band, rancheria, pueblo, colony, 

or community, including any Alaskan 

native village or regional village 

corporation (as defined in or established 

pursuant to the Alaska Native Claims 

Settlement Act) and a tribal organization 

(as defined in section 4(1) of the Indian 

Self-Determination and Education 

Assistance Act (25 U.S.C. 450(b)(1)). 

(Authority: Section 7(19) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(19)) 

(26) Individual who is blind means a 

person who is blind within the meaning 

of applicable State law. 


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(Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c)) 

(27) Individual with a disability, 

except as provided in paragraph 

(c)(28)of this section, means an 

individual— 

(i) Who has a physical or mental 

impairment; 

(ii) Whose impairment constitutes or 

results in a substantial impediment to 

employment; and 

(iii) Who can benefit in terms of an 

employment outcome from the 

provision of vocational rehabilitation 

services. 

(Authority: Section 7(20)(A) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(20)(A)) 

(28) Individual with a disability, for 

purposes of §§ 361.5(c)(13), 361.13(a), 

361.13(b)(1), 361.17(a), (b), (c), and (j), 

361.18(b), 361.19, 361.20, 361.23(b)(2), 

361.29(a) and (d)(8), and 361.51(b), 

means an individual— 

(i) Who has a physical or mental 

impairment that substantially limits one 

or more major life activities; 

(ii) Who has a record of such an 

impairment; or 

(iii) Who is regarded as having such 

an impairment. 

(Authority: Section 7(20)(B) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(20)(B)) 

(29) Individual with a most significant 

disability means an individual with a 

significant disability who meets the 

designated State unit’s criteria for an 

individual with a most significant 

disability. These criteria must be 

consistent with the requirements in 

§ 361.36(d)(1) and (2). 

(Authority: Sections 7(21)(E) and 101(a)(5)(C) 

of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 705(21)(E) and 

721(a)(5)(C)) 

(30) Individual with a significant 

disability means an individual with a 

disability— 

(i) Who has a severe physical or 

mental impairment that seriously limits 

one or more functional capacities (such 

as mobility, communication, self-care, 

self-direction, interpersonal skills, work 

tolerance, or work skills) in terms of an 

employment outcome; 

(ii) Whose vocational rehabilitation 

can be expected to require multiple 

vocational rehabilitation services over 

an extended period of time; and 

(iii) Who has one or more physical or 

mental disabilities resulting from 

amputation, arthritis, autism, blindness, 

burn injury, cancer, cerebral palsy, 

cystic fibrosis, deafness, head injury, 

heart disease, hemiplegia, hemophilia, 

respiratory or pulmonary dysfunction, 

mental illness, multiple sclerosis, 

muscular dystrophy, musculo-skeletal 

disorders, neurological disorders 

(including stroke and epilepsy), spinal 

cord conditions (including paraplegia 

and quadriplegia), sickle cell anemia, 

intellectual disability, specific learning 

disability, end-stage renal disease, or 

another disability or combination of 

disabilities determined on the basis of 

an assessment for determining eligibility 

and vocational rehabilitation needs to 

cause comparable substantial functional 

limitation. 

(Authority: Section 7(21)(A) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(21)(A)) 

(31) Individual’s representative means 

any representative chosen by an 

applicant or eligible individual, as 

appropriate, including a parent, 

guardian, other family member, or 

advocate, unless a representative has 

been appointed by a court to represent 

the individual, in which case the courtappointed representative is the 

individual’s representative. 

(Authority: Sections 7(22) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(22) and 709(c)) 

(32) Integrated setting means— 

(i) With respect to the provision of 

services, a setting typically found in the 

community in which applicants or 

eligible individuals interact with nondisabled individuals other than nondisabled individuals who are providing 

services to those applicants or eligible 

individuals; and 

(ii) With respect to an employment 

outcome, means a setting— 

(A) Typically found in the 

community; and 

(B) Where the employee with a 

disability interacts, for the purpose of 

performing the duties of the position, 

with other employees within the 

particular work unit and the entire work 

site, and, as appropriate to the work 

performed, other persons (e.g., 

customers and vendors) who are not 

individuals with disabilities (not 

including supervisory personnel or 

individuals who are providing services 

to such employee) to the same extent 

that employees who are not individuals 

with disabilities and who are in 

comparable positions interact with these 

persons. 

(Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c)) 

(33) Local workforce development 

board means a local board, as defined in 

section 3 of the Workforce Innovation 

and Opportunity Act. 

(Authority: Section 7(25) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(25)) 

(34) Maintenance means monetary 

support provided to an individual for 

expenses, such as food, shelter, and 

clothing, that are in excess of the normal 

expenses of the individual and that are 

necessitated by the individual’s 

participation in an assessment for 

determining eligibility and vocational 

rehabilitation needs or the individual’s 

receipt of vocational rehabilitation 

services under an individualized plan 

for employment. 

(Authority: Sections 12(c) and 103(a)(7) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 723(a)(7)) 

(i)Examples: The following are 

examples of expenses that would meet 

the definition of maintenance. The 

examples are illustrative, do not address 

all possible circumstances, and are not 

intended to substitute for individual 

counselor judgment. 

Example 1: The cost of a uniform or 

other suitable clothing that is required 

for an individual’s job placement or jobseeking activities. 

Example 2: The cost of short-term 

shelter that is required in order for an 

individual to participate in assessment 

activities or vocational training at a site 

that is not within commuting distance 

of an individual’s home. 

Example 3: The initial one-time costs, 

such as a security deposit or charges for 

the initiation of utilities, that are 

required in order for an individual to 

relocate for a job placement. 

(ii) [Reserved] 

(35) Mediation means the act or 

process of using an independent third 

party to act as a mediator, intermediary, 

or conciliator to assist persons or parties 

in settling differences or disputes prior 

to pursuing formal administrative or 

other legal remedies. Mediation under 

the program must be conducted in 

accordance with the requirements in 

§ 361.57(d) by a qualified and impartial 

mediator as defined in § 361.5(c)(43). 

(Authority: Sections 12(c) and 102(c)(4) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 722(c)(4)) 

(36) Nonprofit, with respect to a 

community rehabilitation program, 

means a community rehabilitation 

program carried out by a corporation or 

association, no part of the net earnings 

of which inures, or may lawfully inure, 

to the benefit of any private shareholder 

or individual and the income of which 

is exempt from taxation under section 

501(c)(3) of the Internal Revenue Code 

of 1986. 


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(Authority: Section 7(26) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(26)) 

(37) Ongoing support services, as used 

in the definition of supported 

employment, means services that— 

(i) Are needed to support and 

maintain an individual with a most 

significant disability, including a youth 

with a most significant disability, in 

supported employment; 

(ii) Are identified based on a 

determination by the designated State 

unit of the individual’s need as 

specified in an individualized plan for 

employment; 

(iii) Are furnished by the designated 

State unit from the time of job 

placement until transition to extended 

services, unless post-employment 

services are provided following 

transition, and thereafter by one or more 

extended services providers throughout 

the individual’s term of employment in 

a particular job placement or multiple 

placements if those placements are 

being provided under a program of 

transitional employment; 

(iv) Include an assessment of 

employment stability and provision of 

specific services or the coordination of 

services at or away from the worksite 

that are needed to maintain stability 

based on— 

(A) At a minimum, twice-monthly 

monitoring at the worksite of each 

individual in supported employment; or 

(B) If under specific circumstances, 

especially at the request of the 

individual, the individualized plan for 

employment provides for off-site 

monitoring, twice monthly meetings 

with the individual; 

(v) Consist of— 

(A) Any particularized assessment 

supplementary to the comprehensive 

assessment of rehabilitation needs 

described in paragraph (c)(5)(ii) of this 

section; 

(B) The provision of skilled job 

trainers who accompany the individual 

for intensive job skill training at the 

work site; 

(C) Job development and training; 

(D) Social skills training; 

(E) Regular observation or supervision 

of the individual; 

(F) Follow-up services including 

regular contact with the employers, the 

individuals, the parents, family 

members, guardians, advocates or 

authorized representatives of the 

individuals, and other suitable 

professional and informed advisors, in 

order to reinforce and stabilize the job 

placement; 

(G) Facilitation of natural supports at 

the worksite; 

(H) Any other service identified in the 

scope of vocational rehabilitation 

services for individuals, described in 

§ 361.48; or 

(I) Any service similar to the foregoing 

services. 

(Authority: Sections 7(27) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(27) and 709(c)) 

(38) Personal assistance services 

means a range of services, including, 

among other things, training in 

managing, supervising, and directing 

personal assistance services, provided 

by one or more persons, that are— 

(i) Designed to assist an individual 

with a disability to perform daily living 

activities on or off the job that the 

individual would typically perform 

without assistance if the individual did 

not have a disability; 

(ii) Designed to increase the 

individual’s control in life and ability to 

perform everyday activities on or off the 

job; 

(iii) Necessary to the achievement of 

an employment outcome; and 

(iv) Provided only while the 

individual is receiving other vocational 

rehabilitation services. The services may 

include training in managing, 

supervising, and directing personal 

assistance services. 

(Authority: Sections 7(28), 12(c), 

102(b)(4)(B)(i)(I)(bb), and 103(a)(9) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(28), 709(c), 722(b)(4)(B)(i)(I)(bb), 

and 723(a)(9)) 

(39) Physical and mental restoration 

services means— 

(i) Corrective surgery or therapeutic 

treatment that is likely, within a 

reasonable period of time, to correct or 

modify substantially a stable or slowly 

progressive physical or mental 

impairment that constitutes a 

substantial impediment to employment; 

(ii) Diagnosis of and treatment for 

mental or emotional disorders by 

qualified personnel in accordance with 

State licensure laws; 

(iii) Dentistry; 

(iv) Nursing services; 

(v) Necessary hospitalization (either 

inpatient or outpatient care) in 

connection with surgery or treatment 

and clinic services; 

(vi) Drugs and supplies; 

(vii) Prosthetic and orthotic devices; 

(viii) Eyeglasses and visual services, 

including visual training, and the 

examination and services necessary for 

the prescription and provision of 

eyeglasses, contact lenses, microscopic 

lenses, telescopic lenses, and other 

special visual aids prescribed by 

personnel who are qualified in 

accordance with State licensure laws; 

(ix) Podiatry; 

(x) Physical therapy; 

(xi) Occupational therapy; 

(xii) Speech or hearing therapy; 

(xiii) Mental health services; 

(xiv) Treatment of either acute or 

chronic medical complications and 

emergencies that are associated with or 

arise out of the provision of physical 

and mental restoration services, or that 

are inherent in the condition under 

treatment; 

(xv) Special services for the treatment 

of individuals with end-stage renal 

disease, including transplantation, 

dialysis, artificial kidneys, and supplies; 

and 

(xvi) Other medical or medically 

related rehabilitation services. 

(Authority: Sections 12(c) and 103(a)(6) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 723(a)(6)) 

(40) Physical or mental impairment 

means— 

(i) Any physiological disorder or 

condition, cosmetic disfigurement, or 

anatomical loss affecting one or more of 

the following body systems: 

Neurological, musculo-skeletal, special 

sense organs, respiratory (including 

speech organs), cardiovascular, 

reproductive, digestive, genitourinary, 

hemic and lymphatic, skin, and 

endocrine; or 

(ii) Any mental or psychological 

disorder such as intellectual disability, 

organic brain syndrome, emotional or 

mental illness, and specific learning 

disabilities. 

(Authority: Sections 7(20)(A) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(20)(A) and 709(c)) 

(41) Post-employment services means 

one or more of the services identified in 

§ 361.48 that are provided subsequent to 

the achievement of an employment 

outcome and that are necessary for an 

individual to maintain, regain, or 

advance in employment, consistent with 

the individual’s unique strengths, 

resources, priorities, concerns, abilities, 

capabilities, interests, and informed 

choice. 

(Authority: Sections 12(c) and 103(a)(20) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 723(a)(20)) 

Note to paragraph(c)(41): Postemployment services are intended to 

ensure that the employment outcome 

remains consistent with the individual’s 

unique strengths, resources, priorities, 

concerns, abilities, capabilities, 

interests, and informed choice. These 

services are available to meet 

rehabilitation needs that do not require 

a complex and comprehensive provision 

of services and, thus, should be limited 


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in scope and duration. If more 

comprehensive services are required, 

then a new rehabilitation effort should 

be considered. Post-employment 

services are to be provided under an 

amended individualized plan for 

employment; thus, a re-determination of 

eligibility is not required. The provision 

of post-employment services is subject 

to the same requirements in this part as 

the provision of any other vocational 

rehabilitation service. Post-employment 

services are available to assist an 

individual to maintain employment, 

e.g., the individual’s employment is 

jeopardized because of conflicts with 

supervisors or co-workers, and the 

individual needs mental health services 

and counseling to maintain the 

employment, or the individual requires 

assistive technology to maintain the 

employment; to regain employment, 

e.g., the individual’s job is eliminated 

through reorganization and new 

placement services are needed; and to 

advance in employment, e.g., the 

employment is no longer consistent 

with the individual’s unique strengths, 

resources, priorities, concerns, abilities, 

capabilities, interests, and informed 

choice. 

(42) Pre-employment transition 

services means the required activities 

and authorized activities specified in 

§ 361.48(a). 

(Authority: Sections 7(30) and 113 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 7(30) and 733) 

(43) Qualified and impartial 

mediator. (i) Qualified and impartial 

mediator means an individual who— 

(A) Is not an employee of a public 

agency (other than an administrative 

law judge, hearing examiner, employee 

of a State office of mediators, or 

employee of an institution of higher 

education); 

(B) Is not a member of the State 

Rehabilitation Council for the 

designated State unit; 

(C) Has not been involved previously 

in the vocational rehabilitation of the 

applicant or eligible individual; 

(D) Is knowledgeable of the vocational 

rehabilitation program and the 

applicable Federal and State laws, 

regulations, and policies governing the 

provision of vocational rehabilitation 

services; 

(E) Has been trained in effective 

mediation techniques consistent with 

any State-approved or -recognized 

certification, licensing, registration, or 

other requirements; and 

(F) Has no personal, professional, or 

financial interest that could affect the 

individual’s objectivity during the 

mediation proceedings. 

(ii) An individual is not considered to 

be an employee of the designated State 

agency or designated State unit for the 

purposes of this definition solely 

because the individual is paid by the 

designated State agency or designated 

State unit to serve as a mediator. 

(Authority: Sections 12(c) and 102(c)(4) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 722(c)(4)) 

(44) Rehabilitation engineering means 

the systematic application of 

engineering sciences to design, develop, 

adapt, test, evaluate, apply, and 

distribute technological solutions to 

problems confronted by individuals 

with disabilities in functional areas, 

such as mobility, communications, 

hearing, vision, and cognition, and in 

activities associated with employment, 

independent living, education, and 

integration into the community. 

(Authority: Sections 7(32) and (12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(32) and 709(c)) 

(45) Rehabilitation technology means 

the systematic application of 

technologies, engineering 

methodologies, or scientific principles 

to meet the needs of, and address the 

barriers confronted by, individuals with 

disabilities in areas that include 

education, rehabilitation, employment, 

transportation, independent living, and 

recreation. The term includes 

rehabilitation engineering, assistive 

technology devices, and assistive 

technology services. 

(Authority: Section 7(32) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(32)) 

(46) Reservation means a Federal or 

State Indian reservation, a public 

domain Indian allotment, a former 

Indian reservation in Oklahoma, and 

land held by incorporated Native 

groups, regional corporations, and 

village corporations under the 

provisions of the Alaska Native Claims 

Settlement Act (43 U.S.C. 1601 et seq.); 

or a defined area of land recognized by 

a State or the Federal Government 

where there is a concentration of tribal 

members and on which the tribal 

government is providing structured 

activities and services. 

(Authority: Section 121(e) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 741(e)) 

(47) Sole local agency means a unit or 

combination of units of general local 

government or one or more Indian tribes 

that has the sole responsibility under an 

agreement with, and the supervision of, 

the State agency to conduct a local or 

tribal vocational rehabilitation program, 

in accordance with the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan. 

(Authority: Section 7(24) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(24)) 

(48) State means any of the 50 States, 

the District of Columbia, the 

Commonwealth of Puerto Rico, the 

United States Virgin Islands, Guam, 

American Samoa, and the 

Commonwealth of the Northern Mariana 

Islands. 

(Authority: Section 7(34) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(34)) 

(49) State workforce development 

board means a State workforce 

development board, as defined in 

section 3 of the Workforce Innovation 

and Opportunity Act (29 U.S.C. 3102). 

(Authority: Section 7(35) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(35)) 

(50) Statewide workforce development 

system means a workforce development 

system, as defined in section 3 of the 

Workforce Innovation and Opportunity 

Act (29 U.S.C. 3102). 

(Authority: Section 7(36) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(36)) 

(51) Student with a disability. (i) 

Student with a disability means, in 

general, an individual with a disability 

who— 

(A)(1) Is not younger than the earliest 

age for the provision of transition 

services under section 

614(d)(1)(A)(i)(VIII) of the Individuals 

with Disabilities Education Act (20 

U.S.C. 1414(d)(1)(A)(i)(VIII)); or 

(2) If the State involved elects to use 

a lower minimum age for receipt of preemployment transition services under 

this Act, is not younger than that 

minimum age; and 

(B)(1) Is not older than 21 years of age; 

or 

(2) If the State law for the State 

provides for a higher maximum age for 

receipt of services under the Individuals 

with Disabilities Education Act (20 

U.S.C. 1400 et seq.), is not older than 

that maximum age; and 

(C)(1) Is eligible for, and receiving, 

special education or related services 

under Part B of the Individuals with 

Disabilities Education Act (20 U.S.C. 

1411 et seq.); or 

(2) Is a student who is an individual 

with a disability, for purposes of section 

504. 

(ii) Students with disabilities means 

more than one student with a disability. 

(Authority: Section 7(37) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(37)) 


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(52) Substantial impediment to 

employment means that a physical or 

mental impairment (in light of attendant 

medical, psychological, vocational, 

educational, communication, and other 

related factors) hinders an individual 

from preparing for, entering into, 

engaging in, advancing in, or retaining 

employment consistent with the 

individual’s abilities and capabilities. 

(Authority: Sections 7(20)(A) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(20)(A) and 709(c)) 

(53) Supported employment. (i) 

Supported employment means— 

(A) Competitive integrated 

employment, including customized 

employment, or employment in an 

integrated work setting in which an 

individual with a most significant 

disability, including a youth with a 

most significant disability, is working 

on a short-term basis toward 

competitive integrated employment that 

is individualized, consistent with the 

unique strengths, abilities, interests, and 

informed choice of the individual, 

including with ongoing support services 

for individuals with the most significant 

disabilities— 

(1) For whom competitive integrated 

employment has not historically 

occurred, or for whom competitive 

integrated employment has been 

interrupted or intermittent as a result of 

a significant disability; and 

(2) Who, because of the nature and 

severity of their disability, need 

intensive supported employment 

services and extended services after the 

transition from support provided by the 

designated State unit, in order to 

perform this work; or 

(B) Transitional employment, as 

defined in paragraph (c)(56) of this 

section, for individuals with the most 

significant disabilities due to mental 

illness, including youth with the most 

significant disabilities, constitutes 

supported employment. 

(ii) For purposes of this part, an 

individual with the most significant 

disabilities, whose supported 

employment in an integrated setting 

does not satisfy the criteria of 

competitive integrated employment, as 

defined in paragraph (c)(9) of this 

section, is considered to be working on 

a short-term basis toward competitive 

integrated employment so long as the 

individual can reasonably anticipate 

achieving competitive integrated 

employment within six months of 

achieving an employment outcome of 

supported employment. 

(Authority: Sections 7(38), 12(c), and 602 of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 705(38), 709(c), and 795g) 

(54) Supported employment services 

means ongoing support services, 

including customized employment, and 

other appropriate services needed to 

support and maintain an individual 

with a most significant disability, 

including a youth with a most 

significant disability, in supported 

employment that are— 

(i) Organized and made available, 

singly or in combination, in such a way 

as to assist an eligible individual to 

achieve competitive integrated 

employment; 

(ii) Based on a determination of the 

needs of an eligible individual, as 

specified in an individualized plan for 

employment; 

(iii) Provided by the designated State 

unit for a period of time not to exceed 

24 months, unless under special 

circumstances the eligible individual 

and the rehabilitation counselor or 

coordinator jointly agree to extend the 

time to achieve the employment 

outcome identified in the 

individualized plan for employment; 

and 

(iv) Following transition, as postemployment services that are 

unavailable from an extended services 

provider and that are necessary to 

maintain or regain the job placement or 

advance in employment. 

(Authority: Sections 7(39), 12(c), and 

103(a)(16) of the Rehabilitation Act of 1973, 

as amended; 29 U.S.C. 705(39), 709(c), and 

723(a)(16)) 

(55) Transition services means a 

coordinated set of activities for a 

student or youth with a disability— 

(i) Designed within an outcomeoriented process that promotes 

movement from school to post-school 

activities, including postsecondary 

education, vocational training, 

integrated employment (including 

supported employment), continuing and 

adult education, adult services, 

independent living, or community 

participation; 

(ii) Based upon the individual 

student’s needs, taking into account the 

student’s preferences and interests; 

(iii) That includes instruction, 

community experiences, the 

development of employment and other 

post-school adult living objectives, and, 

if appropriate, acquisition of daily living 

skills and functional vocational 

evaluation; and 

(iv) That promotes or facilitates the 

achievement of the employment 

outcome identified in the student’s 

individualized plan for employment. 

(Authority: Sections 12(c) and 103(a)(15) and 

(b)(7) of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 709(c) and 723(a)(15) 

and (b)(7)) 

(56) Transitional employment, as used 

in the definition of supported 

employment, means a series of 

temporary job placements in 

competitive integrated employment 

with ongoing support services for 

individuals with the most significant 

disabilities due to mental illness. In 

transitional employment, the provision 

of ongoing support services must 

include continuing sequential job 

placements until job permanency is 

achieved. 

(Authority: Sections 7(38)(B) and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(38)(B) and 709(c)) 

(57) Transportation means travel and 

related expenses that are necessary to 

enable an applicant or eligible 

individual to participate in a vocational 

rehabilitation service, including 

expenses for training in the use of 

public transportation vehicles and 

systems. 

(Authority: Sections 12(c) and 103(a)(8) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 723(a)(8)) 

(i) Examples. The following are 

examples of expenses that would meet 

the definition of transportation. The 

examples are purely illustrative, do not 

address all possible circumstances, and 

are not intended as substitutes for 

individual counselor judgment. 

Example 1: Travel and related 

expenses for a personal care attendant 

or aide if the services of that person are 

necessary to enable the applicant or 

eligible individual to travel to 

participate in any vocational 

rehabilitation service. 

Example 2: The purchase and repair 

of vehicles, including vans, but not the 

modification of these vehicles, as 

modification would be considered a 

rehabilitation technology service. 

Example 3: Relocation expenses 

incurred by an eligible individual in 

connection with a job placement that is 

a significant distance from the eligible 

individual’s current residence. 

(ii) [Reserved] 

(58) Vocational rehabilitation 

services— 

(i) If provided to an individual, means 

those services listed in § 361.48; and 

(ii) If provided for the benefit of 

groups of individuals, means those 

services listed in § 361.49. 

(Authority: Sections 7(40) and 103 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(40) and 723) 

(59) Youth with a disability. (i) Youth 

with a disability means an individual 

with a disability who is not— 

(A) Younger than 14 years of age; and 

(B) Older than 24 years of age. 


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(ii) Youth with disabilities means 

more than one youth with a disability. 

(Authority: Section 7(42) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(42)) 

Subpart B—State Plan and Other 

Requirements for Vocational 

Rehabilitation Services 

§ 361.10 Submission, approval, and 

disapproval of the State plan. 

(a) Purpose. (1) To be eligible to 

receive funds under this part for a fiscal 

year, a State must submit, and have 

approved, a vocational rehabilitation 

services portion of a Unified or 

Combined State Plan in accordance with 

sections 102 or 103 of the Workforce 

Innovation and Opportunity Act. 

(2) The vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must satisfy all 

requirements set forth in this part. 

(b) Separate part relating to the 

vocational rehabilitation of individuals 

who are blind. If a separate State agency 

administers or supervises the 

administration of a separate part of the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan relating to the vocational 

rehabilitation of individuals who are 

blind, that part of the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

separately conform to all applicable 

requirements under this part. 

(c) Public participation. Prior to the 

adoption of any substantive policies or 

procedures specific to the provision of 

vocational rehabilitation services under 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan, including making any 

substantive amendment to those 

policies and procedures, the designated 

State agency must conduct public 

meetings throughout the State, in 

accordance with the requirements of 

§ 361.20. 

(d) Submission, approval, 

disapproval, and duration. All 

requirements regarding the submission, 

approval, disapproval, and duration of 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan are governed by joint 

regulations set forth in subpart D of this 

part. 

(e) Submission of policies and 

procedures. The State is not required to 

submit policies, procedures, or 

descriptions required under this part 

that have been previously submitted to 

the Secretary and that demonstrate that 

the State meets the requirements of this 

part, including any policies, procedures, 

or descriptions submitted under this 

part that are in effect on July 22, 2014. 

(f) Due process. If the Secretary 

disapproves the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan, the 

Secretary will follow these procedures: 

(1) Informal resolution. Prior to 

disapproving the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan, the 

Secretary attempts to resolve disputes 

informally with State officials. 

(2) Notice. If, after reasonable effort 

has been made to resolve the dispute, no 

resolution has been reached, the 

Secretary provides notice to the State 

agency of the intention to disapprove 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan and of the opportunity for a 

hearing. 

(3) State plan hearing. If the State 

agency requests a hearing, the Secretary 

designates one or more individuals, 

either from the Department or 

elsewhere, not responsible for or 

connected with the administration of 

this program, to conduct a hearing in 

accordance with the provisions of 34 

CFR part 81, subpart A. 

(4) Initial decision. The hearing officer 

issues an initial decision in accordance 

with 34 CFR 81.41. 

(5) Petition for review of an initial 

decision. The State agency may seek the 

Secretary’s review of the initial decision 

in accordance with 34 CFR part 81. 

(6) Review by the Secretary. The 

Secretary reviews the initial decision in 

accordance with 34 CFR 81.43. 

(7) Final decision of the Department. 

The final decision of the Department is 

made in accordance with 34 CFR 81.44. 

(8) Judicial review. A State may 

appeal the Secretary’s decision to 

disapprove the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan by filing a petition 

for review with the United States Court 

of Appeals for the circuit in which the 

State is located, in accordance with 

section 107(d) of the Act. 

(Authority: Sections 101(a) and (b) and 

107(d) of the Rehabilitation Act of 1973, as 

amended; 20 U.S.C. 1231g(a); and 29 U.S.C. 

721(a) and (b) and 727(d)) 

§ 361.11 Withholding of funds. 

(a) Basis for withholding. The 

Secretary may withhold or limit 

payments under section 111 or 603(a) of 

the Act, as provided by section 107(c) of 

the Act, if the Secretary determines 

that— 

(1) The vocational rehabilitation 

services portion of the Unified or 

Combined State Plan, including the 

supported employment supplement, has 

been so changed that it no longer 

conforms with the requirements of this 

part or part 363; or 

(2) In the administration of the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan there is a failure to comply 

substantially with any provision of such 

plan or with an evaluation standard or 

performance indicator established under 

section 106 of the Act. 

(b) Informal resolution. Prior to 

withholding or limiting payments in 

accordance with this section, the 

Secretary attempts to resolve disputed 

issues informally with State officials. 

(c) Notice. If, after reasonable effort 

has been made to resolve the dispute, no 

resolution has been reached, the 

Secretary provides notice to the State 

agency of the intention to withhold or 

limit payments and of the opportunity 

for a hearing. 

(d) Withholding hearing. If the State 

agency requests a hearing, the Secretary 

designates one or more individuals, 

either from the Department or 

elsewhere, not responsible for or 

connected with the administration of 

this program, to conduct a hearing in 

accordance with the provisions of 34 

CFR part 81, subpart A. 

(e) Initial decision. The hearing officer 

issues an initial decision in accordance 

with 34 CFR 81.41. 

(f) Petition for review of an initial 

decision. The State agency may seek the 

Secretary’s review of the initial decision 

in accordance with 34 CFR 81.42. 

(g) Review by the Secretary. The 

Secretary reviews the initial decision in 

accordance with 34 CFR 81.43. 

(h) Final decision of the Department. 

The final decision of the Department is 

made in accordance with 34 CFR 81.44. 

(i) Judicial review. A State may appeal 

the Secretary’s decision to withhold or 

limit payments by filing a petition for 

review with the United States Court of 

Appeals for the circuit in which the 

State is located, in accordance with 

section 107(d) of the Act. 

(Authority: Sections 12(c), 101(b), 107(c) and 

(d) of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 709(c), 721(b), 727(c) and 

(d)) 

Administration 

§ 361.12 Methods of administration. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that the State 

agency, and the designated State unit if 

applicable, employs methods of 

administration found necessary by the 

Secretary for the proper and efficient 

administration of the plan and for 


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carrying out all functions for which the 

State is responsible under the plan and 

this part. These methods must include 

procedures to ensure accurate data 

collection and financial accountability. 

(Authority: Sections 12(c) and 101(a)(6) and 

(a)(10)(A) of the Rehabilitation Act of 1973, 

as amended; 29 U.S.C. 709(c) and 721(a)(6) 

and (a)(10)(A)) 

§ 361.13 State agency for administration. 

(a) Designation of State agency. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must designate a State agency 

as the sole State agency to administer 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan, or to supervise its 

administration in a political subdivision 

of the State by a sole local agency, in 

accordance with the following 

requirements: 

(1) General. Except as provided in 

paragraphs (a)(2) and (a)(3) of this 

section, the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must provide that 

the designated State agency is one of the 

following types of agencies: 

(i) A State agency that is primarily 

concerned with vocational 

rehabilitation or vocational and other 

rehabilitation of individuals with 

disabilities; or 

(ii) A State agency that includes a 

vocational rehabilitation unit as 

provided in paragraph (b) of this 

section. 

(2) American Samoa. In the case of 

American Samoa, the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

designate the Governor. 

(3) Designated State agency for 

individuals who are blind. If a State 

commission or other agency that 

provides assistance or services to 

individuals who are blind is authorized 

under State law to provide vocational 

rehabilitation services to individuals 

who are blind, and this commission or 

agency is primarily concerned with 

vocational rehabilitation or includes a 

vocational rehabilitation unit as 

provided in paragraph (b) of this 

section, the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan may designate that 

agency as the sole State agency to 

administer the part of the plan under 

which vocational rehabilitation services 

are provided for individuals who are 

blind or to supervise its administration 

in a political subdivision of the State by 

a sole local agency. 

(b) Designation of State unit. (1) 

General. If the designated State agency 

is not of the type specified in paragraph 

(a)(1)(i) of this section or if the 

designated State agency specified in 

paragraph (a)(3) of this section is not 

primarily concerned with vocational 

rehabilitation or vocational and other 

rehabilitation of individuals with 

disabilities, the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must assure that 

the agency (or each agency if two 

agencies are designated) includes a 

vocational rehabilitation bureau, 

division, or unit that— 

(i) Is primarily concerned with 

vocational rehabilitation or vocational 

and other rehabilitation of individuals 

with disabilities and is responsible for 

the administration of the State agency’s 

vocational rehabilitation program under 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan; 

(ii) Has a full-time director who is 

responsible for the day-to-day 

operations of the vocational 

rehabilitation program; 

(iii) Has a staff, at least 90 percent of 

whom are employed full time on the 

rehabilitation work of the organizational 

unit; 

(iv) Is located at an organizational 

level and has an organizational status 

within the State agency comparable to 

that of other major organizational units 

of the agency; and 

(v) Has the sole authority and 

responsibility described within the 

designated State agency in paragraph (a) 

of this section to expend funds made 

available under the Act in a manner that 

is consistent with the purpose of the 

Act. 

(2) In the case of a State that has not 

designated a separate State agency for 

individuals who are blind, as provided 

for in paragraph (a)(3) of this section, 

the State may assign responsibility for 

the part of the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan under which 

vocational rehabilitation services are 

provided to individuals who are blind 

to one organizational unit of the 

designated State agency and may assign 

responsibility for the rest of the plan to 

another organizational unit of the 

designated State agency, with the 

provisions of paragraph (b)(1) of this 

section applying separately to each of 

these units. 

(c) Responsibility for administration. 

(1) Required activities. At a minimum, 

the following activities are the 

responsibility of the designated State 

unit or the sole local agency under the 

supervision of the State unit: 

(i) All decisions affecting eligibility 

for vocational rehabilitation services, 

the nature and scope of available 

services, and the provision of these 

services. 

(ii) The determination to close the 

record of services of an individual who 

has achieved an employment outcome 

in accordance with § 361.56. 

(iii) Policy formulation and 

implementation. 

(iv) The allocation and expenditure of 

vocational rehabilitation funds. 

(v) Participation as a partner in the 

one-stop service delivery system 

established under title I of the 

Workforce Investment Act of 1998, in 

accordance with 20 CFR part 662. 

(2) Non-delegable responsibility. The 

responsibility for the functions 

described in paragraph (c)(1) of this 

section may not be delegated to any 

other agency or individual. 

(Authority: Section 101(a)(2) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(2)) 

§ 361.14 Substitute State agency. 

(a) General provisions. (1) If the 

Secretary has withheld all funding from 

a State under § 361.11, the State may 

designate another agency to substitute 

for the designated State agency in 

carrying out the State’s program of 

vocational rehabilitation services. 

(2) Any public or nonprofit private 

organization or agency within the State 

or any political subdivision of the State 

is eligible to be a substitute agency. 

(3) The substitute agency must submit 

a vocational rehabilitation services 

portion of the Unified or Combined 

State Plan that meets the requirements 

of this part. 

(4) The Secretary makes no grant to a 

substitute agency until the Secretary 

approves its plan. 

(b) Substitute agency matching share. 

The Secretary does not make any 

payment to a substitute agency unless it 

has provided assurances that it will 

contribute the same matching share as 

the State would have been required to 

contribute if the State agency were 

carrying out the vocational 

rehabilitation program. 

(Authority: Section 107(c)(3) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 727(c)(3)) 

§ 361.15 Local administration. 

(a) If the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan provides for the 

administration of the plan by a local 

agency, the designated State agency 

must— 

(1) Ensure that each local agency is 

under the supervision of the designated 

State unit and is the sole local agency 

as defined in § 361.5(c)(47) that is 

responsible for the administration of the 


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program within the political subdivision 

that it serves; and 

(2) Develop methods that each local 

agency will use to administer the 

vocational rehabilitation program, in 

accordance with the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan. 

(b) A separate local agency serving 

individuals who are blind may 

administer that part of the plan relating 

to vocational rehabilitation of 

individuals who are blind, under the 

supervision of the designated State unit 

for individuals who are blind. 

(Authority: Sections 7(24) and 101(a)(2)(A) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 705(24) and 721(a)(2)(A)) 

§ 361.16 Establishment of an independent 

commission or a State Rehabilitation 

Council. 

(a) General requirement. Except as 

provided in paragraph (b) of this 

section, the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must contain one 

of the following two assurances: 

(1) An assurance that the designated 

State agency is an independent State 

commission that— 

(i) Is responsible under State law for 

operating, or overseeing the operation 

of, the vocational rehabilitation program 

in the State and is primarily concerned 

with vocational rehabilitation or 

vocational and other rehabilitation 

services, in accordance with 

§ 361.13(a)(1)(i); 

(ii) Is consumer-controlled by persons 

who— 

(A) Are individuals with physical or 

mental impairments that substantially 

limit major life activities; and 

(B) Represent individuals with a 

broad range of disabilities, unless the 

designated State unit under the 

direction of the commission is the State 

agency for individuals who are blind; 

(iii) Includes family members, 

advocates, or other representatives of 

individuals with mental impairments; 

and 

(iv) Conducts the functions identified 

in § 361.17(h)(4). 

(2) An assurance that— 

(i) The State has established a State 

Rehabilitation Council (Council) that 

meets the requirements of § 361.17; 

(ii) The designated State unit, in 

accordance with § 361.29, jointly 

develops, agrees to, and reviews 

annually State goals and priorities and 

jointly submits to the Secretary annual 

reports of progress with the Council; 

(iii) The designated State unit 

regularly consults with the Council 

regarding the development, 

implementation, and revision of State 

policies and procedures of general 

applicability pertaining to the provision 

of vocational rehabilitation services; 

(iv) The designated State unit 

transmits to the Council— 

(A) All plans, reports, and other 

information required under this part to 

be submitted to the Secretary; 

(B) All policies and information on all 

practices and procedures of general 

applicability provided to or used by 

rehabilitation personnel providing 

vocational rehabilitation services under 

this part; and 

(C) Copies of due process hearing 

decisions issued under this part and 

transmitted in a manner to ensure that 

the identity of the participants in the 

hearings is kept confidential; and 

(v) The vocational rehabilitation 

services portion of the Unified or 

Combined State Plan, and any revision 

to the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan, includes a summary of input 

provided by the Council, including 

recommendations from the annual 

report of the Council, the review and 

analysis of consumer satisfaction 

described in § 361.17(h)(4), and other 

reports prepared by the Council, and the 

designated State unit’s response to the 

input and recommendations, including 

its reasons for rejecting any input or 

recommendation of the Council. 

(b) Exception for separate State 

agency for individuals who are blind. In 

the case of a State that designates a 

separate State agency under 

§ 361.13(a)(3) to administer the part of 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan under which vocational 

rehabilitation services are provided to 

individuals who are blind, the State 

must either establish a separate State 

Rehabilitation Council for each agency 

that does not meet the requirements in 

paragraph (a)(1) of this section or 

establish one State Rehabilitation 

Council for both agencies if neither 

agency meets the requirements of 

paragraph (a)(1) of this section. 

(Authority: Sections 101(a)(21) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(21)) 

§ 361.17 Requirements for a State 

Rehabilitation Council. 

If the State has established a Council 

under § 361.16(a)(2) or (b), the Council 

must meet the following requirements: 

(a) Appointment. (1) The members of 

the Council must be appointed by the 

Governor or, in the case of a State that, 

under State law, vests authority for the 

administration of the activities carried 

out under this part in an entity other 

than the Governor (such as one or more 

houses of the State legislature or an 

independent board), the chief officer of 

that entity. 

(2) The appointing authority must 

select members of the Council after 

soliciting recommendations from 

representatives of organizations 

representing a broad range of 

individuals with disabilities and 

organizations interested in individuals 

with disabilities. In selecting members, 

the appointing authority must consider, 

to the greatest extent practicable, the 

extent to which minority populations 

are represented on the Council. 

(b) Composition. (1) General. Except 

as provided in paragraph (b)(3) of this 

section, the Council must be composed 

of at least 15 members, including— 

(i) At least one representative of the 

Statewide Independent Living Council, 

who must be the chairperson or other 

designee of the Statewide Independent 

Living Council; 

(ii) At least one representative of a 

parent training and information center 

established pursuant to section 682(a) of 

the Individuals with Disabilities 

Education Act; 

(iii) At least one representative of the 

Client Assistance Program established 

under part 370 of this chapter, who 

must be the director of or other 

individual recommended by the Client 

Assistance Program; 

(iv) At least one qualified vocational 

rehabilitation counselor with knowledge 

of and experience with vocational 

rehabilitation programs who serves as 

an ex officio, nonvoting member of the 

Council if employed by the designated 

State agency; 

(v) At least one representative of 

community rehabilitation program 

service providers; 

(vi) Four representatives of business, 

industry, and labor; 

(vii) Representatives of disability 

groups that include a cross section of— 

(A) Individuals with physical, 

cognitive, sensory, and mental 

disabilities; and 

(B) Representatives of individuals 

with disabilities who have difficulty 

representing themselves or are unable 

due to their disabilities to represent 

themselves; 

(viii) Current or former applicants for, 

or recipients of, vocational 

rehabilitation services; 

(ix) In a State in which one or more 

projects are funded under section 121 of 

the Act (American Indian Vocational 

Rehabilitation Services), at least one 

representative of the directors of the 

projects in such State; 

(x) At least one representative of the 

State educational agency responsible for 

the public education of students with 


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disabilities who are eligible to receive 

services under this part and part B of 

the Individuals with Disabilities 

Education Act; 

(xi) At least one representative of the 

State workforce development board; and 

(xii) The director of the designated 

State unit as an ex officio, nonvoting 

member of the Council. 

(2) Employees of the designated State 

agency. Employees of the designated 

State agency may serve only as 

nonvoting members of the Council. This 

provision does not apply to the 

representative appointed pursuant to 

paragraph (b)(1)(iii) of this section. 

(3) Composition of a separate Council 

for a separate State agency for 

individuals who are blind. Except as 

provided in paragraph (b)(4) of this 

section, if the State establishes a 

separate Council for a separate State 

agency for individuals who are blind, 

that Council must— 

(i) Conform with all of the 

composition requirements for a Council 

under paragraph (b)(1) of this section, 

except the requirements in paragraph 

(b)(1)(vii), unless the exception in 

paragraph (b)(4) of this section applies; 

and 

(ii) Include— 

(A) At least one representative of a 

disability advocacy group representing 

individuals who are blind; and 

(B) At least one representative of an 

individual who is blind, has multiple 

disabilities, and has difficulty 

representing himself or herself or is 

unable due to disabilities to represent 

himself or herself. 

(4) Exception. If State law in effect on 

October 29, 1992 requires a separate 

Council under paragraph (b)(3) of this 

section to have fewer than 15 members, 

the separate Council is in compliance 

with the composition requirements in 

paragraphs (b)(1)(vi) and (b)(1)(viii) of 

this section if it includes at least one 

representative who meets the 

requirements for each of those 

paragraphs. 

(c) Majority. (1) A majority of the 

Council members must be individuals 

with disabilities who meet the 

requirements of § 361.5(c)(28) and are 

not employed by the designated State 

unit. 

(2) In the case of a separate Council 

established under § 361.16(b), a majority 

of the Council members must be 

individuals who are blind and are not 

employed by the designated State unit. 

(d) Chairperson. (1) The chairperson 

must be selected by the members of the 

Council from among the voting 

members of the Council, subject to the 

veto power of the Governor; or 

(2) In States in which the Governor 

does not have veto power pursuant to 

State law, the appointing authority 

described in paragraph (a)(1) of this 

section must designate a member of the 

Council to serve as the chairperson of 

the Council or must require the Council 

to designate a member to serve as 

chairperson. 

(e) Terms of appointment. (1) Each 

member of the Council must be 

appointed for a term of no more than 

three years, and each member of the 

Council, other than a representative 

identified in paragraph (b)(1)(iii) or (ix) 

of this section, may serve for no more 

than two consecutive full terms. 

(2) A member appointed to fill a 

vacancy occurring prior to the end of 

the term for which the predecessor was 

appointed must be appointed for the 

remainder of the predecessor’s term. 

(3) The terms of service of the 

members initially appointed must be, as 

specified by the appointing authority as 

described in paragraph (a)(1) of this 

section, for varied numbers of years to 

ensure that terms expire on a staggered 

basis. 

(f) Vacancies. (1) A vacancy in the 

membership of the Council must be 

filled in the same manner as the original 

appointment, except the appointing 

authority as described in paragraph 

(a)(1) of this section may delegate the 

authority to fill that vacancy to the 

remaining members of the Council after 

making the original appointment. 

(2) No vacancy affects the power of 

the remaining members to execute the 

duties of the Council. 

(g) Conflict of interest. No member of 

the Council may cast a vote on any 

matter that would provide direct 

financial benefit to the member or the 

member’s organization or otherwise give 

the appearance of a conflict of interest 

under State law. 

(h) Functions. The Council must, after 

consulting with the State workforce 

development board— 

(1) Review, analyze, and advise the 

designated State unit regarding the 

performance of the State unit’s 

responsibilities under this part, 

particularly responsibilities related to— 

(i) Eligibility, including order of 

selection; 

(ii) The extent, scope, and 

effectiveness of services provided; and 

(iii) Functions performed by State 

agencies that affect or potentially affect 

the ability of individuals with 

disabilities in achieving employment 

outcomes under this part; 

(2) In partnership with the designated 

State unit— 

(i) Develop, agree to, and review State 

goals and priorities in accordance with 

§ 361.29(c); and 

(ii) Evaluate the effectiveness of the 

vocational rehabilitation program and 

submit reports of progress to the 

Secretary in accordance with 

§ 361.29(e); 

(3) Advise the designated State agency 

and the designated State unit regarding 

activities carried out under this part and 

assist in the preparation of the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan and amendments to the plan, 

applications, reports, needs 

assessments, and evaluations required 

by this part; 

(4) To the extent feasible, conduct a 

review and analysis of the effectiveness 

of, and consumer satisfaction with— 

(i) The functions performed by the 

designated State agency; 

(ii) The vocational rehabilitation 

services provided by State agencies and 

other public and private entities 

responsible for providing vocational 

rehabilitation services to individuals 

with disabilities under the Act; and 

(iii) The employment outcomes 

achieved by eligible individuals 

receiving services under this part, 

including the availability of health and 

other employment benefits in 

connection with those employment 

outcomes; 

(5) Prepare and submit to the 

Governor and to the Secretary no later 

than 90 days after the end of the Federal 

fiscal year an annual report on the status 

of vocational rehabilitation programs 

operated within the State and make the 

report available to the public through 

appropriate modes of communication; 

(6) To avoid duplication of efforts and 

enhance the number of individuals 

served, coordinate activities with the 

activities of other councils within the 

State, including the Statewide 

Independent Living Council established 

under chapter 1, title VII of the Act, the 

advisory panel established under 

section 612(a)(21) of the Individuals 

with Disabilities Education Act, the 

State Developmental Disabilities 

Planning Council described in section 

124 of the Developmental Disabilities 

Assistance and Bill of Rights Act, the 

State mental health planning council 

established under section 1914(a) of the 

Public Health Service Act, and the State 

workforce development board, and with 

the activities of entities carrying out 

programs under the Assistive 

Technology Act of 1998; 

(7) Provide for coordination and the 

establishment of working relationships 

between the designated State agency 

and the Statewide Independent Living 


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Council and centers for independent 

living within the State; and 

(8) Perform other comparable 

functions, consistent with the purpose 

of this part, as the Council determines 

to be appropriate, that are comparable to 

the other functions performed by the 

Council. 

(i) Resources. (1) The Council, in 

conjunction with the designated State 

unit, must prepare a plan for the 

provision of resources, including staff 

and other personnel, that may be 

necessary and sufficient for the Council 

to carry out its functions under this part. 

(2) The resource plan must, to the 

maximum extent possible, rely on the 

use of resources in existence during the 

period of implementation of the plan. 

(3) Any disagreements between the 

designated State unit and the Council 

regarding the amount of resources 

necessary to carry out the functions of 

the Council must be resolved by the 

Governor, consistent with paragraphs 

(i)(1) and (2) of this section. 

(4) The Council must, consistent with 

State law, supervise and evaluate the 

staff and personnel that are necessary to 

carry out its functions. 

(5) Those staff and personnel that are 

assisting the Council in carrying out its 

functions may not be assigned duties by 

the designated State unit or any other 

agency or office of the State that would 

create a conflict of interest. 

(j) Meetings. The Council must— 

(1) Convene at least four meetings a 

year in locations determined by the 

Council to be necessary to conduct 

Council business. The meetings must be 

publicly announced, open, and 

accessible to the general public, 

including individuals with disabilities, 

unless there is a valid reason for an 

executive session; and 

(2) Conduct forums or hearings, as 

appropriate, that are publicly 

announced, open, and accessible to the 

public, including individuals with 

disabilities. 

(k) Compensation. Funds 

appropriated under title I of the Act, 

except funds to carry out sections 112 

and 121 of the Act, may be used to 

compensate and reimburse the expenses 

of Council members in accordance with 

section 105(g) of the Act. 

(Authority: Section 105 of the Rehabilitation 

Act of 1973, as amended; 29 U.S.C. 725) 

§ 361.18 Comprehensive system of 

personnel development. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must describe the procedures 

and activities the State agency will 

undertake to establish and maintain a 

comprehensive system of personnel 

development designed to ensure an 

adequate supply of qualified 

rehabilitation personnel, including 

professionals and paraprofessionals, for 

the designated State unit. If the State 

agency has a State Rehabilitation 

Council, this description must, at a 

minimum, specify that the Council has 

an opportunity to review and comment 

on the development of plans, policies, 

and procedures necessary to meet the 

requirements of paragraphs (b) through 

(d) of this section. This description must 

also conform with the following 

requirements: 

(a) Personnel and personnel 

development data system. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must describe the 

development and maintenance of a 

system by the State agency for collecting 

and analyzing on an annual basis data 

on qualified personnel needs and 

personnel development, in accordance 

with the following requirements: 

(1) Data on qualified personnel needs 

must include— 

(i) The number of personnel who are 

employed by the State agency in the 

provision of vocational rehabilitation 

services in relation to the number of 

individuals served, broken down by 

personnel category; 

(ii) The number of personnel 

currently needed by the State agency to 

provide vocational rehabilitation 

services, broken down by personnel 

category; and 

(iii) Projections of the number of 

personnel, broken down by personnel 

category, who will be needed by the 

State agency to provide vocational 

rehabilitation services in the State in 

five years based on projections of the 

number of individuals to be served, 

including individuals with significant 

disabilities, the number of personnel 

expected to retire or leave the field, and 

other relevant factors. 

(2) Data on personnel development 

must include— 

(i) A list of the institutions of higher 

education in the State that are preparing 

vocational rehabilitation professionals, 

by type of program; 

(ii) The number of students enrolled 

at each of those institutions, broken 

down by type of program; and 

(iii) The number of students who 

graduated during the prior year from 

each of those institutions with 

certification or licensure, or with the 

credentials for certification or licensure, 

broken down by the personnel category 

for which they have received, or have 

the credentials to receive, certification 

or licensure. 

(b) Plan for recruitment, preparation, 

and retention of qualified personnel. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must describe the 

development, updating, and 

implementation of a plan to address the 

current and projected needs for 

personnel who are qualified in 

accordance with paragraph (c) of this 

section. The plan must identify the 

personnel needs based on the data 

collection and analysis system 

described in paragraph (a) of this 

section and must provide for the 

coordination and facilitation of efforts 

between the designated State unit and 

institutions of higher education and 

professional associations to recruit, 

prepare, and retain personnel who are 

qualified in accordance with paragraph 

(c) of this section, including personnel 

from minority backgrounds and 

personnel who are individuals with 

disabilities. 

(c) Personnel standards. (1) The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must include the State 

agency’s policies and describe— 

(i) Standards that are consistent with 

any national or State-approved or 

recognized certification, licensing, or 

registration requirements, or, in the 

absence of these requirements, other 

comparable requirements (including 

State personnel requirements) that 

apply to the profession or discipline in 

which that category of personnel is 

providing vocational rehabilitation 

services; and 

(ii) The establishment and 

maintenance of education and 

experience requirements, to ensure that 

the personnel have a 21st-century 

understanding of the evolving labor 

force and the needs of individuals with 

disabilities, including requirements 

for— 

(A)(1) Attainment of a baccalaureate 

degree in a field of study reasonably 

related to vocational rehabilitation, to 

indicate a level of competency and skill 

demonstrating basic preparation in a 

field of study such as vocational 

rehabilitation counseling, social work, 

psychology, disability studies, business 

administration, human resources, 

special education, supported 

employment, customized employment, 

economics, or another field that 

reasonably prepares individuals to work 

with consumers and employers; and 

(2) Demonstrated paid or unpaid 

experience, for not less than one year, 

consisting of— 

(i) Direct work with individuals with 

disabilities in a setting such as an 

independent living center; 


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(ii) Direct service or advocacy 

activities that provide such individual 

with experience and skills in working 

with individuals with disabilities; or 

(iii) Direct experience in competitive 

integrated employment environments as 

an employer, as a small business owner 

or operator, or in self-employment, or 

other experience in human resources or 

recruitment, or experience in 

supervising employees, training, or 

other activities; or 

(B) Attainment of a master’s or 

doctoral degree in a field of study such 

as vocational rehabilitation counseling, 

law, social work, psychology, disability 

studies, business administration, human 

resources, special education, 

management, public administration, or 

another field that reasonably provides 

competence in the employment sector, 

in a disability field, or in both businessrelated and rehabilitation-related fields; 

and 

(2) As used in this section— 

(i) Profession or discipline means a 

specific occupational category, 

including any paraprofessional 

occupational category, that— 

(A) Provides rehabilitation services to 

individuals with disabilities; 

(B) Has been established or designated 

by the State unit; and 

(C) Has a specified scope of 

responsibility. 

(ii) Ensuring that personnel have a 

21st-century understanding of the 

evolving labor force and the needs of 

individuals with disabilities means that 

personnel have specialized training and 

experience that enables them to work 

effectively with individuals with 

disabilities to assist them to achieve 

competitive integrated employment and 

with employers who hire such 

individuals. Relevant personnel skills 

include, but are not limited to— 

(A) Understanding the medical and 

psychosocial aspects of various 

disabilities; 

(B) Assessing an individual’s skills 

and abilities to obtain and retain 

competitive integrated employment and 

establishing a plan to meet the 

individual’s career goals; 

(C) Counseling, case management, and 

advocacy to modify environmental and 

attitudinal barriers; 

(D) Understanding the effective 

utilization of rehabilitation technology; 

(E) Developing effective relationships 

with employers in the public and 

private sectors and 

(F) Delivering job development and 

job placement services that respond to 

today’s labor market. 

(d) Staff development. (1) The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must include the State 

agency’s policies and describe the 

procedures and activities the State 

agency will undertake to ensure that all 

personnel employed by the State unit 

receive appropriate and adequate 

training, including a description of— 

(i) A system of staff development for 

rehabilitation professionals and 

paraprofessionals within the State unit, 

particularly with respect to assessment, 

vocational counseling, job placement, 

and rehabilitation technology, including 

training implemented in coordination 

with entities carrying out State 

programs under section 4 of the 

Assistive Technology Act of 1998 (29 

U.S.C. 3003); 

(ii) Procedures for acquiring and 

disseminating to rehabilitation 

professionals and paraprofessionals 

within the designated State unit 

significant knowledge from research and 

other sources; and 

(iii) Policies and procedures relating 

to the establishment and maintenance of 

standards to ensure that personnel, 

including rehabilitation professionals 

and paraprofessionals, needed within 

the designated State unit to carry out 

this part are appropriately and 

adequately prepared and trained. 

(2) The specific training areas for staff 

development should be based on the 

needs of each State unit and may 

include, but are not limited to— 

(i) Training regarding the Workforce 

Innovation and Opportunity Act and the 

amendments it made to the 

Rehabilitation Act of 1973; 

(ii) Training with respect to the 

requirements of the Americans with 

Disabilities Act, the Individuals with 

Disabilities Education Act, and Social 

Security work incentive programs, 

including programs under the Ticket to 

Work and Work Incentives 

Improvement Act of 1999, training to 

facilitate informed choice under this 

program, and training to improve the 

provision of services to culturally 

diverse populations; and 

(iii) Activities related to— 

(A) Recruitment and retention of 

qualified rehabilitation personnel; 

(B) Succession planning; and 

(C) Leadership development and 

capacity building. 

(e) Personnel to address individual 

communication needs. The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

describe how the designated State unit 

includes among its personnel, or obtains 

the services of— 

(1) Individuals able to communicate 

in the native languages of applicants 

and eligible individuals who have 

limited English proficiency; and 

(2) Individuals able to communicate 

with applicants and eligible individuals 

in appropriate modes of 

communication. 

(f) Coordination with personnel 

development under the Individuals with 

Disabilities Education Act. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must describe the procedures 

and activities the State agency will 

undertake to coordinate its 

comprehensive system of personnel 

development under the Act with 

personnel development under the 

Individuals with Disabilities Education 

Act. 

(Authority: Sections 12(c) and 101(a)(7) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 721(a)(7)) 

§ 361.19 Affirmative action for individuals 

with disabilities. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that the State 

agency takes affirmative action to 

employ and advance in employment 

qualified individuals with disabilities 

covered under and on the same terms 

and conditions as stated in section 503 

of the Act. 

(Authority: Section 101(a)(6)(B) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(6)(B)) 

§ 361.20 Public participation requirements. 

(a) Conduct of public meetings. (1) 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that prior to the 

adoption of any substantive policies or 

procedures governing the provision of 

vocational rehabilitation services under 

the Unified or Combined State Plan, the 

designated State agency conducts public 

meetings throughout the State to 

provide the public, including 

individuals with disabilities, an 

opportunity to comment on the policies 

or procedures. 

(2) For purposes of this section, 

substantive changes to the policies or 

procedures governing the provision of 

vocational rehabilitation services that 

would require the conduct of public 

meetings are those that directly impact 

the nature and scope of the services 

provided to individuals with 

disabilities, or the manner in which 

individuals interact with the designated 

State agency or in matters related to the 

delivery of vocational rehabilitation 

services. Examples of substantive 

changes include, but are not limited 

to— 

(i) Any changes to policies or 

procedures that fundamentally alter the 

rights and responsibilities of individuals 


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with disabilities in the vocational 

rehabilitation process; 

(ii) Organizational changes to the 

designated State agency or unit that 

would likely affect the manner in which 

services are delivered; 

(iii) Any changes that affect the nature 

and scope of vocational rehabilitation 

services provided by the designated 

State agency or unit; 

(iv) Changes in formal or informal 

dispute procedures; 

(v) The adoption or amendment of 

policies instituting an order of selection; 

and 

(vi) Changes to policies and 

procedures regarding the financial 

participation of eligible individuals. 

(3) Non-substantive, e.g., 

administrative changes that would not 

require the need for public hearings 

include: 

(i) Internal procedures that do not 

directly affect individuals receiving 

vocational rehabilitation services, such 

as payment processing or personnel 

procedures; 

(ii) Changes to the case management 

system that only affect vocational 

rehabilitation personnel; 

(iii) Changes in indirect cost 

allocations, internal fiscal review 

procedures, or routine reporting 

requirements; 

(iv) Minor revisions to vocational 

rehabilitation procedures or policies to 

correct production errors, such as 

typographical and grammatical 

mistakes; and 

(v) Changes to contract procedures 

that do not affect the delivery of 

vocational rehabilitation services. 

(b) Notice requirements. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that the 

designated State agency, prior to 

conducting the public meetings, 

provides appropriate and sufficient 

notice throughout the State of the 

meetings in accordance with— 

(1) State law governing public 

meetings; or 

(2) In the absence of State law 

governing public meetings, procedures 

developed by the designated State 

agency in consultation with the State 

Rehabilitation Council. 

(c) Summary of input of the State 

Rehabilitation Council. The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

provide a summary of the input of the 

State Rehabilitation Council, if the State 

agency has a Council, into the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan and any amendment to that 

portion of the plan, in accordance with 

§ 361.16(a)(2)(v). 

(d) Special consultation requirements. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that the State 

agency actively consults with the 

director of the Client Assistance 

Program, the State Rehabilitation 

Council, if the State agency has a 

Council, and, as appropriate, Indian 

tribes, tribal organizations, and native 

Hawaiian organizations on its policies 

and procedures governing the provision 

of vocational rehabilitation services 

under the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan. 

(e) Appropriate modes of 

communication. The State unit must 

provide to the public, through 

appropriate modes of communication, 

notices of the public meetings, any 

materials furnished prior to or during 

the public meetings, and the policies 

and procedures governing the provision 

of vocational rehabilitation services 

under the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan. 

(Authority: Sections 12(c), 101(a)(16)(A) and 

105(c)(3) of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 709(c), 721(a)(16)(A) and 

725(c)(3)) 

§ 361.21 Consultations regarding the 

administration of the vocational 

rehabilitation services portion of the Unified 

or Combined State plan. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that, in 

connection with matters of general 

policy arising in the administration of 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan, the designated State agency 

takes into account the views of— 

(a) Individuals and groups of 

individuals who are recipients of 

vocational rehabilitation services or, as 

appropriate, the individuals’ 

representatives; 

(b) Personnel working in programs 

that provide vocational rehabilitation 

services to individuals with disabilities; 

(c) Providers of vocational 

rehabilitation services to individuals 

with disabilities; 

(d) The director of the Client 

Assistance Program; and 

(e) The State Rehabilitation Council, if 

the State has a Council. 

(Authority: Sections 101(a)(16)(B) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(16)(B)) 

§ 361.22 Coordination with education 

officials. 

(a) Plans, policies, and procedures. (1) 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must contain plans, policies, 

and procedures for coordination 

between the designated State agency 

and education officials responsible for 

the public education of students with 

disabilities that are designed to facilitate 

the transition of students with 

disabilities from the receipt of 

educational services, including preemployment transition services, in 

school to the receipt of vocational 

rehabilitation services under the 

responsibility of the designated State 

agency. 

(2) These plans, policies, and 

procedures in paragraph (a)(1) of this 

section must provide for the 

development and approval of an 

individualized plan for employment in 

accordance with § 361.45 as early as 

possible during the transition planning 

process and not later than the time a 

student determined to be eligible for 

vocational rehabilitation services leaves 

the school setting or, if the designated 

State unit is operating under an order of 

selection, before each eligible student 

able to be served under the order leaves 

the school setting. 

(b) Formal interagency agreement. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must include information on 

a formal interagency agreement with the 

State educational agency that, at a 

minimum, provides for— 

(1) Consultation and technical 

assistance, which may be provided 

using alternative means for meeting 

participation (such as video conferences 

and conference calls), to assist 

educational agencies in planning for the 

transition of students with disabilities 

from school to post-school activities, 

including vocational rehabilitation 

services; 

(2) Transition planning by personnel 

of the designated State agency and 

educational agency personnel for 

students with disabilities that facilitates 

the development and implementation of 

their individualized education programs 

(IEPs) under section 614(d) of the 

Individuals with Disabilities Education 

Act; 

(3) The roles and responsibilities, 

including financial responsibilities, of 

each agency, including provisions for 

determining State lead agencies and 

qualified personnel responsible for 

transition services; 

(4) Procedures for outreach to and 

identification of students with 

disabilities who are in need of transition 


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services. Outreach to these students 

should occur as early as possible during 

the transition planning process and 

must include, at a minimum, a 

description of the purpose of the 

vocational rehabilitation program, 

eligibility requirements, application 

procedures, and scope of services that 

may be provided to eligible individuals; 

(5) Coordination necessary to satisfy 

documentation requirements set forth at 

34 CFR part 397 with regard to students 

and youth with disabilities who are 

seeking subminimum wage 

employment; and 

(6) Assurance that, in accordance with 

34 CFR 397.31, neither the State 

educational agency nor the local 

educational agency will enter into a 

contract or other arrangement with an 

entity, as defined in 34 CFR 397.5(d), for 

the purpose of operating a program 

under which a youth with a disability 

is engaged in subminimum wage 

employment. 

(c) Construction. Nothing in this part 

will be construed to reduce the 

obligation under the Individuals with 

Disabilities Education Act (20 U.S.C. 

1400 et seq.) of a local educational 

agency or any other agency to provide 

or pay for any transition services that 

are also considered special education or 

related services and that are necessary 

for ensuring a free appropriate public 

education to children with disabilities 

within the State involved. 

(Authority: Sections 101(a)(11)(D), 101(c), 

and 511 of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 721 (a)(11)(D), 721(c), 

and 794g) 

§ 361.23 Requirements related to the 

statewide workforce development system. 

As a required partner in the one-stop 

service delivery system (which is part of 

the statewide workforce development 

system under title I of the Workforce 

Innovation and Opportunity Act), the 

designated State unit must satisfy all 

requirements set forth in joint 

regulations in subpart F of this part. 

(Authority: Section 101(a)(11)(A) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(11)(A); Section 121 (b)(1)(B)(iv) 

of the Workforce Innovation and Opportunity 

Act; 29 U.S.C. 3151) 

§ 361.24 Cooperation and coordination 

with other entities. 

(a) Interagency cooperation. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must describe the designated 

State agency’s cooperation with and use 

of the services and facilities of Federal, 

State, and local agencies and programs, 

including the State programs carried out 

under section 4 of the Assistive 

Technology Act of 1998 (29 U.S.C. 

3003), programs carried out by the 

Under Secretary for Rural Development 

of the Department of Agriculture, 

noneducational agencies serving out-ofschool youth, and State use contracting 

programs, to the extent that such 

Federal, State, and local agencies and 

programs are not carrying out activities 

through the statewide workforce 

development system. 

(b) Coordination with the Statewide 

Independent Living Council and 

independent living centers. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that the 

designated State unit, the Statewide 

Independent Living Council established 

under title VII, chapter 1, part B of the 

Act, and the independent living centers 

established under title VII, Chapter 1, 

Part C of the Act have developed 

working relationships and coordinate 

their activities. 

(c) Coordination with Employers. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must describe how the 

designated State unit will work with 

employers to identify competitive 

integrated employment opportunities 

and career exploration opportunities, in 

order to facilitate the provision of— 

(1) Vocational rehabilitation services; 

and 

(2) Transition services for youth with 

disabilities and students with 

disabilities, such as pre-employment 

transition services. 

(d) Cooperative agreement with 

recipients of grants for services to 

American Indians. (1) General. In 

applicable cases, the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

assure that the designated State agency 

has entered into a formal cooperative 

agreement with each grant recipient in 

the State that receives funds under part 

C of the Act (American Indian 

Vocational Rehabilitation Services). 

(2) Contents of formal cooperative 

agreement. The agreement required 

under paragraph (d)(1) of this section 

must describe strategies for 

collaboration and coordination in 

providing vocational rehabilitation 

services to American Indians who are 

individuals with disabilities, 

including— 

(i) Strategies for interagency referral 

and information sharing that will assist 

in eligibility determinations and the 

development of individualized plans for 

employment; 

(ii) Procedures for ensuring that 

American Indians who are individuals 

with disabilities and are living on or 

near a reservation or tribal service area 

are provided vocational rehabilitation 

services; 

(iii) Strategies for the provision of 

transition planning by personnel of the 

designated State unit, the State 

educational agency, and the recipient of 

funds under part C of the Act, that will 

facilitate the development and approval 

of the individualized plan for 

employment under § 361.45; and 

(iv) Provisions for sharing resources 

in cooperative studies and assessments, 

joint training activities, and other 

collaborative activities designed to 

improve the provision of services to 

American Indians who are individuals 

with disabilities. 

(e) Reciprocal referral services 

between two designated State units in 

the same State. If there is a separate 

designated State unit for individuals 

who are blind, the two designated State 

units must establish reciprocal referral 

services, use each other’s services and 

facilities to the extent feasible, jointly 

plan activities to improve services in the 

State for individuals with multiple 

impairments, including visual 

impairments, and otherwise cooperate 

to provide more effective services, 

including, if appropriate, entering into a 

written cooperative agreement. 

(f) Cooperative agreement regarding 

individuals eligible for home and 

community-based waiver programs. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must include an assurance 

that the designated State unit has 

entered into a formal cooperative 

agreement with the State agency 

responsible for administering the State 

Medicaid plan under title XIX of the 

Social Security Act (42 U.S.C. 1396 et 

seq.) and the State agency with primary 

responsibility for providing services and 

supports for individuals with 

intellectual disabilities and individuals 

with developmental disabilities, with 

respect to the delivery of vocational 

rehabilitation services, including 

extended services, for individuals with 

the most significant disabilities who 

have been determined to be eligible for 

home and community-based services 

under a Medicaid waiver, Medicaid 

State plan amendment, or other 

authority related to a State Medicaid 

program. 

(g) Interagency cooperation. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan shall describe how the 

designated State agency will collaborate 

with the State agency responsible for 

administering the State Medicaid plan 

under title XIX of the Social Security 

Act (42 U.S.C. 1396 et seq.), the State 


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agency responsible for providing 

services with developmental 

disabilities, and the State agency 

responsible for providing mental health 

services, to develop opportunities for 

community-based employment in 

integrated settings, to the greatest extent 

practicable. 

(h) Coordination with assistive 

technology programs. The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

include an assurance that the designated 

State unit, and the lead agency and 

implementing entity (if any) designated 

by the Governor of the State under 

section 4 of the Assistive Technology 

Act of 1998 (29 U.S.C. 3003), have 

developed working relationships and 

will enter into agreements for the 

coordination of their activities, 

including the referral of individuals 

with disabilities to programs and 

activities described in that section. 

(i) Coordination with ticket to work 

and self-sufficiency program. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must include an assurance 

that the designated State unit will 

coordinate activities with any other 

State agency that is functioning as an 

employment network under the Ticket 

to Work and Self-Sufficiency Program 

established under section 1148 of the 

Social Security Act (42 U.S.C. 1320b– 

19). 

(Authority: Sections 12(c) and 101(a)(11) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 721(a)(11)) 

§ 361.25 Statewideness. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that services 

provided under the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan will be 

available in all political subdivisions of 

the State, unless a waiver of 

statewideness is requested and 

approved in accordance with § 361.26. 

(Authority: Section 101(a)(4) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(4)) 

§ 361.26 Waiver of statewideness. 

(a) Availability. The State unit may 

provide services in one or more political 

subdivisions of the State that increase 

services or expand the scope of services 

that are available statewide under the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan if— 

(1) The non-Federal share of the cost 

of these services is met from funds 

provided by a local public agency, 

including funds contributed to a local 

public agency by a private agency, 

organization, or individual; 

(2) The services are likely to promote 

the vocational rehabilitation of 

substantially larger numbers of 

individuals with disabilities or of 

individuals with disabilities with 

particular types of impairments; and 

(3) For purposes other than those 

specified in § 361.60(b)(3)(i) and 

consistent with the requirements in 

§ 361.60(b)(3)(ii), the State includes in 

its vocational rehabilitation services 

portion of the Unified or Combined 

State Plan, and the Secretary approves, 

a waiver of the statewideness 

requirement, in accordance with the 

requirements of paragraph (b) of this 

section. 

(b) Request for waiver. The request for 

a waiver of statewideness must— 

(1) Identify the types of services to be 

provided; 

(2) Contain a written assurance from 

the local public agency that it will make 

available to the State unit the nonFederal share of funds; 

(3) Contain a written assurance that 

State unit approval will be obtained for 

each proposed service before it is put 

into effect; and 

(4) Contain a written assurance that 

all other requirements of the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan, 

including a State’s order of selection 

requirements, will apply to all services 

approved under the waiver. 

(Authority: Section 101(a)(4) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(4)) 

§ 361.27 Shared funding and 

administration of joint programs. 

(a) If the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan provides for the 

designated State agency to share 

funding and administrative 

responsibility with another State agency 

or local public agency to carry out a 

joint program to provide services to 

individuals with disabilities, the State 

must submit to the Secretary for 

approval a plan that describes its shared 

funding and administrative 

arrangement. 

(b) The plan under paragraph (a) of 

this section must include— 

(1) A description of the nature and 

scope of the joint program; 

(2) The services to be provided under 

the joint program; 

(3) The respective roles of each 

participating agency in the 

administration and provision of 

services; and 

(4) The share of the costs to be 

assumed by each agency. 

(c) If a proposed joint program does 

not comply with the statewideness 

requirement in § 361.25, the State unit 

must obtain a waiver of statewideness, 

in accordance with § 361.26. 

(Authority: Section 101(a)(2)(A) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(2)(A)) 

§ 361.28 Third-party cooperative 

arrangements involving funds from other 

public agencies. 

(a) The designated State unit may 

enter into a third-party cooperative 

arrangement for providing or 

contracting for the provision of 

vocational rehabilitation services with 

another State agency or a local public 

agency that is providing part or all of 

the non-Federal share in accordance 

with paragraph (c) of this section, if the 

designated State unit ensures that— 

(1) The services provided by the 

cooperating agency are not the 

customary or typical services provided 

by that agency but are new services that 

have a vocational rehabilitation focus or 

existing services that have been 

modified, adapted, expanded, or 

reconfigured to have a vocational 

rehabilitation focus; 

(2) The services provided by the 

cooperating agency are only available to 

applicants for, or recipients of, services 

from the designated State unit; 

(3) Program expenditures and staff 

providing services under the 

cooperative arrangement are under the 

administrative supervision of the 

designated State unit; and 

(4) All requirements of the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan, 

including a State’s order of selection, 

will apply to all services provided 

under the cooperative arrangement. 

(b) If a third party cooperative 

arrangement does not comply with the 

statewideness requirement in § 361.25, 

the State unit must obtain a waiver of 

statewideness, in accordance with 

§ 361.26. 

(c) The cooperating agency’s 

contribution toward the non-Federal 

share required under the arrangement, 

as set forth in paragraph (a) of this 

section, may be made through: 

(1) Cash transfers to the designated 

State unit; and 

(2) Certified personnel expenditures 

for the time cooperating agency staff 

spent providing direct vocational 

rehabilitation services pursuant to a 

third-party cooperative arrangement that 

meets the requirements of this section. 

Certified personnel expenditures may 

include the allocable portion of staff 

salary and fringe benefits based upon 

the amount of time cooperating agency 


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staff spent providing services under the 

arrangement. 

(Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c)) 

§ 361.29 Statewide assessment; annual 

estimates; annual State goals and priorities; 

strategies; and progress reports. 

(a) Comprehensive statewide 

assessment. (1) The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

include— 

(i) The results of a comprehensive, 

statewide assessment, jointly conducted 

by the designated State unit and the 

State Rehabilitation Council (if the State 

unit has a Council) every three years. 

Results of the assessment are to be 

included in the vocational rehabilitation 

portion of the Unified or Combined 

State Plan, submitted in accordance 

with the requirements of § 361.10(a) and 

the joint regulations of this part. The 

comprehensive needs assessment must 

describe the rehabilitation needs of 

individuals with disabilities residing 

within the State, particularly the 

vocational rehabilitation services needs 

of— 

(A) Individuals with the most 

significant disabilities, including their 

need for supported employment 

services; 

(B) Individuals with disabilities who 

are minorities and individuals with 

disabilities who have been unserved or 

underserved by the vocational 

rehabilitation program carried out under 

this part; 

(C) Individuals with disabilities 

served through other components of the 

statewide workforce development 

system as identified by those 

individuals and personnel assisting 

those individuals through the 

components of the system; and 

(D) Youth with disabilities, and 

students with disabilities, including 

(1) Their need for pre-employment 

transition services or other transition 

services; and 

(2) An assessment of the needs of 

individuals with disabilities for 

transition services and pre-employment 

transition services, and the extent to 

which such services provided under 

this part are coordinated with transition 

services provided under the Individuals 

with Disabilities Education Act (20 

U.S.C. 1400 et seq.) in order to meet the 

needs of individuals with disabilities. 

(ii) An assessment of the need to 

establish, develop, or improve 

community rehabilitation programs 

within the State. 

(2) The vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must assure that 

the State will submit to the Secretary a 

report containing information regarding 

updates to the assessments under 

paragraph (a) of this section for any year 

in which the State updates the 

assessments at such time and in such 

manner as the Secretary determines 

appropriate. 

(b) Annual estimates. The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

include, and must assure that the State 

will submit a report to the Secretary (at 

such time and in such manner 

determined appropriate by the 

Secretary) that includes, State estimates 

of— 

(1) The number of individuals in the 

State who are eligible for services under 

this part; 

(2) The number of eligible individuals 

who will receive services provided with 

funds provided under this part and 

under part § 363, including, if the 

designated State agency uses an order of 

selection in accordance with § 361.36, 

estimates of the number of individuals 

to be served under each priority 

category within the order; 

(3) The number of individuals who 

are eligible for services under paragraph 

(b)(1) of this section, but are not 

receiving such services due to an order 

of selection; and 

(4) The costs of the services described 

in paragraph (b)(2) of this section, 

including, if the designated State agency 

uses an order of selection, the service 

costs for each priority category within 

the order. 

(c) Goals and priorities. (1) In general. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must identify the goals and 

priorities of the State in carrying out the 

program. 

(2) Council. The goals and priorities 

must be jointly developed, agreed to, 

reviewed annually, and, as necessary, 

revised by the designated State unit and 

the State Rehabilitation Council, if the 

State unit has a Council. 

(3) Submission. The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

assure that the State will submit to the 

Secretary a report containing 

information regarding revisions in the 

goals and priorities for any year in 

which the State revises the goals and 

priorities at such time and in such 

manner as determined appropriate by 

the Secretary. 

(4) Basis for goals and priorities. The 

State goals and priorities must be based 

on an analysis of— 

(i) The comprehensive statewide 

assessment described in paragraph (a) of 

this section, including any updates to 

the assessment; 

(ii) The performance of the State on 

the standards and indicators established 

under section 106 of the Act; and 

(iii) Other available information on 

the operation and the effectiveness of 

the vocational rehabilitation program 

carried out in the State, including any 

reports received from the State 

Rehabilitation Council under 

§ 361.17(h) and the findings and 

recommendations from monitoring 

activities conducted under section 107 

of the Act. 

(5) Service and outcome goals for 

categories in order of selection. If the 

designated State agency uses an order of 

selection in accordance with § 361.36, 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must identify the State’s 

service and outcome goals and the time 

within which these goals may be 

achieved for individuals in each priority 

category within the order. 

(d) Strategies. The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

describe the strategies the State will use 

to address the needs identified in the 

assessment conducted under paragraph 

(a) of this section and achieve the goals 

and priorities identified in paragraph (c) 

of this section, including— 

(1) The methods to be used to expand 

and improve services to individuals 

with disabilities, including how a broad 

range of assistive technology services 

and assistive technology devices will be 

provided to those individuals at each 

stage of the rehabilitation process and 

how those services and devices will be 

provided to individuals with disabilities 

on a statewide basis; 

(2) The methods to be used to 

improve and expand vocational 

rehabilitation services for students with 

disabilities, including the coordination 

of services designed to facilitate the 

transition of such students from the 

receipt of educational services in school 

to postsecondary life, including the 

receipt of vocational rehabilitation 

services under the Act, postsecondary 

education, employment, and preemployment transition services; 

(3) Strategies developed and 

implemented by the State to address the 

needs of students and youth with 

disabilities identified in the assessments 

described in paragraph (a) of this 

section and strategies to achieve the 

goals and priorities identified by the 

State to improve and expand vocational 

rehabilitation services for students and 

youth with disabilities on a statewide 

basis; 


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(4) Strategies to provide preemployment transition services. 

(5) Outreach procedures to identify 

and serve individuals with disabilities 

who are minorities and individuals with 

disabilities who have been unserved or 

underserved by the vocational 

rehabilitation program; 

(6) As applicable, the plan of the State 

for establishing, developing, or 

improving community rehabilitation 

programs; 

(7) Strategies to improve the 

performance of the State with respect to 

the evaluation standards and 

performance indicators established 

pursuant to section 106 of the Act and 

section 116 of Workforce Innovation 

and Opportunity Act; and 

(8) Strategies for assisting other 

components of the statewide workforce 

development system in assisting 

individuals with disabilities. 

(e) Evaluation and reports of progress. 

(1) The vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must include— 

(i) The results of an evaluation of the 

effectiveness of the vocational 

rehabilitation program; and 

(ii) A joint report by the designated 

State unit and the State Rehabilitation 

Council, if the State unit has a Council, 

to the Secretary on the progress made in 

improving the effectiveness of the 

program from the previous year. This 

evaluation and joint report must 

include— 

(A) An evaluation of the extent to 

which the goals and priorities identified 

in paragraph (c) of this section were 

achieved; 

(B) A description of the strategies that 

contributed to the achievement of the 

goals and priorities; 

(C) To the extent to which the goals 

and priorities were not achieved, a 

description of the factors that impeded 

that achievement; and 

(D) An assessment of the performance 

of the State on the standards and 

indicators established pursuant to 

section 106 of the Act. 

(2) The vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must assure that 

the designated State unit and the State 

Rehabilitation Council, if the State unit 

has a Council, will jointly submit to the 

Secretary a report that contains the 

information described in paragraph 

(e)(1) of this section at such time and in 

such manner the Secretary determines 

appropriate. 

(Authority: Section 101(a)(15) and (25) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(15) and (25)) 

§ 361.30 Services to American Indians. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that the 

designated State agency provides 

vocational rehabilitation services to 

American Indians who are individuals 

with disabilities residing in the State to 

the same extent as the designated State 

agency provides vocational 

rehabilitation services to other 

significant populations of individuals 

with disabilities residing in the State. 

(Authority: Sections 101(a)(13) and 121(b)(3) 

of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 721(a)(13) and 741(b)(3)) 

§ 361.31 Cooperative agreements with 

private nonprofit organizations. 

The vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must describe the manner in 

which cooperative agreements with 

private nonprofit vocational 

rehabilitation service providers will be 

established. 

(Authority: Section 101(a)(24)(B) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(24)(B)) 

§ 361.32 Provision of training and services 

for employers. 

The designated State unit may expend 

payments received under this part to 

educate and provide services to 

employers who have hired or are 

interested in hiring individuals with 

disabilities under the vocational 

rehabilitation program, including— 

(a) Providing training and technical 

assistance to employers regarding the 

employment of individuals with 

disabilities, including disability 

awareness, and the requirements of the 

Americans with Disabilities Act of 1990 

(42 U.S.C. 12101 et seq.) and other 

employment-related laws; 

(b) Working with employers to— 

(1) Provide opportunities for workbased learning experiences (including 

internships, short-term employment, 

apprenticeships, and fellowships); 

(2) Provide opportunities for preemployment transition services; 

(3) Recruit qualified applicants who 

are individuals with disabilities; 

(4) Train employees who are 

individuals with disabilities; and 

(5) Promote awareness of disabilityrelated obstacles to continued 

employment. 

(c) Providing consultation, technical 

assistance, and support to employers on 

workplace accommodations, assistive 

technology, and facilities and workplace 

access through collaboration with 

community partners and employers, 

across States and nationally, to enable 

the employers to recruit, job match, 

hire, and retain qualified individuals 

with disabilities who are recipients of 

vocational rehabilitation services under 

this part, or who are applicants for such 

services; and 

(d) Assisting employers with utilizing 

available financial support for hiring or 

accommodating individuals with 

disabilities. 

(Authority: Section 109 of the Rehabilitation 

Act of 1973, as amended; 29 U.S.C. 728A) 

§ 361.33 [Reserved] 

§ 361.34 Supported employment State plan 

supplement. 

(a) The vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must assure that 

the State has an acceptable plan under 

part 363 of this chapter that provides for 

the use of funds under that part to 

supplement funds under this part for 

the cost of services leading to supported 

employment. 

(b) The supported employment plan, 

including any needed revisions, must be 

submitted as a supplement to the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan submitted under this part. 

(Authority: Sections 101(a)(22) and 606 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(22) and 795k) 

§ 361.35 Innovation and expansion 

activities. 

(a) The vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must assure that 

the State will reserve and use a portion 

of the funds allotted to the State under 

section 110 of the Act— 

(1) For the development and 

implementation of innovative 

approaches to expand and improve the 

provision of vocational rehabilitation 

services to individuals with disabilities, 

particularly individuals with the most 

significant disabilities, including 

transition services for students and 

youth with disabilities and preemployment transition services for 

students with disabilities, consistent 

with the findings of the comprehensive 

statewide assessment of the 

rehabilitation needs of individuals with 

disabilities under § 361.29(a) and the 

State’s goals and priorities under 

§ 361.29(c); 

(2) To support the funding of the State 

Rehabilitation Council, if the State has 

a Council, consistent with the resource 

plan identified in § 361.17(i); and 

(3) To support the Statewide 

Independent Living Council, consistent 

with the Statewide Independent Living 

Council resource plan prepared under 

title VII, chapter 1 of the Act. The State 


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and the Statewide Independent Living 

Council may determine in the Statewide 

Independent Living Council resource 

plan that other sources of available 

funding may be used instead of funding 

under this section. 

(b) The vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must— 

(1) Describe how the reserved funds 

will be used; and 

(2) Include a report describing how 

the reserved funds were used. 

(Authority: Sections 12(c) and 101(a)(18) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 721(a)(18)) 

§ 361.36 Ability to serve all eligible 

individuals; order of selection for services. 

(a) General provisions. (1) The 

designated State unit either must be able 

to provide the full range of services 

listed in section 103(a) of the Act and 

§ 361.48, as appropriate, to all eligible 

individuals or, in the event that 

vocational rehabilitation services cannot 

be provided to all eligible individuals in 

the State who apply for the services, 

include in the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan the order to be 

followed in selecting eligible 

individuals to be provided vocational 

rehabilitation services. 

(2) The ability of the designated State 

unit to provide the full range of 

vocational rehabilitation services to all 

eligible individuals must be supported 

by a determination that satisfies the 

requirements of paragraph (b) or (c) of 

this section and a determination that, on 

the basis of the designated State unit’s 

projected fiscal and personnel resources 

and its assessment of the rehabilitation 

needs of individuals with significant 

disabilities within the State, it can— 

(i) Continue to provide services to all 

individuals currently receiving services; 

(ii) Provide assessment services to all 

individuals expected to apply for 

services in the next fiscal year; 

(iii) Provide services to all individuals 

who are expected to be determined 

eligible in the next fiscal year; and 

(iv) Meet all program requirements. 

(3) If the designated State unit is 

unable to provide the full range of 

vocational rehabilitation services to all 

eligible individuals in the State who 

apply for the services, the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must— 

(i) Show the order to be followed in 

selecting eligible individuals to be 

provided vocational rehabilitation 

services; 

(ii) Provide a justification for the 

order of selection; 

(iii) Identify service and outcome 

goals and the time within which the 

goals may be achieved for individuals in 

each priority category within the order, 

as required under § 361.29(c)(5); 

(iv) Assure that— 

(A) In accordance with criteria 

established by the State for the order of 

selection, individuals with the most 

significant disabilities will be selected 

first for the provision of vocational 

rehabilitation services; and 

(B) Individuals who do not meet the 

order of selection criteria will have 

access to services provided through the 

information and referral system 

established under § 361.37; and 

(v) State whether the designated State 

unit will elect to serve, in its discretion, 

eligible individuals (whether or not the 

individuals are receiving vocational 

rehabilitation services under the order 

of selection) who require specific 

services or equipment to maintain 

employment, notwithstanding the 

assurance provided pursuant to 

paragraph (3)(iv)(A) of this section. 

(b) Basis for assurance that services 

can be provided to all eligible 

individuals. (1) For a designated State 

unit that determined, for the current 

fiscal year and the preceding fiscal year, 

that it is able to provide the full range 

of services, as appropriate, to all eligible 

individuals, the State unit, during the 

current fiscal and preceding fiscal year, 

must have in fact— 

(i) Provided assessment services to all 

applicants and the full range of services, 

as appropriate, to all eligible 

individuals; 

(ii) Made referral forms widely 

available throughout the State; 

(iii) Conducted outreach efforts to 

identify and serve individuals with 

disabilities who have been unserved or 

underserved by the vocational 

rehabilitation system; and 

(iv) Not delayed, through waiting lists 

or other means, determinations of 

eligibility, the development of 

individualized plans for employment 

for individuals determined eligible for 

vocational rehabilitation services, or the 

provision of services for eligible 

individuals for whom individualized 

plans for employment have been 

developed. 

(2) For a designated State unit that 

was unable to provide the full range of 

services to all eligible individuals 

during the current or preceding fiscal 

year or that has not met the 

requirements in paragraph (b)(1) of this 

section, the determination that the 

designated State unit is able to provide 

the full range of vocational 

rehabilitation services to all eligible 

individuals in the next fiscal year must 

be based on— 

(i) A demonstration that 

circumstances have changed that will 

allow the designated State unit to meet 

the requirements of paragraph (a)(2) of 

this section in the next fiscal year, 

including— 

(A) An estimate of the number of and 

projected costs of serving, in the next 

fiscal year, individuals with existing 

individualized plans for employment; 

(B) The projected number of 

individuals with disabilities who will 

apply for services and will be 

determined eligible in the next fiscal 

year and the projected costs of serving 

those individuals; 

(C) The projected costs of 

administering the program in the next 

fiscal year, including, but not limited to, 

costs of staff salaries and benefits, 

outreach activities, and required 

statewide studies; and 

(D) The projected revenues and 

projected number of qualified personnel 

for the program in the next fiscal year. 

(ii) Comparable data, as relevant, for 

the current or preceding fiscal year, or 

for both years, of the costs listed in 

paragraphs (b)(2)(i)(A) through (C) of 

this section and the resources identified 

in paragraph (b)(2)(i)(D) of this section 

and an explanation of any projected 

increases or decreases in these costs and 

resources; and 

(iii) A determination that the 

projected revenues and the projected 

number of qualified personnel for the 

program in the next fiscal year are 

adequate to cover the costs identified in 

paragraphs (b)(2)(i)(A) through (C) of 

this section to ensure the provision of 

the full range of services, as appropriate, 

to all eligible individuals. 

(c) Determining need for establishing 

and implementing an order of selection. 

(1) The designated State unit must 

determine, prior to the beginning of 

each fiscal year, whether to establish 

and implement an order of selection. 

(2) If the designated State unit 

determines that it does not need to 

establish an order of selection, it must 

reevaluate this determination whenever 

changed circumstances during the 

course of a fiscal year, such as a 

decrease in its fiscal or personnel 

resources or an increase in its program 

costs, indicate that it may no longer be 

able to provide the full range of services, 

as appropriate, to all eligible 

individuals, as described in paragraph 

(a)(2) of this section. 

(3) If a designated State unit 

establishes an order of selection, but 

determines that it does not need to 

implement that order at the beginning of 

the fiscal year, it must continue to meet 

the requirements of paragraph (a)(2) of 

this section, or it must implement the 


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order of selection by closing one or 

more priority categories. 

(d) Establishing an order of selection. 

(1) Basis for order of selection. An order 

of selection must be based on a 

refinement of the three criteria in the 

definition of individual with a 

significant disability in section 7(21)(A) 

of the Act and § 361.5(c)(29). 

(2) Factors that cannot be used in 

determining order of selection of eligible 

individuals. An order of selection may 

not be based on any other factors, 

including— 

(i) Any duration of residency 

requirement, provided the individual is 

present in the State; 

(ii) Type of disability; 

(iii) Age, sex, race, color, or national 

origin; 

(iv) Source of referral; 

(v) Type of expected employment 

outcome; 

(vi) The need for specific services or 

anticipated cost of services required by 

an individual; or 

(vii) The income level of an 

individual or an individual’s family. 

(e) Administrative requirements. In 

administering the order of selection, the 

designated State unit must— 

(1) Implement the order of selection 

on a statewide basis; 

(2) Notify all eligible individuals of 

the priority categories in a State’s order 

of selection, their assignment to a 

particular category, and their right to 

appeal their category assignment; 

(3) Continue to provide all needed 

services to any eligible individual who 

has begun to receive services under an 

individualized plan for employment 

prior to the effective date of the order 

of selection, irrespective of the severity 

of the individual’s disability; and 

(4) Ensure that its funding 

arrangements for providing services 

under the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan, including thirdparty arrangements and awards under 

the establishment authority, are 

consistent with the order of selection. If 

any funding arrangements are 

inconsistent with the order of selection, 

the designated State unit must 

renegotiate these funding arrangements 

so that they are consistent with the 

order of selection. 

(f) State Rehabilitation Council. The 

designated State unit must consult with 

the State Rehabilitation Council, if the 

State unit has a Council, regarding the— 

(1) Need to establish an order of 

selection, including any reevaluation of 

the need under paragraph (c)(2) of this 

section; 

(2) Priority categories of the particular 

order of selection; 

(3) Criteria for determining 

individuals with the most significant 

disabilities; and 

(4) Administration of the order of 

selection. 

(Authority: Sections 12(d); 101(a)(5); 

101(a)(12); 101(a)(15)(A), (B) and (C); 

101(a)(21)(A)(ii); and 504(a) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(d), 721(a)(5), 721(a)(12), 

721(a)(15)(A), (B) and (C); 721(a)(21)(A)(ii), 

and 794(a)) 

§ 361.37 Information and referral 

programs. 

(a) General provisions. The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

assure that— 

(1) The designated State agency will 

implement an information and referral 

system adequate to ensure that 

individuals with disabilities, including 

eligible individuals who do not meet the 

agency’s order of selection criteria for 

receiving vocational rehabilitation 

services if the agency is operating on an 

order of selection, are provided accurate 

vocational rehabilitation information 

and guidance (which may include 

counseling and referral for job 

placement) using appropriate modes of 

communication to assist them in 

preparing for, securing, retaining, 

advancing in, or regaining employment; 

and 

(2) The designated State agency will 

refer individuals with disabilities to 

other appropriate Federal and State 

programs, including other components 

of the statewide workforce development 

system. 

(b) The designated State unit must 

refer to appropriate programs and 

service providers best suited to address 

the specific rehabilitation, independent 

living and employment needs of an 

individual with a disability who makes 

an informed choice not to pursue an 

employment outcome under the 

vocational rehabilitation program, as 

defined in § 361.5(c)(15). Before making 

the referral required by this paragraph, 

the State unit must— 

(1) Consistent with § 361.42(a)(4)(i), 

explain to the individual that the 

purpose of the vocational rehabilitation 

program is to assist individuals to 

achieve an employment outcome as 

defined in § 361.5(c)(15); 

(2) Consistent with § 361.52, provide 

the individual with information 

concerning the availability of 

employment options, and of vocational 

rehabilitation services, to assist the 

individual to achieve an appropriate 

employment outcome; 

(3) Inform the individual that services 

under the vocational rehabilitation 

program can be provided to eligible 

individuals in an extended employment 

setting if necessary for purposes of 

training or otherwise preparing for 

employment in an integrated setting; 

(4) Inform the individual that, if he or 

she initially chooses not to pursue an 

employment outcome as defined in 

§ 361.5(c)(15), he or she can seek 

services from the designated State unit 

at a later date if, at that time, he or she 

chooses to pursue an employment 

outcome; and 

(5) Refer the individual, as 

appropriate, to the Social Security 

Administration in order to obtain 

information concerning the ability of 

individuals with disabilities to work 

while receiving benefits from the Social 

Security Administration. 

(c) Criteria for appropriate referrals. 

In making the referrals identified in 

paragraph (a)(2) of this section, the 

designated State unit must— 

(1) Refer the individual to Federal or 

State programs, including programs 

carried out by other components of the 

statewide workforce development 

system, best suited to address the 

specific employment needs of an 

individual with a disability; and 

(2) Provide the individual who is 

being referred— 

(i) A notice of the referral by the 

designated State agency to the agency 

carrying out the program; 

(ii) Information identifying a specific 

point of contact within the agency to 

which the individual is being referred; 

and 

(iii) Information and advice regarding 

the most suitable services to assist the 

individual to prepare for, secure, retain, 

or regain employment. 

(d) Order of selection. In providing 

the information and referral services 

under this section to eligible individuals 

who are not in the priority category or 

categories to receive vocational 

rehabilitation services under the State’s 

order of selection, the State unit must 

identify, as part of its reporting under 

section 101(a)(10) of the Act and 

§ 361.40, the number of eligible 

individuals who did not meet the 

agency’s order of selection criteria for 

receiving vocational rehabilitation 

services and did receive information 

and referral services under this section. 

(Authority: Sections 7(11), 12(c), 101(a)(5)(D), 

101(a)(10)(C)(ii), and 101(a)(20) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c), 721(a)(5)(D), 721(a)(10)(C)(ii), 

and 721(a)(20)) 

§ 361.38 Protection, use, and release of 

personal information. 

(a) General provisions. (1) The State 

agency and the State unit must adopt 


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and implement written policies and 

procedures to safeguard the 

confidentiality of all personal 

information, including photographs and 

lists of names. These policies and 

procedures must ensure that— 

(i) Specific safeguards are established 

to protect current and stored personal 

information; 

(ii) All applicants and eligible 

individuals and, as appropriate, those 

individuals’ representatives, service 

providers, cooperating agencies, and 

interested persons are informed through 

appropriate modes of communication of 

the confidentiality of personal 

information and the conditions for 

accessing and releasing this 

information; 

(iii) All applicants or their 

representatives are informed about the 

State unit’s need to collect personal 

information and the policies governing 

its use, including— 

(A) Identification of the authority 

under which information is collected; 

(B) Explanation of the principal 

purposes for which the State unit 

intends to use or release the 

information; 

(C) Explanation of whether providing 

requested information to the State unit 

is mandatory or voluntary and the 

effects of not providing requested 

information; 

(D) Identification of those situations 

in which the State unit requires or does 

not require informed written consent of 

the individual before information may 

be released; and 

(E) Identification of other agencies to 

which information is routinely released; 

(iv) An explanation of State policies 

and procedures affecting personal 

information will be provided to each 

individual in that individual’s native 

language or through the appropriate 

mode of communication; and 

(v) These policies and procedures 

provide no fewer protections for 

individuals than State laws and 

regulations. 

(2) The State unit may establish 

reasonable fees to cover extraordinary 

costs of duplicating records or making 

extensive searches and must establish 

policies and procedures governing 

access to records. 

(b) State program use. All personal 

information in the possession of the 

State agency or the designated State unit 

must be used only for the purposes 

directly connected with the 

administration of the vocational 

rehabilitation program. Information 

containing identifiable personal 

information may not be shared with 

advisory or other bodies that do not 

have official responsibility for 

administration of the program. In the 

administration of the program, the State 

unit may obtain personal information 

from service providers and cooperating 

agencies under assurances that the 

information may not be further 

divulged, except as provided under 

paragraphs (c), (d), and (e) of this 

section. 

(c) Release to applicants and eligible 

individuals. (1) Except as provided in 

paragraphs (c)(2) and (c)(3) of this 

section, if requested in writing by an 

applicant or eligible individual, the 

State unit must make all requested 

information in that individual’s record 

of services accessible to and must 

release the information to the individual 

or the individual’s representative in a 

timely manner. 

(2) Medical, psychological, or other 

information that the State unit 

determines may be harmful to the 

individual may not be released directly 

to the individual, but must be provided 

to the individual through a third party 

chosen by the individual, which may 

include, among others, an advocate, a 

family member, or a qualified medical 

or mental health professional, unless a 

representative has been appointed by a 

court to represent the individual, in 

which case the information must be 

released to the court-appointed 

representative. 

(3) If personal information has been 

obtained from another agency or 

organization, it may be released only by, 

or under the conditions established by, 

the other agency or organization. 

(4) An applicant or eligible individual 

who believes that information in the 

individual’s record of services is 

inaccurate or misleading may request 

that the designated State unit amend the 

information. If the information is not 

amended, the request for an amendment 

must be documented in the record of 

services, consistent with § 361.47(a)(12). 

(d) Release for audit, evaluation, and 

research. Personal information may be 

released to an organization, agency, or 

individual engaged in audit, evaluation, 

or research only for purposes directly 

connected with the administration of 

the vocational rehabilitation program or 

for purposes that would significantly 

improve the quality of life for applicants 

and eligible individuals and only if the 

organization, agency, or individual 

assures that— 

(1) The information will be used only 

for the purposes for which it is being 

provided; 

(2) The information will be released 

only to persons officially connected 

with the audit, evaluation, or research; 

(3) The information will not be 

released to the involved individual; 

(4) The information will be managed 

in a manner to safeguard confidentiality; 

and 

(5) The final product will not reveal 

any personal identifying information 

without the informed written consent of 

the involved individual or the 

individual’s representative. 

(e) Release to other programs or 

authorities. (1) Upon receiving the 

informed written consent of the 

individual or, if appropriate, the 

individual’s representative, the State 

unit may release personal information to 

another agency or organization for its 

program purposes only to the extent that 

the information may be released to the 

involved individual or the individual’s 

representative and only to the extent 

that the other agency or organization 

demonstrates that the information 

requested is necessary for its program. 

(2) Medical or psychological 

information that the State unit 

determines may be harmful to the 

individual may be released if the other 

agency or organization assures the State 

unit that the information will be used 

only for the purpose for which it is 

being provided and will not be further 

released to the individual. 

(3) The State unit must release 

personal information if required by 

Federal law or regulations. 

(4) The State unit must release 

personal information in response to 

investigations in connection with law 

enforcement, fraud, or abuse, unless 

expressly prohibited by Federal or State 

laws or regulations, and in response to 

an order issued by a judge, magistrate, 

or other authorized judicial officer. 

(5) The State unit also may release 

personal information in order to protect 

the individual or others if the individual 

poses a threat to his or her safety or to 

the safety of others. 

(Authority: Sections 12(c) and 101(a)(6)(A) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 721(a)(6)(A)) 

§ 361.39 State-imposed requirements. 

The designated State unit must, upon 

request, identify those regulations and 

policies relating to the administration or 

operation of its vocational rehabilitation 

program that are State-imposed, 

including any regulations or policy 

based on State interpretation of any 

Federal law, regulation, or guideline. 

(Authority: Section 17 of the Rehabilitation 

Act of 1973, as amended; 29 U.S.C. 714) 

§ 361.40 Reports; Evaluation standards 

and performance indicators. 

(a) Reports. (1) The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

assure that the designated State agency 


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will submit reports, including reports 

required under sections 13, 14, and 

101(a)(10) of the Act— 

(i) In the form and level of detail and 

at the time required by the Secretary 

regarding applicants for and eligible 

individuals receiving services, 

including students receiving preemployment transition services in 

accordance with § 361.48(a); and 

(ii) In a manner that provides a 

complete count (other than the 

information obtained through sampling 

consistent with section 101(a)(10)(E) of 

the Act) of the applicants and eligible 

individuals to— 

(A) Permit the greatest possible crossclassification of data; and 

(B) Protect the confidentiality of the 

identity of each individual. 

(2) The designated State agency must 

comply with any requirements 

necessary to ensure the accuracy and 

verification of those reports. 

(b) Evaluation standards and 

performance indicators. 

(1) Standards and indicators. The 

evaluation standards and performance 

indicators for the vocational 

rehabilitation program carried out under 

this part are subject to the performance 

accountability provisions described in 

section 116(b) of the Workforce 

Innovation and Opportunity Act and 

implemented in joint regulations set 

forth in subpart E of this part. 

(2) Compliance. A State’s compliance 

with common performance measures 

and any necessary corrective actions 

will be determined in accordance with 

joint regulations set forth in subpart E 

of this part. 

(Authority: Sections 12(c), 101(a)(10)(A) and 

(F), and 106 of the Rehabilitation Act of 1973, 

as amended; 29 U.S.C. 709(c), 721(a)(10)(A) 

and (F), and 726) 

Provision and Scope of Services 

§ 361.41 Processing referrals and 

applications. 

(a) Referrals. The designated State 

unit must establish and implement 

standards for the prompt and equitable 

handling of referrals of individuals for 

vocational rehabilitation services, 

including referrals of individuals made 

through the one-stop service delivery 

systems under section 121 of the 

Workforce Innovation and Opportunity 

Act. The standards must include 

timelines for making good faith efforts 

to inform these individuals of 

application requirements and to gather 

information necessary to initiate an 

assessment for determining eligibility 

and priority for services. 

(b) Applications. (1) Once an 

individual has submitted an application 

for vocational rehabilitation services, 

including applications made through 

common intake procedures in one-stop 

centers under section 121 of the 

Workforce Innovation and Opportunity 

Act, an eligibility determination must be 

made within 60 days, unless— 

(i) Exceptional and unforeseen 

circumstances beyond the control of the 

designated State unit preclude making 

an eligibility determination within 60 

days and the designated State unit and 

the individual agree to a specific 

extension of time; or 

(ii) An exploration of the individual’s 

abilities, capabilities, and capacity to 

perform in work situations is carried out 

in accordance with § 361.42(e). 

(2) An individual is considered to 

have submitted an application when the 

individual or the individual’s 

representative, as appropriate— 

(i)(A) Has completed and signed an 

agency application form; 

(B) Has completed a common intake 

application form in a one-stop center 

requesting vocational rehabilitation 

services; or 

(C) Has otherwise requested services 

from the designated State unit; 

(ii) Has provided to the designated 

State unit information necessary to 

initiate an assessment to determine 

eligibility and priority for services; and 

(iii) Is available to complete the 

assessment process. 

(3) The designated State unit must 

ensure that its application forms are 

widely available throughout the State, 

particularly in the one-stop centers 

under section 121 of the Workforce 

Innovation and Opportunity Act. 

(Authority: Sections 12(c), 101(a)(6)(A) and 

102(a)(6) of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 709(c), 721(a)(6)(A) and 

722(a)(6)) 

§ 361.42 Assessment for determining 

eligibility and priority for services. 

In order to determine whether an 

individual is eligible for vocational 

rehabilitation services and the 

individual’s priority under an order of 

selection for services (if the State is 

operating under an order of selection), 

the designated State unit must conduct 

an assessment for determining eligibility 

and priority for services. The 

assessment must be conducted in the 

most integrated setting possible, 

consistent with the individual’s needs 

and informed choice, and in accordance 

with the following provisions: 

(a) Eligibility requirements. (1) Basic 

requirements. The designated State 

unit’s determination of an applicant’s 

eligibility for vocational rehabilitation 

services must be based only on the 

following requirements: 

(i) A determination by qualified 

personnel that the applicant has a 

physical or mental impairment; 

(ii) A determination by qualified 

personnel that the applicant’s physical 

or mental impairment constitutes or 

results in a substantial impediment to 

employment for the applicant; and 

(iii) A determination by a qualified 

vocational rehabilitation counselor 

employed by the designated State unit 

that the applicant requires vocational 

rehabilitation services to prepare for, 

secure, retain, advance in, or regain 

employment that is consistent with the 

individual’s unique strengths, resources, 

priorities, concerns, abilities, 

capabilities, interest, and informed 

choice. For purposes of an assessment 

for determining eligibility and 

vocational rehabilitation needs under 

this part, an individual is presumed to 

have a goal of an employment outcome. 

(2) Presumption of benefit. The 

designated State unit must presume that 

an applicant who meets the eligibility 

requirements in paragraphs (a)(1)(i) and 

(ii) of this section can benefit in terms 

of an employment outcome. 

(3) Presumption of eligibility for 

Social Security recipients and 

beneficiaries. (i) Any applicant who has 

been determined eligible for Social 

Security benefits under title II or title 

XVI of the Social Security Act is— 

(A) Presumed eligible for vocational 

rehabilitation services under paragraphs 

(a)(1) and (2) of this section; and 

(B) Considered an individual with a 

significant disability as defined in 

§ 361.5(c)(29). 

(ii) If an applicant for vocational 

rehabilitation services asserts that he or 

she is eligible for Social Security 

benefits under title II or title XVI of the 

Social Security Act (and, therefore, is 

presumed eligible for vocational 

rehabilitation services under paragraph 

(a)(3)(i)(A) of this section), but is unable 

to provide appropriate evidence, such as 

an award letter, to support that 

assertion, the State unit must verify the 

applicant’s eligibility under title II or 

title XVI of the Social Security Act by 

contacting the Social Security 

Administration. This verification must 

be made within a reasonable period of 

time that enables the State unit to 

determine the applicant’s eligibility for 

vocational rehabilitation services within 

60 days of the individual submitting an 

application for services in accordance 

with § 361.41(b)(2). 

(4) Achievement of an employment 

outcome. Any eligible individual, 

including an individual whose 

eligibility for vocational rehabilitation 

services is based on the individual being 

eligible for Social Security benefits 


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under title II or title XVI of the Social 

Security Act, must intend to achieve an 

employment outcome that is consistent 

with the applicant’s unique strengths, 

resources, priorities, concerns, abilities, 

capabilities, interests, and informed 

choice. 

(i) The State unit is responsible for 

informing individuals, through its 

application process for vocational 

rehabilitation services, that individuals 

who receive services under the program 

must intend to achieve an employment 

outcome. 

(ii) The applicant’s completion of the 

application process for vocational 

rehabilitation services is sufficient 

evidence of the individual’s intent to 

achieve an employment outcome, and 

no additional demonstration on the part 

of the applicant is required for purposes 

of satisfying paragraph (a)(4) of this 

section. 

(5) Interpretation. Nothing in this 

section, including paragraph (a)(3)(i), is 

to be construed to create an entitlement 

to any vocational rehabilitation service. 

(b) Interim determination of eligibility. 

(1) The designated State unit may 

initiate the provision of vocational 

rehabilitation services for an applicant 

on the basis of an interim determination 

of eligibility prior to the 60-day period 

described in § 361.41(b)(2). 

(2) If a State chooses to make interim 

determinations of eligibility, the 

designated State unit must— 

(i) Establish criteria and conditions 

for making those determinations; 

(ii) Develop and implement 

procedures for making the 

determinations; and 

(iii) Determine the scope of services 

that may be provided pending the final 

determination of eligibility. 

(3) If a State elects to use an interim 

eligibility determination, the designated 

State unit must make a final 

determination of eligibility within 60 

days of the individual submitting an 

application for services in accordance 

with § 361.41(b)(2). 

(c) Prohibited factors. (1) The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that the State 

unit will not impose, as part of 

determining eligibility under this 

section, a duration of residence 

requirement that excludes from services 

any applicant who is present in the 

State. The designated State unit may not 

require the applicant to demonstrate a 

presence in the State through the 

production of any documentation that 

under State or local law, or practical 

circumstances, results in a duration of 

residency. 

(2) In making a determination of 

eligibility under this section, the 

designated State unit also must ensure 

that— 

(i) No applicant or group of applicants 

is excluded or found ineligible solely on 

the basis of the type of disability; and 

(ii) The eligibility requirements are 

applied without regard to the— 

(A) Age, sex, race, color, or national 

origin of the applicant; 

(B) Type of expected employment 

outcome; 

(C) Source of referral for vocational 

rehabilitation services; 

(D) Particular service needs or 

anticipated cost of services required by 

an applicant or the income level of an 

applicant or applicant’s family; 

(E) Applicants’ employment history or 

current employment status; and 

(F) Applicants’ educational status or 

current educational credential. 

(d) Review and assessment of data for 

eligibility determination. Except as 

provided in paragraph (e) of this 

section, the designated State unit— 

(1) Must base its determination of 

each of the basic eligibility requirements 

in paragraph (a) of this section on— 

(i) A review and assessment of 

existing data, including counselor 

observations, education records, 

information provided by the individual 

or the individual’s family, particularly 

information used by education officials, 

and determinations made by officials of 

other agencies; and 

(ii) To the extent existing data do not 

describe the current functioning of the 

individual or are unavailable, 

insufficient, or inappropriate to make an 

eligibility determination, an assessment 

of additional data resulting from the 

provision of vocational rehabilitation 

services, including trial work 

experiences, assistive technology 

devices and services, personal 

assistance services, and any other 

support services that are necessary to 

determine whether an individual is 

eligible; and 

(2) Must base its presumption under 

paragraph (a)(3)(i) of this section that an 

applicant who has been determined 

eligible for Social Security benefits 

under title II or title XVI of the Social 

Security Act satisfies each of the basic 

eligibility requirements in paragraph (a) 

of this section on determinations made 

by the Social Security Administration. 

(e) Trial work experiences for 

individuals with significant disabilities. 

(1) Prior to any determination that an 

individual with a disability is unable to 

benefit from vocational rehabilitation 

services in terms of an employment 

outcome because of the severity of that 

individual’s disability or that the 

individual is ineligible for vocational 

rehabilitation services, the designated 

State unit must conduct an exploration 

of the individual’s abilities, capabilities, 

and capacity to perform in realistic 

work situations. 

(2)(i) The designated State unit must 

develop a written plan to assess 

periodically the individual’s abilities, 

capabilities, and capacity to perform in 

competitive integrated work situations 

through the use of trial work 

experiences, which must be provided in 

competitive integrated employment 

settings to the maximum extent 

possible, consistent with the informed 

choice and rehabilitation needs of the 

individual. 

(ii) Trial work experiences include 

supported employment, on-the-job 

training, and other experiences using 

realistic integrated work settings. 

(iii) Trial work experiences must be of 

sufficient variety and over a sufficient 

period of time for the designated State 

unit to determine that there is sufficient 

evidence to conclude that the individual 

cannot benefit from the provision of 

vocational rehabilitation services in 

terms of a competitive integrated 

employment outcome; and 

(iv) The designated State unit must 

provide appropriate supports, including 

assistive technology devices and 

services and personal assistance 

services, to accommodate the 

rehabilitation needs of the individual 

during the trial work experiences. 

(f) Data for determination of priority 

for services under an order of selection. 

If the designated State unit is operating 

under an order of selection for services, 

as provided in § 361.36, the State unit 

must base its priority assignments on— 

(1) A review of the data that was 

developed under paragraphs (d) and (e) 

of this section to make the eligibility 

determination; and 

(2) An assessment of additional data, 

to the extent necessary. 

(Authority: Sections 7(2), 12(c), 101(a)(12), 

102(a), 103(a)(1), 103(a)(9), 103(a)(10) and 

103(a)(14) of the Rehabilitation Act of 1973, 

as amended; 29 U.S.C. 705(2), 709(c), 

721(a)(12), 722(a), 723(a)(1), 723(a)(9), 

723(a)(10) and 723(a)(14)) 

Note to § 361.42: Clear and 

convincing evidence means that the 

designated State unit has a high degree 

of certainty before it can conclude that 

an individual is incapable of benefiting 

from services in terms of an 

employment outcome. The clear and 

convincing standard constitutes the 

highest standard used in our civil 

system of law and is to be individually 

applied on a case-by-case basis. The 


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term clear means unequivocal. For 

example, the use of an intelligence test 

result alone would not constitute clear 

and convincing evidence. Clear and 

convincing evidence might include a 

description of assessments, including 

situational assessments and supported 

employment assessments, from service 

providers who have concluded that they 

would be unable to meet the 

individual’s needs due to the severity of 

the individual’s disability. The 

demonstration of ‘‘clear and convincing 

evidence’’ must include, if appropriate, 

a functional assessment of skill 

development activities, with any 

necessary supports (including assistive 

technology), in real life settings. (S. Rep. 

No. 357, 102d Cong., 2d. Sess. 37–38 

(1992)) 

§ 361.43 Procedures for ineligibility 

determination. 

If the State unit determines that an 

applicant is ineligible for vocational 

rehabilitation services or determines 

that an individual receiving services 

under an individualized plan for 

employment is no longer eligible for 

services, the State unit must— 

(a) Make the determination only after 

providing an opportunity for full 

consultation with the individual or, as 

appropriate, with the individual’s 

representative; 

(b) Inform the individual in writing, 

supplemented as necessary by other 

appropriate modes of communication 

consistent with the informed choice of 

the individual, of the ineligibility 

determination, including the reasons for 

that determination, the requirements 

under this section, and the means by 

which the individual may express and 

seek remedy for any dissatisfaction, 

including the procedures for review of 

State unit personnel determinations in 

accordance with § 361.57; 

(c) Provide the individual with a 

description of services available from a 

client assistance program established 

under 34 CFR part 370 and information 

on how to contact that program; 

(d) Refer the individual— 

(1) To other programs that are part of 

the one-stop service delivery system 

under the Workforce Investment Act 

that can address the individual’s 

training or employment-related needs; 

or 

(2) To Federal, State, or local 

programs or service providers, 

including, as appropriate, independent 

living programs and extended 

employment providers, best suited to 

meet their rehabilitation needs, if the 

ineligibility determination is based on a 

finding that the individual has chosen 

not to pursue, or is incapable of 

achieving, an employment outcome as 

defined in § 361.5(c)(15). 

(e) Review within 12 months and 

annually thereafter if requested by the 

individual or, if appropriate, by the 

individual’s representative any 

ineligibility determination that is based 

on a finding that the individual is 

incapable of achieving an employment 

outcome. This review need not be 

conducted in situations in which the 

individual has refused it, the individual 

is no longer present in the State, the 

individual’s whereabouts are unknown, 

or the individual’s medical condition is 

rapidly progressive or terminal. 

(Authority: Sections 12(c) and 102(a)(5) and 

(c) of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 709(c) and 722(a)(5) and 

(c)) 

§ 361.44 Closure without eligibility 

determination. 

The designated State unit may not 

close an applicant’s record of services 

prior to making an eligibility 

determination unless the applicant 

declines to participate in, or is 

unavailable to complete, an assessment 

for determining eligibility and priority 

for services, and the State unit has made 

a reasonable number of attempts to 

contact the applicant or, if appropriate, 

the applicant’s representative to 

encourage the applicant’s participation. 

(Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c)) 

§ 361.45 Development of the individualized 

plan for employment. 

(a) General requirements. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that— 

(1) An individualized plan for 

employment meeting the requirements 

of this section and § 361.46 is developed 

and implemented in a timely manner for 

each individual determined to be 

eligible for vocational rehabilitation 

services or, if the designated State unit 

is operating under an order of selection 

in accordance with § 361.36, for each 

eligible individual to whom the State 

unit is able to provide services; and 

(2) Services will be provided in 

accordance with the provisions of the 

individualized plan for employment. 

(b) Purpose. (1) The designated State 

unit must conduct an assessment for 

determining vocational rehabilitation 

needs, if appropriate, for each eligible 

individual or, if the State is operating 

under an order of selection, for each 

eligible individual to whom the State is 

able to provide services. The purpose of 

this assessment is to determine the 

employment outcome, and the nature 

and scope of vocational rehabilitation 

services to be included in the 

individualized plan for employment. 

(2) The individualized plan for 

employment must be designed to 

achieve a specific employment outcome, 

as defined in § 361.5(c)(15), that is 

selected by the individual consistent 

with the individual’s unique strengths, 

resources, priorities, concerns, abilities, 

capabilities, interests, and informed 

choice. 

(c) Required information. The State 

unit must provide the following 

information to each eligible individual 

or, as appropriate, the individual’s 

representative, in writing and, if 

appropriate, in the native language or 

mode of communication of the 

individual or the individual’s 

representative: 

(1) Options for developing an 

individualized plan for employment. 

Information on the available options for 

developing the individualized plan for 

employment, including the option that 

an eligible individual or, as appropriate, 

the individual’s representative may 

develop all or part of the individualized 

plan for employment— 

(i) Without assistance from the State 

unit or other entity; or 

(ii) With assistance from— 

(A) A qualified vocational 

rehabilitation counselor employed by 

the State unit; 

(B) A qualified vocational 

rehabilitation counselor who is not 

employed by the State unit; 

(C) A disability advocacy 

organization; or 

(D) Resources other than those in 

paragraph (c)(1)(ii)(A) through (C) of 

this section. 

(2) Additional information. 

Additional information to assist the 

eligible individual or, as appropriate, 

the individual’s representative in 

developing the individualized plan for 

employment, including— 

(i) Information describing the full 

range of components that must be 

included in an individualized plan for 

employment; 

(ii) As appropriate to each eligible 

individual— 

(A) An explanation of agency 

guidelines and criteria for determining 

an eligible individual’s financial 

commitments under an individualized 

plan for employment; 

(B) Information on the availability of 

assistance in completing State unit 

forms required as part of the 

individualized plan for employment; 

and 

(C) Additional information that the 

eligible individual requests or the State 

unit determines to be necessary to the 


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development of the individualized plan 

for employment; 

(iii) A description of the rights and 

remedies available to the individual, 

including, if appropriate, recourse to the 

processes described in § 361.57; and 

(iv) A description of the availability of 

a client assistance program established 

under part 370 of this chapter and 

information on how to contact the client 

assistance program. 

(3) Individuals entitled to benefits 

under title II or XVI of the Social 

Security Act. For individuals entitled to 

benefits under title II or XVI of the 

Social Security Act on the basis of a 

disability or blindness, the State unit 

must provide to the individual general 

information on additional supports and 

assistance for individuals with 

disabilities desiring to enter the 

workforce, including assistance with 

benefits planning. 

(d) Mandatory procedures. The 

designated State unit must ensure that— 

(1) The individualized plan for 

employment is a written document 

prepared on forms provided by the State 

unit; 

(2) The individualized plan for 

employment is developed and 

implemented in a manner that gives 

eligible individuals the opportunity to 

exercise informed choice, consistent 

with § 361.52, in selecting— 

(i) The employment outcome, 

including the employment setting; 

(ii) The specific vocational 

rehabilitation services needed to 

achieve the employment outcome, 

including the settings in which services 

will be provided; 

(iii) The entity or entities that will 

provide the vocational rehabilitation 

services; and 

(iv) The methods available for 

procuring the services; 

(3) The individualized plan for 

employment is— 

(i) Agreed to and signed by the 

eligible individual or, as appropriate, 

the individual’s representative; and 

(ii) Approved and signed by a 

qualified vocational rehabilitation 

counselor employed by the designated 

State unit; 

(4) A copy of the individualized plan 

for employment and a copy of any 

amendments to the individualized plan 

for employment are provided to the 

eligible individual or, as appropriate, to 

the individual’s representative, in 

writing and, if appropriate, in the native 

language or mode of communication of 

the individual or, as appropriate, the 

individual’s representative; 

(5) The individualized plan for 

employment is reviewed at least 

annually by a qualified vocational 

rehabilitation counselor and the eligible 

individual or, as appropriate, the 

individual’s representative to assess the 

eligible individual’s progress in 

achieving the identified employment 

outcome; 

(6) The individualized plan for 

employment is amended, as necessary, 

by the individual or, as appropriate, the 

individual’s representative, in 

collaboration with a representative of 

the State unit or a qualified vocational 

rehabilitation counselor (to the extent 

determined to be appropriate by the 

individual), if there are substantive 

changes in the employment outcome, 

the vocational rehabilitation services to 

be provided, or the providers of the 

vocational rehabilitation services; 

(7) Amendments to the individualized 

plan for employment do not take effect 

until agreed to and signed by the 

eligible individual or, as appropriate, 

the individual’s representative and by a 

qualified vocational rehabilitation 

counselor employed by the designated 

State unit; 

(8) The individualized plan for 

employment is amended, as necessary, 

to include the postemployment services 

and service providers that are necessary 

for the individual to maintain, advance 

in or regain employment, consistent 

with the individual’s unique strengths, 

resources, priorities, concerns, abilities, 

capabilities, interests, and informed 

choice; and 

(9) An individualized plan for 

employment for a student with a 

disability is developed— 

(i) In consideration of the student’s 

individualized education program or 

504 services, as applicable; and 

(ii) In accordance with the plans, 

policies, procedures, and terms of the 

interagency agreement required under 

§ 361.22. 

(e) Standards for developing the 

individualized plan for employment. 

The individualized plan for 

employment must be developed as soon 

as possible, but not later than 90 days 

after the date of determination of 

eligibility, unless the State unit and the 

eligible individual agree to the 

extension of that deadline to a specific 

date by which the individualized plan 

for employment must be completed. 

(f) Data for preparing the 

individualized plan for employment. (1) 

Preparation without comprehensive 

assessment. To the extent possible, the 

employment outcome and the nature 

and scope of rehabilitation services to 

be included in the individual’s 

individualized plan for employment 

must be determined based on the data 

used for the assessment of eligibility 

and priority for services under § 361.42. 

(2) Preparation based on 

comprehensive assessment. 

(i) If additional data are necessary to 

determine the employment outcome and 

the nature and scope of services to be 

included in the individualized plan for 

employment of an eligible individual, 

the State unit must conduct a 

comprehensive assessment of the 

unique strengths, resources, priorities, 

concerns, abilities, capabilities, 

interests, and informed choice, 

including the need for supported 

employment services, of the eligible 

individual, in the most integrated 

setting possible, consistent with the 

informed choice of the individual in 

accordance with the provisions of 

§ 361.5(c)(5)(ii). 

(ii) In preparing the comprehensive 

assessment, the State unit must use, to 

the maximum extent possible and 

appropriate and in accordance with 

confidentiality requirements, existing 

information that is current as of the date 

of the development of the 

individualized plan for employment, 

including information— 

(A) Available from other programs 

and providers, particularly information 

used by education officials and the 

Social Security Administration; 

(B) Provided by the individual and 

the individual’s family; and 

(C) Obtained under the assessment for 

determining the individual’s eligibility 

and vocational rehabilitation needs. 

(Authority: Sections 7(2)(B), 101(a)(9), 102(b), 

and 103(a)(1) of the Rehabilitation Act of 

1973, as amended; 29 U.S.C. 705(2)(B), 

721(a)(9), 722(b), and 723(a)(1)) 

§ 361.46 Content of the individualized plan 

for employment. 

(a) Mandatory components. 

Regardless of the approach in 

§ 361.45(c)(1) that an eligible individual 

selects for purposes of developing the 

individualized plan for employment, 

each individualized plan for 

employment must— 

(1) Include a description of the 

specific employment outcome, as 

defined in § 361.5(c)(15), that is chosen 

by the eligible individual and is 

consistent with the individual’s unique 

strengths, resources, priorities, 

concerns, abilities, capabilities, career 

interests, and informed choice 

consistent with the general goal of 

competitive integrated employment 

(except that in the case of an eligible 

individual who is a student or a youth 

with a disability, the description may be 

a description of the individual’s 

projected post-school employment 

outcome); 

(2) Include a description under 

§ 361.48 of— 


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(i) These specific rehabilitation 

services needed to achieve the 

employment outcome, including, as 

appropriate, the provision of assistive 

technology devices, assistive technology 

services, and personal assistance 

services, including training in the 

management of those services; and 

(ii) In the case of a plan for an eligible 

individual that is a student or youth 

with a disability, the specific transition 

services and supports needed to achieve 

the individual’s employment outcome 

or projected post-school employment 

outcome. 

(3) Provide for services in the most 

integrated setting that is appropriate for 

the services involved and is consistent 

with the informed choice of the eligible 

individual; 

(4) Include timelines for the 

achievement of the employment 

outcome and for the initiation of 

services; 

(5) Include a description of the entity 

or entities chosen by the eligible 

individual or, as appropriate, the 

individual’s representative that will 

provide the vocational rehabilitation 

services and the methods used to 

procure those services; 

(6) Include a description of the 

criteria that will be used to evaluate 

progress toward achievement of the 

employment outcome; and 

(7) Include the terms and conditions 

of the individualized plan for 

employment, including, as appropriate, 

information describing— 

(i) The responsibilities of the 

designated State unit; 

(ii) The responsibilities of the eligible 

individual, including— 

(A) The responsibilities the individual 

will assume in relation to achieving the 

employment outcome; 

(B) If applicable, the extent of the 

individual’s participation in paying for 

the cost of services; and 

(C) The responsibility of the 

individual with regard to applying for 

and securing comparable services and 

benefits as described in § 361.53; and 

(iii) The responsibilities of other 

entities as the result of arrangements 

made pursuant to the comparable 

services or benefits requirements in 

§ 361.53. 

(b) Supported employment 

requirements. An individualized plan 

for employment for an individual with 

a most significant disability for whom 

an employment outcome in a supported 

employment setting has been 

determined to be appropriate must— 

(1) Specify the supported employment 

services to be provided by the 

designated State unit; 

(2) Specify the expected extended 

services needed, which may include 

natural supports; 

(3) Identify the source of extended 

services or, to the extent that it is not 

possible to identify the source of 

extended services at the time the 

individualized plan for employment is 

developed, include a description of the 

basis for concluding that there is a 

reasonable expectation that those 

sources will become available; 

(4) Provide for periodic monitoring to 

ensure that the individual is making 

satisfactory progress toward meeting the 

weekly work requirement established in 

the individualized plan for employment 

by the time of transition to extended 

services; 

(5) Provide for the coordination of 

services provided under an 

individualized plan for employment 

with services provided under other 

individualized plans established under 

other Federal or State programs; 

(6) To the extent that job skills 

training is provided, identify that the 

training will be provided on site; and 

(7) Include placement in an integrated 

setting for the maximum number of 

hours possible based on the unique 

strengths, resources, priorities, 

concerns, abilities, capabilities, 

interests, and informed choice of 

individuals with the most significant 

disabilities. 

(c) Post-employment services. The 

individualized plan for employment for 

each individual must contain, as 

determined to be necessary, statements 

concerning— 

(1) The expected need for postemployment services prior to closing 

the record of services of an individual 

who has achieved an employment 

outcome; 

(2) A description of the terms and 

conditions for the provision of any postemployment services; and 

(3) If appropriate, a statement of how 

post-employment services will be 

provided or arranged through other 

entities as the result of arrangements 

made pursuant to the comparable 

services or benefits requirements in 

§ 361.53. 

(d) Coordination of services for 

students with disabilities. The 

individualized plan for employment for 

a student with a disability must be 

coordinated with the individualized 

education program or 504 services, as 

applicable, for that individual in terms 

of the goals, objectives, and services 

identified in the education program. 

(Authority: Sections 101(a)(8), 101(a)(9), and 

102(b)(4) of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 721(a)(8), 721(a)(9), and 

722(b)(4)) 

§ 361.47 Record of services. 

(a) The designated State unit must 

maintain for each applicant and eligible 

individual a record of services that 

includes, to the extent pertinent, the 

following documentation: 

(1) If an applicant has been 

determined to be an eligible individual, 

documentation supporting that 

determination in accordance with the 

requirements under § 361.42. 

(2) If an applicant or eligible 

individual receiving services under an 

individualized plan for employment has 

been determined to be ineligible, 

documentation supporting that 

determination in accordance with the 

requirements under § 361.43. 

(3) Documentation that describes the 

justification for closing an applicant’s or 

eligible individual’s record of services if 

that closure is based on reasons other 

than ineligibility, including, as 

appropriate, documentation indicating 

that the State unit has satisfied the 

requirements in § 361.44. 

(4) If an individual has been 

determined to be an individual with a 

significant disability or an individual 

with a most significant disability, 

documentation supporting that 

determination. 

(5) If an individual with a significant 

disability requires an exploration of 

abilities, capabilities, and capacity to 

perform in realistic work situations 

through the use of trial work 

experiences or, as appropriate, an 

extended evaluation to determine 

whether the individual is an eligible 

individual, documentation supporting 

the need for, and the plan relating to, 

that exploration or, as appropriate, 

extended evaluation and documentation 

regarding the periodic assessments 

carried out during the trial work 

experiences or, as appropriate, the 

extended evaluation, in accordance with 

the requirements under § 361.42(e) and 

(f). 

(6) The individualized plan for 

employment, and any amendments to 

the individualized plan for 

employment, consistent with the 

requirements under § 361.46. 

(7) Documentation describing the 

extent to which the applicant or eligible 

individual exercised informed choice 

regarding the provision of assessment 

services and the extent to which the 

eligible individual exercised informed 

choice in the development of the 

individualized plan for employment 

with respect to the selection of the 

specific employment outcome, the 

specific vocational rehabilitation 

services needed to achieve the 

employment outcome, the entity to 

provide the services, the employment 


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setting, the settings in which the 

services will be provided, and the 

methods to procure the services. 

(8) In the event that an individual’s 

individualized plan for employment 

provides for vocational rehabilitation 

services in a non-integrated setting, a 

justification to support the need for the 

non-integrated setting. 

(9) In the event that an individual 

obtains competitive employment, 

verification that the individual is 

compensated at or above the minimum 

wage and that the individual’s wage and 

level of benefits are not less than that 

customarily paid by the employer for 

the same or similar work performed by 

non-disabled individuals in accordance 

with § 361.5(c)(9)(i). 

(10) In the event an individual 

achieves an employment outcome in 

which the individual is compensated in 

accordance with section 14(c) of the Fair 

Labor Standards Act or the designated 

State unit closes the record of services 

of an individual in extended 

employment on the basis that the 

individual is unable to achieve an 

employment outcome consistent with 

§ 361.5(c)(15) or that an eligible 

individual through informed choice 

chooses to remain in extended 

employment, documentation of the 

results of the annual reviews required 

under § 361.55, of the individual’s input 

into those reviews, and of the 

individual’s or, if appropriate, the 

individual’s representative’s 

acknowledgment that those reviews 

were conducted. 

(11) Documentation concerning any 

action or decision resulting from a 

request by an individual under § 361.57 

for a review of determinations made by 

designated State unit personnel. 

(12) In the event that an applicant or 

eligible individual requests under 

§ 361.38(c)(4) that documentation in the 

record of services be amended and the 

documentation is not amended, 

documentation of the request. 

(13) In the event an individual is 

referred to another program through the 

State unit’s information and referral 

system under § 361.37, including other 

components of the statewide workforce 

development system, documentation on 

the nature and scope of services 

provided by the designated State unit to 

the individual and on the referral itself, 

consistent with the requirements of 

§ 361.37. 

(14) In the event an individual’s 

record of service is closed under 

§ 361.56, documentation that 

demonstrates the services provided 

under the individual’s individualized 

plan for employment contributed to the 

achievement of the employment 

outcome. 

(15) In the event an individual’s 

record of service is closed under 

§ 361.56, documentation verifying that 

the provisions of § 361.56 have been 

satisfied. 

(b) The State unit, in consultation 

with the State Rehabilitation Council if 

the State has a Council, must determine 

the type of documentation that the State 

unit must maintain for each applicant 

and eligible individual in order to meet 

the requirements in paragraph (a) of this 

section. 

(Authority: Sections 12(c), 101(a)(6), (9), (14), 

and (20) and 102(a), (b), and (d) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c), 721(a)(6), (9), (14), and (20) 

and 722(a), (b), and (d)) 

§ 361.48 Scope of vocational rehabilitation 

services for individuals with disabilities. 

(a) Pre-employment transition 

services. Each State must ensure that the 

designated State unit, in collaboration 

with the local educational agencies 

involved, provide, or arrange for the 

provision of, pre-employment transition 

services for all students with 

disabilities, as defined in § 361.5(c)(51), 

in need of such services, without regard 

to the type of disability, from funds 

reserved in accordance with § 361.65 

and any funds made available from 

State, local, or private funding sources. 

(1) Availability of services. Preemployment transition services may be 

provided to all students with 

disabilities, regardless of whether an 

application for services has been 

submitted. 

(2) Required activities. The designated 

State unit must provide the following 

pre-employment transition services: 

(i) Job exploration counseling; 

(ii) Work-based learning experiences, 

which may include in-school or after 

school opportunities, or experience 

outside the traditional school setting 

(including internships), that is provided 

in an integrated environment in the 

community to the maximum extent 

possible; 

(iii) Counseling on opportunities for 

enrollment in comprehensive transition 

or postsecondary educational programs 

at institutions of higher education; 

(iv) Workplace readiness training to 

develop social skills and independent 

living; and 

(v) Instruction in self-advocacy 

(including instruction in personcentered planning), which may include 

peer mentoring (including peer 

mentoring from individuals with 

disabilities working in competitive 

integrated employment). 

(3) Authorized activities. Funds 

available and remaining after the 

provision of the required activities 

described in paragraph (a)(2) of this 

section may be used to improve the 

transition of students with disabilities 

from school to postsecondary education 

or an employment outcome by— 

(i) Implementing effective strategies to 

increase the likelihood of independent 

living and inclusion in communities 

and competitive integrated workplaces; 

(ii) Developing and improving 

strategies for individuals with 

intellectual disabilities and individuals 

with significant disabilities to live 

independently; participate in 

postsecondary education experiences; 

and obtain, advance in and retain 

competitive integrated employment; 

(iii) Providing instruction to 

vocational rehabilitation counselors, 

school transition personnel, and other 

persons supporting students with 

disabilities; 

(iv) Disseminating information about 

innovative, effective, and efficient 

approaches to achieve the goals of this 

section; 

(v) Coordinating activities with 

transition services provided by local 

educational agencies under the 

Individuals with Disabilities Education 

Act (20 U.S.C. 1400 et seq.); 

(vi) Applying evidence-based findings 

to improve policy, procedure, practice, 

and the preparation of personnel, in 

order to better achieve the goals of this 

section; 

(vii) Developing model transition 

demonstration projects; 

(viii) Establishing or supporting 

multistate or regional partnerships 

involving States, local educational 

agencies, designated State units, 

developmental disability agencies, 

private businesses, or other participants 

to achieve the goals of this section; and 

(ix) Disseminating information and 

strategies to improve the transition to 

postsecondary activities of individuals 

who are members of traditionally 

unserved and underserved populations. 

(4) Pre-employment transition 

coordination. Each local office of a 

designated State unit must carry out 

responsibilities consisting of— 

(i) Attending individualized 

education program meetings for 

students with disabilities, when invited; 

(ii) Working with the local workforce 

development boards, one-stop centers, 

and employers to develop work 

opportunities for students with 

disabilities, including internships, 

summer employment and other 

employment opportunities available 

throughout the school year, and 

apprenticeships; 


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(iii) Working with schools, including 

those carrying out activities under 

section 614(d) of the IDEA, to 

coordinate and ensure the provision of 

pre-employment transition services 

under this section; 

(iv) When invited, attending personcentered planning meetings for 

individuals receiving services under 

title XIX of the Social Security Act (42 

U.S.C. 1396 et seq.); and 

(b) Services for individuals who have 

applied for or been determined eligible 

for vocational rehabilitation services. As 

appropriate to the vocational 

rehabilitation needs of each individual 

and consistent with each individual’s 

individualized plan for employment, 

the designated State unit must ensure 

that the following vocational 

rehabilitation services are available to 

assist the individual with a disability in 

preparing for, securing, retaining, 

advancing in or regaining an 

employment outcome that is consistent 

with the individual’s unique strengths, 

resources, priorities, concerns, abilities, 

capabilities, interests, and informed 

choice: 

(1) Assessment for determining 

eligibility and priority for services by 

qualified personnel, including, if 

appropriate, an assessment by personnel 

skilled in rehabilitation technology, in 

accordance with § 361.42. 

(2) Assessment for determining 

vocational rehabilitation needs by 

qualified personnel, including, if 

appropriate, an assessment by personnel 

skilled in rehabilitation technology, in 

accordance with § 361.45. 

(3) Vocational rehabilitation 

counseling and guidance, including 

information and support services to 

assist an individual in exercising 

informed choice in accordance with 

§ 361.52. 

(4) Referral and other services 

necessary to assist applicants and 

eligible individuals to secure needed 

services from other agencies, including 

other components of the statewide 

workforce development system, in 

accordance with §§ 361.23, 361.24, and 

361.37, and to advise those individuals 

about client assistance programs 

established under 34 CFR part 370. 

(5) In accordance with the definition 

in § 361.5(c)(40), physical and mental 

restoration services, to the extent that 

financial support is not readily available 

from a source other than the designated 

State unit (such as through health 

insurance or a comparable service or 

benefit as defined in § 361.5(c)(10)). 

(6) Vocational and other training 

services, including personal and 

vocational adjustment training, 

advanced training in a field of science, 

technology, engineering, or mathematics 

(including computer science), medicine, 

law, or business; books, tools, and other 

training materials, except that no 

training or training services in an 

institution of higher education 

(universities, colleges, community or 

junior colleges, vocational schools, 

technical institutes, or hospital schools 

of nursing or any other postsecondary 

education institution) may be paid for 

with funds under this part unless 

maximum efforts have been made by the 

State unit and the individual to secure 

grant assistance in whole or in part from 

other sources to pay for that training. 

(7) Maintenance, in accordance with 

the definition of that term in 

§ 361.5(c)(35). 

(8) Transportation in connection with 

the provision of any vocational 

rehabilitation service and in accordance 

with the definition of that term in 

§ 361.5(c)(57). 

(9) Vocational rehabilitation services 

to family members, as defined in 

§ 361.5(c)(23), of an applicant or eligible 

individual if necessary to enable the 

applicant or eligible individual to 

achieve an employment outcome. 

(10) Interpreter services, including 

sign language and oral interpreter 

services, for individuals who are deaf or 

hard of hearing and tactile interpreting 

services for individuals who are deafblind provided by qualified personnel. 

(11) Reader services, rehabilitation 

teaching services, and orientation and 

mobility services for individuals who 

are blind. 

(12) Job-related services, including job 

search and placement assistance, job 

retention services, follow-up services, 

and follow-along services. 

(13) Supported employment services 

in accordance with the definition of that 

term in § 361.5(c)(54). 

(14) Personal assistance services in 

accordance with the definition of that 

term in § 361.5(c)(39). 

(15) Post-employment services in 

accordance with the definition of that 

term in § 361.5(c)(42). 

(16) Occupational licenses, tools, 

equipment, initial stocks, and supplies. 

(17) Rehabilitation technology in 

accordance with the definition of that 

term in § 361.5(c)(45), including 

vehicular modification, 

telecommunications, sensory, and other 

technological aids and devices. 

(18) Transition services for students 

and youth with disabilities, that 

facilitate the transition from school to 

postsecondary life, such as achievement 

of an employment outcome in 

competitive integrated employment, or 

pre-employment transition services for 

students. 

(19) Technical assistance and other 

consultation services to conduct market 

analyses, develop business plans, and 

otherwise provide resources, to the 

extent those resources are authorized to 

be provided through the statewide 

workforce development system, to 

eligible individuals who are pursuing 

self-employment or telecommuting or 

establishing a small business operation 

as an employment outcome. 

(20) Customized employment in 

accordance with the definition of that 

term in § 361.5(c)(11). 

(21) Other goods and services 

determined necessary for the individual 

with a disability to achieve an 

employment outcome. 

(Authority: Sections 7(37), 103(a), and 113 of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 704(37), 723(a), and 733) 

§ 361.49 Scope of vocational rehabilitation 

services for groups of individuals with 

disabilities. 

(a) The designated State unit may 

provide for the following vocational 

rehabilitation services for the benefit of 

groups of individuals with disabilities: 

(1) The establishment, development, 

or improvement of a public or other 

nonprofit community rehabilitation 

program that is used to provide 

vocational rehabilitation services that 

promote integration into the community 

and prepare individuals with 

disabilities for competitive integrated 

employment, including supported 

employment and customized 

employment, and under special 

circumstances, the construction of a 

facility for a public or nonprofit 

community rehabilitation program as 

defined in §§ 361.5(c)(10), 361.5(c)(16) 

and 361.5(c)(17). Examples of special 

circumstances include the destruction 

by natural disaster of the only available 

center serving an area or a State 

determination that construction is 

necessary in a rural area because no 

other public agencies or private 

nonprofit organizations are currently 

able to provide vocational rehabilitation 

services to individuals. 

(2) Telecommunications systems that 

have the potential for substantially 

improving vocational rehabilitation 

service delivery methods and 

developing appropriate programming to 

meet the particular needs of individuals 

with disabilities, including telephone, 

television, video description services, 

satellite, tactile-vibratory devices, and 

similar systems, as appropriate. 

(3) Special services to provide 

nonvisual access to information for 

individuals who are blind, including the 

use of telecommunications, Braille, 

sound recordings, or other appropriate 


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media; captioned television, films, or 

video cassettes for individuals who are 

deaf or hard of hearing; tactile materials 

for individuals who are deaf-blind; and 

other special services that provide 

information through tactile, vibratory, 

auditory, and visual media. 

(4) Technical assistance to businesses 

that are seeking to employ individuals 

with disabilities. 

(5) In the case of any small business 

enterprise operated by individuals with 

significant disabilities under the 

supervision of the designated State unit, 

including enterprises established under 

the Randolph-Sheppard program, 

management services and supervision 

provided by the State unit along with 

the acquisition by the State unit of 

vending facilities or other equipment, 

initial stocks and supplies, and initial 

operating expenses, in accordance with 

the following requirements: 

(i) Management services and 

supervision includes inspection, quality 

control, consultation, accounting, 

regulating, in-service training, and 

related services provided on a 

systematic basis to support and improve 

small business enterprises operated by 

individuals with significant disabilities. 

Management services and supervision 

may be provided throughout the 

operation of the small business 

enterprise. 

(ii) Initial stocks and supplies 

includes those items necessary to the 

establishment of a new business 

enterprise during the initial 

establishment period, which may not 

exceed six months. 

(iii) Costs of establishing a small 

business enterprise may include 

operational costs during the initial 

establishment period, which may not 

exceed six months. 

(iv) If the designated State unit 

provides for these services, it must 

ensure that only individuals with 

significant disabilities will be selected 

to participate in this supervised 

program. 

(v) If the designated State unit 

provides for these services and chooses 

to set aside funds from the proceeds of 

the operation of the small business 

enterprises, the State unit must 

maintain a description of the methods 

used in setting aside funds and the 

purposes for which funds are set aside. 

Funds may be used only for small 

business enterprises purposes, and 

benefits that are provided to operators 

from set-aside funds must be provided 

on an equitable basis. 

(6) Consultation and technical 

assistance services to assist State 

educational agencies and local 

educational agencies in planning for the 

transition of students and youth with 

disabilities from school to 

postsecondary life, including 

employment. 

(7) Transition services to youth with 

disabilities and students with 

disabilities who may not have yet 

applied or been determined eligible for 

vocational rehabilitation services, for 

which a vocational rehabilitation 

counselor works in concert with 

educational agencies, providers of job 

training programs, providers of services 

under the Medicaid program under title 

XIX of the Social Security Act (42 U.S.C. 

1396 et seq.), entities designated by the 

State to provide services for individuals 

with developmental disabilities, centers 

for independent living (as defined in 

section 702 of the Act), housing and 

transportation authorities, workforce 

development systems, and businesses 

and employers. These specific transition 

services are to benefit a group of 

students with disabilities or youth with 

disabilities and are not individualized 

services directly related to an 

individualized plan for employment 

goal. Services may include, but are not 

limited to, group tours of universities 

and vocational training programs, 

employer or business site visits to learn 

about career opportunities, career fairs 

coordinated with workforce 

development and employers to facilitate 

mock interviews and resume writing, 

and other general services applicable to 

groups of students with disabilities and 

youth with disabilities. 

(8) The establishment, development, 

or improvement of assistive technology 

demonstration, loan, reutilization, or 

financing programs in coordination with 

activities authorized under the Assistive 

Technology Act of 1998 (29 U.S.C. 3001 

et seq.) to promote access to assistive 

technology for individuals with 

disabilities who are applicants of or 

have been determined eligible for 

vocational rehabilitation services and 

employers. 

(9) Support (including, as appropriate, 

tuition) for advanced training in a field 

of science, technology, engineering, or 

mathematics (including computer 

science), medicine, law, or business, 

provided after an individual eligible to 

receive services under this title 

demonstrates— 

(i) Such Eligibility; 

(ii) Previous completion of a 

bachelor’s degree program at an 

institution of higher education or 

scheduled completion of such a degree 

program prior to matriculating in the 

program for which the individual 

proposes to use the support; and 

(iii) Acceptance by a program at an 

institution of higher education in the 

United States that confers a master’s 

degree in a field of science, technology, 

engineering, or mathematics (including 

computer science), a juris doctor degree, 

a master of business administration 

degree, or a doctor of medicine degree, 

except that— 

(A) No training provided at an 

institution of higher education may be 

paid for with funds under this program 

unless maximum efforts have been 

made by the designated State unit to 

secure grant assistance, in whole or in 

part, from other sources to pay for such 

training; and 

(B) Nothing in this paragraph prevents 

any designated State unit from 

providing similar support to individuals 

with disabilities within the State who 

are eligible to receive support under this 

title and who are not served under this 

section. 

(b) If the designated State unit 

provides for vocational rehabilitation 

services for groups of individuals, it 

must— 

(1) Develop and maintain written 

policies covering the nature and scope 

of each of the vocational rehabilitation 

services it provides and the criteria 

under which each service is provided; 

and 

(2) Maintain information to ensure the 

proper and efficient administration of 

those services in the form and detail and 

at the time required by the Secretary, 

including the types of services 

provided, the costs of those services, 

and, to the extent feasible, estimates of 

the numbers of individuals benefiting 

from those services. 

(Authority: Sections 12(c), 101(a)(6)(A), and 

103(b) of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 709(c), 721(a)(6), and 

723(b)) 

§ 361.50 Written policies governing the 

provision of services for individuals with 

disabilities. 

(a) Policies. The State unit must 

develop and maintain written policies 

covering the nature and scope of each of 

the vocational rehabilitation services 

specified in § 361.48 and the criteria 

under which each service is provided. 

The policies must ensure that the 

provision of services is based on the 

rehabilitation needs of each individual 

as identified in that individual’s 

individualized plan for employment 

and is consistent with the individual’s 

informed choice. The written policies 

may not establish any arbitrary limits on 

the nature and scope of vocational 

rehabilitation services to be provided to 

the individual to achieve an 

employment outcome. The policies 

must be developed in accordance with 

the following provisions: 


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(b) Out-of-State services. (1) The State 

unit may establish a preference for inState services, provided that the 

preference does not effectively deny an 

individual a necessary service. If the 

individual chooses an out-of-State 

service at a higher cost than an in-State 

service, if either service would meet the 

individual’s rehabilitation needs, the 

designated State unit is not responsible 

for those costs in excess of the cost of 

the in-State service. 

(2) The State unit may not establish 

policies that effectively prohibit the 

provision of out-of-State services. 

(c) Payment for services. (1) The State 

unit must establish and maintain 

written policies to govern the rates of 

payment for all purchased vocational 

rehabilitation services. 

(2) The State unit may establish a fee 

schedule designed to ensure a 

reasonable cost to the program for each 

service, if the schedule is— 

(i) Not so low as to effectively deny 

an individual a necessary service; and 

(ii) Not absolute and permits 

exceptions so that individual needs can 

be addressed. 

(3) The State unit may not place 

absolute dollar limits on specific service 

categories or on the total services 

provided to an individual. 

(d) Duration of services. (1) The State 

unit may establish reasonable time 

periods for the provision of services 

provided that the time periods are— 

(i) Not so short as to effectively deny 

an individual a necessary service; and 

(ii) Not absolute and permit 

exceptions so that individual needs can 

be addressed. 

(2) The State unit may not establish 

absolute time limits on the provision of 

specific services or on the provision of 

services to an individual. The duration 

of each service needed by an individual 

must be determined on an individual 

basis and reflected in that individual’s 

individualized plan for employment. 

(e) Authorization of services. The 

State unit must establish policies related 

to the timely authorization of services, 

including any conditions under which 

verbal authorization can be given. 

(Authority: Sections 12(c) and 101(a)(6) of 

the Rehabilitation Act of 1973, as amended 

and 29 U.S.C. 709(c) and 721(a)(6)) 

§ 361.51 Standards for facilities and 

providers of services. 

(a) Accessibility of facilities. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that any facility 

used in connection with the delivery of 

vocational rehabilitation services under 

this part meets program accessibility 

requirements consistent with the 

requirements, as applicable, of the 

Architectural Barriers Act of 1968, the 

Americans with Disabilities Act of 1990, 

section 504 of the Act, and the 

regulations implementing these laws. 

(b) Affirmative action. The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

assure that community rehabilitation 

programs that receive assistance under 

part B of title I of the Act take 

affirmative action to employ and 

advance in employment qualified 

individuals with disabilities covered 

under and on the same terms and 

conditions as in section 503 of the Act. 

(c) Special communication needs 

personnel. The designated State unit 

must ensure that providers of vocational 

rehabilitation services are able to 

communicate— 

(1) In the native language of 

applicants and eligible individuals who 

have limited English proficiency; and 

(2) By using appropriate modes of 

communication used by applicants and 

eligible individuals. 

(Authority: Sections 12(c) and 101(a)(6)(B) 

and (C) of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 709(c) and 721(a)(6)(B) 

and (C)) 

§ 361.52 Informed choice. 

(a) General provision. The vocational 

rehabilitation services portion of the 

Unified or Combined State Plan must 

assure that applicants and eligible 

individuals or, as appropriate, their 

representatives are provided 

information and support services to 

assist applicants and eligible 

individuals in exercising informed 

choice throughout the rehabilitation 

process consistent with the provisions 

of section 102(d) of the Act and the 

requirements of this section. 

(b) Written policies and procedures. 

The designated State unit, in 

consultation with its State 

Rehabilitation Council, if it has a 

Council, must develop and implement 

written policies and procedures that 

enable an applicant or eligible 

individual to exercise informed choice 

throughout the vocational rehabilitation 

process. These policies and procedures 

must provide for— 

(1) Informing each applicant and 

eligible individual (including students 

with disabilities who are making the 

transition from programs under the 

responsibility of an educational agency 

to programs under the responsibility of 

the designated State unit and including 

youth with disabilities), through 

appropriate modes of communication, 

about the availability of and 

opportunities to exercise informed 

choice, including the availability of 

support services for individuals with 

cognitive or other disabilities who 

require assistance in exercising 

informed choice throughout the 

vocational rehabilitation process; 

(2) Assisting applicants and eligible 

individuals in exercising informed 

choice in decisions related to the 

provision of assessment services; 

(3) Developing and implementing 

flexible procurement policies and 

methods that facilitate the provision of 

vocational rehabilitation services and 

that afford eligible individuals 

meaningful choices among the methods 

used to procure vocational 

rehabilitation services; 

(4) Assisting eligible individuals or, as 

appropriate, the individuals’ 

representatives, in acquiring 

information that enables them to 

exercise informed choice in the 

development of their individualized 

plans for employment with respect to 

the selection of the— 

(i) Employment outcome; 

(ii) Specific vocational rehabilitation 

services needed to achieve the 

employment outcome; 

(iii) Entity that will provide the 

services; 

(iv) Employment setting and the 

settings in which the services will be 

provided; and 

(v) Methods available for procuring 

the services; and 

(5) Ensuring that the availability and 

scope of informed choice is consistent 

with the obligations of the designated 

State agency under this part. 

(c) Information and assistance in the 

selection of vocational rehabilitation 

services and service providers. In 

assisting an applicant and eligible 

individual in exercising informed 

choice during the assessment for 

determining eligibility and vocational 

rehabilitation needs and during 

development of the individualized plan 

for employment, the designated State 

unit must provide the individual or the 

individual’s representative, or assist the 

individual or the individual’s 

representative in acquiring, information 

necessary to make an informed choice 

about the specific vocational 

rehabilitation services, including the 

providers of those services, that are 

needed to achieve the individual’s 

employment outcome. This information 

must include, at a minimum, 

information relating to the— 

(1) Cost, accessibility, and duration of 

potential services; 

(2) Consumer satisfaction with those 

services to the extent that information 

relating to consumer satisfaction is 

available; 


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(3) Qualifications of potential service 

providers; 

(4) Types of services offered by the 

potential providers; 

(5) Degree to which services are 

provided in integrated settings; and 

(6) Outcomes achieved by individuals 

working with service providers, to the 

extent that such information is 

available. 

(d) Methods or sources of information. 

In providing or assisting the individual 

or the individual’s representative in 

acquiring the information required 

under paragraph (c) of this section, the 

State unit may use, but is not limited to, 

the following methods or sources of 

information: 

(1) Lists of services and service 

providers. 

(2) Periodic consumer satisfaction 

surveys and reports. 

(3) Referrals to other consumers, 

consumer groups, or disability advisory 

councils qualified to discuss the 

services or service providers. 

(4) Relevant accreditation, 

certification, or other information 

relating to the qualifications of service 

providers. 

(5) Opportunities for individuals to 

visit or experience various work and 

service provider settings. 

(Authority: Sections 12(c), 101(a)(19); 

102(b)(2)(B) and 102(d) of the Rehabilitation 

Act of 1973, as amended; 29 U.S.C. 709(c), 

721(a)(19); 722(b)(2)(B) and 722(d)) 

§ 361.53 Comparable services and 

benefits. 

(a) Determination of availability. The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that prior to 

providing an accommodation or 

auxiliary aid or service or any 

vocational rehabilitation services, 

except those services listed in paragraph 

(b) of this section, to an eligible 

individual or to members of the 

individual’s family, the State unit must 

determine whether comparable services 

and benefits, as defined in § 361.5(c)(8), 

exist under any other program and 

whether those services and benefits are 

available to the individual unless such 

a determination would interrupt or 

delay— 

(1) The progress of the individual 

toward achieving the employment 

outcome identified in the 

individualized plan for employment; 

(2) An immediate job placement; or 

(3) The provision of vocational 

rehabilitation services to any individual 

who is determined to be at extreme 

medical risk, based on medical evidence 

provided by an appropriate qualified 

medical professional. 

(b) Exempt services. The following 

vocational rehabilitation services 

described in § 361.48(a) are exempt from 

a determination of the availability of 

comparable services and benefits under 

paragraph (a) of this section: 

(1) Assessment for determining 

eligibility and vocational rehabilitation 

needs. 

(2) Counseling and guidance, 

including information and support 

services to assist an individual in 

exercising informed choice. 

(3) Referral and other services to 

secure needed services from other 

agencies, including other components of 

the statewide workforce development 

system, if those services are not 

available under this part. 

(4) Job-related services, including job 

search and placement assistance, job 

retention services, follow-up services, 

and follow-along services. 

(5) Rehabilitation technology, 

including telecommunications, sensory, 

and other technological aids and 

devices. 

(6) Post-employment services 

consisting of the services listed under 

paragraphs (b)(1) through (5) of this 

section. 

(c) Provision of services. (1) If 

comparable services or benefits exist 

under any other program and are 

available to the individual at the time 

needed to ensure the progress of the 

individual toward achieving the 

employment outcome in the 

individual’s individualized plan for 

employment, the designated State unit 

must use those comparable services or 

benefits to meet, in whole or part, the 

costs of the vocational rehabilitation 

services. 

(2) If comparable services or benefits 

exist under any other program, but are 

not available to the individual at the 

time needed to ensure the progress of 

the individual toward achieving the 

employment outcome specified in the 

individualized plan for employment, 

the designated State unit must provide 

vocational rehabilitation services until 

those comparable services and benefits 

become available. 

(d) Interagency coordination. (1) The 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan must assure that the 

Governor, in consultation with the 

entity in the State responsible for the 

vocational rehabilitation program and 

other appropriate agencies, will ensure 

that an interagency agreement or other 

mechanism for interagency coordination 

takes effect between the designated 

State vocational rehabilitation unit and 

any appropriate public entity, including 

the State entity responsible for 

administering the State Medicaid 

program, a public institution of higher 

education, and a component of the 

statewide workforce development 

system, to ensure the provision of 

vocational rehabilitation services, and, 

if appropriate, accommodations or 

auxiliary aids and services, (other than 

those services listed in paragraph (b) of 

this section) that are included in the 

individualized plan for employment of 

an eligible individual, including the 

provision of those vocational 

rehabilitation services (including, if 

appropriate, accommodations or 

auxiliary aids and services) during the 

pendency of any interagency dispute in 

accordance with the provisions of 

paragraph (d)(3)(iii) of this section. 

(2) The Governor may meet the 

requirements of paragraph (d)(1) of this 

section through— 

(i) A State statute or regulation; 

(ii) A signed agreement between the 

respective officials of the public entities 

that clearly identifies the 

responsibilities of each public entity for 

the provision of the services; or 

(iii) Another appropriate mechanism 

as determined by the designated State 

vocational rehabilitation unit. 

(3) The interagency agreement or 

other mechanism for interagency 

coordination must include the 

following: 

(i) Agency financial responsibility. An 

identification of, or description of a 

method for defining, the financial 

responsibility of the designated State 

unit and other public entities for the 

provision of vocational rehabilitation 

services, and, if appropriate, 

accommodations or auxiliary aids and 

services other than those listed in 

paragraph (b) of this section and a 

provision stating the financial 

responsibility of the public entity for 

providing those services. 

(ii) Conditions, terms, and procedures 

of reimbursement. Information 

specifying the conditions, terms, and 

procedures under which the designated 

State unit must be reimbursed by the 

other public entities for providing 

vocational rehabilitation services, and 

accommodations or auxiliary aids and 

services based on the terms of the 

interagency agreement or other 

mechanism for interagency 

coordination. 

(iii) Interagency disputes. Information 

specifying procedures for resolving 

interagency disputes under the 

interagency agreement or other 

mechanism for interagency 

coordination, including procedures 

under which the designated State unit 

may initiate proceedings to secure 

reimbursement from other public 


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entities or otherwise implement the 

provisions of the agreement or 

mechanism. 

(iv) Procedures for coordination of 

services. Information specifying policies 

and procedures for public entities to 

determine and identify interagency 

coordination responsibilities of each 

public entity to promote the 

coordination and timely delivery of 

vocational rehabilitation services, and 

accommodations or auxiliary aids and 

services, other than those listed in 

paragraph (b) of this section. 

(e) Responsibilities under other law. 

(1) If a public entity (other than the 

designated State unit) is obligated under 

Federal law (such as the Americans 

with Disabilities Act, section 504 of the 

Act, or section 188 of the Workforce 

Innovation and Opportunity Act) or 

State law, or assigned responsibility 

under State policy or an interagency 

agreement established under this 

section, to provide or pay for any 

services considered to be vocational 

rehabilitation services (e.g., interpreter 

services under § 361.48(j)), and, if 

appropriate, accommodations or 

auxiliary aids and services other than 

those services listed in paragraph (b) of 

this section, the public entity must 

fulfill that obligation or responsibility 

through— 

(i) The terms of the interagency 

agreement or other requirements of this 

section; 

(ii) Providing or paying for the service 

directly or by contract; or 

(iii) Other arrangement. 

(2) If a public entity other than the 

designated State unit fails to provide or 

pay for vocational rehabilitation 

services, and, if appropriate, 

accommodations or auxiliary aids and 

services for an eligible individual as 

established under this section, the 

designated State unit must provide or 

pay for those services to the individual 

and may claim reimbursement for the 

services from the public entity that 

failed to provide or pay for those 

services. The public entity must 

reimburse the designated State unit 

pursuant to the terms of the interagency 

agreement or other mechanism 

described in paragraph (d) of this 

section in accordance with the 

procedures established in the agreement 

or mechanism pursuant to paragraph 

(d)(3)(ii) of this section. 

(Authority: Sections 12(c) and 101(a)(8) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 721(a)(8)) 

§ 361.54 Participation of individuals in 

cost of services based on financial need. 

(a) No Federal requirement. There is 

no Federal requirement that the 

financial need of individuals be 

considered in the provision of 

vocational rehabilitation services. 

(b) State unit requirements. (1) The 

State unit may choose to consider the 

financial need of eligible individuals or 

individuals who are receiving services 

through trial work experiences under 

§ 361.42(e) for purposes of determining 

the extent of their participation in the 

costs of vocational rehabilitation 

services, other than those services 

identified in paragraph (b)(3) of this 

section. 

(2) If the State unit chooses to 

consider financial need— 

(i) It must maintain written policies— 

(A) Explaining the method for 

determining the financial need of an 

eligible individual; and 

(B) Specifying the types of vocational 

rehabilitation services for which the 

unit has established a financial needs 

test; 

(ii) The policies must be applied 

uniformly to all individuals in similar 

circumstances; 

(iii) The policies may require different 

levels of need for different geographic 

regions in the State, but must be applied 

uniformly to all individuals within each 

geographic region; and 

(iv) The policies must ensure that the 

level of an individual’s participation in 

the cost of vocational rehabilitation 

services is— 

(A) Reasonable; 

(B) Based on the individual’s financial 

need, including consideration of any 

disability-related expenses paid by the 

individual; and 

(C) Not so high as to effectively deny 

the individual a necessary service. 

(3) The designated State unit may not 

apply a financial needs test, or require 

the financial participation of the 

individual— 

(i) As a condition for furnishing the 

following vocational rehabilitation 

services: 

(A) Assessment for determining 

eligibility and priority for services 

under § 361.48(b)(1), except those nonassessment services that are provided to 

an individual with a significant 

disability during either an exploration 

of the individual’s abilities, capabilities, 

and capacity to perform in work 

situations through the use of trial work 

experiences under § 361.42(e). 

(B) Assessment for determining 

vocational rehabilitation needs under 

§ 361.48(b)(2). 

(C) Vocational rehabilitation 

counseling and guidance under 

§ 361.48(b)(3). 

(D) Referral and other services under 

§ 361.48(b)(4). 

(E) Job-related services under 

§ 361.48(b)(12). 

(F) Personal assistance services under 

§ 361.48(b)(14). 

(G) Any auxiliary aid or service (e.g., 

interpreter services under 

§ 361.48(b)(10), reader services under 

§ 361.48(b)(11)) that an individual with 

a disability requires under section 504 

of the Act (29 U.S.C. 794) or the 

Americans with Disabilities Act (42 

U.S.C. 12101, et seq.), or regulations 

implementing those laws, in order for 

the individual to participate in the 

vocational rehabilitation program as 

authorized under this part; or 

(ii) As a condition for furnishing any 

vocational rehabilitation service if the 

individual in need of the service has 

been determined eligible for Social 

Security benefits under titles II or XVI 

of the Social Security Act. 

(Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c)) 

§ 361.55 Semi-annual review of individuals 

in extended employment and other 

employment under special certificate 

provisions of the Fair Labor Standards Act. 

(a) The vocational rehabilitation 

services portion of the Unified or 

Combined State Plan must assure that 

the designated State unit conducts a 

semi-annual review and reevaluation for 

the first two years of such employment 

and annually thereafter, in accordance 

with the requirements in paragraph (b) 

of this section for an individual with a 

disability served under this part— 

(1) Who has achieved an employment 

outcome in which the individual is 

compensated in accordance with section 

14(c) of the Fair Labor Standards Act; or 

(2) Whose record of services is closed 

while the individual is in extended 

employment on the basis that the 

individual is unable to achieve an 

employment outcome consistent with 

§ 361.5(c)(15) or that the individual 

made an informed choice to remain in 

extended employment. 

(b) For each individual with a 

disability who meets the criteria in 

paragraph (a) of this section, the 

designated State unit must— 

(1) Semi-annually review and 

reevaluate the status of each individual 

for two years after the individual’s 

record of services is closed (and 

annually thereafter) to determine the 

interests, priorities, and needs of the 

individual with respect to competitive 

integrated employment or training for 

competitive integrated employment; 

(2) Enable the individual or, if 

appropriate, the individual’s 

representative to provide input into the 

review and reevaluation and must 

document that input in the record of 

services, consistent with § 361.47(a)(10), 


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with the individual’s or, as appropriate, 

the individual’s representative’s signed 

acknowledgment that the review and 

reevaluation have been conducted; and 

(3) Make maximum efforts, including 

identifying and providing vocational 

rehabilitation services, reasonable 

accommodations, and other necessary 

support services, to assist the individual 

in engaging in competitive integrated 

employment as defined in § 361.5(c)(9). 

(Authority: Sections 12(c) and 101(a)(14) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 721(a)(14)) 

§ 361.56 Requirements for closing the 

record of services of an individual who has 

achieved an employment outcome. 

The record of services of an 

individual who has achieved an 

employment outcome may be closed 

only if all of the following requirements 

are met: 

(a) Employment outcome achieved. 

The individual has achieved the 

employment outcome that is described 

in the individual’s individualized plan 

for employment in accordance with 

§ 361.46(a)(1) and is consistent with the 

individual’s unique strengths, resources, 

priorities, concerns, abilities, 

capabilities, interests, and informed 

choice. 

(b) Employment outcome maintained. 

The individual has maintained the 

employment outcome for an appropriate 

period of time, but not less than 90 

days, necessary to ensure the stability of 

the employment outcome, and the 

individual no longer needs vocational 

rehabilitation services. 

(c) Satisfactory outcome. At the end of 

the appropriate period under paragraph 

(b) of this section, the individual and 

the qualified rehabilitation counselor 

employed by the designated State unit 

consider the employment outcome to be 

satisfactory and agree that the 

individual is performing well in the 

employment. 

(d) Post-employment services. The 

individual is informed through 

appropriate modes of communication of 

the availability of post-employment 

services. 

(Authority: Sections 12(c), 101(a)(6), and 

106(a)(2) of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 711(c), 721(a)(6), and 

726(a)(2)) 

§ 361.57 Review of determinations made 

by designated State unit personnel. 

(a) Procedures. The designated State 

unit must develop and implement 

procedures to ensure that an applicant 

or eligible individual who is dissatisfied 

with any determination made by 

personnel of the designated State unit 

that affects the provision of vocational 

rehabilitation services may request, or, 

if appropriate, may request through the 

individual’s representative, a timely 

review of that determination. The 

procedures must be in accordance with 

paragraphs (b) through (k) of this 

section: 

(b) General requirements. (1) 

Notification. Procedures established by 

the State unit under this section must 

provide an applicant or eligible 

individual or, as appropriate, the 

individual’s representative notice of— 

(i) The right to obtain review of State 

unit determinations that affect the 

provision of vocational rehabilitation 

services through an impartial due 

process hearing under paragraph (e) of 

this section; 

(ii) The right to pursue mediation 

under paragraph (d) of this section with 

respect to determinations made by 

designated State unit personnel that 

affect the provision of vocational 

rehabilitation services to an applicant or 

eligible individual; 

(iii) The names and addresses of 

individuals with whom requests for 

mediation or due process hearings may 

be filed; 

(iv) The manner in which a mediator 

or impartial hearing officer may be 

selected consistent with the 

requirements of paragraphs (d) and (f) of 

this section; and 

(v) The availability of the client 

assistance program, established under 

34 CFR part 370, to assist the applicant 

or eligible individual during mediation 

sessions or impartial due process 

hearings. 

(2) Timing. Notice described in 

paragraph (b)(1) of this section must be 

provided in writing— 

(i) At the time the individual applies 

for vocational rehabilitation services 

under this part; 

(ii) At the time the individual is 

assigned to a category in the State’s 

order of selection, if the State has 

established an order of selection under 

§ 361.36; 

(iii) At the time the individualized 

plan for employment is developed; and 

(iv) Whenever vocational 

rehabilitation services for an individual 

are reduced, suspended, or terminated. 

(3) Evidence and representation. 

Procedures established under this 

section must— 

(i) Provide an applicant or eligible 

individual or, as appropriate, the 

individual’s representative with an 

opportunity to submit during mediation 

sessions or due process hearings 

evidence and other information that 

supports the applicant’s or eligible 

individual’s position; and 

(ii) Allow an applicant or eligible 

individual to be represented during 

mediation sessions or due process 

hearings by counsel or other advocate 

selected by the applicant or eligible 

individual. 

(4) Impact on provision of services. 

The State unit may not institute a 

suspension, reduction, or termination of 

vocational rehabilitation services being 

provided to an applicant or eligible 

individual, including evaluation and 

assessment services and individualized 

plan for employment development, 

pending a resolution through mediation, 

pending a decision by a hearing officer 

or reviewing official, or pending 

informal resolution under this section 

unless— 

(i) The individual or, in appropriate 

cases, the individual’s representative 

requests a suspension, reduction, or 

termination of services; or 

(ii) The State agency has evidence that 

the services have been obtained through 

misrepresentation, fraud, collusion, or 

criminal conduct on the part of the 

individual or the individual’s 

representative. 

(5) Ineligibility. Applicants who are 

found ineligible for vocational 

rehabilitation services and previously 

eligible individuals who are determined 

to be no longer eligible for vocational 

rehabilitation services pursuant to 

§ 361.43 are permitted to challenge the 

determinations of ineligibility under the 

procedures described in this section. 

(c) Informal dispute resolution. The 

State unit may develop an informal 

process for resolving a request for 

review without conducting mediation or 

a formal hearing. A State’s informal 

process must not be used to deny the 

right of an applicant or eligible 

individual to a hearing under paragraph 

(e) of this section or any other right 

provided under this part, including the 

right to pursue mediation under 

paragraph (d) of this section. If informal 

resolution under this paragraph or 

mediation under paragraph (d) of this 

section is not successful in resolving the 

dispute within the time period 

established under paragraph (e)(1) of 

this section, a formal hearing must be 

conducted within that same time 

period, unless the parties agree to a 

specific extension of time. 

(d) Mediation. (1) The State must 

establish and implement procedures, as 

required under paragraph (b)(1)(ii) of 

this section, to allow an applicant or 

eligible individual and the State unit to 

resolve disputes involving State unit 

determinations that affect the provision 

of vocational rehabilitation services 

through a mediation process that must 

be made available, at a minimum, 


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whenever an applicant or eligible 

individual or, as appropriate, the 

individual’s representative requests an 

impartial due process hearing under this 

section. 

(2) Mediation procedures established 

by the State unit under paragraph (d) of 

this section must ensure that— 

(i) Participation in the mediation 

process is voluntary on the part of the 

applicant or eligible individual, as 

appropriate, and on the part of the State 

unit; 

(ii) Use of the mediation process is 

not used to deny or delay the 

applicant’s or eligible individual’s right 

to pursue resolution of the dispute 

through an impartial hearing held 

within the time period specified in 

paragraph (e)(1) of this section or any 

other rights provided under this part. At 

any point during the mediation process, 

either party or the mediator may elect to 

terminate the mediation. In the event 

mediation is terminated, either party 

may pursue resolution through an 

impartial hearing; 

(iii) The mediation process is 

conducted by a qualified and impartial 

mediator, as defined in § 361.5(c)(43), 

who must be selected from a list of 

qualified and impartial mediators 

maintained by the State— 

(A) On a random basis; 

(B) By agreement between the director 

of the designated State unit and the 

applicant or eligible individual or, as 

appropriate, the individual’s 

representative; or 

(C) In accordance with a procedure 

established in the State for assigning 

mediators, provided this procedure 

ensures the neutrality of the mediator 

assigned; and 

(iv) Mediation sessions are scheduled 

and conducted in a timely manner and 

are held in a location and manner that 

is convenient to the parties to the 

dispute. 

(3) Discussions that occur during the 

mediation process must be kept 

confidential and may not be used as 

evidence in any subsequent due process 

hearings or civil proceedings, and the 

parties to the mediation process may be 

required to sign a confidentiality pledge 

prior to the commencement of the 

process. 

(4) An agreement reached by the 

parties to the dispute in the mediation 

process must be described in a written 

mediation agreement that is developed 

by the parties with the assistance of the 

qualified and impartial mediator and 

signed by both parties. Copies of the 

agreement must be sent to both parties. 

(5) The costs of the mediation process 

must be paid by the State. The State is 

not required to pay for any costs related 

to the representation of an applicant or 

eligible individual authorized under 

paragraph (b)(3)(ii) of this section. 

(e) Impartial due process hearings. 

The State unit must establish and 

implement formal review procedures, as 

required under paragraph (b)(1)(i) of this 

section, that provide that— 

(1) hearing conducted by an impartial 

hearing officer, selected in accordance 

with paragraph (f) of this section, must 

be held within 60 days of an applicant’s 

or eligible individual’s request for 

review of a determination made by 

personnel of the State unit that affects 

the provision of vocational 

rehabilitation services to the individual, 

unless informal resolution or a 

mediation agreement is achieved prior 

to the 60th day or the parties agree to 

a specific extension of time; 

(2) In addition to the rights described 

in paragraph (b)(3) of this section, the 

applicant or eligible individual or, if 

appropriate, the individual’s 

representative must be given the 

opportunity to present witnesses during 

the hearing and to examine all witnesses 

and other relevant sources of 

information and evidence; 

(3) The impartial hearing officer 

must— 

(i) Make a decision based on the 

provisions of the approved vocational 

rehabilitation services portion of the 

Unified or Combined State Plan, the 

Act, Federal vocational rehabilitation 

regulations, and State regulations and 

policies that are consistent with Federal 

requirements; and 

(ii) Provide to the individual or, if 

appropriate, the individual’s 

representative and to the State unit a 

full written report of the findings and 

grounds for the decision within 30 days 

of the completion of the hearing; and 

(4) The hearing officer’s decision is 

final, except that a party may request an 

impartial review under paragraph (g)(1) 

of this section if the State has 

established procedures for that review, 

and a party involved in a hearing may 

bring a civil action under paragraph (i) 

of this section. 

(f) Selection of impartial hearing 

officers. The impartial hearing officer 

for a particular case must be selected— 

(1) From a list of qualified impartial 

hearing officers maintained by the State 

unit. Impartial hearing officers included 

on the list must be— 

(i) Identified by the State unit if the 

State unit is an independent 

commission; or 

(ii) Jointly identified by the State unit 

and the State Rehabilitation Council if 

the State has a Council; and 

(2)(i) On a random basis; or 

(ii) By agreement between the director 

of the designated State unit and the 

applicant or eligible individual or, as 

appropriate, the individual’s 

representative. 

(g) Administrative review of hearing 

officer’s decision. The State may 

establish procedures to enable a party 

who is dissatisfied with the decision of 

the impartial hearing officer to seek an 

impartial administrative review of the 

decision under paragraph (e)(3) of this 

section in accordance with the 

following requirements: 

(1) A request for administrative 

review under paragraph (g) of this 

section must be made within 20 days of 

the mailing of the impartial hearing 

officer’s decision. 

(2) Administrative review of the 

hearing officer’s decision must be 

conducted by— 

(i) The chief official of the designated 

State agency if the State has established 

both a designated State agency and a 

designated State unit under § 361.13(b); 

or 

(ii) An official from the office of the 

Governor. 

(3) The reviewing official described in 

paragraph (g)(2)(i) of this section— 

(i) Provides both parties with an 

opportunity to submit additional 

evidence and information relevant to a 

final decision concerning the matter 

under review; 

(ii) May not overturn or modify the 

hearing officer’s decision, or any part of 

that decision, that supports the position 

of the applicant or eligible individual 

unless the reviewing official concludes, 

based on clear and convincing evidence, 

that the decision of the impartial 

hearing officer is clearly erroneous on 

the basis of being contrary to the 

approved vocational rehabilitation 

services portion of the Unified or 

Combined State Plan, the Act, Federal 

vocational rehabilitation regulations, or 

State regulations and policies that are 

consistent with Federal requirements; 

(iii) Makes an independent, final 

decision following a review of the entire 

hearing record and provides the 

decision in writing, including a full 

report of the findings and the statutory, 

regulatory, or policy grounds for the 

decision, to the applicant or eligible 

individual or, as appropriate, the 

individual’s representative and to the 

State unit within 30 days of the request 

for administrative review under 

paragraph (g)(1) of this section; and 

(iv) May not delegate the 

responsibility for making the final 

decision under paragraph (g) of this 

section to any officer or employee of the 

designated State unit. 


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(4) The reviewing official’s decision 

under paragraph (g) of this section is 

final unless either party brings a civil 

action under paragraph (i) of this 

section. 

(h) Implementation of final decisions. 

If a party brings a civil action under 

paragraph (h) of this section to 

challenge the final decision of a hearing 

officer under paragraph (e) of this 

section or to challenge the final decision 

of a State reviewing official under 

paragraph (g) of this section, the final 

decision of the hearing officer or State 

reviewing official must be implemented 

pending review by the court. 

(i) Civil action. (1) Any party who 

disagrees with the findings and decision 

of an impartial hearing officer under 

paragraph (e) of this section in a State 

that has not established administrative 

review procedures under paragraph (g) 

of this section and any party who 

disagrees with the findings and decision 

under paragraph (g)(3)(iii) of this section 

have a right to bring a civil action with 

respect to the matter in dispute. The 

action may be brought in any State court 

of competent jurisdiction or in a district 

court of the United States of competent 

jurisdiction without regard to the 

amount in controversy. 

(2) In any action brought under 

paragraph (i) of this section, the court— 

(i) Receives the records related to the 

impartial due process hearing and the 

records related to the administrative 

review process, if applicable; 

(ii) Hears additional evidence at the 

request of a party; and 

(iii) Basing its decision on the 

preponderance of the evidence, grants 

the relief that the court determines to be 

appropriate. 

(j) State fair hearing board. A fair 

hearing board as defined in 

§ 361.5(c)(21) is authorized to carry out 

the responsibilities of the impartial 

hearing officer under paragraph (e) of 

this section in accordance with the 

following criteria: 

(1) The fair hearing board may 

conduct due process hearings either 

collectively or by assigning 

responsibility for conducting the 

hearing to one or more members of the 

fair hearing board. 

(2) The final decision issued by the 

fair hearing board following a hearing 

under paragraph (j)(1) of this section 

must be made collectively by, or by a 

majority vote of, the fair hearing board. 

(3) The provisions of paragraphs 

(b)(1), (2), and (3) of this section that 

relate to due process hearings and of 

paragraphs (e), (f), (g), and (h) of this 

section do not apply to fair hearing 

boards under this paragraph (j). 

(k) Data collection. (1) The director of 

the designated State unit must collect 

and submit, at a minimum, the 

following data to the Secretary for 

inclusion each year in the annual report 

to Congress under section 13 of the Act: 

(i) A copy of the standards used by 

State reviewing officials for reviewing 

decisions made by impartial hearing 

officers under this section. 

(ii) The number of mediations held, 

including the number of mediation 

agreements reached. 

(iii) The number of hearings and 

reviews sought from impartial hearing 

officers and State reviewing officials, 

including the type of complaints and 

the issues involved. 

(iv) The number of hearing officer 

decisions that were not reviewed by 

administrative reviewing officials. 

(v) The number of hearing decisions 

that were reviewed by State reviewing 

officials and, based on these reviews, 

the number of hearing decisions that 

were— 

(A) Sustained in favor of an applicant 

or eligible individual; 

(B) Sustained in favor of the 

designated State unit; 

(C) Reversed in whole or in part in 

favor of the applicant or eligible 

individual; and 

(D) Reversed in whole or in part in 

favor of the State unit. 

(2) The State unit director also must 

collect and submit to the Secretary 

copies of all final decisions issued by 

impartial hearing officers under 

paragraph (e) of this section and by 

State review officials under paragraph 

(g) of this section. 

(3) The confidentiality of records of 

applicants and eligible individuals 

maintained by the State unit may not 

preclude the access of the Secretary to 

those records for the purposes described 

in this section. 

(Authority: Section 102(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 722(c)) 

Subpart C—Financing of State 

Vocational Rehabilitation Programs 

§ 361.60 Matching requirements. 

(a) Federal share. (1) General. Except 

as provided in paragraph (a)(2) of this 

section, the Federal share for 

expenditures made by the State under 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan, including expenditures for 

the provision of vocational 

rehabilitation services and the 

administration of the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan, is 78.7 

percent. 

(2) Construction projects. The Federal 

share for expenditures made for the 

construction of a facility for community 

rehabilitation program purposes may 

not be more than 50 percent of the total 

cost of the project. 

(b) Non-Federal share. (1) General. 

Except as provided in paragraph (b)(2) 

and (b)(3) of this section, expenditures 

made under the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan to meet 

the non-Federal share under this section 

must be consistent with the provisions 

of 2 CFR 200.306(b). 

(2) Third party in-kind contributions. 

Third party in-kind contributions 

specified in 2 CFR 200.306(b) may not 

be used to meet the non-Federal share 

under this section. 

(3) Contributions by private entities. 

Expenditures made from those cash 

contributions provided by private 

organizations, agencies, or individuals 

and that are deposited in the State 

agency’s account or, if applicable, sole 

local agency’s account, in accordance 

with State law prior to their expenditure 

and that are earmarked, under a 

condition imposed by the contributor, 

may be used as part of the non-Federal 

share under this section if the funds are 

earmarked for— 

(i) Meeting in whole or in part the 

State’s share for establishing a 

community rehabilitation program or 

constructing a particular facility for 

community rehabilitation program 

purposes; 

(ii) Particular geographic areas within 

the State for any purpose under the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan, other than those described in 

paragraph (b)(3)(i) of this section, in 

accordance with the following criteria: 

(A) Before funds that are earmarked 

for a particular geographic area may be 

used as part of the non-Federal share, 

the State must notify the Secretary that 

the State cannot provide the full nonFederal share without using these funds. 

(B) Funds that are earmarked for a 

particular geographic area may be used 

as part of the non-Federal share without 

requesting a waiver of statewideness 

under § 361.26. 

(C) Except as provided in paragraph 

(b)(3)(i) of this section, all Federal funds 

must be used on a statewide basis 

consistent with § 361.25, unless a 

waiver of statewideness is obtained 

under § 361.26; and 

(iii) Any other purpose under the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan, provided the expenditures 

do not benefit in any way the donor, 

employee, officer, or agent, any member 


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of his or her immediate family, his or 

her partner, an individual with whom 

the donor has a close personal 

relationship, or an individual, entity, or 

organization with whom the donor 

shares a financial or other interest. The 

Secretary does not consider a donor’s 

receipt from the State unit of a 

subaward or contract with funds 

allotted under this part to be a benefit 

for the purposes of this paragraph if the 

subaward or contract is awarded under 

the State’s regular competitive 

procedures. 

(Authority: Sections 7(14), 101(a)(3), 

101(a)(4) and 104 of the Rehabilitation Act of 

1973, as amended; 29 U.S.C. 705(14), 

721(a)(3), 721(a)(4) and 724) 

Example for paragraph (b)(3): 

Contributions may be earmarked in 

accordance with § 361.60(b)(3)(iii) for 

providing particular services (e.g., 

rehabilitation technology services); 

serving individuals with certain types of 

disabilities (e.g., individuals who are 

blind), consistent with the State’s order 

of selection, if applicable; providing 

services to special groups that State or 

Federal law permits to be targeted for 

services (e.g., students with disabilities 

who are receiving special education 

services), consistent with the State’s 

order of selection, if applicable; or 

carrying out particular types of 

administrative activities permissible 

under State law. Contributions also may 

be restricted to particular geographic 

areas to increase services or expand the 

scope of services that are available 

statewide under the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan in 

accordance with the requirements in 

§ 361.60(b)(3)(ii). 

§ 361.61 Limitation on use of funds for 

construction expenditures. 

No more than 10 percent of a State’s 

allotment for any fiscal year under 

section 110 of the Act may be spent on 

the construction of facilities for 

community rehabilitation program 

purposes. 

(Authority: Section 101(a)(17)(A) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 721(a)(17)(A)) 

§ 361.62 Maintenance of effort 

requirements. 

(a) General requirements. The 

Secretary reduces the amount otherwise 

payable to a State for any fiscal year by 

the amount by which the total 

expenditures from non-Federal sources 

under the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan for any previous 

fiscal year were less than the total of 

those expenditures for the fiscal year 

two years prior to that previous fiscal 

year. 

(b) Specific requirements for 

construction of facilities. If the State 

provides for the construction of a 

facility for community rehabilitation 

program purposes, the amount of the 

State’s share of expenditures for 

vocational rehabilitation services under 

the plan, other than for the construction 

of a facility for community 

rehabilitation program purposes or the 

establishment of a facility for 

community rehabilitation purposes, 

must be at least equal to the 

expenditures for those services for the 

second prior fiscal year. 

(c) Separate State agency for 

vocational rehabilitation services for 

individuals who are blind. If there is a 

separate part of the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan 

administered by a separate State agency 

to provide vocational rehabilitation 

services for individuals who are blind— 

(1) Satisfaction of the maintenance of 

effort requirements under paragraphs (a) 

and (b) of this section is determined 

based on the total amount of a State’s 

non-Federal expenditures under both 

parts of the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan; and 

(2) If a State fails to meet any 

maintenance of effort requirement, the 

Secretary reduces the amount otherwise 

payable to the State for any fiscal year 

under each part of the plan in direct 

proportion to the amount by which nonFederal expenditures under each part of 

the plan in any previous fiscal year were 

less than they were for that part of the 

plan for the fiscal year 2 years prior to 

that previous fiscal year. 

(d) Waiver or modification. (1) The 

Secretary may waive or modify the 

maintenance of effort requirement in 

paragraph (a) of this section if the 

Secretary determines that a waiver or 

modification is necessary to permit the 

State to respond to exceptional or 

uncontrollable circumstances, such as a 

major natural disaster or a serious 

economic downturn, that— 

(i) Cause significant unanticipated 

expenditures or reductions in revenue 

that result in a general reduction of 

programs within the State; or 

(ii) Require the State to make 

substantial expenditures in the 

vocational rehabilitation program for 

long-term purposes due to the one-time 

costs associated with the construction of 

a facility for community rehabilitation 

program purposes, the establishment of 

a facility for community rehabilitation 

program purposes, or the acquisition of 

equipment. 

(2) The Secretary may waive or 

modify the maintenance of effort 

requirement in paragraph (b) of this 

section or the 10 percent allotment 

limitation in § 361.61 if the Secretary 

determines that a waiver or 

modification is necessary to permit the 

State to respond to exceptional or 

uncontrollable circumstances, such as a 

major natural disaster, that result in 

significant destruction of existing 

facilities and require the State to make 

substantial expenditures for the 

construction of a facility for community 

rehabilitation program purposes or the 

establishment of a facility for 

community rehabilitation program 

purposes in order to provide vocational 

rehabilitation services. 

(3) A written request for waiver or 

modification, including supporting 

justification, must be submitted to the 

Secretary for consideration as soon as 

the State has determined that it has 

failed to satisfy its maintenance of effort 

requirement due to an exceptional or 

uncontrollable circumstance, as 

described in paragraphs (d)(1) and (2) of 

this section. 

(Authority: Sections 101(a)(17) and 111(a)(2) 

of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 721(a)(17) and 731(a)(2)) 

§ 361.63 Program income. 

(a) Definition. For purposes of this 

section, program income means gross 

income received by the State that is 

directly generated by a supported 

activity under this part. 

(b) Sources. Sources of program 

income include, but are not limited to: 

Payments from the Social Security 

Administration for assisting Social 

Security beneficiaries and recipients to 

achieve employment outcomes; 

payments received from workers’ 

compensation funds; payments received 

by the State agency from insurers, 

consumers, or others for services to 

defray part or all of the costs of services 

provided to particular individuals; and 

income generated by a State-operated 

community rehabilitation program for 

activities authorized under this part. 

(c) Use of program income. (1) Except 

as provided in paragraph (c)(2) of this 

section, program income, whenever 

earned, must be used for the provision 

of vocational rehabilitation services and 

the administration of the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan. 

Program income— 

(i) Is considered earned in the fiscal 

year in which it is received; and 

(ii) Must be disbursed during the 

period of performance of the award, 

prior to requesting additional cash 


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payments, in accordance with 2 CFR 

200.305(b)(5). 

(2) Payments provided to a State from 

the Social Security Administration for 

assisting Social Security beneficiaries 

and recipients to achieve employment 

outcomes may also be used to carry out 

programs under part B of title I of the 

Act (client assistance), title VI of the Act 

(supported employment), and title VII of 

the Act (independent living). 

(3) The State is authorized to treat 

program income using the deduction or 

addition alternative in accordance with 

2 CFR 200.307(e)(1) and (2). 

(4) Program income cannot be used to 

meet the non-Federal share requirement 

under § 361.60. 

(Authority: Sections 12(c) and 108 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c) and 728; 2 CFR part 200) 

§ 361.64 Obligation of Federal funds. 

(a) Except as provided in paragraph 

(b) of this section, any Federal award 

funds, including reallotted funds, that 

are appropriated for a fiscal year to carry 

out a program under this part that are 

not obligated by the State by the 

beginning of the succeeding fiscal year 

remain available for obligation by the 

State during that succeeding fiscal year. 

(b) Federal funds appropriated for a 

fiscal year remain available for 

obligation in the succeeding fiscal year 

only to the extent that the State met the 

matching requirement for those Federal 

funds by obligating, in accordance with 

34 CFR 76.707, the non-Federal share in 

the fiscal year for which the funds were 

appropriated. 

(Authority: Section 19 of the Rehabilitation 

Act of 1973, as amended; 29 U.S.C. 716) 

§ 361.65 Allotment and payment of Federal 

funds for vocational rehabilitation services. 

(a) Allotment. (1) The allotment of 

Federal funds for vocational 

rehabilitation services for each State is 

computed in accordance with the 

requirements of section 110 of the Act, 

and payments are made to the State on 

a quarterly basis, unless some other 

period is established by the Secretary. 

(2) If the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan designates one 

State agency to administer, or supervise 

the administration of, the part of the 

plan under which vocational 

rehabilitation services are provided for 

individuals who are blind and another 

State agency to administer the rest of the 

plan, the division of the State’s 

allotment is a matter for State 

determination. 

(3) Reservation for pre-employment 

transition services. (i) Pursuant to 

section 110(d) of the Act, the State must 

reserve at least 15 percent of the State’s 

allotment, received in accordance with 

section 110(a) of the Act for the 

provision of pre-employment transition 

services, as described at § 361.48(a) of 

this part. 

(ii) The funds reserved in accordance 

with paragraph (3)(i) of this section— 

(A) Must only be used for preemployment transition services 

authorized in § 361.48(a); and: 

(B) Must not be used to pay for 

administrative costs associated with the 

provision of such services or any other 

vocational rehabilitation services. 

(b) Reallotment. (1) The Secretary 

determines not later than 45 days before 

the end of a fiscal year which States, if 

any, will not use their full allotment. 

(2) As soon as possible, but not later 

than the end of the fiscal year, the 

Secretary reallots these funds to other 

States that can use those additional 

funds during the period of performance 

of the award, provided the State can 

meet the matching requirement by 

obligating the non-Federal share of any 

reallotted funds in the fiscal year for 

which the funds were appropriated. 

(3) In the event more funds are 

requested by agencies than are available, 

the Secretary will determine the process 

for allocating funds available for 

reallotment. 

(4) Funds reallotted to another State 

are considered to be an increase in the 

recipient State’s allotment for the fiscal 

year for which the funds were 

appropriated. 

(Authority: Sections 12(c), 110 and 111 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c), 730, and 731) 

Subpart D—[Reserved] 

Subpart E—[Reserved] 

Subpart F—[Reserved] 

■ 2. Part 363 is revised to read as 

follows: 

PART 363—THE STATE SUPPORTED 

EMPLOYMENT SERVICES PROGRAM 

Subpart A—General 

Sec. 

363.1 What is the State Supported 

Employment Services Program? 

363.2 Who is eligible for an award? 

363.3 Who is eligible for services? 

363.4 What are the authorized activities 

under the State Supported Employment 

Services program? 

363.5 What regulations apply? 

363.6 What definitions apply? 

Subpart B—How Does a State Apply for a 

Grant? 

363.10 What documents must a State 

submit to receive a grant? 

363.11 What are the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan 

supplement requirements? 

Subpart C—How Are State Supported 

Employment Services Programs Financed? 

363.20 How does the Secretary allocate 

funds? 

363.21 How does the Secretary reallocate 

funds? 

363.22 How are funds reserved for youth 

with the most significant disabilities? 

363.23 What are the matching 

requirements? 

363.24 What is program income and how 

may it be used? 

363.25 What is the period of availability of 

funds? 

Subpart D—[Reserved] 

Subpart E—[Reserved] 

Subpart F—What Post-Award Conditions 

Must Be Met by a State? 

363.50 What collaborative agreements must 

the State develop? 

363.51 What are the allowable 

administrative costs? 

363.52 What are the information collection 

and reporting requirements? 

363.53 What requirements must a State 

meet before it provides for the transition 

of an individual to extended services? 

363.54 When will an individual be 

considered to have achieved an 

employment outcome in supported 

employment? 

363.55 What notice requirements apply to 

this program? 

Authority: Sections 602–608 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 795g–795m, unless otherwise noted. 

Subpart A—General 

§ 363.1 What is the State Supported 

Employment Services Program? 

(a) Under the State supported 

employment services program, the 

Secretary provides grants to assist States 

in developing and implementing 

collaborative programs with appropriate 

entities to provide programs of 

supported employment services for 

individuals with the most significant 

disabilities, including youth with the 

most significant disabilities, to enable 

them to achieve an employment 

outcome of supported employment in 

competitive integrated employment. 

Grants made under the State supported 

employment services program 

supplement a State’s vocational 

rehabilitation program grants under 34 

CFR part 361. 

(b) For purposes of this part, 

‘‘supported employment’’ means 

competitive integrated employment, 

including customized employment, or 

employment in an integrated work 

setting in which individuals with the 

most significant disabilities are working 


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on a short-term basis toward 

competitive integrated employment, 

that is individualized and customized 

consistent with the unique strengths, 

abilities, interests, and informed choice 

of the individuals with ongoing support 

services for individuals with the most 

significant disabilities— 

(1)(i) For whom competitive 

integrated employment has not 

historically occurred; or 

(ii) For whom competitive integrated 

employment has been interrupted or 

intermittent as a result of a significant 

disability; and 

(2) Who, because of the nature and 

severity of the disability, need intensive 

supported employment services, and 

extended services after the transition 

from support provided by the 

designated State unit in order to 

perform the work. 

(c) For purposes of this part, an 

individual with the most significant 

disabilities, whose supported 

employment in an integrated setting 

does not satisfy the criteria of 

competitive integrated employment, as 

defined at 34 CFR 361.5(c)(9), is 

considered to be working on a shortterm basis toward competitive 

integrated employment so long as the 

individual can reasonably anticipate 

achieving competitive integrated 

employment within six months of the 

individual entering supported 

employment. 

(Authority: Sections 7(38), 7(39), 12(c), and 

602 of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C., 705(38), 705(39), 709(c), 

and 795g) 

§ 363.2 Who is eligible for an award? 

Any State that submits the 

documentation required by § 363.10, as 

part of the vocational rehabilitation 

services portion of the Unified or 

Combined State Plan under 34 CFR part 

361, is eligible for an award under this 

part. 

(Authority: Section 606(a) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 795k(a)) 

§ 363.3 Who is eligible for services? 

A State may provide services under 

this part to any individual, including a 

youth with a disability, if— 

(a) The individual has been 

determined to be— 

(1) Eligible for vocational 

rehabilitation services in accordance 

with 34 CFR 361.42; and 

(2) An individual with the most 

significant disabilities; 

(b) For purposes of activities carried 

out under § 363.4(a)(2) of this part, the 

individual is a youth with a disability, 

as defined at 34 CFR 361.5(c)(59), who 

satisfies the requirements of this 

section; and 

(c) Supported employment has been 

identified as the appropriate 

employment outcome for the individual 

on the basis of a comprehensive 

assessment of rehabilitation needs, as 

defined at 34 CFR 361.5(c)(5), including 

an evaluation of rehabilitation, career, 

and job needs. 

(Authority: Section 605 of the Rehabilitation 

Act of 1973, as amended; 29 U.S.C. 795j) 

§ 363.4 What are the authorized activities 

under the State Supported Employment 

Services program? 

(a) The State may use funds allotted 

under this part to— 

(1) Provide supported employment 

services, as defined at 34 CFR 

361.5(c)(54); 

(2) Provide extended services, as 

defined at 34 CFR 361.5(c)(19), to youth 

with the most significant disabilities, in 

accordance with § 363.11(f), for a period 

of time not to exceed four years; and 

(3) With funds reserved, in 

accordance with § 363.22 for the 

provision of supported employment 

services to youth with the most 

significant disabilities, leverage other 

public and private funds to increase 

resources for extended services and 

expand supported employment 

opportunities. 

(b) Except as provided in paragraph 

(a)(2) of this section, a State may not use 

funds under this part to provide 

extended services to individuals with 

the most significant disabilities. 

(c) Nothing in this part will be 

construed to prohibit a State from 

providing— 

(1) Supported employment services in 

accordance with the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan 

submitted under 34 CFR part 361 by 

using funds made available through a 

State allotment under that part. 

(2) Discrete postemployment services 

in accordance with 34 CFR 361.48(b) by 

using funds made available under 34 

CFR part 361 to an individual who is 

eligible under this part. 

(d) A State must coordinate with the 

entities described in § 363.50(a) 

regarding the services provided to 

individuals with the most significant 

disabilities, including youth with the 

most significant disabilities, under this 

part and under 34 CFR part 361 to 

ensure that the services are 

complementary and not duplicative. 

(Authority: Sections 7(39), 12(c), 604, 

606(b)(6), and 608 of the Rehabilitation Act 

of 1973, as amended; 29 U.S.C. 705(39), 

709(c), 795i, 795k(b)(6), and 795m) 

§ 363.5 What regulations apply? 

The following regulations apply to the 

State supported employment services 

program: 

(a) The Education Department General 

Administrative Regulations (EDGAR) as 

follows: 

(1) 34 CFR part 76 (StateAdministered Programs). 

(2) 34 CFR part 77 (Definitions that 

Apply to Department Regulations). 

(3) 34 CFR part 79 (Intergovernmental 

Review of Department of Education 

Programs and Activities). 

(4) 34 CFR part 81 (General Education 

Provisions Act—Enforcement). 

(5) 34 CFR part 82 (New Restrictions 

on Lobbying). 

(b) The regulations in this part 363. 

(c) The following regulations in 34 

CFR part 361 (The State Vocational 

Rehabilitation Services Program): 

§§ 361.5, 361.31, 361.32, 361.34, 361.35, 

361.39, 361.40, 361.41, 361.42, 

361.47(a), 361.48, 361.49, and 361.53. 

(d) 2 CFR part 200 (Uniform 

Administrative Requirements, Cost 

Principles, and Audit Requirements for 

Federal Awards), as adopted in 2 CFR 

part 3474. 

(e) 2 CFR part 180 (OMB Guidelines 

to Agencies on Governmentwide 

Debarment and Suspension 

(Nonprocurement)), as adopted in 2 CFR 

part 3485. 

(Authority: Section 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c)) 

§ 363.6 What definitions apply? 

The following definitions apply to 

this part; 

(a) Definitions in 34 CFR part 361. 

(b) Definitions in 34 CFR part 77. 

(c) Definitions in 2 CFR part 200, 

subpart A. 

(Authority: Sections 7 and 12(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705 and 709(c)) 

Subpart B—How Does a State Apply 

for a Grant? 

§ 363.10 What documents must a State 

submit to receive a grant? 

(a) To be eligible to receive a grant 

under this part, a State must submit to 

the Secretary, as part of the vocational 

rehabilitation services portion of the 

Unified or Combined State Plan under 

34 CFR part 361, a State plan 

supplement that meets the requirements 

of § 363.11. 

(b) A State must submit revisions to 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan supplement submitted under 

this part as may be necessary. 


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(Authority: Section 606(a) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 795k(a)) 

§ 363.11 What are the vocational 

rehabilitation services portion of the Unified 

or Combined State Plan supplement 

requirements? 

Each State plan supplement, 

submitted in accordance with § 363.10, 

must— 

(a) Designate a designated State unit 

or, as applicable, units, as defined in 34 

CFR 361.5(c)(13), as the State agency or 

agencies to administer the Supported 

Employment program under this part; 

(b) Summarize the results of the needs 

assessment of individuals with most 

significant disabilities, including youth 

with the most significant disabilities, 

conducted under 34 CFR 361.29(a), with 

respect to the rehabilitation and career 

needs of individuals with most 

significant disabilities and their need for 

supported employment services. The 

results of the needs assessment must 

also address needs relating to 

coordination; 

(c) Describe the quality, scope, and 

extent of supported employment 

services to be provided to eligible 

individuals with the most significant 

disabilities under this part, including 

youth with the most significant 

disabilities; 

(d) Describe the State’s goals and 

plans with respect to the distribution of 

funds received under § 363.20; 

(e) Demonstrate evidence of the 

designated State unit’s efforts to identify 

and make arrangements, including 

entering into cooperative agreements, 

with— 

(1) Other State agencies and other 

appropriate entities to assist in the 

provision of supported employment 

services; and 

(2) Other public or non-profit agencies 

or organizations within the State, 

employers, natural supports, and other 

entities with respect to the provision of 

extended services; 

(f) Describe the activities to be 

conducted for youth with the most 

significant disabilities with the funds 

reserved in accordance with § 363.22, 

including– 

(1) The provision of extended services 

to youth with the most significant 

disabilities for a period not to exceed 

four years, in accordance with 

§ 363.4(a)(2); and 

(2) How the State will use supported 

employment funds reserved under 

§ 363.22 to leverage other public and 

private funds to increase resources for 

extended services and expand 

supported employment opportunities 

for youth with the most significant 

disabilities; 

(g) Assure that— 

(1) Funds made available under this 

part will only be used to provide 

authorized supported employment 

services to individuals who are eligible 

under this part to receive such services; 

(2) The comprehensive assessments of 

individuals with significant disabilities, 

including youth with the most 

significant disabilities, conducted under 

34 CFR part 361 will include 

consideration of supported employment 

as an appropriate employment outcome; 

(3) An individualized plan for 

employment, as described at 34 CFR 

361.45 and 361.46, will be developed 

and updated, using funds received 

under 34 CFR part 361, in order to— 

(i) Specify the supported employment 

services to be provided, including, as 

appropriate, transition services and preemployment transition services to be 

provided for youth with the most 

significant disabilities; 

(ii) Specify the expected extended 

services needed, including the extended 

services that may be provided under 

this part to youth with the most 

significant disabilities in accordance 

with an approved individualized plan 

for employment for a period not to 

exceed four years; and 

(iii) Identify, as appropriate, the 

source of extended services, which may 

include natural supports, programs, or 

other entities, or an indication that it is 

not possible to identify the source of 

extended services at the time the 

individualized plan for employment is 

developed; 

(4) The State will use funds provided 

under this part only to supplement, and 

not supplant, the funds received under 

34 CFR part 361, in providing supported 

employment services specified in the 

individualized plan for employment; 

(5) Services provided under an 

individualized plan for employment 

will be coordinated with services 

provided under other individualized 

plans established under other Federal or 

State programs; 

(6) To the extent job skills training is 

provided, the training will be provided 

onsite; 

(7) Supported employment services 

will include placement in an integrated 

setting based on the unique strengths, 

resources, interests, concerns, abilities, 

and capabilities of individuals with the 

most significant disabilities, including 

youth with the most significant 

disabilities; 

(8) The designated State agency or 

agencies, as described in paragraph (a) 

of this section, will expend no more 

than 2.5 percent of the State’s allotment 

under this part for administrative costs 

of carrying out this program; and 

(9) The designated State agency or 

agencies will provide, directly or 

indirectly through public or private 

entities, non-Federal contributions in an 

amount that is not less than 10 percent 

of the costs of carrying out supported 

employment services provided to youth 

with the most significant disabilities 

with the funds reserved for such 

purpose under § 363.22; and 

(h) Contain any other information and 

be submitted in the form and in 

accordance with the procedures that the 

Secretary may require. 

(Authority: Section 606 of the Rehabilitation 

Act of 1973, as amended; 29 U.S.C. 795k) 

Subpart C—How Are State Supported 

Employment Services Programs 

Financed? 

§ 363.20 How does the Secretary allocate 

funds? 

(a) States. The Secretary will allot the 

sums appropriated for each fiscal year to 

carry out the activities of this part 

among the States on the basis of relative 

population of each State, except that— 

(1) No State will receive less than 

$250,000, or 1/3 of 1 percent of the 

sums appropriated for the fiscal year for 

which the allotment is made, whichever 

amount is greater; and 

(2) If the sums appropriated to carry 

out this part for the fiscal year exceed 

the sums appropriated to carry out this 

part (as in effect on September 30, 1992) 

in fiscal year 1992 by $1,000,000 or 

more, no State will receive less than 

$300,000, or 1/3 of 1 percent of the 

sums appropriated for the fiscal year for 

which the allotment is made, whichever 

amount is greater. 

(b) Certain Territories. (1) For the 

purposes of this part, Guam, American 

Samoa, the United States Virgin Islands, 

and the Commonwealth of the Northern 

Mariana Islands are not considered to be 

States. 

(2) Each jurisdiction described in 

paragraph (b)(1) of this section will be 

allotted not less than 1/8 of 1 percent of 

the amounts appropriated for the fiscal 

year for which the allotment is made. 

(Authority: Section 603(a) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 795h(a)) 

§ 363.21 How does the Secretary 

reallocate funds? 

(a) Whenever the Secretary 

determines that any amount of an 

allotment to a State under § 363.20 for 

any fiscal year will not be expended by 

such State for carrying out the 

provisions of this part, the Secretary 

will make such amount available for 

carrying out the provisions of this part 

to one or more of the States that the 


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Secretary determines will be able to use 

additional amounts during such year for 

carrying out such provisions. 

(b) Any amount made available to a 

State for any fiscal year in accordance 

with paragraph (a) will be regarded as 

an increase in the State’s allotment 

under this part for such year. 

(Authority: Section 603(b) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 795h(b)) 

§ 363.22 How are funds reserved for youth 

with the most significant disabilities? 

A State that receives an allotment 

under this part must reserve and expend 

50 percent of such allotment for the 

provision of supported employment 

services, including extended services, to 

youth with the most significant 

disabilities in order to assist those youth 

in achieving an employment outcome in 

supported employment. 

(Authority: Sections 12(c) and 603(d) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c) and 795h(d)) 

§ 363.23 What are the matching 

requirements? 

(a) Non-Federal Share. (1) For funds 

allotted under § 363.20 and not reserved 

under § 363.22 for the provision of 

supported employment services to 

youth with the most significant 

disabilities, there is no non-Federal 

share requirement. 

(2)(i) For funds allotted under 

§ 363.20 and reserved under § 363.22 for 

the provision of supported employment 

services to youth with the most 

significant disabilities, a designated 

State agency must provide non-Federal 

expenditures in an amount that is not 

less than 10 percent of the total 

expenditures made with the reserved 

funds for the provision of supported 

employment services to youth with the 

most significant disabilities, including 

extended services. 

(ii) In the event that a designated State 

agency uses more than 50 percent of its 

allotment under this part to provide 

supported employment services to 

youth with the most significant 

disabilities as required by § 363.22, 

there is no requirement that a 

designated State agency provide nonFederal expenditures to match the 

excess Federal funds spent for this 

purpose. 

(2) Except as provided under 

paragraphs (b) and (c) of this section, 

non-Federal expenditures made under 

the vocational rehabilitation services 

portion of the Unified or Combined 

State Plan supplement to meet the nonFederal share requirement under this 

section must be consistent with the 

provision of 2 CFR 200.306. 

(b) Third-party in-kind contributions. 

Third-party in-kind contributions, as 

described in 2 CFR 200.306(b), may not 

be used to meet the non-Federal share 

under this section. 

(c)(1) Contributions by private 

entities. Expenditures made from 

contributions by private organizations, 

agencies, or individuals that are 

deposited into the sole account of the 

State agency, in accordance with State 

law may be used as part of the nonFederal share under this section, 

provided the expenditures under the 

vocational rehabilitation services 

portion of the Unified or Combined 

State Plan supplement, as described in 

§ 363.11, do not benefit in any way the 

donor, an individual to whom the donor 

is related by blood or marriage or with 

whom the donor shares a financial 

interest. 

(2) The Secretary does not consider a 

donor’s receipt from the State unit of a 

contract or subaward with funds 

allotted under this part to be a benefit 

for the purpose of this paragraph if the 

contract or subaward is awarded under 

the State’s regular competitive 

procedures. 

(Authority: Sections 12(c) and 606(b)(7)(I) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 709(c) and 795k(b)(7)(I)) 

§ 363.24 What is program income and how 

may it be used? 

(a) Definition. (1) Program income 

means gross income earned by the State 

that is directly generated by authorized 

activities supported under this part. 

(2) Program income received through 

the transfer of Social Security 

Administration payments from the State 

Vocational Rehabilitation Services 

program, in accordance with 34 CFR 

361.63(c)(2), will be treated as program 

income received under this part. 

(b) Use of program income. (1) 

Program income must be used for the 

provision of services authorized under 

§ 363.4. Program income earned or 

received during the fiscal year must be 

disbursed during the period of 

performance of the award, prior to 

requesting additional cash payments in 

accordance with 2 CFR 200.305(b)(5). 

(2) States are authorized to treat 

program income as— 

(i) A deduction from total allowable 

costs charged to a Federal grant, in 

accordance with 2 CFR 200.307(e)(1); or 

(ii) An addition to the grant funds to 

be used for additional allowable 

program expenditures, in accordance 

with 2 CFR 200.307(e)(2). 

(Authority: Sections 12(c) and 108 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c) and 728) 

§ 363.25 What is the period of availability 

of funds? 

(a) Except as provided in paragraph 

(b) of this section, any Federal award 

funds, including reallotted funds, that 

are appropriated for a fiscal year to carry 

out a program under this part that are 

not obligated by the State by the 

beginning of the succeeding fiscal year, 

and any program income received 

during a fiscal year that is not obligated 

or expended by the State prior to the 

beginning of the succeeding fiscal year 

in which the program income was 

received, remain available for obligation 

by the State during that succeeding 

fiscal year. 

(b) Federal funds appropriated for a 

fiscal year and reserved for the 

provision of supported employment 

services to youth with the most 

significant disabilities, in accordance 

with § 363.22 of this part, remain 

available for obligation in the 

succeeding fiscal year only to the extent 

that the State met the matching 

requirement, as described at § 363.23, 

for those Federal funds by obligating, in 

accordance with 34 CFR 76.707, the 

non-Federal share in the fiscal year for 

which the funds were appropriated. 

(Authority: Sections 12(c) and 19 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c) and 716) 

Subpart D—[Reserved] 

Subpart E—[Reserved] 

Subpart F—What Post-Award 

Conditions Must Be Met by a State? 

§ 363.50 What collaborative agreements 

must the State develop? 

(a) A designated State unit must enter 

into one or more written collaborative 

agreements, memoranda of 

understanding, or other appropriate 

mechanisms with other public agencies, 

private nonprofit organizations, and 

other available funding sources, 

including employers and other natural 

supports, as appropriate, to assist with 

the provision of supported employment 

services and extended services to 

individuals with the most significant 

disabilities in the State, including youth 

with the most significant disabilities, to 

enable them to achieve an employment 

outcome of supported employment in 

competitive integrated employment. 

(b) These agreements provide the 

mechanism for collaboration at the State 

level that is necessary to ensure the 

smooth transition from supported 

employment services to extended 

services, the transition of which is 

inherent to the definition of ‘‘supported 

employment’’ in § 363.1(b). To that end, 


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the agreement may contain information 

regarding the— 

(1) Supported employment services to 

be provided, for a period not to exceed 

24 months, by the designated State unit 

with funds received under this part. 

(2) Extended services to be provided 

to youth with the most significant 

disabilities, for a period not to exceed 

four years, by the designated State unit 

with the funds reserved under § 363.22 

of this part; 

(3) Extended services to be provided 

by other public agencies, private 

nonprofit organizations, or other 

sources, including employers and other 

natural supports, following the 

provision of authorized supported 

employment services, or extended 

services as appropriate for youth with 

the most significant disabilities, under 

this part; and 

(4) Collaborative efforts that will be 

undertaken by all relevant entities to 

increase opportunities for competitive 

integrated employment in the State for 

individuals with the most significant 

disabilities, especially youth with the 

most significant disabilities. 

(Authority: Sections 7(38), 7(39), 12(c), 602, 

and 606(b) of the Rehabilitation Act of 1973, 

as amended; 29 U.S.C. 705(38), 705(39), 

709(c), 795g, and 795k(b)) 

§ 363.51 What are the allowable 

administrative costs? 

(a) A State may use funds under this 

part to pay for expenditures incurred in 

the administration of activities carried 

out under this part, consistent with the 

definition of administrative costs in 34 

CFR 361.5(c)(2). 

(b) A designated State agency may not 

expend more than 2.5 percent of a 

State’s allotment under this part for 

administrative costs for carrying out the 

State supported employment program. 

(Authority: Sections 7(1), 12(c), and 603(c) of 

the Rehabilitation Act of 1973, as amended; 

29 U.S.C. 705(1), 709(c), and 795h(c)) 

§ 363.52 What are the information 

collection and reporting requirements? 

Each State agency designated in 

§ 363.11(a) of this part must collect and 

report separately the information 

required under 34 CFR 361.40 for— 

(a) Eligible individuals receiving 

supported employment services under 

this part; 

(b) Eligible individuals receiving 

supported employment services under 

34 CFR part 361; 

(c) Eligible youth receiving supported 

employment services and extended 

services under this part; and 

(d) Eligible youth receiving supported 

employment services under 34 CFR part 

361 and extended services. 

(Authority: Sections 13 and 607 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 710 and 795l) 

§ 363.53 What requirements must a State 

meet before it provides for the transition of 

an individual to extended services? 

A designated State unit must provide 

for the transition of an individual with 

the most significant disabilities, 

including youth with the most 

significant disabilities, to extended 

services no later than 24 months after 

the individual enters supported 

employment, unless a longer period is 

established in the individualized plan 

for employment. Before assisting the 

individual in transitioning from 

supported employment services to 

extended services, the designated State 

unit must ensure— 

(a) The supported employment is— 

(1) In competitive integrated 

employment, including customized 

employment; or 

(2) In an integrated work setting in 

which individuals are working on a 

short-term basis, as described in 

§ 363.1(c), toward competitive 

integrated employment; 

(3) Individualized and customized 

consistent with the strengths, abilities, 

interests, and informed choice of the 

individual; and 

(b) The source of extended services 

for the individual has been identified so 

there will be no interruption of services. 

(Authority: Sections 7(13), 7(38), 7(39), 12(c), 

602, and 606(b) of the Rehabilitation Act of 

1973, as amended; 29 U.S.C. 705(13), 

705(38), 705(39), 709(c), 795g, and 795k(b)) 

§ 363.54 When will an individual be 

considered to have achieved an 

employment outcome in supported 

employment? 

An individual with the most 

significant disabilities, including a 

youth with the most significant 

disabilities, who is receiving services 

under this part will be determined to 

have achieved an employment outcome 

of supported employment if the 

individual— 

(a) Maintains supported employment 

for at least 90 days after the individual 

has— 

(1) Completed all supported 

employment services provided under 

this part, as well as any other services 

listed on the individualized plan for 

employment and provided under 34 

CFR part 361; and 

(2) Begun extended services provided 

by either the designated State unit, in 

the case of a youth with a most 

significant disabilities receiving services 

with the funds reserved under § 363.22, 

or another provider for all other 

individuals with the most significant 

disabilities; 

(b) Satisfies requirements for case 

closure, as set forth in 34 CFR 361.56; 

and 

(c) Satisfies the requirement at 

§ 363.1(c) if the individual’s supported 

employment is in an integrated setting, 

but is not in competitive integrated 

employment, as defined in 34 CFR 

361.5(c)(9). 

(Authority: Sections 7(38), 7(39), 12(c), and 

602 of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 705(38), 705(39), 709(c), 

and 795g) 

§ 363.55 What notice requirements apply 

to this program? 

Each grantee must advise applicants 

for or recipients of services under this 

part, or as appropriate, the parents, 

family members, guardians, advocates, 

or authorized representatives of those 

individuals, including youth with the 

most significant disabilities, of the 

availability and purposes of the Client 

Assistance Program, including 

information on seeking assistance from 

that program. 

(Authority: Section 20 of the Rehabilitation 

Act of 1973, as amended; 29 U.S.C. 717) 

■ 3. Part 397 is added to read as follows: 

PART 397—LIMITATIONS ON USE OF 

SUBMINIMUM WAGE 

Subpart A—General Provisions 

Sec. 

397.1 Purpose. 

397.2 What is the Department of 

Education’s jurisdiction under this part? 

397.3 What rules of construction apply to 

this part? 

397.4 What regulations apply? 

397.5 What definitions apply? 

Subpart B—Coordinated Documentation 

Procedures Related To Youth With 

Disabilities 

397.10 What documentation process must 

the designated State unit develop? 

Subpart C—Designated State Unit 

Responsibilities Prior To Youth With 

Disabilities Starting Subminimum Wage 

Employment 

397.20 What are the responsibilities of a 

designated State unit to youth with 

disabilities who are known to be 

considering subminimum wage 

employment? 

Subpart D—Local Educational Agency 

Responsibilities Prior To Youth With 

Disabilities Starting Subminimum Wage 

Employment 

397.30 What are the responsibilities of a 

local educational agency to youth with 

disabilities who are known to be 

considering subminimum wage 

employment? 


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397.31 Are there any contracting 

limitations on educational agencies 

under this part? 

Subpart E—Designated State Unit 

Responsibilities To Individuals With 

Disabilities During Subminimum Wage 

Employment 

397.40 What are the responsibilities of a 

designated State unit for individuals 

with disabilities, regardless of age, who 

are employed at subminimum wage? 

Subpart F—Review Of Documentation 

Process 

397.50 What is the role of the designated 

State unit in the review of 

documentation process under this part? 

Authority: Section 511 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 794g, unless otherwise noted. 

Subpart A—General Provisions 

§ 397.1 Purpose. 

(a) The purpose of this part is to set 

forth requirements the designated State 

units and State and local educational 

agencies must satisfy to ensure that 

individuals with disabilities, especially 

youth with disabilities, have a 

meaningful opportunity to prepare for, 

obtain, maintain, advance in, or regain 

competitive integrated employment, 

including supported or customized 

employment. 

(b) This part requires— 

(1) A designated State unit to provide 

youth with disabilities documentation 

demonstrating that they have completed 

certain requirements, as described in 

this part, prior to starting subminimum 

wage employment with entities holding 

special wage certificates under section 

14(c) of the Fair Labor Standards Act of 

1938 (29 U.S.C. 214(c)), as defined in 

397.5(d); 

(2) A designated State unit to provide, 

at certain prescribed intervals, career 

counseling and information and referral 

services, designed to promote 

opportunities for competitive integrated 

employment, to individuals with 

disabilities, regardless of age, who are 

known to be employed at a 

subminimum wage level for the 

duration of such employment; and 

(3) A designated State unit, in 

consultation with the State educational 

agency, to develop a, or utilize an 

existing, process to document 

completion of required activities under 

this part by a youth with a disability. 

(c) The provisions in this part 

authorize a designated State unit, or a 

representative of a designated State unit, 

to engage in the review of individual 

documentation required to be 

maintained by these entities under this 

part. 

(d) The provisions in this part work 

in concert with requirements in 34 CFR 

part 300, 361, and 363, and do not alter 

any requirements under those parts. 

(Authority: Sections 12(c) and 511 of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c) and 794g) 

§ 397.2 What is the Department of 

Education’s jurisdiction under this part? 

(a) The Department of Education has 

jurisdiction under this part to 

implement guidelines for— 

(1) Documentation requirements 

imposed on designated State units and 

local educational agencies; 

(2) Requirements related to the 

services that designated State units must 

provide to individuals regardless of age 

who are employed at the subminimum 

wage level; and 

(3) Requirements under § 397.31 of 

this part. 

(b) Nothing in this part will be 

construed to grant to the Department of 

Education, or its grantees, jurisdiction 

over requirements set forth in the Fair 

Labor Standards Act, including those 

imposed on entities holding special 

wage certificates under section 14(c) of 

that Act, which is administered by the 

Department of Labor. 

(Authority: Sections 12(c), 511(b)(3), and 

511(c) and (d) of the Rehabilitation Act of 

1973, as amended; 29 U.S.C. 709(c), 

794g(b)(3), 794g(c), and 794g(d)) 

§ 397.3 What rules of construction apply to 

this part? 

Nothing in this part will be construed 

to— 

(a) Change the purpose of the 

Rehabilitation Act, which is to empower 

individuals with disabilities to 

maximize opportunities for achieving 

competitive integrated employment; 

(b) Promote subminimum wage 

employment as a vocational 

rehabilitation strategy or employment 

outcome, as defined in 34 CFR 

361.5(c)(15); and 

(c) Affect the provisions of the Fair 

Labor Standards Act, as amended before 

or after July 22, 2014. 

(Authority: Sections 12(c) and 511(b) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c) and 794g(b)) 

§ 397.4 What regulations apply? 

(a) The regulations in 34 CFR part 300 

governing the definition of transition 

services, and the Individualized 

Education Program requirements related 

to the development of postsecondary 

goals and the transition services needed 

to assist the eligible child in reaching 

those goals (§§ 300.320(b), 300.321(b), 

300.324(c), and 300.43). 

(b) The regulations at 34 CFR part 361 

governing the vocational rehabilitation 

program, especially those regarding 

eligibility determinations § 361.42; 

individualized plans for employment 

§ 361.45 and § 361.46; provision of 

vocational rehabilitation services, 

including pre-employment transition 

services, transition services, and 

supported employment services 

§ 361.48; ineligibility determinations 

§ 361.43; and case closures § 361.56. 

(c) The regulations at 29 CFR part 525 

governing the employment of 

individuals with disabilities at 

subminimum wage rates pursuant to a 

certificate issued by the Secretary of the 

Department of Labor. 

(d) The regulations in this part 387. 

(Authority: Sections 12(c), 102(a) and (b), 

103(a), and 113 of the Rehabilitation Act of 

1973, as amended; 29 U.S.C. 709(c), 722(a) 

and (b), 723(a), and 733; sections 601(34) and 

614(d)(1)(A)(i)(VIII) of the Individuals with 

Disabilities Education Act (20 U.S.C. 

1401(34) and 1414(d)); and section 14(c) of 

the Fair Labor Standards Act (29 U.S.C. 

214(c)) 

§ 397.5 What definitions apply? 

(a) The following terms have the 

meanings given to them in 34 CFR 

§ 361.5(c): 

(1) Act; 

(2) Competitive integrated 

employment; 

(3) Customized employment; 

(4) Designated State unit; 

(5) Extended services; 

(6) Individual with a disability; 

(7) Individual with a most significant 

disability; 

(8) Individual’s representative; 

(9) Individualized plan for 

employment; 

(10) Pre-employment transition 

services; 

(11) Student with a disability; 

(12) Supported employment; 

(13) Vocational rehabilitation 

services; and 

(14) Youth with a disability. 

(b) The following terms have the 

meanings given to them in 34 CFR part 

300: 

(1) Local educational agency 

(§ 300.28); 

(2) State educational agency 

(§ 300.41); and 

(3) Transition services (§ 300.43). 

(c) The following terms have the 

meaning given to them in 29 CFR 525.3 

and section 6(a)(1) of the Fair Labor 

Standards Act (29 U.S.C. 206(a)(1)): 

(1) Federal minimum wage has the 

meaning given to that term in section 

6(a)(1) of the Fair Labor Standards Act 

(29 U.S.C. 206(a)(1)); and 

(2) Special wage certificate means a 

certificate issued to an employer under 

section 14(c) of the Fair Labor Standards 


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Act (29 U.S.C. 214(c)) and 29 CFR part 

525 that authorizes payment of 

subminimum wages, wages less than the 

statutory minimum wage, to workers 

with disabilities for the work being 

performed. 

(d) For purposes of this part, entity 

means an employer, or a contractor or 

subcontractor of that employer, that 

holds a special wage certificate 

described in section 14(c) of the Fair 

Labor Standards Act (29 U.S.C. 214(c)). 

(Authority: Sections 7, 12(c), and 511(a) and 

(f) of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 705, 709(c), and 794g(a) 

and (f); sections 601 and 614(d) of the 

Individuals with Disabilities Education Act, 

20 U.S.C. 1401 and 1414(d); section 901 of 

the Elementary and Secondary Education Act 

of 1965, 20 U.S.C. 7801; and sections 6(a)(1) 

and 14(c) of the Fair Labor Standards Act, 29 

U.S.C. 206(a)(1) and 29 U.S.C. 214(c)) 

Subpart B—Coordinated 

Documentation Procedures Related to 

Youth With Disabilities 

§ 397.10 What documentation process 

must the designated State unit develop? 

(a) The designated State unit, in 

consultation with the State educational 

agency, must develop a new process, or 

utilize an existing process, to document 

the completion of the actions described 

in § 397.20 and § 397.30 by a youth with 

a disability. 

(b) The documentation process must 

ensure that— 

(1) A designated State unit provides a 

youth with a disability documentation 

of completion of appropriate preemployment transition services, in 

accordance with § 361.48(a) and as 

required by § 397.20(a)(1); 

(2) In the case of a student with a 

disability, for actions described in 

§ 397.30— 

(i) The designated State unit will 

receive from the appropriate school 

official, responsible for the provision of 

transition services, documentation of 

completion of appropriate transition 

services under the Individuals with 

Disabilities Education Act, including 

those provided under section 

614(d)(1)(A)(i)(VIII) (20 U.S.C. 

1414(d)(1)(A)(i)(VIII)); 

(ii) The designated State unit must 

provide documentation of completion of 

the transition services, as documented 

and provided by the appropriate school 

official in accordance with paragraph 

(b)(2) of this section, to the youth with 

a disability. 

(c) The designated State unit must 

provide— 

(1) Documentation required by this 

part in a form and manner consistent 

with this part and in an accessible 

format for the youth; and 

(2) Documentation required by this 

part to a youth as soon as possible upon 

the completion of each of the required 

actions, but no later than 90 days after 

completion of each of the required 

actions in § 397.20 and § 397.30. 

(Authority: Sections 12(c) and 511(d) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c) and 794g(d)) 

Subpart C—Designated State Unit 

Responsibilities Prior To Youth With 

Disabilities Starting Subminimum 

Wage Employment 

§ 397.20 What are the responsibilities of a 

designated State unit to youth with 

disabilities who are known to be 

considering subminimum wage 

employment? 

(a) A designated State unit must 

provide youth with disabilities 

documentation upon the completion of 

the following actions: 

(1) Pre-employment transition 

services that are available to the 

individual under § 34 CFR 361.48; and 

(2) Application for vocational 

rehabilitation services, in accordance 

with 34 CFR § 361.41(b), with the result 

that the individual was determined— 

(i) Ineligible for vocational 

rehabilitation services, in accordance 

with 34 CFR § 361.43; or 

(ii) Eligible for vocational 

rehabilitation services, in accordance 

with 34 CFR § 361.42; and 

(A) The youth with a disability had an 

approved individualized plan for 

employment, in accordance with 34 

CFR 361.46; 

(B) The youth with a disability was 

unable to achieve the employment 

outcome specified in the individualized 

plan for employment, as described in 34 

CFR 361.5(c)(15) and 361.46, despite 

working toward the employment 

outcome with reasonable 

accommodations and appropriate 

supports and services, including 

supported employment services and 

customized employment services, for a 

reasonable period of time; and 

(C) The youth with a disability’s case 

record, which meets all of the 

requirements of 34 CFR 361.47, is 

closed. 

(3)(i) Regardless of the determination 

made under paragraph (a)(2) of this 

section, the youth with a disability has 

received career counseling, and 

information and referrals to Federal and 

State programs and other resources in 

the individual’s geographic area that 

offer employment-related services and 

supports designed to enable the 

individual to explore, discover, 

experience, and attain competitive 

integrated employment. 

(ii) The career counseling and 

information and referral services 

provided in accordance with paragraph 

(a)(3)(i) of this section must— 

(A) Be provided in a manner that 

facilitates informed choice and 

decision-making by the youth, or the 

youth’s representative as appropriate; 

and 

(B) Not be for subminimum wage 

employment by an entity defined in 

§ 397.5(d), and such employmentrelated services are not compensated at 

a subminimum wage and do not directly 

result in employment compensated at a 

subminimum wage provided by such an 

entity. 

(b) The following special 

requirements apply— 

(1) For purposes of this part, all 

documentation provided by a 

designated State unit must satisfy the 

requirements for such documentation 

under 34 CFR part 361. 

(2) The individualized plan for 

employment, required in paragraph 

(a)(3)(i) of this section, must include a 

specific employment goal consistent 

with competitive integrated 

employment, including supported or 

customized employment. 

(3)(i) For purposes of paragraph 

(a)(2)(ii)(B) of this section, a 

determination as to what constitutes 

‘‘reasonable period of time’’ must be 

consistent with the disability-related 

and vocational needs of the individual, 

as well as the anticipated length of time 

required to complete the services 

identified in the individualized plan for 

employment. 

(ii) For an individual whose specified 

employment goal is in supported 

employment, such reasonable period of 

time is up to 24 months, unless under 

special circumstances the individual 

and the rehabilitation counselor jointly 

agree to extend the time to achieve the 

employment outcome identified in the 

individualized plan for employment. 

(Authority: Sections 7(5), 7(39), 12(c), 102(a) 

and (b), 103(a), 113, and 511(a) and (d) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 705(5), 705(39), 709(c), 722(a) and (b), 

723(a), 733, and 794g(a) and (d)) 

Subpart D—Local Educational Agency 

Responsibilities Prior To Youth With 

Disabilities Starting Subminimum 

Wage Employment 

§ 397.30 What are the responsibilities of a 

local educational agency to youth with 

disabilities who are known to be seeking 

subminimum wage employment? 

Of the documentation to demonstrate 

a youth with a disability’s completion of 

the actions described in § 397.20(a) of 

this part, a local educational agency, as 


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21146 Federal Register / Vol. 80, No. 73 / Thursday, April 16, 2015 / Proposed Rules 

defined in § 397.5(b)(1), can provide the 

youth with documentation that the 

youth has received transition services 

under the Individuals with Disabilities 

Education Act (20 U.S.C. 1400 et seq.), 

such as transition services available to 

the individual under section 614(d) of 

that act (20 U.S.C. 1414(d)). 

(Authority: Sections 511(a)(2)(A) and 511(d) 

of the Rehabilitation Act of 1973, as 

amended; 29 U.S.C. 794g(a)(2)(A) and (d)) 

§ 397.31 Are there any contracting 

limitations on educational agencies under 

this part? 

Neither a local educational agency, as 

defined in § 397.5(b)(1), nor a State 

educational agency, as defined in 

§ 397.5(b)(2), may enter into a contract 

or other arrangement with an entity, as 

defined in § 397.5(d), for the purpose of 

operating a program under which a 

youth with a disability is engaged in 

subminimum wage employment. 

(Authority: Section 511(b)(2) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 794g(b)(2)) 

Subpart E—Designated State Unit 

Responsibilities to Individuals With 

Disabilities During Subminimum Wage 

Employment 

§ 397.40 What are the responsibilities of a 

designated State unit for individuals with 

disabilities, regardless of age, who are 

employed at a subminimum wage? 

(a) Counseling and information 

services. (1) A designated State unit 

must provide career counseling, and 

information and referral services, as 

described in § 397.20(a)(4) to 

individuals with disabilities, regardless 

of age, or the individual’s representative 

as appropriate, who are known by the 

designated State unit to be employed by 

an entity, as defined in § 397.5(d), at a 

subminimum wage level. 

(2) A designated State unit may know 

the identification of individuals with 

disabilities described in this paragraph 

through the vocational rehabilitation 

process or by referral from the client 

assistance program, another agency, or 

an entity, as defined in § 397.5(d). 

(3) The career counseling and 

information and referral services must 

be provided in a manner that– 

(i) Is understandable to the individual 

with a disability; and 

(ii) Facilitates independent decisionmaking and informed choice as the 

individual makes decisions regarding 

opportunities for competitive integrated 

employment and career advancement, 

particularly with respect to supported 

employment, including customized 

employment. 

(b) Other services. (1) Upon a referral 

by an entity, as defined in 397.5(d), that 

has fewer than 15 employees, of an 

individual with a disability who is 

employed at a subminimum wage by 

that entity, a designated State unit must 

also inform the individual of selfadvocacy, self-determination, and peer 

mentoring training opportunities 

available in the community. 

(2) The services described in 

paragraph (c)(1) of this section must be 

provided by an entity that does not have 

a financial interest in the individual’s 

employment outcome. 

(c) Required intervals. The services 

required by this section must be carried 

out once every six months for the first 

year of the individual’s subminimum 

wage employment and annually 

thereafter for the duration of such 

employment. 

(d) Documentation. The designated 

State unit must provide timely 

documentation to the individual upon 

completion of the activities required 

under this section. 

(e) Provision of services. Nothing in 

this section will be construed as 

requiring a designated State unit to 

provide the services required by this 

section directly. A designated State unit 

may contract with other entities, i.e., 

other public and private service 

providers, as appropriate, to fulfill the 

requirements of this section. 

(Authority: Sections 12(c) and 511(c) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 709(c) and 794g(c)) 

Subpart F–Review of Documentation 

Process 

§ 397.50 What is the role of the designated 

State unit in the review of documentation 

process under this part? 

The designated State unit, or a 

contractor working directly for the 

designated State unit is authorized to 

engage in the review of individual 

documentation required under this part 

that is maintained by entities, as defined 

at 397.5(d), under this part. 

(Authority: Section 511(e) of the 

Rehabilitation Act of 1973, as amended; 29 

U.S.C. 794g(e)) 

[FR Doc. 2015–05538 Filed 4–2–15; 4:15 pm] 

BILLING CODE 4000–01–P 


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