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###### Department of Education

# AGENCY:

Office of Special Education and Rehabilitative Services, Department of Education. 

# ACTION:

Notice of proposed priority. 

# SUMMARY:

The Assistant Secretary for Special Education and Rehabilitative Services (OSERS) proposes a priority under section 4(b)(2)(D) of the Assistive Technology Act of 1998, as amended, administered by the Rehabilitation Services Administration (RSA). The Assistant Secretary may use the priority for competitions in fiscal year (FY) 2007 and later years. We take this action to focus Federal financial assistance on an identified area of national need. We intend the priority to support activities that increase the availability of, funding for, access to, and provision of assistive technology (AT) devices and AT services. 

# DATES:

We must receive your comments on or before June 13, 2007. 

# ADDRESSES:

                        Address all comments about the proposed priority to Robert Groenendaal, U.S. Department of Education, 400 Maryland Avenue, SW., room 5019, Potomac Center Plaza, Washington, DC 20202-2550. Telephone: (202) 245-7393 or by e-mail:                         *robert.groenendaal@ed.gov.*

You must include the term “AFP Priority” in the subject line of your electronic message. 

# FOR FURTHER INFORMATION CONTACT:

                        Robert Groenendaal. Telephone: (202)                               ( print page 27107)                            245-7393, or via Internet:                         *robert.groenendaal@ed.gov.*

If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service (FRS) at 1-800-877-8339. 

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

# SUPPLEMENTARY INFORMATION:

## Invitation to Comment 

We invite you to submit comments regarding the proposed priority. 

We invite you to assist us in complying with the specific requirements of Executive Order 12866 and its overall requirement of reducing regulatory burden that might result from the proposed priority. Please let us know of any further opportunities we should take to reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program. 

During and after the comment period, you may inspect all public comments about the proposed priority in room 5019, Potomac Center Plaza, 550 12th Street, SW., Washington, DC, between the hours of 8:30 a.m. and 4 p.m., Eastern Time, Monday through Friday of each week except Federal holidays. 

## Assistance to Individuals With Disabilities in Reviewing the Rulemaking Record 

                    On request, we will supply an appropriate aid, such as a reader or print magnifier, to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for the proposed priority. If you want to schedule an appointment for this type of aid, please contact the person listed under                     **FOR FURTHER INFORMATION CONTACT**                    .                 

## Background 

Most individuals with disabilities do not have the private financial resources to purchase the AT they need. Currently, programs such as Medicaid, Medicare, and vocational rehabilitation cannot meet the growing demand for AT. Through services such as financial loans, alternative financing programs (AFPs) offer individuals with disabilities affordable options that can significantly enhance their access to AT in a way that underscores independence and inclusion. 

The FY 2007 full-year Continuing Resolution provides funding for the Department to support the establishment, expansion, and administration of AFPs under section 4(b)(2)(D) of the Assistive Technology Act of 1998, as amended (AT Act). States and outlying areas operate AFPs in accordance with the requirements of title III of the Assistive Technology Act of 1998 as in effect on the day before the date of enactment of the 2004 amendments (referred to throughout this document as the “old AT Act”). The purpose of title III of the old AT Act is to maximize independence and participation in society by individuals with disabilities through AFPs. These programs offer alternatives to the traditional payment options of public assistance and out-of-pocket financing so that individuals with disabilities and their family members, guardians, advocates, and authorized representatives can purchase AT devices and services. Grantees operating AFPs must match their Federal grant amount; as provided for by the FY 2007 Continuing Resolution, which incorporates the requirements in the FY 2006 appropriations act relating to this program, the Federal share may not be more than 75 percent of the cost of AFPs featuring one or more alternative financing mechanisms for the purchase of AT devices and AT services. 

                    In order to maintain consistency among AFPs funded under this program, we are proposing substantially the same priority that was published for this program in the                     **Federal Register**                     on June 30, 2005 (70 FR 37794).                 

                    We will announce the final priority in a notice in the                     **Federal Register**                    . We will determine the final priority after considering responses to this notice and other information available to the Department. This notice does not preclude us from proposing or using other priorities, subject to meeting applicable rulemaking requirements.                 

# Note:

                        This notice does not solicit applications. In any year in which we choose to use the priority, we invite applications through a notice in the                         **Federal Register**                        . When inviting applications we designate the priority as absolute, competitive preference, or invitational. The effect of each type of priority follows:                     

*Absolute priority:*                         Under an absolute priority we consider only applications that meet the priority (34 CFR 75.105(c)(3)).                     

*Competitive preference priority:*                         Under a competitive preference priority we give competitive preference to an application by either (1) awarding additional points, depending on how well or the extent to which the application meets the competitive priority (34 CFR 75.105(c)(2)(i)); or (2) selecting an application that meets the competitive priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)).                     

*Invitational priority:*                         Under an invitational priority we are particularly interested in applications that meet the invitational priority. However, we do not give an application that meets the invitational priority a competitive or absolute preference over other applications (34 CFR 75.105(c)(1)).                    

## Priority 

The Assistant Secretary proposes this priority to support AFPs that provide individuals with disabilities the funding for and provision of AT devices and services. 

In order to meet this priority, the State must establish or expand one or more of the following types of AFPs (section 301(b) of the old AT Act): 

(1) A low-interest loan fund. 

(2) An interest buy-down program. 

(3) A revolving loan fund. 

(4) A loan guarantee or insurance program. 

(5) A program operated by a partnership among private entities for the purchase, lease, or other acquisition of AT devices or services. 

(6) Another mechanism that meets the requirements of title III of the old AT Act and is approved by the Secretary. 

AFPs are designed to allow individuals with disabilities and their family members, guardians, advocates, and authorized representatives to purchase AT devices or services. If family members, guardians, advocates, and authorized representatives (including employers who have been designated by an individual with a disability as an authorized representative) receive AFP support to purchase AT devices or services, the purchase must be on behalf of an individual with a disability, i.e., the AT device or service that is purchased must be solely for the benefit of that individual. 

To be considered for funding, an applicant must identify the type or types of AFP to be supported by the grant and submit all of the following assurances in their entirety: 

                    (1)                     *Nature of the Match:*                     An assurance that the State will provide the non-Federal share (not less than 25 percent) of the cost of the AFP in cash, from State, local, or private sources (sections 301(d) and 303(b)(1) of the old AT Act, as provided for by the 2007 Continuing Resolution, which incorporates requirements in the FY 2006 appropriations act relating to this program). An applicant must identify the amount of Federal funds the State is requesting, the amount of cash that the State will provide as a match, and the source of the cash.                 

                    (2)                     *Permanent Separate Account:*                     An assurance from the State that—                           ( print page 27108)    

(a) All funds that support the AFP, including funds repaid during the life of the program, will be placed in a permanent separate account and identified and accounted for separately from any other fund; 

(b) If the organization administering the program invests funds within this account, the organization will invest the funds in low-risk securities in which a regulated insurance company may invest under the law of the State; and 

(c) The organization will administer the funds with the same judgment and care that a person of prudence, discretion, and intelligence would exercise in the management of the financial affairs of that person (section 303(b)(5) of the old AT Act). 

During the first 12-month budget period, a grantee must deposit its matching funds and its Federal award funds in the permanent and separate account. 

                    (3)                     *Permanence of the Program:*                     An assurance that the AFP will continue on a permanent basis (section 303(b)(2) of the old AT Act).                 

A State's obligation to implement the AFP consistent with all of the requirements, including reporting requirements, continues until there are no longer any funds available to operate the AFP and all outstanding loans have been repaid. If a State decides to terminate its AFP while there are still funds available to operate the program, the State must return the Federal share of the funds remaining in the permanent separate account to RSA (e.g., 75 percent if the original State to Federal match was 1 to 3) except for funds being used for grant purposes, such as loan guarantees for outstanding loans. However, before closing out its grant, the State also must return the Federal share of any principal and interest remitted to it on outstanding loans and any other funds remaining in the permanent separate account, such as funds being used as loan guarantees for those loans. 

                    (4)                     *Consumer Choice and Control:*                     An assurance that, and information describing the manner in which, the AFP will expand and emphasize consumer choice and control (section 303(b)(3) of the old AT Act).                 

                    (5)                     *Supplement Not Supplant:*                     An assurance that the funds made available through the grant to support the AFP will be used to supplement and not supplant other Federal, State, and local public funds expended to provide alternative financing mechanisms (section 303(b)(4) of the old AT Act).                 

                    (6)                     *Contract With a Community-Based Organization:*                     An assurance that the State will enter into a contract with a community-based organization (CBO) (including a group of CBOs) that has individuals with disabilities involved in organizational decision-making at all organizational levels, to administer the AFP. The contract must—                 

(a) Include a provision requiring that the program funds, including the Federal and non-Federal shares of the cost of the program, be administered in a manner consistent with the provisions of title III of the old AT Act; 

(b) Include any provision the Secretary requires concerning oversight and evaluation necessary to protect Federal financial interests; and 

(c) Require the CBO to enter into a contract, to expand opportunities under title III of the old AT Act and facilitate administration of the AFP, with commercial lending institutions or organizations or State financing agencies (section 304 of the old AT Act). 

During the first 12-month budget period, a grantee will enter into the contract with a CBO and ensure that the CBO has entered into the contract with the commercial lending institutions or organizations or State financing agencies. 

                    (7)                     *Use and Control of Funds:*                     An assurance that—                 

                    (a) Funds comprised of the principal and interest from the account described in paragraph (2)                     *Permanent Separate Account*                     of this priority will be available to support the AFP; and                 

(b) Any interest or investment income that accrues on or derives from those funds after the funds have been placed under the control of the organization administering the AFP, but before the funds are distributed for purposes of supporting the program, will be the property of the organization administering the program (section 303(b)(6) of the old AT Act). 

This assurance regarding the use and control of funds applies to all funds derived from the AFP including the original Federal award, the State matching funds, AFP funds generated by either interest bearing accounts or investments, and all principal and interest paid by borrowers of the AFP who are extended loans from the permanent separate account. 

                    (8)                     *Indirect Costs:*                     An assurance that the percentage of the funds made available through the grant that is used for indirect costs will not exceed 10 percent (section 303(b)(7) of the old AT Act).                 

For each 12-month budget period, grantees must recalculate their allowable indirect cost rate, which may not exceed 10 percent of the amount of funds in the permanent and separate account and any outstanding loans from that account. 

                    (9)                     *Administrative Policies and Procedures:*                     An assurance that the State and any CBO that enters into a contract with the State under title III of the old AT Act will submit to the Secretary the following policies and procedures for administration of the AFP:                 

(a) A procedure to review and process in a timely manner requests for financial assistance for immediate and potential technology needs, including consideration of methods to reduce paperwork and duplication of effort, particularly relating to need, eligibility, and determination of the specific AT device or service to be financed through the program. 

(b) A policy and procedure to ensure that access to the AFP must be given to consumers regardless of type of disability, age, income level, location of residence in the State, or type of AT device or service for which financing is requested through the program. 

(c) A procedure to ensure consumer-controlled oversight of the program (section 305 of the old AT Act). 

Grantees must submit the administrative policies and procedures required in this assurance within 12 months of the start of the grant. 

                    (10)                     *Data Collection:*                     An assurance that the State will collect and report data requested by the Secretary in the format, with the frequency, and using the method established by the Secretary until there are no longer any funds available to operate the AFP and all outstanding loans have been repaid.                 

                    (11)                     *Collaboration With the Statewide AT Program:*                     An assurance that the AFP will enter into a written agreement with that State's statewide AT program supported under section 4 of the AT Act to coordinate activities appropriately.                 

## Executive Order 12866

This notice of proposed priority has been reviewed in accordance with Executive Order 12866. Under the terms of the order, we have assessed the potential costs and benefits of this regulatory action. 

The potential costs associated with the notice of proposed priority are those resulting from statutory requirements and those we have determined as necessary for administering this program effectively and efficiently. 

In assessing the potential costs and benefits—both quantitative and qualitative—of this notice of proposed priority we have determined that the benefits of the proposed priority justify the costs. 

                    We have also determined that this regulatory action does not unduly                           ( print page 27109)                        interfere with State, local, and tribal governments in the exercise of their governmental functions.                 

## Intergovernmental Review 

This program is 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 this program. 

## Applicability of Education Department General Administrative Regulations (EDGAR) to AFP 

In general, EDGAR would apply to this grant except to the extent it is inconsistent with the purpose of and intent of section 4(b)(2)(D) of the AT Act. Specifically, grantees would be exempt from section 80.21(i) regarding interest earned on advances and the addition method in section 80.25(g)(1). Also, sections 75.560-75.564 would not apply to the extent that these sections of EDGAR are inconsistent with the AFP requirement that indirect costs cannot exceed 10 percent. 

## Electronic Access to This Document 

                    You may view this document, as well as all other Department of Education documents published in the                     **Federal Register**                    , in text or Adobe Portable Document Format (PDF) on the Internet at the following site:                     *http://www.ed.gov/​news/​fedregister*.                 

To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at (202) 512-1530. 

# Note:

                        The official version of this document is the document published in the                         **Federal Register**                        . Free Internet access to the official edition of the                         **Federal Register**                         and the Code of Federal Regulations is available on GPO Access at:                         *http://www.gpoaccess.gov/​nara/​index.html*.                    

(Catalog of Federal Domestic Assistance Number 84.224C Assistive Technology Alternative Financing Programs)

Program Authority:29 U.S.C. 3001*et seq.*

Dated: May 9, 2007. 

Andrew J. Pepin, 

Executive Administrator, Office of Special Education and Rehabilitative Services. 

[FR Doc. E7-9222 Filed 5-11-07; 8:45 am] 

BILLING CODE 4000-01-P