6308 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

DEPARTMENT OF EDUCATION

34 CFR Parts 361, 363, 376, and 380

RIN 1820–AB12

The State Vocational Rehabilitation

Services Program

AGENCY: Department of Education.

ACTION: Final regulations.

SUMMARY: The Secretary amends the

regulations governing The State

Vocational Rehabilitation Services

Program. These amendments are needed

to implement changes to the

Rehabilitation Act of 1973 (Act) made

by the Rehabilitation Act Amendments

of 1992, enacted on October 29, 1992, as

amended by the 1993 technical

amendments (hereinafter collectively

referred to as the 1992 Amendments).

EFFECTIVE DATE: These regulations take

effect March 13, 1997.

FOR FURTHER INFORMATION CONTACT:

Beverlee Stafford, U.S. Department of

Education, 600 Independence Avenue,

SW., Room 3014, Mary E. Switzer

Building, Washington, DC. 20202–2531.

Telephone (202) 205–8831. Individuals

who use a telecommunications device

for the deaf (TDD) may call (202) 205–

5538.

SUPPLEMENTARY INFORMATION: The State

Vocational Rehabilitation Services

Program (program) is authorized by

Title I of the Act (29 U.S.C. 701–744).

This program provides support to each

State to assist it in operating a

comprehensive, coordinated, effective,

efficient, and accountable State program

to assess, plan, develop, and provide

vocational rehabilitation (VR) services

to individuals with disabilities so that

those individuals may prepare for and

engage in gainful employment,

consistent with their strengths,

resources, priorities, concerns, abilities,

capabilities, and informed choice.

On December 15, 1995, the Secretary

published a notice of proposed

rulemaking (NPRM) for this program in

the Federal Register (60 FR 64476).

Additionally, pursuant to Executive

Order 12866, which encourages Federal

agencies to facilitate meaningful

participation in the regulatory

development process, the Rehabilitation

Services Administration (RSA) made

available draft proposed regulations

(draft regulations) in accessible formats,

including an electronic format, to a

broad spectrum of parties for informal

review and comment prior to publishing

the December 15, 1995 NPRM. RSA also

gathered public input on the draft

regulations through public meetings and

focus groups and analyzed over 600

letters of comments on the draft

regulations.

These final regulations implement

changes made to the program by the

1992 Amendments with the exception

of the evaluation standards and

performance indicator requirements in

section 106 of the Act, which are being

implemented in a separate rulemaking

document, and incorporate some of the

burden-reducing changes previously

proposed in an NPRM for this program

that was published on July 3, 1991 (56

FR 30620) (1991 NPRM). The 1991

NPRM was not finalized at the request

of Congress. These regulations also

implement changes that the Secretary

believes are important to update,

consolidate, clarify, and in other ways

improve the regulations for this

program.

The Supplementary Information

section to the NPRM includes a

discussion of the major changes to Title

I of the Act made by the 1992

Amendments. These changes have farreaching implications for the program.

Individuals are encouraged to refer to

the NPRM (60 FR 64476–64477) for a

discussion of the major themes

associated with the 1992 Amendments.

These final regulations contain a

limited number of significant changes to

the proposed regulations based on

public comment and interdepartmental

review. A detailed description of these

changes follows. In addition, the final

regulations have been reviewed and

revised in accordance with the

Department’s Principles for Regulating,

which were developed as part of the

Administration’s regulatory reinvention

initiative under the National

Performance Review II. The principles

are designed to ensure that the

Department regulates in the most

flexible, most equitable, and least

burdensome way possible.

The Secretary also notes that the

changes to supported employment

definitions included in these final

regulations affect those definitions in 34

CFR parts 363, 376, and 380.

Corresponding regulatory changes to

those parts follow the final regulations

amending 34 CFR part 361.

Goals 2000: Educate America Act

The Goals 2000: Educate America Act

(Goals 2000) focuses the Nation’s

education reform efforts on the eight

National Education Goals and provides

a framework for meeting them. Goals

2000 promotes new partnerships to

strengthen schools and expands the

Department’s capacities for helping

communities to exchange ideas and

obtain information needed to achieve

the goals.

These regulations address the

National Education Goal that every

adult American, including individuals

with disabilities, will possess the

knowledge and skills necessary to

compete in a global economy and

exercise the rights and responsibilities

of citizenship.

Executive Order 12866

These final regulations have been

reviewed in accordance with Executive

Order 12866. Under the terms of the

order the Secretary has assessed the

potential costs and benefits of this

regulatory action.

The potential costs associated with

the final regulations are those resulting

from statutory requirements and those

determined by the Secretary as

necessary for administering this

program effectively and efficiently.

In assessing the potential costs and

benefits—both quantitative and

qualitative—of these final regulations,

the Secretary has determined that the

benefits of the final regulations justify

the costs.

The Secretary has also determined

that this regulatory action does not

unduly interfere with State, local, and

tribal governments in the exercise of

their governmental functions.

Summary of potential costs and benefits

The potential costs and benefits of

these final regulations were summarized

in the preamble to the NPRM under the

following headings: Improved

Organization of Regulations; Notes and

Examples; Reduction of Grantee Burden;

Enhanced Protections for Individuals

with Disabilities (60 FR 64495);

Increased Flexibility of Grantees to

Satisfy Statutory Requirements; and

Additional Benefits (60 FR 64496).

Additional discussion of potential costs

and benefits is included in the following

Analysis of Comments and Changes

section of this preamble.

Analysis of Comments and Changes

In response to the Secretary’s

invitation in the NPRM, more than 400

parties submitted comments on the

proposed regulations. RSA gathered

additional public input on the NPRM

through a series of public meetings. An

analysis of the comments and of the

changes in the regulations since

publication of the NPRM follows.

Major issues are grouped according to

subject under appropriate sections of

the regulations. Other substantive issues

are discussed under the section of the

regulations to which they pertain.

Technical and other minor changes—

and suggested changes the Secretary is

not legally authorized to make under the
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applicable statutory authority—

generally are not addressed. However,

some suggested changes that the

Secretary is not authorized to make also

raise important policy issues and,

therefore, are discussed under the

appropriate section of the analysis.

References in the analysis of

comments to the ‘‘proposed regulations’’

refer to the regulatory provisions in the

December 15, 1995 NPRM, whereas

references to the ‘‘draft regulations’’

refer to provisions in the draft proposed

regulations that were circulated for

informal comment prior to publishing

the NPRM.

Section 361.5(b) Applicable

definitions

• Administrative Costs Under the State

Plan

Comments: Some commenters

requested that this definition be revised

to specifically limit administrative costs

to expenditures incurred by the

Designated State Unit (DSU) in

administering the VR program. One

commenter recommended that the

definition identify indirect costs as a

type of administrative cost. Finally, one

commenter sought to exclude costs

incurred by DSUs in providing technical

assistance to businesses and industries

from the definition on the basis that

those costs represent expenditures for

the provision of services under

§ 361.49(a) of the proposed regulations.

Discussion: The Secretary agrees that

administrative costs under the VR State

plan are those costs that the DSU incurs

in administering the VR program. While

most indirect costs (those costs that

cannot be allocated to a single cost

objective and that benefit more than one

program) are generally types of

administrative expenditures, they need

not be limited to administrative

expenditures. The Secretary does not

believe it is necessary to classify

indirect costs in order to ensure their

allowability under the program. All

indirect costs that are approved under

an indirect cost agreement or cost

allocation plan are allowable. The

Secretary emphasizes that indirect costs

related to multiple State programs (e.g.,

operating expenses for State buildings

occupied by DSU staff and staff from

other State-administered programs) can

be charged to the VR program only to

the extent that the costs are attributable

to the VR program.

In addition, the Secretary agrees that

although technical assistance to

businesses, in some cases, is considered

an administrative cost, any technical

assistance provided by a DSU to a

business or industry that seeks to

employ individuals with disabilities

and that is not subject to the Americans

with Disabilities Act (ADA) does not

constitute an administrative cost.

Technical assistance provided under

these circumstances is authorized by

section 103(b)(5) of the Act and

§ 361.49(a)(4) of the regulations as a

service for groups of individuals with

disabilities.

Changes: The Secretary has revised

§ 361.5(b)(2) to clarify that

administrative costs are expenditures

that are incurred by the DSU in

performing administrative functions

related to the VR program. The

definition also has been amended to

exclude technical assistance provided to

businesses and industries as a service

under the conditions in § 361.49(a)(4).

• Appropriate Modes of

Communication

Comments: One commenter opposed

defining ‘‘appropriate modes of

communication’’ as specialized media

systems and devices that facilitate

communication on the basis that not all

modes of communication used by

persons with disabilities are ‘‘media

systems and devices.’’ Several

commenters requested that the

definition identify graphic

presentations, simple language, and

other modes of communication used by

individuals with cognitive impairments.

Discussion: The Secretary agrees that

‘‘appropriate modes of communication’’

are not limited to specific systems,

devices, or equipment, as indicated by

the proposed definition, and include

any type of aid or support needed by an

individual with a disability to

communicate with others effectively.

For example, the use of an interpreter by

a person who is deaf is an appropriate

mode of communication, but is not

typically viewed as a system or device.

The Secretary believes it would be

useful for the definition of appropriate

modes of communication to include

examples of communication methods

used by individuals with cognitive

impairments. However, the Secretary

emphasizes that the examples of

communication services and materials

listed in the definition in the final

regulations are not all-inclusive and that

other appropriate modes of

communication not specified in the

definition are also available to address

the particular communication needs of

an individual with a disability.

Changes: The Secretary has amended

§ 361.5(b)(5) to clarify that appropriate

modes of communication include any

aid or support that enables an

individual with a disability to

comprehend and respond to information

being communicated. In addition, the

definition has been amended to include

graphic presentations and simple

language materials as examples of

modes of communication that may be

appropriate for individuals with

cognitive impairments.

• Assistive Technology Service

Comments: Some commenters asked

that particular services be identified in

this definition as examples of

permissible assistive technology

services. For instance, one commenter

suggested that the definition specifically

identify modifications to vehicles used

by individuals with disabilities as an

assistive technology service.

Discussion: The definition of the term

‘‘assistive technology service’’ in both

the proposed and final regulations

tracks the definition of that term in the

Technology-Related Assistance for

Individuals with Disabilities Act of 1988

(Tech Act), as required by section 7(24)

of the Act. The Tech Act defines

assistive technology services generally

to include any service that directly

assists an individual with a disability in

the selection, acquisition, or use of an

assistive technology device. The

definition in the regulations, therefore,

is intended to address the scope of

service-related needs of individuals who

use assistive technology devices (e.g.,

the need to acquire a particular device

or the need to receive training on the

operation of a device) rather than to

identify actual services that an

individual might receive. Nevertheless,

the Secretary recognizes that any

modification to a vehicle that is

necessary to enable an individual with

a disability to use that vehicle is

considered an adaptation or a

customization of an assistive technology

device under § 361.5(b)(7)(iii) and,

therefore, constitutes an assistive

technology service. This position is

consistent with current RSA policy.

Changes: None.

• Community Rehabilitation Program

Comments: Some commenters

requested that the definition of

‘‘community rehabilitation program’’

specify additional services, such as

rehabilitation teaching services, that

could be provided under a community

rehabilitation program for individuals

with disabilities.

Discussion: The definition of

‘‘community rehabilitation program’’ in

both the proposed and final regulations

is based on the statutory definition in

section 7(25) of the Act. However,

paragraph (i)(Q) of this definition, like

section 7(25)(Q) of the Act, authorizes

community rehabilitation programs that
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provide services similar to the services

specified in the definition. Thus, the

Secretary believes that a community

rehabilitation program could provide

rehabilitation teaching services for

individuals who are blind because those

services are similar to orientation and

mobility services for individuals who

are blind, which are expressly

authorized under paragraph (i)(K) of the

definition.

Changes: None.

• Comparable Services and Benefits

Comments: Several commenters

requested clarification of the

requirement in the proposed regulations

that comparable services and benefits be

available to the individual within a

reasonable period of time. Some

commenters requested that the

regulations allow DSUs to use

comparable services and benefits only if

they are currently available at the time

the individual’s Individualized Written

Rehabilitation Program (IWRP) is

developed. Other commenters suggested

that comparable services and benefits

should be available when necessary to

meet the rehabilitation objectives

identified in the individual’s IWRP.

Discussion: The definition of

‘‘comparable services and benefits’’ is

intended to support the statutory

purpose of conserving rehabilitation

funds, while ensuring the provision of

appropriate and timely services. The

proposed requirement in the NPRM that

comparable services and benefits be

available within a reasonable period of

time was intended to enable DSUs to

conserve VR funds by searching for

alternative sources of funds without

jeopardizing the timely provision of VR

services to eligible individuals. The

Secretary agrees that additional

clarification in the regulations is

required to ensure that VR services are

provided to eligible individuals at the

time they are needed.

Changes: The Secretary has revised

§ 361.5(b)(9)(ii) of the proposed

regulations to require that comparable

services and benefits be available to the

individual at the time that the relevant

service is needed to achieve the

rehabilitation objectives in the

individual’s IWRP. This change is

consistent with revisions made to

§ 361.53 of the proposed regulations,

which are discussed in the analysis of

comments to that section.

• Competitive Employment and

Integrated Setting

Comments: Some commenters

opposed the definition of ‘‘competitive

employment’’ in the proposed

regulations on the basis that it limited

competitive employment outcomes to

those in which an individual with a

disability earns at least the minimum

wage. Because the proposed definition

applied to supported employment

placements, these commenters believed

that the minimum wage requirement

would restrict employment

opportunities for individuals with the

most severe disabilities who need

supported employment services in order

to work. These commenters stated that

some individuals with the most severe

disabilities would be unable to obtain

competitive employment unless the

definition permitted employers to

compensate employees in accordance

with section 14(c) of the Fair Labor

Standards Act (FLSA) (i.e., wages based

on individual productivity that would

be less than the minimum wage). Other

commenters supported the proposed

definition and the requirement that

individuals in competitive employment

earn at least the minimum wage.

Several commenters opposed the

requirement in the proposed regulations

that individuals in competitive

employment earn at least the prevailing

wage for the same or similar work in the

local community performed by nondisabled individuals. The commenters

believed that it would be unduly

burdensome for DSUs to ascertain the

relevant prevailing wage given the

potential differences in wages provided

by employers within the same

community. In addition, these

commenters stated that the prevailing

wage standard would dissuade some

employers from hiring individuals with

disabilities when the wage to be

provided, although at least the

minimum wage, would have to be

increased to be consistent with higher

wages provided by other employers in

the community for the same or similar

work.

Several commenters on the proposed

regulations opposed the requirement

that competitive employment be

performed in an integrated setting.

Several other commenters questioned or

requested clarification of the proposed

definition of integrated setting with

respect to the provision of services or

the achievement of an employment

outcome. In light of the

interrelationship between the terms

‘‘competitive employment’’ and

‘‘integrated setting’’ and the fact that the

Secretary considers integration to be an

essential component of competitive

employment, comments on both the

proposed definition of ‘‘integrated

setting’’ and the use of the term

‘‘integrated setting’’ as an element of

competitive employment are addressed

in the following paragraphs.

Commenters who opposed limiting

competitive employment to placements

in integrated settings believed that

requiring individuals with disabilities to

interact with non-disabled persons at

the work site would preclude certain

kinds of employment outcomes from the

scope of competitive employment.

Specifically, the commenters identified

self-employment, home-based

employment, and various forms of

telecommuting as examples of

employment outcomes that are

competitive but are not located in

integrated settings. The commenters

stated that these placement options

should be available to individuals with

disabilities to same extent that they are

available to non-disabled persons.

Some commenters believed that the

definition of ‘‘integrated setting’’ in the

proposed regulations was too weak.

These commenters recommended that

the proposed definition, which defined

integrated setting as ‘‘. . . a setting

typically found in the community in

which an applicant or eligible

individual has an opportunity to

interact regularly with non-disabled

persons . . .,’’ be amended to require

actual interaction between the applicant

or eligible individual and non-disabled

individuals. Other commenters stated

that individuals in competitive

employment should be required to

interact with non-disabled persons only

to the extent that non-disabled

individuals in similar positions interact

with others. Finally, some commenters

suggested that the definition clarify that

sheltered workshops and other

employment settings that are

established specifically for the purpose

of employing individuals with

disabilities do not constitute integrated

settings.

Discussion: The Secretary agrees with

the commenters who believe that

competitive employment outcomes

should be limited to those in which

individuals earn at least the minimum

wage. Consequently, the Secretary does

not consider placements in supported

employment settings in which

individuals receive wages below the

minimum wage under section 14(c) of

the FLSA to be competitive

employment. This position, which

would modify longstanding RSA

regulatory policy, is consistent with the

requirement in the 1992 Amendments

(section 101(a)(16) of the Act) that DSUs

annually review and reevaluate the

status of each individual in an

employment setting under section 14(c)

of the FLSA in order to determine the

individual’s readiness for competitive

employment. This statutory requirement

indicates that supported employment
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6311

settings in which individuals are

compensated below the minimum wage

in accordance with the FLSA do not

constitute competitive employment. The

Secretary wishes to clarify that the

minimum wage requirement for

individuals placed in supported

employment applies at the time of

transition to extended services. If an

individual is unable to obtain the

minimum wage at this time, the

individual would still be considered to

have achieved an employment outcome

but it would not be considered a

supported employment outcome.

The Secretary agrees that requiring

individuals in competitive employment

to earn at least the prevailing wage for

the same or similar work in the local

community performed by non-disabled

individuals is unduly restrictive and

that requiring individuals with

disabilities who achieve competitive

employment outcomes to be

compensated at the wage level typically

paid to non-disabled individuals who

perform the same or similar work for the

same employer is a more reasonable

standard. This standard requires that

competitively employed individuals

with disabilities receive the customary

wage and level of benefits (e.g.,

insurance premiums, retirement

contributions) received by non-disabled

workers performing comparable jobs for

the same employer. Clarification in the

final regulations that comparable

compensation includes both the wage

and benefit level typically paid by the

employer is necessary, the Secretary

believes, in order to ensure that

competitive employment outcomes for

individuals with disabilities are truly

‘‘competitive.’

A key purpose of the 1992

Amendments is to ensure that

individuals with disabilities achieve

employment outcomes in the most

integrated settings possible, consistent

with the individual’s informed choice.

Consequently, the Secretary believes

that placement in an integrated setting

is an essential component of

‘‘competitive employment.’

The Secretary agrees with those

commenters who believe that the

definition of integrated setting in the

proposed regulations did not

sufficiently ensure actual interaction

between individuals with disabilities

and non-disabled persons. The

Secretary also agrees with those

commenters who contend that the best

measure of integration in an

employment setting for individuals with

disabilities is to require parity with the

integration experienced by non-disabled

workers in similar positions.

Consequently, the final regulations

establish a standard of integration with

respect to employment outcomes that is

based on ensuring the same level of

interaction by disabled individuals with

non-disabled persons as that

experienced by a non-disabled worker

in the same or similar job. An integrated

setting for purposes of a job placement

is one in which an applicant or eligible

individual interacts with non-disabled

persons, excluding service providers, to

the same extent that a non-disabled

worker in a comparable position

interacts with others.

The Secretary believes, however, that

interaction between individuals with

disabilities and non-disabled persons

need not be face-to-face in order to meet

this standard. Persons with disabilities

who are self-employed or telecommute

may interact regularly with nondisabled persons through a number of

mediums (e.g., telephone, facsimile, or

computer). Self-employment, homebased employment, and other forms of

employment in which individuals

communicate regularly from separate

locations, therefore, would satisfy the

integration requirement of competitive

employment as long as the eligible

individual interacts with non-disabled

persons other than service providers to

the same extent as a non-disabled

person in a comparable job.

The Secretary, like many of the

commenters, also believes that settings

that are established specifically for the

purpose of employing individuals with

disabilities (e.g., sheltered workshops)

do not constitute integrated settings

since there are no comparable settings

for non-disabled individuals.

Changes: The Secretary has amended

§ 361.5(b)(10) to define ‘‘competitive

employment,’’ in part, as work for

which an individual earns at least the

minimum wage but not less than the

customary wage and level of benefits

provided by the same employer to nondisabled workers who perform the same

or similar work. The Secretary also has

amended § 361.5(b)(30) to define

‘‘integrated setting’’ with respect to an

employment outcome as a setting

typically found in the community in

which applicants or eligible individuals

interact with non-disabled individuals

to the same extent that non-disabled

individuals in comparable positions

interact with other persons. The

definition of ‘‘integrated setting’’ with

respect to the provision of services has

been similarly strengthened to require

actual interaction between individuals

with disabilities receiving services and

non-disabled individuals.

• Designated State Unit

Comments: Some commenters

requested that the regulatory definition

of ‘‘designated State unit’’ prohibit

DSUs from administering vocational

and other rehabilitation programs other

than those programs authorized or

funded under the Act.

Discussion: Sections 101(a)(1) and

(a)(2) of the Act require that the State

VR Services Program be administered by

a State entity that is primarily

concerned with vocational

rehabilitation or vocational and other

rehabilitation of individuals with

disabilities, but does not restrict this

rehabilitation focus to only programs

authorized or funded under the Act. The

Secretary wishes to give States as much

organizational flexibility as is permitted

by statute.

Changes: None.

• Employment Outcome

Comments: Several commenters

opposed the definition of ‘‘employment

outcome’’ in the proposed regulations

on the basis that it failed to exclude

outcomes other than competitive

employment (e.g., homemaker, selfemployment). Other commenters

disagreed with the emphasis in the

definition on competitive employment.

Discussion: The definition of

‘‘employment outcome’’ in the final

regulations, like the proposed

definition, elaborates on the definition

in section 7(5) of the Act by

incorporating into the definition the

statutory concept that an employment

outcome must be consistent with an

individual’s strengths, resources,

priorities, concerns, abilities,

capabilities, interests, and informed

choice. Although the definition does not

contain a full list of permissible

employment outcomes, it does not

exclude any employment outcomes that

have been permitted in the past. Thus,

for example, homemaker, extended

employment, and self-employment

remain acceptable employment

outcomes even though they are not

specifically identified in the definition.

The Secretary also believes, however,

that competitive employment, which is

the optimal employment outcome under

the program, should be considered for

each individual who receives services

under the program and should,

therefore, be highlighted in the

definition.

Changes: None.

• Establishment, Development, or

Improvement of a Public or Nonprofit

Community Rehabilitation Program

Comments: Some commenters

opposed that part of the proposed
6312 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

definition of the term ‘‘establishment,

development, or improvement of a

public or nonprofit community

rehabilitation program’’ that would

reduce over a four-year period Federal

financial support of staffing costs

associated with operating a community

rehabilitation program. Some of these

commenters also opposed the

prohibition in the definition of Federal

support for ongoing operating expenses

of a community rehabilitation program.

The commenters were concerned that

these provisions would make it difficult

or impossible to develop new

community rehabilitation programs.

Discussion: The definition elaborates

on the statutory definition of the term

‘‘establishment of a community

rehabilitation program’’ under section

7(6) of the Act by incorporating all of

the types of expenditures for which a

DSU can receive Federal financial

support. The limitations on staffing

costs in the proposed definition are

based on the authorization in section

7(6) of the Act for the Secretary to

include as part of the costs of

establishment any additional staffing

costs that the Secretary considers

appropriate. The limitations are similar

to those previously proposed in the

1991 NPRM. Specifically, the proposed

regulations established a limitation on

staffing costs by providing, after the first

12 months of staffing assistance, for an

annual decrease in the percentage of

staffing costs (from 100 percent to 45

percent) for which Federal financial

participation (FFP) is available. This

limitation, like the staffing cost

requirements proposed in the 1991

NPRM, is influenced by and in part

based on the conclusions of a 1979

General Accounting Office (GAO) report

(HRD–79–84). The GAO Report to

Congress recommended amending the

Act to provide for a gradual reduction

of Federal funding for staffing costs in

the establishment authority. Legislative

change is unnecessary to accomplish

this purpose because section 7(6) of the

Act vests the Secretary with the

authority to determine what staffing

costs are appropriate for Federal

financial participation. The Secretary

believes that the GAO recommendation

is still relevant and needs to be

implemented. The limitation on staffing

costs is intended, in part, to ensure that

facilities bear an increasing share of the

responsibility for running community

rehabilitation programs, while

preserving VR funds needed to support

necessary development or expansion of

community rehabilitation facilities.

More generally, the limitation on

staffing costs is intended to preserve the

amount of funds available to the DSU

for providing VR services to eligible

individuals.

The final regulations also authorize

Federal support for other costs needed

to establish, develop, or improve a

community rehabilitation program as

long as these costs are not ongoing

operational expenses of the program.

The Secretary believes that this

prohibition is consistent with the Act,

which limits Federal financial support

to costs associated with setting up,

renovating, converting, or otherwise

improving community rehabilitation

programs.

The Secretary also notes that recent

audits of State agencies have indicated,

in some cases, that VR funds have been

used under the authority for

establishing community rehabilitation

programs for purposes other than

providing services under the VR

program. In response, the Secretary

believes the proposed definition should

be amended to ensure that Federal

support for the establishment,

development, or improvement of a

public or nonprofit community

rehabilitation program is provided only

if the purpose of the expenditures is to

provide services to applicants and

eligible individuals under the VR

program.

Changes: The Secretary has amended

§ 361.5(b)(16) to ensure that costs

associated with the establishment,

development, or improvement of a

public or nonprofit community

rehabilitation program must be

necessary to the provision of VR

services to applicants and eligible

individuals. Changes to this definition

and to the State plan requirements in

§ 361.33(b) of the regulations are

intended to address the violations

identified in recent audits of State

agencies.

• Extended Employment

Comments: Several commenters

requested that the definition of

‘‘extended employment’’ in the

proposed regulations be broadened to

include placements in integrated

settings. Other commenters sought to

expand the proposed definition to

include employment with profitmaking

organizations. Finally, some

commenters requested that the

regulations exclude extended

employment from the scope of potential

employment outcomes under the

program.

Discussion: Section 101(a)(16) of the

Act requires DSUs to annually review

and reevaluate the status of each

individual in extended employment to

determine the individual’s readiness for

competitive employment in an

integrated setting. This statutory

requirement indicates that extended

employment is limited to placements in

non-integrated settings. The lack of

integration in extended employment

placements is a key factor in

differentiating between extended

employment and competitive

employment outcomes.

The Secretary does not believe that

extended employment includes work

performed on behalf of profitmaking

organizations. Extended employment,

according to section 101(a)(16) of the

Act, means work performed in

community rehabilitation programs,

including workshops, or in other nonintegrated employment settings in

which individuals are compensated

pursuant to the FLSA. The Secretary

believes that employment in private,

profitmaking organizations should be

viewed as competitive employment in

which individuals shall earn at least the

minimum wage and work in integrated

settings. Incorporating placements in

profitmaking organizations into the

definition of extended employment

would expand the scope of potential

extended employment placements and

would be contrary to the statutory

policy that promotes movement from

extended employment to competitive

employment, the optimal employment

outcome under the program.

Nevertheless, the final regulations will

continue to recognize extended

employment as a possible employment

outcome under the program consistent

with 101(a)(16) of the Act.

Changes: None.

• Impartial Hearing Officer

Comments: One commenter requested

that the regulations prohibit a member

of a State Rehabilitation Advisory

Council from serving as an impartial

hearing officer for any DSU within that

State.

Discussion: The definition of

‘‘impartial hearing officer’’ in the

proposed regulations specified that a

member of a DSU’s State Rehabilitation

Advisory Council (Council) could not

serve as an impartial hearing officer for

that same DSU. The proposed

definition, however, did allow a

member of a DSU’s Council to serve as

an impartial hearing officer in cases

involving another DSU within the same

State. For example, a member of the

Council for a State unit serving

individuals who are blind was not

precluded under the proposed

regulations, solely on the basis of that

membership, from serving as an

impartial hearing officer in cases

involving the State unit that serves
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6313

individuals with disabilities other than

individuals with visual disabilities. The

Secretary believes that prohibiting

members of a Council from serving as

impartial hearing officers in cases

involving any DSU within the State

would be unduly restrictive. The

Secretary also believes that other

impartiality requirements in the

definition that apply to all impartial

hearing officers, including those who

are members of Councils for other DSUs

(e.g., the individual has no personal,

professional, or financial conflict of

interest) will sufficiently ensure the

absence of potential conflicts between

the hearing officer and the parties to the

dispute.

Changes: None.

• Maintenance

Comments: Some commenters

requested that the definition of

‘‘maintenance’’ in the proposed

regulations be expanded to include

expenses other than living expenses

(e.g., food, shelter, and clothing). As an

example, the commenters stated that

maintenance should be authorized to

support costs incurred by eligible

individuals who take part in enrichment

activities as part of a training program

in a higher education institution.

Several other commenters

recommended deletion of the fourth

example in the note following the

proposed definition, which stated that

maintenance could be used to pay for

food, shelter, and clothing for homeless

or recently deinstitutionalized

individuals until other financial

assistance is secured. These commenters

asserted that these costs should be

supported by welfare or other public

assistance agencies rather than DSUs.

Discussion: The Secretary agrees that

maintenance may include costs other

than standard living expenses (i.e., food,

shelter, and clothing) as long as the

expenses are in excess of the normal

expenses incurred by an eligible

individual or an individual receiving

extended evaluation services. Limiting

maintenance to additional costs

incurred by individuals receiving

services under an IWRP or under a

written plan for providing extended

evaluation services is consistent with

section 103(a)(5) of the Act, which

restricts the provision of maintenance to

‘‘additional costs while participating in

rehabilitation.’

The Secretary also agrees that the

fourth example of permissible

maintenance expenses in the proposed

regulations was inadvisable. Permitting

DSUs to support the full costs of a

homeless or deinstitutionalized

individual’s subsistence under the

maintenance authority, until other

financial assistance becomes available,

is inconsistent with the policy of

limiting maintenance costs to those in

excess of the individual’s normal

expenses. In addition, the Secretary

agrees that welfare and other social

service agencies are better equipped to

support the everyday living expenses of

the homeless or deinstitutionalized.

However, a DSU could choose to

provide short-term emergency financial

assistance to those individuals under

§ 361.48(a)(20) as ‘‘other’’ services that

the DSU determines are necessary for

the individual to achieve an

employment outcome.

Changes: The Secretary has deleted

the term ‘‘living’’ from § 361.5(b)(31) of

the proposed regulations to clarify that

maintenance may include expenses

other than living expenses. In addition,

the Secretary has deleted the fourth

example in the note following the

proposed definition of maintenance and

replaced it with an example of a

permissible maintenance cost that

would not constitute a living expense.

• Ongoing Support Services

Comments: Some commenters

recommended that the Secretary place a

time limit on the provision of ongoing

support services furnished by extended

services providers. The commenters

stated that the regulations should permit

ongoing support services to ‘‘fade’’ once

they are no longer needed to maintain

an individual in supported

employment.

Discussion: It is RSA’s longstanding

policy that individuals with the most

severe disabilities who are placed in

supported employment should require

ongoing support services throughout the

course of their placement. The need for

ongoing support services provides a

critical distinction (i.e., the provision of

ongoing supports) between supported

employment and other kinds of

employment outcomes. The Secretary

believes that if an individual in

supported employment no longer

requires ongoing support services that

individual is no longer an appropriate

candidate for supported employment.

Changes: None.

• Personal Assistance Services

Comments: Some commenters

requested that the definition of

‘‘personal assistance services’’ in the

proposed regulations be amended to

more closely track the statutory

definition of that term in section 7(11)

of the Act. The commenters stated that

revision to the proposed definition is

needed to clarify that personal

assistance services need not be provided

on the job site.

Discussion: The Secretary agrees that

personal assistance services may be

provided off the job site as long as they

are necessary to assist an individual

with a disability to perform daily living

functions and achieve an employment

outcome and are provided while the

individual is participating in a program

of VR services. The Secretary believes

the proposed definition clearly

authorized personal assistance services

needed by an individual to perform

everyday activities off the job but,

nevertheless, agrees that further

clarification may be helpful.

Changes: The Secretary has amended

§ 361.5(b)(34) of the proposed

regulations to track the language in

section 7(11) of the Act authorizing

personal assistance services needed to

increase the individual’s control in life

and ability to perform everyday

activities on or off the job.

• Physical and Mental Restoration

Services

Comments: Some commenters

requested that the regulatory definition

of ‘‘physical and mental restoration

services’’ specifically include

psychological services provided by

qualified personnel under State

licensure laws.

Discussion: The Secretary agrees that

psychological services are a form of

mental restoration services.

Psychological services, however, are

subsumed within the broader term

‘‘mental health services’’ in paragraph

(xiii) of the definition and need not be

identified separately. Moreover, section

103(a)(4) of the Act authorizes services,

including psychological services, that

are needed to diagnose and treat mental

or emotional disorders only if those

services are provided by qualified

personnel in accordance with State

licensure laws. This requirement, which

was included in the proposed

definition, is reflected in paragraph (ii)

of the definition in the final regulations.

Changes: None.

• Physical or Mental Impairment

Comments: Some commenters

requested clarification of the

requirement in the proposed regulations

that a physical or mental impairment

will probably result in materially

limiting mental or physical functioning

if it is not treated. One commenter

stated that the definition should be

limited to conditions that cause present

functional limitations so as not to

unnecessarily expand the pool of

eligible individuals.
6314 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

Discussion: The Secretary agrees that

clarification is needed. The proposed

regulations defined ‘‘physical or mental

impairment’’ as an injury, disease, or

other condition that materially limits, or

if not treated will probably result in

materially limiting, mental or physical

functioning. The existence of a physical

or mental impairment is the first

criterion for determining eligibility

under the program (see § 361.42(a) of

the final regulations). The proposed

definition was designed to include

progressive conditions that may cause

functional limitations in the future even

though current functional limitations

may not be evident. Although a DSU

may not always know with certainty

whether a certain condition will limit

an individual’s functional abilities, the

Secretary believes that the definition

must account for situations in which

there is a strong likelihood that

functional limitations will result if

treatment is not provided. On the other

hand, the Secretary does not believe that

accounting for progressive conditions

will result in an unwarranted increase

in eligible individuals since all eligible

individuals, including those who do not

currently experience a limitation in

functioning, must meet each of the

eligibility criteria in § 361.42(a).

Changes: The Secretary has amended

§ 361.5(b)(36) of the proposed

regulations to clarify that a physical or

mental impairment must materially

limit, or if untreated must be expected

to materially limit, physical or mental

functioning.

• Post-Employment Services

Comments: Some commenters

requested that the regulations specify a

time limit for providing postemployment services following the

achievement of an employment

outcome. Other commenters opposed

the availability of post-employment

services for purposes of assisting an

individual to advance in employment.

Finally, several commenters

recommended that the definition enable

individuals to receive post-employment

services in order to maintain, regain, or

advance in employment that is

consistent with the individual’s

informed choice.

Discussion: The Secretary believes

that it would be inappropriate to

establish an absolute time limit after

which post-employment services would

be unavailable. DSUs are responsible for

determining on a case-by-case basis

whether an eligible individual who has

achieved an employment outcome

requires post-employment services in

accordance with the definition in the

regulations. As stated in the note

following the proposed definition, postemployment services are available to

meet rehabilitation needs that do not

require a complex and comprehensive

provision of services and, therefore,

should be limited in scope and

duration. If the DSU determines that an

individual requires extensive services or

requires services over an extended

period of time, then the DSU should

consider beginning a new rehabilitation

effort for the individual, starting with a

redetermination of whether, under

current circumstances, the individual is

eligible under the VR program.

The Secretary emphasizes that postemployment services are available if the

DSU determines that the services are

necessary to enable an individual to

advance in employment consistent with

the individual’s strengths, resources,

priorities, concerns, abilities,

capabilities, and interests. Section

103(a)(2) of the Act specifically

authorizes the provision of postemployment services for purposes of

assisting an individual to maintain,

regain, or advance in employment.

The Secretary agrees that the

provision of post-employment services

must be consistent with the individual’s

informed choice. However, the

Secretary believes that it is unnecessary

to add informed choice as an element in

the definition of ‘‘post-employment

services’’ because informed choice is

specifically identified as a condition

that applies to the provision of any VR

service, including post-employment

services, under § 361.48(a).

Changes: None.

• Substantial Impediment To

Employment

Comments: The majority of

commenters supported the definition of

‘‘substantial impediment to

employment’’ in the proposed

regulations. However, some commenters

opposed the proposed definition on the

basis that it requires only that an

impairment hinder the individual from

preparing for, entering into, engaging in,

or retaining employment. These

commenters recommended that the

Secretary reinstate the standard from the

draft regulations that an impairment

must prevent the individual from

employment in order for it to constitute

a substantial impediment to

employment.

Discussion: An individual’s disability

must result in a substantial impediment

to employment for the individual to be

found eligible under the VR program

(see § 361.42(a)). The Secretary believes

that the proposed definition establishes

the appropriate standard for

determining whether the individual’s

impairment causes a substantial

impediment to employment when read

in conjunction with the remaining

eligibility requirements in § 361.42(a).

This standard does not extend eligibility

under the program to individuals with

disabilities who do not experience

material functional limitation or who do

not need VR services to obtain

appropriate employment since these

individuals would not meet the criteria

in § 361.42(a). On the other hand, the

Secretary believes that requiring that an

impairment prevent the individual from

employment is too stringent and would

exclude from the program those

individuals who are underemployed

and who need VR services to obtain new

employment that is consistent with their

abilities and capabilities.

Changes: None.

• Supported Employment

Comments: One commenter suggested

that, given the requirement in the

proposed regulations that limits

competitive employment outcomes to

those in which individuals earn at least

the minimum wage, competitive

employment should not be a required

element of supported employment.

Another commenter stated that an

individual in a supported employment

setting should be viewed as

competitively employed as long as the

individual earns at least the minimum

wage at the time of transition to an

extended services provider rather than

at the time of initial placement in

supported employment.

Discussion: Section 7(18) of the Act

defines supported employment as

competitive employment in an

integrated setting with ongoing support

services. Thus, individuals in supported

employment shall earn at least the

minimum wage consistent with the

definition of competitive employment

in the final regulations. The Secretary

agrees, however, that the minimum

wage requirement applies to individuals

in supported employment at the time

the individual has made the transition

from support provided by the DSU to

extended services provided by an

appropriate State or private entity.

Changes: None.

• Transitioning Student

Comments: Some commenters were

concerned that omitting the term

applicant from the definition of

‘‘transitioning student’’ would mean

that students with disabilities who

apply for VR services might not be

evaluated for program eligibility. In

addition, some commenters stated that

the term ‘‘transitioning student’’ is

confusing and is inappropriately used in
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6315

other sections of the proposed

regulations, specifically § 361.22

(Cooperation with agencies responsible

for transitioning students).

Discussion: The proposed regulations

defined ‘‘transitioning student’’ as a

student who is eligible under the VR

program and is receiving transition

services. The Secretary believes that

transition services, which are

authorized under section 103(a)(14) of

the Act and defined in § 361.5(b)(47) of

the final regulations, are limited to those

services identified in an eligible

student’s IWRP that promote or

facilitate the accomplishment of longterm rehabilitation goals and

intermediate rehabilitation objectives.

Because assessment services are

provided prior to the development of an

IWRP and, therefore, are not transition

services, student applicants under the

program were not included within the

proposed definition of ‘‘transitioning

student.’’ Nevertheless, this

interpretation does not alter the

responsibility of DSUs to evaluate

student applicants for eligibility for VR

services. As with any individual with a

disability, DSUs shall promptly handle

a referral of a student for VR services,

evaluate the student following

application for services, and determine

the student’s eligibility under the

program within 60 days after the

application is submitted.

The Secretary agrees that the

definition of the term ‘‘transitioning

student’’ in the proposed regulations is

confusing, as evidenced by the previous

comments questioning the DSU’s

responsibility with regard to student

applicants. Other commenters were

confused by § 361.22(b) of the proposed

regulations, which referred to students

with disabilities who are not receiving

special education services as

‘‘transitioning students.’

Changes: The Secretary has

eliminated the definition of the term

‘‘transitioning student’’, which is not

defined in the Act, from the final

regulations and has replaced that term

in the regulations with the term

‘‘student with a disability,’’ which

includes students who are receiving

special education services and students

who are not.

• Transportation

Comments: One commenter requested

that the regulations clarify that

transportation is a support service.

Other commenters opposed the example

following the definition that identified

the purchase and repair of vehicles as a

possible transportation expense. These

commenters stated that adherence to

this example would severely deplete

DSU resources.

Discussion: ‘‘Transportation’’ is

defined in both the proposed and final

regulations as travel and related

expenses that are necessary to enable an

applicant or eligible individual to

participate in a VR service. The

Secretary believes that it is clear from

this definition that transportation is not

a stand-alone service but must be tied to

the provision of other services identified

in an IWRP.

The Secretary emphasizes that the

examples provided under this

definition, like all examples throughout

the regulations, are provided solely for

purposes of illustration and guidance

and are not intended to substitute for

DSU determinations in individual cases.

Accordingly, the example opposed by

some commenters neither requires nor

encourages DSUs to purchase or repair

vehicles. The example states only that

the purchase or repair of vehicles is

authorized as a transportation expense

in those limited circumstances in which

the DSU determines that provision of

this service is necessary for an

individual to participate in a VR service

and is consistent with DSU policies that

govern the provision of services.

Appropriately developed DSU policies

covering the nature and scope of

services dictate the extent to which any

service, including transportation, can be

provided.

Changes: None.

§ 361.10 Submission, approval, and

disapproval of the State plan.

Comments: None.

Discussion: The Secretary has revised

the requirements governing the duration

of State plans to reflect recent

amendments to section 436 of the

General Education Provisions Act

(GEPA). Section 436 of GEPA, which

applies to Rehabilitation Act programs,

authorizes the Secretary to establish a

State plan period that is longer than the

standard three-year period specified in

section 101(a) of the Rehabilitation Act

and § 361.10(e) of the proposed

regulations. Although RSA will

continue to require the submission of a

new State plan every three years, the

regulations now permit RSA to establish

a State plan period other than the

regular three-year period if

circumstances warrant. For example,

RSA used this statutory authority in FY

1996 to extend for a fourth year the

State plan covering FYs 1994 through

1996 in order to allow these final

regulations to become effective before

requiring submission of a new State

plan. The flexibility afforded RSA

through this regulatory change also

obviates the need for § 361.10(h) of the

proposed regulations, which would

have permitted the Secretary to require

an interim State plan covering less than

three years following a reauthorization

of the Act and prior to the publication

of final regulations.

Changes: The Secretary has amended

§ 361.10(e) to state that the State plan

must cover a multi-year period as

determined by the Secretary. In

addition, § 361.10(h) of the proposed

regulations has been deleted from the

final regulations.

§ 361.13 State agency for

administration

Comments: Some commenters

opposed the elimination of the

requirement from the draft proposed

regulations that the State plan describe

the organizational structure of the State

agency and its organizational units.

These commenters stated that the

absence of this description in the State

plan would make it impossible for RSA

to determine whether each DSU

operates at a level comparable to that of

other organizational units within the

State agency. Other commenters

recommended, consistent with

requirements in the draft proposed

regulations, that the final regulations

authorize the designated State agency to

define the scope of the program and

direct its administration without

external administrative controls.

Additionally, in response to the

Secretary’s request in the NPRM, some

commenters identified additional

program functions that were not

included in the proposed regulations for

which the DSU shall be responsible in

order to meet the statutory requirement

in section 101(a)(2)(A) that it be

responsible for the VR program. The

additional functions identified by the

commenters (determinations of whether

an individual has achieved an

employment outcome; policy

development; and administrative

control of VR funds) were specified in

the draft proposed regulations. Finally,

some commenters stated that the

requirement in the proposed regulations

that at least 90 percent of DSU staff shall

be employed full time on rehabilitation

work was unduly restrictive.

Discussion: This section of the

proposed regulations was significantly

revised under the Department’s

Principles for Regulating in an effort to

reduce the paperwork requirements

imposed on State agencies. For example,

the Secretary proposed to remove from

current regulations the requirement that

the State plan describe the

organizational structure of the State

agency and its organizational units
6316 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

because the Secretary considered the

requirement unduly burdensome. The

Secretary intended to reduce the

paperwork burden on State agencies in

developing their State plans and to

emphasize the underlying

administrative responsibility of States

by relying on an assurance, required by

statute, that if the State agency is

required to have a vocational

rehabilitation unit, the unit is located at

an organizational level comparable to

other organizational units within the

State agency. The Secretary does not

believe that continuing to require by

regulations that an organizational

description be included in the State

plan would necessarily ensure that a

DSU actually operates at a level

comparable to that of other units within

the State agency. Moreover, the

Secretary believes that determinations

as to whether a State agency meets the

organizational requirements in this

section, including whether the State

unit operates at a comparable level to

that of other State entities, can be better

addressed by RSA through its

monitoring process.

In an effort to reduce regulatory

burden and increase State flexibility in

accordance with the Department’s

Principles for Regulating, the Secretary

also proposed to remove from current

regulations the requirement that a

designated State agency that has as its

major function vocational rehabilitation

or vocational and other rehabilitation of

individuals with disabilities shall ‘‘have

the authority, subject to the supervision

of the Governor, if appropriate, to define

the scope of the program within the

provisions of State and Federal law and

to direct its administration without

external administrative controls.’’ This

non-statutory requirement applies under

current regulations to only one of the

three designated State agency options.

The Secretary believes, however, that a

State should have the same authority to

review or oversee the administration of

its VR program regardless of the option

under which it chooses to organize its

agency. Elimination of this requirement

will enable a State to locate and

administer its vocational rehabilitation

program within the limits permitted by

statute without being influenced by the

existence or non-existence of varying

levels of control outside of the DSU.

In the preamble to the proposed

regulations, the Secretary solicited

public comment on whether the

regulations should expand or otherwise

clarify essential program functions for

which the DSU shall be responsible in

order to meet the statutory requirement

in section 101(a)(2)(A) of the Act that it

be responsible for the VR program.

Consistent with current regulations, the

proposed regulations specified that the

DSU shall be responsible for

determinations of eligibility,

development of IWRPs, and decisions

regarding the provision of services. The

Secretary interprets this non-delegation

provision to mean that the DSU shall

carry out these functions or activities

using its own staff. While some

commenters believed that States should

have the flexibility to delegate

responsibility for other programmatic

functions to State entities other than the

DSU, the overwhelming majority of

commenters stated that the additional

functions that were identified in the

draft regulations (determinations that

service recipients have achieved

appropriate employment outcomes, the

formulation and implementation of

program policy, and the allocation and

expenditure of program funds) must be

carried out by the DSU to ensure that

the program is administered properly. In

light of the public comment received,

the Secretary agrees that responsibility

for these additional functions must be

retained by the DSU to ensure that State

agencies that consolidate staff to

administer multiple State and federally

funded programs do not entrust these

key VR programmatic decisions to

individuals who lack experience in

meeting the needs of individuals with

disabilities. Moreover, the Secretary

believes that the benefits derived from

DSU retention of these functions—

enhanced program efficiency and

effectiveness—outweigh any costs that

may be associated with the nondelegation requirements in the final

regulations.

The Secretary does not believe that

the proposed requirement that at least

90 percent of the designated State unit

staff shall work full time on the

rehabilitation work of the organizational

unit is unduly restrictive. This

provision means that if the

organizational unit provides other

rehabilitation services, in addition to

vocational rehabilitation, the 90 percent

staffing requirement applies to all unit

staff providing rehabilitation services,

not to just the vocational rehabilitation

staff. ‘‘Other rehabilitation’’ includes,

but is not limited to, other programs that

provide medical, psychological,

educational, or social services to

individuals with disabilities. Although

some commenters believed the 90

percent staffing requirement sets too

restrictive a standard, the Secretary

believes that this requirement is

consistent with the statutory

requirement in section 101(a)(2)(A)(iii)

of the Act that ‘‘substantially all’’ of the

DSU’s staff shall work on rehabilitation

and with RSA’s longstanding

interpretation of ‘‘substantially all’’ to

mean 90 percent.

Changes: The Secretary has revised

§ 361.13(c) by adding three functions—

determination that an individual has

achieved an employment outcome,

formulation and implementation of

program policy, and allocation and

expenditure of program funds—that

must be carried out by the DSU.

§ 361.15 Local administration

Comments: One commenter requested

clarification of the requirement that

each local agency administering the

program be ‘‘under the supervision of

the DSU.’’

Discussion: Section 7(9) of the Act

defines the term ‘‘local agency’’ as a

local governmental unit that has an

agreement with the designated State

agency to conduct the VR program in

accordance with the State plan.

Accordingly, the requirement in this

section that each local agency is subject

to the supervision of the DSU means

that the DSU is responsible for ensuring

that the program is administered in

accordance with the State plan. This

provision does not require the DSU to

supervise the day-to-day operations of

each local agency’s program staff.

Changes: For purposes of

clarification, the Secretary has revised

§ 361.15 to add a cross-reference to the

regulatory definition of ‘‘sole local

agency.’’ The Secretary has also made

technical changes to the citations of

authority for this section.

§ 361.16 Establishment of an

independent commission or a State

Rehabilitation Advisory Council

Comments: One commenter requested

clarification of the scope of the

proposed requirement that the State

plan summarize annually the advice

provided by the Council.

Discussion: Section 101(a)(36)(A)(iii)

of the Act requires the DSU to include

in its State plan or amendment to the

plan a summary of advice provided by

the Council. Accordingly,

§ 361.16(a)(2)(iv) of the regulations

requires that the State plan ‘‘annually

summarize the advice provided by the

Council.’’ This ‘‘annual’’ requirement

means that any State plan submission,

whether a new three-year plan or an

annual amendment to an existing plan,

must include, as appropriate, a

summary of the advice provided by the

Council on the new plan or the plan

amendment. Thus, a summary of the

advice provided by the Council on the

entire plan must be submitted once

every three years in conjunction with
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6317

the DSU’s new, three-year State plan.

During the interim between new plans,

the DSU shall summarize the advice

provided by the Council on the

amendments to the existing plan and

submit that summary in conjunction

with its annual submission of

amendments to the plan. Annual

amendments to the plan include any

amendment generated by a change to a

State policy or practice that is reflected

in the current State plan, as well as

those amendments that are required by

the Act or these regulations. Consistent

with the general requirement in section

101(a)(36)(A)(iii), this section also

requires the DSU to annually summarize

the advice provided by the Council on

matters other than those addressed in

the State plan. A summary of the advice

provided by the Council on these issues

should be included also in the annual

summaries.

Changes: None.

§ 361.18 Comprehensive system of

personnel development

Comments: Some commenters

questioned the authority for requiring

the involvement of the State

Rehabilitation Advisory Council in the

development of the State agency’s

personnel standards, whereas other

commenters supported a role for the

Council in this area. Some commenters

sought clarification of what it means for

the Council to be ‘‘involved’’ in the

development of personnel standards.

Additional commenters sought an

expanded role for the Council that

would involve it in the formulation of

other aspects of the State agency’s

comprehensive system of personnel

development in addition to the State

agency’s personnel standards.

Some commenters stated that the data

collection requirements in paragraph (a)

of this section are unduly burdensome

and should be eliminated.

A number of commenters opposed the

authorization of State personnel

requirements as comparable

requirements upon which a State agency

could develop its personnel standards

under paragraph (c) of this section.

These commenters stated that a State

agency’s personnel standards should be

based solely on the licensing and

certification requirements applicable to

the profession in which DSU employees

provide VR services in order to ensure

that DSU personnel are ‘‘qualified’’

within the meaning of the Act.

Similarly, several commenters opposed

the use of ‘‘equivalent experience’’ as a

substitute for academic degrees in the

definition of ‘‘highest requirements in

the State* * *’’ under paragraph (c) of

this section. One commenter stated that

the personnel standards developed by

State agencies under this section should

be prospective only and that agencies

should be permitted to retain current

DSU personnel who do not meet the

‘‘highest requirements in the State.’’ In

addition, some commenters

recommended that the regulations

specifically provide for DSU

employment for individuals who, due to

the existence of their disability, are

unable to satisfy certification or

licensure standards applicable to a

particular profession. As an example,

these commenters stated that,

historically, individuals who are blind

have been excluded on the basis of their

disability from obtaining necessary

certification to teach orientation and

mobility to other blind individuals even

though they are fully qualified to work

in that profession.

Some commenters believed that the

regulations should require that DSU

staff receive mandatory training in all of

the areas identified in paragraph (d)(2)

of this section. Paragraph (d)(2) listed

examples of training areas (e.g., the

Americans with Disabilities Act and the

Individuals with Disabilities Education

Act (IDEA)) that State agencies, at their

discretion, may incorporate into their

staff development systems.

Several commenters opposed the

statement in the preamble to the

proposed regulations that supported a

DSU’s use of family members and

community volunteers for purposes of

communicating in an applicant’s or

eligible individual’s native language.

The commenters believed that the

availability of family members or

volunteers should not relieve the State

agency of its responsibility to hire

qualified personnel who are able to

meet the communication needs of

individuals with disabilities. One

commenter asked whether the State

agency’s responsibility to employ

persons who can address the

communication needs of applicants and

eligible individuals means that the State

agency shall include sign-language

interpreters among its personnel.

Finally, one commenter stated that

the number of individuals that a

rehabilitation counselor assists in

achieving an employment outcome

should not be considered as a factor in

the evaluation of the rehabilitation

counselor’s performance under

paragraph (f) of this section.

Discussion: The Act requires that the

Council generally advise the State unit

in connection with the carrying out of

its responsibilities. In addition, the

Council is required to advise the State

agency on issues affecting the

development of the State plan. Because

an effective system of personnel

development is an essential part of the

State plan and a critical element to the

success of The State Vocational

Rehabilitation Services Program, the

Secretary believes it is necessary for the

Council to be involved in the

development of key aspects of the State

agency’s personnel development

system. Specifically, the Secretary

agrees with the commenters who stated

that the Council should provide advice

to the State agency in connection with

the development of the recruitment,

preparation, and retention plan under

paragraph (b) of this section; staff

development policies and procedures

under paragraph (d) of this section; and

the performance evaluation system

under paragraph (f) of this section; as

well as in the development of personnel

standards under paragraph (c) of this

section, as was stated in the proposed

regulations.

The Secretary emphasizes that this

section of the regulations is not

intended to expand or alter the role of

the Council beyond the advisory role

contemplated by the Act, but only to

identify those areas of personnel

development in which the Council must

be involved in an advisory capacity. The

Secretary believes that to fulfill its

advisory role, the Council, at a

minimum, must be afforded an

opportunity to review and comment on

relevant plans, policies, and procedures

prior to their implementation. This

‘‘opportunity for review and comment’’

is necessary to ensure that the Council

plays a meaningful, although advisory,

role in the development of a system that

ensures an adequate supply of qualified

DSU personnel.

The data system and data collection

requirements specified in paragraph (a)

of this section are statutorily required.

However, the Secretary emphasizes that

the regulations require only that the

State plan include a description of the

system used to collect the data on

personnel needs and personnel

development and do not require the

State to submit the actual data to the

Secretary.

The Secretary agrees with those

commenters who stated that the State

agency’s personnel standards must be

based solely on existing licensing or

certification requirements applicable to

the profession in which DSU employees

provide VR services. The Secretary

interprets section 101(a)(7)(B) of the Act

to permit DSUs to base their personnel

standards on other ‘‘comparable’’

requirements only if certification or

licensing requirements applicable to a

particular profession do not exist. This

interpretation is consistent with the
6318 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

statute’s emphasis on qualified

personnel and with the requirement in

the Act that State agencies develop

personnel standards that are based on

the ‘‘highest requirements in the State.’’

State personnel requirements may be

used as ‘‘comparable requirements’’ by

the State agency only in those very

limited instances in which there is no

national or statewide certification or

license that applies to the professional

or paraprofessional providing VR

services (e.g., case aides). Under those

circumstances, State personnel

requirements may, in fact, represent the

highest requirements in the State for the

particular profession.

The proposed regulations authorized

States to base the highest personnel

standards in the State on equivalent

experience, as well as on academic

degrees, in an effort to stress the

significance of relevant work experience

and to expand the pool from which

qualified personnel can be selected. The

overwhelming majority of commenters

on this issue, however, asserted that the

use of ‘‘equivalent experience’’ as a

substitute for academic degrees for

purposes of meeting the ‘‘highest

requirements in the State * * *’’

significantly weakened the Act’s focus

on qualified personnel. In light of these

comments, the Secretary agrees that the

‘‘highest requirements in the State’’

should be limited to the highest entrylevel academic degree needed for a

national or State license or certification

in order to ensure that the DSU employs

those professionals who are most

capable of assessing the specialized

needs of individuals with disabilities

and addressing those needs through an

appropriate provision of VR services.

The Secretary recognizes the extent to

which the qualified personnel standard

in the Act would be undermined if

States chose to ignore widely

recognized, nationally approved or

State-approved licensing standards and

to employ less qualified individuals on

the basis of ‘‘equivalent experience.’’

The Secretary interprets the Act and

regulations to permit State agencies to

retain current DSU personnel who do

not meet the ‘‘highest requirements in

the State.’’ This position is consistent

with paragraph (c)(1)(ii) of this section,

which requires the State agency to

describe the steps it plans to take to

retrain or hire personnel to meet

standards that are based on the highest

requirements in the State if the State’s

current standards are not based on the

highest requirements in the State.

The Secretary recognizes the concerns

of those commenters who sought to

safeguard DSU employment

opportunities for individuals who,

because of their disability, are

prohibited from obtaining the license or

certification applicable to their

particular profession. To the extent that

certification and licensing requirements

are discriminatory on the basis of

disability, these issues should be

addressed as compliance issues under

section 504 of the Act and the ADA.

Nevertheless, the Secretary is cognizant

of the particular difficulty experienced

by blind individuals who, historically,

have been excluded on the basis of their

disability from becoming certified as

orientation and mobility instructors.

The Secretary emphasizes that these

regulations do not inhibit DSUs or other

VR service providers from hiring blind

individuals as orientation and mobility

teachers even though those individuals

may not meet current certification

requirements. To the extent that a DSU

employs blind individuals who do not

meet the ‘‘highest requirements in the

State’’ applicable to the orientation and

mobility profession, the State agency’s

plan under paragraph (c)(1)(ii) of this

section must identify the steps the

agency plans to take to assist employees

in meeting those requirements. In this

regard, the Secretary is supporting a

national project to develop alternative

certification standards for orientation

and mobility instructors in order to

ensure that individuals who are blind

can meet necessary certification

standards within the timeframe outlined

in the DSU’s plan under paragraph

(c)(1)(ii) of this section.

The Secretary does not believe it is

prudent to make the training areas

identified in paragraph (d) of this

section mandatory for all staff employed

by each DSU. The Secretary believes

that the specific training areas for staff

development adopted by a State unit

must be based on the particular needs

of that State unit. Thus, the final

regulations, like the proposed

regulations, identify specific training

areas as examples that State agencies

may incorporate into their staff

development systems in light of the

DSU’s needs.

Paragraph (e) of this section requires

the State unit to describe in the State

plan how it 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 speaking ability; and (2)

Individuals able to communicate with

applicants or eligible individuals in

appropriate modes of communication.

Personnel under the first requirement

may include State agency staff, family

members of an applicant or eligible

individual, community volunteers, and

other individuals able to communicate

in the appropriate native language.

However, the Secretary agrees that a

DSU cannot institute an across-theboard policy of using family members or

volunteers as a substitute for addressing

the communication needs of individuals

with limited English proficiency

through the use of DSU staff or contract

personnel. DSUs shall be prepared to

address the individual communication

needs of each applicant or eligible

individual it serves. In addition, the

Secretary believes that the DSU is

responsible for employing or obtaining

the services of sign-language

interpreters, which fall within the

definition of ‘‘appropriate modes of

communication’’ in § 361.5(b)(5), to the

extent necessary to meet the

communication needs of individuals

who are deaf.

The Secretary believes that in

evaluating a rehabilitation counselor’s

performance, States should not focus

primarily on the number of individuals

that the counselor has assisted in

achieving an employment outcome. At

most, the number of employment

outcomes for which the counselor is

responsible should be considered as one

of many factors in the assessment of the

counselor’s performance. The Act

requires that the State’s performance

evaluation system facilitate the

accomplishment of the policies and

procedures outlined in the statute,

including the policy of serving, among

others, individuals with the most severe

disabilities. Thus, counselors should be

evaluated on the basis of their efforts in

advancing the purposes of the program

and, more precisely, on the basis of their

performance in serving the most

severely disabled. The Secretary notes

the following passage from the report of

the Senate Committee on Labor and

Human Resources, which was also

referenced in the preamble to the

proposed regulations, to further support

this position: ‘‘The Committee is

concerned that in some States,

procedures used for evaluating

performance of counselors may have the

unintended consequence of providing a

disincentive to serve individuals with

the most severe disabilities and those

clients requiring complex services.’’ The

performance evaluation system required

under the Act and included in the

regulations is designed to address these

disincentives.

Changes: The Secretary has amended

§ 361.18 to require that the State

Rehabilitation Advisory Council must

be afforded an opportunity to review

and comment on the following aspects

of the State agency’s comprehensive

system of personnel development: The
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6319

plan for recruitment, preparation, and

retention of qualified personnel.

Personnel standards. Staff development.

The performance evaluation system. In

addition, the Secretary has clarified

paragraph (c) of this section to permit

DSUs to base their personnel standards

on comparable requirements (including

State personnel requirements) only if

national or State-approved or

-recognized certification, licensing, or

registration requirements applicable to a

particular profession do not exist.

Finally, the term ‘‘equivalent

experience’’ has been deleted from the

definition of ‘‘highest requirements in

the State’’ under paragraph (c) of this

section.

§ 361.22 Cooperation with agencies

responsible for students with disabilities

Comments: Some commenters

questioned whether this section requires

DSUs to develop policies that enable

transitioning students to live

independently before leaving school.

The commenters stated that the

proposed regulations appeared to

require DSUs to assist students in living

independently while the student

continues to receive special education

services from an educational agency.

Other commenters recommended that

the regulations be revised to require the

development and completion of the

IWRP for a special education student

who is eligible for VR services before

the student leaves the school system.

Several commenters believed that the

elements of formal interagency

agreements between State units and

educational agencies identified in the

proposed regulations should be

mandatory for all interagency

agreements developed under this

section. Another commenter asked

whether the regulations require DSUs to

enter into formal interagency

agreements with each local educational

agency within the State.

One commenter opposed the

distinction in the proposed regulations

between those students who receive

special education services and those

who do not receive special education

services and argued that the

requirements governing coordination

between educational agencies and State

units should apply for both groups of

students. Finally, some commenters

recommended that the term

‘‘transitioning student’’ be replaced by

the term ‘‘student with a disability’’ for

purposes of referring to students who do

not receive special education services

from an educational agency.

Discussion: The proposed regulations

required the DSU to develop plans,

policies, and procedures designed to

facilitate the transition of special

education students from the school

setting to the VR program. Specifically,

the regulations stated these policies

must be designed to facilitate the

development and accomplishment of

long-term rehabilitation goals,

intermediate rehabilitation objectives,

and goals and objectives related to

enabling a transitioning student to live

independently before leaving school.

Although these regulatory requirements

largely track the statutory requirements

in section 101(a)(24) of the Act, the

Secretary agrees that clarification is

needed.

The Secretary does not believe that

the Act places on the DSU the

responsibility for assisting a student

with a disability to become independent

prior to leaving school. However, the

Secretary interprets the Act to require

that, before a student with a disability

who is in a special education program

leaves school, the DSU shall plan for

that student’s transition to the VR

program in order to ensure that there is

no delay in the provision of VR services

once special education services end.

This means that the IWRP for each

student determined to be eligible under

the VR program or, if the designated

State unit is operating under an order of

selection, the IWRP for each eligible

student able to be served under the

order, must be completed before the

student leaves school and must, at a

minimum, be consistent with the

rehabilitation goals and objectives,

including goals and objectives related to

enabling the student to live

independently, that were previously

identified in the student’s

individualized education program. The

Secretary believes that this position is

further supported by the legislative

history to the Act, particularly the

Report of the Senate Committee on

Labor and Human Resources, portions

of which are restated in the note

following this section of the regulations.

Furthermore, the Secretary believes that

requiring the development of the IWRP

before a VR-eligible student leaves

school does not impose any additional

costs on the DSU since DSUs are already

required to develop IWRPs for eligible

individuals, including students with

disabilities, if those individuals can be

served. More importantly, the Secretary

believes that this requirement will

improve coordination between the

State’s special education and VR

programs and will ensure that services

are not interrupted after an eligible

student leaves school.

In the proposed regulations, the

Secretary attempted to lessen the

paperwork burden on State units by

reducing the mandatory content

requirements that the draft regulations

made applicable to all formal

interagency agreements between State

units and educational agencies.

Accordingly, the proposed regulations

required only that interagency

agreements identify provisions for

determining State lead agencies and

qualified personnel responsible for

transition services and identify policies

and practices that can be coordinated

between the agencies. The remaining

elements under the draft regulations

(identification of available resources,

financial responsibilities of each agency,

dispute resolution procedures, and

other necessary cooperative policies)

were discretionary under the proposed

regulations. However, most commenters

on this section opposed the reduction in

required elements and stated that each

component is essential for ensuring the

appropriate transition of special

education students from the school

setting to the VR program. Without

detailed agreements, the commenters

argue, resources may be wasted and key

processes may not be delineated,

resulting in delays in services once the

special education student leaves school.

Consequently, each identified element

of formal interagency agreements is

mandatory for all agreements developed

under this section of the final

regulations. The Secretary believes this

position is consistent with the statutory

requirements governing formal

interagency agreements in section 101

(a)(11) and (a)(24) of the Act.

In reviewing the regulations since

publication of the NPRM, the Secretary

identified an additional mandatory

element of formal interagency

agreements that was inadvertently

omitted from the proposed regulations.

This additional element implements the

requirement in section 101(a)(11)(B) of

the Act, which specifies that

interagency cooperation between the

DSU and other agencies, including

educational agencies, must include

training for staff of the agencies as to the

availability, benefits of, and eligibility

standards for vocational rehabilitation

services, to the extent practicable.

The Secretary notes that, although the

regulations require the DSU to enter into

a formal agreement with the State

educational agency, it is within the

discretion of each State to determine

which local educational agencies should

be parties to agreements with the DSU.

The Secretary agrees that classifying

students who do not receive special

education services as ‘‘transitioning

students’’ is confusing. As stated

previously in the preamble analysis of

comments on § 361.5(b)(49), the
6320 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

Secretary believes that replacing all

references to ‘‘transitioning students’’ in

the final regulations with the term

‘‘students with disabilities’’ and

eliminating the definition of

‘‘transitioning student’’ from the final

regulations will enable DSUs and

educational agencies to more easily refer

to, and differentiate between, students

with disabilities who are receiving

special education services and students

with disabilities who are not receiving

special education services. Moreover,

these changes are consistent with the

reference to ‘‘students who are

individuals with disabilities’’ in section

101 (a)(24) and (a)(30) of the Act.

The Secretary also notes that section

101(a)(30) of the Act warrants the

separate treatment that is afforded

students with disabilities who are not in

special education programs as opposed

to those who receive special education

services. Paragraph (b) of this section

implements this statutory provision by

requiring DSUs to develop and

implement policies for providing VR

services to students with disabilities

who do not receive special education

services.

Changes: The Secretary has revised

§ 361.22 to clarify that DSU policies

must provide for the development and

completion of the IWRP for each student

with a disability determined to be

eligible for vocational rehabilitation

services before the student leaves the

school setting. This section has been

revised further to expand the number of

mandatory elements, including staff

training to the extent practicable, that

must be included in formal interagency

agreements between DSUs and

educational agencies. The Secretary also

has revised this section by replacing the

term ‘‘transitioning student’’ with the

term ‘‘student with a disability.’’

Finally, the Secretary has expanded the

note following this section in order to

highlight the emphasis in the Act on the

timely provision of VR services to

special education students.

§ 361.23 Cooperation with other public

agencies

Comments: None.

Discussion: The Secretary wishes to

clarify the requirements governing

interagency cooperation between State

units and other public agencies that

provide rehabilitation services to

individuals with disabilities. Section

361.23(b)(3) of the proposed regulations

would have required that all types of

interagency cooperative initiatives

developed pursuant to this section meet

certain requirements. However,

consistent with section 101(a)(11) of the

Act, the Secretary wishes to clarify that

the requirements specified in paragraph

(b)(3) of this section (e.g., identification

of policies that can be coordinated

between agencies, description of

financial responsibility of each agency,

and procedures for resolving disputes)

apply only if the State unit chooses to

enter into formal interagency

cooperative agreements with other

agencies. It is within the discretion of

the State to determine how the State

unit will cooperate with agencies other

than agencies responsible for students

with disabilities and to determine

whether the requirements identified in

paragraph (b)(3) of this section should

be addressed if the State adopts

cooperative methods other than formal

interagency agreements (e.g.,

interagency working groups).

Changes: The Secretary has revised

§ 361.23 to clarify that the mandatory

policies, practices, and procedures

specified in paragraph (b)(3) apply only

to formal interagency cooperative

agreements developed under this

section.

§ 361.27 Shared funding and

administration of joint programs

Comments: One commenter

supported the proposal to no longer

require written agreements for joint

programs. The majority of commenters,

however, stated that written agreements

are necessary to ensure that joint

programs are administered consistent

with the purposes of the VR program.

Discussion: The proposed regulations

removed the current regulatory

requirements relating to written

agreements for programs involving

shared funding and administrative

responsibility as part of the effort to

reduce paperwork burden on State units

and increase State flexibility. The

Secretary maintains that it is within the

discretion of the State to determine

whether the public agencies

administering a joint program for

providing services to individuals with

disabilities shall enter into a formal

written agreement. However, the

Secretary agrees with the commenters

who indicated that DSUs should be

accountable for the proper

administration of joint rehabilitation

programs authorized under section

101(a)(1)(A) of the Act. Accountability

will be based on the extent to which

joint programs are carried out consistent

with the State plan description required

by the final regulations. This limited

description is much less extensive, and

therefore less burdensome to DSUs, than

the State plan requirements in the

current regulations related to joint

programs.

Changes: The Secretary has amended

§ 361.27 to require that the State plan

describe the nature and scope of any

joint program to be entered into by the

DSU, including the services to be

provided, the respective roles of each

participating agency in the provision of

services and in the administration of the

services, and the share of the costs to be

assumed by each agency.

§ 361.29 Statewide studies and

evaluations

Comments: One commenter requested

that DSUs be required to conduct a

comprehensive assessment of the

rehabilitation needs of individuals with

severe disabilities every five years rather

than every three years as was specified

in the proposed regulations. Another

commenter asked whether the review of

outreach procedures to identify and

serve underserved populations and the

review of the provision of VR services

to individuals with the most severe

disabilities required under paragraph (a)

of this section are to be conducted on

an annual or triennial basis. In addition,

one commenter questioned the statutory

basis for requiring the DSU to analyze

the characteristics of individuals

determined to be ineligible for VR

services and the reasons for the

ineligibility determinations.

One commenter stated that requiring

the DSU to analyze, as part of its annual

evaluation under paragraph (b) of this

section, the extent to which the State

has achieved the objectives of the

strategic plan is unnecessary and

duplicative of the requirements in

§ 361.72. Other commenters stated that

it is unduly burdensome to require the

submission of summaries or copies of

the statewide studies and annual

evaluations as attachments to the State

plan. Finally, one commenter asked

whether the DSU must provide copies of

the statewide studies and annual

evaluations to the State Rehabilitation

Advisory Council.

Discussion: The Secretary believes it

is appropriate and necessary that a

comprehensive assessment of the

rehabilitation needs of individuals with

severe disabilities be conducted every

three years. This time period is intended

to ensure that the DSU conducts the

assessment and reviews its results in

connection with the development of a

new State plan which, in most

instances, must be submitted every

three years. Moreover, the Secretary

believes that each review or assessment

identified in the regulations as a

minimum component of the DSU’s

continuing statewide studies must be

conducted on a triennial basis in
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6321

conjunction with the development of

the State plan.

Section 101(a)(9)(D) of the Act

requires that the State agency annually

provide to the Secretary an analysis of

the characteristics of those individuals

determined to be ineligible for VR

services and the reasons for the

ineligibility determinations. This

requirement, however, was

mischaracterized in the proposed

regulations as a statewide study

component and should have been

identified as an annual reporting

requirement to be submitted in the State

plan.

The Secretary agrees that the

proposed annual evaluation

requirement related to the State’s

achievement of the objectives in its

strategic plan is duplicative of the

requirements in § 361.72(e) and that the

requirement should be deleted from

paragraph (b) of this section.

In recognition of the paperwork

burden associated with including

summaries or copies of the statewide

studies and annual evaluations as

attachments to the State plan, the

Secretary intends to require only that

DSUs maintain copies of the studies and

evaluations and provide copies to the

Secretary upon request. Copies of the

studies and evaluations, however,

should be provided to the State

Rehabilitation Advisory Council so that

the Council can meaningfully fulfill its

advisory role in connection with the

development of those documents as is

required under section 105(c) of the Act.

Additionally, although this program

reporting requirement has been revised,

the Secretary notes that, pursuant to

section 635 of the Act, State agencies

shall submit as part of the supported

employment supplement to their State

plan a summary of the results of the

comprehensive, statewide assessment

on the rehabilitation and career needs of

individuals with severe disabilities and

the need for supported employment

services.

Changes: The Secretary has amended

§ 361.29 to clarify that each mandatory

assessment and review identified in

paragraph (a) as part of the DSU’s

continuing statewide studies must be

conducted triennially in conjunction

with the development of the State plan.

In addition, paragraph (a)(3) of this

section of the proposed regulations

(annual analysis of ineligible

individuals and ineligibility

determinations) has been changed to a

reporting requirement in the State plan

and relocated to paragraph (c)(3) in the

final regulations. The Secretary also has

deleted the analysis of the State’s

progress in achieving the objectives in

the strategic plan from the annual

evaluation requirements in paragraph

(b) of this section. Finally, the Secretary

has revised paragraph (c)(3) of this

section to require that the DSU maintain

copies of its statewide studies and

annual evaluations and make those

copies available upon the request of the

Secretary. This provision has been

relocated to paragraph (c)(4) in the final

regulations.

§ 361.33 Use, assessment, and support

of community rehabilitation programs

Comments: Some commenters

opposed the requirement that vocational

rehabilitation services received through

community rehabilitation programs

must be provided in the most integrated

settings possible. Other commenters

requested that this section be revised to

require the development of a plan for

improving existing community

rehabilitation programs.

Discussion: Section 102(b)(1)(B) of the

Act requires that vocational

rehabilitation services, including those

provided by community rehabilitation

programs, be provided in the most

integrated settings possible. Thus, the

standard of integration specified in this

section is consistent with the Act and

with other sections of the regulations

governing the provision of services.

The Secretary recognizes that the

proposed regulations did not adequately

address each statutory requirement in

section 101(a) of the Act related to

community rehabilitation programs.

Consequently, the Secretary believes

that this section of the final regulations

should be reorganized, revised, and

retitled in an effort to more accurately

reflect all of these statutory

requirements, including the requirement

that DSUs develop plans for improving

existing programs.

In addition, the Secretary believes

that DSUs should be required to

describe in the State plan the need to

use Federal funds in support of new or

existing community rehabilitation

programs in light of recent program

audit findings indicating that some

States have used Federal funds received

under the authority for establishing,

developing, or improving community

rehabilitation programs for purposes

other than providing VR services to

applicants and eligible individuals. Any

paperwork burden or cost associated

with this description, the Secretary

believes, is significantly outweighed by

the need to ensure that program funds

used to support community

rehabilitation programs are properly

expended.

Changes: The Secretary has revised

§ 361.33 to require that the State plan

contain plans for improving existing

community rehabilitation programs. In

addition, the Secretary has revised this

section to require States to describe in

the State plan the need to establish,

develop, or improve, as appropriate, a

community rehabilitation program to

provide VR services to applicants and

eligible individuals. This requirement is

consistent with revisions made to the

definition of ‘‘establishment,

development, or improvement of a

public or nonprofit community

rehabilitation program’’ in § 361.5(b)(16)

to clarify that Federal support of

community rehabilitation programs is

limited to the provision of services to

applicants and eligible individuals

under the VR program. Finally, this

section has been retitled ‘‘use,

assessment, and support of community

rehabilitation programs’’ and has been

reorganized to reflect these three types

of requirements.

§ 361.34 Supported employment plan

Comments: One commenter opposed

the requirement in the proposed

regulations that the DSU submit annual

revisions to its supported employment

plan as a supplement to its State plan.

Discussion: The Secretary does not

intend to require DSUs to annually

revise each provision of its supported

employment plan and submit those

revisions to RSA every year. Section

635(a) of the Act requires that each State

submit a State plan supplement for

providing supported employment

services and ‘‘annual revisions [to] the

plan supplement as may be necessary.’’

Pursuant to section 635(b)(3) of the Act,

however, RSA requires that each year

the DSU explain how it will expend its

annual allotment of supported

employment funds received under

section 632 of the Act. Thus, at a

minimum, the DSU is required to

submit an annual revision to its State

plan attachment that describes its plans

for distributing section 632 funds for

purposes of providing supported

employment services to individuals

with the most severe disabilities. In

addition, the State unit shall provide, on

an annual basis, any revisions to its

supported employment plan that are

necessary to reflect corresponding

changes in State policies or practices

regarding the provision of supported

employment services.

Changes: The Secretary has revised

§ 361.34(b) to clarify that the DSU is

required to submit ‘‘any needed’’ annual

revisions to its supported employment

plan.
6322 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

§ 361.35 Strategic plan

Comments: Two commenters opposed

the requirement that the strategic plan

be submitted as a supplement to the

State plan.

Discussion: Section 120 of the Act

requires that each State develop a

strategic plan for developing,

expanding, and improving VR services

and submit the plan to RSA. In addition,

section 101(a)(34)(A) of the Act requires

that the State plan include an assurance

that the State has developed and

implemented a strategic plan. The

statute, however, does not authorize the

Secretary to approve or disapprove the

strategic plan. Consistent with these

requirements, the Secretary does not

consider the strategic plan to be part of

the State plan that is subject to the

approval of the Secretary, but is

requiring the DSU to submit the

strategic plan and the State plan at the

same time for purposes of

administrative efficiency.

Changes: The Secretary has amended

§ 361.35(b) to require that the DSU

submit the strategic plan at the same

time that it submits the State plan.

§ 361.37 Establishment and

maintenance of information and referral

programs

Comments: The majority of

commenters on this section of the

proposed regulations supported the new

provision that would authorize State

units operating under an order of

selection to establish an expanded

information and referral program for

eligible individuals who do not meet the

order of selection criteria for receiving

VR services. Some commenters did seek

additional clarification as to whether

counseling and guidance services are

authorized or whether an IWRP is to be

developed for individuals served under

the expanded program. One commenter

requested that the Secretary define the

term ‘‘referral for job placement.’’ Other

commenters requested that DSUs be

permitted to count as successful

outcomes those individuals who obtain

employment following a referral by the

DSU. A limited number of commenters

believed the expanded program to be

inconsistent with the order of selection

requirements in the Act.

Discussion: The expanded

information and referral program

authorized in this section is intended to

address the concerns of some State units

operating under an order of selection.

These State units believe they should be

permitted to provide limited nonpurchased services to eligible

individuals who do not qualify for

services under the State unit’s priority

categories. An order of selection is

required under section 101(a)(5)(A) of

the Act if a State unit determines that

it is unable to provide services to all

eligible individuals. Authorization of an

expanded information and referral

program under this section is consistent

with the Act as long as the DSU, in

carrying out the expanded program,

does not use funds needed to provide

VR services to eligible individuals who

are able to be served under the State

unit’s order of selection. An assurance

to this effect is a key condition to

operating an expanded program. In

addition, the Secretary expects a DSU to

expend a limited level of resources (e.g.,

staff time and equipment) in support of

its referral program. For example, a DSU

staff member can administer the

expanded program only to extent that

the staff person is not needed to provide

VR services to eligible individuals who

qualify for services. This limited

commitment of resources must be

reflected in the DSU’s description of its

program under paragraph (c)(2) of this

section.

The Secretary agrees that it is

appropriate to provide counseling and

guidance services under the expanded

referral program. Authorization of these

services further distinguishes the

expanded program from the general

information and referral functions

performed by the DSU for any

individual with a disability. However,

DSUs are not expected to develop

IWRPs for eligible individuals receiving

expanded information and referral

services since these individuals do not

meet the DSU’s criteria for receiving

services under its order of selection and,

therefore, cannot receive the full range

of services under section 103(a) of the

Act to address their rehabilitation

needs.

The Secretary believes that the term

‘‘referral for job placement’’ is selfexplanatory. The expanded program

authorizes DSUs to refer individuals to

various public and private placement

agencies in the community that may be

able to assist the individual in obtaining

employment.

Although the proposed regulations

had required DSUs to track the results

of its expanded information and referral

program, the final regulations make this

a State option. For those DSUs that

choose to track and report on

individuals who obtain employment

following their participation in the

expanded information and referral

program, the final regulations require

that the DSU report to RSA the number

of individuals served and the number

who obtain employment. However, the

Secretary emphasizes that the number of

individuals who are assisted, in part,

under the expanded information and

referral program and who subsequently

obtain employment must be identified

separately from those individuals who

receive full services under an IWRP and

achieve an employment outcome under

the VR program. Individuals who obtain

employment following their receipt of

limited counseling, guidance, and

referral services through the expanded

program are not considered to have

achieved an employment outcome

under § 361.56 of the regulations.

Changes: The Secretary has revised

§ 361.37(c) to authorize counseling and

guidance services under the DSU’s

expanded information and referral

program. In addition, paragraph (c) of

this section has been amended to give

the DSU the discretion to determine

whether to track the results of its

expanded information and referral

program.

§ 361.38 Protection, use, and release of

personal information

Comments: One commenter

questioned whether the regulations

authorize the release of personal

information to the State Rehabilitation

Advisory Council for purposes of

evaluating program effectiveness and

consumer satisfaction. Other

commenters stated that this section

should permit applicants or eligible

individuals to examine, as well as

receive copies of, the information in

their record of services.

Some commenters argued that

determinations as to whether

information is harmful under paragraph

(c)(2) of this section should be made by

objective third parties rather than DSUs.

These commenters were concerned that

a conservative interpretation of the term

‘‘harmful’’ by a State unit would result

in limited access to important

information.

Additional commenters requested that

applicants and eligible individuals be

given unrestricted access to personal

information obtained by the DSU from

other agencies and organizations. Other

commenters sought authorization in this

section for the removal of inaccurate or

misleading information from the record

of services. Finally, some commenters

requested clarification of the term

‘‘judicial officer’’ in paragraph (e)(4) of

this section, which is used in

connection with the release of

information in response to a judicial

order.

Discussion: Paragraph (d) of this

section authorizes the release of

personal information to entities that

evaluate the VR program as long as the

evaluation is directly related to the
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6323

administration of the program or to the

improvement of the quality of life for

applicants and eligible individuals.

State Rehabilitation Advisory Councils

are responsible for evaluating the

effectiveness of, and consumer

satisfaction with, the State agency and

VR services. Because the Council’s

evaluations are designed to facilitate

improvement in the administration of

the VR program and in the provision of

VR services, personal information may

be released to the Council for purposes

of carrying out its evaluative functions,

provided that the Council safeguards the

confidentiality of the information

consistent with the requirements in

paragraph (d).

The Secretary recognizes that, in some

instances, an applicant or eligible

individual may need ready access to the

information in his or her case record, in

addition to copies of the information.

The proposed regulations were not

intended to foreclose the current

regulatory option that permits

applicants and eligible individuals to

examine the information in their record

of services.

The Secretary believes it would be

unduly burdensome to require that an

objective third party rather than the

DSU determine whether information

requested by an applicant or eligible

individual is ‘‘harmful’’ to that

individual. Moreover, the Secretary

regards any inconvenience resulting

from the individual’s inability to

directly receive ‘‘harmful’’ information

as minimal since the relevant

information must still be provided to

the individual, except that it shall be

provided through a third party chosen

by the applicant or eligible individual.

The Secretary also notes that the

individual’s right under paragraph (c)(2)

of this section to choose the person to

whom harmful information is released

supersedes any conflicting State

confidentiality policy developed under

paragraph (a)(1) that designates a

specific individual to receive harmful

information (e.g., medical professional).

Nevertheless, if a representative has

been assigned by a court to represent the

applicant or eligible individual, the

harmful information must be released to

the individual through the courtappointed representative. This

exception is particularly applicable if

the applicant or eligible individual is a

minor or has limited cognitive capacity.

The Secretary does not believe that

there is a basis for requiring that

applicants and eligible individuals be

given unrestricted access to personal

information obtained by the DSU from

other agencies and organizations.

Release of information developed or

compiled by another agency or

organization is subject to the conditions

established by that entity in accordance

with paragraph (c)(3) of this section.

The Secretary recognizes that any

applicant or eligible individual would

prefer that inaccurate or misleading

information be removed from the

individual’s record of services. On the

other hand, the Secretary also believes

it would be unduly burdensome to

impose, through these regulations,

costly and time-consuming due process

procedures that would enable an

individual to legally challenge the

accuracy of the information in his or her

file. It is within the discretion of the

DSU to determine the extent to which

an individual may challenge the

information in that individual’s record

of services. However, the Secretary

believes, at a minimum, that applicants

and eligible individuals should be given

an opportunity to question the accuracy

of the information in the individual’s

record of services and, if unsuccessful

in having the information removed,

should be permitted to include a

statement in the record that identifies

the information that the individual

considers to be inaccurate.

The Secretary emphasizes that DSUs

are not authorized to release personal

information in response to a subpoena

or other document issued by a party to

a dispute or an attorney. Release is

authorized only if a judge or other

judicial officer orders the State unit to

release the information. The term

‘‘judicial officer’’ in the proposed

regulations was intended to mean any

judge, magistrate, or other official who

is authorized to decide the merits of,

and issue, a court order. The Secretary

has clarified this intention in the final

regulations.

Changes: The Secretary has expanded

paragraph (c)(1) of § 361.38 to require

that the DSU make the information in

the record of services available for

inspection by the applicant or eligible

individual. In addition, paragraph (c)(2)

has been amended to clarify that if a

court has appointed a representative to

represent an applicant or eligible

individual, then any requested

information that is considered harmful

to the individual shall be provided to

the individual through the courtappointed representative. The Secretary

also has expanded paragraph (c) to

authorize applicants and eligible

individuals to request that misleading or

inaccurate information in the

individual’s record of services be

amended and to have the request

documented in the individual’s file.

Finally, paragraph (e)(4) has been

clarified to require the release of

information in response to an order

issued by a judge, magistrate, or other

authorized judicial officer.

§ 361.41 Processing referrals and

applications

Comments: Some commenters

opposed the proposed requirement that

the DSU develop timelines for

informing individuals referred to the

DSU for VR services of its application

requirements and for gathering

information necessary to assess the

individual’s eligibility and priority for

services. While these commenters

viewed the timeline requirements as

unduly burdensome, other commenters

supported the provision and

emphasized the need for DSUs to

respond timely to individuals during

the pre-application stage.

One commenter stated that authorized

extensions of the 60-day time period for

determining eligibility should be

limited in duration. Other commenters

stated that all individuals should be

required to complete the DSU’s formal

application form before the 60-day time

period begins to run. Finally, one

commenter requested clarification as to

whether all individuals must provide

information necessary to conduct an

assessment for determining eligibility

and priority for services before being

considered ‘‘to have submitted an

application.’’

Discussion: The Secretary believes

that it is important to retain in the final

regulations the requirement that DSUs

develop timelines for making good faith

efforts to inform individuals referred to

the VR program of the DSU’s

application requirements and to obtain

information needed to assess the

individual’s eligibility and priority for

services. The Secretary agrees with

those commenters who indicated that

these timelines are necessary to ensure

that there is no unreasonable delay

between the individual’s referral and

application for VR services. Moreover,

this requirement is unlikely to cause

DSUs undue burden since many States

already have in place timelines for

handling referrals. However, the

Secretary believes that the development

of an appropriate, good faith timeline

for processing referrals is a matter of

State discretion and that it would be

inappropriate to impose in the final

regulations a specific Federal time

period for this purpose.

Section 102(a)(5)(A) authorizes

extensions of the 60-day time period for

determining eligibility if (1) exceptional

or unforeseen circumstances arise or (2)

an extended evaluation of the

individual is necessary, which may not

exceed 18 months. The Secretary agrees,
6324 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

however, that extensions due to

exceptional or unforeseen

circumstances cannot be open-ended

but must be limited to a specific time

period that is mutually agreed upon by

the individual and the DSU.

The Secretary believes it would be

unduly restrictive to require in all

instances that an individual with a

disability complete the DSU’s

application form before the DSU

initiates an assessment for determining

eligibility and priority for services. This

limitation would be particularly

burdensome for individuals in rural

areas who may not have ready access to

a DSU application form. Although the

regulations require the DSU to make its

application form widely available

throughout the State, the Secretary

considers it inappropriate to penalize

individuals who are unable to secure an

application. Thus, the Secretary

maintains that the 60-day time period

for determining eligibility begins once

the individual (1) has either completed

and signed an agency application form

or has otherwise requested services and

(2) has provided information necessary

for the DSU to initiate the assessment.

Once an individual or the individual’s

representative, as appropriate, requests

services, it is expected that State units

will make good faith efforts to obtain the

assessment information as quickly as

possible. The Secretary also notes that

information needed to initiate the

assessment must be provided before the

60-day timeline begins to run, whether

the individual has completed an agency

application form or has otherwise

requested services. Of course, it is

essential that the individual remain

available during this period to complete

the assessment process.

Changes: The Secretary has amended

§ 361.41 to require that extensions of the

60-day time period for determining

eligibility due to exceptional or

unforeseen circumstances be limited in

duration and that a specific time period

be agreed to by the individual and the

DSU. In addition, the Secretary has

revised this section to clarify that all

individuals who have requested VR

services, whether through the

completion of an agency application or

otherwise, shall be available to complete

the assessment before the individual is

considered to have submitted an

application for VR services.

§ 361.42 Assessment for determining

eligibility and priority for services

Comments: With respect to the first

eligibility criterion, several commenters

opposed the standard in the proposed

regulations that required qualified

personnel ‘‘licensed or certified in

accordance with State law and

regulation’’ to determine the existence

of a physical or mental impairment. The

commenters further recommended that

the regulations permit DSU employees

who meet requirements that are

‘‘comparable’’ to licensing or

certification requirements to determine

the existence of obvious physical

impairments.

Some commenters sought clarification

under the second eligibility criterion

that an impairment that hinders an

individual from maintaining a job

placement constitutes a ‘‘substantial

impediment to employment.’’ These

commenters were concerned that the

proposed regulations appeared to limit

‘‘substantial impediments to

employment’’ to impairments that

prevent unemployed individuals from

obtaining jobs.

Other commenters recommended that

the term ‘‘determine’’ be replaced by the

statutory term ‘‘demonstrate’’ in

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

connection with rebutting the

presumption that an individual who has

a substantial impediment to

employment can benefit in terms of an

employment outcome from VR services.

Finally, one commenter requested

clarification as to whether individuals

who qualify for Social Security benefits

are presumed eligible for VR services.

Several commenters recommended

specific clarifying changes to some of

the examples following this section,

whereas other commenters opposed the

use of examples under this section

altogether.

Discussion: The Secretary believes

that the personnel standard proposed in

connection with the first eligibility

criterion is consistent with the Act. The

proposed standard was based on the

requirement in section 103(a)(1) of the

Act, which states that the assessment for

determining an individual’s eligibility

and VR needs must be conducted by

qualified personnel. The Secretary

interprets the term ‘‘qualified

personnel’’ under section 103(a)(1) of

the Act to refer to personnel who meet

the DSU’s personnel standards under

§ 361.18(c) of these final regulations

(i.e., national or State-approved

certification, licensing, or registration

requirements or, if none of these

requirements exist, other ‘‘comparable

requirements’’ that apply to the

profession in which the individual

provides VR services). Thus, a

determination that an individual has a

physical or mental impairment, or meets

any of the other eligibility criteria in

§ 361.42(a), must be made by personnel

who meet existing licensure,

certification, or registration

requirements applicable to their

profession. Moreover, because DSUs are

required under § 361.18(c) to develop

personnel standards based on existing

certification or licensure requirements,

it is expected that DSU personnel who

determine the existence of impairments,

including obvious physical

impairments, will be qualified within

the meaning of the Act.

The Secretary agrees that an

individual does not have to be

unemployed to have a ‘‘substantial

impediment to employment.’’ A

‘‘substantial impediment to

employment,’’ as defined in

§ 361.5(b)(44), includes any impairment

that hinders the individual from

entering into, engaging in, or retaining

employment consistent with the

individual’s abilities and capabilities.

Given that the regulatory definition of

the term ‘‘substantial impediment to

employment’’ clearly recognizes that

currently employed individuals may

qualify for VR services for purposes of

‘‘retaining’’ their employment, the

Secretary does not believe it is

necessary to revise the second eligibility

criterion in paragraph (a)(1)(ii) as the

commenters recommended.

Section 102(a)(4)(A) of the Act

requires the DSU to presume that an

individual can benefit in terms of an

employment outcome, unless the DSU

can ‘‘demonstrate,’’ based on clear and

convincing evidence, that the individual

is incapable of benefitting in terms of an

employment outcome from VR services.

The Secretary did not intend to weaken

this statutory presumption by using the

term ‘‘determine’’ in place of the term

‘‘demonstrate’’ in the proposed

regulations and agrees that the

regulations should be changed to track

the stronger statutory language.

In addition, the Secretary emphasizes

that Social Security beneficiaries are not

automatically eligible to receive VR

services, but are presumed under

section 102(a)(2) of the Act to meet only

the first two eligibility criteria under

paragraph (a)(1) of this section (i.e., the

individual has a physical or mental

impairment that constitutes or results in

a substantial impediment to

employment). Eligibility for services

under the Social Security Act also

means that the individual is presumed

to meet the first element in the

definition of ‘‘individual with a severe

disability’’ under § 361.5(b)(28). The

Secretary believes that these limited

presumptions were clearly reflected in

the proposed regulations.

Although the Secretary believes that

most of the examples in the regulations

represent useful guidance material, the

Secretary agrees that the examples
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6325

following this section of the proposed

regulations, which had identified six

potential applications of the fourth

eligibility criterion (an individual

requires VR services), should be

removed from the final regulations in

light of the confusion expressed by

commenters and in recognition of the

fact that eligibility determinations are

highly individualized. The commenters’

confusion, the Secretary believes, stems

from the possibility that the application

of the fourth eligibility criterion may

result in different outcomes for

individuals with disabilities who face

apparently similar circumstances. By

removing these examples, the Secretary

seeks to avoid causing similar confusion

on the part of individual counselors

charged with making individual

eligibility determinations. Because the

examples used elsewhere in the

regulations (e.g., permissible expenses

under the definitions of ‘‘maintenance’’

and ‘‘transportation’’) are

straightforward applications of clear

issues and do not create similar

confusion among commenters, the

Secretary believes that those examples

should be retained in the final

regulations.

Changes: The Secretary has amended

§ 361.42(a)(2) of this section to require

a ‘‘demonstration,’’ based on clear and

convincing evidence, that an individual

is incapable of benefitting from VR

services in order for the DSU to

overcome the presumption that an

individual can benefit from VR services.

A technical change also has been made

to paragraph (a)(1)(iii) to identify more

accurately the third eligibility criterion

as a ‘‘presumption’’ of benefit, not a

‘‘determination’’ of benefit. In addition,

the Secretary has removed from the final

regulations the examples that had

followed this section in the proposed

regulations of how an individual may or

may not meet the final eligibility

criterion.

§ 361.43 Procedures for ineligibility

determination

Comments: Several commenters

stated that DSUs should be required, in

all instances, to inform individuals in

writing of the DSU’s ineligibility

determination. These commenters were

concerned that the proposed regulations

authorized DSUs to inform individuals

of ineligibility determinations through

an appropriate mode of communication

without a written record.

In addition, several commenters

indicated that it is unduly burdensome

to require DSUs to review all

ineligibility determinations within 12

months. These commenters stated that

the review of ineligibility

determinations should be limited to

those determinations that are based on

a finding that the individual is

incapable of achieving an employment

outcome. Other commenters asked that

the regulations specify additional bases

for not reviewing ineligibility

determinations (e.g., that the

individual’s disability is rapidly

progressive or terminal).

Discussion: The proposed regulations

incorrectly indicated that DSUs have the

option of providing ineligibility notices

in writing or through an appropriate

mode of communication. The Secretary

agrees that, at a minimum, notice of an

ineligibility determination and other

required information should be

provided to the individual in writing

and supplemented, as necessary, by

other appropriate modes of

communication in accordance with the

individual’s informed choice.

The Secretary agrees with the

suggestion to modify the requirements

in paragraph (d) of this section

governing the review of ineligibility

determinations in light of the views

expressed by public commenters. The

proposed regulations required DSUs to

review all ineligibility determinations at

least once within 12 months and to

review annually thereafter if requested

by the individual determinations based

on a finding that the individual cannot

achieve an employment outcome. In

order to reduce the process burden and

associated costs on DSUs, however, the

Secretary believes that DSUs should be

required to review within 12 months,

and annually thereafter if requested by

the individual, only those ineligibility

determinations that are based on a

finding that the individual is incapable

of achieving an employment outcome.

Moreover, an additional exception to

this review requirement, which is

authorized under the current

regulations, should be permitted for

situations in which the individual’s

medical condition is rapidly progressive

or terminal. The Secretary believes this

narrower interpretation of the review

requirements is supported by sections

101(a)(9)(D) and 102(c) of the Act and

notes that this position is consistent

with the current regulations in 34 CFR

361.35(d). The Secretary also notes that

the requirements of this section apply

both to ineligibility determinations

following an extended evaluation and to

ineligibility determinations made after

an individual has begun to receive

services under an IWRP.

Changes: The Secretary has revised

§ 361.43 to specify that notice of

ineligibility determinations must be

provided in writing and must be

supplemented, as necessary, by other

appropriate modes of communication

consistent with the individual’s

informed choice. For example, a DSU

could meet these requirements by

providing an ineligibility notice in

braille or large print form to an

applicant who has a visual impairment.

In addition, the Secretary has revised

this section to require DSUs to review

only ineligibility determinations that are

based on a finding that the individual is

incapable of achieving an employment

outcome. The final regulations also

clarify that this review of ineligibility

determinations need not be conducted if

the individual’s medical condition is

rapidly progressive or terminal.

§ 361.44 Closure without eligibility

determination

Comments: One commenter requested

that this section be amended to state

that a DSU ‘‘shall not close’’ (rather than

‘‘may not close’’) an applicant’s case

prior to making an eligibility

determination in order to clarify that the

prohibition under this section is

mandatory.

Discussion: The Secretary emphasizes

that State units are prohibited from

closing an applicant’s record of services

prior to making an eligibility

determination unless certain

circumstances are evident (e.g., the

applicant declines to participate in the

assessment, and the DSU has made a

reasonable number of attempts to

encourage the applicant’s participation).

The Secretary interprets the phrase

‘‘may not close’’ to signify a mandatory

prohibition.

Changes: None.

§ 361.45 Development of the

individualized written rehabilitation

program

Comments: Several commenters

stated that the regulations should be

strengthened to ensure that the eligible

individual’s employment goal is

consistent with that individual’s

informed choice. In addition, some

commenters opposed requiring DSUs to

develop timelines for the prompt

development of IWRPs, whereas other

commenters supported the timeline

requirement as a necessary protection

for eligible individuals. Commenters

also stated that the DSU should not be

required to revise an individual’s IWRP

to reflect minor changes to services that

are already identified in the IWRP.

Discussion: The Secretary agrees that

the informed choice of the individual,

as well as the individual’s strengths,

priorities, concerns, abilities,

capabilities, and interests, should be

considered in determining the

individual’s employment goal. Addition
6326 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

of the term ‘‘informed choice’’ to the list

of factors to be considered under

paragraph (a) of this section is also

consistent with the consideration of

informed choice in connection with the

provision of services under § 361.48 and

in connection with the achievement of

an employment outcome under

§ 361.56.

The Secretary believes that the

proposed requirement that DSUs

establish and implement timelines for

the prompt development of IWRPs

should be retained in the final

regulations. The Secretary agrees with

those commenters who indicated that

these timelines are necessary to guard

against unreasonable delays in the

development of the IWRP once an

individual is determined eligible for VR

services. It should also be noted that

this section does not require DSUs to

apply an arbitrary time limit to the

development of all IWRPs, as some

commenters had questioned. Instead,

DSUs are required to develop general

standards that ensure the timely

development of IWRPs as long as the

standards include timelines that take

into account the specific needs of the

individual.

Changes in an individual’s vocational

goal, intermediate objectives, or VR

services must be documented through a

revision in the IWRP after obtaining the

agreement and signature of the

individual. The Secretary believes that

changing the reference from ‘‘VR needs’’

to ‘‘VR services’’ will help clarify this

provision.

In addition, the Secretary agrees that

minor changes to an individual’s

program of services do not have to be

recorded in a revision to the IWRP. This

means, for example, that a slight change

in the cost of a previously authorized

VR service would not warrant a revision

to the IWRP. On the other hand, a

substantive change to an existing service

(e.g., a change in service provider) or the

addition of a new service must be

documented by a revision. Regardless of

whether a particular change to an

individual’s program necessitates a

revision to the IWRP, however, the

Secretary expects that the DSU will

obtain the agreement of the individual

before the change is implemented.

Changes: The Secretary has revised

§ 361.45 to clarify that the informed

choice of the individual must be

considered in the development of the

IWRP and the identification of a

vocational goal. The Secretary also has

amended this section to require the DSU

to incorporate into the IWRP any

revisions necessary to reflect changes to

the individual’s goal, objectives, or VR

services and to obtain the individual’s

agreement and signature to the

revisions.

§ 361.46 Content of the IWRP

Comments: Some commenters on the

proposed regulations questioned certain

required elements of the IWRP,

contending they were inconsistent with

the Act and unnecessarily burdensome.

Specifically, several commenters

questioned the basis for requiring that

the long-term vocational goal identified

in the IWRP be ‘‘specific.’’ Similarly,

other commenters stated that

intermediate rehabilitation objectives

need not be ‘‘measurable.’’ Additional

commenters opposed requiring a

projected date for the achievement of

the vocational goal. Several commenters

recommended that the record of the

DSU’s evaluations of individual

progress be removed from the IWRP and

added to the record of services under

§ 361.47. Finally, some commenters

opposed the requirement that the

individual be provided with

information concerning the availability

and qualifications of alternative service

providers.

Discussion: The Secretary believes

that the long-term vocational goal must

be stated with some specificity in the

IWRP in order for it to be meaningful.

The Secretary does not intend that the

IWRP identify the exact job that the

individual intends to obtain, but

expects, at a minimum, that the

vocational goal be described in terms of

a particular type of profession or

occupation. For example, ‘‘clerical

work’’ is a sufficiently detailed

vocational goal under this requirement,

whereas a vocational goal of ‘‘supported

employment’’ or ‘‘self-employment’’

would be impermissibly vague.

The requirement in the proposed

regulations that the intermediate

rehabilitation objectives must be

‘‘measurable’’ was misplaced and has

been eliminated from the final

regulations. The use of this term was

based on the requirement in section

102(b)(1)(B)(vii) of the Act that the DSU

shall develop procedures for evaluating

the individual’s progress toward

meeting the intermediate rehabilitation

objectives. The final regulations also

clarify that the progress of the

individual in satisfying the objectives

must be measured periodically by the

DSU, but a record of the reviews and

evaluations need not be included in the

IWRP. These reviews and evaluations,

the Secretary agrees, should be

maintained as part of the individual’s

record of services under § 361.47, as

some commenters suggested.

The Secretary does not expect DSUs

to specify a date certain on which an

employment outcome shall be achieved.

Thus, the term ‘‘projected date’’ for the

achievement of the individual’s

vocational goal in paragraph (a)(4) of

this section in the proposed regulations

has been replaced by the term

‘‘projected timeframe’’ in the final

regulations. This provision is intended

to ensure that the individual

understands how long the rehabilitation

process is expected to take.

The Secretary believes that the

requirement in this section concerning

the individual’s description of how

information was provided about the

availability and qualification of

alternative service providers should be

removed from the final regulations since

it is duplicative of the choice

requirements in § 361.52. Section

361.52(b) specifies that the DSU shall

provide the individual, or assist the

individual in acquiring, information

necessary to make an informed choice

about VR services and service providers,

including information about the

qualifications of potential service

providers.

Changes: The Secretary has revised

§ 361.46 by removing the term

‘‘measurable’’ from paragraph (a)(2). The

Secretary also has replaced the term

‘‘projected date’’ in paragraph (a)(4) of

this section with the term ‘‘projected

timeframe’’ in connection with the

achievement of the individual’s

vocational goal. Additionally, the record

of reviews and evaluations of individual

progress has been removed from

paragraph (a)(5) of this section as an

IWRP requirement and relocated to

§ 361.47(h) as a record of services

requirement. Finally, the reference in

the individual’s statement to the

availability and qualifications of

alternative service providers has been

removed from paragraph (a)(6).

§ 361.47 Record of services

Comments: None.

Discussion: In the proposed

regulations, the Secretary proposed to

delete from the record of services a

number of requirements that were

considered burdensome or were

adequately addressed in other

regulatory provisions. In particular,

several requirements that were

duplicative of IWRP content

requirements in § 361.46 were proposed

for removal from this section. For the

same reason, the Secretary believes that

proposed § 361.47(h) should be deleted

from the final regulations. This

provision would have required

documentation in the record of services

of the DSU’s reasons for terminating

services to an individual and, if

appropriate, documentation of the
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6327

DSU’s basis for determining that the

individual has achieved an employment

outcome under § 361.56. The Secretary

believes that further reducing the

paperwork burden on DSUs by

removing proposed § 361.47(h) is

appropriate given that this requirement

is adequately addressed by

§ 361.46(a)(10).

However, in order to ensure that

individuals in competitive employment

are compensated in accordance with the

definition of ‘‘competitive employment’’

in § 361.5(b)(10), the Secretary believes

that the record of services for those

individuals must include

documentation that the individual is

compensated at or above the minimum

wage and receives at least the customary

wage and benefit level paid to nondisabled persons performing similar

work for the same employer.

Changes: The Secretary has removed

from § 361.47 the documentation

requirements relating to the termination

of services and the achievement of an

employment outcome and has added a

cross-reference in § 361.46(a)(10) to

§ 361.56 for additional clarification. In

addition, this section has been amended

to require that the DSU verify in the

record of services that an individual

with a disability in competitive

employment is compensated at or above

the minimum wage and that the

individual’s wage and level of benefits

are not less than that paid by the

employer for the same or similar work

performed by non-disabled individuals.

This new requirement is located in

paragraph (i) of this section.

§ 361.48 Scope of vocational

rehabilitation services for individuals

with disabilities

Comments: Some commenters

recommended that this section of the

final regulations identify assessment

services, counseling and guidance, and

rehabilitation technology as mandatory

services that the DSU shall provide to

all individuals in need of these services.

Other commenters opposed limiting

counseling and guidance services

authorized under this section to

‘‘vocational counseling and guidance.’’

Two commenters requested that the

final regulations clarify that it is the

joint responsibility of the DSU and the

individual to secure grant assistance

from sources other than VR program

funds to pay for training in institutions

of higher education. Other commenters

recommended that language be added to

paragraph (a)(13) of this section to

ensure that job search and placement

services are not discontinued before an

individual achieves the employment

outcome specified in the individual’s

IWRP. One commenter opposed the

requirement in paragraph (b) that the

State plan descriptions related to the

provision of rehabilitation technology

and personal assistance services be

provided on an annual basis. Another

commenter stated that the description of

the DSU’s strategies for expanding the

availability of personal assistance

services under § 361.48(b)(3) of the

proposed regulations is unduly

burdensome and is not required by the

Act. Finally, several commenters

recommended that the final regulations

require, consistent with the Act, a

description in the State plan of how

assistive technology devices are

provided or worksite assessments are

made as part of the assessment for

determining eligibility and VR needs of

the individual.

Discussion: Section 361.48, which

implements section 103(a) of the Act,

authorizes specific vocational

rehabilitation services necessary to

address the rehabilitation needs of

individuals with disabilities. These

services must be included in each DSU’s

program of VR services and, consistent

with § 361.45(a) and § 361.46(a), must

be provided to an eligible individual if

the service is needed to achieve the

intermediate rehabilitation objectives or

vocational goal included in the

individual’s IWRP. In addition, § 361.42

requires DSUs to conduct an assessment

for determining eligibility and priority

for services for each applicant and to

provide rehabilitation technology

devices and services during the

assessment if needed to determine

eligibility. In light of these

requirements, the Secretary does not

believe it is necessary to identify

assessment services, counseling and

guidance, and rehabilitation technology

as mandatory services under this section

of the regulations, as some commenters

had recommended. The commenters

correctly noted that section 101(a)(8) of

the Act exempts these services from the

required search for comparable service

and benefits. Regardless of whether a

particular service is subject to the

comparable service and benefits

requirements, however, the regulations

clearly require DSUs to conduct an

assessment for determining eligibility

and priority for services for each

applicant and to ensure that each

eligible individual receives needed VR

services in accordance with the

individual’s IWRP.

Those commenters who opposed

changing the term ‘‘counseling and

guidance’’ to ‘‘vocational counseling

and guidance’’ in the proposed

regulations were concerned that the

change would limit the scope of

counseling and guidance currently

provided under the program.

Specifically, the commenters were

concerned that this term would prohibit

the provision of personal adjustment

counseling and other related counseling

services currently provided by

vocational rehabilitation counselors—

services that are necessary to address

issues confronted by individuals with

disabilities seeking employment,

including issues associated with

adjusting to environmental barriers,

medical issues, family and social issues,

and other related issues that are not

considered ‘‘vocational.’’ However, the

use of the term ‘‘vocational counseling

and guidance’’ in the proposed

regulations was not intended to limit

the scope of the counseling and

guidance that an individual may need in

order to achieve a vocational goal.

Rather, the term ‘‘vocational counseling

and guidance’’ was intended merely as

a means of distinguishing discrete,

therapeutic counseling and guidance

services that are necessary for an

individual to achieve an employment

outcome from the general supportive

role that the VR counselor performs

throughout the rehabilitation process in

connection with any service. Discrete,

therapeutic counseling and guidance

services include personal adjustment

counseling, counseling that addresses

medical, family, or social issues,

vocational counseling, and any other

form of counseling and guidance that is

necessary for an individual with a

disability to achieve an employment

outcome. The Secretary agrees that

changing the term ‘‘vocational

counseling and guidance’’ to

‘‘vocational rehabilitation counseling

and guidance’’ in the final regulations,

as some commenters suggested, better

reflects this broad interpretation. Like

the term used in the proposed

regulations, this change does not affect

the general counseling and guidance

relationship that exists between the

counselor and the individual during the

entire rehabilitation process.

The Secretary agrees that the DSU and

the individual share a joint

responsibility to secure grant assistance

from sources other than VR program

funds in order to pay for training in

institutions of higher education. This

position is consistent with RSA’s

longstanding policy relating to the

requirement that available comparable

services and benefits be located and

used before a DSU expends program

funds to pay for VR services. Under this

policy, DSUs are responsible for

identifying providers of comparable

services and benefits and for assisting
6328 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

eligible individuals in obtaining those

resources. The individual, on the other

hand, is responsible for applying for

appropriate comparable services and

benefits identified by the DSU. The

Secretary believes that this policy is

equally applicable to the requirement in

section 103(a)(3) of the Act that

maximum efforts be made to secure

alternative sources to pay for training in

institutions of higher education.

Accordingly, it is expected that DSUs

will locate alternative funding sources

to support the cost of training in

colleges and universities and, to the

extent necessary, assist eligible

individuals in obtaining this assistance.

It is further expected that an individual

in need of training in a higher education

institution will pursue and apply for

alternative funding sources identified by

the DSU.

Commenters on § 361.48(a)(13) of the

proposed regulations were concerned

that DSUs could terminate job

placement services anytime an eligible

individual obtains a job even if the job

is inconsistent with the vocational goal

identified in the individual’s IWRP. As

a result, these commenters

recommended that this section

specifically authorize job search and

placement assistance until the

individual achieves an employment

outcome that is consistent with his or

her abilities, capabilities, interests, and

informed choice. The Secretary believes,

however, that the commenters’ concerns

are fully addressed by § 361.56 of the

regulations. That section contains the

requirements for determining whether

an individual has achieved an

employment outcome, including the

requirement in § 361.56(b) that the

employment outcome be consistent with

the individual’s abilities, capabilities,

interests, and informed choice. Thus,

termination of services on the basis that

the individual has achieved an

employment outcome is dependent, in

part, upon whether the job placement is

appropriate for the individual in

accordance with § 361.56(b). If an

eligible individual receiving VR services

is underemployed (i.e., placed in a job

that is not consistent with the

individual’s abilities, capabilities,

interests, and informed choice), the DSU

may not discontinue services, including

job search and placement assistance,

that the individual needs in order to

achieve the vocational goal specified in

the individual’s IWRP.

In an effort to further reduce the

paperwork burden and associated costs

on DSUs, the Secretary has made two

regulatory changes to paragraph (b) of

this section that were recommended by

commenters on the proposed

regulations. First, the final regulations

require the DSU to submit descriptions

related to the provision of rehabilitation

technology and personal assistance

services triennially as part of its new

State plan. The proposed regulations

would have required submission of

these descriptions annually as revisions

to the State plan. Second, the proposed

State plan description of the DSU’s

strategies for expanding the availability

of personal assistance services has been

removed from the final regulations

because it is not required by statute and

could be more appropriately addressed

in a DSU’s strategic plan. Additionally,

the Secretary has added to § 361.48(b) of

the final regulations a requirement that

the State plan describe how assistive

technology devices are provided or

worksite assessments are made as part

of the assessment for determining

eligibility and VR needs of the

individual. This State plan component,

which is required under section

101(a)(31) of the Act, was inadvertently

omitted from the proposed regulations.

Changes: The Secretary has revised

§ 361.48 of the proposed regulations by

changing the term ‘‘vocational

counseling and guidance’’ under

paragraph (a)(3) of this section to

‘‘vocational rehabilitation counseling

and guidance.’’ The Secretary also has

revised this section by clarifying under

paragraph (a)(6) that it is the joint

responsibility of the DSU and the

individual to secure grant assistance

from other sources before using VR

funds to pay for training in institutions

of higher education. In addition, the

term ‘‘annually’’ has been removed from

paragraph (b) of this section. The

description in the State plan regarding

the DSU’s strategies for expanding the

availability of personal assistance

services that would have been required

under § 361.48(b)(3) of the proposed

regulations also has been removed from

the final regulations. Finally, the

Secretary has added to this section the

requirement that the State plan describe

the manner in which assistive

technology devices are provided or

worksite assessments are made as part

of the assessment for determining

eligibility and VR needs of the

individual.

§ 361.49 Scope of Vocational

Rehabilitation Services for Groups of

Individuals With Disabilities

Comments: None.

Discussion: Because the final

regulations limit § 361.50 to written

policies that cover the nature and scope

of services provided to individuals

under § 361.48, the Secretary believes

that the requirement regarding written

policies for services to groups properly

belongs in § 361.49(b)(2) of the final

regulations. This provision is intended

to ensure that if a DSU chooses to

provide services to groups under

§ 361.49, then the DSU develops and

maintains written policies covering each

service and the criteria under which

each service is provided.

Changes: The Secretary has revised

§ 361.49 by relocating the requirement

regarding written policies for services to

groups from § 361.50 of the proposed

regulations to § 361.49(b)(2).

§ 361.50 Written Policies Governing

the Provision of Services for Individuals

With Disabilities

Comments: One commenter stated

that it is inappropriate for this section

to require DSUs to develop written

policies governing the provision of VR

services to groups since these services

are not included in the individual’s

IWRP. Several commenters

recommended requiring that the written

policies developed under this section

must ensure that the provision of

services to each individual is consistent

with the individual’s informed choice.

Finally, one commenter questioned

whether DSUs can prohibit verbal

authorization for services in all

instances.

Discussion: The Secretary recognizes

the inconsistency in requiring the DSU

to develop written policies that cover

the scope of VR services for groups

under § 361.49 and, at the same time,

ensure that the provision of services is

based on the needs of the individual as

identified in the individual’s IWRP. The

commenter on the proposed regulations

who raised this issue correctly noted

that group services under § 361.49 are

not necessarily included in the IWRP to

address a rehabilitation need of the

individual. The Secretary intends that

the policies developed under § 361.50

will ensure that the provision of

services to any eligible individual will

be based on that individual’s needs and

that no arbitrary limits, including limits

pertaining to the location, cost, or

duration of a particular service, will be

placed on an individual’s receipt of VR

services.

The Secretary agrees that the

provision of VR services must be

consistent with the informed choice of

the individual. This position is clearly

reflected in § 361.48 of the regulations.

Consequently, the final regulations

specify that the DSU’s written policies

developed under § 361.50 must ensure

that the provision of VR services is

based on the individual’s rehabilitation

needs and is consistent with the

individual’s informed choice.
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6329

Consistent with the proposed

regulations, § 361.50(d) of the final

regulations requires DSUs to establish

policies related to the timely

authorization of services, including any

conditions under which it allows verbal

authorization. Although the Secretary

expects that, in most instances, the DSU

will provide written authorization of

services before or at the same time that

the services are provided, the Secretary

agrees that DSUs should have the

flexibility to determine the

circumstances under which verbal

authorization for services is permitted.

The Secretary recognizes, however, that

some States prohibit verbal

authorization under all circumstances.

This provision is not intended to

infringe on this State prerogative and

requires only that the DSU specify the

conditions, if any, under which verbal

authorization can be given.

Changes: The Secretary has amended

§ 361.50 by clarifying that this section

applies only to the provision of services

to individuals with disabilities under

§ 361.48. This section also has been

retitled to reflect this change. A

corresponding requirement regarding

written policies for services to groups

has been added to § 361.49(b) of the

final regulations. In addition, the

Secretary has revised § 361.50 to specify

that the DSU’s written policies must

ensure that the provision of services is

consistent with the individual’s

informed choice. Finally, paragraph (d)

of this section has been clarified to

require that the DSU’s policies regarding

the timely authorization of services

identify any conditions under which

verbal authorization can be given.

§ 361.51 Written Standards for

Facilities and Providers of Services

Comments: None.

Discussion: The Secretary believes it

is necessary to revise the requirements

relating to qualified personnel in

paragraph (b)(1) of this section to reflect

corresponding changes to the personnel

standards included in the State agency’s

comprehensive system of personnel

development under § 361.18(c) of these

regulations. A change is necessary to

clarify that individuals who provide VR

services shall meet existing national or

State-approved certification, licensing,

or registration requirements that apply

to the discipline in which that

rehabilitation professional provides VR

services. Individuals who meet

‘‘comparable requirements,’’ such as

State personnel requirements,

developed by the DSU under § 361.18(c)

would be authorized to provide VR

services only if there are no existing

licensing, certification, or registration

requirements applicable to their

particular profession. As stated in the

analysis of comments on § 361.18(c), the

Secretary believes that the Act

precludes the use of less rigorous

‘‘comparable requirements’’ in place of

existing national or statewide

certification, licensing, or registration

requirements that apply to the

discipline in which a rehabilitation

professional provides VR services.

Changes: The Secretary has revised

§ 361.51(b) consistent with § 361.18(c)

to clarify that individuals who provide

VR services shall meet applicable

certification, licensing, or registration

requirements or, if none exist, other

‘‘comparable requirements’’ developed

by the DSU under its comprehensive

system of personnel development.

§ 361.52 Opportunity To Make

Informed Choices

Comments: Some commenters

requested clarification of the meaning of

the term ‘‘informed choice.’’ Other

commenters stated that the DSUs should

be required to inform individuals of

their right to make informed choices

and to explain how informed choice

may be exercised. Additional

commenters recommended requiring

DSUs to provide through appropriate

modes of communication information

that is necessary for an individual to

make an informed choice and to assist

individuals with cognitive disabilities

in exercising choice.

Some commenters opposed the

requirement that DSUs provide, or assist

individuals in obtaining, information

related to the level of consumer

satisfaction with each service. These

commenters stated that information

pertaining to consumer satisfaction may

not be available to the DSU in all

instances. In addition, several

commenters questioned whether the

sources of information specified in

paragraph (c) of this section must be

used by DSUs to ensure that individuals

have sufficient information to make

informed choices.

Discussion: ‘‘Informed choice’’ is a

decisionmaking process in which the

individual analyzes relevant

information and selects, with the

assistance of the rehabilitation

counselor or coordinator, a vocational

goal, intermediate rehabilitation

objectives, VR services, and VR service

providers. Accordingly, this section of

the regulations requires each DSU, in

consultation with its Council if it has

one, to develop its own policies and

procedures that enable individuals with

disabilities to make informed choices

throughout their participation in the VR

program. In addition, the regulations

identify minimum types of information

that must be provided to the individual

by the DSU or through the DSU’s

assistance in connection with the

development of the IWRP (e.g.,

information pertaining to cost,

accessibility, and duration of services,

qualifications of service providers, and

degree of integration associated with a

service). Beyond these limited

informational requirements, the

Secretary believes it would be

inappropriate to impose, through these

regulations, an across-the-board

definition of ‘‘informed choice,’’ as

some commenters suggested. It is within

the discretion of the DSU to develop

appropriate policies that facilitate

access to, at a minimum, the types of

information specified in the regulations

and that enable each individual to make

informed choices.

However, the Secretary agrees that

individuals must be appropriately

informed of their opportunity to make

informed choices throughout the

rehabilitation process and that

requirements should be added to the

final regulations that are designed to

ensure that individuals are aware of

their right to make an informed choice

about their vocational goal,

rehabilitation objectives, services, and

service providers and that they

understand how to exercise that right. In

addition, the Secretary believes that

requiring DSUs to apprise eligible

individuals of their statutory right to

informed choice is an essential

protection for individuals with

disabilities that significantly outweighs

any additional burden associated with

the information requirements in this

section.

The Secretary recognizes that, in some

instances, DSUs may not have access to

information regarding the level of

consumer satisfaction with a particular

service and that DSUs should be

required to provide, or assist the

individual in acquiring, this information

to the extent that it is available.

In addition, the Secretary emphasizes

that the information sources and

methods of obtaining information

identified in paragraph (c) of this

section are intended to serve only as

examples. A DSU can assist individuals

in making informed choices by using

the identified methods (e.g., referring

individuals to local consumer groups or

disability advisory councils), by

providing the listed sources of

information (e.g., State or regional lists

of services and services providers), or by

using other methods or information

sources that it considers appropriate.

Changes: The Secretary has revised

§ 361.52(a) to require DSUs to develop
6330 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

policies that ensure that each individual

receives, through appropriate modes of

communication, information concerning

the availability and scope of informed

choice, the manner in which informed

choice may be exercised, and, consistent

with section 12(e)(2)(F) of the Act, the

availability of support services for

individuals with cognitive or other

disabilities who require assistance in

exercising informed choice. In addition,

the Secretary has clarified in paragraph

(b) that the DSU shall provide the

individual, or assist the individual in

acquiring, information regarding

consumer satisfaction with relevant

services to the extent that that

information is available.

§ 361.53 Availability of Comparable

Services and Benefits

Comments: Several commenters

requested clarification of the proposed

requirement that comparable services

and benefits must be available within a

reasonable period of time. Other

commenters sought clarification of

proposed paragraph (b) of this section,

which identifies those services for

which a DSU is not required to

determine whether comparable services

and benefits are available. Some

commenters recommended that the

regulations direct DSUs to provide the

services specified in paragraph (b) in all

instances. Other commenters asked

whether a DSU, although not required,

has the discretion to search for and use

comparable services and benefits in

connection with the provision of the

services identified in paragraph (b).

Discussion: The proposed regulations

required DSUs to use comparable

services and benefits for all non-exempt

services if available to the eligible

individual within a reasonable period of

time so that the intermediate

rehabilitation objectives in the

individual’s IWRP can be met. The

proposed regulations were intended to

require DSUs to determine what

constitutes a reasonable period of time

on a case-by-case basis according to the

services and rehabilitation objectives

identified in each individual’s IWRP.

However, in light of the confusion

expressed by commenters about both

this section of the regulations and the

proposed definition of ‘‘comparable

services and benefits, the Secretary

believes that requiring comparable

services and benefits to be available at

the time that the service is needed to

accomplish the rehabilitation objectives

in the individual’s IWRP represents a

clearer standard for DSUs to follow.

The proposed regulations also were

intended to exempt specific services

from the comparable services and

benefits requirement consistent with

section 101(a)(8) of the Act. The statute

requires DSUs to provide certain

services (e.g., rehabilitation technology)

as mandatory services without

determining the availability of

comparable services and benefits as is

required for the remaining VR services.

The Secretary agrees that the statement

in proposed paragraph (b) of this section

that a comparable services and benefits

determination ‘‘is not required’’ prior to

the provision of the services identified

in section 101(a)(8) of the statute is

unclear and that the final regulations

should clarify that the exempted

services are not subject to a prior

comparable services and benefits

determination, i.e., the DSU has the

affirmative responsibility to provide

these services without determining the

availability of alternative funding

sources. Nevertheless, the Secretary

agrees that, if an exempted service such

as an assistive technology device is

known to be readily available from an

alternative source at the time the service

is needed to accomplish a rehabilitation

objective in the individual’s IWRP, it is

prudent for the DSU to use those

sources in order to conserve funds

provided under this program. The

Secretary notes, however, that projects

supported by the Technology-Related

Assistance for Individuals with

Disabilities Act of 1988 (Tech Act) are

not alternative sources to the VR

program for purposes of providing

rehabilitation technology. Tech Act

projects are designed to assist States in

developing and implementing effective

systems for securing from other

programs technology-related assistance

for individuals with disabilities. These

projects do not provide actual assistive

technology devices or services to

individuals.

Changes: The Secretary has revised

paragraph (a)(2) of § 361.53 to require

DSUs to use comparable services and

benefits that are available to the

individual at the time the services are

needed to achieve the rehabilitation

objectives in the individual’s IWRP.

This change is consistent with the

changes made to the proposed

definition of ‘‘comparable services and

benefits’’ discussed previously in the

preamble analysis of comments under

§ 361.5(b). In addition, the Secretary has

revised this section to clarify that the

services listed in paragraph (b) are

exempt from a determination of the

availability of comparable services and

benefits.

§ 361.54 Participation of Individuals in

Cost of Services Based on Financial

Need

Comments: None.

Discussion: The Secretary believes it

is necessary to clarify that State policies

governing individual participation

levels in the cost of VR services must

take into consideration the disabilityrelated expenses born by an individual

when determining the individual’s

financial need. Although the Secretary

presumes that DSUs already consider

the individual’s disability-related

expenses when determining financial

need, the Secretary seeks to emphasize

the importance of disability-related

expenses given the significant impact

that they may have on an individual’s

ability to contribute to the cost of VR

services.

Changes: The Secretary has revised

§ 361.54 by requiring in paragraph

(b)(2)(v)(C) that an individual’s

disability-related expenses be

considered in determining the extent to

which an individual shall contribute

toward the cost of VR services.

§ 361.55 Review of extended

employment in community

rehabilitation programs or other

employment under section 14(c) of the

Fair Labor Standards Act

Comments: Some commenters

requested that DSUs be permitted to

limit the number of annual reviews of

individuals in extended employment

that DSUs are required to conduct. In

addition, some commenters requested

that the regulations specify that the

annual review requirement in this

section applies to individuals in

supported employment who earn less

than the minimum wage.

Discussion: Section 101(a)(16) of the

Act requires DSUs to review annually

the status of each eligible individual in

extended employment in order to

determine the individual’s needs and

interests related to competitive

employment. The Act does not provide

for any exceptions to this annual review

requirement. Thus, the Secretary

interprets section 101(a)(16) of the Act

to prohibit DSUs from discontinuing

annual reviews of individuals who

remain in extended employment for

extensive periods. This position

represents a modification to the policy

in the RSA Manual, which had

permitted States to place limitations on

the number of annual reviews of those

in extended employment. Given the

expanded scope of competitive

employment, supported employment,

and other integrated employment

opportunities that may become available
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6331

to individuals in extended employment

in future years, the Secretary believes

that discontinuing annual reviews

would be inconsistent with the

emphasis that the statute places on

competitive and integrated employment.

In addition to conducting reviews of

individuals in extended employment,

section 101(a)(16) of the Act requires

DSUs to review annually the job status

of individuals employed in ‘‘other

employment settings’’ in which the

individual is compensated under

section 14(c) of the FLSA. This review

requirement applies to any eligible

individual employed in an integrated

setting who earns below the minimum

wage, including individuals in

supported employment settings who are

unable to earn the minimum wage at the

time of transition to extended services.

In each case, the DSU is required to

review the individual’s employment

status and determine his or her needs

and interests in becoming competitively

employed.

Changes: None.

§ 361.56 Individuals determined to

have achieved an employment outcome

Comments: Several commenters

responded to the Secretary’s request in

the NPRM for comments on the

potential effect of the proposed time

standard for maintaining a job

placement in order to achieve an

employment outcome. Many of the

commenters questioned the proposed

standard—the duration of the

employers’s probationary period or 90

days if the employer does not have an

established probationary period—by

stating that reliance on employer

probationary periods would be too

burdensome for DSUs to administer or

would not ensure job stability in

instances in which the probationary

period is very short (e.g., two weeks).

Some commenters supported the

proposed standard, while others

suggested that the regulatory time

period be 90 days or the employer’s

probationary period, whichever is

longer. However, a large majority of the

commenters recommended that the

regulations establish a uniform time

period applicable to all job placements.

Some commenters suggested retaining

the 60-day time period required under

the current regulations, whereas other

commenters recommended that the

current standard be increased to 90 or

180 days.

Discussion: The requirement in the

proposed regulations that an individual

maintain a job placement for the

employer’s probationary period or, if the

employer does not have a probationary

period, for at least 90 days was intended

to better reflect whether an individual

has successfully achieved an

employment outcome. Like many of the

commenters on the proposed

regulations, the Secretary believes that

the 60-day standard under the current

regulations is too short a period to

determine whether the individual will

be able to successfully maintain the job

placement over time. The proposed

regulations were designed both to

strengthen the existing standard and to

base the decision that an individual has

achieved an employment outcome, in

part, on the individual’s ability to

satisfy the requirements imposed by the

employer on any employee. If the

employer did not have a probationary

period in place, the 90-day period was

considered an adequate safeguard to

ensure that the individual is performing

well and is likely to maintain the

employment outcome.

Nevertheless, the Secretary

understands the concerns of many

commenters that the proposed standard

may cause DSUs to avoid placing

individuals with employers who have

lengthy probationary periods, thereby

shrinking the pool of potential job

placements, or may be inconsistent with

the informed choice of an individual

who seeks to cease contact with the

DSU prior to the end of the relevant

probationary period. In addition, it is

clear that most commenters prefer a

fixed time period that applies equally to

each individual who receives VR

services. At the same time, however, the

Secretary recognizes that in some

instances 90 days may be too short a

period to ensure job stability. For these

reasons, the final regulations contain a

uniform, minimum 90-day standard that

applies to all individuals who obtain

employment under the VR program.

This uniform standard, the Secretary

expects, enables DSU staff to conserve

time and work more efficiently than

would be possible under an individual

employer-based standard and also

affords DSUs the flexibility to increase

the 90-day minimum time period

whenever circumstances warrant. For

example, a DSU may decide to extend

the period to conform to an employer’s

longer probationary period if at the end

of 90 days it is uncertain whether the

individual will be able to successfully

satisfy the probationary period without

DSU support. Similarly, a DSU should

extend the job-retention period if

requested by the individual. The

Secretary also emphasizes that

paragraph (e) precludes DSUs from

ceasing contact with an individual who

obtains employment unless at the end of

the appropriate retention period (90

days or longer), the individual and the

rehabilitation counselor or coordinator

consider the employment outcome

satisfactory and agree that the

individual is performing well on the job.

Additional safeguards that were

specified in the proposed regulations

also are retained in the final regulations,

including the requirement that the

employment outcome be consistent with

the strengths, resources, priorities,

concerns, abilities, capabilities,

interests, and informed choice of the

individual and that the employment

outcome be located in the most

integrated setting possible.

Changes: The Secretary has revised

§ 361.56 to require in all instances that

an individual shall maintain

employment for a period of at least 90

days in order to be considered to have

achieved an employment outcome.

§ 361.57 Review of rehabilitation

counselor and coordinator

determinations

Comments: One commenter requested

that the prohibition in paragraph (b)(2)

of this section against suspending

services being provided under an IWRP

pending resolution of a dispute be

broadened to cover assessment services.

Another commenter stated that this

prohibition should apply to any service

identified in an IWRP, including those

services that the individual has yet to

receive.

Two commenters stated that State

policies used as a basis for an impartial

hearing officer’s decision under

paragraph (b)(4) of this section, or for a

DSU director’s decision under

paragraph (b)(9) of this section, must be

consistent with Federal requirements.

Other commenters recommended that

paragraph (b)(7) of this section identify

specific Federal standards of review for

determining whether a DSU can review

the decision of a hearing officer. In

addition, one commenter stated that,

anytime the DSU director reverses the

decision of an impartial hearing officer,

the director should be required to

inform the individual of the statutory,

regulatory, or policy basis for the

reversal.

Several commenters opposed the

removal of the current regulatory

timelines governing key stages of the

review process. These commenters

asserted that the timelines in the current

regulations represent essential

protections for individuals with

disabilities and are critical to the

timeliness of appeal procedures. These

commenters also stated that the current

timelines are reasonable, do not pose

significant difficulties for DSUs, and are

necessary to ensure that issues related to
6332 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

the provision of VR services are

resolved in a timely fashion.

Finally, some commenters

recommended that the regulations

require DSUs to inform individuals at

each stage of the rehabilitation process

of their right to appeal a counselor’s

determination.

Discussion: The Secretary believes

that it is necessary to clarify in the final

regulations that time extensions for

informally resolving an individual’s

appeal of a counselor’s determination

under paragraph (a) of this section must

be agreed to by both parties and must

be specific in length. This change is

necessary to ensure the timely

resolution of disputes through formal

review procedures.

Section 102(d)(5) of the Act, which is

implemented by paragraph (b)(2) of this

section, states that the DSU may not

institute a suspension, reduction, or

termination of services being provided

under the individual’s IWRP pending

final resolution of an individual’s

challenge to a determination of a

rehabilitation counselor unless the

individual so requests or the services

have been obtained through

misrepresentation, fraud, collusion, or

criminal conduct on the part of the

individual. This statutory prohibition

does not apply to assessment or other

services that are not included in the

IWRP. Similarly, the statutory reference

to services ‘‘being provided under the

IWRP’’ means that the DSU is

prohibited from suspending only those

services in the IWRP that the individual

has begun to receive prior to requesting

a review of a counselor’s determination.

However, the Secretary notes that the

DSU cannot discontinue a service

during a regular interruption in that

service (e.g., between semesters at an

institution of higher education in which

training is provided) as long as the

service is included in the IWRP and has

been initiated.

The Secretary agrees that any State

policy used as a basis for an impartial

hearing officer’s decision under

paragraph (b)(4) of this section or for a

modification of that decision by the

director of the DSU under paragraph

(b)(9) of this section must be consistent

with Federal statutory and regulatory

requirements.

Section 361.57(b)(7) of the proposed

and final regulations requires that any

decision by a DSU director to review the

decision of an impartial hearing officer

must be based on standards of review

established under written State policy.

Although DSUs have the discretion to

establish appropriate standards of

review, the Secretary intends that

standards developed under paragraph

(b)(7) of this section be consistent with

RSA policy, specifically Chapter 0545 of

the Rehabilitation Services Manual

(Clients’’ Rights to Appeal Decisions),

which specifies a number of

fundamental issues that should be

addressed in connection with

determining whether to review a

hearing officer’s decision (e.g., Is the

initial decision arbitrary, capricious, an

abuse of discretion or otherwise

unreasonable? Is the initial decision

consistent with the facts of the case and

applicable Federal and State policies?).

Section 361.57(b)(10) of the proposed

regulations provided that if the DSU

director decided to review the decision

of an impartial hearing officer, the

director would provide to the individual

a full report of the director’s final

decision and of the findings and

grounds for the decision. The Secretary

intended the term ‘‘grounds’’ to include

any applicable law or policy on which

the decision was based and believes that

changing that term in the final

regulations to ‘‘statutory, regulatory, and

policy grounds’’ will clarify this

intention. As stated previously, any

State policy that is used to support the

director’s decision must be consistent

with Federal statutory and regulatory

requirements.

The proposed regulations would have

afforded DSUs the discretion to develop

timelines for the prompt handling of

appeals instead of specifying Federal

timelines for certain stages of the

appeals process. However, there was

near-unanimity among commenters in

opposing this change from current

regulations. The commenters stressed

the importance of protecting individuals

from delays in the resolution of issues

affecting an individual’s receipt of VR

services and vigorously asserted that

Federal timelines are the best means of

ensuring that State appeal procedures

are conducted in a timely fashion.

For the reasons stated by the

commenters, the Secretary agrees that

the current regulatory timelines should

be retained in the final regulations. State

units have not indicated that the Federal

timelines are unreasonable or

unnecessarily burdensome. Moreover,

commenters on the proposed

regulations indicated that a number of

DSUs have failed to meet the current

timelines in the past. In light of these

comments, the Secretary believes that at

this time affording DSUs the additional

flexibility to develop their own

timelines for handling appeals is neither

warranted nor appropriate and that

retaining the current timelines does not

impose additional costs on DSUs.

Finally, the Secretary agrees that

individuals must be informed of their

appeal rights during key stages of the

rehabilitation process. Section 361.46

(a)(8) and (a)(9) requires that these

rights, as well as the availability of

representation through the Client

Assistance Program (CAP) under 34 CFR

part 370, be clearly delineated in the

IWRP. Moreover, § 361.43(c) requires

DSUs to provide individuals with

information concerning the CAP

whenever an individual is found

ineligible to receive VR services. The

Secretary believes that these provisions

sufficiently ensure that individuals are

apprised of their right to challenge any

determination made by a counselor

regarding the provision or denial of

services.

Changes: The Secretary has revised

§ 361.57 to clarify that time extensions

for informally resolving an individual’s

request for review of a counselor’s

determination under paragraph (a) must

be specific and agreed upon by both

parties. In addition, paragraphs (b)(4)

and (b)(9) of this section have been

revised to clarify that any State policy

on which the decision of an impartial

hearing officer or DSU director is based

must be consistent with applicable

Federal requirements. Paragraph (b)(10)

of this section also has been amended to

clarify that the director’s decision and

corresponding report must specify the

statutory, regulatory, or policy grounds

for the decision. Finally, the Secretary

also has revised this section by applying

specific timelines to certain stages of the

appeals process. Like the current

regulations, the final regulations require

that an impartial hearing officer conduct

a formal hearing within 45 days of an

individual’s request for review; that the

hearing officer render a decision within

30 days of the completion of the

hearing; and that the DSU director issue

a final decision within 30 days of

notifying the individual of the director’s

intent to review the initial decision. The

requirement that the individual be

notified of the director’s intent to review

the initial decision within 20 days of its

issuance is specified in the Act and is

implemented by § 361.57(b)(5) of the

regulations. Because the current

regulatory timelines have been

reinserted into this section of the final

regulations, the Secretary has removed

from the final regulations the

requirement under paragraph (c) of the

proposed regulations that the DSU

develop timelines applicable to these

stages of the review process.

§ 361.60 Matching Requirements

Comments: Two commenters opposed

the prohibition in this section against

using third party in-kind contributions

to meet the non-Federal share under the
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6333

VR program. Another commenter

expressed concern about the impact of

this prohibition on the use, as nonFederal match, of funds provided by

other public agencies under third-party

cooperative arrangements.

Discussion: ‘‘Third party in-kind

contributions,’’ which are a permissible

source of State matching funds under

the Education Department General

Administrative Regulations (EDGAR),

are defined in 34 CFR 80.3 as ‘‘property

or services which benefit a federally

assisted project or program and which

are contributed by non-Federal third

parties without charge to the grantee.

* * *’’ However, it is RSA’s policy to

not allow the use of third-party in-kind

contributions to meet the State matching

requirement under the VR program in

the absence of specific statutory

authority. Where the Act permits the

use of in-kind expenditures as match for

certain programs, that authority is

expressed (e.g., the State Independent

Living Program under section 712(b)(2)

of the Act). Thus, § 361.60(b)(2)

specifies that these contributions may

not be used as part of the DSU’s nonFederal share under the program. This

provision is consistent with the

definition of ‘‘State and local funds’’

under § 361.76 of the current regulations

and with the current regulatory

prohibition on the use of in-kind

contributions as match in § 361.24(c).

Nevertheless, this prohibition has no

effect on a DSU’s ability to enter into

third-party cooperative arrangements

under § 361.28 of the regulations for

providing VR services with another

public agency that is furnishing part or

all of the non-Federal share under the

program. As long as the third party is

contributing funds to support VR

services, those dollars may be used as

part of the DSU’s non-Federal share

(e.g., staff salaries paid by the third

party that are allowable matching

expenditures). If, on the other hand, the

DSU enters into an arrangement under

which a third party provides equipment

or property used in the administration

of the VR program, the costs associated

with those items cannot be used as nonFederal matching funds.

Changes: None.

§ 361.62 Maintenance of Effort

Requirements

Comments: One commenter suggested

that recoveries of State maintenance of

effort deficits should always be

deducted from the State’s allotment in

a future fiscal year.

Discussion: Section 111(a)(2)(B)(ii) of

the Act, which is implemented by

§ 361.62(a)(1) of the regulations,

requires the Department to recover

maintenance of effort deficits through a

deduction in the State’s allotment for

the following Federal fiscal year.

However, there is no statutory authority

to deduct an allotment other than in the

year immediately following a

maintenance of effort shortfall. Thus,

§ 361.62(a)(2) of the regulations

specifies that when a maintenance of

effort deficit is discovered too late to

adjust the allotment for the following

year, then the deficit will be recovered

through an audit disallowance.

Changes: None.

§ 361.71 Procedures for Developing the

Strategic Plan

Comments: Two commenters

recommended that the DSU be required

to consult the State Client Assistance

Program prior to developing its strategic

plan. Other commenters recommended

that DSUs be required only to review

rather than to revise the strategic plan

on an annual basis under paragraph (c)

of this section.

Discussion: Section 122(b) of the Act

specifies that, prior to developing the

strategic plan, the DSU shall hold public

forums and solicit recommendations

specifically from the State

Rehabilitation Advisory Council and the

Statewide Independent Living Council.

The Secretary agrees that the views of

the CAP also should be considered in

connection with the development of the

strategic plan. The public participation

requirements in § 361.71(a) afford the

CAP and other interested parties the

opportunity to provide the DSU with its

comments and recommendations. The

annual revision requirement under

paragraph (c) of this section is based on

section 122(a) of the Act, which states

that the strategic plan must be updated

on an annual basis to reflect actual

experience over the previous year and

input from the Council and other

interested parties. The Secretary

believes that merely requiring an annual

review would be inconsistent with this

statutory requirement.

Changes: None.

Paperwork Reduction Act of 1995

Under the Paperwork Reduction Act

of 1995, no persons are required to

respond to a collection of information

unless it displays a valid OMB control

number. The valid OMB control number

assigned to the collections of

information in these final regulations is

displayed at the end of the affected

sections of the regulations.

Intergovernmental Review

This program is subject to the

requirements of Executive Order 12372

and the regulations in 34 CFR part 79.

The objective of the Executive order is

to foster an intergovernmental

partnership and a strengthened

federalism by relying on processes

developed by State and local

governments for coordination and

review of proposed Federal financial

assistance.

In accordance with the order, this

document is intended to provide early

notification of the Department’s specific

plans and actions for this program.

Assessment of Educational Impact

In the notice of proposed rulemaking,

the Secretary requested comments on

whether the proposed regulations would

require transmission of information that

is being gathered by or is available from

any other agency or authority of the

United States.

Based on the response to the proposed

regulations and on its own review, the

Department has determined that the

regulations in this document do not

require transmission of information that

is being gathered by or is available from

any other agency or authority of the

United States.

List of Subjects

34 CFR Part 361

Reporting and recordkeeping

requirements, State-administered grant

program—education, Vocational

rehabilitation.

34 CFR Part 363

State-administered grant program—

education, Supported employment.

34 CFR Part 376

Special projects and demonstrations,

Transitional rehabilitation services.

34 CFR Part 380

Special projects and demonstrations,

Supported employment, Technical

assistance.

Dated: December 1, 1996.

Richard W. Riley,

Secretary of Education.

(Catalog of Federal Domestic Assistance

Numbers: 84.126 The State Vocational

Rehabilitation Services Program; 84.187 The

State Supported Employment Services

Program; 84.235 Special Projects and

Demonstrations for Providing Transitional

Rehabilitation Services to Youth with

Disabilities; 84.128 Special Projects and

Demonstrations for Providing Supported

Employment Services to Individuals with the

Most Severe Disabilities and Technical

Assistance Projects)

The Secretary amends Title 34,

Chapter III, of the Code of Federal

Regulations as follows:

1. Part 361 is revised to read as

follows:
6334 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

PART 361—THE 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 for Vocational

Rehabilitation Services

361.10 Submission, approval, and

disapproval of the State plan.

361.11 Withholding of funds.

State Plan Content: 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

Advisory Council.

361.17 Requirements for a State

Rehabilitation Advisory Council.

361.18 Comprehensive system of personnel

development.

361.19 Affirmative action for individuals

with disabilities.

361.20 State plan development.

361.21 Consultations regarding the

administration of the State plan.

361.22 Cooperation with agencies

responsible for students with disabilities.

361.23 Cooperation with other public

agencies.

361.24 Coordination with the Statewide

Independent Living Council.

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 studies and evaluations

361.30 Services to special groups of

individuals with disabilities.

361.31 Utilization of community resources.

361.32 Utilization of profitmaking

organizations for on-the-job training in

connection with selected projects.

361.33 Use, assessment, and support of

community rehabilitation programs.

361.34 Supported employment plan.

361.35 Strategic plan.

361.36 Ability to serve all eligible

individuals; order of selection for

services

361.37 Establishment and maintenance of

information and referral programs.

361.38 Protection, use, and release of

personal information.

361.39 State-imposed requirements.

361.40 Reports.

State Plan Content: 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

written rehabilitation program.

361.46 Content of the individualized

written rehabilitation program.

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 Written standards for facilities and

providers of services.

361.52 Opportunity to make informed

choices.

361.53 Availability of comparable services

and benefits.

361.54 Participation of individuals in cost

of services based on financial need.

361.55 Review of extended employment in

community rehabilitation programs or

other employment under section 14(c) of

the Fair Labor Standards Act.

361.56 Individuals determined to have

achieved an employment outcome.

361.57 Review of rehabilitation counselor

or coordinator determinations.

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 and

program income.

361.65 Allotment and payment of Federal

funds for vocational rehabilitation

services.

Subpart D—Strategic Plan for Innovation

and Expansion of Vocational Rehabilitation

Services

361.70 Purpose of the strategic plan.

361.71 Procedures for developing the

strategic plan.

361.72 Content of the strategic plan.

361.73 Use of funds.

361.74 Allotment of Federal funds.

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

otherwise noted.

Subpart A—General

§ 361.1 Purpose.

Under the State Vocational

Rehabilitation Services Program

(program), the Secretary provides grants

to assist States in operating a

comprehensive, coordinated, effective,

efficient, and accountable program that

is designed to assess, plan, develop, and

provide vocational rehabilitation

services for individuals with

disabilities, consistent with their

strengths, resources, priorities,

concerns, abilities, capabilities, and

informed choice, so that they may

prepare for and engage in gainful

employment.

(Authority: Sec. 12(c) and 100(a)(2) of the

Act; 29 U.S.C. 711(c) and 720(a)(2))

§ 361.2 Eligibility for a grant.

Any State that submits to the

Secretary a 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: Sec. 101(a) of the Act; 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 State

plan;

(b) Administrative costs under the

State plan; and

(c) The costs of developing and

implementing the strategic plan.

(Authority: Sec. 111(a)(1) of the Act; 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 74 (Administration of

Grants to Institutions of Higher

Education, Hospitals, and Nonprofit

Organizations), with respect to

subgrants to entities that are not State or

local governments or Indian tribal

organizations.

(2) 34 CFR part 76 (StateAdministered Programs).

(3) 34 CFR part 77 (Definitions that

Apply to Department Regulations).

(4) 34 CFR part 79 (Intergovernmental

Review of Department of Education

Programs and Activities).

(5) 34 CFR part 80 (Uniform

Administrative Requirements for Grants

and Cooperative Agreements to State

and Local Governments), except for

§ 80.24(a)(2).

(6) 34 CFR part 81 (General Education

Provisions Act-Enforcement).

(7) 34 CFR part 82 (New Restrictions

on Lobbying).

(8) 34 CFR part 85 (Governmentwide

Debarment and Suspension

(Nonprocurement) and

Governmentwide Requirements for

Drug-Free Workplace (Grants)).

(9) 34 CFR part 86 (Drug-Free Schools

and Campuses).

(b) The regulations in this part 361.

(Authority: Sec. 12(c) of the Act; 29 U.S.C.

711(c))
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6335

§ 361.5 Applicable definitions.

(a) Definitions in EDGAR. The

following terms used in this part are

defined in 34 CFR 77.1:

Department

EDGAR

Fiscal year

Nonprofit

Private

Public

Secretary

(b) Other definitions. The following

definitions also apply to this part:

(1) Act means the Rehabilitation Act

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

amended.

(Authority: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

(2) Administrative costs under the

State plan means expenditures incurred

in the performance of administrative

functions under the vocational

rehabilitation program. Administrative

costs include expenses related to

program planning, development,

monitoring, and evaluation, including,

but not limited to, quality assurance;

budgeting, accounting, financial

management, information systems, and

related data processing; providing

information about the program to the

public; technical assistance to other

State agencies, private nonprofit

organizations, and businesses and

industries, except for technical

assistance and support services

described in § 361.49(a)(4); the State

Rehabilitation Advisory Council and

other advisory committees; professional

organization membership dues for State

unit employees; the removal of

architectural barriers in State vocational

rehabilitation agency offices and Stateoperated rehabilitation facilities;

operating and maintaining State unit

facilities, equipment, and grounds;

supplies; administration of the

comprehensive system of personnel

development, including personnel

administration, administration of

affirmative action plans, and training

and staff development; administrative

salaries, including clerical and other

support staff salaries, in support of these

functions; travel costs related to

carrying out the program, other than

travel costs related to the provision of

services; costs incurred in conducting

reviews of rehabilitation counselor or

coordinator determinations under

§ 361.57; and legal expenses required in

the administration of the program.

(Authority: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

(3) American Indian means an

individual who is a member of an

Indian tribe.

(Authority: Sec. 7(20) of the Act; 29 U.S.C.

706(20))

(4) Applicant means an individual

who submits an application for

vocational rehabilitation services in

accordance with § 361.41(b)(2).

(Authority: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

(5) 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: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

(6) Assistive technology device means

any item, piece of equipment, or

product system, whether acquired

commercially off the shelf, modified, or

customized, that is used to increase,

maintain, or improve the functional

capabilities of an individual with a

disability.

(Authority: Sec. 7(23) of the Act; 29 U.S.C.

706(23))

(7) Assistive technology service means

any service that directly assists an

individual with a disability in the

selection, acquisition, or use of an

assistive technology device, including—

(i) The evaluation of the needs of an

individual with a disability, including a

functional evaluation of the individual

in his or her customary environment;

(ii) Purchasing, leasing, or otherwise

providing for the acquisition by an

individual with a disability of an

assistive technology device;

(iii) Selecting, designing, fitting,

customizing, adapting, applying,

maintaining, repairing, or replacing

assistive technology devices;

(iv) Coordinating and using other

therapies, interventions, or services

with assistive technology devices, such

as those associated with existing

education and rehabilitation plans and

programs;

(v) Training or technical assistance for

an individual with a disability or, if

appropriate, the family members,

guardians, advocates, or authorized

representatives of the individual; and

(vi) Training or technical assistance

for professionals (including individuals

providing education and rehabilitation

services), employers, or others who

provide services to, employ, or are

otherwise substantially involved in the

major life functions of individuals with

disabilities, to the extent that training or

technical assistance is necessary to the

achievement of an employment outcome

by an individual with a disability.

(Authority: Sec. 7(24) and 12(c) of the Act;

29 U.S.C. 706(24) and 711(c))

(8) 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) Services to family members if

necessary to enable the applicant or

eligible individual to achieve an

employment outcome.

(P) Personal assistance services.

(Q) Services similar to the services

described in paragraphs (A) through (P)

of this definition.

(ii) For the purposes of this definition,

the word 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: Sec. 7(25) and 12(c) of the Act;

29 U.S.C. 706(25) and 711(c))

(9) Comparable services and benefits

means services and benefits that are—
6336 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

(i) Provided or paid for, in whole or

in part, by other Federal, State, or local

public agencies, by health insurance, or

by employee benefits;

(ii) Available to the individual at the

time needed to achieve the intermediate

rehabilitation objectives in the

individual’s Individualized Written

Rehabilitation Program (IWRP) in

accordance with § 361.53; and

(iii) Commensurate to the services

that the individual would otherwise

receive from the vocational

rehabilitation agency.

(Authority: Sec. 12(c) and 101(a)(8) of the

Act; 29 U.S.C. 711(c) and 721(a)(8))

(10) Competitive employment means

work

(i) In the competitive labor market

that is performed on a full-time or parttime basis in an integrated setting; and

(ii) For which an individual is

compensated at or above the minimum

wage, but not less than the customary

wage and level of benefits paid by the

employer for the same or similar work

performed by individuals who are not

disabled.

(Authority: Sec. 7(5), 7(18), and 12(c) of the

Act; 29 U.S.C. 706(5), 706(18), and 711(c))

(11) 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 acquisition of existing

buildings;

(iii) The remodeling, alteration, or

renovation of existing buildings;

(iv) The construction of new buildings

and expansion of existing buildings;

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

soil investigation, if necessary, in

connection with the construction

project;

(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: Sec. 7(1) and 12(c) of the Act; 29

U.S.C. 706(1) and 711(c))

(12) Designated State agency or State

agency means the sole State agency,

designated in accordance with

§ 361.13(a), to administer, or supervise

local administration of, the State plan

for vocational rehabilitation services.

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 plan relating to the

vocational rehabilitation of individuals

who are blind.

(Authority: Sec. 7(3)(A) and 101(a)(1)(A) of

the Act; 29 U.S.C. 706(3)(A) and 721(a)(1)(A))

(13) Designated State unit or State

unit means either—

(i) The State agency 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 independent State

commission, board, or other agency that

has vocational rehabilitation, or

vocational and other rehabilitation, as

its primary function.

(Authority: Sec. 7(3)(B) and 101(a)(2)(A) of

the Act; 29 U.S.C. 706(3)(B) and 721(a)(2)(A))

(14) Eligible individual means an

applicant for vocational rehabilitation

services who meets the eligibility

requirements of § 361.42(a).

(Authority: Sec. 7(8)(a) and 102(a)(1) of the

Act; 29 U.S.C. 706(8) and 722(a)(1))

(15) Employment outcome means,

with respect to an individual, entering

or retaining full-time or, if appropriate,

part-time competitive employment in

the integrated labor market to the

greatest extent practicable; supported

employment; or any other type of

employment that is consistent with an

individual’s strengths, resources,

priorities, concerns, abilities,

capabilities, interests, and informed

choice.

(Authority: Sec. 7(5), 12(c), 100(a)(2), and

102(b)(1)(B)(i) of the Act; 29 U.S.C. 706(5),

711(c), 720(a)(2), and 722(b)(1)(B)(i))

(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 (b)(17) of this section to

provide vocational rehabilitation

services to applicants or eligible

individuals;

(ii) Staffing, if necessary to establish,

develop, or improve a 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.

(D) 45 percent of staffing costs for the

fourth year; and

(iii) Other expenditures related to the

establishment, development, or

improvement of a 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: Secs. 7(6) and 12(c) of the Act; 29

U.S.C. 706(6) and 711(c))

(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 the 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: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

(18) Extended employment means

work in a non-integrated or sheltered

setting for a public or private nonprofit
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6337

agency or organization that provides

compensation in accordance with the

Fair Labor Standards Act and any

needed support services to an

individual with a disability to enable

the individual to continue to train or

otherwise prepare for competitive

employment, unless the individual

through informed choice chooses to

remain in extended employment.

(Authority: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

(19) Extended services, as used in the

definition of ‘‘Supported employment,’’

means ongoing support services and

other appropriate services that are

needed to support and maintain an

individual with a most severe disability

in supported employment and that are

provided by a State agency, a private

nonprofit organization, employer, or any

other appropriate resource, from funds

other than funds received under this

part, 34 CFR part 363, 34 CFR part 376,

or 34 CFR part 380, after an individual

with a most severe disability has made

the transition from support provided by

the designated State unit.

(Authority: Sec. 7(27) of the Act; 29 U.S.C.

706(27))

(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: Secs. 12(c) and 101(a)(8) of the

Act; 29 U.S.C. 711(c) and 721(a)(8))

(21) Family member, for purposes of

receiving vocational rehabilitation

services in accordance with

§ 361.48(a)(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: Secs. 12(c) and 103(a)(3) of the

Act; 29 U.S.C. 711(c) and 723(a)(3))

(22) 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 Advisory Council for the

designated State unit;

(C) Has not been involved in previous

decisions regarding the vocational

rehabilitation of the applicant or eligible

individual;

(D) Has knowledge of the delivery of

vocational rehabilitation services, the

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 would be in

conflict with the objectivity of the

individual.

(ii) An individual may not be

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: Sec. 7(28) of the Act; 29 U.S.C.

706(28))

(23) 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).

(Authority: Sec. 7(21) of the Act; 29 U.S.C.

706(21))

(24) Individual who is blind means a

person who is blind within the meaning

of the applicable State law.

(Authority: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

(25) Individual with a disability,

except in §§ 361.17 (a), (b), (c), and (j),

361.19, 361.20, and 361.51(b)(2), 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: Sec. 7(8)(A) of the Act; 29 U.S.C.

706(8)(A))

(26) Individual with a disability, for

purposes of §§ 361.17 (a), (b), (c), and (j),

361.19, 361.20, and 361.51(b)(2), 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: Sec. 7(8)(B) of the Act; 29 U.S.C.

706(8)(B))

(27) Individual with a most severe

disability means an individual with a

severe disability who meets the

designated State unit’s criteria for an

individual with a most severe disability.

These criteria must be consistent with

the requirements in § 361.36(c)(3).

(Authority: Sec. 101(a)(5) of the Act; 29

U.S.C. 721(a)(5))

(28) Individual with a severe 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 retardation, 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, 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: Sec. 7(15)(A) of the Act; 29 U.S.C.

708(15)(A))

(29) Individual’s representative means

any representative chosen by an

applicant or eligible individual,

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 court-appointed

representative is the individual’s

representative.

(Authority: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

(30) Integrated setting,—

(i) With respect to the provision of

services, means a setting typically found

in the community in which applicants

or eligible individuals interact with

non-disabled individuals other than

non-disabled individuals who are

providing services to those applicants or

eligible individuals;
6338 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

(ii) With respect to an employment

outcome, means a setting typically

found in the community in which

applicants or eligible individuals

interact with non-disabled individuals,

other than non-disabled individuals

who are providing services to those

applicants or eligible individuals, to the

same extent that non-disabled

individuals in comparable positions

interact with other persons.

(Authority: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

(31) Maintenance means monetary

support provided to an eligible

individual or an individual receiving

extended evaluation services for those

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 a program of vocational

rehabilitation services.

(Authority: Secs. 12(c) and 103(a)(5) of the

Act; 29 U.S.C. 711(c) and 723(a)(5))

Note: The following are examples of

expenses that would meet the definition of

maintenance. The examples are purely

illustrative, do not address all possible

circumstances, and are not intended to

substitute for individual counselor

judgement.

Example: The cost of a uniform or other

suitable clothing that is required for an

individual’s job placement or job seeking

activities.

Example: The cost of short-term shelter

that is required in order for an individual to

participate in vocational training at a site that

is not within commuting distance of an

individual’s home.

Example: 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.

Example: The costs of an individual’s

participation in enrichment activities related

to that individual’s training program.

(32) 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 1954.

(Authority: Sec. 7(10) of the Act; 29 U.S.C.

706(10))

(33) Ongoing support services, as used

in the definition of ‘‘Supported

employment’’—

(i) Means services that are—

(A) Needed to support and maintain

an individual with a most severe

disability in supported employment;

(B) Identified based on a

determination by the designated State

unit of the individual’s needs as

specified in an individualized written

rehabilitation program; and

(C) 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;

(ii) Must 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 special circumstances,

especially at the request of the

individual, the individualized written

rehabilitation program provides for offsite monitoring, twice-monthly meetings

with the individual;

(iii) Consist of—

(A) Any particularized assessment

supplementary to the comprehensive

assessment of rehabilitation needs

described in this part;

(B) The provision of skilled job

trainers who accompany the individual

for intensive job skill training at the

work site;

(C) Job development and placement;

(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: Sec. 7(33) and 12(c) of the Act;

29 U.S.C. 706(33) and 711(c))

(34) Personal assistance services

means a range of services provided by

one or more persons 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.

The services must be designed to

increase the individual’s control in life

and ability to perform everyday

activities on or off the job. The services

must be necessary to the achievement of

an employment outcome and may be

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: Sec. 7(11) and 103(a)(15) of the

Act; 29 U.S.C. 706(11) and 29 U.S.C. 723)

(35) 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, orthotic, or other

assistive devices, including hearing

aids;

(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 that 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.
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6339

(Authority: Sec. 12(c) and 103(a)(4) of the

Act; 29 U.S.C. 711(c) and 723(a)(4))

(36) Physical or mental impairment

means an injury, disease, or other

condition that materially limits, or if not

treated is expected to materially limit,

mental or physical functioning.

(Authority: Sec. 7(8)(A) and 12(c) of the Act;

29 U.S.C. 706(8)(A) and 711(c))

(37) 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 strengths, resources,

priorities, concerns, abilities,

capabilities, and interests.

(Authority: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

Note: Post-employment services are

intended to ensure that the employment

outcome remains consistent with the

individual’s strengths, resources, priorities,

concerns, abilities, capabilities, and interests.

These services are available to meet

rehabilitation needs that do not require a

complex and comprehensive provision of

services and, thus, should be limited 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 written

rehabilitation program; thus, a redetermination 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 coworkers and the individual needs mental

health services and counseling 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 strengths, resources,

priorities, concerns, abilities, capabilities,

and interests.

(38) 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: Secs. 7(13) and 12(c) of the Act;

29 U.S.C. 706(13) and 711(c))

(39) 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: Sec. 7(13) of the Act; 29 U.S.C.

706(13))

(40) Reservation means a Federal or

State Indian reservation, public domain

Indian allotment, 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.

(Authority: Sec. 130(c) of the Act; 29 U.S.C.

750(c))

(41) 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 State plan.

(Authority: Sec. 7(9) of the Act; 29 U.S.C.

706(9))

(42) 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: Sec. 7(16) of the Act; 29 U.S.C.

706(16))

(43) State plan means the State plan

for vocational rehabilitation services or

the vocational rehabilitation services

part of a consolidated rehabilitation

plan under § 361.10(c).

(Authority: Secs. 12(c) and 101 of the Act; 29

U.S.C. 711(c) and 721)

(44) Substantial impediment to

employment means that a physical or

mental impairment (in light of attendant

medical, psychological, vocational,

educational, and other related factors)

hinders an individual from preparing

for, entering into, engaging in, or

retaining employment consistent with

the individual’s abilities and

capabilities.

(Authority: Secs. 7(8)(A) and 12(c) of the Act;

29 U.S.C. 706(8)(A) and 711(c))

(45) Supported employment means—

(i) Competitive employment in an

integrated setting with ongoing support

services for individuals with the most

severe disabilities—

(A) For whom competitive

employment has not traditionally

occurred or for whom competitive

employment has been interrupted or

intermittent as a result of a severe

disability; and

(B) Who, because of the nature and

severity of their disabilities, need

intensive supported employment

services from the designated State unit

and extended services after transition in

order to perform this work; or

(ii) Transitional employment for

individuals with the most severe

disabilities due to mental illness.

(Authority: Sec. 7(18) of the Act; 29 U.S.C.

706(18)(A))

(46) Supported employment services

means ongoing support services and

other appropriate services needed to

support and maintain an individual

with a most severe disability in

supported employment that are

provided by the designated State unit—

(i) For a period of time not to exceed

18 months, unless under special

circumstances the eligible individual

and the rehabilitation counselor or

coordinator jointly agree to extend the

time in order to achieve the

rehabilitation objectives identified in

the individualized written rehabilitation

program; and

(ii) 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: Sec. 7(34) and 12(c) of the Act;

29 U.S.C. 706(34) and 711(c))

(47) Transition services means a

coordinated set of activities for a

student 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. The coordinated set of

activities must be based upon the

individual student’s needs, taking into

account the student’s preferences and

interests, and must include 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. Transition services must
6340 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

promote or facilitate the

accomplishment of long-term

rehabilitation goals and intermediate

rehabilitation objectives identified in

the student’s IWRP.

(Authority: Section 7(35) and 103(a)(14) of

the Act; 29 U.S.C. 706(35) and 723(a)(14))

(48) Transitional employment, as used

in the definition of ‘‘Supported

employment,’’ means a series of

temporary job placements in

competitive work in integrated settings

with ongoing support services for

individuals with the most severe

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: Secs. 7(18) and 12(c) of the Act;

29 U.S.C. 706(18) and 711(c))

(49) Transportation means travel and

related expenses that are necessary to

enable an applicant or eligible

individual to participate in a vocational

rehabilitation service.

(Authority: Secs. 12(c) and 103(a)(10) of the

Act; 29 U.S.C. 711(c) and 723(a)(10))

Note: 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 to

substitute for individual counselor

judgement.

Example: 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: Short-term travel-related

expenses, such as food and shelter, incurred

by an applicant participating in evaluation or

assessment services that necessitates travel.

Example: 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.

Example: The purchase and repair of

vehicles, including vans, but not the

modification of these vehicles, as

modification would be considered a

rehabilitation technology service.

(50) 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, also means those

services listed in § 361.49.

(Authority: Sec. 103 (a) and (b) of the Act; 29

U.S.C. 723 (a) and (b))

Subpart B—State Plan for Vocational

Rehabilitation Services

§ 361.10 Submission, approval, and

disapproval of the State plan.

(a) Purpose. In order for a State to

receive a grant under this part, the

designated State agency shall submit to

the Secretary, and obtain approval of, a

State plan that contains a description of

the State’s vocational rehabilitation

services program, the plans and policies

to be followed in carrying out the

program, and other information

requested by the Secretary, in

accordance with the requirements of

this part.

(b) Separate part relating to

rehabilitation of individuals who are

blind. If a separate State agency

administers or supervises the

administration of a separate part of the

State plan relating to the rehabilitation

of individuals who are blind, that part

of the State plan must separately

conform to all requirements under this

part that are applicable to a State plan.

(c) Consolidated rehabilitation plan.

The State may choose to submit a

consolidated rehabilitation plan that

includes the State plan for vocational

rehabilitation services and the State’s

plan for its program for persons with

developmental disabilities. The State

planning and advisory council for

developmental disabilities and the

agency administering the State’s

program for persons with

developmental disabilities must concur

in the submission of a consolidated

rehabilitation plan. A consolidated

rehabilitation plan must comply with,

and be administered in accordance

with, the Act and the Developmental

Disabilities Assistance and Bill of Rights

Act, as amended.

(d) Public participation. The State

shall develop the State plan with input

from the public, through public

meetings, in accordance with the

requirements of § 361.20.

(e) Duration. The State plan must

cover a multi-year period to be

determined by the Secretary.

(f) Submission of the State plan. The

State shall submit the State plan to the

Secretary for approval—

(1) No later than July 1 of the year

preceding the first fiscal year for which

the State plan is submitted; or

(2) With the prior approval of the

Secretary, no later than the date on

which the State is required to submit a

State plan under another Federal law.

(g) Revisions to the State plan. The

State shall submit to the Secretary for

approval revisions to the State plan in

accordance with the requirements of

this part and 34 CFR 76.140.

(h) Approval. The Secretary approves

a State plan and revisions to the State

plan that conform to the requirements of

this part and section 101(a) of the Act.

(i) Disapproval. The Secretary

disapproves a State plan that does not

conform to the requirements of this part

and section 101(a) of the Act, in

accordance with the following

procedures:

(1) Informal resolution. Prior to

disapproving a 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 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 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.

(Approved by the Office of Management and

Budget under control number 1820–0500.

(Authority: Sec. 6, 101 (a) and (b), and 107(d)

of the Act; 20 U.S.C. 1231g(a); and 29 U.S.C.

705, 721 (a) and (b), and 727(d))

§ 361.11 Withholding of funds.

(a) Basis for withholding. The

Secretary may withhold or limit

payments under sections 111, 124, or

632(a) of the Act, as provided by section

107 (c) and (d) of the Act, if the

Secretary determines that—

(1) The State plan, including the

supported employment supplement, has

been so changed that it no longer

conforms with the requirements of this

part or 34 CFR part 363; or
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6341

(2) In the administration of the State

plan, there has been a failure to comply

substantially with any provision of that

plan or a program improvement plan

established in accordance with 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 U.S. Court of Appeals

for the circuit in which the State is

located, in accordance with section

107(d) of the Act.

(Authority: Secs. 101(b), 107(c), and 107(d) of

the Act; 29 U.S.C. 721(b), 727(c)(1) and (2),

and 727(d))

State Plan Content: Administration

§ 361.12 Methods of administration.

The 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

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: Sec. 101(a)(6) of the Act; 29

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

§ 361.13 State agency for administration.

(a) Designation of State agency. The

State plan must designate a State agency

as the sole State agency to administer

the 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 (3) of this section,

the State plan must provide that the

designated State agency is one of the

following types of agencies:

(i) A State agency that is an

independent State commission, board,

or other agency that has as its major

function vocational rehabilitation or

vocational and other rehabilitation of

individuals with disabilities.

(ii) The State agency administering or

supervising the administration of

education or vocational education in the

State, provided that it includes a

vocational rehabilitation unit as

provided in paragraph (b) of this

section.

(iii) A State agency that includes a

vocational rehabilitation unit, as

provided in paragraph (b) of this

section, and at least two other major

organizational units, each of which

administers one or more of the State’s

major programs of public education,

public health, public welfare, or labor.

(2) American Samoa. In the case of

American Samoa, the 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 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) If the

designated State agency is of the type

specified in paragraph (a)(1)(ii) or

(a)(1)(iii) of this section, or if the

designated State agency specified in

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

have as its major function vocational

rehabilitation or vocational and other

rehabilitation of individuals with

disabilities, the 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 State plan, including those

responsibilities specified in paragraph

(c) of this section;

(ii) Has a full-time director;

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

whom are employed full time on the

rehabilitation work of the organizational

unit; and

(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 or, in the case of an

agency described in paragraph (a)(1)(ii)

of this section, is so located and has that

status or has a director who is the

executive officer of the State agency.

(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 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) The State plan must assure that, 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 that an

individual has achieved an employment

outcome under § 361.56.

(iii) Policy formulation and

implementation.

(iv) The allocation and expenditure of

vocational rehabilitation funds.

(2) This responsibility may not be

delegated to any other agency or

individual.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 101(a)(1) and 101(a)(2) of the

Act; 29 U.S.C. 721(a)(1) and 721(a)(2))
6342 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

§ 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 shall submit

a 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.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 107(c)(3) of the Act; 29

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

§ 361.15 Local administration.

(a) If the State plan provides for local

administration, it must—

(1) Identify each local agency;

(2) Assure that each local agency is

under the supervision of the designated

State unit and is the sole local agency

as defined in § 361.5(b)(41) that is

responsible for the administration of the

program within the political subdivision

that it serves; and

(3) Describe the methods each local

agency will use to administer the

vocational rehabilitation program, in

accordance with the 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.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 7(9) and 101(a)(1)(A) of the

Act; 29 U.S.C. 706(9) and 721(a)(1)(A))

§ 361.16 Establishment of an independent

commission or a State Rehabilitation

Advisory Council.

(a) General requirement. Except as

provided in paragraph (b) of this

section, the State plan must contain one

of the following two assurances:

(1) An assurance that the State agency

is an independent State commission

that—

(i) 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;

(iii) Includes individuals representing

family members, advocates, and

authorized representatives of

individuals with mental impairments;

and

(iv) Conducts a review and analysis of

the effectiveness of and consumer

satisfaction with vocational

rehabilitation services and providers in

the State, in accordance with the

provisions in § 361.17(h)(3).

(2) An assurance that—

(i) The State has established a State

Rehabilitation Advisory Council

(Council) that meets the requirements of

§ 361.17;

(ii) The designated State unit seeks

and seriously considers, on a regular

and ongoing basis, advice from the

Council regarding the development,

implementation, and amendment of the

State plan, the strategic plan, and other

policies and procedures of general

applicability pertaining to the provision

of vocational rehabilitation services in

the State;

(iii) The designated State unit

transmits to the Council—

(A) All plans, reports, and other

information required under the Act to

be submitted to the Secretary;

(B) Copies of all written policies,

practices, and procedures of general

applicability provided to or used by

rehabilitation personnel; and

(C) Copies of due process hearing

decisions in a manner that preserves the

confidentiality of the participants in the

hearings; and

(iv) The State plan summarizes

annually the advice provided by the

Council, including recommendations

from the annual report of the Council,

the survey of consumer satisfaction, and

other reports prepared by the Council,

and the State agency’s response to the

advice and recommendations, including

the manner in which the State will

modify its policies and procedures

based on the survey of consumer

satisfaction and explanations of reasons

for rejecting any advice or

recommendations of the Council.

(b) Exception for separate State

agency for individuals who are blind. In

the ase of a State that designates a

separate State agency, under

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

the State plan under which vocational

rehabilitation services are provided to

individuals who are blind, the State

plan must contain one of the following

four assurances:

(1) An assurance that an independent

commission in accordance with

paragraph (a)(1) of this section is

responsible under State law for

operating or overseeing the operation of

the vocational rehabilitation program of

both the State agency that administers

the part of the State plan under which

vocational rehabilitation services are

provided to individuals who are blind

and the State agency that administers

the remainder of the State plan.

(2) An assurance that—

(i) An independent commission that

is consumer-controlled by, and

represents the interests of, individuals

who are blind and conducts a review

and analysis of the effectiveness of and

consumer satisfaction with vocational

rehabilitation services and providers, in

accordance with the provisions of

§ 361.17(h)(3), is responsible under

State law for operating, or overseeing

the operation of, the vocational

rehabilitation program in the State for

individuals who are blind; and

(ii) An independent commission that

is consumer-controlled in accordance

with paragraph (a)(1)(i) of this section

and conducts a review and analysis of

the effectiveness of and consumer

satisfaction with vocational

rehabilitation services and providers, in

accordance with § 361.17(h)(3), is

responsible under State law for

operating, or overseeing the operation

of, the vocational rehabilitation program

in the State for all individuals with

disabilities, except individuals who are

blind.

(3) An assurance that—

(i) An independent commission that

is consumer-controlled by, and

represents the interests of, individuals

who are blind and that conducts a

review and analysis of the effectiveness

of and consumer satisfaction with

vocational rehabilitation services and

providers, in accordance with

§ 361.17(h)(3), is responsible under

State law for operating, or overseeing

the operation of, the vocational

rehabilitation program in the State for

individuals who are blind; and

(ii) The State has established a State

Rehabilitation Advisory Council that

meets the criteria in § 361.17 and carries

out the duties of a Council with respect

to functions for, and services provided

to, individuals with disabilities, except

for individuals who are blind.

(4) An assurance that—

(i) An independent commission that

is consumer-controlled in accordance
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6343

with paragraph (a)(1)(i) of this section

and conducts a review and analysis of

the effectiveness of and consumer

satisfaction with vocational

rehabilitation services and providers, in

accordance with the provisions of

§ 361.17(h)(3), is responsible under

State law for operating or overseeing the

operation of the vocational

rehabilitation services for all

individuals in the State, except

individuals who are blind; and

(ii) The State has established a State

Rehabilitation Advisory Council that

meets the criteria in § 361.17 and carries

out the duties of a Council with respect

to functions for, and services provided

to, individuals who are blind.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 101(a)(32) and 101(a)(36) of

the Act; 29 U.S.C. 721(a)(32) and 721(a)(36))

§ 361.17 Requirements for a State

Rehabilitation Advisory Council.

If the State plan contains an assurance

that the State has established a Council

under § 361.16(a)(2), (b)(3)(ii), or

(b)(4)(ii), the State plan must also

contain an assurance that the Council

meets the following requirements:

(a) Appointment. (1) The members of

the Council shall be—

(i) Appointed by the Governor; or

(ii) If State law vests appointment

authority in an entity other than, or in

conjunction with, the Governor (such as

one or more houses of the State

legislature or an independent board that

has general appointment authority),

appointed by that entity or entities.

(2) The appointing authority shall

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.

(b) Composition.—(1) General. Except

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

section, the Council shall be composed

of at least 13 members, including—

(i) At least one representative of the

Statewide Independent Living Council,

who shall be the chairperson of, or other

individual recommended by, the

Statewide Independent Living Council;

(ii) At least one representative of a

parent training and information center

established pursuant to section 631(e)(1)

of IDEA;

(iii) At least one representative of the

Client Assistance Program (CAP),

established under 34 CFR Part 370, who

shall be the director of, or other

individual recommended by, the CAP;

(iv) At least one vocational

rehabilitation counselor with knowledge

of and experience with vocational

rehabilitation programs who serves as

an ex officio, nonvoting member 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) Parents, family members,

guardians, advocates, or authorized

representatives of individuals with

disabilities who have difficulty

representing themselves due to their

disabilities;

(viii) Current or former applicants for,

or recipients of, vocational

rehabilitation services; and

(ix) The director of the designated

State unit as an ex officio, nonvoting

member.

(2) Employees of the designated State

agency. Employees of the designated

State agency may serve only as

nonvoting members of the Council.

(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 shall—

(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 parent, family

member, guardian, advocate, or

authorized representative of an

individual who is blind, has multiple

disabilities, and has difficulty

representing himself or herself due to

disabilities.

(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 13 members,

the separate Council is deemed to be 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. A majority of the Council

members shall be individuals with

disabilities who are not employed by

the designated State unit.

(d) Chairperson. The chairperson

shall be—

(1) 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) If the Governor does not have veto

power pursuant to State law, selected by

the Governor, or by the Council if

required by the Governor, from among

the voting members of the Council.

(e) Terms of appointment. (1) Each

member of the Council shall be

appointed for a term of no more than

three years and 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 shall be appointed for the

remainder of the predecessor’s term.

(3) The terms of service of the

members initially appointed must be 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.

(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 shall 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 shall—

(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 to achieve rehabilitation

goals and objectives under this part;

(2) Advise, and at the discretion of the

State agency assist, the State unit in the

preparation of applications, the State

plan, the strategic plan, and

amendments to the plans, reports, needs

assessments, and evaluations required

by this part;

(3) To the extent feasible, conduct a

review and analysis of the effectiveness

of, and consumer satisfaction with—

(i) The functions performed by State

agencies and other public and private
6344 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

entities responsible for serving

individuals with disabilities; and

(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 from funds made

available under the Act or through other

public or private sources;

(4) Prepare and submit to the

Governor, or appropriate State entity,

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;

(5) Coordinate with other councils

within the State, including the

Statewide Independent Living Council

established under 34 CFR part 364, the

advisory panel established under

section 613(a)(12) of IDEA, the State

Planning Council described in section

124 of the Developmental Disabilities

Assistance and Bill of Rights Act, and

the State mental health planning

council established under section

1916(e) of the Public Health Service Act;

(6) Advise the designated State agency

and provide for coordination and the

establishment of working relationships

between the designated State agency

and the Statewide Independent Living

Council and centers for independent

living within the State; and

(7) Perform other comparable

functions, consistent with the purpose

of this part, that the Council determines

to be appropriate.

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

conjunction with the designated State

unit, shall prepare a plan for the

provision of resources, including staff

and other personnel, that may be

necessary for the Council to carry out its

functions under this part.

(2) In implementing the resources

plan, the Council shall rely on existing

resources to the maximum extent

possible.

(3) Any disagreements between the

designated State unit and the Council

regarding the amount of resources

necessary must be resolved by the

Governor or other appointing entity,

consistent with paragraphs (i)(1) and (2)

of this section.

(4) The Council shall, 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 shall—

(1) Convene at least four meetings a

year to conduct Council business that

are publicly announced, open and

accessible to the 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 130 of the Act, may be used to

compensate and reimburse the expenses

of Council members in accordance with

section 105(g) of the Act.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 105 of the Act; 29 U.S.C.

725)

§ 361.18 Comprehensive system of

personnel development.

The 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

Advisory 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) and

paragraph (f) of this section. This

description must also conform with the

following requirements:

(a) Data system on personnel and

personnel development. The 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 severe

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 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 State

plan must include the State agency’s

policies and describe the procedures the

State agency will undertake to establish

and maintain standards to ensure that

professional and paraprofessional

personnel needed within the State unit

to carry out this part are appropriately

and adequately prepared and trained,

including—

(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
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6345

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) To the extent that existing

standards are not based on the highest

requirements in the State, the steps the

State is currently taking and the steps

the State plans to take to retrain or hire

personnel to meet standards that are

based on the highest requirements in the

State, including measures to notify State

unit personnel, the institutions of higher

education identified under paragraph

(a)(2)(i) of this section, and other public

agencies of these steps and the timelines

for taking each step.

(2) As used in this section—

(i) Highest requirements in the State

applicable to that profession or

discipline means the highest entry-level

academic degree needed for any

national or State-approved or

-recognized certification, licensing,

registration, or other comparable

requirements that apply to that

profession or discipline. The current

requirements of all State statutes and

regulations of other agencies in the State

applicable to that profession or

discipline must be considered and must

be kept on file by the designated State

unit and available to the public.

(ii) 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; and

(C) Has a specified scope of

responsibility.

(d) Staff development. (1) The 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

rehabilitation technology; and

(ii) Procedures for acquiring and

disseminating to rehabilitation

professionals and paraprofessionals

within the designated State unit

significant knowledge from research and

other sources, including procedures for

providing training regarding the

amendments to the Rehabilitation Act of

1973 made by the Rehabilitation Act

Amendments of 1992.

(2) The specific training areas for staff

development must be based on the

needs of each State unit and may

include, but are not limited to, training

with respect to the requirements of the

Americans with Disabilities Act, IDEA,

and Social Security work incentive

programs, training to facilitate informed

choice under this program, and training

to improve the provision of services to

culturally diverse populations.

(e) Personnel to address individual

communication needs. The State plan

must describe how the State unit—

(1) Includes among its personnel, or

obtains the services of, individuals able

to communicate in the native languages

of applicants and eligible individuals

who have limited English speaking

ability; and

(2) Includes among its personnel, or

obtains the services of, individuals able

to communicate with applicants and

eligible individuals in appropriate

modes of communication.

(f) Performance evaluation system.

The State plan must describe how the

system for evaluating the performance

of rehabilitation counselors,

coordinators, and other personnel used

in the State unit facilitates, and in no

way impedes, the accomplishment of

the purpose and policy of the program

as described in sections 100(a)(2) and

100(a)(3) of the Act, including the

policy of serving, among others,

individuals with the most severe

disabilities.

(g) Coordination with personnel

development under IDEA. The 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 IDEA.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 101 (a)(7) and (a)(35) of the

Act; 29 U.S.C. 721(a) (7) and (35))

Note: Under the Act and the regulations in

this part, the State agency is required to

collect and analyze data regarding personnel

needs by type or category of personnel. The

personnel data must be collected and

analyzed according to personnel category

breakdowns that are based on the major

categories of staff in the State unit. Similarly,

the data from institutions of higher education

must be broken down by type of program to

correspond as closely as possible with the

personnel categories of the State unit.

§ 361.19 Affirmative action for individuals

with disabilities.

The State plan must assure that the

State agency takes affirmative action to

employ and advance in employment

qualified individuals with disabilities.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 101(a)(6)(A) of the Act; 29

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

§ 361.20 State plan development.

(a) Public participation

requirements.—(1) Plan development

and revisions. The State plan must

assure that the State unit conducts

public meetings throughout the State to

provide all segments of the public,

including interested groups,

organizations, and individuals, an

opportunity to comment on the State

plan prior to its development and to

comment on any revisions to the State

plan.

(2) Notice requirements. The State

plan must assure that the State unit,

prior to conducting public meetings,

provides appropriate and sufficient

notice throughout the State of the

meetings in accordance with—

(i) State law governing public

meetings; or

(ii) In the absence of State law

governing public meetings, procedures

developed by the State unit in

consultation with the State

Rehabilitation Advisory Council.

(3) Revisions based on consumer

satisfaction surveys. The State plan

must describe the manner in which the

State’s policies and procedures will be

revised based on the results of consumer

satisfaction surveys conducted by the

State Rehabilitation Advisory Council

under § 361.17(h)(3) or by the State

agency if it is an independent

commission in accordance with the

requirements of § 361.16.

(b) Special consultation requirements.

The State plan must assure that, as

appropriate, the State unit actively

consults in the development and

revision of the State plan with the CAP

director, the State Rehabilitation

Advisory Council, and, as appropriate,

those Indian tribes, tribal organizations,

and native Hawaiian organizations that

represent significant numbers of

individuals with disabilities within the

State.

(c) Summary of public comments. The

State plan must include a summary of

the public comments on the State plan,

including comments on revisions to the

State plan and the State unit’s response

to those comments.

(d) Appropriate modes of

communication. The State unit shall

provide, through appropriate modes of

communication, the notices of the

public meetings, any materials

furnished prior to or during the public

meetings, and the approved State plan.

(Approved by the Office of Management and

Budget under control number 1820–0500.)
6346 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

(Authority: Sec. 101(a)(20), 101(a)(23),

101(a)(32), and 105(c)(2) of the Act; 29 U.S.C.

721(a)(20), (23), and (32) and 725(c)(2))

§ 361.21 Consultations regarding the

administration of the State plan.

(a) The State plan must assure that, in

connection with matters of general

policy development and

implementation arising in the

administration of the State plan, the

State unit seeks and takes into account

the views of—

(1) Individuals who receive vocational

rehabilitation services or, as

appropriate, the individuals’

representatives;

(2) Personnel working in the field of

vocational rehabilitation;

(3) Providers of vocational

rehabilitation services;

(4) The CAP director; and

(5) The State Rehabilitation Advisory

Council, if the State has a Council.

(b) The State plan must specifically

describe the manner in which the State

unit will take into account the views

regarding State policy and

administration of the State plan that are

expressed in the consumer satisfaction

surveys conducted by the State

Rehabilitation Advisory Council under

§ 361.17(h)(3) or by the State agency if

it is an independent commission in

accordance with the requirements of

§ 361.16(a)(1).

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 101(a)(18), 101(a)(32), and

105(c)(2) of the Act; 29 U.S.C. 721(a)(18),

721(a)(32), and 725(c)(2))

§ 361.22 Cooperation with agencies

responsible for students with disabilities.

(a) Students with disabilities who are

receiving special education services.—

(1) General. The State plan must contain

plans, policies, and procedures that are

designed to facilitate the transition of

students who are receiving special

education services from the provision of

a free appropriate public education

under the responsibility of an

educational agency to the provision of

vocational rehabilitation services under

the responsibility of the designated

State unit. These plans, policies, and

procedures must provide for the

development and completion of the

IWRP before the student leaves the

school setting for each student

determined to be eligible for vocational

rehabilitation services or, if the

designated State unit is operating under

an order of selection, for each eligible

student able to be served under the

order. The IWRP must, at a minimum,

identify the long-term rehabilitation

goals, intermediate rehabilitation

objectives, and goals and objectives

related to enabling the student to live

independently, to the extent these goals

and objectives are included in the

student’s individualized education

program.

(2) Formal interagency agreement.

The State plan must assure that the

State unit enters into formal interagency

agreements with the State educational

agency and, as appropriate, with local

educational agencies, that are

responsible for the free appropriate

public education of students with

disabilities who are receiving special

education services. Formal interagency

agreements must, at a minimum,

identify—

(i) Policies, practices, and procedures

that can be coordinated between the

agencies, including definitions,

standards for eligibility, policies and

procedures for making referrals,

procedures for outreach to and

identification of youth who are

receiving special education services and

are in need of transition services, and

procedures and timeframes for

evaluation and follow-up of those

students;

(ii) The roles of each agency,

including provisions for determining

State lead agencies and qualified

personnel responsible for transition

services;

(iii) Procedures for providing training

for staff of State and local educational

agencies as to the availability, benefits

of, and eligibility standards for

vocational rehabilitation services, to the

extent practicable;

(iv) Available resources, including

sources of funds for the development

and expansion of services;

(v) The financial responsibility of

each agency in providing services to

students with disabilities who are

receiving special education services,

consistent with State law;

(vi) Procedures for resolving disputes

between the agencies that are parties to

the agreement; and

(vii) All other components necessary

to ensure meaningful cooperation

among agencies, including procedures

to facilitate the development of local

teams to coordinate the provision of

services to individuals, sharing data,

and coordinating joint training of staff

in the provision of transition services.

(b) Students with disabilities who are

not receiving special education services.

The State plan must contain plans,

policies, and procedures, including

cooperation with appropriate agencies,

designed to ensure that students with

disabilities who are not receiving

special education services have access

to and can receive vocational

rehabilitation services, if appropriate,

and to ensure outreach to and

identification of those students.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 101(a)(11)(C), 101(a)(24)

and 101(a)(30) of the Act; 29 U.S.C. 721

(a)(11), (a)(24), and (a)(30))

Note: The following excerpt from page 33

of Senate Report No. 102–357 further clarifies

the provision of transition services by the

State vocational rehabilitation agency:

The overall purpose of this provision is to

ensure that all students who require

vocational rehabilitation services receive

those services in a timely manner. There

should be no gap in services between the

education system and the vocational

rehabilitation system * * *. The committee

intends that students with disabilities who

are eligible for, and who need, vocational

rehabilitation services will receive those

services as soon as possible, consistent with

Federal and State law. These provisions are

not intended in any way to shift the

responsibility of service delivery from

education to rehabilitation during the

transition years. School officials will

continue to be responsible for providing a

free and appropriate public education as

defined by the IEP. The role of the

rehabilitation system is primarily one of

planning for the student’s years after leaving

school. (S. Rep. No. 357, 102d Cong., 2d.

Sess. 33 (1992))

§ 361.23 Cooperation with other public

agencies.

(a) Coordination of services with

vocational education and Javits-WagnerO’Day programs. The State plan must

assure that specific arrangements or

agreements are made for the

coordination of services for any

individual who is eligible for vocational

rehabilitation services and is also

eligible for services under the Carl D.

Perkins Vocational and Applied

Technology Education Act or the JavitsWagner-O’Day Act.

(b) Cooperation with other Federal,

State, and local public agencies

providing services related to the

rehabilitation of individuals with

disabilities. (1) The State plan must

assure that the State unit cooperates

with other Federal, State, and local

public agencies providing services

related to the rehabilitation of

individuals with disabilities, including,

as appropriate, establishing interagency

working groups or entering into formal

interagency cooperative agreements

with, and using the services and

facilities of—

(i) Federal agencies providing services

related to the rehabilitation of

individuals with disabilities, including

the Social Security Administration, the

Office of Workers’ Compensation

Programs of the Department of Labor,
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6347

and the Department of Veterans Affairs;

and

(ii) State and local public agencies

providing services related to the

rehabilitation of individuals with

disabilities, including State and local

public agencies administering the

State’s social services and financial

assistance programs and other State

programs for individuals with

disabilities, such as the State’s

developmental disabilities program,

veterans programs, health and mental

health programs, education programs

(including adult education, higher

education, and vocational education

programs), workers’ compensation

programs, job training and placement

programs, and public employment

offices.

(2) Interagency cooperation under

paragraph (b)(1) of this section, to the

extent practicable, must provide for

training for staff of the agencies as to the

availability, benefits of, and eligibility

standards for vocational rehabilitation

services.

(3) If the State unit chooses to enter

into formal interagency cooperative

agreements developed under paragraph

(b)(1) of this section, the agreements

must—

(i) Identify policies, practices, and

procedures that can be coordinated

among the agencies (particularly

definitions, standards for eligibility, the

joint sharing and use of evaluations and

assessments, and procedures for making

referrals);

(ii) Identify available resources and

define the financial responsibility of

each agency for paying for necessary

services (consistent with State law) and

procedures for resolving disputes

between agencies; and

(iii) Include all additional

components necessary to ensure

meaningful cooperation and

coordination.

(c) Reciprocal referral services with a

separate agency for individuals who are

blind. If there is a separate State unit for

individuals who are blind, the State

plan must assure that the two State

units 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.

(Authority: Secs. 101(a)(11) and 101(a)(22) of

the Act; 29 U.S.C. 721(a)(11) and 721(a)(22))

§ 361.24 Coordination with the Statewide

Independent Living Council.

The State plan must assure that the

State unit will coordinate and establish

working relationships with the

Statewide Independent Living Council

established under 34 CFR Part 364 and

with independent living centers within

the State.

(Authority: Sec. 101(a)(33) of the Act; 29

U.S.C. 721(a)(33))

§ 361.25 Statewideness.

The State plan must assure that

services provided under the 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 Act; 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

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) The State includes in its State

plan, and the Secretary approves, a

request for 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 State plan requirements,

including a State’s order of selection

requirements, will apply to all services

approved under the waiver.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 101(a)(4) of the Act; 29

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

§ 361.27 Shared funding and

administration of joint programs.

(a) If the State plan provides for a

joint program involving shared funding

and administrative responsibility with

another State agency or a local public

agency to provide services to

individuals with disabilities, the plan

must include a description of the nature

and scope of the joint program, the

services to be provided, the respective

roles of each participating agency in the

provision of services and in their

administration, and the share of the

costs to be assumed by each agency.

(b) If a proposed joint program does

not comply with the statewideness

requirement in § 361.25, the State unit

shall obtain a waiver of statewideness,

in accordance with § 361.26.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Section 101(a)(1)(A) of the Act;

29 U.S.C. 721(a)(1)(A))

§ 361.28 Third-party cooperative

arrangements involving funds from other

public agencies.

(a) If the designated State unit enters

into a third-party cooperative

arrangement for providing or

administering vocational rehabilitation

services with another State agency or a

local public agency that is furnishing

part or all of the non-Federal share, the

State plan must assure 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 State plan requirements,

including a State’s order of selection,

will apply to all services provided

under the cooperative program.

(b) If a third party cooperative

agreement does not comply with the

statewideness requirement in § 361.25,

the State unit shall obtain a waiver of

statewideness, in accordance with

§ 361.26.

(Authority: Sec. 101(a)(1)(A) of the Act; 29

U.S.C. 721(a)(1)(A))
6348 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

§ 361.29 Statewide studies and

evaluations.

(a) Statewide studies. The State plan

must assure that the State unit conducts

continuing statewide studies to

determine the current needs of

individuals with disabilities within the

State and the best methods to meet

those needs. As part of the development

of the State plan, the continuing

statewide studies, at a minimum, must

include—

(1) A triennial comprehensive

assessment of the rehabilitation needs of

individuals with severe disabilities who

reside in the State;

(2) A triennial review of the

effectiveness of outreach procedures

used to identify and serve individuals

with disabilities who are minorities and

individuals with disabilities who are

unserved and underserved by the

vocational rehabilitation system; and

(3) A triennial review of a broad

variety of methods to provide, expand,

and improve vocational rehabilitation

services to individuals with the most

severe disabilities, including

individuals receiving supported

employment services under 34 CFR part

363.

(b) Annual evaluation. The State plan

must assure that the State unit conducts

an annual evaluation of the

effectiveness of the State’s vocational

rehabilitation program in providing

vocational rehabilitation and supported

employment services, especially to

individuals with the most severe

disabilities. The annual evaluation must

analyze the extent to which—

(1) The State has achieved the goals

and priorities established in the State

plan and annual amendments to the

plan; and

(2) The State is in compliance with

the evaluation standards and

performance indicators established by

the Secretary pursuant to section 106 of

the Act.

(c) Reporting requirements. (1) The

State plan must describe annually those

changes that have been adopted in

policy, in the State plan and its

amendments, and in the strategic plan

and its amendments as a result of the

statewide studies and the annual

program evaluation.

(2) The State plan must contain an

annual description of the methods used

to expand and improve vocational

rehabilitation services to individuals

with the most severe disabilities,

including the State unit’s criteria for

determining which individuals are

individuals with the most severe

disabilities.

(3) The State plan must contain an

annual analysis of the characteristics of

individuals determined to be ineligible

for services and the reasons for the

ineligibility determinations.

(4) The State unit shall maintain

copies of the statewide studies and the

annual evaluations and shall make the

copies available to the Secretary upon

request.

(d) Role of the State Rehabilitation

Advisory Council. The State plan must

assure that the State unit seeks the

advice of the State Rehabilitation

Advisory Council, if the State has a

Council, regarding the continuing

statewide studies and the annual

evaluation and, at the discretion of the

State agency, seeks assistance from the

Council in the preparation and analysis

of the studies and evaluation.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sections 101(a)(5) (A) and (B),

101(a)(9)(D), 101(a)(15) (A), (C), and (D),

101(a)(19), and 105(c)(2) of the Act; 29 U.S.C.

721(a) (5), (9), (15), and (19) and 725(c)(2))

§ 361.30 Services to special groups of

individuals with disabilities.

(a) Civil employees of the United

States. The State plan must assure that

vocational rehabilitation services are

available to civil employees of the U.S.

Government who are disabled in the

line of duty, under the same terms and

conditions applied to other individuals

with disabilities.

(b) Public safety officers. (1) The State

plan must assure that special

consideration will be given to those

individuals with disabilities whose

disability arose from an impairment

sustained in the line of duty while

performing as a public safety officer and

the immediate cause of that impairment

was a criminal act, apparent criminal

act, or a hazardous condition resulting

directly from the officer’s performance

of duties in direct connection with the

enforcement, execution, and

administration of law or fire prevention,

firefighting, or related public safety

activities.

(2) For the purposes of paragraph (b)

of this section, special consideration for

States under an order of selection means

that those public safety officers who

meet the requirements of paragraph

(b)(1) of this section must receive

priority for services over other eligible

individuals in the same priority

category of the order of selection.

(3) For the purposes of paragraph (b)

of this section, criminal act means any

crime, including an act, omission, or

possession under the laws of the United

States, a State, or a unit of general local

government that poses a substantial

threat of personal injury,

notwithstanding that by reason of age,

insanity, intoxication, or otherwise, the

person engaging in the act, omission, or

possession was legally incapable of

committing a crime.

(4) For the purposes of paragraph (b)

of this section, public safety officer

means a person serving the United

States or a State or unit of local

government, with or without

compensation, in any activity pertaining

to—

(i) The enforcement of the criminal

laws, including highway patrol, or the

maintenance of civil peace by the

National Guard or the Armed Forces;

(ii) A correctional program, facility, or

institution if the activity is potentially

dangerous because of contact with

criminal suspects, defendants,

prisoners, probationers, or parolees;

(iii) A court having criminal or

juvenile delinquent jurisdiction if the

activity is potentially dangerous because

of contact with criminal suspects,

defendants, prisoners, probationers, or

parolees; or

(iv) Firefighting, fire prevention, or

emergency rescue missions.

(c) American Indians. (1) The State

plan must assure that vocational

rehabilitation services are provided to

American Indians with disabilities

residing in the State to the same extent

that these services are provided to other

significant groups of individuals with

disabilities residing in the State.

(2) The State plan also must assure

that the designated State unit continues

to provide vocational rehabilitation

services, including, as appropriate,

services traditionally used by Indian

tribes, to American Indians with

disabilities who reside on reservations

and are eligible for services by a special

tribal program under 34 CFR part 371.

(Authority: Secs. 7, 101(a)(13), 101(a)(20),

and 130(b)(3) of the Act; 29 U.S.C. 706,

721(a)(13), 721(a)(20), and 750(b)(3))

§ 361.31 Utilization of community

resources.

The State plan must assure that, in

providing vocational rehabilitation

services, public or other vocational or

technical training programs or other

appropriate community resources are

used to the maximum extent feasible.

(Authority: Sec. 101(a)(12)(A) of the Act; 29

U.S.C. 721(a)(12)(A))

§ 361.32 Utilization of profitmaking

organizations for on-the-job training in

connection with selected projects.

The State plan must assure that the

State unit has the authority to enter into

contracts with profitmaking

organizations for the purpose of

providing on-the-job training and

related programs for individuals with
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6349

disabilities under the Projects With

Industry program, 34 CFR part 379, if it

has been determined that they are better

qualified to provide needed services

than nonprofit agencies, organizations,

or programs in the State.

(Authority: Sec. 101(a)(21) of the Act; 29

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

§ 361.33 Use, assessment, and support of

community rehabilitation programs.

(a) The State plan must contain a

description of how the designated State

unit uses community rehabilitation

programs to the maximum extent

feasible to provide vocational

rehabilitation services in the most

integrated settings possible, consistent

with the informed choices of the

individuals. This description must—

(1) Include the methods the

designated State unit uses to ensure the

appropriate use of community

rehabilitation programs;

(2) Provide, as appropriate, for

entering into agreements with the

operators of those community

rehabilitation programs;

(3) Specify the manner in which the

designated State unit will establish

cooperative agreements with private

nonprofit vocational rehabilitation

service providers;

(4) Contain the findings resulting from

an assessment of the capacity and

effectiveness of community

rehabilitation programs, including

programs under the Javits-WagnerO’Day Act, based on the use of those

programs; and

(5) Contain plans for improving

community rehabilitation programs

based on the assessment in paragraph

(a)(4) of this section.

(b) If the State plan provides for the

establishment, development, or

improvement of a public or nonprofit

community rehabilitation program, the

State plan must contain a description of

the need to establish, develop, or

improve, as appropriate, the community

rehabilitation program to provide

vocational rehabilitation services to

applicants and eligible individuals,

based on the assessment and

improvement plans required in

paragraphs (a)(4) and (a)(5) of this

section.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 101(a)(5)(A), 101(a)(12)(B),

101(a)(15)(B), 101(a)(27), 101(a)(28), and

103(b)(2) of the Act; 29 U.S.C. 721(a)(5), (12),

(15), (27), and (28) and 723(b)(2))

§ 361.34 Supported employment plan.

(a) The State plan must assure that the

State has an acceptable plan under 34

CFR part 363 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 annual revisions,

must be submitted as a supplement to

the State plan.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 101(a)(25) and 635(a) of the

Act; 29 U.S.C. 721(a)(25))

§ 361.35 Strategic plan.

(a) The State plan must assure that the

State—

(1) Has developed and implemented a

strategic plan for expanding and

improving vocational rehabilitation

services for individuals with disabilities

on a statewide basis in accordance with

subpart D of this part; and

(2) Will use at least 1.5 percent of its

allotment under this program for

expansion and improvement activities

in accordance with § 361.73(b).

(b) The strategic plan must be

submitted at the same time as the State

plan.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 101(a)(34) and 120 of the

Act; 29 U.S.C. 721(a)(34) and 740)

§ 361.36 Ability to serve all eligible

individuals; order of selection for services.

(a) General provisions. (1) The State

plan must contain—

(i) An assurance that the designated

State unit is able to provide the full

range of services listed in section 103(a)

of the Act, as appropriate, to all eligible

individuals. The assurance must be

supported by an explanation that

satisfies the requirements of paragraph

(a)(2) or (a)(3) of this section and

describes how, on the basis of the

designated State unit’s projected fiscal

and personnel resources and its

assessment of the rehabilitation needs of

individuals with severe disabilities

within the State, it will—

(A) Continue to provide services to all

individuals currently receiving services;

(B) Provide assessment services to all

individuals expected to apply for

services in the next fiscal year;

(C) Provide services to all individuals

who are expected to be determined

eligible in the next fiscal year; and

(D) Meet all program requirements; or

(ii) The order to be followed in

selecting eligible individuals to be

provided services, a justification of that

order of selection, and a description of

the outcome and service goals and

service costs to be achieved for

individuals with disabilities in each

category within the order and the time

within which these goals may be

achieved.

(2) For those designated State units

that provided assurances in their State

plans for the current fiscal year and the

preceding fiscal year that they are able

to provide the full range of services, as

appropriate, to all eligible individuals,

the explanation required by paragraph

(a)(1)(i) of this section must include a

statement that, during the current fiscal

year and the preceding fiscal year, the

DSU has 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 written rehabilitation

programs (IWRPs) for individuals

determined eligible, or the provision of

services for eligible individuals for

whom IWRPs have been developed.

(3) For those designated State units

unable to provide the full range of

services to all eligible individuals

during the current or preceding fiscal

year, or unable to provide the statement

required in paragraph (a)(2) of this

section, the explanation required by

paragraph (a)(1)(i) of this section must

include—

(i) A description of the circumstances

that have changed that will allow the

DSU to meet the requirements of

paragraph (a)(1)(i) of this section in the

next fiscal year, including a description

of—

(A) The estimated number of and

projected costs of serving, in the next

fiscal year, individuals with existing

IWRPs;

(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
6350 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

paragraphs (a)(3)(i) (A) through (C) of

this section and the resources identified

in paragraph (a)(3)(i)(D) of this section

and an explanation of any projected

increases or decreases in these costs and

resources; and

(iii) A demonstration 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 (a)(3)(i) (A) through (C) of

this section so as to ensure the provision

of the full range of services, as

appropriate, to all eligible individuals.

(b) Time for determining need for an

order of selection. (1) The designated

State unit shall 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 shall

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.

(c) 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 severe disability’’ in section

7(15)(A) of the Act.

(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, gender, race, color, creed, 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.

(3) Priority for individuals with the

most severe disabilities. The State plan

must assure that those individuals with

the most severe disabilities are selected

for service before other individuals with

disabilities. The designated State unit

shall establish criteria for determining

which individuals are individuals with

the most severe disabilities. The criteria

must be consistent with the definition of

‘‘individual with a severe disability’’ in

section 7(15)(A) of the Act and the

requirements in paragraphs (c) (1) and

(2) of this section.

(d) Administrative requirements. In

administering the order of selection, the

designated State unit shall—

(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

IWRP prior to the effective date of the

order of selection, irrespective of the

severity of the individual’s disability;

(4) Ensure that its funding

arrangements for providing services

under the 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 shall

renegotiate these funding arrangements

so that they are consistent with the

order of selection.

(e) State Rehabilitation Advisory

Council. The designated State unit shall

consult with and seriously consider the

advice of the State Rehabilitation

Advisory Council regarding the—

(1) Need to establish an order of

selection, including any reevaluation of

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

section;

(2) Priority categories of the particular

order of selection;

(3) Criteria for determining

individuals with the most severe

disabilities; and

(4) Administration of the order of

selection.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 7(15)(A); 12(d); 17; 101(a)(4);

101(a)(5)(A); 101(a)(7); 101(a)(11)(A);

101(a)(15)(D); 101(a)(24); 101(a)(30);

101(a)(36)(A)(ii); 107(a)(4)(B); and 504(a) of

the Act; 29 U.S.C. 706(15)(A), 711(d), 716,

721(a)(4), 721(a)(5)(A), 721(a)(7),

721(a)(11)(A), 721(a)(15)(D), 721(a)(24),

721(a)(30), 721(a)(36)(A)(ii), 727(a)(4)(B), and

794(a))

§ 361.37 Establishment and maintenance

of information and referral programs.

(a) General provisions. The State plan

must assure that—

(1) The designated State unit will

establish and maintain information and

referral programs adequate to ensure

that individuals with disabilities within

the State are given accurate information

about State vocational rehabilitation

services, independent living services,

vocational rehabilitation services

available from other agencies,

organizations, and community

rehabilitation programs, and, to the

extent possible, other Federal and State

services and programs that assist

individuals with disabilities, including

client assistance and other protection

and advocacy programs;

(2) The State unit will refer

individuals with disabilities to other

appropriate Federal and State programs

that might be of benefit to them; and

(3) The State unit will use existing

information and referral systems in the

State to the greatest extent possible.

(b) Appropriate modes of

communication. The State plan further

must assure that information and

referral programs use appropriate modes

of communication.

(c) Special circumstances. If the State

unit is operating under an order of

selection for services, the State unit may

elect to establish an expanded

information and referral program that

includes counseling, guidance, and

referral for job placements for those

eligible individuals who are not in the

priority category or categories to receive

vocational rehabilitation services under

the State’s order of selection.

(1) If a State unit elects to establish an

expanded information and referral

program under paragraph (c) of this

section, the State plan must include—

(i) A description of how the expanded

information and referral program will be

established and how it will function,

including the level of commitment of

State unit staff and resources; and

(ii) An assurance that, in carrying out

this program, the State unit will not use

funds that are needed to provide

vocational rehabilitation services under

IWRPs for eligible individuals in the

priority category or categories receiving

services under the State unit’s order of

selection or for other eligible

individuals who have begun to receive

services prior to the effective date of the

order of selection.

(2) If the designated State unit

chooses to track the individuals who

obtain employment through

participation in an expanded

information and referral program

established under paragraph (c) of this

section, the State plan must include a

report of the number of individuals

served and the number of individuals

who obtain employment through this

program.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 101(a)(22) of the Act; 29

U.S.C. 721(a)(22))
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6351

§ 361.38 Protection, use, and release of

personal information.

(a) General provisions. (1) The State

plan must assure that the State agency

and the State unit will adopt and

implement policies and procedures to

safeguard the confidentiality of all

personal information, including

photographs and lists of names. These

policies and procedures must assure

that—

(i) Specific safeguards 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 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 shall 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 shall make all requested

information in that individual’s record

of services accessible to and shall

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.

(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 shall release

personal information if required by

Federal law or regulations.

(4) The State unit shall 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: Secs. 12(c) and 101(a)(6)(A) of the

Act; 29 U.S.C. 711(c) and 721(a)(6)(A))

§ 361.39 State-imposed requirements.

The State plan must assure that the

designated State unit identifies upon

request 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, regulations, or guideline.

(Authority: Sect. 17 of the Act; 29 U.S.C. 716)
6352 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

§ 361.40 Reports.

The State plan must assure that the

State unit—

(a) Will submit reports in the form

and detail and at the time required by

the Secretary, including reports required

under sections 13, 14, and 101(a)(10) of

the Act; and

(b) Will comply with any

requirements necessary to ensure the

correctness and verification of those

reports.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 101(a)(10) of the Act; 29

U.S.C. 721(a)(10))

State Plan Content: Provision and

Scope of Services

§ 361.41 Processing referrals and

applications.

(a) Referrals. The State plan must

assure that the designated State unit has

established and implemented standards

for the prompt and equitable handling

of referrals of individuals for vocational

rehabilitation services. 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) The State plan

must assure that once an individual has

submitted an application for vocational

rehabilitation services, an eligibility

determination will be made within 60

days, unless—

(i) Exceptional and unforeseen

circumstances beyond the control of the

agency preclude a determination within

60 days and the agency and the

individual agree to a specific extension

of time; or

(ii) An extended evaluation is

necessary, in accordance with

§ 361.42(d).

(2) An individual is considered to

have submitted an application when the

individual or the individual’s

representative, as appropriate,—

(i) Has completed and signed an

agency application form or has

otherwise requested services;

(ii) Has provided 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 shall

ensure that its application forms are

widely available throughout the State.

(Authority: Sec. 101(a)(6)(A) and 102(a)(5)(A)

of the Act; 29 U.S.C. 721(a)(6)(A) and

722(a)(5)(A))

§ 361.42 Assessment for determining

eligibility and priority for services.

The State plan must assure that, 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 will 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 State plan must

assure that the State unit’s

determination of an applicant’s

eligibility for vocational rehabilitation

services is based only on the following

requirements:

(i) A determination that the applicant

has a physical or mental impairment.

(ii) A determination that the

applicant’s physical or mental

impairment constitutes or results in a

substantial impediment to employment

for the applicant.

(iii) A presumption, in accordance

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

that the applicant can benefit in terms

of an employment outcome from the

provision of vocational rehabilitation

services.

(iv) A determination that the

applicant requires vocational

rehabilitation services to prepare for,

enter into, engage in, or retain gainful

employment consistent with the

applicant’s strengths, resources,

priorities, concerns, abilities,

capabilities, and informed choice.

(2) Presumption of benefit. The State

plan must assure that the designated

State unit will 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 unless it

demonstrates, based on clear and

convincing evidence, that the applicant

is incapable of benefitting in terms of an

employment outcome from vocational

rehabilitation services.

(3) Limited presumption for Social

Security beneficiaries. The State plan

must assure that, if an applicant has

appropriate evidence, such as an award

letter, that establishes the applicant’s

eligibility for Social Security benefits

under Title II or Title XVI of the Social

Security Act, the designated State unit

will presume that the applicant—

(i) Meets the eligibility requirements

in paragraphs (a)(1) (i) and (ii) of this

section; and

(ii) Has a severe physical or mental

impairment that seriously limits one or

more functional capacities in terms of

an employment outcome.

(b) Prohibited factors. The State plan

must assure that— (1) No duration of

residence requirement is imposed that

excludes from services any applicant

who is present in the State;

(2) No applicant or group of

applicants is excluded or found

ineligible solely on the basis of the type

of disability;

(3) The eligibility requirements are

applied without regard to the age,

gender, race, color, creed, or national

origin of the applicant; and

(4) The eligibility requirements are

applied without regard to the particular

service needs or anticipated cost of

services required by an applicant or the

income level of an applicant or

applicant’s family.

(c) Review and assessment of data for

eligibility determination. Except as

provided in paragraph (d) of this

section, the designated State unit shall

base its determination of each of the

basic eligibility requirements in

paragraph (a) of this section on—

(1) A review and assessment of

existing data, including counselor

observations, education records,

information provided by the individual

or the individual’s family, information

used by the Social Security

Administration, and determinations

made by officials of other agencies; and

(2) 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 assistive technology

devices and services and worksite

assessments, that are necessary to

determine whether an individual is

eligible.

(d) Extended evaluation for

individuals with severe disabilities. (1)

Prior to any determination that an

individual with a severe disability is

incapable of benefitting from vocational

rehabilitation services in terms of an

employment outcome because of the

severity of that individual’s disability,

the State unit shall conduct an extended

evaluation to determine whether or not

there is clear and convincing evidence

to support such a determination.

(2) During the extended evaluation

period, which may not exceed 18

months, vocational rehabilitation

services must be provided in the most

integrated setting possible, consistent

with the informed choice of the

individual.
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6353

(3) During the extended evaluation

period, the State unit shall develop a

written plan for determining eligibility

and for determining the nature and

scope of services required to achieve an

employment outcome. The State unit

may provide during this period only

those services that are necessary to

make these two determinations.

(4) The State unit shall assess the

individual’s progress as frequently as

necessary, but at least once every 90

days, during the extended evaluation

period.

(5) The State unit shall terminate

extended evaluation services at any

point during the 18-month extended

evaluation period if the State unit

determines that—

(i) There is sufficient evidence to

conclude that the individual can benefit

from the provision of vocational

rehabilitation services in terms of an

employment outcome; or

(ii) There is clear and convincing

evidence that the individual is

incapable of benefiting from vocational

rehabilitation services in terms of an

employment outcome.

(e) Data for determination of priority

for services under an order of selection.

If the State unit is operating under an

order of selection for services, as

provided in § 361.36, the State unit shall

base its priority assignments on—

(1) A review of the data that was

developed under paragraphs (c) and (d)

of this section to make the eligibility

determination; and

(2) An assessment of additional data,

to the extent necessary.

(Authority: Secs. 7(22)(A)(ii), 7(22)(C)(iii),

101(a)(9)(A), 101(a)(14), 101(a)(31), 102(a)(1),

102(a)(2), 102(a)(3), 102(a)(4), 103(a)(4), and

103(a)(6) of the Act; 29 U.S.C. 706(22)(A)(ii),

706(22)(C)(iii), 721(a)(9)(a), 721(a)(14),

721(a)(31), 722(a)(1), 722(a)(2), 722(a)(3),

722(a)(4), 723(a)(4), and 723(a)(6))

Note: Clear and convincing evidence

means that the designated State unit shall

have 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-bycase basis. The term clear means

unequivocal. Given these requirements, a

review of existing information generally

would not provide clear and convincing

evidence. 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.

The State plan must assure that if the

State unit determines that an applicant

is ineligible for vocational rehabilitation

services or determines that an

individual receiving services under an

individualized written rehabilitation

program is no longer eligible for

services, the State unit shall—

(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

a determination by the rehabilitation

counselor or coordinator 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; and

(d) 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: Secs. 101(a)(9)(D), 102(a)(6), and

102(c) of the Act; 29 U.S.C. 721(a)(9),

722(a)(6), and 722(c))

§ 361.44 Closure without eligibility

determination.

The State plan must assure that the

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: Secs. 12(c) and 101(a)(6)(A) of the

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

§ 361.45 Development of the individualized

written rehabilitation program.

(a) Purpose. The State plan must

assure that the State unit conducts an

assessment for determining vocational

rehabilitation needs 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 longterm vocational goal, intermediate

rehabilitation objectives, and the nature

and scope of vocational rehabilitation

services to be included in the IWRP,

which must be designed to achieve an

employment outcome that is consistent

with the individual’s unique strengths,

priorities, concerns, abilities,

capabilities, career interests, and

informed choice.

(b) Procedural requirements. The

State plan must assure that—

(1) The IWRP is developed jointly,

agreed to, and signed by the vocational

rehabilitation counselor or coordinator

and the individual or, as appropriate,

the individual’s representative within

the framework of a counseling and

guidance relationship;

(2) The State unit has established and

implemented standards for the prompt

development of IWRPs for the

individuals identified under paragraph

(a) of this section, including timelines

that take into consideration the needs of

the individual;

(3) The State unit advises each

individual or, as appropriate, the

individual’s representative of all State

unit procedures and requirements

affecting the development and review of

an IWRP, including the availability of

appropriate modes of communication;

(4) In developing an IWRP for a

student with a disability who is

receiving special education services, the

State unit considers the student’s

individualized education program;

(5) The State unit reviews the IWRP

with the individual or, as appropriate,

the individual’s representative as often

as necessary, but at least once each year

to assess the individual’s progress in

meeting the objectives identified in the

IWRP;

(6) The State unit incorporates into

the IWRP any revisions that are

necessary to reflect changes in the

individual’s vocational goal,

intermediate objectives, or vocational

rehabilitation services, and obtains the
6354 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

agreement and signature of the

individual or, as appropriate, of the

individual’s representative to the

revisions; and

(7) The State unit promptly provides

each individual or, as appropriate, the

individual’s representative, a copy of

the IWRP and its amendments in the

native language, or appropriate mode of

communication, of the individual or, as

appropriate, of the individual’s

representative.

(c) Data for preparing the IWRP.—(1)

Preparation without comprehensive

assessment. To the extent possible, the

vocational goal, intermediate objectives,

and the nature and scope of

rehabilitation services to be included in

the individual’s IWRP must be

determined based on the data used for

the assessment of eligibility and priority

for services under section § 361.42.

(2) Preparation based on

comprehensive assessment. (i) If

additional data are necessary to prepare

the IWRP, the designated State unit

shall conduct a comprehensive

assessment of the unique strengths,

resources, priorities, concerns, abilities,

capabilities, interests, and needs,

including the need for supported

employment services, of an eligible

individual, in the most integrated

setting possible, consistent with the

informed choice of the individual.

(ii) The comprehensive assessment

must be limited to information that is

necessary to identify the rehabilitation

needs of the individual and develop the

IWRP and may, to the extent needed,

include—

(A) An analysis of pertinent medical,

psychiatric, psychological,

neuropsychological, and other pertinent

vocational, educational, cultural, social,

recreational, and environmental factors,

and related functional limitations, that

affect the employment and

rehabilitation needs of the individual;

(B) An analysis of the individual’s

personality, career interests,

interpersonal skills, intelligence and

related functional capacities,

educational achievements, work

experience, vocational aptitudes,

personal and social adjustments, and

employment opportunities;

(C) An appraisal of the individual’s

patterns of work behavior and services

needed to acquire occupational skills

and to develop work attitudes, work

habits, work tolerance, and social and

behavior patterns suitable for successful

job performance; and

(D) An assessment, through provision

of rehabilitation technology services, of

the individual’s capacities to perform in

a work environment, including in an

integrated setting, to the maximum

extent feasible and consistent with the

individual’s informed choice.

(iii) In preparing a comprehensive

assessment, the State unit shall use, to

the maximum extent possible and

appropriate and in accordance with

confidentiality requirements, existing

information, including information that

is provided by the individual, the family

of the individual, and education

agencies.

(Authority: Secs. 7(22)(B), 102(b)(1)(A), and

102(b)(2); 29 U.S.C. 706(5), 721(a)(9), 722,

and 723(a)(1))

§ 361.46 Content of the individualized

written rehabilitation program.

(a) General requirements. The State

plan must assure that each IWRP

includes, as appropriate, statements

concerning—

(1) The specific long-term vocational

goal, which must be based on the

assessment for determining vocational

rehabilitation needs, including the

individual’s career interests, and must

be, to the extent appropriate and

consistent with the informed choice of

the individual, in an integrated setting;

(2) The specific intermediate

rehabilitation objectives related to the

attainment of the long-term vocational

goal, based on the assessment for

determining vocational rehabilitation

needs and consistent with the informed

choice of the individual;

(3) The specific rehabilitation services

under § 361.48 to be provided to achieve

the established intermediate

rehabilitation objectives, including, if

appropriate, rehabilitation technology

services and on-the-job and related

personal assistance services;

(4) The projected dates for the

initiation of each vocational

rehabilitation service, the anticipated

duration of each service, and the

projected timeframe for the achievement

of the individual’s vocational goal;

(5) A procedure and schedule for

periodic review and evaluation of

progress toward achieving intermediate

rehabilitation objectives based upon

objective criteria;

(6) How, in the words of the

individual or, as appropriate, in the

words of the individual’s representative,

the individual was informed about and

involved in choosing among alternative

goals, objectives, services, providers,

and methods used to procure or provide

services;

(7) The terms and conditions for the

provision of vocational rehabilitation

services, including—

(i) The responsibilities of the

individual in implementing the IWRP;

(ii) The extent of the individual’s

participation in the cost of services;

(iii) The extent to which goods and

services will be provided in the most

integrated settings possible, consistent

with the informed choices of the

individual;

(iv) The extent to which comparable

services and benefits are available to the

individual under any other program;

and

(v) The entity or entities that will

provide the services and the process

used to provide or procure the services;

(8) The rights of the individual under

this part and the means by which the

individual may express and seek

remedy for any dissatisfaction,

including the opportunity for a review

of rehabilitation counselor or

coordinator determinations under

§ 361.57;

(9) The availability of a client

assistance program established under 34

CFR part 370; and

(10) The basis on which the

individual has been determined to have

achieved an employment outcome in

accordance with § 361.56.

(b) Supported employment

requirements. The State plan must

assure that the IWRP for individuals

with the most severe disabilities for

whom a vocational goal in a supported

employment setting has been

determined to be appropriate will also

contain—

(1) A description of the supported

employment services to be provided by

the State unit; and

(2) A description of the extended

services needed and identification of the

source of extended services or, in the

event that identification of the source is

not possible at the time the IWRP is

developed, a statement explaining the

basis for concluding that there is a

reasonable expectation that services will

become available.

(c) Post-employment services. The

State plan must assure that the IWRP for

each individual contains statements

concerning—

(1) The expected need for postemployment services, based on an

assessment during the development of

the IWRP;

(2) A reassessment of the need for

post-employment services prior to the

determination that the individual has

achieved an employment outcome;

(3) A description of the terms and

conditions for the provision of any postemployment services, including the

anticipated duration of those services,

subsequent to the achievement of an

employment outcome by the individual;

and

(4) If appropriate, a statement of how

post-employment services will be

provided or arranged through
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6355

cooperative agreements with other

service providers.

(d) Coordination of services for

students with disabilities who are

receiving special education services.

The State plan must assure that the

IWRP for a student with a disability

who is receiving special education

services is coordinated with the

individualized education program (IEP)

for that individual in terms of the goals,

objectives, and services identified in the

IEP.

(e) Ineligibility. The State plan must

assure that the decision that an

individual is not capable of achieving

an employment outcome and is no

longer eligible to receive services under

an IWRP is made in accordance with the

requirements in § 361.43. The decision,

and the reasons on which the decision

was based, must be included as an

amendment to the IWRP.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 101(a)(9), 102(b)(1), 102(c),

and 635(b)(6) of the Act; 29 U.S.C. 721(a)(9),

722, and 795n)

§ 361.47 Record of services.

The State plan must assure that the

designated State unit maintains for each

applicant or eligible individual a record

of services that includes, to the extent

pertinent, the following documentation:

(a) If an applicant has been

determined to be an eligible individual,

documentation supporting that

determination in accordance with the

requirements in § 361.42.

(b) If an applicant has been

determined to be ineligible,

documentation supporting that

determination in accordance with the

requirements of § 361.43.

(c) Documentation supporting the

determination that an individual has a

severe disability or a most severe

disability.

(d) If an individual with a severe

disability requires an extended

evaluation in order to determine

whether the individual is an eligible

individual, documentation supporting

the need for an extended evaluation,

documentation supporting the periodic

assessments conducted during the

extended evaluation, and the written

plan developed during the extended

evaluation, in accordance with the

requirements in § 361.42(d).

(e) The IWRP, and any amendments to

the IWRP, containing the information

required under § 361.46.

(f) In accordance with § 361.45(a),

documentation supporting the

development of the long-term vocational

goal, intermediate rehabilitation

objectives, and nature and scope of

services included in the individual’s

IWRP and, for students with disabilities

who are receiving special education

services, in the student’s IEP.

(g) In the event that an individual’s

IWRP provides for services or a job

placement in a non-integrated setting, a

justification for that non-integrated

setting.

(h) Documentation of the periodic

reviews and evaluations of progress

toward achieving intermediate

rehabilitation objectives conducted

under § 361.46(a)(5).

(i) 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(b)(10)(ii).

(j) Documentation concerning any

action and decision resulting from a

request by an individual for review of a

rehabilitation counselor or coordinator

determination under § 361.57.

(Authority: Secs. 101(a)(6) and 101(a)(9) of

the Act; 29 U.S.C. 721(a)(6) and 721(a)(9))

§ 361.48 Scope of vocational rehabilitation

services for individuals with disabilities.

(a) The State plan must assure that, as

appropriate to the vocational

rehabilitation needs of each individual

and consistent with each individual’s

informed choice, the following

vocational rehabilitation services are

available:

(1) Assessment for determining

eligibility and priority for services in

accordance with § 361.42.

(2) Assessment for determining

vocational rehabilitation needs in

accordance with § 361.45.

(3) Vocational rehabilitation

counseling and guidance.

(4) Referral and other services

necessary to help applicants and eligible

individuals secure needed services from

other agencies and to advise those

individuals about client assistance

programs established under 34 CFR part

370.

(5) Physical and mental restoration

services in accordance with the

definition of that term in § 361.5(b)(35).

(6) Vocational and other training

services, including personal and

vocational adjustment training, 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) 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(b)(31).

(8) Transportation in connection with

the rendering of any vocational

rehabilitation service and in accordance

with the definition of that term in

§ 361.5(b)(49).

(9) Vocational rehabilitation services

to family members of an applicant or

eligible individual if necessary to enable

the applicant or eligible individual to

achieve an employment outcome.

(10) Interpreter services for

individuals who are deaf and tactile

interpreting services for individuals

who are deaf-blind.

(11) Reader services, rehabilitation

teaching services, and orientation and

mobility services for individuals who

are blind.

(12) Recruitment and training services

to provide new employment

opportunities in the fields of

rehabilitation, health, welfare, public

safety, law enforcement, and other

appropriate public service employment.

(13) Job search and placement

assistance and job retention services.

(14) Supported employment services

in accordance with the definition of that

term in § 361.5(b)(46).

(15) Personal assistance services in

accordance with the definition of that

term in § 361.5(b)(34).

(16) Post-employment services in

accordance with the definition of that

term in § 361.5(b)(37).

(17) Occupational licenses, tools,

equipment, initial stocks, and supplies.

(18) Rehabilitation technology in

accordance with the definition of that

term in § 361.5(b)(39), including

vehicular modification,

telecommunications, sensory, and other

technological aids and devices.

(19) Transition services in accordance

with the definition of that term in

§ 361.5(b)(47).

(20) Other goods and services

determined necessary for the individual

with a disability to achieve an

employment outcome.

(b) The State plan also must

describe—

(1) The manner in which a broad

range of rehabilitation technology

services will be provided at each stage

of the rehabilitation process and on a

statewide basis;

(2) The training that will be provided

to vocational rehabilitation counselors,

client assistance personnel, and other
6356 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

related services personnel on the

provision of rehabilitation technology

services;

(3) The manner in which assistive

technology devices and services will be

provided or worksite assessments will

be made as part of the assessment for

determining eligibility and vocational

rehabilitation needs of an individual;

and

(4) The manner in which on-the-job

and other related personal assistance

services will be provided to assist

individuals while they are receiving

vocational rehabilitation services.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 101(a)(5)(C), 101(a)(26),

101(a)(31), and 103(a) of the Act; 29 U.S.C.

721(a)(5)(C), 721(a)(26), 721(a)(31), and

723(a))

§ 361.49 Scope of vocational rehabilitation

services for groups of individuals with

disabilities.

(a) The State plan may also 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 services

that promote integration and

competitive employment, including

under special circumstances, the

construction of a facility for a public or

nonprofit community rehabilitation

program. 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 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

recorded material or video description

services for individuals who are blind,

captioned television, films, or video

cassettes for individuals who are deaf,

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 and support

services, such as job site modification

and other reasonable accommodations,

to businesses that are not subject to Title

I of the Americans with Disabilities Act

of 1990 and that are seeking to employ

individuals with disabilities.

(5) In the case of small business

enterprises operated by individuals with

the most severe disabilities under the

supervision of the State unit, including

enterprises established under the

Randolph-Sheppard program,

management services and supervision,

acquisition of 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 the most

severe 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 State plan provides for these

services, it must contain an assurance

that only individuals with the most

severe disabilities will be selected to

participate in this supervised program.

(v) If the State plan provides for these

services and the State unit chooses to

set aside funds from the proceeds of the

operation of the small business

enterprises, the State plan also must

assure that the State unit maintains 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) Other services that promise to

contribute substantially to the

rehabilitation of a group of individuals

but that are not related directly to the

IWRP of any one individual. Examples

of those other services might include the

purchase or lease of a bus to provide

transportation to a group of applicants

or eligible individuals or the purchase

of equipment or instructional materials

that would benefit a group of applicants

or eligible individuals.

(b) If the State plan provides for

vocational rehabilitation services for

groups of individuals, the State plan

must assure that the designated State

unit—

(1) Develops and maintains 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) Maintains 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

benefitting from those services.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 12(c), 101(a)(6), and 103(b)

of the Act; 29 U.S.C. 711(c), 721(a)(6), and

723(b))

§ 361.50 Written policies governing the

provision of services for individuals with

disabilities.

The State plan must assure that the

State unit develops and maintains

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 IWRP 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:

(a) 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.

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

unit shall establish and maintain

written policies to govern the rates of

payment for all purchased vocational

rehabilitation services.
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6357

(2) The State unit may establish a fee

schedule designed to ensure a

reasonable cost to the program for each

service, provided that 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.

(c) 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

IWRP.

(d) Authorization of services. The

State unit shall establish policies related

to the timely authorization of services,

including any conditions under which

verbal authorization can be given.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 12(c), 12(e)(2)(A), and

101(a)(6) of the Act and 29 U.S.C. 711(c),

711(e)(2)(A), and 721(a)(6))

§ 361.51 Written standards for facilities

and providers of services.

The State plan must assure that the

designated State unit establishes,

maintains, makes available to the

public, and implements written

minimum standards for the various

types of facilities and providers of

services used by the State unit in

providing vocational rehabilitation

services, in accordance with the

following requirements:

(a) Accessibility of facilities. Any

facility in which vocational

rehabilitation services are provided

must be accessible to individuals

receiving services and must comply

with the requirements of the

Architectural Barriers Act of 1968, the

Uniform Accessibility Standards and

their implementing regulations in 41

CFR part 101, subpart 101–19.6, the

Americans with Disabilities Act of 1990,

and section 504 of the Act.

(b) Personnel standards. (1) Qualified

personnel. Providers of vocational

rehabilitation services shall use

qualified personnel, in accordance with

any applicable national or Stateapproved 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.

(2) Affirmative action. Providers of

vocational rehabilitation services shall

take affirmative action to employ and

advance in employment qualified

individuals with disabilities.

(3) Special communication needs

personnel. Providers of vocational

rehabilitation services shall—

(i) Include among their personnel, or

obtain the services of, individuals able

to communicate in the native languages

of applicants and eligible individuals

who have limited English speaking

ability; and

(ii) Ensure that appropriate modes of

communication for all applicants and

eligible individuals are used.

(c) Fraud, waste, and abuse. Providers

of vocational rehabilitation services

shall have adequate and appropriate

policies and procedures to prevent

fraud, waste, and abuse.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 12(e)(2) (B), (D), and (E) and

101(a)(6)(B) of the Act; 29 U.S.C. 711(e) and

721(a)(6)(B))

§ 361.52 Opportunity to make informed

choices.

The State plan must describe the

manner in which the State unit will

provide each applicant, including

individuals who are receiving services

during an extended evaluation, and

each eligible individual the opportunity

to make informed choices throughout

the vocational rehabilitation process in

accordance with the following

requirements:

(a) Each State unit, in consultation

with its State Rehabilitation Advisory

Council, if it has one, shall develop and

implement written policies and

procedures that enable each individual

to make an informed choice with regard

to the selection of a long-term

vocational goal, intermediate

rehabilitation objectives, vocational

rehabilitation services, including

assessment services, and service

providers. These policies and

procedures must ensure that each

individual receives, through appropriate

modes of communication, information

concerning the availability and scope of

informed choice, the manner in which

informed choice may be exercised, and

the availability of support services for

individuals with cognitive or other

disabilities who require assistance in

exercising informed choice.

(b) In developing an individual’s

IWRP, the State unit shall provide the

individual, or assist the individual in

acquiring, information necessary to

make an informed choice about the

specific services, including the

providers of those services, that are

needed to achieve the individual’s

vocational goal. This information must

include, at a minimum, information

relating to the cost, accessibility, and

duration of potential services, the

consumer satisfaction with those

services to the extent that information

relating to consumer satisfaction is

available, the qualifications of potential

service providers, the types of services

offered by those providers, and the

degree to which services are provided in

integrated settings.

(c) In providing, or assisting the

individual in acquiring, the information

required under paragraph (b) of this

section, the State unit may use, but is

not limited to, the following methods or

sources of information:

(1) State or regional lists of services

and service providers.

(2) Periodic consumer satisfaction

surveys and reports.

(3) Referrals to other consumers, local

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.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 12(e)(1), 12(e)(2) (C) and (F),

and 101(a)(29) of the Act; 29 U.S.C. 711(e)

and 721(a)(29))

§ 361.53 Availability of comparable

services and benefits.

(a) The State plan must assure that—

(1) Prior to providing any vocational

rehabilitation services to an eligible

individual, or to members of the

individual’s family, except those

services listed in paragraph (b) of this

section, the State unit shall determine

whether comparable services and

benefits exist under any other program

and whether those services and benefits

are available to the individual;

(2) If comparable services or benefits

exist under any other program and are

available to the eligible individual at the

time needed to achieve the

rehabilitation objectives in the

individual’s IWRP, the State unit shall

use those comparable services or

benefits to meet, in whole or in part, the
6358 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

cost of vocational rehabilitation

services; and

(3) If comparable services or benefits

exist under any other program, but are

not available to the individual at the

time needed to satisfy the rehabilitation

objectives in the individual’s IWRP, the

State unit shall provide vocational

rehabilitation services until those

comparable services and benefits

become available.

(b) The following services 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 priority for services.

(2) Assessment for determining

vocational rehabilitation needs.

(3) Vocational rehabilitation

counseling, guidance, and referral

services.

(4) Vocational and other training

services, such as personal and

vocational adjustment training, books

(including alternative format books

accessible by computer and taped

books), tools, and other training

materials in accordance with

§ 361.48(a)(6).

(5) Placement services.

(6) Rehabilitation technology.

(7) Post-employment services

consisting of the services listed under

paragraphs (b) (1) through (6) of this

section.

(c) The requirements of paragraph (a)

of this section also do not apply if—

(1) The determination of the

availability of comparable services and

benefits under any other program would

delay 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; or

(2) An immediate job placement

would be lost due to a delay in the

provision of comparable services and

benefits.

(Authority: Sec. 101(a)(8) of the Act; 29

U.S.C. 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

during an extended evaluation 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 shall maintain written policies

covering the determination of financial

need;

(ii) The State plan must specify the

types of vocational rehabilitation

services for which the unit has

established a financial needs test;

(iii) The policies must be applied

uniformly to all individuals in similar

circumstances;

(iv) 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

(v) 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 State plan must assure that no

financial needs test is applied and no

financial participation is required as a

condition for furnishing the following

vocational rehabilitation services:

(i) Assessment for determining

eligibility and priority for services,

except those non-assessment services

that are provided during an extended

evaluation for an individual with a

severe disability under § 361.42(d).

(ii) Assessment for determining

vocational rehabilitation needs.

(iii) Vocational rehabilitation

counseling, guidance, and referral

services.

(iv) Placement services.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 12(c) of the Act; 29 U.S.C.

711(c))

§ 361.55 Review of extended employment

in community rehabilitation programs or

other employment under section 14(c) of

the Fair Labor Standards Act.

The State plan must assure that the

State unit—

(a) Reviews and re-evaluates at least

annually the status of each individual

determined by the State unit to have

achieved an employment outcome in an

extended employment setting in a

community rehabilitation program or

other employment setting in which the

individual is compensated in

accordance with section 14(c) of the Fair

Labor Standards Act. This review or reevaluation must include input from the

individual or, in an appropriate case,

the individual’s representative to

determine the interests, priorities, and

needs of the individual for employment

in, or training for, competitive

employment in an integrated setting in

the labor market;

(b) Makes maximum effort, including

the identification of vocational

rehabilitation services, reasonable

accommodations, and other support

services, to enable the eligible

individual to benefit from training in, or

to be placed in employment in, an

integrated setting; and

(c) Provides services designed to

promote movement from extended

employment to integrated employment,

including supported employment,

independent living, and community

participation.

(Authority: Sec. 101(a)(16) of the Act; 29

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

§ 361.56 Individuals determined to have

achieved an employment outcome.

The State plan must assure that an

individual is determined to have

achieved an employment outcome only

if the following requirements are met:

(a) The provision of services under

the individual’s IWRP has contributed

to the achievement of the employment

outcome.

(b) The employment outcome is

consistent with the individual’s

strengths, resources, priorities,

concerns, abilities, capabilities,

interests, and informed choice.

(c) The employment outcome is in the

most integrated setting possible,

consistent with the individual’s

informed choice.

(d) The individual has maintained the

employment outcome for a period of at

least 90 days.

(e) At the end of the appropriate

period under paragraph (d) of this

section, the individual and the

rehabilitation counselor or coordinator

consider the employment outcome to be

satisfactory and agree that the

individual is performing well on the job.

(Authority: Secs. 12(c), 101(a)(6), and

106(a)(2) of the Act; 29 U.S.C. 711(c),

721(a)(6), and 726(a)(2))

§ 361.57 Review of rehabilitation

counselor or coordinator determinations.

The State plan must contain

procedures, including standards of

review under paragraph (b)(7) of this

section, established by the director of

the designated State unit to ensure that

any applicant or eligible individual who

is dissatisfied with any determinations

made by a rehabilitation counselor or

coordinator concerning the furnishing

or denial of services may request, or, if
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6359

appropriate, may request through the

individual’s representative, a timely

review of those determinations. The

procedures established by the director

of the State unit must be in accordance

with the following provisions:

(a) Informal resolution. The State unit

may establish an informal process to

resolve a request for review without

conducting a formal hearing. However,

a State’s informal process must be

conducted and concluded within the

time period established under paragraph

(b)(1) of this section for holding a formal

hearing. If informal resolution is not

successful, a formal hearing must be

conducted by the end of this same

period, unless the parties agree to a

specific extension of time.

(b) Formal hearing procedures. Except

as provided in paragraph (d) of this

section, the State unit shall establish

formal review procedures that provide

that—

(1) A hearing by an impartial hearing

officer, selected in accordance with

paragraph (c) of this section, must be

held within 45 days of an individual’s

request for review, unless informal

resolution is achieved prior to the 45th

day or the parties agree to a specific

extension of time;

(2) The State unit may not institute a

suspension, reduction, or termination of

services being provided under an IWRP

pending a final determination of the

formal hearing under this paragraph or

informal resolution under paragraph (a)

of this section, unless the individual or,

in an appropriate case, the individual’s

representative so requests or the agency

has evidence that the services have been

obtained through misrepresentation,

fraud, collusion, or criminal conduct on

the part of the individual;

(3) The individual or, if appropriate,

the individual’s representative must be

afforded an opportunity to present

additional evidence, information, and

witnesses to the impartial hearing

officer, to be represented by counsel or

other appropriate advocate, and to

examine all witnesses and other

relevant sources of information and

evidence;

(4) The impartial hearing officer shall

make a decision based on the provisions

of the approved State plan, the Act,

Federal vocational rehabilitation

regulations, and State regulations and

policies that are consistent with Federal

requirements and shall provide to the

individual or, if appropriate, the

individual’s representative and to the

director of the designated State unit a

full written report of the findings and

grounds for the decision within 30 days

of the completion of the hearing;

(5) If the director of the designated

State unit decides to review the decision

of the impartial hearing officer, the

director shall notify in writing the

individual or, if appropriate, the

individual’s representative of that intent

within 20 days of the mailing of the

impartial hearing officer’s decision;

(6) If the director of the designated

State unit fails to provide the notice

required by paragraph (b)(5) of this

section, the impartial hearing officer’s

decision becomes a final decision;

(7) The decision of the director of the

designated State unit to review any

impartial hearing officer’s decision must

be based on standards of review

contained in written State unit policy;

(8) If the director of the designated

State unit decides to review the decision

of the impartial hearing officer, the

director shall provide the individual or,

if appropriate, the individual’s

representative an opportunity to submit

additional evidence and information

relevant to the final decision;

(9) The director may not overturn or

modify a decision, or part of a decision,

of an impartial hearing officer that

supports the position of the individual

unless the director concludes, based on

clear and convincing evidence, that the

decision of the impartial hearing officer

is clearly erroneous because it is

contrary to the approved State plan, the

Act, Federal vocational rehabilitation

regulations, or State regulations or

policies that are consistent with Federal

requirements;

(10) Within 30 days of providing

notice of intent to review the impartial

hearing officer’s decision, the director of

the designated State unit shall make a

final decision and provide a full report

in writing of the decision, including the

findings and the statutory, regulatory, or

policy grounds for the decision, to the

individual or, if appropriate, the

individual’s representative;

(11) The director of the designated

State unit may not delegate

responsibility to make any final

decision to any other officer or

employee of the designated State unit;

and

(12) Except for the time limitations

established in paragraphs (b)(1) and

(b)(5) of this section, each State’s review

procedures may provide for reasonable

time extensions for good cause shown at

the request of a party or at the request

of both parties.

(c) Selection of impartial hearing

officers. Except as provided in

paragraph (d) of this section, the

impartial hearing officer for a particular

case must be selected—

(1) From among the pool of persons

qualified to be an impartial hearing

officer, as defined in § 361.5(b)(22), who

are identified by the State unit, if the

State unit is an independent

commission, or jointly by the designated

State unit and those members of the

State Rehabilitation Advisory Council

designated in section 102(d)(2)(C) of the

Act, 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

individual or, if appropriate, the

individual’s representative.

(d) State fair hearing board. The

provisions of paragraphs (b) and (c) of

this section are not applicable if the

State has a fair hearing board that was

established before January 1, 1985, that

is authorized under State law to review

rehabilitation counselor or coordinator

determinations and to carry out the

responsibilities of the director of the

designated State unit under this section.

(e) Informing affected individuals.

The State unit shall inform, through

appropriate modes of communication,

all applicants and eligible individuals

of—

(1) Their right to review under this

section, including the names and

addresses of individuals with whom

appeals may be filed; and

(2) The manner in which an impartial

hearing officer will be selected

consistent with the requirements of

paragraph (c) of this section.

(f) Data collection. The director of the

designated State unit shall 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:

(1) The number of appeals to

impartial hearing officers and the State

director, including the type of

complaints and the issues involved.

(2) The number of decisions by the

State director reversing in whole or in

part a decision of the impartial hearing

officer.

(3) The number of decisions affirming

the position of the dissatisfied

individual assisted through the client

assistance program, when that

assistance is known to the State unit.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 102(b) and 102(d) of the

Act; 29 U.S.C. 722(b) and 722(d))

Subpart C—Financing of State

Vocational Rehabilitation Programs

§ 361.60 Matching requirements.

(a) Federal share—(1) General. Except

as provided in paragraphs (a)(2) and

(a)(3) of this section, the Federal share

for expenditures made by the State unit

under the State plan, including
6360 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

expenditures for the provision of

vocational rehabilitation services,

administration of the State plan, and the

development and implementation of the

strategic 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.

(3) Innovation and expansion grant

activities. The Federal share for the cost

of innovation and expansion grant

activities funded by appropriations

under Part C of Title I of the Act is 90

percent.

(b) Non-Federal share—(1) General.

Except as provided in paragraphs (b)(2)

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

made under the State plan to meet the

non-Federal share under this section

must be consistent with the provisions

of 34 CFR 80.24.

(2) Third party in-kind contributions.

Third party in-kind contributions

specified in 34 CFR 80.24(a)(2) may not

be used to meet the non-Federal share

under this section.

(3) Contributions by private entities.

Expenditures made from contributions

by private organizations, agencies, or

individuals that are deposited in the

account of the State agency or sole local

agency in accordance with State law

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 following

requirements are met:

(i) The funds are earmarked for

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) If the funds are earmarked for any

other purpose under the State plan, the

expenditures 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 has a close

personal relationship, or an individual,

entity, or organization with whom the

donor shares a financial interest. The

Secretary does not consider a donor’s

receipt from the State unit of a grant,

subgrant, or contract with funds allotted

under this part to be a benefit for the

purposes of this paragraph if the grant,

subgrant, or contract is awarded under

the State’s regular competitive

procedures.

(Authority: Secs. 7(7), 101(a)(3), and 104 of

the Act; 29 U.S.C. 706(7), 721(a)(3) and 724)

Note: The Secretary notes that

contributions may be earmarked in

accordance with paragraph (b)(3)(ii) of this

section 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 State plan. However, if a contribution is

earmarked for a restricted geographic area,

expenditures from that contribution may be

used to meet the non-Federal share

requirement only if the State unit requests

and the Secretary approves a waiver of

statewideness, in accordance with § 361.26.

§ 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: Sec. 101(a)(17)(A) of the Act; 29

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

§ 361.62 Maintenance of effort

requirements.

(a) General requirements. (1) The

Secretary reduces the amount otherwise

payable to a State for a fiscal year by the

amount by which the total expenditures

from non-Federal sources under the

State plan for the previous fiscal year

were less than the total of those

expenditures for the fiscal year two

years prior to the previous fiscal year.

For example, for fiscal year 1996, a

State’s maintenance of effort level is

based on the amount of its expenditures

from non-Federal sources for fiscal year

1994. Thus, if the State’s non-Federal

expenditures in 1996 are less than they

were in 1994, the State has a

maintenance of effort deficit, and the

Secretary reduces the State’s allotment

in 1997 by the amount of that deficit.

(2) If, at the time the Secretary makes

a determination that a State has failed

to meet its maintenance of effort

requirements, it is too late for the

Secretary to make a reduction in

accordance with paragraph (a)(1) of this

section, then the Secretary recovers the

amount of the maintenance of effort

deficit through audit disallowance.

(b) Specific requirements for

construction of facilities. If the State

plan 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. If a State fails

to meet the requirements of this

paragraph, the Secretary recovers the

amount of the maintenance of effort

deficit through audit disallowance.

(c) Separate State agency for

vocational rehabilitation services for

individuals who are blind. If there is a

separate part of the 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 are determined

based on the total amount of a State’s

non-Federal expenditures under both

parts of the 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 that fiscal year

under each part of the plan in direct

relation to the amount by which

expenditures from non-Federal sources

under each part of the plan in the

previous fiscal year were less than they

were for that part of the plan for the

fiscal year two years prior to the

previous fiscal year.

(d) Waiver or modification. (1) The

Secretary may waive or modify the

maintenance of effort requirement in

paragraph (a)(1) 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;

and

(ii) Result in—

(A) A general reduction of programs

within the State; or

(B) The State making 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
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6361

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 as soon as the State

determines that an exceptional or

uncontrollable circumstance will

prevent it from making its required

expenditures from non-Federal sources.

(Authority: Secs. 101(a)(17) and 111(a)(2) of

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

§ 361.63 Program income.

(a) Definition. Program income means

gross income received by the State that

is directly generated by an activity

supported under this part.

(b) Sources. Sources of program

income include, but are not limited to,

payments from the Social Security

Administration for rehabilitating Social

Security beneficiaries, payments

received from workers’ compensation

funds, fees 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.

(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, the

administration of the State plan, and

developing and implementing the

strategic plan. Program income is

considered earned when it is received.

(2) Payments provided to a State from

the Social Security Administration for

rehabilitating Social Security

beneficiaries may also be used to carry

out programs under Part B of Title I of

the Act (client assistance), Part C of

Title I of the Act (innovation and

expansion), Part C of Title VI of the Act

(supported employment) and Title VII of

the Act (independent living).

(3) The State is authorized to treat

program income as—

(i) An addition to the grant funds to

be used for additional allowable

program expenditures, in accordance

with 34 CFR 80.25(g)(2); or

(ii) A deduction from total allowable

costs, in accordance with 34 CFR

80.25(g)(1).

(4) Program income may not be used

to meet the non-Federal share

requirement under § 361.60.

(Authority: Sec. 108 of the Act; 29 U.S.C.

728; 34 CFR 80.25)

§ 361.64 Obligation of Federal funds and

program income.

(a) Except as provided in paragraph

(b) of this section, any Federal 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 unit by the

beginning of the succeeding fiscal year

and any program income received

during a fiscal year that is not obligated

by the State unit by the beginning of the

succeeding fiscal year must remain

available for obligation by the State unit

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 unit 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: Sec. 19 of the Act; 29 U.S.C. 718)

§ 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 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.

(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 current or subsequent

fiscal year, 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) 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: Secs. 110 and 111 of the Act; 29

U.S.C. 730 and 731)

Subpart D—Strategic Plan for

Innovation and Expansion of

Vocational Rehabilitation Services

§ 361.70 Purpose of the strategic plan.

The State shall prepare a statewide

strategic plan, in accordance with

§ 361.71, to develop and use innovative

approaches for achieving long-term

success in expanding and improving

vocational rehabilitation services,

including supported employment

services, provided under the State plan,

including the supported employment

supplement to the State plan required

under 34 CFR part 363.

(Authority: Sec. 120 of the Act; 29 U.S.C.

740)

§ 361.71 Procedures for developing the

strategic plan.

(a) Public input. (1) The State unit

shall meet with and receive

recommendations from members of the

State Rehabilitation Advisory Council, if

the State has a Council, and the

Statewide Independent Living Council

prior to developing the strategic plan.

(2) The State unit shall solicit public

input on the strategic plan prior to or at

the public meetings on the State plan,

in accordance with the requirements of

§ 361.20.

(3) The State unit shall consider the

recommendations received under

paragraphs (a)(1) and (a)(2) of this

section and, if the State rejects any

recommendations, shall include a

written explanation of the reasons for

those rejections in the strategic plan.

(4) The State unit shall develop a

procedure to ensure ongoing comment

from the Council or Councils, if

applicable, as the plan is being

implemented.

(b) Duration. The strategic plan must

cover a three-year period.

(c) Revisions. The State unit shall

revise the strategic plan on an annual

basis to reflect the unit’s actual

experience over the previous year and

input from the State Rehabilitation

Advisory Council, if the State has a

Council, individuals with disabilities,

and other interested parties.

(d) Dissemination. The State unit

shall disseminate widely the strategic

plan to individuals with disabilities,

disability organizations, rehabilitation

professionals, and other interested

persons and shall make the strategic

plan available in accessible formats and

appropriate modes of communication.
6362 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 122 of the Act; 29 U.S.C.

742)

§ 361.72 Content of the strategic plan.

The strategic plan must include—

(a) A statement of the mission,

philosophy, values, and principles of

the vocational rehabilitation program in

the State;

(b) Specific goals and objectives for

expanding and improving the system for

providing vocational rehabilitation

services;

(c) Specific multi-faceted and

systemic approaches for accomplishing

the objectives, including interagency

coordination and cooperation, that build

upon state-of-the-art practices and

research findings and that implement

the State plan and the supplement to the

State plan submitted under 34 CFR Part

363;

(d) A description of the specific

programs, projects, and activities

funded under this subpart, including

how the programs, projects, and

activities accomplish the objectives of

the subpart, and the resource allocation

and budget for the programs, projects,

and activities; and

(e) Specific criteria for determining

whether the objectives have been

achieved, including an assurance that

the State will conduct an annual

evaluation to determine the extent to

which the objectives have been

achieved and, if specific objectives have

not been achieved, the reasons that the

objectives have not been achieved and

a description of alternative approaches

that will be taken.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Sec. 121 of the Act; 29 U.S.C.

741)

§ 361.73 Use of funds.

(a) A State unit shall use all grant

funds received under Title I, Part C of

the Act to carry out programs and

activities that are identified under the

State’s strategic plan, including but not

limited to those programs and activities

that are identified in paragraph (b) of

this section.

(b) A State unit shall use at least 1.5

percent of the funds received under

section 111 of the Act to carry out one

or more of the following types of

programs and activities that are

identified in the State’s strategic plan:

(1) Programs to initiate or expand

employment opportunities for

individuals with severe disabilities in

integrated settings that allow for the use

of on-the-job training to promote the

objectives of Title I of the Americans

with Disabilities Act of 1990.

(2) Programs or activities to improve

or expand the provision of employment

services in integrated settings to

individuals with sensory, cognitive,

physical, and mental impairments who

traditionally have not been served by

the State vocational rehabilitation

agency.

(3) Programs or activities to maximize

the ability of individuals with

disabilities to use rehabilitation

technology in employment settings.

(4) Programs or activities that assist

employers in accommodating,

evaluating, training, or placing

individuals with disabilities in the

workplace of the employer consistent

with the provisions of the Act and Title

I of the Americans with Disabilities Act

of 1990. These programs or activities

may include short-term technical

assistance or other effective strategies.

(5) Programs or activities that expand

and improve the extent and type of an

individual’s involvement in the review

and selection of his or her training and

employment goals.

(6) Programs or activities that expand

and improve opportunities for career

advancement for individuals with

severe disabilities.

(7) Programs, projects, or activities

designed to initiate, expand, or improve

working relationships between

vocational rehabilitation services

provided under Title I of the Act and

independent living services provided

under Title VII of the Act.

(8) Programs, projects, or activities

designed to improve functioning of the

system for delivering vocational

rehabilitation services and to improve

coordination and working relationships

with other State agencies and local

public agencies, business, industry,

labor, community rehabilitation

programs, and centers for independent

living, including projects designed to—

(i) Increase the ease of access to,

timeliness of, and quality of vocational

rehabilitation services through the

development and implementation of

policies, procedures, systems, and

interagency mechanisms for providing

vocational rehabilitation services;

(ii) Improve the working relationships

between State vocational rehabilitation

agencies and other State agencies,

centers for independent living,

community rehabilitation programs,

educational agencies involved in higher

education, adult basic education, and

continuing education, and businesses,

industry, and labor organizations, in

order to create and facilitate cooperation

in—

(A) Planning and implementing

services; and

(B) Developing an integrated system

of community-based vocational

rehabilitation services that includes

appropriate transitions between service

systems; and

(iii) Improve the ability of

professionals, advocates, business,

industry, labor, and individuals with

disabilities to work in cooperative

partnerships to improve the quality of

vocational rehabilitation services and

job and career opportunities for

individuals with disabilities.

(9) Projects or activities that ensure

that the annual evaluation of the

effectiveness of the program in meeting

the goals and objectives in the State

plan, including the system for

evaluating the performance of

rehabilitation counselors, coordinators,

and other personnel used in the State,

facilitates and does not impede the

accomplishment of the purpose of this

part, including serving individuals with

the most severe disabilities.

(10) Projects or activities to support

the initiation, expansion, and

improvement of a comprehensive

system of personnel development.

(11) Programs, projects, or activities to

support the provision of training and

technical assistance to individuals with

disabilities, business, industry, labor,

community rehabilitation programs, and

others regarding the implementation of

the Rehabilitation Act Amendments of

1992, of Title V of the Act, and of the

Americans with Disabilities Act of 1990.

(12) Projects or activities to support

the funding of the State Rehabilitation

Advisory Council and the Statewide

Independent Living Council.

(Authority: Secs. 101(a)(34)(B) and 123 of the

Act; 29 U.S.C. 721(a)(34)(B) and 743)

§ 361.74 Allotment of Federal funds.

(a) The allotment and any reallotment

of Federal funds under Title I, Part C of

the Act are computed in accordance

with the requirements of section 124 of

the Act.

(b) If at any time the Secretary

determines that any amount will not be

expended by a State in carrying out the

purpose of this subpart, the Secretary

makes that amount available to one or

more other States that the Secretary

determines will be able to use

additional amounts during the fiscal

year. Any amount made available to any

State under this paragraph of this

section is regarded as an increase in the

State’s allotment for that fiscal year.

(Authority: Sec. 124 of the Act; 29 U.S.C.

744)
Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations 6363

PART 363—THE STATE SUPPORTED

EMPLOYMENT SERVICES PROGRAM

2. The authority citation for part 363

continues to read as follows:

Authority: 29 U.S.C. 795j–q, unless

otherwise noted.

3. In § 363.6, paragraphs (c)(1),

(c)(2)(i), (c)(2)(ii), and the authority

citation are revised to read as follows:

§ 363.6 What definitions apply?

* * * * *

(c) * * *

(1) Supported employment means—

(i) Competitive employment in an

integrated setting with ongoing support

services for individuals with the most

severe disabilities—

(A) For whom competitive

employment has not traditionally

occurred or for whom competitive

employment has been interrupted or

intermittent as a result of a severe

disability; and

(B) Who, because of the nature and

severity of their disabilities, need

intensive supported employment

services from the designated State unit

and extended services after transition in

order to perform this work; or

(ii) Transitional employment for

individuals with the most severe

disabilities due to mental illness.

(2) As used in the definition of

‘‘Supported employment’’—

(i) Competitive employment means

work—

(A) In the competitive labor market

that is performed on a full-time or parttime basis in an integrated setting; and

(B) For which an individual is

compensated at or above the minimum

wage, but not less than the customary or

usual wage paid by the employer for the

same or similar work performed by

individuals who are not disabled.

(ii) Integrated setting means a setting

typically found in the community in

which an individual with the most

severe disabilities interacts with nondisabled individuals, other than nondisabled individuals who are providing

services to that individual, to the same

extent that non-disabled individuals in

comparable positions interact with other

persons.

* * * * *

(Authority: 29 U.S.C. 706(18), 711(c), and

795j)

PART 376—SPECIAL PROJECTS AND

DEMONSTRATIONS FOR PROVIDING

TRANSITIONAL REHABILITATION

SERVICES TO YOUTH WITH

DISABILITIES

4. The authority citation for part 376

continues to read as follows:

Authority: 29 U.S.C. 777a(b), unless

otherwise noted.

5. In § 376.4, paragraph (c) and the

authority citation are revised to read as

follows:

§ 376.4 What definitions apply to this

program?

* * * * *

(c) The definitions of ‘‘Competitive

employment’’, ‘‘Integrated setting’’,

‘‘On-going support services’’,

‘‘Transitional employment’’, and ‘‘Timelimited services’’ in 34 CFR part 380.

* * * * *

(Authority: 29 U.S.C. 711(c) and 777a(b))

PART 380—SPECIAL PROJECTS AND

DEMONSTRATIONS FOR PROVIDING

SUPPORTED EMPLOYMENT

SERVICES TO INDIVIDUALS WITH THE

MOST SEVERE DISABILITIES AND

TECHNICAL ASSISTANCE PROJECTS

6. The authority citation for part 380

continues to read as follows:

Authority: 29 U.S.C. 711(c) and 777a(c),

unless otherwise noted.

7. In § 380.9, paragraphs (c)(1)(i) and

(c)(1)(ii) are revised to read as follows:

§ 380.9 What definitions apply?

* * * * *

(c) * * *

(1) * * *

(i) Competitive employment means

work—

(A) In the competitive labor market

that is performed on a full-time or parttime basis in an integrated setting; and

(B) For which an individual is

compensated at or above the minimum

wage, but not less than the customary or

usual wage paid by the employer for the

same or similar work performed by

individuals who are not disabled.

(ii) Integrated setting means a setting

typically found in the community in

which an individual with the most

severe disabilities interacts with nondisabled individuals, other than nondisabled individuals who are providing

services to that individual, to the same

extent that non-disabled individuals in

comparable positions interact with other

persons.

* * * * *

[FR Doc. 97–3159 Filed 2–10– 97; 8:45 am]

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