77432 Federal Register / Vol. 65, No. 238 / Monday, December 11, 2000 / Rules and Regulations

DEPARTMENT OF EDUCATION

34 CFR Part 373

Special Demonstration Programs

AGENCY: Office of Special Education and

Rehabilitative Services, Department of

Education.

ACTION: Final regulations.

SUMMARY: The Secretary issues

regulations governing the Special

Demonstration Programs. These

regulations are needed to implement

changes in the Rehabilitation Act

Amendments of 1998. The regulations

provide definitions and requirements

for grants and contracts under the

expanded authority of the Special

Demonstration Programs.

DATES: These regulations are effective

January 10, 2001.

FOR FURTHER INFORMATION CONTACT:

Thomas E. Finch, Ph.D., U.S.

Department of Education, 400 Maryland

Avenue, SW., room 3038 MES,

Washington, DC 20202–2575.

Telephone: (202) 205–8292. If you use a

telecommunications device for the deaf

(TDD), you may call the Federal

Information Relay Service (FIRS) at 1–

800–877–8339.

Individuals with disabilities may

obtain this document in an alternative

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

audiotape, or computer diskette) on

request to the contact person listed in

the preceding paragraph.

SUPPLEMENTARY INFORMATION: These

regulations implement changes to the

Rehabilitation Act of 1973, as amended

(Act), made by the Rehabilitation Act

Amendments of 1998, enacted as part of

the Workforce Investment Act of 1998

(Pub. L. 105–220), on August 7, 1998,

and as further amended in 1998 by

technical amendments in the Reading

Excellence Act and the Carl D. Perkins

Vocational and Applied Technology

Education Act Amendments of 1998

(hereinafter collectively referred to as

the 1998 Amendments).

On June 23, 2000 we published a

notice of proposed rulemaking (NPRM)

for the Special Demonstration Programs

in the Federal Register (65 FR 39252).

In the preamble to the NPRM, we noted

that section 303(b) of the Act, which

contains the authority for these

programs, had undergone considerable

changes. While continuing to focus on

the expansion and improvement of

rehabilitation services, the Special

Demonstration Programs now include

the expansion and improvement of

other services authorized under the Act.

In addition to reflecting this statutory

change in the purpose of the Special

Demonstration Programs, these

regulations have been designed to give

the Secretary greater flexibility in

making awards that are relevant and

responsive to the needs of individuals

with disabilities. The following

overview, which was originally

contained in the preamble to the NPRM

(pages 39252 and 39253), describes the

benefits of the regulations:

Section 373.2 provides additional

flexibility in determining eligible

entities.

Section 373.4 contains terms from the

Act and other terms that may be used in

applying for a grant and administering

a grant project.

Section 373.6 permits the Secretary to

meet the current trends and needs

relative to services for individuals with

disabilities and on accepted methods of

improving and expanding those

services. In addition, the Secretary may

announce priorities without further

public comment. Additional

information and requirements pertinent

to the priorities will be announced in

the Federal Register and in the

application package for a given

competition.

Section 373.11 permits the Secretary

to inform the potential applicant of

information the Secretary may consider,

in addition to the peer review scores,

when making an award.

Section 373.20 permits the Secretary

to institute a matching requirement not

to exceed 10 percent of the total project

costs. The matching funds may be

provided in cash or in-kind.

Section 373.21 informs grantees under

section 306 of the Act that the Secretary

may require that recipients of grants

under this title submit information,

including data, necessary to measure

project outcomes and performance,

including any data needed to comply

with the Government Performance and

Results Act of 1993 (GPRA). We are

developing a uniform data collection

instrument for future use by grantees

under this program. This instrument

will be published in the Federal

Register for public comment. The

inclusion of § 373.21 emphasizes the

authority for the Secretary to require

needed information.

Section 373.22 limits indirect cost

reimbursement for grants under this

program to the recipient’s actual

indirect costs, as determined by its

negotiated indirect cost rate agreement,

or 10 percent of the total direct cost

base, whichever amount is less.

Section 373.23 lists additional

requirements for grantees.

There are no differences between the

NPRM and these final regulations.

Public Comment

In the NPRM we invited comments on

the proposed regulations. We did not

receive any substantive comments.

National Education Goals

The eight National Education Goals

focus the Nation’s education reform

efforts and provide a framework for

improving teaching and learning.

These regulations address the

National Education Goal that every

adult American will possess the

knowledge and skills necessary to

compete in a global economy. These

regulations further the objectives of this

goal by implementing programs to

provide vocational rehabilitation

services and other services to provide

increased employment opportunities for

individuals with disabilities.

Paperwork Reduction Act of 1995

These regulations do not contain any

information collection requirements.

Intergovernmental Review

This program is subject to Executive

Order 12372 and the regulations in 34

CFR part 79. One of the objectives of the

Executive order is to foster an

intergovernmental partnership and a

strengthened federalism. The Executive

order relies on processes developed by

State and local governments for

coordination and review of proposed

Federal financial assistance.

This document provides early

notification of our specific plans and

actions for this program.

Assessment of Educational Impact

In the NPRM we requested comments

on whether the proposed regulations

would require transmission of

information that any other agency or

authority of the United States gathers or

makes available.

Based on the response to the NPRM

and on our review, we have determined

that these final regulations do not

require transmission of information that

any other agency or authority of the

United States gathers or makes

available.

Electronic Access to This Document

You may view this document, as well

as all other Department of Education

documents published in the Federal

Register, in text or Adobe Portable

Document Format (PDF) on the Internet

at either of the following sites:

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

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

To use PDF you must have Adobe

Acrobat Reader, which is available free

at either of the previous sites. If you

Federal Register / Vol. 65, No. 238 / Monday, December 11, 2000 / Rules and Regulations 77433

have questions about using PDF, call the

U.S. Government Printing Office (GPO),

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

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

Note: The official version of this document

is the document published in the Federal

Register. Free Internet access to the official

edition of the Federal Register and the Code

of Federal Regulations is available on GPO

Access at:

http://www.access.gpo.gov/nara/index.html

(Catalog of Federal Domestic Assistance

Number 84.235 Special Demonstration

Program)

List of Subjects in 34 CFR Part 373

Grant programs—education,

Vocational rehabilitation.

Dated: December 5, 2000.

Judith E. Heumann,

Assistant Secretary for Special Education and

Rehabilitative Services.

For the reasons discussed in the

preamble, the Secretary amends title 34

of the Code of Federal Regulations by

adding a new part 373 to read as

follows:

PART 373—SPECIAL

DEMONSTRATION PROGRAMS

Subpart A—General

Sec.

373.1 What is the purpose of the Special

Demonstration Programs?

373.2 Who is eligible for assistance?

373.3 What regulations apply?

373.4 What definitions apply?

373.5 Who is eligible to receive services

and to benefit from activities conducted

by eligible entities?

373.6 What are the priorities and other

factors and requirements for

competitions?

Subpart B—How Does the Secretary Make

a Grant?

373.10 What selection criteria does the

Secretary use?

373.11 What other factors does the

Secretary consider when making a grant?

Subpart C—What Conditions Must Be Met

by a Grantee?

373.20 What are the matching

requirements?

373.21 What are the reporting

requirements?

373.22 What are the limitations on indirect

costs?

373.23 What additional requirements must

be met?

373.24 What are the special requirements

pertaining to the protection, use, and

release of personal information?

Authority: 29 U.S.C. 773(b), unless

otherwise noted.

Subpart A—General

§ 373.1 What is the purpose of the Special

Demonstration Programs?

The purpose of this program is to

provide competitive grants to, or enter

into contracts with, eligible entities to

expand and improve the provision of

rehabilitation and other services

authorized under the Rehabilitation Act

of 1973, as amended (Act), or to further

the purposes and policies in sections

2(b) and (c) of the Act by supporting

activities that increase the provision,

extent, availability, scope, and quality of

rehabilitation services under the Act,

including related research and

evaluations activities.

(Authority: 29 U.S.C. 701(b) and (c), 711(c),

and 773(b))

§ 373.2 Who is eligible for assistance?

(a) The following types of

organizations are eligible for assistance

under this program:

(1) State vocational rehabilitation

agencies.

(2) Community rehabilitation

programs.

(3) Indian tribes or tribal

organizations.

(4) Other public or nonprofit agencies

or organizations, including institutions

of higher education.

(5) For-profit organizations, if the

Secretary considers them to be

appropriate.

(6) Consortia that meet the

requirements of 34 CFR 75.128 and

75.129.

(7) Other organizations identified by

the Secretary and published in the

Federal Register.

(b) In competitions held under this

program, the Secretary may limit

competitions to one or more types of

these organizations.

(Authority: 29 U.S.C. 711(c) and 773(b)(2))

§ 373.3 What regulations apply?

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 and Agreements with Institutions

of Higher Education, Hospitals, and

other Non-profit Organizations).

(2) 34 CFR part 75 (Direct Grant

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).

(6) 34 CFR part 81 (General Education

Provisions Act—Enforcement).

(7) 35 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 and Alcohol

Abuse Prevention).

(10) 34 CFR part 97 (Protection of

Human Subjects).

(11) 34 CFR part 99 (Family

Educational Rights and Privacy).

(b) The regulations in this part 373.

(c) The regulations in 48 CFR part 31

(Contracts Cost Principles and

Procedures).

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

§ 373.4 What definitions apply?

The following definitions apply to

this part:

Act means the Rehabilitation Act of

1973, as amended.

(Authority: 29 U.S.C. 701 et seq.)

Early intervention means a service

delivery or model demonstration

program for adults with disabilities

designed to begin the rehabilitation

services as soon as possible after the

onset or identification of actually or

potentially disabling conditions. The

populations served may include, but are

not limited to, the following:

(a) Individuals with chronic and

progressive diseases that may become

more disabling, such as multiple

sclerosis, progressive visual disabilities,

or HIV.

(b) Individuals in the acute stages of

injury or illness, including, but not

limited to, diabetes, traumatic brain

injury, stroke, burns, or amputation.

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

Employment outcome is defined in 34

CFR 361.5.

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

Individual with a disability is defined

as follows:

(a) For an individual who will receive

rehabilitation services under this part,

an individual with a disability means an

individual—

(1) Who has a physical or mental

impairment which, for that individual,

constitutes or results in a substantial

impediment to employment; and

(2) Who can benefit in terms of an

employment outcome from vocational

rehabilitation services.

(b) For all other purposes of this part,

an individual with a disability means an

individual—

(1) Who has a physical or mental

impairment that substantially limits one

or more major life activities;

77434 Federal Register / Vol. 65, No. 238 / Monday, December 11, 2000 / Rules and Regulations

(2) Who has a record of such an

impairment; or

(3) Who is regarded as having such an

impairment.

(c) For purposes of paragraph (b) of

this definition, projects that carry out

services or activities pertaining to Title

V of the Act must also meet the

requirements for ‘‘an individual with a

disability’’ in section 7(20)(c) through

(e) of the Act, as applicable.

(Authority: 29 U.S.C 705(20)(A) and (B))

Individual with a significant disability

means an individual—

(a) 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;

(b) Whose vocational rehabilitation

can be expected to require multiple

vocational rehabilitation services over

an extended period of time; and

(c) 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), paraplegia, quadriplegia and

other spinal cord conditions, sickle-cell

anemia, specific learning disabilities,

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

Informed choice means the provision

of activities whereby individuals with

disabilities served by projects under this

part have the opportunity to be active,

full partners in the rehabilitation

process, making meaningful and

informed choices as follows:

(a) During assessments of eligibility

and vocational rehabilitation needs.

(b) In the selection of employment

outcomes, services needed to achieve

the outcomes, entities providing these

services, and the methods used to

secure these services.

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

Rehabilitation services means services

provided to an individual with a

disability in preparing for, securing,

retaining, or regaining an employment

outcome that is consistent with the

strengths, resources, priorities,

concerns, abilities, capabilities,

interests, and informed choice of the

individual. Rehabilitation services for

an individual with a disability may

include—

(a) An assessment for determining

eligibility and vocational rehabilitation

needs by qualified personnel, including,

if appropriate, an assessment by

personnel skilled in rehabilitation

technology;

(b) Counseling and guidance,

including information and support

services to assist an individual in

exercising informed choice;

(c) Referral and other services to

secure needed services from other

agencies;

(d) Job-related services, including job

search and placement assistance, job

retention services, follow-up services,

and follow-along services;

(e) Vocational and other training

services, including the provision of

personal and vocational adjustment

services, books, tools, and other training

materials;

(f) Diagnosis and treatment of

physical and mental impairments;

(g) Maintenance for additional costs

incurred while the individual is

receiving services;

(h) Transportation;

(i) On-the-job or other related

personal assistance services;

(j) Interpreter and reader services;

(k) Rehabilitation teaching services,

and orientation and mobility services;

(l) Occupational licenses, tools,

equipment, and initial stocks and

supplies;

(m) Technical assistance and other

consultation services to conduct market

analysis, develop business plans, and

otherwise provide resources to eligible

individuals who are pursuing selfemployment or telecommuting or

establishing a small business operation

as an employment outcome;

(n) Rehabilitation technology,

including telecommunications, sensory,

and other technological aids and

devices;

(o) Transition services for individuals

with disabilities that facilitate the

achievement of employment outcomes;

(p) Supported employment services;

(q) Services to the family of an

individual with a disability necessary to

assist the individual to achieve an

employment outcome;

(r) Post-employment services

necessary to assist an individual with a

disability to retain, regain, or advance in

employment; and

(s) Expansion of employment

opportunities for individuals with

disabilities, which includes, but is not

limited to—

(1) Self-employment, business

ownership, and entreprenuership;

(2) Non-traditional jobs, professional

employment, and work settings;

(3) Collaborating with employers,

Economic Development Councils, and

others in creating new jobs and career

advancement options in local job

markets through the use of job

restructuring and other methods; and

(4) Other services as identified by the

Secretary and published in the Federal

Register.

(Authority: 29 U.S.C. 711(c) and 723(a))

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 capacities and abilities.

(Authority: 29 U.S.C. 705(20)(A))

Youth or Young adults with

disabilities means individuals with

disabilities who are between the ages of

16 and 26 inclusive when entering the

program.

(Authority: 29 U.S.C. 711(c) and 723(a))

§ 373.5 Who is eligible to receive services

and to benefit from activities conducted by

eligible entities?

(a)(1) For projects that provide

rehabilitation services or activities to

expand and improve the provision of

rehabilitation services and other

services authorized under Titles I, III,

and VI of the Act, individuals are

eligible who meet the definition in

paragraph (a) of an ‘‘individual with a

disability’’ as stated in § 373.4.

(2) For projects that provide

independent living services or activities,

individuals are eligible who meet the

definition in paragraph (b) of an

‘‘individual with a disability’’ as stated

in § 373.4.

(3) For projects that provide other

services or activities that further the

purposes of the Act, individuals are

eligible who meet the definition in

paragraph (b) of an ‘‘individual with a

disability’’ as stated in § 373.4.

(b) By publishing a notice in the

Federal Register, the Secretary may

identify individuals determined to be

eligible under one or more of the

provisions in paragraph (a) of this

section.

(Authority: 29 U.S.C. 711(c) and 723(a))

§ 373.6 What are the priorities and other

factors and requirements for competitions?

(a)(1) In making an award, the

Secretary may limit competitions to, or

Federal Register / Vol. 65, No. 238 / Monday, December 11, 2000 / Rules and Regulations 77435

otherwise give priority to, one or more

of the priority projects listed in

paragraph (b) of this section that are

identified by the Secretary and

published in a notice in the Federal

Register.

(2) The Secretary also will identify in

the notice the following:

(i) Specific required priority project

activities authorized under section 303

of the Act that the applicant must

conduct for the priority project to be

approved for funding.

(ii) Any of the additional factors listed

in paragraph (c) of this section that the

Secretary may consider in making an

award.

(b) Priority projects are as follows:

(1) Special projects of service

delivery.

(2) Model demonstration.

(3) Technical assistance.

(4) Systems change.

(5) Special studies, research, or

evaluations.

(6) Dissemination and utilization.

(7) Replication.

(8) Special projects and

demonstration of service delivery for

adults who are low-functioning and deaf

or low-functioning and hard of hearing.

(9) Supported employment.

(10) Model transitional rehabilitation

services for youth and young adults

with disabilities.

(11) Expansion of employment

opportunities for individuals with

disabilities, as authorized in paragraph

(s) of the definition of ‘‘rehabilitation

services’’ as stated in § 373.4.

(12) Projects to promote meaningful

access of individuals with disabilities to

employment-related services under Title

I of the Workforce Investment Act of

1998 and under other Federal laws.

(13) Innovative methods of promoting

achievement of high-quality

employment outcomes.

(14) The demonstration of the

effectiveness of early intervention

activities in improving employment

outcomes.

(15) Projects to find alternative

methods of providing affordable

transportation services to individuals

with disabilities.

(16) Other projects that will expand

and improve the provision, extent,

availability, scope, and quality of

rehabilitation and other services under

the Act or that further the purpose and

policy of the Act as stated in section

2(b) and (c) of the Act.

(c) The Secretary may identify and

publish in the Federal Register for

specific projects listed in paragraph (b)

of this section one or more of the

following factors, including any specific

elements defining any factor (e.g., the

Secretary may identify ages 16 through

21 to be the specific age range for a

particular competition):

(1) Specific stages of the rehabilitation

process.

(2) Unserved and underserved

populations.

(3) Unserved and underserved

geographical areas.

(4) Individuals with significant

disabilities.

(5) Low-incidence disability

populations.

(6) Individuals residing in federally

designated Empowerment Zones and

Enterprise Communities.

(7) Types of disabilities.

(8) Specific age ranges.

(9) Other specific populations and

geographical areas.

(d) The Secretary may require that an

applicant certify that the project does

not include building upon or expanding

activities that have previously been

conducted or funded, for that applicant

or in that service area.

(e) The Secretary may require that the

project widely disseminate the methods

of rehabilitation service delivery or

model proven to be effective, so that

they may be adapted, replicated, or

purchased under fee-for-service

arrangements by State vocational

rehabilitation agencies and other

disability organizations in the project’s

targeted service area or other locations.

(Authority: 29 U.S.C. 711(c) and 773(b)(4)

and (5))

Subpart B—How Does the Secretary

Make a Grant?

§ 373.10 What selection criteria does the

Secretary use?

The Secretary publishes in the

Federal Register or includes in the

application package the selection

criteria for each competition under this

program. To evaluate the applications

for new grants under this program, the

Secretary may use the following:

(a) Selection criteria established

under 34 CFR 75.209.

(b) Selection criteria in 34 CFR

75.210.

(c) Any combination of selection

criteria from paragraphs (a) and (b) of

this section.

(Authority: 29 U.S.C. 711(c) and 723(a))

§ 373.11 What other factors does the

Secretary consider when making a grant?

(a) The Secretary funds only those

applications submitted in response to

competitions announced in the Federal

Register.

(b) The Secretary may consider the

past performance of the applicant in

carrying out activities under previously

awarded grants.

(c) The Secretary awards bonus points

if identified and published in the

Federal Register for specific

competitions.

(Authority: 29 U.S.C. 711(c) and 723(a))

Subpart C—What Conditions Must Be

Met By a Grantee?

§ 373.20 What are the matching

requirements?

The Secretary may make grants to pay

all or part of the cost of activities

covered under this program. If the

Secretary determines that the grantee is

required to pay part of the costs, the

amount of grantee participation is

specified in the application notice, and

the Secretary will not require grantee

participation to be more than 10 percent

of the total cost of the project.

(Authority: 29 U.S.C. 711(c) and 723(a))

§ 373.21 What are the reporting

requirements?

(a) In addition to the program and

fiscal reporting requirements in EDGAR

that are applicable to projects funded

under this program, the Secretary may

require that recipients of grants under

this part submit information determined

by the Secretary to be necessary to

measure project outcomes and

performance, including any data needed

to comply with the Government

Performance and Results Act.

(b) Specific reporting requirements for

competitions will be identified by the

Secretary and published in the Federal

Register.

(Authority: 29 U.S.C. 711(c) and 776)

§ 373.22 What are the limitations on

indirect costs?

(a) Indirect cost reimbursement for

grants under this program is limited to

the recipient’s actual indirect costs, as

determined by its negotiated indirect

cost rate agreement, or 10 percent of the

total direct cost base, whichever amount

is less.

(b) Indirect costs in excess of the 10

percent limit may be used to satisfy

matching or cost-sharing requirements.

(c) The 10 percent limit does not

apply to federally recognized Indian

tribal governments and their tribal

representatives.

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

§ 373.23 What additional requirements

must be met?

(a) Each grantee must do the

following:

(1) Ensure equal access and treatment

for eligible project participants who are

members of groups that have

traditionally been underrepresented

77436 Federal Register / Vol. 65, No. 238 / Monday, December 11, 2000 / Rules and Regulations

based on race, color, national origin,

gender, age, or disabilities.

(2) Encourage applications for

employment from persons who are

members of groups that have

traditionally been underrepresented

based on race, color, national origin,

gender, age, or disabilities.

(3) Advise individuals with

disabilities who are applicants for or

recipients of the services, or the

applicants’ representatives or the

individuals’ representatives, of the

availability and purposes of the Client

Assistance Program, including

information on means of seeking

assistance under that program.

(4) Provide, through a careful

appraisal and study, an assessment and

evaluation of the project that indicates

the significance or worth of processes,

methodologies, and practices

implemented by the project.

(b) A grantee may not make a subgrant

under this part. However, a grantee may

contract for supplies, equipment, and

other services, in accordance with 34

CFR part 74, subpart C—Post-Award

Requirements, Procurement Standards.

(Authority: 29 U.S.C. 711(c) and 717)

§ 373.24 What are the special

requirements pertaining to the protection,

use, and release of personal information?

(a) All personal information about

individuals served by any project under

this part, including lists of names,

addresses, photographs, and records of

evaluation, must be confidential.

(b) The use of information and records

concerning individuals must be limited

only to purposes directly connected

with the project, including project

reporting and evaluation activities. This

information may not be disclosed,

directly or indirectly, other than in the

administration of the project unless the

consent of the agency providing the

information and the individual to whom

the information applies, or his or her

representative, has been obtained in

writing. The Secretary or other Federal

officials responsible for enforcing legal

requirements have access to this

information without written consent

being obtained. The final products of

the project may not reveal any personal

identifying information without written

consent of the individual or his or her

representative.

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

[FR Doc. 00–31378 Filed 12–8–00; 8:45 am]

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