Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

Subpart A—General .......................................................... 3

§ 361.1 Purpose. ............................................................... 3

§ 361.2 Eligibility for a grant. ............................................. 3

§ 361.3 Authorized activities. ............................................ 3

§ 361.4 Applicable regulations. ......................................... 3

§ 361.5 Applicable definitions. .......................................... 3

Subpart B—State Plan and Other Requirements for 

Vocational Rehabilitation Services .................................. 15

§ 361.10 Submission, approval, and disapproval of the 

State plan. ....................................................................... 15

§ 361.11 Withholding of funds......................................... 16

ADMINISTRATION ......................................................... 17

§ 361.12 Methods of administration. ............................... 17

§ 361.13 State agency for administration. ...................... 17

§ 361.14 Substitute State agency. .................................. 18

§ 361.15 Local administration. ........................................ 18

§ 361.16 Establishment of an independent commission or 

a state rehabilitation council. ........................................... 19

§ 361.17 Requirements for a state rehabilitation council.20

§ 361.18 Comprehensive system of personnel 

development. ................................................................... 23

§ 361.19 Affirmative action for individuals with disabilities.

 ........................................................................................ 25

§ 361.20 Public participation requirements. .................... 25

§ 361.21 Consultations regarding the administration of the 

state plan. ........................................................................ 26

§ 361.22 Coordination with education officials................ 26

§ 361.23 Requirements related to the statewide workforce 

investment system. ......................................................... 27

§ 361.24 Cooperation and coordination with other entities.

 ........................................................................................ 28

§ 361.25 Statewideness. ................................................. 29

§ 361.26 Waiver of statewideness. ................................. 29

§ 361.27 Shared funding and administration of joint 

programs. ........................................................................ 29

§ 361.28 Third-party cooperative arrangements involving 

funds from other public agencies. ................................... 29

§ 361.29 Statewide assessment; annual estimates; annual 

State goals and priorities; strategies; and progress 

reports. ............................................................................ 30

§ 361.30 Services to American Indians. ......................... 32

§ 361.31 Cooperative agreements with private nonprofit 

organizations. .................................................................. 32

§ 361.32 Use of profitmaking organizations for on-the-job 

training in connection with selected projects................... 32

§ 361.33 [Reserved] ........................................................ 32

§ 361.34 Supported employment State plan supplement.

 ........................................................................................ 32

§ 361.35 Innovation and expansion activities. ................ 32

§ 361.36 Ability to serve all eligible individuals; order of 

selection for services. ...................................................... 33

§ 361.37 Information and referral programs. .................. 35

§ 361.38 Protection, use, and release of personal 

information....................................................................... 36

§ 361.39 State-imposed requirements. ........................... 38

§ 361.40 Reports. ............................................................ 38

§ 361.41 Processing referrals and applications. ............. 38

§ 361.42 Assessment for determining eligibility and priority 

for services. ..................................................................... 39

§ 361.43 Procedures for ineligibility determination. ........ 42

§ 361.44 Closure without eligibility determination. .......... 42

§ 361.45 Development of the individualized plan for 

employment. .................................................................... 43

§ 361.46 Content of the individualized plan for 

employment. .................................................................... 45

§ 361.47 Record of services............................................ 46

§ 361.48 Scope of vocational rehabilitation services for 

individuals with disabilities............................................... 47

§ 361.49 Scope of vocational rehabilitation services for 

groups of individuals with disabilities. ............................. 48

§ 361.50 Written policies governing the provision of 

services for individuals with disabilities. .......................... 50

§ 361.51 Standards for facilities and providers of services.

 ......................................................................................... 51

§ 361.52 Informed choice. ............................................... 51

§ 361.53 Comparable services and benefits. .................. 52

§ 361.54 Participation of individuals in cost of services 

based on financial need. ................................................. 54

§ 361.55 Annual review of individuals in extended 

employment and other employment under special 

certificate provisions of the Fair Labor Standards Act. ... 55

§ 361.56 Requirements for closing the record of services 

of an individual who has achieved an employment 

outcome. .......................................................................... 55

§ 361.57 Review of determinations made by designated 

State unit personnel. ....................................................... 56

Subpart C—Financing of State Vocational Rehabilitation 

Programs ......................................................................... 60

§ 361.60 Matching requirements. .................................... 60

§ 361.61 Limitation on use of funds for construction 

expenditures. ................................................................... 61

§ 361.62 Maintenance of effort requirements. ................ 61

§ 361.63 Program income. .............................................. 62

§ 361.64 Obligation of Federal funds and program 

income. ............................................................................ 63

§ 361.65 Allotment and payment of Federal funds for 

vocational rehabilitation services. ................................... 63

Subpart D [Reserved] ...................................................... 63

Subpart E—Evaluation Standards and Performance 

Indicators ......................................................................... 63

§ 361.80 Purpose. ........................................................... 63

§ 361.81 Applicable definitions. ...................................... 63

§ 361.82 Evaluation standards. ....................................... 64

§ 361.84 Performance indicators. ................................... 65

§ 361.86 Performance levels........................................... 65

§ 361.88 Reporting requirements. ................................... 66

§ 361.89 Enforcement procedures. ................................. 67

APPENDIX A TO PART 361—QUESTIONS AND 

ANSWERS ...................................................................... 67

Page 1 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

Subpart A—General 

Sec. 

361.1 Purpose. 

361.2 Eligibility for a grant. 

361.3 Authorized activities. 

361.4 Applicable regulations. 

361.5 Applicable definitions. 

Subpart B—State Plan and Other Requirements 

for Vocational Rehabilitation 

Services 

361.10 Submission, approval, and disapproval 

of the State plan. 

361.11 Withholding of funds. 

ADMINISTRATION 

361.12 Methods of administration. 

361.13 State agency for administration. 

361.14 Substitute State agency. 

361.15 Local administration. 

361.16 Establishment of an independent 

commission or a State Rehabilitation 

Council. 

361.17 Requirements for a State Rehabilitation 

Council. 

361.18 Comprehensive system of personnel 

development. 

361.19 Affirmative action for individuals 

with disabilities. 

361.20 Public participation requirements. 

361.21 Consultations regarding the administration 

of the State plan. 

361.22 Coordination with education officials. 

361.23 Requirements related to the statewide 

workforce investment system. 

361.24 Cooperation and coordination with 

other entities. 

361.25 Statewideness. 

361.26 Waiver of statewideness. 

361.27 Shared funding and administration of 

joint programs. 

361.28 Third-party cooperative arrangements 

involving funds from other public 

agencies. 

361.29 Statewide assessment; annual estimates; 

annual State goals and priorities; 

strategies; and progress reports. 

361.30 Services to American Indians. 

361.31 Cooperative agreements with private 

nonprofit organizations. 

361.32 Use of profitmaking organizations for 

on-the-job training in connection with 

selected projects. 

361.33 [Reserved.] 

361.34 Supported employment State plan 

supplement. 

361.35 Innovation and expansion activities. 

361.36 Ability to serve all eligible individuals; 

order of selection for services. 

361.37 Information and referral services. 

361.38 Protection, use, and release of personal 

information. 

361.39 State-imposed requirements. 

361.40 Reports. 

PROVISION AND SCOPE OF SERVICES 

361.41 Processing referrals and applications. 

361.42 Assessment for determining eligibility 

and priority for services. 

361.43 Procedures for ineligibility determination. 

361.44 Closure without eligibility determination. 

361.45 Development of the individualized 

plan for employment. 

361.46 Content of the individualized plan for 

employment. 

361.47 Record of services. 

361.48 Scope of vocational rehabilitation 

services for individuals with disabilities. 

361.49 Scope of vocational rehabilitation 

services for groups of individuals with 

disabilities. 

361.50 Written policies governing the provision 

of services for individuals with disabilities. 

361.51 Standards for facilities and providers 

of services. 

361.52 Informed choice. 

361.53 Comparable services and benefits. 

361.54 Participation of individuals in cost of 

services based on financial need. 

361.55 Annual review of individuals in extended 

employment and other employment 

under special certificate provisions 

of the Fair Labor Standards Act. 

361.56 Requirements for closing the record 

of services of an individual who has 

achieved an employment outcome. 

361.57 Review of determinations made by 

designated State unit personnel. 

Subpart C—Financing of State Vocational 

Rehabilitation Programs 

361.60 Matching requirements. 

361.61 Limitation on use of funds for construction 

expenditures. 

361.62 Maintenance of effort requirements. 

361.63 Program income. 

361.64 Obligation of Federal funds and program 

income. 

361.65 Allotment and payment of Federal 

funds for vocational rehabilitation services. 

Subpart D [Reserved] 

Subpart E—Evaluation Standards and 

Performance Indicators 

361.80 Purpose. 

361.81 Applicable definitions. 

Page 2 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

361.82 Evaluation standards. 

Off. of Spec. Educ. and Rehab. Services, Education § 

361.5 

361.84 Performance indicators. 

361.86 Performance levels. 

361.88 Reporting requirements. 

361.89 Enforcement procedures. 

APPENDIX A TO PART 361—QUESTIONS AND 

ANSWERS 

AUTHORITY: 29 U.S.C. 709(c), unless otherwise 

noted. 

SOURCE: 66 FR 4382, Jan. 17, 2001, 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 statewide comprehensive, 

coordinated, effective, efficient, 

and accountable programs, each 

of which is— 

(a) An integral part of a statewide 

workforce investment system; and 

(b) Designed to assess, plan, develop, 

and provide vocational rehabilitation 

services for individuals with disabilities, 

consistent with their strengths, 

resources, priorities, concerns, abilities, 

capabilities, interests, and informed 

choice, so that they may prepare 

for and engage in gainful employment. 

(Authority: Section 100(a)(2) of the Act; 29 

U.S.C. 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: Section 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; and 

(b) Administrative costs under the 

State plan. 

(Authority: Section 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 and Agreements with Institutions 

of Higher Education, Hospitals, 

and other Non-profit Organizations), 

with respect to subgrants to entities 

that are not State or local governments 

or Indian tribal organizations. 

(2) 34 CFR part 76 (State-Administered 

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 and Alcohol 

Abuse Prevention). 

(b) The regulations in this part 361. 

(c) 20 CFR part 662 (Description of 

One-Stop Service Delivery System 

under Title I of the Workforce Investment 

Act of 1998). 

(d) 29 CFR part 37, to the extent programs 

and activities are being conducted 

as part of the One-Stop service 

delivery system under section 121(b) of 

the Workforce Investment Act of 1998. 

(Authority: Section 12(c) of the Act; 29 

U.S.C. 709(c)) 

§ 361.5 Applicable definitions. 

(a) Definitions in EDGAR. The following 

terms used in this part are defined 

Page 3 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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

seq.). 

(2) Administrative costs under the State 

plan means expenditures incurred in 

the performance of administrative 

functions under the vocational rehabilitation 

program carried out under 

this part, including expenses related to 

program planning, development, monitoring, 

and evaluation, including, but 

not limited to, expenses for— 

(i) Quality assurance; 

(ii) Budgeting, accounting, financial 

management, information systems, and 

related data processing; 

(iii) Providing information about the 

program to the public; 

(iv) Technical assistance and support 

services to other State agencies, private 

nonprofit organizations, and businesses 

and industries, except for technical 

assistance and support services 

described in § 361.49(a)(4); 

(v) The State Rehabilitation Council 

and other advisory committees; 

(vi) Professional organization membership 

dues for designated State unit 

employees; 

(vii) The removal of architectural 

barriers in State vocational rehabilitation 

agency offices and State-operated 

rehabilitation facilities; 

(viii) Operating and maintaining designated 

State unit facilities, equipment, 

and grounds; 

(ix) Supplies; 

(x) Administration of the comprehensive 

system of personnel development 

described in § 361.18, including personnel 

administration, administration 

of affirmative action plans, and training 

and staff development; 

(xi) Administrative salaries, including 

clerical and other support staff salaries, 

in support of these administrative 

functions; 

(xii) Travel costs related to carrying 

out the program, other than travel 

costs related to the provision of services; 

(xiii) Costs incurred in conducting reviews 

of determinations made by personnel 

of the designated State unit, including 

costs associated with mediation 

and impartial due process hearings 

under § 361.57; and 

(xiv) Legal expenses required in the 

administration of the program. 

(Authority: Section 7(1) of the Act; 29 U.S.C. 

705(1)) 

(3) American Indian means an individual 

who is a member of an Indian 

tribe. 

(Authority: Section 7(19)(A) of the Act; 29 

U.S.C. 705(19)(A)) 

(4) Applicant means an individual who 

submits an application for vocational 

rehabilitation services in accordance 

with § 361.41(b)(2). 

(Authority: Section 12(c) of the Act; 29 

U.S.C. 709(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: Section 12(c) of the Act; 29 

U.S.C. 709(c)) 

(6) Assessment for determining eligibility 

and vocational rehabilitation needs 

means, as appropriate in each case— 

(i)(A) A review of existing data— 

(1) To determine if an individual is 

eligible for vocational rehabilitation 

services; and 

(2) To assign priority for an order of 

selection described in § 361.36 in the 

States that use an order of selection; 

and 

(B) To the extent necessary, the provision 

of appropriate assessment activities 

to obtain necessary additional 

Page 4 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

data to make the eligibility determination 

and assignment; 

(ii) To the extent additional data are 

necessary to make a determination of 

the employment outcomes and the nature 

and scope of vocational rehabilitation 

services to be included in the individualized 

plan for employment of an 

eligible individual, a comprehensive assessment 

to determine the unique 

strengths, resources, priorities, concerns, 

abilities, capabilities, interests, 

and informed choice, including the 

need for supported employment, of the 

eligible individual. This comprehensive 

assessment— 

(A) Is limited to information that is 

necessary to identify the rehabilitation 

needs of the individual and to develop 

the individualized plan of employment 

of the eligible individual; 

(B) Uses as a primary source of information, 

to the maximum extent possible 

and appropriate and in accordance 

with confidentiality requirements— 

(1) Existing information obtained for 

the purposes of determining the eligibility 

of the individual and assigning 

priority for an order of selection described 

in § 361.36 for the individual; 

and 

(2) Information that can be provided 

by the individual and, if appropriate, 

by the family of the individual; 

(C) May include, to the degree needed 

to make such a determination, an assessment 

of the personality, interests, 

interpersonal skills, intelligence and 

related functional capacities, educational 

achievements, work experience, 

vocational aptitudes, personal 

and social adjustments, and employment 

opportunities of the individual 

and the medical, psychiatric, psychological, 

and other pertinent vocational, 

educational, cultural, social, recreational, 

and environmental factors 

that affect the employment and rehabilitation 

needs of the individual; and 

(D) May include, to the degree needed, 

an appraisal of the patterns of work 

behavior of the individual and services 

needed for the individual to acquire occupational 

skills and to develop work 

attitudes, work habits, work tolerance, 

and social and behavior patterns necessary 

for successful job performance, 

including the use of work in real job 

situations to assess and develop the capacities 

of the individual to perform 

adequately in a work environment; 

(iii) Referral, for the provision of rehabilitation 

technology services to the 

individual, to assess and develop the 

capacities of the individual to perform 

in a work environment; and 

(iv) An exploration of the individual’s 

abilities, capabilities, and capacity to 

perform in work situations, which 

must be assessed periodically during 

trial work experiences, including experiences 

in which the individual is provided 

appropriate supports and training. 

(Authority: Section 7(2) of the Act; 29 U.S.C. 

705(2)) 

(7) 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: Section 7(3) of the Act; 29 U.S.C. 

705(3)) 

(8) 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 

Page 5 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(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: Sections 7(4) and 12(c) of the Act; 

29 U.S.C. 705(4) and 709(c)) 

(9) 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. 

(10) Comparable services and benefits 

means— 

(i) Services and benefits that are— 

(A) Provided or paid for, in whole or 

in part, by other Federal, State, or 

local public agencies, by health insurance, 

or by employee benefits; 

(B) Available to the individual at the 

time needed to ensure the progress of 

the individual toward achieving the 

employment outcome in the individual’s 

individualized plan for employment 

in accordance with § 361.53; and 

(C) Commensurate to the services 

that the individual would otherwise receive 

from the designated State vocational 

rehabilitation agency. 

(ii) For the purposes of this definition, 

comparable benefits do not include 

awards and scholarships based on 

merit. 

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

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

(11) Competitive employment means 

work— 

(i) In the competitive labor market 

that is performed on a full-time or 

part-time 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: Sections 7(11) and 12(c) of the Act; 

29 U.S.C. 705(11) and 709(c)) 

(12) Construction of a facility for a public 

or nonprofit community rehabilitation 

program means— 

(i) The acquisition of land in connection 

with the construction of a new 

building for a community rehabilitation 

program; 

(ii) The construction of new buildings; 

(iii) The acquisition of existing buildings; 

(iv) The expansion, remodeling, alteration, 

Page 6 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

or renovation 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: Sections 7(6) and 12(c) of the Act; 

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

(13) Designated State agency or State 

agency means the sole State agency, 

designated in accordance with 

§ 361.13(a), to administer, or supervise 

the local administration of, the 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: Sections 7(8)(A) and 101(a)(2)(A) 

of the Act; 29 U.S.C. 705(8)(A) and 

721(a)(2)(A)) 

(14) Designated State unit or State unit 

means either— 

(i) The State vocational rehabilitation 

bureau, division, or other organizational 

unit that is primarily concerned 

with vocational rehabilitation 

or vocational and other rehabilitation 

of individuals with disabilities and that 

is responsible for the administration of 

the vocational rehabilitation program 

of the State agency, as required under 

§ 361.13(b); or 

(ii) The State agency that is primarily 

concerned with vocational rehabilitation 

or vocational and other rehabilitation 

of individuals with disabilities. 

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

of the Act; 29 U.S.C. 705(8)(B) and 721(a)(2)(B)) 

(15) Eligible individual means an applicant 

for vocational rehabilitation services 

who meets the eligibility requirements 

of § 361.42(a). 

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

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

(16) Employment outcome means, with 

respect to an individual, entering or retaining 

full-time or, if appropriate, 

part-time competitive employment, as 

defined in § 361.5(b)(11), in the integrated 

labor market, supported employment, 

or any other type of employment 

in an integrated setting, including 

self-employment, telecommuting, 

or business ownership, that is consistent 

with an individual’s strengths, 

resources, priorities, concerns, abilities, 

capabilities, interests, and informed 

choice. 

(Authority: Sections 7(11), 12(c), 100(a)(2), and 

102(b)(3)(A) of the Act; 29 U.S.C. 705(11), 

709(c), 720(a)(2), and 722(b)(3)(A)) 

(17) 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)(18) 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 4 

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

Act; 29 U.S.C. 705(12) and 709(c)) 

(18) Establishment of a facility for a 

Page 7 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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 1 year prior to the 

date of acquisition and the Federal 

share of the cost of acquisition is not 

more than $300,000; 

(ii) The remodeling or alteration of 

an existing building, provided the estimated 

cost of remodeling or alteration 

does not exceed the appraised value of 

the existing building; 

(iii) The expansion of an existing 

building, provided that— 

(A) The existing building is complete 

in all respects; 

(B) The total size in square footage of 

the expanded building, notwithstanding 

the number of expansions, is 

not greater than twice the size of the 

existing building; 

(C) The expansion is joined structurally 

to the existing building and 

does not constitute a separate building; 

and 

(D) The costs of the expansion do not 

exceed the appraised value of the existing 

building; 

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

soil investigation, if necessary in connection 

with the acquisition, remodeling, 

alteration, or expansion of an existing 

building; and 

(v) The acquisition of fixed or movable 

equipment, including the costs of 

installation of the equipment, if necessary 

to establish, develop, or improve 

a community rehabilitation program. 

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

Act; 29 U.S.C. 705(12) and 709(c)) 

(19) Extended employment means work 

in a non-integrated or sheltered setting 

for a public or private nonprofit agency 

or organization that provides compensation 

in accordance with the Fair 

Labor Standards Act. 

(Authority: Section 12(c) of the Act; 29 

U.S.C. 709(c)) 

(20) Extended services means ongoing 

support services and other appropriate 

services that are needed to support and 

maintain an individual with a most 

significant 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 and 34 

CFR part 363 after an individual with a 

most significant disability has made 

the transition from support provided 

by the designated State unit. 

(Authority: Sections 7(13) and 623 of the Act; 

29 U.S.C. 705(13) and 795i) 

(21) Extreme medical risk means a 

probability of substantially increasing 

functional impairment or death if medical 

services, including mental health 

services, are not provided expeditiously. 

(Authority: Sections 12(c) and 

101(a)(8)(A)(i)(III) of the Act; 29 U.S.C. 709(c) 

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

(22) Fair hearing board means a committee, 

body, or group of persons established 

by a State prior to January 1, 

1985 that— 

(i) Is authorized under State law to 

review determinations made by personnel 

of the designated State unit 

that affect the provision of vocational 

rehabilitation services; and 

(ii) Carries out the responsibilities of 

the impartial hearing officer in accordance 

with the requirements in 

§ 361.57(j). 

(Authority: Section 12(c) of the Act; 29 

U.S.C. 709(c)) 

(23) Family member, for purposes of receiving 

vocational rehabilitation services 

in accordance with § 361.48(i), 

means an individual— 

(i) Who either— 

(A) Is a relative or guardian of an applicant 

or eligible individual; or 

(B) Lives in the same household as an 

applicant or eligible individual; 

(ii) Who has a substantial interest in 

the well-being of that individual; and 

(iii) Whose receipt of vocational rehabilitation 

services is necessary to enable 

the applicant or eligible individual 

to achieve an employment outcome. 

(Authority: Sections 12(c) and 103(a)(17) of 

the Act; 29 U.S.C. 709(c) and 723(a)(17)) 

(24) Governor means a chief executive 

officer of a State. 

(Authority: Section 7(15) of the Act; 29 U.S.C. 

705(15)) 

(25) Impartial hearing officer. 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(i) Impartial hearing officer means an 

individual who— 

(A) Is not an employee of a public 

agency (other than an administrative 

law judge, hearing examiner, or employee 

of an institution of higher education); 

(B) Is not a member of the State Rehabilitation 

Council for the designated 

State unit; 

(C) Has not been involved previously 

in the vocational rehabilitation of the 

applicant or eligible individual; 

(D) Has knowledge of the delivery of 

vocational rehabilitation services, the 

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 is not considered to 

be an employee of a public agency for 

the purposes of this definition solely 

because the individual is paid by the 

agency to serve as a hearing officer. 

(Authority: Section 7(16) of the Act; 29 U.S.C. 

705(16)) 

(26) 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: Section 7(19)(B) of the Act; 29 

U.S.C. 705(19)(B)) 

(27) Individual who is blind means a 

person who is blind within the meaning 

of applicable State law. (Authority: 

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

709(c)) 

(28) Individual with a disability, except 

as provided in § 361.5(b)(29), means an 

individual— 

(i) Who has a physical or mental impairment; 

(ii) Whose impairment constitutes or 

results in a substantial impediment to 

employment; and 

(iii) Who can benefit in terms of an 

employment outcome from the provision 

of vocational rehabilitation services. 

(Authority: Section 7(20)(A) of the Act; 29 

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

(29) Individual with a disability, for 

purposes of §§ 361.5(b)(14), 361.13(a), 

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

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

361.29(a) and (d)(5), and 361.51(b), means 

an individual— 

(i) Who has a physical or mental impairment 

that substantially limits one 

or more major life activities; 

(ii) Who has a record of such an impairment; 

or 

(iii) Who is regarded as having such 

an impairment. 

(Authority: Section 7(20)(B) of the Act; 29 

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

(30) Individual with a most significant 

disability means an individual with a 

significant disability who meets the 

designated State unit’s criteria for an 

individual with a most significant disability. 

These criteria must be consistent 

with the requirements in 

§ 361.36(d)(1) and (2). 

(Authority: Sections 7(21)(E)(i) and 

101(a)(5)(C) of the Act; 29 U.S.C. 705(21)(E)(i) 

and 721(a)(5)(C)) 

(31) Individual with a significant disability 

means an individual with a disability— 

(i) Who has a severe physical or mental 

impairment that seriously limits 

one or more functional capacities (such 

as mobility, communication, self-care, 

self-direction, interpersonal skills, 

work tolerance, or work skills) in 

terms of an employment outcome; 

(ii) Whose vocational rehabilitation 

can be expected to require multiple vocational 

rehabilitation services over an 

extended period of time; and 

(iii) Who has one or more physical or 

mental disabilities resulting from amputation, 

arthritis, autism, blindness, 

burn injury, cancer, cerebral palsy, 

cystic fibrosis, deafness, head injury, 

heart disease, hemiplegia, hemophilia, 

respiratory or pulmonary dysfunction, 

mental 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 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

an assessment for determining eligibility 

and vocational rehabilitation 

needs to cause comparable substantial 

functional limitation. 

(Authority: Section 7(21)(A) of the Act; 29 

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

(32) Individual’s representative means 

any representative chosen by an applicant 

or eligible individual, as appropriate, 

including a parent, guardian, 

other family member, or advocate, unless 

a representative has been appointed 

by a court to represent the individual, 

in which case the court-appointed 

representative is the individual’s 

representative. 

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

Act; 29 U.S.C. 705(22) and 709(c)) 

(33) 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; 

(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: Section 12(c) of the Act; 29 

U.S.C. 709(c)) 

(34) Local workforce investment board 

means a local workforce investment 

board established under section 117 of 

the Workforce Investment Act of 1998. 

(Authority: Section 7(25) of the Act; 29 U.S.C. 

705(25)) 

(35) Maintenance means monetary 

support provided to an individual for 

expenses, such as food, shelter, and 

clothing, that are in excess of the normal 

expenses of the individual and that 

are necessitated by the individual’s 

participation in an assessment for determining 

eligibility and vocational rehabilitation 

needs or the individual’s 

receipt of vocational rehabilitation 

services under an individualized plan 

for employment. 

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

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

(i) Examples: The following are examples 

of expenses that would meet the 

definition of maintenance. The examples 

are illustrative, do not address all 

possible circumstances, and are not intended 

to substitute for individual 

counselor judgment. 

Example 1: The cost of a uniform or other 

suitable clothing that is required for an individual’s 

job placement or job-seeking activities. 

Example 2: The cost of short-term shelter 

that is required in order for an individual to 

participate in assessment activities or vocational 

training at a site that is not within 

commuting distance of an individual’s home. 

Example 3: The initial one-time costs, such 

as a security deposit or charges for the initiation 

of utilities, that are required in order 

for an individual to relocate for a job placement. 

Example 4: The costs of an individual’s participation 

in enrichment activities related to 

that individual’s training program. 

(ii) [Reserved] 

(36) Mediation means the act or process 

of using an independent third party 

to act as a mediator, intermediary, or 

conciliator to assist persons or parties 

in settling differences or disputes prior 

to pursuing formal administrative or 

other legal remedies. Mediation under 

the program must be conducted in accordance 

with the requirements in 

§ 361.57(d) by a qualified and impartial 

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

(Authority: Section 12(c) of the Act; 29 

U.S.C. 709(c)) 

(37) Nonprofit, with respect to a community 

rehabilitation program, means 

a community rehabilitation program 

carried out by a corporation or association, 

no part of the net earnings of 

which inures, or may lawfully inure, to 

the benefit of any private shareholder 

or individual and the income of which 

is exempt from taxation under section 

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

of 1986. 

(Authority: Section 7(26) of the Act; 29 U.S.C. 

705(26)) 

(38) Ongoing support services, as used 

in the definition of ‘‘Supported employment’’ 

(i) Means services that are— 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(A) Needed to support and maintain 

an individual with a most significant 

disability in supported employment; 

(B) Identified based on a determination 

by the designated State unit of 

the individual’s need as specified in an 

individualized plan for employment; 

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 specific circumstances, 

especially at the request of the individual, 

the individualized plan for employment 

provides for off-site monitoring, 

twice monthly meetings with 

the individual; 

(iii) Consist of— 

(A) Any particularized assessment 

supplementary to the comprehensive 

assessment of rehabilitation needs described 

in paragraph (b)(6)(ii) of this 

section; 

(B) The provision of skilled job trainers 

who accompany the individual for 

intensive job skill training at the work 

site; 

(C) Job development and training; 

(D) Social skills training; 

(E) Regular observation or supervision 

of the individual; 

(F) Follow-up services including regular 

contact with the employers, the 

individuals, the parents, family members, 

guardians, advocates or authorized 

representatives of the individuals, 

and other suitable professional and informed 

advisors, in order to reinforce 

and stabilize the job placement; 

(G) Facilitation of natural supports 

at the worksite; 

(H) Any other service identified in 

the scope of vocational rehabilitation 

services for individuals, described in 

§ 361.48; or 

(I) Any service similar to the foregoing 

services. 

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

Act; 29 U.S.C. 705(27) and 709(c)) 

(39) 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: Sections 7(28), 102(b)(3)(B)(i)(I), 

and 103(a)(9) of the Act; 29 U.S.C. 705(28), 

722(b)(3)(B)(i)(I), and 723(a)(9)) 

(40) Physical and mental restoration 

services means— 

(i) Corrective surgery or therapeutic 

treatment that is likely, within a reasonable 

period of time, to correct or 

modify substantially a stable or slowly 

progressive physical or mental impairment 

that constitutes a substantial 

impediment to employment; 

(ii) Diagnosis of and treatment for 

mental or emotional disorders by 

qualified personnel in accordance with 

State licensure laws; 

(iii) Dentistry; 

(iv) Nursing services; 

(v) Necessary hospitalization (either 

inpatient or outpatient care) in connection 

with surgery or treatment and 

clinic services; 

(vi) Drugs and supplies; 

(vii) Prosthetic and orthotic devices; 

(viii) Eyeglasses and visual services, 

including visual training, and the examination 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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. 

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

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

(41) Physical or mental impairment 

means— 

(i) Any physiological disorder or condition, 

cosmetic disfigurement, or anatomical 

loss affecting one or more of 

the following body systems: neurological, 

musculo-skeletal, special sense 

organs, respiratory (including speech 

organs), cardiovascular, reproductive, 

digestive, genitourinary, hemic and 

lymphatic, skin, and endocrine; or 

(ii) Any mental or psychological disorder 

such as mental retardation, organic 

brain syndrome, emotional or 

mental illness, and specific learning 

disabilities. 

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

Act; 29 U.S.C. 705(20)(A) and 709(c)) 

(42) 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, 

interests, and informed choice. 

(Authority: Sections 12(c) and 103(a)(18) of 

the Act; 29 U.S.C. 709(c)) and 723(a)(18)) 

NOTE TO PARAGRAPH (B)(42): Post-employment 

services are intended to ensure that 

the employment outcome remains consistent 

with the individual’s strengths, resources, 

priorities, concerns, abilities, capabilities, 

interests, and informed choice. These services 

are available to meet rehabilitation 

needs that do not require a complex and 

comprehensive provision of services and, 

thus, should be limited in scope and duration. 

If more comprehensive services are required, 

then a new rehabilitation effort 

should be considered. Post-employment services 

are to be provided under an amended individualized 

plan for employment; thus, a 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 co-workers, 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, interests, and 

informed choice. 

(43) Qualified and impartial mediator. 

(i) Qualified and impartial mediator 

means an individual who— 

(A) Is not an employee of a public 

agency (other than an administrative 

law judge, hearing examiner, employee 

of a State office of mediators, or employee 

of an institution of higher education); 

(B) Is not a member of the State Rehabilitation 

Council for the designated 

State unit; 

(C) Has not been involved previously 

in the vocational rehabilitation of the 

applicant or eligible individual; 

(D) Is knowledgeable of the vocational 

rehabilitation program and the 

applicable Federal and State laws, regulations, 

and policies governing the 

provision of vocational rehabilitation 

services; 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(E) Has been trained in effective mediation 

techniques consistent with any 

State-approved or -recognized certification, 

licensing, registration, or other 

requirements; and 

(F) Has no personal, professional, or 

financial interest that would be in conflict 

with the objectivity of the individual 

during the mediation proceedings. 

(ii) An individual serving as a mediator 

is not considered to be an employee 

of the designated State agency 

or designated State unit for the purposes 

of this definition solely because 

the individual is paid by the designated 

State agency or designated State unit 

to serve as a mediator. 

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

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

(44) Rehabilitation engineering means 

the systematic application of engineering 

sciences to design, develop, adapt, 

test, evaluate, apply, and distribute 

technological solutions to problems 

confronted by individuals with disabilities 

in functional areas, such as mobility, 

communications, hearing, vision, 

and cognition, and in activities associated 

with employment, independent 

living, education, and integration into 

the community. 

(Authority: Section 7(12)(c) of the Act; 29 

U.S.C. 709(c)) 

(45) Rehabilitation technology means 

the systematic application of technologies, 

engineering methodologies, 

or scientific principles to meet the 

needs of, and address the barriers confronted 

by, individuals with disabilities 

in areas that include education, rehabilitation, 

employment, transportation, 

independent living, and recreation. 

The term includes rehabilitation 

engineering, assistive technology devices, 

and assistive technology services. 

(Authority: Section 7(30) of the Act; 29 U.S.C. 

705(30)) 

(46) 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: Section 121(c) of the Act; 29 

U.S.C. 741(c)) 

(47) Sole local agency means a unit or 

combination of units of general local 

government or one or more Indian 

tribes that has the sole responsibility 

under an agreement with, and the supervision 

of, the State agency to conduct 

a local or tribal vocational rehabilitation 

program, in accordance with 

the State plan. 

(Authority: Section 7(24) of the Act; 29 U.S.C. 

705(24)) 

(48) State means any of the 50 States, 

the District of Columbia, the Commonwealth 

of Puerto Rico, the United 

States Virgin Islands, Guam, American 

Samoa, and the Commonwealth of the 

Northern Mariana Islands. 

(Authority: Section 7(32) of the Act; 29 U.S.C. 

705(32)) 

(49) State workforce investment board 

means a State workforce investment 

board established under section 111 of 

the Workforce Investment Act of 1998. 

(Authority: Section 7(33) of the Act; 29 U.S.C. 

705(33)) 

(50) Statewide workforce investment system 

means a system described in section 

111(d)(2) of the Workforce Investment 

Act of 1998. 

(Authority: Section 7(34) of the Act; 29 U.S.C. 

705(34)) 

(51) State plan means the State plan 

for vocational rehabilitation services 

submitted under § 361.10. 

(Authority: Sections 12(c) and 101 of the Act; 

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

(52) Substantial impediment to employment 

means that a physical or mental 

impairment (in light of attendant medical, 

psychological, vocational, educational, 

communication, and other related 

factors) hinders an individual 

from preparing for, entering into, engaging 

in, or retaining employment 

consistent with the individual’s abilities 

and capabilities. 

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

Act; 29 U.S.C. 705(20)(A) and 709(c)) 

(53) Supported employment means— 

(i) Competitive employment in an integrated 

setting, or employment in integrated 

work settings in which individuals 

are working toward competitive 

employment, consistent with the 

strengths, resources, priorities, concerns, 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

abilities, capabilities, interests, 

and informed choice of the individuals 

with ongoing support services for individuals 

with the most significant 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 significant 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 as described 

in paragraph (b)(20) of this section 

to perform this work; or 

(ii) Transitional employment, as defined 

in paragraph (b)(54) of this section, 

for individuals with the most significant 

disabilities due to mental illness. 

(Authority: Section 7(35) of the Act; 29 U.S.C. 

705(35)) 

(54) Supported employment services 

means ongoing support services and 

other appropriate services needed to 

support and maintain an individual 

with a most significant 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 

to achieve the employment outcome 

identified in the individualized plan for 

employment; and 

(ii) Following transition, as post-employment 

services that are unavailable 

from an extended services provider and 

that are necessary to maintain or regain 

the job placement or advance in 

employment. 

(Authority: Sections 7(36) and 12(c) of the 

Act; 29 U.S.C. 705(36) and 709(c)) 

(55) Transition services means a coordinated 

set of activities for a student 

designed within an outcome-oriented 

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 promote or facilitate the achievement 

of the employment outcome identified 

in the student’s individualized 

plan for employment. 

(Authority: Section 7(37) and 103(a)(15) of the 

Act; 29 U.S.C. 705(37) and 723(a)(15)) 

(56) 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 significant disabilities 

due to mental illness. In transitional 

employment, the provision of ongoing 

support services must include continuing 

sequential job placements until 

job permanency is achieved. 

(Authority: Sections 7(35)(B) and 12(c) of the 

Act; 29 U.S.C. 705(35)(B) and 709(c) 

(57) Transportation means travel and 

related expenses that are necessary to 

enable an applicant or eligible individual 

to participate in a vocational 

rehabilitation service, including expenses 

for training in the use of public 

transportation vehicles and systems. 

(Authority: 103(a)(8) of the Act; 29 U.S.C. 

723(a)(8)) 

(i) Examples: The following are examples 

of expenses that would meet the 

definition of transportation. The examples 

are purely illustrative, do not address 

all possible circumstances, and 

are not intended to substitute for individual 

counselor judgment. 

Example 1: Travel and related expenses for 

a personal care attendant or aide if the services 

of that person are necessary to enable 

the applicant or eligible individual to travel 

to participate in any vocational rehabilitation 

service. 

Example 2: The purchase and repair of vehicles, 

including vans, but not the modification 

of these vehicles, as modification would 

be considered a rehabilitation technology 

Page 14 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

service. 

Example 3: Relocation expenses incurred by 

an eligible individual in connection with a 

job placement that is a significant distance 

from the eligible individual’s current residence. 

(ii) [Reserved] 

(58) Vocational rehabilitation services— 

(i) If provided to an individual, 

means those services listed in § 361.48; 

and 

(ii) If provided for the benefit of 

groups of individuals, also means those 

services listed in § 361.49. 

(Authority: Sections 7(38) and 103(a) and (b) 

of the Act; 29 U.S.C. 705(38), 723(a) and (b)) 

66 FR 4382, Jan. 17, 2001, as amended at 66 FR 

7252, Jan. 22, 2001] 

Subpart B—State Plan and Other 

Requirements for Vocational Rehabilitation 

Services 

§ 361.10 Submission, approval, and 

disapproval of the State plan. 

(a) Purpose. For a State to receive a 

grant under this part, the designated 

State agency must 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 the vocational 

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 vocational 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) State unified plan. The State may 

choose to submit the State plan for vocational 

rehabilitation services as part 

of the State unified plan under section 

501 of the Workforce Investment Act of 

1998. The portion of the State unified 

plan that includes the State plan for 

vocational rehabilitation services must 

meet the State plan requirements in 

this part. 

(d) Public participation. Prior to the 

adoption of any substantive policies or 

procedures governing the provision of 

vocational rehabilitation services 

under the State plan, including making 

any substantive amendment to those 

policies and procedures, the designated 

State agency must conduct public 

meetings throughout the State, in accordance 

with the requirements of 

§ 361.20. 

(e) Duration. The State plan remains 

in effect subject to the submission of 

modifications the State determines to 

be necessary or the Secretary may require 

based on a change in State policy, 

a change in Federal law, including 

regulations, an interpretation of the 

Act by a Federal court or the highest 

court of the State, or a finding by the 

Secretary of State noncompliance with 

the requirements of the Act or this 

part. 

(f) Submission of the State plan. The 

State must submit the State plan for 

approval— 

(1) To the Secretary on the same date 

that the State submits a State plan relating 

to the statewide workforce investment 

system under section 112 of 

the Workforce Investment Act of 1998; 

(2) As part of the State unified plan 

submitted under section 501 of that 

Act; or 

(3) To the Secretary on the same date 

that the State submits a State unified 

plan under section 501 of that Act that 

does not include the State plan under 

this part. 

(g) Annual submission. (1) The State 

must submit to the Secretary for approval 

revisions to the State plan in 

accordance with paragraph (e) of this 

section and 34 CFR 76.140. 

(2) The State must submit to the Secretary 

reports containing annual updates 

of the information required under 

§§ 361.18, 361.29, and 361.35 and any other 

updates of the information required 

under this part that are requested by 

the Secretary. 

(3) The State is not required to submit 

Page 15 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

policies, procedures, or descriptions 

required under this part that 

have been previously submitted to the 

Secretary and that demonstrate that 

the State meets the requirements of 

this part, including any policies, procedures, 

or descriptions submitted under 

this part that are in effect on August 6, 

1998. 

(h) Approval. The Secretary approves 

any State plan and any 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 

any 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 

any 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: Sections 101(a) and (b), and 107(d) 

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

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.11 Withholding of funds. 

(a) Basis for withholding. The Secretary 

may withhold or limit payments 

under section 111 or 622(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 

(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(b)(2) 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. 

Page 16 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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: Sections 101(b), 107(c), and 107(d) 

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

and 727(d)) 

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. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Sections 101(a)(6) and (a)(10)(A) 

of the Act; 29 U.S.C. 721(a)(6) and (a)(10)(A)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 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 primarily 

concerned with vocational rehabilitation 

or vocational and other rehabilitation 

of individuals with disabilities; or 

(ii) A State agency that includes a 

vocational rehabilitation unit as provided 

in paragraph (b) of this section. 

(2) American Samoa. In the case of 

American Samoa, the 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 

not of the type specified in paragraph 

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

State agency specified in paragraph 

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

concerned with vocational rehabilitation 

or vocational and other rehabilitation 

of individuals with disabilities, 

the 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; 

(ii) Has a full-time director; 

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

whom are employed full time on the rehabilitation 

Page 17 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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. 

(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) At a minimum, the following activities 

are the responsibility of the 

designated State unit or the sole local 

agency under the supervision of the 

State unit: 

(i) All decisions affecting eligibility 

for vocational rehabilitation services, 

the nature and scope of available services, 

and the provision of these services. 

(ii) The determination to close the 

record of services of an individual who 

has achieved an employment outcome 

in accordance with § 361.56. 

(iii) Policy formulation and implementation. 

(iv) The allocation and expenditure 

of vocational rehabilitation funds. 

(v) Participation as a partner in the 

One-Stop service delivery system under 

Title I of the Workforce Investment 

Act of 1998, in accordance with 20 CFR 

part 662. 

(2) The responsibility for the functions 

described in paragraph (c)(1) of 

this section may not be delegated to 

any other agency or individual. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 101(a)(2) of the Act; 29 

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.14 Substitute State agency. 

(a) General provisions. 

(1) If the Secretary has withheld all 

funding from a State under § 361.11, the 

State may designate another agency to 

substitute for the designated State 

agency in carrying out the State’s program 

of vocational rehabilitation services. 

(2) Any public or nonprofit private 

organization or agency within the 

State or any political subdivision of 

the State is eligible to be a substitute 

agency. 

(3) The substitute agency must submit 

a 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: Section 107(c)(3) of the Act; 29 

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.15 Local administration. 

(a) If the State plan provides for the 

administration of the plan by a local 

agency, the designated State agency 

must— 

(1) Ensure that each local agency is 

under the supervision of the designated 

State unit and is the sole local agency 

as defined in § 361.5(b)(47) that is responsible 

for the administration of the 

program within the political subdivision 

that it serves; and 

(2) Develop methods that each local 

agency will use to administer the vocational 

rehabilitation program, in accordance 

with the 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 

Page 18 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.16 Establishment of an independent 

commission or a state rehabilitation council. 

(a) General requirement. Except as provided 

in paragraph (b) of this section, 

the State plan must contain one of the 

following two assurances: 

(1) An assurance that the designated 

State agency is an independent State 

commission that— 

(i) Is responsible under State law for 

operating, or overseeing the operation 

of, the vocational rehabilitation program 

in the State and is primarily concerned 

with vocational rehabilitation 

or vocational and other rehabilitation 

services, in accordance with 

§ 361.13(a)(1)(i); 

(ii) Is consumer-controlled by persons 

who— 

(A) Are individuals with physical or 

mental impairments that substantially 

limit major life activities; and 

(B) Represent individuals with a 

broad range of disabilities, unless the 

designated State unit under the direction 

of the commission is the State 

agency for individuals who are blind; 

(iii) Includes family members, advocates, 

or other representatives of individuals 

with mental impairments; and 

(iv) Conducts the functions identified 

in § 361.17(h)(4). 

(2) An assurance that— 

(i) The State has established a State 

Rehabilitation Council (Council) that 

meets the requirements of § 361.17; 

(ii) The designated State unit, in accordance 

with § 361.29, jointly develops, 

agrees to, and reviews annually State 

goals and priorities and jointly submits 

to the Secretary annual reports of 

progress with the Council; 

(iii) The designated State unit regularly 

consults with the Council regarding 

the development, implementation, 

and revision of State policies and procedures 

of general applicability pertaining 

to the provision of vocational 

rehabilitation services; 

(iv) The designated State unit transmits 

to the Council— 

(A) All plans, reports, and other information 

required under this part to 

be submitted to the Secretary; 

(B) All policies and information on 

all practices and procedures of general 

applicability provided to or used by rehabilitation 

personnel providing vocational 

rehabilitation services under 

this part; and 

(C) Copies of due process hearing decisions 

issued under this part and 

transmitted in a manner to ensure that 

the identity of the participants in the 

hearings is kept confidential; and 

(v) The State plan, and any revision 

to the State plan, includes a summary 

of input provided by the Council, including 

recommendations from the annual 

report of the Council, the review 

and analysis of consumer satisfaction 

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

prepared by the Council, and the 

designated State unit’s response to the 

input and recommendations, including 

explanations of reasons for rejecting 

any input or recommendation of the 

Council. 

(b) Exception for separate State agency 

for individuals who are blind. In the case 

of a State that designates a separate 

State agency under § 361.13(a)(3) to administer 

the part of the State plan 

under which vocational rehabilitation 

services are provided to individuals 

who are blind, the State must either 

establish a separate State Rehabilitation 

Council for each agency that does 

not meet the requirements in paragraph 

(a)(1) of this section or establish 

one State Rehabilitation Council for 

both agencies if neither agency meets 

the requirements of paragraph (a)(1) of 

this section. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

Page 19 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

§ 361.17 Requirements for a state 

rehabilitation council. 

If the State has established a Council 

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

must meet the following requirements: 

(a) Appointment. 

(1) The members of the Council must 

be appointed by the Governor or, in the 

case of a State that, under State law, 

vests authority for the administration 

of the activities carried out under this 

part in an entity other than the Governor 

(such as one or more houses of 

the State legislature or an independent 

board), the chief officer of that entity. 

(2) The appointing authority must select 

members of the Council after soliciting 

recommendations from representatives 

of organizations representing a 

broad range of individuals with disabilities 

and organizations interested in individuals 

with disabilities. In selecting 

members, the appointing authority 

must consider, to the greatest extent 

practicable, the extent to which minority 

populations are represented on the 

Council. 

(b) Composition. 

(1) General. Except as provided in 

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

Council must be composed of at least 15 

members, including— 

(i) At least one representative of the 

Statewide Independent Living Council, 

who must be the chairperson or other 

designee of the Statewide Independent 

Living Council; 

(ii) At least one representative of a 

parent training and information center 

established pursuant to section 682(a) 

of the Individuals with Disabilities 

Education Act; 

(iii) At least one representative of 

the Client Assistance Program established 

under 34 CFR part 370, who must 

be the director of or other individual 

recommended by the Client Assistance 

Program; 

(iv) At least one qualified vocational 

rehabilitation counselor with knowledge 

of and experience with vocational 

rehabilitation programs who serves as 

an ex officio, nonvoting member of the 

Council if employed by the designated 

State agency; 

(v) At least one representative of 

community rehabilitation program 

service providers; 

(vi) Four representatives of business, 

industry, and labor; 

(vii) Representatives of disability 

groups that include a cross section of— 

(A) Individuals with physical, cognitive, 

sensory, and mental disabilities; 

and 

(B) Representatives of individuals 

with disabilities who have difficulty 

representing themselves or are unable 

due to their disabilities to represent 

themselves; 

(viii) Current or former applicants 

for, or recipients of, vocational rehabilitation 

services; 

(ix) In a State in which one or more 

projects are carried out under section 

121 of the Act (American Indian Vocational 

Rehabilitation Services), at 

least one representative of the directors 

of the projects; 

(x) At least one representative of the 

State educational agency responsible 

for the public education of students 

with disabilities who are eligible to receive 

services under this part and part 

B of the Individuals with Disabilities 

Education Act; 

(xi) At least one representative of the 

State workforce investment board; and 

(xii) The director of the designated 

State unit as an ex officio, nonvoting 

member of the Council. 

(2) Employees of the designated State 

agency. Employees of the designated 

State agency may serve only as nonvoting 

members of the Council. This 

provision does not apply to the representative 

appointed pursuant to 

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

(3) Composition of a separate Council 

for a separate State agency for individuals 

who are blind. Except as provided 

in paragraph (b)(4) of this section, if 

the State establishes a separate Council 

for a separate State agency for individuals 

who are blind, that Council 

must— 

(i) Conform with all of the composition 

requirements for a Council under 

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

the requirements in paragraph 

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

Page 20 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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

(ii) Include— 

(A) At least one representative of a 

disability advocacy group representing 

individuals who are blind; and 

(B) At least one representative of an 

individual who is blind, has multiple 

disabilities, and has difficulty representing 

himself or herself or is unable 

due to disabilities to represent 

himself or herself. 

(4) Exception. If State law in effect on 

October 29, 1992 requires a separate 

Council under paragraph (b)(3) of this 

section to have fewer than 15 members, 

the separate Council is in compliance 

with the composition requirements in 

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

this section if it includes at least one 

representative who meets the requirements 

for each of those paragraphs. 

(c) Majority. 

(1) A majority of the Council members 

must be individuals with disabilities 

who meet the requirements of 

§ 361.5(b)(29) and are not employed by 

the designated State unit. 

(2) In the case of a separate Council 

established under § 361.16(b), a majority 

of the Council members must be individuals 

who are blind and are not employed 

by the designated State unit. 

(d) Chairperson. The chairperson must 

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) In States in which the Governor 

does not have veto power pursuant to 

State law, the appointing authority described 

in paragraph (a)(1) of this section 

must designate a member of the 

Council to serve as the chairperson of 

the Council or must require the Council 

to designate a member to serve as 

chairperson. 

(e) Terms of appointment. 

(1) Each member of the Council must 

be appointed for a term of no more 

than 3 years, and each member of the 

Council, other than a representative 

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

of this section, may serve for no more 

than two consecutive full terms. 

(2) A member appointed to fill a vacancy 

occurring prior to the end of the 

term for which the predecessor was appointed 

must be appointed for the remainder 

of the predecessor’s term. 

(3) The terms of service of the members 

initially appointed must be, as 

specified by the appointing authority 

as described in paragraph (a)(1) of this 

section, for varied numbers of years to 

ensure that terms expire on a staggered 

basis. 

(f) Vacancies. 

(1) A vacancy in the membership of 

the Council must be filled in the same 

manner as the original appointment, 

except the appointing authority as described 

in paragraph (a)(1) of this section 

may delegate the authority to fill 

that vacancy to the remaining members 

of the Council after making the 

original appointment. 

(2) No vacancy affects the power of 

the remaining members to execute the 

duties of the Council. 

(g) Conflict of interest. No member of 

the Council 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 must, 

after consulting with the State workforce 

investment board— 

(1) Review, analyze, and advise the 

designated State unit regarding the 

performance of the State unit’s responsibilities 

under this part, particularly 

responsibilities related to— 

(i) Eligibility, including order of selection; 

(ii) The extent, scope, and effectiveness 

of services provided; and 

(iii) Functions performed by State 

agencies that affect or potentially affect 

the ability of individuals with disabilities 

in achieving employment outcomes 

under this part; 

(2) In partnership with the designated 

State unit— 

(i) Develop, agree to, and review 

State goals and priorities in accordance 

with § 361.29(c); and 

(ii) Evaluate the effectiveness of the 

vocational rehabilitation program and 

submit reports of progress to the Secretary 

in accordance with § 361.29(e); 

Page 21 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(3) Advise the designated State agency 

and the designated State unit regarding 

activities carried out under 

this part and assist in the preparation 

of the State plan and amendments to 

the plan, applications, reports, needs 

assessments, and evaluations required 

by this part; 

(4) To the extent feasible, conduct a 

review and analysis of the effectiveness 

of, and consumer satisfaction with— 

(i) The functions performed by the 

designated State agency; 

(ii) The vocational rehabilitation 

services provided by State agencies and 

other public and private entities responsible 

for providing vocational rehabilitation 

services to individuals 

with disabilities under the Act; and 

(iii) The employment outcomes 

achieved by eligible individuals receiving 

services under this part, including 

the availability of health and other 

employment benefits in connection 

with those employment outcomes; 

(5) Prepare and submit to the Governor 

and to the Secretary no later 

than 90 days after the end of the Federal 

fiscal year an annual report on the 

status of vocational rehabilitation programs 

operated within the State and 

make the report available to the public 

through appropriate modes of communication; 

(6) To avoid duplication of efforts and 

enhance the number of individuals 

served, coordinate activities with the 

activities of other councils within the 

State, including the Statewide Independent 

Living Council established 

under 34 CFR part 364, the advisory 

panel established under section 

612(a)(21) of the Individuals with Disabilities 

Education Act, the State Developmental 

Disabilities Planning 

Council described in section 124 of the 

Developmental Disabilities Assistance 

and Bill of Rights Act, the State mental 

health planning council established 

under section 1914(a) of the Public 

Health Service Act, and the State 

workforce investment board; 

(7) 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 

(8) Perform other comparable functions, 

consistent with the purpose of 

this part, as the Council determines to 

be appropriate, that are comparable to 

the other functions performed by the 

Council. 

(i) Resources. 

(1) The Council, in conjunction with 

the designated State unit, must prepare 

a plan for the provision of resources, 

including staff and other personnel, 

that may be necessary and sufficient 

for the Council to carry out its 

functions under this part. 

(2) The resource plan must, to the 

maximum extent possible, rely on the 

use of resources in existence during the 

period of implementation of the plan. 

(3) Any disagreements between the 

designated State unit and the Council 

regarding the amount of resources necessary 

to carry out the functions of the 

Council must be resolved by the Governor, 

consistent with paragraphs (i)(1) 

and (2) of this section. 

(4) The Council must, consistent with 

State law, supervise and evaluate the 

staff and personnel that are necessary 

to carry out its functions. 

(5) Those staff and personnel that are 

assisting the Council in carrying out 

its functions may not be assigned duties 

by the designated State unit or 

any other agency or office of the State 

that would create a conflict of interest. 

(j) Meetings. The Council must— 

(1) Convene at least four meetings a 

year in locations determined by the 

Council to be necessary to conduct 

Council business. The meetings must 

be publicly announced, open, and accessible 

to the general public, including 

individuals with disabilities, unless 

there is a valid reason for an executive 

session; and 

(2) Conduct forums or hearings, as 

appropriate, that are publicly announced, 

open, and accessible to the 

public, including individuals with disabilities. 

(k) Compensation. Funds appropriated 

under Title I of the Act, except funds 

to carry out sections 112 and 121 of the 

Act, may be used to compensate and 

reimburse the expenses of Council 

members in accordance with section 

Page 22 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

105(g) of the Act. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

725) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 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 

Council, this description must, at a 

minimum, specify that the Council has 

an opportunity to review and comment 

on the development of plans, policies, 

and procedures necessary to meet the 

requirements of paragraphs (b) through 

(d) of this section. This description 

must also conform with the following 

requirements: 

(a) 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 5 years 

based on projections of the number of 

individuals to be served, including individuals 

with significant disabilities, 

the number of personnel expected to retire 

or leave the field, and other relevant 

factors. 

(2) Data on personnel development 

must include— 

(i) A list of the institutions of higher 

education in the State that are preparing 

vocational rehabilitation professionals, 

by type of program; 

(ii) The number of students enrolled 

at each of those institutions, broken 

down by type of program; and 

(iii) The number of students who 

graduated during the prior year from 

each of those institutions with certification 

or licensure, or with the credentials 

for certification or licensure, broken 

down by the personnel category for 

which they have received, or have the 

credentials to receive, certification or 

licensure. 

(b) Plan for recruitment, preparation, 

and retention of qualified personnel. The 

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 all professional 

and paraprofessional personnel 

needed within the designated State 

unit to carry out this part are appropriately 

and adequately prepared and 

Page 23 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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 

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. The steps taken by the State unit 

under this paragraph must be described 

in a written plan that includes— 

(A) Specific strategies for retraining, 

recruiting, and hiring personnel; 

(B) The specific time period by which 

all State unit personnel will meet the 

standards described in paragraph 

(c)(1)(i) of this section; 

(C) Procedures for evaluating the 

State unit’s progress in hiring or retraining 

personnel to meet applicable 

personnel standards within the time 

period established under paragraph 

(c)(1)(ii)(B) of this section; and 

(D) In instances in which the State 

unit is unable to immediately hire new 

personnel who meet the requirements 

in paragraph (c)(1)(i) of this section, 

the initial minimum qualifications 

that the designated State unit will require 

of newly hired personnel and a 

plan for training those individuals to 

meet applicable requirements within 

the time period established under paragraph 

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

(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, in 

the absence of these requirements, 

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 unit; 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 assessment, 

vocational counseling, job placement, 

and 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. 

(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— 

(i) Training regarding the Workforce 

Investment Act of 1998 and the amendments 

to the Rehabilitation Act of 1973 

made by the Rehabilitation Act 

Amendments of 1998; 

(ii) Training with respect to the requirements 

of the Americans with Disabilities 

Act, the Individuals with Disabilities 

Education Act, and Social Security 

work incentive programs, including 

Page 24 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

programs under the Ticket to 

Work and Work Incentives Improvement 

Act of 1999, training to facilitate 

informed choice under this program, 

and training to improve the provision 

of services to culturally diverse populations; 

and 

(iii) Activities related to— 

(A) Recruitment and retention of 

qualified rehabilitation personnel; 

(B) Succession planning; and 

(C) Leadership development and capacity 

building. 

(e) Personnel to address individual communication 

needs. The 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) Coordination with personnel development 

under the Individuals with Disabilities 

Education Act. 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 the Individuals with Disabilities 

Education Act. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 101(a)(7) of the Act; 29 

U.S.C. 721(a)(7)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 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 

covered under and on the same terms 

and conditions as stated in section 503 

of the Act. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 101(a)(6)(B) of the Act; 29 

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.20 Public participation requirements. 

(a) Conduct of public meetings. The 

State plan must assure that prior to 

the adoption of any substantive policies 

or procedures governing the provision 

of vocational rehabilitation services 

under the State plan, including 

making any substantive amendments 

to the policies and procedures, the designated 

State agency conducts public 

meetings throughout the State to provide 

the public, including individuals 

with disabilities, an opportunity to 

comment on the policies or procedures. 

(b) Notice requirements. The State plan 

must assure that the designated State 

agency, prior to conducting the public 

meetings, provides appropriate and sufficient 

notice throughout the State of 

the meetings in accordance with— 

(1) State law governing public meetings; 

or 

(2) In the absence of State law governing 

public meetings, procedures developed 

by the designated State agency 

in consultation with the State Rehabilitation 

Council. 

(c) Summary of input of the State Rehabilitation 

Council. The State plan must 

provide a summary of the input of the 

State Rehabilitation Council, if the 

State agency has a Council, into the 

State plan and any amendment to the 

plan, in accordance with 

§ 361.16(a)(2)(v). 

(d) Special consultation requirements. 

The State plan must assure that the 

State agency actively consults with 

the director of the Client Assistance 

Program, the State Rehabilitation 

Council, if the State agency has a 

Council, and, as appropriate, Indian 

tribes, tribal organizations, and native 

Hawaiian organizations on its policies 

and procedures governing the provision 

of vocational rehabilitation services 

under the State plan. 

(e) Appropriate modes of communication. 

The State unit must provide to 

the public, through appropriate modes 

Page 25 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

of communication, notices of the public 

meetings, any materials furnished 

prior to or during the public meetings, 

and the policies and procedures governing 

the provision of vocational rehabilitation 

services under the State 

plan. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Sections 101(a)(16)(A) and 

105(c)(3) of the Act; 29 U.S.C. 721(a)(16)(A), 

and 725(c)(3)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.21 Consultations regarding the 

administration of the state plan. 

The State plan must assure that, in 

connection with matters of general policy 

arising in the administration of the 

State plan, the designated State agency 

takes into account the views of— 

(a) Individuals and groups of individuals 

who are recipients of vocational 

rehabilitation services or, as appropriate, 

the individuals’ representatives; 

(b) Personnel working in programs 

that provide vocational rehabilitation 

services to individuals with disabilities; 

(c) Providers of vocational rehabilitation 

services to individuals with disabilities; 

(d) The director of the Client Assistance 

Program; and 

(e) The State Rehabilitation Council, 

if the State has a Council. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.22 Coordination with education 

officials. 

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

The State plan must contain plans, 

policies, and procedures for coordination 

between the designated State 

agency and education officials responsible 

for the public education of students 

with disabilities that are designed 

to facilitate the transition of 

students with disabilities from the receipt 

of educational services in school 

to the receipt of vocational rehabilitation 

services under the responsibility 

of the designated State agency. 

(2) These plans, policies, and procedures 

in paragraph (a)(1) of this section 

must provide for the development and 

approval of an individualized plan for 

employment in accordance with § 361.45 

as early as possible during the transition 

planning process but, at the latest, 

by the time each student determined 

to be eligible for vocational rehabilitation 

services leaves the school 

setting or, if the designated State unit 

is operating under an order of selection, 

before each eligible student able 

to be served under the order leaves the 

school setting. 

(b) Formal interagency agreement. The 

State plan must include information 

on a formal interagency agreement 

with the State educational agency 

that, at a minimum, provides for— 

(1) Consultation and technical assistance 

to assist educational agencies in 

planning for the transition of students 

with disabilities from school to postschool 

activities, including vocational 

rehabilitation services; 

(2) Transition planning by personnel 

of the designated State agency and 

educational agency personnel for students 

with disabilities that facilitates 

the development and completion of 

their individualized education programs 

(IEPs) under section 614(d) of the 

Individuals with Disabilities Education 

Act; 

(3) The roles and responsibilities, including 

financial responsibilities, of 

each agency, including provisions for 

determining State lead agencies and 

qualified personnel responsible for 

transition services; and 

(4) Procedures for outreach to and 

identification of students with disabilities 

who are in need of transition services. 

Outreach to these students should 

occur as early as possible during the 

transition planning process and must 

include, at a minimum, a description of 

the purpose of the vocational rehabilitation 

program, eligibility requirements, 

application procedures, and 

scope of services that may be provided 

to eligible individuals. 

Page 26 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 101(a)(11)(D) of the Act; 

29 U.S.C. 721 (a)(11)(D)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.23 Requirements related to the 

statewide workforce investment system. 

(a) Responsibilities as a partner of the 

One-Stop service delivery system. As a required 

partner in the One-Stop service 

delivery system (which is part of the 

statewide workforce investment system 

under Title I of the Workforce Investment 

Act of 1998), the designated 

State unit must carry out the following 

functions consistent with the 

Act, this part, Title I of the Workforce 

Investment Act of 1998, and the regulations 

in 20 CFR part 662: 

(1) Make available to participants 

through the One-Stop service delivery 

system the core services (as described 

in 20 CFR 662.240) that are applicable to 

the Program administered by the designated 

State unit under this part. 

(2) Use a portion of funds made available 

to the Program administered by 

the designated State unit under this 

part, consistent with the Act and this 

part, to— 

(i) Create and maintain the One-Stop 

service delivery system; and 

(ii) Provide core services (as described 

in 20 CFR 662.240). 

(3) Enter into a memorandum of understanding 

(MOU) with the Local 

Workforce Investment Board under section 

117 of the Workforce Investment 

Act of 1998 relating to the operation of 

the One-Stop service delivery system 

that meets the requirements of section 

121(c) of the Workforce Investment Act 

and 20 CFR 662.300, including a description 

of services, how the cost of the 

identified services and operating costs 

of the system will be funded, and methods 

for referrals. 

(4) Participate in the operation of the 

One-Stop service delivery system consistent 

with the terms of the MOU and 

the requirements of the Act and this 

part. 

(5) Provide representation on the 

Local Workforce Investment Board 

under section 117 of the Workforce Investment 

Act of 1998. 

(b) Cooperative agreements with OneStop partners. (1) The State plan must 

assure that the designated State unit 

or the designated State agency enters 

into cooperative agreements with the 

other entities that are partners under 

the One-Stop service delivery system 

under Title I of the Workforce Investment 

Act of 1998 and replicates those 

agreements at the local level between 

individual offices of the designated 

State unit and local entities carrying 

out the One-Stop service delivery system 

or other activities through the 

statewide workforce investment system. 

(2) Cooperative agreements developed 

under paragraph (b)(1) of this section 

may provide for— 

(i) Intercomponent training and technical 

assistance regarding— 

(A) The availability and benefits of, 

and information on eligibility standards 

for, vocational rehabilitation 

services; and 

(B) The promotion of equal, effective 

and meaningful participation by individuals 

with disabilities in the OneStop service delivery system and other 

workforce investment activities 

through the promotion of program accessibility 

consistent with the requirements 

of the Americans with Disabilities 

Act of 1990 and section 504 of the 

Act, the use of nondiscriminatory policies 

and procedures, and the provision 

of reasonable accommodations, auxiliary 

aids and services, and rehabilitation 

technology for individuals with 

disabilities; 

(ii) The use of information and financial 

management systems that link all 

of the partners of the One-Stop service 

delivery system to one another and to 

other electronic networks, including 

nonvisual electronic networks, and 

that relate to subjects such as employment 

statistics, job vacancies, career 

planning, and workforce investment 

activities; 

(iii) The use of customer service features 

such as common intake and referral 

procedures, customer databases, resource 

information, and human services 

Page 27 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

hotlines; 

(iv) The establishment of cooperative 

efforts with employers to facilitate job 

placement and carry out other activities 

that the designated State unit and 

the employers determine to be appropriate; 

(v) The identification of staff roles, 

responsibilities, and available resources 

and specification of the financial 

responsibility of each partner of 

the One-Stop service delivery system 

with respect to providing and paying 

for necessary services, consistent with 

the requirements of the Act, this part, 

other Federal requirements, and State 

law; and 

(vi) The specification of procedures 

for resolving disputes among partners 

of the One-Stop service delivery system. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

29 U.S.C. 721(a)(11)(A); Sections 121 and 134 of 

the Workforce Investment Act of 1998; 29 

U.S.C. 2841 and 2864) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.24 Cooperation and coordination with 

other entities. 

(a) Interagency cooperation. The State 

plan must describe the designated 

State agency’s cooperation with and 

use of the services and facilities of Federal, 

State, and local agencies and programs, 

including programs carried out 

by the Under Secretary for Rural Development 

of the Department of Agriculture 

and State use contracting programs, 

to the extent that those agencies 

and programs are not carrying out 

activities through the statewide workforce 

investment system. 

(b) Coordination with the Statewide 

Independent Living Council and independent 

living centers. The State plan 

must assure that the designated State 

unit, the Statewide Independent Living 

Council established under 34 CFR part 

364, and the independent living centers 

established under 34 CFR part 366 have 

developed working relationships and 

coordinate their activities. 

(c) Cooperative agreement with recipients 

of grants for services to American Indians. 

(1) General. In applicable cases, the 

State plan must assure that the designated 

State agency has entered into 

a formal cooperative agreement with 

each grant recipient in the State that 

receives funds under part C of the Act 

(American Indian Vocational Rehabilitation 

Services). 

(2) Contents of formal cooperative 

agreement. The agreement required 

under paragraph (a)(1) of this section 

must describe strategies for collaboration 

and coordination in providing vocational 

rehabilitation services to 

American Indians who are individuals 

with disabilities, including— 

(i) Strategies for interagency referral 

and information sharing that will assist 

in eligibility determinations and 

the development of individualized 

plans for employment; 

(ii) Procedures for ensuring that 

American Indians who are individuals 

with disabilities and are living near a 

reservation or tribal service area are 

provided vocational rehabilitation 

services; and 

(iii) Provisions for sharing resources 

in cooperative studies and assessments, 

joint training activities, and other collaborative 

activities designed to improve 

the provision of services to 

American Indians who are individuals 

with disabilities. 

(d) Reciprocal referral services between 

two designated State units in the same 

State. If there is a separate designated 

State unit for individuals who are 

blind, the two designated State units 

must establish reciprocal referral services, 

use each other’s services and facilities 

to the extent feasible, jointly 

plan activities to improve services in 

the State for individuals with multiple 

impairments, including visual impairments, 

and otherwise cooperate to provide 

more effective services, including, 

if appropriate, entering into a written 

cooperative agreement. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Sections 12(c) and 101(a)(11)(C), 

(E), and (F) of the Act; 29 U.S.C. 709(c) and 

721(a)(11) (C), (E), and (F)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

Page 28 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

§ 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. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 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) For purposes other than those 

specified in § 361.60(b)(3)(i) and consistent 

with the requirements in 

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

its State plan, and the Secretary approves, 

a waiver of the statewideness 

requirement, in accordance with the 

requirements of paragraph (b) of this 

section. 

(b) Request for waiver. The request for 

a waiver of statewideness must— 

(1) Identify the types of services to be 

provided; 

(2) Contain a written assurance from 

the local public agency that it will 

make available to the State unit the 

non-Federal 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: Section 101(a)(4) of the Act; 29 

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.27 Shared funding and administration 

of joint programs. 

(a) If the State plan provides for the 

designated State agency to share funding 

and administrative responsibility 

with another State agency or local 

public agency to carry out a joint program 

to provide services to individuals 

with disabilities, the State must submit 

to the Secretary for approval a 

plan that describes its shared funding 

and administrative arrangement. 

(b) The plan under paragraph (a) of 

this section must include— 

(1) A description of the nature and 

scope of the joint program; 

(2) The services to be provided under 

the joint program; 

(3) The respective roles of each participating 

agency in the administration 

and provision of services; and 

(4) The share of the costs to be assumed 

by each agency. 

(c) If a proposed joint program does 

not comply with the statewideness requirement 

in § 361.25, the State unit 

must obtain a waiver of statewideness, 

in accordance with § 361.26. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 101(a)(2)(A) of the Act; 29 

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.28 Third-party cooperative 

arrangements involving funds from other 

public agencies. 

(a) The designated State unit may 

enter into a third-party cooperative arrangement 

for providing or administering 

vocational rehabilitation services 

with another State agency or a 

Page 29 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

local public agency that is furnishing 

part or all of the non-Federal share, if 

the designated State unit ensures 

that— 

(1) The services provided by the cooperating 

agency are not the customary 

or typical services provided by 

that agency but are new services that 

have a vocational rehabilitation focus 

or existing services that have been 

modified, adapted, expanded, or reconfigured 

to have a vocational rehabilitation 

focus; 

(2) The services provided by the cooperating 

agency are only available to 

applicants for, or recipients of, services 

from the designated State unit; 

(3) Program expenditures and staff 

providing services under the cooperative 

arrangement are under the administrative 

supervision of the designated 

State unit; and 

(4) All 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 must 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 12(c) of the Act; 29 

U.S.C. 709(c)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.29 Statewide assessment; annual 

estimates; annual State goals and priorities; 

strategies; and progress reports. 

(a) Comprehensive statewide assessment. 

(1) The State plan must include— 

(i) The results of a comprehensive, 

statewide assessment, jointly conducted 

by the designated State unit 

and the State Rehabilitation Council 

(if the State unit has a Council) every 

3 years describing the rehabilitation 

needs of individuals with disabilities 

residing within the State, particularly 

the vocational rehabilitation services 

needs of— 

(A) Individuals with the most significant 

disabilities, including their need 

for supported employment services; 

(B) Individuals with disabilities who 

are minorities and individuals with disabilities 

who have been unserved or underserved 

by the vocational rehabilitation 

program carried out under this 

part; and 

(C) Individuals with disabilities 

served through other components of 

the statewide workforce investment 

system as identified by those individuals 

and personnel assisting those individuals 

through the components of the 

system; and 

(ii) An assessment of the need to establish, 

develop, or improve community 

rehabilitation programs within 

the State. 

(2) The State plan must assure that 

the State will submit to the Secretary 

a report containing information regarding 

updates to the assessments 

under paragraph (a) of this section for 

any year in which the State updates 

the assessments. 

(b) Annual estimates. The State plan 

must include, and must assure that the 

State will annually submit a report to 

the Secretary that includes, State estimates 

of— 

(1) The number of individuals in the 

State who are eligible for services 

under this part; 

(2) The number of eligible individuals 

who will receive services provided with 

funds provided under part B of Title I 

of the Act and under part B of Title VI 

of the Act, including, if the designated 

State agency uses an order of selection 

in accordance with § 361.36, estimates of 

the number of individuals to be served 

under each priority category within 

the order; and 

(3) The costs of the services described 

in paragraph (b)(1) of this section, including, 

if the designated State agency 

uses an order of selection, the service 

costs for each priority category within 

the order. 

(c) Goals and priorities. 

(1) In general. The State plan must 

identify the goals and priorities of the 

State in carrying out the program. 

(2) Council. The goals and priorities 

must be jointly developed, agreed to, 

Page 30 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

reviewed annually, and, as necessary, 

revised by the designated State unit 

and the State Rehabilitation Council, 

if the State unit has a Council. 

(3) Submission. The State plan must 

assure that the State will submit to 

the Secretary a report containing information 

regarding revisions in the 

goals and priorities for any year in 

which the State revises the goals and 

priorities. 

(4) Basis for goals and priorities. The 

State goals and priorities must be 

based on an analysis of— 

(i) The comprehensive statewide assessment 

described in paragraph (a) of 

this section, including any updates to 

the assessment; 

(ii) The performance of the State on 

the standards and indicators established 

under section 106 of the Act; and 

(iii) Other available information on 

the operation and the effectiveness of 

the vocational rehabilitation program 

carried out in the State, including any 

reports received from the State Rehabilitation 

Council under § 361.17(h) and 

the findings and recommendations 

from monitoring activities conducted 

under section 107 of the Act. 

(5) Service and outcome goals for categories 

in order of selection. If the designated 

State agency uses an order of 

selection in accordance with § 361.36, 

the State plan must identify the 

State’s service and outcome goals and 

the time within which these goals may 

be achieved for individuals in each priority 

category within the order. 

(d)Strategies. The State plan must describe 

the strategies the State will use 

to address the needs identified in the 

assessment conducted under paragraph 

(a) of this section and achieve the goals 

and priorities identified in paragraph 

(c) of this section, including— 

(1) The methods to be used to expand 

and improve services to individuals 

with disabilities, including how a broad 

range of assistive technology services 

and assistive technology devices will 

be provided to those individuals at 

each stage of the rehabilitation process 

and how those services and devices will 

be provided to individuals with disabilities 

on a statewide basis; 

(2) Outreach procedures to identify 

and serve individuals with disabilities 

who are minorities and individuals 

with disabilities who have been 

unserved or underserved by the vocational 

rehabilitation program; 

(3) As applicable, the plan of the 

State for establishing, developing, or 

improving community rehabilitation 

programs; 

(4) Strategies to improve the performance 

of the State with respect to 

the evaluation standards and performance 

indicators established pursuant to 

section 106 of the Act; and 

(5) Strategies for assisting other 

components of the statewide workforce 

investment system in assisting individuals 

with disabilities. 

(e) Evaluation and reports of progress. 

(1) The State plan must include— 

(i) The results of an evaluation of the 

effectiveness of the vocational rehabilitation 

program; and 

(ii) A joint report by the designated 

State unit and the State Rehabilitation 

Council, if the State unit has a 

Council, to the Secretary on the 

progress made in improving the effectiveness 

of the program from the previous 

year. This evaluation and joint 

report must include— 

(A) An evaluation of the extent to 

which the goals and priorities identified 

in paragraph (c) of this section 

were achieved; 

(B) A description of the strategies 

that contributed to the achievement of 

the goals and priorities; 

(C) To the extent to which the goals 

and priorities were not achieved, a description 

of the factors that impeded 

that achievement; and 

(D) An assessment of the performance 

of the State on the standards and 

indicators established pursuant to section 

106 of the Act. 

(2) The State plan must assure that 

the designated State unit and the 

State Rehabilitation Council, if the 

State unit has a Council, will jointly 

submit to the Secretary an annual report 

that contains the information described 

in paragraph (e)(1) of this section. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

Page 31 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(Authority: Section 101(a)(15) of the Act; 29 

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.30 Services to American Indians. 

The State plan must assure that the 

designated State agency provides vocational 

rehabilitation services to American 

Indians who are individuals with 

disabilities residing in the State to the 

same extent as the designated State 

agency provides vocational rehabilitation 

services to other significant populations 

of individuals with disabilities 

residing in the State. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

of the Act; 29 U.S.C. 721(a)(13) and 741(b)(3)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.31 Cooperative agreements with 

private nonprofit organizations. 

The State plan must describe the 

manner in which cooperative agreements 

with private nonprofit vocational 

rehabilitation service providers 

will be established. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Sections 101(a)(24)(B); 29 U.S.C. 

721(a)(24)(B)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.32 Use of profitmaking organizations 

for on-the-job training in connection with 

selected projects. 

The State plan must assure that the 

designated State agency has the authority 

to enter into contracts with 

for-profit organizations for the purpose 

of providing, as vocational rehabilitation 

services, on-the-job training and 

related programs for individuals with 

disabilities under the Projects With Industry 

program, 34 CFR part 379, if the 

designated State agency has determined 

that for-profit agencies are better 

qualified to provide needed vocational 

rehabilitation services than nonprofit 

agencies and organizations. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 101(a)(24)(A) of the Act; 

29 U.S.C. 721(a)(24)(A)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.33 [Reserved] 

§ 361.34 Supported employment State plan 

supplement. 

(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 submitted under this 

part. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Sections 101(a)(22) and 625(a) of 

the Act; 29 U.S.C. 721(a)(22) and 795(k)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.35 Innovation and expansion activities. 

(a) The State plan must assure that 

the State will reserve and use a portion 

of the funds allotted to the State under 

section 110 of the Act— 

(1) For the development and implementation 

of innovative approaches to 

expand and improve the provision of 

vocational rehabilitation services to 

individuals with disabilities, particularly 

individuals with the most significant 

disabilities, consistent with the 

findings of the comprehensive, statewide 

assessment of the rehabilitation 

needs of individuals with disabilities 

under § 361.29(a) and the State’s goals 

and priorities under § 361.29(c); and 

(2) To support the funding of— 

(i) The State Rehabilitation Council, 

if the State has a Council, consistent 

with the resource plan identified in 

§ 361.17(i); and 

(ii) The Statewide Independent Living 

Council, consistent with the plan 

prepared under 34 CFR 364.21(i). 

Page 32 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(b) The State plan must— 

(1) Describe how the reserved funds 

will be used; and 

(2) Include, on an annual basis, a report 

describing how the reserved funds 

were used during the preceding year. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 101(a)(18) of the Act; 29 

U.S.C. 721(a)(18)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.36 Ability to serve all eligible 

individuals; order of selection for services. 

(a) General provisions. 

(1) The designated State unit either 

must be able to provide the full range 

of services listed in section 103(a) of the 

Act and § 361.48, as appropriate, to all 

eligible individuals or, in the event 

that vocational rehabilitation services 

cannot be provided to all eligible individuals 

in the State who apply for the 

services, include in the State plan the 

order to be followed in selecting eligible 

individuals to be provided vocational 

rehabilitation services. 

(2) The ability of the designated 

State unit to provide the full range of 

vocational rehabilitation services to 

all eligible individuals must be supported 

by a determination that satisfies 

the requirements of paragraph (b) 

or (c) of this section and a determination 

that, on the basis of the designated 

State unit’s projected fiscal 

and personnel resources and its assessment 

of the rehabilitation needs of individuals 

with significant disabilities 

within the State, it can— 

(i) Continue to provide services to all 

individuals currently receiving services; 

(ii) Provide assessment services to all 

individuals expected to apply for services 

in the next fiscal year; 

(iii) Provide services to all individuals 

who are expected to be determined 

eligible in the next fiscal year; and 

(iv) Meet all program requirements. 

(3) If the designated State unit is unable 

to provide the full range vocational 

rehabilitation services to all eligible 

individuals in the State who 

apply for the services, the State plan 

must— 

(i) Show the order to be followed in 

selecting eligible individuals to be provided 

vocational rehabilitation services; 

(ii) Provide a justification for the 

order of selection; 

(iii) Identify service and outcome 

goals and the time within which the 

goals may be achieved for individuals 

in each priority category within the 

order, as required under § 361.29(c)(5); 

and 

(iv) Assure that— 

(A) In accordance with criteria established 

by the State for the order of selection, 

individuals with the most significant 

disabilities will be selected 

first for the provision of vocational rehabilitation 

services; and 

(B) Individuals who do not meet the 

order of selection criteria will have access 

to services provided through the 

information and referral system established 

under § 361.37. 

(b) Basis for assurance that services can 

be provided to all eligible individuals. 

(1) For a designated State unit that 

determined, for the current fiscal year 

and the preceding fiscal year, that it is 

able to provide the full range of services, 

as appropriate, to all eligible individuals, 

the State unit, during the current 

fiscal and preceding fiscal year, 

must have in fact— 

(i) Provided assessment services to 

all applicants and the full range of 

services, as appropriate, to all eligible 

individuals; 

(ii) Made referral forms widely available 

throughout the State; 

(iii) Conducted outreach efforts to 

identify and serve individuals with disabilities 

who have been unserved or underserved 

by the vocational rehabilitation 

system; and 

(iv) Not delayed, through waiting 

lists or other means, determinations of 

eligibility, the development of individualized 

plans for employment for individuals 

determined eligible for vocational 

rehabilitation services, or the 

provision of services for eligible individuals 

for whom individualized plans 

for employment have been developed. 

(2) For a designated State unit that 

was unable to provide the full range of 

Page 33 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

services to all eligible individuals during 

the current or preceding fiscal year 

or that has not met the requirements 

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

determination that the designated 

State unit is able to provide the full 

range of vocational rehabilitation services 

to all eligible individuals in the 

next fiscal year must be based on— 

(i) Circumstances that have changed 

that will allow the designated State 

unit to meet the requirements of paragraph 

(a)(2) of this section in the next 

fiscal year, including— 

(A) An estimate of the number of and 

projected costs of serving, in the next 

fiscal year, individuals with existing 

individualized plans for employment; 

(B) The projected number of individuals 

with disabilities who will apply for 

services and will be determined eligible 

in the next fiscal year and the projected 

costs of serving those individuals; 

(C) The projected costs of administering 

the program in the next fiscal 

year, including, but not limited to, 

costs of staff salaries and benefits, outreach 

activities, and required statewide 

studies; and 

(D) The projected revenues and projected 

number of qualified personnel 

for the program in the next fiscal year; 

(ii) Comparable data, as relevant, for 

the current or preceding fiscal year, or 

for both years, of the costs listed in 

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

this section and the resources identified 

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

and an explanation of any projected 

increases or decreases in these 

costs and resources; and 

(iii) A determination that the projected 

revenues and the projected number 

of qualified personnel for the program 

in the next fiscal year are adequate 

to cover the costs identified in 

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

this section to ensure the provision of 

the full range of services, as appropriate, 

to all eligible individuals. 

(c) Determining need for establishing 

and implementing an order of selection. 

(1) The designated State unit must 

determine, prior to the beginning of 

each fiscal year, whether to establish 

and implement an order of selection. 

(2) If the designated State unit determines 

that it does not need to establish 

an order of selection, it must reevaluate 

this determination whenever 

changed circumstances during the 

course of a fiscal year, such as a decrease 

in its fiscal or personnel resources 

or an increase in its program 

costs, indicate that it may no longer be 

able to provide the full range of services, 

as appropriate, to all eligible individuals, 

as described in paragraph (a)(2) 

of this section. 

(3) If a DSU establishes an order of 

selection, but determines that it does 

not need to implement that order at 

the beginning of the fiscal year, it 

must continue to meet the requirements 

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

or it must implement the order of 

selection by closing one or more priority 

categories. 

(d) Establishing an order of selection. 

(1) Basis for order of selection. An 

order of selection must be based on a 

refinement of the three criteria in the 

definition of ‘‘individual with a significant 

disability’’ in section 7(21)(A) of 

the Act and § 361.5(b)(31). 

(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, or national 

origin; 

(iv) Source of referral; 

(v) Type of expected employment 

outcome; 

(vi) The need for specific services or 

anticipated cost of services required by 

an individual; or 

(vii) The income level of an individual 

or an individual’s family. 

(e) Administrative requirements. In administering 

the order of selection, the 

designated State unit must— 

(1) Implement the order of selection 

on a statewide basis; 

(2) Notify all eligible individuals of 

the priority categories in a State’s 

order of selection, their assignment to 

a particular category, and their right 

Page 34 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

to appeal their category assignment; 

(3) Continue to provide all needed 

services to any eligible individual who 

has begun to receive services under an 

individualized plan for employment 

prior to the effective date of the order 

of selection, irrespective of the severity 

of the individual’s disability; and 

(4) Ensure that its funding arrangements 

for providing services under the 

State plan, including third-party arrangements 

and awards under the establishment 

authority, are consistent 

with the order of selection. If any funding 

arrangements are inconsistent with 

the order of selection, the designated 

State unit must renegotiate these 

funding arrangements so that they are 

consistent with the order of selection. 

(f) State Rehabilitation Council. The 

designated State unit must consult 

with the State Rehabilitation Council, 

if the State unit has a Council, regarding 

the— 

(1) Need to establish an order of selection, 

including any reevaluation of 

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

section; 

(2) Priority categories of the particular 

order of selection; 

(3) Criteria for determining individuals 

with the most significant disabilities; 

and 

(4) Administration of the order of selection. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

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

101(a)(21)(A)(ii); and 504(a) of the Act; 29 

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

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

794(a)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.37 Information and referral programs. 

(a) General provisions. The State plan 

must assure that— 

(1) The designated State agency will 

implement an information and referral 

system adequate to ensure that individuals 

with disabilities, including eligible 

individuals who do not meet the 

agency’s order of selection criteria for 

receiving vocational rehabilitation 

services if the agency is operating on 

an order of selection, are provided accurate 

vocational rehabilitation information 

and guidance (which may include 

counseling and referral for job 

placement) using appropriate modes of 

communication to assist them in preparing 

for, securing, retaining, or regaining 

employment; and 

(2) The designated State agency will 

refer individuals with disabilities to 

other appropriate Federal and State 

programs, including other components 

of the statewide workforce investment 

system. 

(b) The State unit must refer to local 

extended employment providers an individual 

with a disability who makes 

an informed choice to pursue extended 

employment as the individual’s employment 

goal. Before making the referral 

required by this paragraph, the 

State unit must— 

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

this part, explain to the individual that 

the purpose of the vocational rehabilitation 

program is to assist individuals 

to achieve an employment outcome as 

defined in § 361.5(b)(16) (i.e., employment 

in an integrated setting); 

(2) Consistent with § 361.52 of this 

part, provide the individual with information 

concerning the availability of 

employment options, and of vocational 

rehabilitation services, in integrated 

settings; 

(3) Inform the individual that services 

under the vocational rehabilitation 

program can be provided to eligible 

individuals in an extended employment 

setting if necessary for purposes 

of training or otherwise preparing for 

employment in an integrated setting; 

(4) Inform the individual that, if he 

or she initially chooses not to pursue 

employment in an integrated setting, 

he or she can seek services from the 

designated State unit at a later date if, 

at that time, he or she chooses to pursue 

employment in an integrated setting; 

and 

(5) Refer the individual, as appropriate, 

to the Social Security Administration 

in order to obtain information 

concerning the ability of individuals 

with disabilities to work while receiving 

Page 35 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

benefits from the Social Security 

Administration. 

(c) Criteria for appropriate referrals. In 

making the referrals identified in paragraph 

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

State unit must— 

(1) Refer the individual to Federal or 

State programs, including programs 

carried out by other components of the 

statewide workforce investment system, 

best suited to address the specific 

employment needs of an individual 

with a disability; and 

(2) Provide the individual who is 

being referred— 

(i) A notice of the referral by the designated 

State agency to the agency 

carrying out the program; 

(ii) Information identifying a specific 

point of contact within the agency to 

which the individual is being referred; 

and 

(iii) Information and advice regarding 

the most suitable services to assist 

the individual to prepare for, secure, 

retain, or regain employment. 

(d) Order of selection. In providing the 

information and referral services under 

this section to eligible individuals who 

are not in the priority category or categories 

to receive vocational rehabilitation 

services under the State’s order 

of selection, the State unit must identify, 

as part of its reporting under section 

101(a)(10) of the Act and § 361.40, 

the number of eligible individuals who 

did not meet the agency’s order of selection 

criteria for receiving vocational 

rehabilitation services and did 

receive information and referral services 

under this section. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

101(a)(10)(C)(ii), and 101(a)(20) of the Act; 29 

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

721(a)(20)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.38 Protection, use, and release of 

personal information. 

(a) General provisions. 

(1) The State agency and the State 

unit must adopt and implement written 

policies and procedures to safeguard 

the confidentiality of all personal 

information, including photographs 

and lists of names. These policies 

and procedures must ensure that— 

(i) Specific safeguards are established 

to protect current and stored personal 

information; 

(ii) All applicants and eligible individuals 

and, as appropriate, those individuals’ 

representatives, service providers, 

cooperating agencies, and interested 

persons are informed through appropriate 

modes of communication of 

the confidentiality of personal information 

and the conditions for accessing 

and releasing this information; 

(iii) All applicants or their representatives 

are informed about the State 

unit’s need to collect personal information 

and the policies governing its use, 

including— 

(A) Identification of the authority 

under which information is collected; 

(B) Explanation of the principal purposes 

for which the State unit intends 

to use or release the information; 

(C) Explanation of whether providing 

requested information to the State 

unit is mandatory or voluntary and the 

effects of not providing requested information; 

(D) Identification of those situations 

in which the State unit requires or 

does not require informed written consent 

of the individual before information 

may be released; and 

(E) Identification of other agencies 

to which information is routinely released; 

(iv) An explanation of State policies 

and procedures affecting personal information 

will be provided to each individual 

in that individual’s native language 

or through the appropriate mode 

of communication; and 

(v) These policies and procedures provide 

no fewer protections for individuals 

than State laws and regulations. 

(2) The State unit may establish reasonable 

fees to cover extraordinary 

costs of duplicating records or making 

extensive searches and must establish 

policies and procedures governing access 

to records. 

(b) State program use. All personal information 

in the possession of the 

State agency or the designated State 

Page 36 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

unit must be used only for the purposes 

directly connected with the administration 

of the vocational rehabilitation 

program. Information containing identifiable 

personal information may not 

be shared with advisory or other bodies 

that do not have official responsibility 

for administration of the program. In 

the administration of the program, the 

State unit may obtain personal information 

from service providers and cooperating 

agencies under assurances 

that the information may not be further 

divulged, except as provided under 

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

(c) Release to applicants and eligible individuals. 

(1) Except as provided in paragraphs 

(c)(2) and (c)(3) of this section, if requested 

in writing by an applicant or 

eligible individual, the State unit must 

make all requested information in that 

individual’s record of services accessible 

to and must release the information 

to the individual or the individual’s 

representative in a timely manner. 

(2) Medical, psychological, or other 

information that the State unit determines 

may be harmful to the individual 

may not be released directly to 

the individual, but must be provided to 

the individual through a third party 

chosen by the individual, which may 

include, among others, an advocate, a 

family member, or a qualified medical 

or mental health professional, unless a 

representative has been appointed by a 

court to represent the individual, in 

which case the information must be released 

to the court-appointed representative. 

(3) If personal information has been 

obtained from another agency or organization, 

it may be released only by, or 

under the conditions established by, 

the other agency or organization. 

(4) An applicant or eligible individual 

who believes that information in the 

individual’s record of services is inaccurate 

or misleading may request that 

the designated State unit amend the 

information. If the information is not 

amended, the request for an amendment 

must be documented in the 

record of services, consistent with 

§ 361.47(a)(12). 

(d) Release for audit, evaluation, and 

research. Personal information may be 

released to an organization, agency, or 

individual engaged in audit, evaluation, 

or research only for purposes directly 

connected with the administration 

of the vocational rehabilitation 

program or for purposes that would significantly 

improve the quality of life 

for applicants and eligible individuals 

and only if the organization, agency, or 

individual assures that— 

(1) The information will be used only 

for the purposes for which it is being 

provided; 

(2) The information will be released 

only to persons officially connected 

with the audit, evaluation, or research; 

(3) The information will not be released 

to the involved individual; 

(4) The information will be managed 

in a manner to safeguard confidentiality; 

and 

(5) The final product will not reveal 

any personal identifying information 

without the informed written consent 

of the involved individual or the individual’s 

representative. 

(e) Release to other programs or authorities. 

(1) Upon receiving the informed written 

consent of the individual or, if appropriate, 

the individual’s representative, 

the State unit may release personal 

information to another agency or 

organization for its program purposes 

only to the extent that the information 

may be released to the involved individual 

or the individual’s representative 

and only to the extent that the 

other agency or organization demonstrates 

that the information requested 

is necessary for its program. 

(2) Medical or psychological information 

that the State unit determines 

may be harmful to the individual may 

be released if the other agency or organization 

assures the State unit that 

the information will be used only for 

the purpose for which it is being provided 

and will not be further released 

to the individual. 

(3) The State unit must release personal 

information if required by Federal 

law or regulations. 

(4) The State unit must release personal 

information in response to investigations 

in connection with law enforcement, 

fraud, or abuse, unless expressly 

Page 37 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.39 State-imposed requirements. 

The designated State unit must, 

upon request, identify those regulations 

and policies relating to the administration 

or operation of its vocational 

rehabilitation program that are 

State-imposed, including any regulations 

or policy based on State interpretation 

of any Federal law, regulations, 

or guideline. 

(Authority: Section 17 of the Act; 29 U.S.C. 

714) 

§ 361.40 Reports. 

(a) The State plan must assure that 

the designated State agency will submit 

reports, including reports required 

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

the Act— 

(1) In the form and level of detail and 

at the time required by the Secretary 

regarding applicants for and eligible 

individuals receiving services under 

this part; and 

(2) In a manner that provides a complete 

count (other than the information 

obtained through sampling consistent 

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

Act) of the applicants and eligible individuals 

to— 

(i) Permit the greatest possible crossclassification 

of data; and 

(ii) Protect the confidentiality of the 

identity of each individual. 

(b) The designated State agency must 

comply with any requirements necessary 

to ensure the accuracy and 

verification of those reports. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 101(a)(10)(A) and (F) of 

the Act; 29 U.S.C. 721(a)(10)(A) and (F)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

PROVISION AND SCOPE OF SERVICES 

§ 361.41 Processing referrals and 

applications. 

(a) Referrals. The designated State 

unit must establish and implement 

standards for the prompt and equitable 

handling of referrals of individuals for 

vocational rehabilitation services, including 

referrals of individuals made 

through the One-Stop service delivery 

systems established under section 121 

of the Workforce Investment Act of 

1998. The standards must include 

timelines for making good faith efforts 

to inform these individuals of application 

requirements and to gather information 

necessary to initiate an assessment 

for determining eligibility and 

priority for services. 

(b) Applications. 

(1) Once an individual has submitted 

an application for vocational rehabilitation 

services, including applications 

made through common intake procedures 

in One-Stop centers established 

under section 121 of the Workforce Investment 

Act of 1998, an eligibility determination 

must be made within 60 

days, unless— 

(i) Exceptional and unforeseen circumstances 

beyond the control of the 

designated State unit preclude making 

an eligibility determination within 60 

days and the designated State unit and 

the individual agree to a specific extension 

of time; or 

(ii) An exploration of the individual’s 

abilities, capabilities, and capacity to 

perform in work situations is carried 

out in accordance with § 361.42(e) or, if 

appropriate, an extended evaluation is 

carried out in accordance with 

§ 361.42(f). 

(2) An individual is considered to 

have submitted an application when 

the individual or the individual’s representative, 

as appropriate— 

(i)(A) Has completed and signed an 

agency application form; 

Page 38 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(B) Has completed a common intake 

application form in a One-Stop center 

requesting vocational rehabilitation 

services; or 

(C) Has otherwise requested services 

from the designated State unit; 

(ii) Has provided to the designated 

State unit information necessary to 

initiate an assessment to determine 

eligibility and priority for services; 

and 

(iii) Is available to complete the assessment 

process. 

(3) The designated State unit must 

ensure that its application forms are 

widely available throughout the State, 

particularly in the One-Stop centers 

established under section 121 of the 

Workforce Investment Act of 1998. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Sections 101(a)(6)(A) and 102(a)(6) 

of the Act; 29 U.S.C. 721(a)(6)(A) and 722(a)(6)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.42 Assessment for determining 

eligibility and priority for services. 

In order to determine whether an individual 

is eligible for vocational rehabilitation 

services and the individual’s 

priority under an order of selection for 

services (if the State is operating under 

an order of selection), the designated 

State unit must conduct an assessment 

for determining eligibility and priority 

for services. The assessment must be 

conducted in the most integrated setting 

possible, consistent with the individual’s 

needs and informed choice, and 

in accordance with the following provisions: 

(a) Eligibility requirements. 

(1) Basic requirements. The designated 

State unit’s determination of an applicant’s 

eligibility for vocational rehabilitation 

services must be based only 

on the following requirements: 

(i) A determination by qualified personnel 

that the applicant has a physical 

or mental impairment. 

(ii) A determination by qualified personnel 

that the applicant’s physical or 

mental impairment constitutes or results 

in a substantial impediment to 

employment for the applicant. 

(iii) A determination by a qualified 

vocational rehabilitation counselor 

employed by the designated State unit 

that the applicant requires vocational 

rehabilitation services to prepare for, 

secure, retain, or regain employment 

consistent with the applicant’s unique 

strengths, resources, priorities, concerns, 

abilities, capabilities, interests, 

and informed choice. 

(iv) 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. 

(2) Presumption of benefit. The designated 

State unit must presume that 

an applicant who meets the eligibility 

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

and (ii) of this section can benefit in 

terms of an employment outcome unless 

it demonstrates, based on clear 

and convincing evidence, that the applicant 

is incapable of benefiting in 

terms of an employment outcome from 

vocational rehabilitation services due 

to the severity of the applicant’s disability. 

(3) Presumption of eligibility for Social 

Security recipients and beneficiaries. 

(i) Any applicant who has been determined 

eligible for Social Security benefits 

under Title II or Title XVI of the 

Social Security Act is— 

(A) Presumed eligible for vocational 

rehabilitation services under paragraphs 

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

(B) Considered an individual with a 

significant disability as defined in 

§ 361.5(b)(31). 

(ii) If an applicant for vocational rehabilitation 

services asserts that he or 

she is eligible for Social Security benefits 

under Title II or Title XVI of the 

Social Security Act (and, therefore, is 

presumed eligible for vocational rehabilitation 

services under paragraph 

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

to provide appropriate evidence, 

such as an award letter, to support 

that assertion, the State unit must 

verify the applicant’s eligibility under 

Title II or Title XVI of the Social Security 

Act by contacting the Social Security 

Administration. This 

verification must be made within a reasonable 

Page 39 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

period of time that enables the 

State unit to determine the applicant’s 

eligibility for vocational rehabilitation 

services within 60 days of the individual 

submitting an application for 

services in accordance with 

§ 361.41(b)(2). 

(4) Achievement of an employment outcome. 

Any eligible rehabilitation services 

is based on the individual being eligible 

for Social Security benefits 

under Title II or Title XVI of the Social 

Security Act, must intend to 

achieve an employment outcome that 

is consistent with the applicant’s 

unique strengths, resources, priorities, 

concerns, abilities, capabilities, interests, 

and informed choice. 

(i) The State unit is responsible for 

informing individuals, through its application 

process for vocational rehabilitation 

services, that individuals 

who receive services under the program 

must intend to achieve an employment 

outcome. 

(ii) The applicant’s completion of the 

application process for vocational rehabilitation 

services is sufficient evidence 

of the individual’s intent to 

achieve an employment outcome, and 

no additional demonstration on the 

part of the applicant is required for 

purposes of satisfying paragraph (a)(4) 

of this section. 

(5) Interpretation. Nothing in this section, 

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

be construed to create an entitlement 

to any vocational rehabilitation service. 

(b) Interim determination of eligibility. 

(1) The designated State unit may 

initiate the provision of vocational rehabilitation 

services for an applicant 

on the basis of an interim determination 

of eligibility prior to the 60-day 

period described in § 361.41(b)(2). 

(2) If a State chooses to make interim 

determinations of eligibility, the 

designated State unit must— 

(i) Establish criteria and conditions 

for making those determinations; 

(ii) Develop and implement procedures 

for making the determinations; 

and 

(iii) Determine the scope of services 

that may be provided pending the final 

determination of eligibility. 

(3) If a State elects to use an interim 

eligibility determination, the designated 

State unit must make a final 

determination of eligibility within 60 

days of the individual submitting an 

application for services in accordance 

with § 361.41(b)(2). 

(c) Prohibited factors. 

(1) The State plan must assure that 

the State unit will not impose, as part 

of determining eligibility under this 

section, a duration of residence requirement 

that excludes from services 

any applicant who is present in the 

State. 

(2) In making a determination of eligibility 

under this section, the designated 

State unit also must ensure 

that— 

(i) No applicant or group of applicants 

is excluded or found ineligible 

solely on the basis of the type of disability; 

and 

(ii) The eligibility requirements are 

applied without regard to the— 

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

origin of the applicant; 

(B) Type of expected employment 

outcome; 

(C) Source of referral for vocational 

rehabilitation services; and 

(D) Particular service needs or anticipated 

cost of services required by 

an applicant or the income level of an 

applicant or applicant’s family. 

(d) Review and assessment of data for 

eligibility determination. Except as provided 

in paragraph (e) of this section, 

the designated State unit— 

(1) Must base its determination of 

each of the basic eligibility requirements 

in paragraph (a) of this section 

on— 

(i) A review and assessment of existing 

data, including counselor observations, 

education records, information 

provided by the individual or the individual’s 

family, particularly information 

used by education officials, and 

determinations made by officials of 

other agencies; and 

(ii) To the extent existing data do 

not describe the current functioning of 

the individual or are unavailable, insufficient, 

or inappropriate to make an 

eligibility determination, an assessment 

Page 40 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

of additional data resulting from 

the provision of vocational rehabilitation 

services, including trial work experiences, 

assistive technology devices 

and services, personal assistance services, 

and any other support services 

that are necessary to determine whether 

an individual is eligible; and 

(2) Must base its presumption under 

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

an applicant who has been determined 

eligible for Social Security benefits 

under Title II or Title XVI of the Social 

Security Act satisfies each of the 

basic eligibility requirements in paragraph 

(a) of this section on determinations 

made by the Social Security Administration. 

(e) Trial work experiences for individuals 

with significant disabilities. 

(1) Prior to any determination that 

an individual with a disability is incapable 

of benefiting from vocational 

rehabilitation services in terms of an 

employment outcome because of the 

severity of that individual’s disability, 

the designated State unit must conduct 

an exploration of the individual’s 

abilities, capabilities, and capacity to 

perform in realistic work situations to 

determine whether or not there is clear 

and convincing evidence to support 

such a determination. 

(2)(i) The designated State unit must 

develop a written plan to assess periodically 

the individual’s abilities, capabilities, 

and capacity to perform in 

work situations through the use of 

trial work experiences, which must be 

provided in the most integrated setting 

possible, consistent with the informed 

choice and rehabilitation needs of the 

individual. 

(ii) Trial work experiences include 

supported employment, on-the-job 

training, and other experiences using 

realistic work settings. 

(iii) Trial work experiences must be 

of sufficient variety and over a sufficient 

period of time for the designated 

State unit to determine that— 

(A) 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 

(B) There is clear and convincing evidence 

that the individual is incapable 

of benefiting from vocational rehabilitation 

services in terms of an employment 

outcome due to the severity of 

the individual’s disability. 

(iv) The designated State unit must 

provide appropriate supports, including 

assistive technology devices and services 

and personal assistance services, 

to accommodate the rehabilitation 

needs of the individual during the trial 

work experiences. 

(f) Extended evaluation for certain individuals 

with significant disabilities. 

(1) Under limited circumstances if an 

individual cannot take advantage of 

trial work experiences or if options for 

trial work experiences have been exhausted 

before the State unit is able to 

make the determinations described in 

paragraph (e)(2)(iii) of this section, the 

designated State unit must conduct an 

extended evaluation to make these determinations. 

(2) During the extended evaluation 

period, vocational rehabilitation services 

must be provided in the most integrated 

setting possible, consistent with 

the informed choice and rehabilitation 

needs of the individual. 

(3) During the extended evaluation 

period, the designated State unit must 

develop a written plan for providing 

services necessary to make a determination 

under paragraph (e)(2)(iii) of 

this section. 

(4) During the extended evaluation 

period, the designated State unit provides 

only those services that are necessary 

to make the determinations described 

in paragraph (e)(2)(iii) of this 

section and terminates extended evaluation 

services when the State unit is 

able to make the determinations. 

(g) Data for determination of priority 

for services under an order of selection. If 

the designated State unit is operating 

under an order of selection for services, 

as provided in § 361.36, the State unit 

must base its priority assignments 

on— 

(1) A review of the data that was developed 

under paragraphs (d) and (e) of 

this section to make the eligibility determination; 

and 

(2) An assessment of additional data, 

to the extent necessary. 

Page 41 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(Authority: Sections 7(2)(A), 7(2)(B)(ii)(I), 

7(2)(C), 7(2)(D), 101(a)(12), 102(a)(1), 102(a)(2), 

102(a)(3), 102(a)(4)(A), 102(a)(4)(B), 102(a)(4)(C), 

103(a)(1), 103(a)(9), 103(a)(10) and 103(a)(14) of 

the Act; 29 U.S.C. 705(2)(A), 705(2)(B)(ii)(I), 

705(2)(C), 705(2)(D), 721(a)(12), 722(a)(1), 

722(a)(2), 722(a)(3), 722(a)(4)(A), 722(a)(4)(B), 

722(a)(4)(C), 723(a)(1), 723(a)(9), 723(a)(10) and 

723(a)(14)) 

NOTE TO § 361.42: Clear and convincing evidence 

means that the designated State unit 

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. 

For example, the use of an intelligence 

test result alone would not constitute clear 

and convincing evidence. Clear and convincing 

evidence might include a description 

of assessments, including situational assessments 

and supported employment assessments, 

from service providers who have concluded 

that they would be unable to meet 

the individual’s needs due to the severity of 

the individual’s disability. The demonstration 

of ‘‘clear and convincing evidence’’ must 

include, if appropriate, a functional assessment 

of skill development activities, with 

any necessary supports (including assistive 

technology), in real life settings. (S. Rep. No. 

357, 102d Cong., 2d. Sess. 37–38 (1992)) 

§ 361.43 Procedures for ineligibility 

determination. 

If the State unit determines that an 

applicant is ineligible for vocational 

rehabilitation services or determines 

that an individual receiving services 

under an individualized plan for employment 

is no longer eligible for services, 

the State unit must— 

(a) Make the determination only 

after providing an opportunity for full 

consultation with the individual or, as 

appropriate, with the individual’s representative; 

(b) Inform the individual in writing, 

supplemented as necessary by other appropriate 

modes of communication 

consistent with the informed choice of 

the individual, of the ineligibility determination, 

including the reasons for 

that determination, the requirements 

under this section, and the means by 

which the individual may express and 

seek remedy for any dissatisfaction, including 

the procedures for review of 

State unit personnel determinations in 

accordance with § 361.57; 

(c) Provide the individual with a description 

of services available from a 

client assistance program established 

under 34 CFR part 370 and information 

on how to contact that program; 

(d) Refer the individual— 

(1) To other programs that are part 

of the One-Stop service delivery system 

under the Workforce Investment 

Act that can address the individual’s 

training or employment-related needs; 

or 

(2) To local extended employment 

providers if the ineligibility determination 

is based on a finding that the individual 

is incapable of achieving an employment 

outcome as defined in 

§ 361.5(b)(16). 

(e) Review within 12 months and annually 

thereafter if requested by the 

individual or, if appropriate, by the individual’s 

representative any ineligibility 

determination that is based on a 

finding that the individual is incapable 

of achieving an employment outcome. 

This review need not be conducted in 

situations in which the individual has 

refused it, the individual is no longer 

present in the State, the individual’s 

whereabouts are unknown, or the individual’s 

medical condition is rapidly 

progressive or terminal. 

(AUTHORITY: Sections 12(c), 102(a)(5), and 

102(c) of the Act; 29 U.S.C. 709(c), 722(a)(5), 

and 722(c)) 

[66 FR 4382, Jan. 11, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.44 Closure without eligibility 

determination. 

The designated State unit may not 

close an applicant’s record of services 

prior to making an eligibility determination 

unless the applicant declines 

to participate in, or is unavailable to 

complete, an assessment for determining 

eligibility and priority for services, 

Page 42 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

and the State unit has made a 

reasonable number of attempts to contact 

the applicant or, if appropriate, 

the applicant’s representative to encourage 

the applicant’s participation. 

(Authority: Section 12(c) of the Act; 29 

U.S.C. 709(c)) 

§ 361.45 Development of the individualized 

plan for employment. 

(a) General requirements. The State 

plan must assure that— 

(1) An individualized plan for employment 

(IPE) meeting the requirements 

of this section and § 361.46 is developed 

and implemented in a timely manner 

for each individual determined to be eligible 

for vocational rehabilitation 

services or, if the designated State unit 

is operating under an order of selection 

in accordance with § 361.36, for each eligible 

individual to whom the State 

unit is able to provide services; and 

(2) Services will be provided in accordance 

with the provisions of the 

IPE. 

(b) Purpose. 

(1) The designated State unit must 

conduct an assessment for determining 

vocational rehabilitation needs, if appropriate, 

for each eligible individual 

or, if the State is operating under an 

order of selection, for each eligible individual 

to whom the State is able to 

provide services. The purpose of this 

assessment is to determine the employment 

outcome, and the nature and 

scope of vocational rehabilitation services 

to be included in the IPE. 

(2) The IPE must be designed to 

achieve a specific employment outcome, 

as defined in § 361.5(b)(16), that is 

selected by the individual consistent 

with the individual’s unique strengths, 

resources, priorities, concerns, abilities, 

capabilities, interests, and informed 

choice. 

(c) Required information. The State 

unit must provide the following information 

to each eligible individual or, 

as appropriate, the individual’s representative, 

in writing and, if appropriate, 

in the native language or mode 

of communication of the individual or 

the individual’s representative: 

(1) Options for developing an IPE. Information 

on the available options for 

developing the IPE, including the option 

that an eligible individual or, as 

appropriate, the individual’s representative 

may develop all or part of the 

IPE— 

(i) Without assistance from the State 

unit or other entity; or 

(ii) With assistance from— 

(A) A qualified vocational rehabilitation 

counselor employed by the State 

unit; 

(B) A qualified vocational rehabilitation 

counselor who is not employed by 

the State unit; or 

(C) Resources other than those in 

paragraph (A) or (B) of this section. 

(2) Additional information. Additional 

information to assist the eligible individual 

or, as appropriate, the individual’s 

representative in developing the 

IPE, including— 

(i) Information describing the full 

range of components that must be included 

in an IPE; 

(ii) As appropriate to each eligible individual— 

(A) An explanation of agency guidelines 

and criteria for determining an 

eligible individual’s financial commitments 

under an IPE; 

(B) Information on the availability of 

assistance in completing State unit 

forms required as part of the IPE; and 

(C) Additional information that the 

eligible individual requests or the 

State unit determines to be necessary 

to the development of the IPE; 

(iii) A description of the rights and 

remedies available to the individual, 

including, if appropriate, recourse to 

the processes described in § 361.57; and 

(iv) A description of the availability 

of a client assistance program established 

under 34 CFR part 370 and information 

on how to contact the client assistance 

program. 

(d) Mandatory procedures. The designated 

State unit must ensure that— 

(1) The IPE is a written document 

prepared on forms provided by the 

State unit; 

(2) The IPE is developed and implemented 

in a manner that gives eligible 

individuals the opportunity to exercise 

informed choice, consistent with 

Page 43 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

§ 361.52, in selecting— 

(i) The employment outcome, including 

the employment setting; 

(ii) The specific vocational rehabilitation 

services needed to achieve the 

employment outcome, including the 

settings in which services will be provided; 

(iii) The entity or entities that will 

provide the vocational rehabilitation 

services; and 

(iv) The methods available for procuring 

the services; 

(3) The IPE is— 

(i) Agreed to and signed by the eligible 

individual or, as appropriate, the 

individual’s representative; and 

(ii) Approved and signed by a qualified 

vocational rehabilitation counselor 

employed by the designated State 

unit; 

(4) A copy of the IPE and a copy of 

any amendments to the IPE are provided 

to the eligible individual or, as 

appropriate, to the individual’s representative, 

in writing and, if appropriate, 

in the native language or mode 

of communication of the individual or, 

as appropriate, the individual’s representative; 

(5) The IPE is reviewed at least annually 

by a qualified vocational rehabilitation 

counselor and the eligible individual 

or, as appropriate, the individual’s 

representative to assess the eligible 

individual’s progress in achieving 

the identified employment outcome; 

(6) The IPE is amended, as necessary, 

by the individual or, as appropriate, 

the individual’s representative, in collaboration 

with a representative of the 

State unit or a qualified vocational rehabilitation 

counselor (to the extent 

determined to be appropriate by the individual), 

if there are substantive 

changes in the employment outcome, 

the vocational rehabilitation services 

to be provided, or the providers of the 

vocational rehabilitation services; 

(7) Amendments to the IPE do not 

take effect until agreed to and signed 

by the eligible individual or, as appropriate, 

the individual’s representative 

and by a qualified vocational rehabilitation 

counselor employed by the designated 

State unit; and 

(8) An IPE for a student with a disability 

receiving special education 

services is developed— 

(i) In consideration of the student’s 

IEP; and 

(ii) In accordance with the plans, 

policies, procedures, and terms of the 

interagency agreement required under 

§ 361.22. 

(e) Standards for developing the IPE. 

The designated State unit must establish 

and implement standards for the 

prompt development of IPEs for the individuals 

identified under paragraph 

(a) of this section, including timelines 

that take into consideration the needs 

of the individuals. 

(f) Data for preparing the IPE. 

(1) Preparation without comprehensive 

assessment. To the extent possible, the 

employment outcome and the nature 

and scope of rehabilitation services to 

be included in the individual’s IPE 

must be determined based on the data 

used for the assessment of eligibility 

and priority for services under § 361.42. 

(2) Preparation based on comprehensive 

assessment. 

(i) If additional data are necessary to 

determine the employment outcome 

and the nature and scope of services to 

be included in the IPE of an eligible individual, 

the State unit must conduct a 

comprehensive assessment of the 

unique strengths, resources, priorities, 

concerns, abilities, capabilities, interests, 

and informed choice, including 

the need for supported employment 

services, of the eligible individual, in 

the most integrated setting possible, 

consistent with the informed choice of 

the individual in accordance with the 

provisions of § 361.5(b)(6)(ii). 

(ii) In preparing the comprehensive 

assessment, the State unit must use, to 

the maximum extent possible and appropriate 

and in accordance with confidentiality 

requirements, existing information 

that is current as of the date 

of the development of the IPE, including— 

(A) Information available from other 

programs and providers, particularly 

information used by education officials 

and the Social Security Administration; 

(B) Information provided by the individual 

and the individual’s family; and 

(C) Information obtained under the 

assessment for determining the individual’s 

Page 44 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

eligibility and vocational rehabilitation 

needs. 

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

102(b)(1), 102(b)(2), 102(c) and 103(a)(1); 29 

U.S.C. 705(2)(B), 721(a)(9), 722(b)(1), 722(b)(2), 

722(c) and 723(a)(1)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.46 Content of the individualized plan 

for employment. 

(a) Mandatory components. Regardless 

of the approach in § 361.45(c)(1) that an 

eligible individual selects for purposes 

of developing the IPE, each IPE must 

include— 

(1) A description of the specific employment 

outcome, as defined in 

§ 361.5(b)(16), that is chosen by the eligible 

individual and is consistent with 

the individual’s unique strengths, resources, 

priorities, concerns, abilities, 

capabilities, career interests, and informed 

choice. 

(2) A description of the specific rehabilitation 

services under § 361.48 that 

are— 

(i) Needed to achieve the employment 

outcome, including, as appropriate, 

the provision of assistive technology 

devices, assistive technology 

services, and personal assistance services, 

including training in the management 

of those services; and 

(ii) Provided in the most integrated 

setting that is appropriate for the services 

involved and is consistent with the 

informed choice of the eligible individual; 

(3) Timelines for the achievement of 

the employment outcome and for the 

initiation of services; 

(4) A description of the entity or entities 

chosen by the eligible individual 

or, as appropriate, the individual’s representative 

that will provide the vocational 

rehabilitation services and the 

methods used to procure those services; 

(5) A description of the criteria that 

will be used to evaluate progress toward 

achievement of the employment 

outcome; and 

(6) The terms and conditions of the 

IPE, including, as appropriate, information 

describing— 

(i) The responsibilities of the designated 

State unit; 

(ii) The responsibilities of the eligible 

individual, including— 

(A) The responsibilities the individual 

will assume in relation to 

achieving the employment outcome; 

(B) If applicable, the extent of the individual’s 

participation in paying for 

the cost of services; and 

(C) The responsibility of the individual 

with regard to applying for and 

securing comparable services and benefits 

as described in § 361.53; and 

(iii) The responsibilities of other entities 

as the result of arrangements 

made pursuant to the comparable services 

or benefits requirements in § 361.53. 

(b) Supported employment requirements. 

An IPE for an individual with a most 

significant disability for whom an employment 

outcome in a supported employment 

setting has been determined 

to be appropriate must— 

(1) Specify the supported employment 

services to be provided by the 

designated State unit; 

(2) Specify the expected extended 

services needed, which may include 

natural supports; 

(3) Identify the source of extended 

services or, to the extent that it is not 

possible to identify the source of extended 

services at the time the IPE is 

developed, include a description of the 

basis for concluding that there is a reasonable 

expectation that those sources 

will become available; 

(4) Provide for periodic monitoring to 

ensure that the individual is making 

satisfactory progress toward meeting 

the weekly work requirement established 

in the IPE by the time of transition 

to extended services; 

(5) Provide for the coordination of 

services provided under an IPE with 

services provided under other individualized 

plans established under other 

Federal or State programs; 

(6) To the extent that job skills 

training is provided, identify that the 

training will be provided on site; and 

(7) Include placement in an integrated 

setting for the maximum number 

of hours possible based on the 

unique strengths, resources, priorities, 

concerns, abilities, capabilities, interests, 

Page 45 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

and informed choice of individuals 

with the most significant disabilities. 

(c) Post-employment services. The IPE 

for each individual must contain, as determined 

to be necessary, statements 

concerning— 

(1) The expected need for post-employment 

services prior to closing the 

record of services of an individual who 

has achieved an employment outcome; 

(2) A description of the terms and 

conditions for the provision of any 

post-employment services; and 

(3) If appropriate, a statement of how 

post-employment services will be provided 

or arranged through other entities 

as the result of arrangements 

made pursuant to the comparable services 

or benefits requirements in § 361.53. 

(d) Coordination of services for students 

with disabilities who are receiving special 

education services. The IPE for a student 

with a disability who is receiving 

special education services must be coordinated 

with the IEP for that individual 

in terms of the goals, objectives, 

and services identified in the IEP. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

102(b)(3), and 625(b)(6) of the Act; 29 U.S.C. 

721(a)(8), 721(a)(9), 722(b)(3), and 795(k)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.47 Record of services. 

(a) The designated State unit must 

maintain for each applicant and eligible 

individual a record of services that 

includes, to the extent pertinent, the 

following documentation: 

(1) If an applicant has been determined 

to be an eligible individual, documentation 

supporting that determination 

in accordance with the requirements 

under § 361.42. 

(2) If an applicant or eligible individual 

receiving services under an IPE 

has been determined to be ineligible, 

documentation supporting that determination 

in accordance with the requirements 

under § 361.43. 

(3) Documentation that describes the 

justification for closing an applicant’s 

or eligible individual’s record of services 

if that closure is based on reasons 

other than ineligibility, including, as 

appropriate, documentation indicating 

that the State unit has satisfied the requirements 

in § 361.44. 

(4) If an individual has been determined 

to be an individual with a significant 

disability or an individual 

with a most significant disability, documentation 

supporting that determination. 

(5) If an individual with a significant 

disability requires an exploration of 

abilities, capabilities, and capacity to 

perform in realistic work situations 

through the use of trial work experiences 

or, as appropriate, an extended 

evaluation to determine whether the 

individual is an eligible individual, 

documentation supporting the need for, 

and the plan relating to, that exploration 

or, as appropriate, extended 

evaluation and documentation regarding 

the periodic assessments carried 

out during the trial work experiences 

or, as appropriate, the extended evaluation, 

in accordance with the requirements 

under § 361.42(e) and (f). 

(6) The IPE, and any amendments to 

the IPE, consistent with the requirements 

under § 361.46. 

(7) Documentation describing the extent 

to which the applicant or eligible 

individual exercised informed choice 

regarding the provision of assessment 

services and the extent to which the eligible 

individual exercised informed 

choice in the development of the IPE 

with respect to the selection of the specific 

employment outcome, the specific 

vocational rehabilitation services 

needed to achieve the employment outcome, 

the entity to provide the services, 

the employment setting, the settings 

in which the services will be provided, 

and the methods to procure the 

services. 

(8) In the event that an individual’s 

IPE provides for vocational rehabilitation 

services in a non-integrated setting, 

a justification to support the need 

for the non-integrated setting. 

(9) In the event that an individual obtains 

competitive employment, 

verification that the individual is compensated 

at or above the minimum 

wage and that the individual’s wage 

Page 46 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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)(11)(ii). 

(10) In the event an individual 

achieves an employment outcome in 

which the individual is compensated in 

accordance with section 14(c) of the 

Fair Labor Standards Act or the designated 

State unit closes the record of 

services of an individual in extended 

employment on the basis that the individual 

is unable to achieve an employment 

outcome consistent with 

§ 361.5(b)(16) or that an eligible individual 

through informed choice chooses 

to remain in extended employment, 

documentation of the results of the annual 

reviews required under § 361.55, of 

the individual’s input into those reviews, 

and of the individual’s or, if appropriate, 

the individual’s representative’s 

acknowledgment that those reviews 

were conducted. 

(11) Documentation concerning any 

action or decision resulting from a request 

by an individual under § 361.57 for 

a review of determinations made by 

designated State unit personnel. 

(12) In the event that an applicant or 

eligible individual requests under 

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

record of services be amended and the 

documentation is not amended, documentation 

of the request. 

(13) In the event an individual is referred 

to another program through the 

State unit’s information and referral 

system under § 361.37, including other 

components of the statewide workforce 

investment system, documentation on 

the nature and scope of services provided 

by the designated State unit to 

the individual and on the referral 

itself, consistent with the requirements 

of § 361.37. 

(14) In the event an individual’s 

record of service is closed under § 361.56, 

documentation that demonstrates the 

services provided under the individual’s 

IPE contributed to the achievement 

of the employment outcome. 

(15) In the event an individual’s 

record of service is closed under § 361.56, 

documentation verifying that the provisions 

of § 361.56 have been satisfied. 

(b) The State unit, in consultation 

with the State Rehabilitation Council 

if the State has a Council, must determine 

the type of documentation that 

the State unit must maintain for each 

applicant and eligible individual in 

order to meet the requirements in 

paragraph (a) of this section. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Sections 101(a)(6), (9), (14), (20) 

and 102(a), (b), and (d) of the Act; 29 U.S.C. 

721(a)(6), (9), (14), (20) and 722(a),(b), and (d)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.48 Scope of vocational rehabilitation 

services for individuals with disabilities. 

As appropriate to the vocational rehabilitation 

needs of each individual 

and consistent with each individual’s 

informed choice, the designated State 

unit must ensure that the following vocational 

rehabilitation services are 

available to assist the individual with 

a disability in preparing for, securing, 

retaining, or regaining an employment 

outcome that is consistent with the individual’s 

strengths, resources, priorities, 

concerns, abilities, capabilities, 

interests, and informed choice: 

(a) Assessment for determining eligibility 

and priority for services by 

qualified personnel, including, if appropriate, 

an assessment by personnel 

skilled in rehabilitation technology, in 

accordance with § 361.42. 

(b) Assessment for determining vocational 

rehabilitation needs by qualified 

personnel, including, if appropriate, an 

assessment by personnel skilled in rehabilitation 

technology, in accordance 

with § 361.45. 

(c) Vocational rehabilitation counseling 

and guidance, including information 

and support services to assist an 

individual in exercising informed 

choice in accordance with § 361.52. 

(d) Referral and other services necessary 

to assist applicants and eligible 

individuals to secure needed services 

from other agencies, including other 

components of the statewide workforce 

investment system, in accordance with 

Page 47 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

§§ 361.23, 361.24, and 361.37, and to advise 

those individuals about client assistance 

programs established under 34 

CFR part 370. 

(e) In accordance with the definition 

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

restoration services, to the extent that 

financial support is not readily available 

from a source other than the designated 

State unit (such as through 

health insurance or a comparable service 

or benefit as defined in 

§ 361.5(b)(10)). 

(f) 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. 

(g) Maintenance, in accordance with 

the definition of that term in 

§ 361.5(b)(35). 

(h) Transportation in connection 

with the rendering of any vocational 

rehabilitation service and in accordance 

with the definition of that term in 

§ 361.5(b)(57). 

(i) Vocational rehabilitation services 

to family members, as defined in 

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

individual if necessary to enable the 

applicant or eligible individual to 

achieve an employment outcome. 

(j) Interpreter services, including 

sign language and oral interpreter 

services, for individuals who are deaf or 

hard of hearing and tactile interpreting 

services for individuals who are deafblind 

provided by qualified personnel. 

(k) Reader services, rehabilitation 

teaching services, and orientation and 

mobility services for individuals who 

are blind. 

(l) Job-related services, including job 

search and placement assistance, job 

retention services, follow-up services, 

and follow-along services. 

(m) Supported employment services 

in accordance with the definition of 

that term in § 361.5(b)(54). 

(n) Personal assistance services in accordance 

with the definition of that 

term in § 361.5(b)(39). 

(o) Post-employment services in accordance 

with the definition of that 

term in § 361.5(b)(42). 

(p) Occupational licenses, tools, 

equipment, initial stocks, and supplies. 

(q) Rehabilitation technology in accordance 

with the definition of that 

term in § 361.5(b)(45), including vehicular 

modification, telecommunications, 

sensory, and other technological 

aids and devices. 

(r) Transition services in accordance 

with the definition of that term in 

§ 361.5(b)(55). 

(s) Technical assistance and other 

consultation services to conduct market 

analyses, develop business plans, 

and otherwise provide resources, to the 

extent those resources are authorized 

to be provided through the statewide 

workforce investment system, to eligible 

individuals who are pursuing selfemployment 

or telecommuting or establishing 

a small business operation 

as an employment outcome. 

(t) Other goods and services determined 

necessary for the individual 

with a disability to achieve an employment 

outcome. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 103(a) of the Act; 29 

U.S.C. 723(a)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.49 Scope of vocational rehabilitation 

services for groups of individuals with 

disabilities. 

(a) The designated State unit 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 vocational 

Page 48 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

rehabilitation 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 vocational rehabilitation 

services to individuals. 

(2) Telecommunications systems that 

have the potential for substantially 

improving vocational rehabilitation 

service delivery methods and developing 

appropriate programming to 

meet the particular needs of individuals 

with disabilities, including telephone, 

television, video description 

services, satellite, tactile-vibratory devices, 

and similar systems, as appropriate. 

(3) Special services to provide nonvisual 

access to information for individuals 

who are blind, including the 

use of telecommunications, Braille, 

sound recordings, or other appropriate 

media; captioned television, films, or 

video cassettes for individuals who are 

deaf or hard of hearing; tactile materials 

for individuals who are deaf-blind; 

and other special services that provide 

information through tactile, vibratory, 

auditory, and visual media. 

(4) Technical assistance and support 

services 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 any small business 

enterprise operated by individuals with 

significant disabilities under the supervision 

of the designated State unit, including 

enterprises established under 

the Randolph-Sheppard program, management 

services and supervision provided 

by the State unit along with the 

acquisition by the State unit of vending 

facilities or other equipment, initial 

stocks and supplies, and initial operating 

expenses, in accordance with 

the following requirements: 

(i) ‘‘Management services and supervision’’ 

includes inspection, quality 

control, consultation, accounting, regulating, 

in-service training, and related 

services provided on a systematic basis 

to support and improve small business 

enterprises operated by individuals 

with significant disabilities. ‘‘Management 

services and supervision’’ may be 

provided throughout the operation of 

the small business enterprise. 

(ii) ‘‘Initial stocks and supplies’’ includes 

those items necessary to the establishment 

of a new business enterprise 

during the initial establishment 

period, which may not exceed 6 

months. 

(iii) Costs of establishing a small 

business enterprise may include operational 

costs during the initial establishment 

period, which may not exceed 

6 months. 

(iv) If the designated State unit provides 

for these services, it must ensure 

that only individuals with significant 

disabilities will be selected to participate 

in this supervised program. 

(v) If the designated State unit provides 

for these services and chooses to 

set aside funds from the proceeds of the 

operation of the small business enterprises, 

the State unit must maintain a 

description of the methods used in setting 

aside funds and the purposes for 

which funds are set aside. Funds may 

be used only for small business enterprises 

purposes, and benefits that are 

provided to operators from set-aside 

funds must be provided on an equitable 

basis. 

(6) Other services that promise to 

contribute substantially to the rehabilitation 

of a group of individuals but 

that are not related directly to the individualized 

plan for employment 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. 

(7) Consultative and technical assistance 

services to assist educational 

agencies in planning for the transition 

of students with disabilities from 

Page 49 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

school to post-school activities, including 

employment. 

(b) If the designated State unit provides 

for vocational rehabilitation 

services for groups of individuals, it 

must— 

(1) Develop and maintain written 

policies covering the nature and scope 

of each of the vocational rehabilitation 

services it provides and the criteria 

under which each service is provided; 

and 

(2) Maintain information to ensure 

the proper and efficient administration 

of those services in the form and detail 

and at the time required by the Secretary, 

including the types of services 

provided, the costs of those services, 

and, to the extent feasible, estimates of 

the numbers of individuals benefiting 

from those services. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

103(b) of the Act; 29 U.S.C. 709(c), 721(a)(6), 

and 723(b)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.50 Written policies governing the 

provision of services for individuals with 

disabilities. 

(a) Policies. The State unit must develop 

and maintain written policies 

covering the nature and scope of each 

of the vocational rehabilitation services 

specified in § 361.48 and the criteria 

under which each service is provided. 

The policies must ensure that the provision 

of services is based on the rehabilitation 

needs of each individual as 

identified in that individual’s IPE 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: 

(b) Out-of-State services. 

(1) The State unit may establish a 

preference for in-State services, provided 

that the preference does not effectively 

deny an individual a necessary 

service. If the individual chooses 

an out-of-State service at a higher cost 

than an in-State service, if either service 

would meet the individual’s rehabilitation 

needs, the designated State 

unit is not responsible for those costs 

in excess of the cost of the in-State 

service. 

(2) The State unit may not establish 

policies that effectively prohibit the 

provision of out-of-State services. 

(c) Payment for services. 

(1) The State unit must establish and 

maintain written policies to govern the 

rates of payment for all purchased vocational 

rehabilitation services. 

(2) The State unit may establish a fee 

schedule designed to ensure a reasonable 

cost to the program for each service, 

if the schedule is— 

(i) Not so low as to effectively deny 

an individual a necessary service; and 

(ii) Not absolute and permits exceptions 

so that individual needs can be 

addressed. 

(3) The State unit may not place absolute 

dollar limits on specific service 

categories or on the total services provided 

to an individual. 

(d) Duration of services. 

(1) The State unit may establish reasonable 

time periods for the provision 

of services provided that the time periods 

are— 

(i) Not so short as to effectively deny 

an individual a necessary service; and 

(ii) Not absolute and permit exceptions 

so that individual needs can be 

addressed. 

(2) The State unit may not establish 

absolute time limits on the provision 

of specific services or on the provision 

of services to an individual. The duration 

of each service needed by an individual 

must be determined on an individual 

basis and reflected in that individual’s 

individualized plan for employment. 

(e) Authorization of services. The State 

unit must establish policies related to 

the timely authorization of services, 

including any conditions under which 

verbal authorization can be given. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

Page 50 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.51 Standards for facilities and 

providers of services. 

(a) Accessibility of facilities. The State 

plan must assure that any facility used 

in connection with the delivery of vocational 

rehabilitation services under 

this part meets program accessibility 

requirements consistent with the requirements, 

as applicable, of the Architectural 

Barriers Act of 1968, the Americans 

with Disabilities Act of 1990, section 

504 of the Act, and the regulations 

implementing these laws. 

(b) Affirmative action. The State plan 

must assure that community rehabilitation 

programs that receive assistance 

under part B of Title I of the Act 

take affirmative action to employ and 

advance in employment qualified individuals 

with disabilities covered under 

and on the same terms and conditions 

as in section 503 of the Act. 

(c) Special communication needs personnel. 

The designated State unit must 

ensure that providers of vocational rehabilitation 

services are able to communicate— 

(1) In the native language of applicants 

and eligible individuals who have 

limited English speaking ability; and 

(2) By using appropriate modes of 

communication used by applicants and 

eligible individuals. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

and (C) of the Act; 29 U.S.C. 709(c) and 

721(a)(6)(B) and (C)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.52 Informed choice. 

(a) General provision. The State plan 

must assure that applicants and eligible 

individuals or, as appropriate, their 

representatives are provided information 

and support services to assist applicants 

and eligible individuals in exercising 

informed choice throughout 

the rehabilitation process consistent 

with the provisions of section 102(d) of 

the Act and the requirements of this 

section. 

(b) Written policies and procedures. The 

designated State unit, in consultation 

with its State Rehabilitation Council, 

if it has a Council, must develop and 

implement written policies and procedures 

that enable an applicant or eligible 

individual to exercise informed 

choice throughout the vocational rehabilitation 

process. These policies and 

procedures must provide for— 

(1) Informing each applicant and eligible 

individual (including students 

with disabilities who are making the 

transition from programs under the responsibility 

of an educational agency 

to programs under the responsibility of 

the designated State unit), through appropriate 

modes of communication, 

about the availability of and opportunities 

to exercise informed choice, including 

the availability of support 

services for individuals with cognitive 

or other disabilities who require assistance 

in exercising informed choice 

throughout the vocational rehabilitation 

process; 

(2) Assisting applicants and eligible 

individuals in exercising informed 

choice in decisions related to the provision 

of assessment services; 

(3) Developing and implementing 

flexible procurement policies and 

methods that facilitate the provision of 

vocational rehabilitation services and 

that afford eligible individuals meaningful 

choices among the methods used 

to procure vocational rehabilitation 

services; 

(4) Assisting eligible individuals or, 

as appropriate, the individuals’ representatives 

in acquiring information 

that enables them to exercise informed 

choice in the development of their 

IPEs with respect to the selection of 

the— 

(i) Employment outcome; 

(ii) Specific vocational rehabilitation 

services needed to achieve the employment 

outcome; 

(iii) Entity that will provide the services; 

(iv) Employment setting and the settings 

in which the services will be provided; 

and 

(v) Methods available for procuring 

the services; and 

Page 51 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(5) Ensuring that the availability and 

scope of informed choice is consistent 

with the obligations of the designated 

State agency under this part. 

(c) Information and assistance in the 

selection of vocational rehabilitation services 

and service providers. In assisting an 

applicant and eligible individual in exercising 

informed choice during the assessment 

for determining eligibility 

and vocational rehabilitation needs 

and during development of the IPE, the 

designated State unit must provide the 

individual or the individual’s representative, 

or assist the individual or 

the individual’s representative in acquiring, 

information necessary to 

make an informed choice about the 

specific vocational rehabilitation services, 

including the providers of those 

services, that are needed to achieve the 

individual’s employment outcome. 

This information must include, at a 

minimum, information relating to 

the— 

(1) Cost, accessibility, and duration 

of potential services; 

(2) Consumer satisfaction with those 

services to the extent that information 

relating to consumer satisfaction is 

available; 

(3) Qualifications of potential service 

providers; 

(4) Types of services offered by the 

potential providers; 

(5) Degree to which services are provided 

in integrated settings; and 

(6) Outcomes achieved by individuals 

working with service providers, to the 

extent that such information is available. 

(d) Methods or sources of information. 

In providing or assisting the individual 

or the individual’s representative in acquiring 

the information required under 

paragraph (c) of this section, the State 

unit may use, but is not limited to, the 

following methods or sources of information: 

(1) Lists of services and service providers. 

(2) Periodic consumer satisfaction 

surveys and reports. 

(3) Referrals to other consumers, consumer 

groups, or disability advisory 

councils qualified to discuss the services 

or service providers. 

(4) Relevant accreditation, certification, 

or other information relating 

to the qualifications of service providers. 

(5) Opportunities for individuals to 

visit or experience various work and 

service provider settings. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

102(b)(2)(B) and 102(d) of the Act; 29 U.S.C. 

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.53 Comparable services and benefits. 

(a) Determination of availability. The 

State plan must assure that prior to 

providing any vocational rehabilitation 

services, except those services 

listed in paragraph (b) of this section, 

to an eligible individual, or to members 

of the individual’s family, the 

State unit must determine whether 

comparable services and benefits, as 

defined in § 361.5(b)(10), exist under any 

other program and whether those services 

and benefits are available to the 

individual unless such a determination 

would interrupt or delay— 

(1) The progress of the individual toward 

achieving the employment outcome 

identified in the individualized 

plan for employment; 

(2) An immediate job placement; or 

(3) The provision of vocational rehabilitation 

services to any individual 

who is determined to be at extreme 

medical risk, based on medical evidence 

provided by an appropriate qualified 

medical professional. 

(b) Exempt services. The following vocational 

rehabilitation services described 

in § 361.48(a) are exempt from a 

determination of the availability of 

comparable services and benefits under 

paragraph (a) of this section: 

(1) Assessment for determining eligibility 

and vocational rehabilitation 

needs. 

(2) Counseling and guidance, including 

information and support services to 

assist an individual in exercising informed 

choice. 

(3) Referral and other services to secure 

needed services from other agencies, 

including other components of the 

statewide workforce investment system, 

Page 52 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

if those services are not available 

under this part. 

(4) Job-related services, including job 

search and placement assistance, job 

retention services, follow-up services, 

and follow-along services. 

(5) Rehabilitation technology, including 

telecommunications, sensory, and 

other technological aids and devices. 

(6) Post-employment services consisting 

of the services listed under 

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

section. 

(c) Provision of services. 

(1) If comparable services or benefits 

exist under any other program and are 

available to the individual at the time 

needed to ensure the progress of the individual 

toward achieving the employment 

outcome in the individual’s IPE, 

the designated State unit must use 

those comparable services or benefits 

to meet, in whole or part, the costs of 

the vocational rehabilitation services. 

(2) If comparable services or benefits 

exist under any other program, but are 

not available to the individual at the 

time needed to ensure the progress of 

the individual toward achieving the 

employment outcome in the individual’s 

IPE, the designated State unit 

must provide vocational rehabilitation 

services until those comparable services 

and benefits become available. 

(d) Interagency coordination. 

(1) The State plan must assure that 

the Governor, in consultation with the 

entity in the State responsible for the 

vocational rehabilitation program and 

other appropriate agencies, will ensure 

that an interagency agreement or 

other mechanism for interagency coordination 

takes effect between the 

designated State vocational rehabilitation 

unit and any appropriate public 

entity, including the State entity responsible 

for administering the State 

medicaid program, a public institution 

of higher education, and a component 

of the statewide workforce investment 

system, to ensure the provision of vocational 

rehabilitation services (other 

than those services listed in paragraph 

(b) of this section) that are included in 

the IPE, including the provision of 

those vocational rehabilitation services 

during the pendency of any interagency 

dispute in accordance with the 

provisions of paragraph (d)(3)(iii) of 

this section. 

(2) The Governor may meet the requirements 

of paragraph (d)(1) of this 

section through— 

(i) A State statute or regulation; 

(ii) A signed agreement between the 

respective officials of the public entities 

that clearly identifies the responsibilities 

of each public entity for the 

provision of the services; or 

(iii) Another appropriate mechanism 

as determined by the designated State 

vocational rehabilitation unit. 

(3) The interagency agreement or 

other mechanism for interagency coordination 

must include the following: 

(i) Agency financial responsibility. An 

identification of, or description of a 

method for defining, the financial responsibility 

of the public entity for 

providing the vocational rehabilitation 

services other than those listed in 

paragraph (b) of this section and a provision 

stating the financial responsibility 

of the public entity for providing 

those services. 

(ii) Conditions, terms, and procedures of 

reimbursement. Information specifying 

the conditions, terms, and procedures 

under which the designated State unit 

must be reimbursed by the other public 

entities for providing vocational rehabilitation 

services based on the terms 

of the interagency agreement or other 

mechanism for interagency coordination. 

(iii) Interagency disputes. Information 

specifying procedures for resolving 

interagency disputes under the interagency 

agreement or other mechanism 

for interagency coordination, including 

procedures under which the designated 

State unit may initiate proceedings to 

secure reimbursement from other public 

entities or otherwise implement the 

provisions of the agreement or mechanism. 

(iv) Procedures for coordination of services. 

Information specifying policies 

and procedures for public entities to 

determine and identify interagency coordination 

responsibilities of each public 

entity to promote the coordination 

and timely delivery of vocational rehabilitation 

services other than those 

Page 53 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

listed in paragraph (b) of this section. 

(e) Responsibilities under other law. 

(1) If a public entity (other than the 

designated State unit) is obligated 

under Federal law (such as the Americans 

with Disabilities Act, section 504 

of the Act, or section 188 of the Workforce 

Investment Act) or State law, or 

assigned responsibility under State 

policy or an interagency agreement established 

under this section, to provide 

or pay for any services considered to be 

vocational rehabilitation services (e.g., 

interpreter services under § 361.48(j)), 

other than those services listed in 

paragraph (b) of this section, the public 

entity must fulfill that obligation or 

responsibility through— 

(i) The terms of the interagency 

agreement or other requirements of 

this section; 

(ii) Providing or paying for the service 

directly or by contract; or 

(iii) Other arrangement. 

(2) If a public entity other than the 

designated State unit fails to provide 

or pay for vocational rehabilitation 

services for an eligible individual as established 

under this section, the designated 

State unit must provide or pay 

for those services to the individual and 

may claim reimbursement for the services 

from the public entity that failed 

to provide or pay for those services. 

The public entity must reimburse the 

designated State unit pursuant to the 

terms of the interagency agreement or 

other mechanism described in paragraph 

(d) of this section in accordance 

with the procedures established in the 

agreement or mechanism pursuant to 

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

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.54 Participation of individuals in cost 

of services based on financial need. 

(a) No Federal requirement. There is no 

Federal requirement that the financial 

need of individuals be considered in the 

provision of vocational rehabilitation 

services. 

(b) State unit requirements. 

(1) The State unit may choose to consider 

the financial need of eligible individuals 

or individuals who are receiving 

services through trial work experiences 

under § 361.42(e) or during an extended 

evaluation under § 361.42(f) for 

purposes of determining the extent of 

their participation in the costs of vocational 

rehabilitation services, other 

than those services identified in paragraph 

(b)(3) of this section. 

(2) If the State unit chooses to consider 

financial need— 

(i) It must maintain written policies— 

(A) Explaining the method for determining 

the financial need of an eligible 

individual; and 

(B) Specifying the types of vocational 

rehabilitation services for which 

the unit has established a financial 

needs test; 

(ii) The policies must be applied uniformly 

to all individuals in similar circumstances; 

(iii) The policies may require different 

levels of need for different geographic 

regions in the State, but must 

be applied uniformly to all individuals 

within each geographic region; and 

(iv) The policies must ensure that the 

level of an individual’s participation in 

the cost of vocational rehabilitation 

services is— 

(A) Reasonable; 

(B) Based on the individual’s financial 

need, including consideration of 

any disability-related expenses paid by 

the individual; and 

(C) Not so high as to effectively deny 

the individual a necessary service. 

(3) The designated State unit may 

not apply a financial needs test, or require 

the financial participation of the 

individual— 

(i) As a condition for furnishing the 

following vocational rehabilitation 

services: 

(A) Assessment for determining eligibility 

and priority for services under 

§ 361.48(a), except those non-assessment 

services that are provided to an individual 

with a significant disability during 

either an exploration of the individual’s 

abilities, capabilities, and capacity 

to perform in work situations 

Page 54 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

through the use of trial work experiences 

under § 361.42(e) or an extended 

evaluation under § 361.42(f). 

(B) Assessment for determining vocational 

rehabilitation needs under 

§ 361.48(b). 

(C) Vocational rehabilitation counseling 

and guidance under § 361.48(c). 

(D) Referral and other services under 

§ 361.48(d). 

(E) Job-related services under 

§ 361.48(l). 

(F) Personal assistance services 

under § 361.48(n). 

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

interpreter services under § 361.48(j), 

reader services under § 361.48(k)) that 

an individual with a disability requires 

under section 504 of the Act (29 U.S.C. 

794) or the Americans with Disabilities 

Act (42 U.S.C. 12101, et seq.), or regulations 

implementing those laws, in 

order for the individual to participate 

in the VR program as authorized under 

this part; or 

(ii) As a condition for furnishing any 

vocational rehabilitation service if the 

individual in need of the service has 

been determined eligible for Social Security 

benefits under Titles II or XVI 

of the Social Security Act. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 12(c) of the Act; 29 

U.S.C. 709(c)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.55 Annual review of individuals in 

extended employment and other employment 

under special certificate provisions of the 

Fair Labor Standards Act. 

(a) The State plan must assure that 

the designated State unit conducts an 

annual review and reevaluation in accordance 

with the requirements in 

paragraph (b) of this section for an individual 

with a disability served under 

this part— 

(1) Who has achieved an employment 

outcome in which the individual is 

compensated in accordance with section 

14(c) of the Fair Labor Standards 

Act; or 

(2) Whose record of services is closed 

while the individual is in extended employment 

on the basis that the individual 

is unable to achieve an employment 

outcome consistent with 

§ 361.5(b)(16) or that the individual 

made an informed choice to remain in 

extended employment. 

(b) For each individual with a disability 

who meets the criteria in paragraph 

(a) of this section, the designated 

State unit must— 

(1) Annually review and reevaluate 

the status of each individual for 2 years 

after the individual’s record of services 

is closed (and thereafter if requested by 

the individual or, if appropriate, the individual’s 

representative) to determine 

the interests, priorities, and needs of 

the individual with respect to competitive 

employment or training for competitive 

employment; 

(2) Enable the individual or, if appropriate, 

the individual’s representative 

to provide input into the review and reevaluation 

and must document that 

input in the record of services, consistent 

with § 361.47(a)(10), with the individual’s 

or, as appropriate, the individual’s 

representative’s signed acknowledgment 

that the review and reevaluation 

have been conducted; and 

(3) Make maximum efforts, including 

identifying and providing vocational 

rehabilitation services, reasonable accommodations, 

and other necessary 

support services, to assist the individual 

in engaging in competitive employment 

as defined in § 361.5(b)(11). 

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

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

[66 FR 7253, Jan. 22, 2001] 

§ 361.56 Requirements for closing the record 

of services of an individual who has 

achieved an employment outcome. 

The record of services of an individual 

who has achieved an employment 

outcome may be closed only if all 

of the following requirements are met: 

(a) Employment outcome achieved. The 

individual has achieved the employment 

outcome that is described in the 

individual’s IPE in accordance with 

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

individual’s strengths, resources, priorities, 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

concerns, abilities, capabilities, 

interests, and informed choice. 

(b) Employment outcome maintained. 

The individual has maintained the employment 

outcome for an appropriate 

period of time, but not less than 90 

days, necessary to ensure the stability 

of the employment outcome, and the 

individual no longer needs vocational 

rehabilitation services. 

(c) Satisfactory outcome. At the end of 

the appropriate period under paragraph 

(b) of this section, the individual and 

the qualified rehabilitation counselor 

employed by the designated State unit 

consider the employment outcome to 

be satisfactory and agree that the individual 

is performing well in the employment. 

(d) Post-employment services. The individual 

is informed through appropriate 

modes of communication of the availability 

of post-employment services. 

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

106(a)(2) of the Act; 29 U.S.C. 711(c), 721(a)(6), 

and 726(a)(2)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.57 Review of determinations made by 

designated State unit personnel. 

(a) Procedures. The designated State 

unit must develop and implement procedures 

to ensure that an applicant or 

eligible individual who is dissatisfied 

with any determination made by personnel 

of the designated State unit 

that affects the provision of vocational 

rehabilitation services may request, or, 

if appropriate, may request through 

the individual’s representative, a timely 

review of that determination. The 

procedures must be in accordance with 

paragraphs (b) through (k) of this section: 

(b) General requirements. 

(1) Notification. Procedures established 

by the State unit under this section 

must provide an applicant or eligible 

individual or, as appropriate, the 

individual’s representative notice of— 

(i) The right to obtain review of 

State unit determinations that affect 

the provision of vocational rehabilitation 

services through an impartial due 

process hearing under paragraph (e) of 

this section; 

(ii) The right to pursue mediation 

under paragraph (d) of this section 

with respect to determinations made 

by designated State unit personnel 

that affect the provision of vocational 

rehabilitation services to an applicant 

or eligible individual; 

(iii) The names and addresses of individuals 

with whom requests for mediation 

or due process hearings may be 

filed; 

(iv) The manner in which a mediator 

or impartial hearing officer may be selected 

consistent with the requirements 

of paragraphs (d) and (f) of this 

section; and 

(v) The availability of the client assistance 

program, established under 34 

CFR part 370, to assist the applicant or 

eligible individual during mediation 

sessions or impartial due process hearings. 

(2) Timing. Notice described in paragraph 

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

in writing— 

(i) At the time the individual applies 

for vocational rehabilitation services 

under this part; 

(ii) At the time the individual is assigned 

to a category in the State’s 

order of selection, if the State has established 

an order of selection under 

§ 361.36; 

(iii) At the time the IPE is developed; 

and 

(iv) Whenever vocational rehabilitation 

services for an individual are reduced, 

suspended, or terminated. 

(3) Evidence and representation. Procedures 

established under this section 

must— 

(i) Provide an applicant or eligible 

individual or, as appropriate, the individual’s 

representative with an opportunity 

to submit during mediation sessions 

or due process hearings evidence 

and other information that supports 

the applicant’s or eligible individual’s 

position; and 

(ii) Allow an applicant or eligible individual 

to be represented during mediation 

sessions or due process hearings 

by counsel or other advocate selected 

by the applicant or eligible individual. 

(4) Impact on provision of services. The 

State unit may not institute a suspension, 

reduction, or termination of vocational 

Page 56 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

rehabilitation services being 

provided to an applicant or eligible individual, 

including evaluation and assessment 

services and IPE development, 

pending a resolution through 

mediation, pending a decision by a 

hearing officer or reviewing official, or 

pending informal resolution under this 

section unless— 

(i) The individual or, in appropriate 

cases, the individual’s representative 

requests a suspension, reduction, or 

termination of services; or 

(ii) The State agency has evidence 

that the services have been obtained 

through misrepresentation, fraud, collusion, 

or criminal conduct on the part 

of the individual or the individual’s 

representative. 

(5) Ineligibility. Applicants who are 

found ineligible for vocational rehabilitation 

services and previously eligible 

individuals who are determined to be 

no longer eligible for vocational rehabilitation 

services pursuant to § 361.43 

are permitted to challenge the determinations 

of ineligibility under the 

procedures described in this section. 

(c) Informal dispute resolution. The 

State unit may develop an informal 

process for resolving a request for review 

without conducting mediation or 

a formal hearing. A State’s informal 

process must not be used to deny the 

right of an applicant or eligible individual 

to a hearing under paragraph (e) 

of this section or any other right provided 

under this part, including the 

right to pursue mediation under paragraph 

(d) of this section. If informal 

resolution under this paragraph or mediation 

under paragraph (d) of this section 

is not successful in resolving the 

dispute within the time period established 

under paragraph (e)(1) of this 

section, a formal hearing must be conducted 

within that same time period, 

unless the parties agree to a specific 

extension of time. 

(d) Mediation. 

(1) The State must establish and implement 

procedures, as required under 

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

allow an applicant or eligible individual 

and the State unit to resolve 

disputes involving State unit determinations 

that affect the provision of 

vocational rehabilitation services 

through a mediation process that must 

be made available, at a minimum, 

whenever an applicant or eligible individual 

or, as appropriate, the individual’s 

representative requests an impartial 

due process hearing under this section. 

(2) Mediation procedures established 

by the State unit under paragraph (d) 

must ensure that— 

(i) Participation in the mediation 

process is voluntary on the part of the 

applicant or eligible individual, as appropriate, 

and on the part of the State 

unit; 

(ii) Use of the mediation process is 

not used to deny or delay the applicant’s 

or eligible individual’s right to 

pursue resolution of the dispute 

through an impartial hearing held 

within the time period specified in 

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

other rights provided under this part. 

At any point during the mediation 

process, either party or the mediator 

may elect to terminate the mediation. 

In the event mediation is terminated, 

either party may pursue resolution 

through an impartial hearing; 

(iii) The mediation process is conducted 

by a qualified and impartial mediator, 

as defined in § 361.5(b)(43), who 

must be selected from a list of qualified 

and impartial mediators maintained 

by the State— 

(A) On a random basis; 

(B) By agreement between the director 

of the designated State unit and 

the applicant or eligible individual or, 

as appropriate, the individual’s representative; 

or 

(C) In accordance with a procedure 

established in the State for assigning 

mediators, provided this procedure ensures 

the neutrality of the mediator assigned; 

and 

(iv) Mediation sessions are scheduled 

and conducted in a timely manner and 

are held in a location and manner that 

is convenient to the parties to the dispute. 

(3) Discussions that occur during the 

mediation process must be kept confidential 

and may not be used as evidence 

in any subsequent due process 

hearings or civil proceedings, and the 

Page 57 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

parties to the mediation process may 

be required to sign a confidentiality 

pledge prior to the commencement of 

the process. 

(4) An agreement reached by the parties 

to the dispute in the mediation 

process must be described in a written 

mediation agreement that is developed 

by the parties with the assistance of 

the qualified and impartial mediator 

and signed by both parties. Copies of 

the agreement must be sent to both 

parties. 

(5) The costs of the mediation process 

must be paid by the State. The State is 

not required to pay for any costs related 

to the representation of an applicant 

or eligible individual authorized 

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

(e) Impartial due process hearings. The 

State unit must establish and implement 

formal review procedures, as required 

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

section, that provide that— 

(1) A hearing conducted by an impartial 

hearing officer, selected in accordance 

with paragraph (f) of this section, 

must be held within 60 days of an applicant’s 

or eligible individual’s request 

for review of a determination made by 

personnel of the State unit that affects 

the provision of vocational rehabilitation 

services to the individual, unless 

informal resolution or a mediation 

agreement is achieved prior to the 60th 

day or the parties agree to a specific 

extension of time; 

(2) In addition to the rights described 

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

applicant or eligible individual or, if 

appropriate, the individual’s representative 

must be given the opportunity to 

present witnesses during the hearing 

and to examine all witnesses and other 

relevant sources of information and 

evidence; 

(3) The impartial hearing officer 

must— 

(i) Make a decision based on the provisions 

of the approved State plan, the 

Act, Federal vocational rehabilitation 

regulations, and State regulations and 

policies that are consistent with Federal 

requirements; and 

(ii) Provide to the individual or, if 

appropriate, the individual’s representative 

and to the State unit a full written 

report of the findings and grounds 

for the decision within 30 days of the 

completion of the hearing; and 

(4) The hearing officer’s decision is 

final, except that a party may request 

an impartial review under paragraph 

(g)(1) of this section if the State has established 

procedures for that review, 

and a party involved in a hearing may 

bring a civil action under paragraph (i) 

of this section. 

(f) Selection of impartial hearing officers. 

The impartial hearing officer for a 

particular case must be selected— 

(1) From a list of qualified impartial 

hearing officers maintained by the 

State unit. Impartial hearing officers 

included on the list must be— 

(i) Identified by the State unit if the 

State unit is an independent commission; 

or 

(ii) Jointly identified by the State 

unit and the State Rehabilitation 

Council if the State has a Council; and 

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

(ii) By agreement between the director 

of the designated State unit and 

the applicant or eligible individual or, 

as appropriate, the individual’s representative. 

(g) Administrative review of hearing officer’s 

decision. The State may establish 

procedures to enable a party who is dissatisfied 

with the decision of the impartial 

hearing officer to seek an impartial 

administrative review of the decision 

under paragraph (e)(3) of this 

section in accordance with the following 

requirements: 

(1) A request for administrative review 

under paragraph (g) of this section 

must be made within 20 days of 

the mailing of the impartial hearing 

officer’s decision. 

(2) Administrative review of the hearing 

officer’s decision must be conducted 

by— 

(i) The chief official of the designated 

State agency if the State has established 

both a designated State agency 

and a designated State unit under 

§ 361.13(b); or 

(ii) An official from the office of the 

Governor. 

(3) The reviewing official described in 

paragraph (g)(2)(i) of this section— 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(i) Provides both parties with an opportunity 

to submit additional evidence 

and information relevant to a 

final decision concerning the matter 

under review; 

(ii) May not overturn or modify the 

hearing officer’s decision, or any part 

of that decision, that supports the position 

of the applicant or eligible individual 

unless the reviewing official 

concludes, based on clear and convincing 

evidence, that the decision of 

the impartial hearing officer is clearly 

erroneous on the basis of being contrary 

to the approved State plan, the 

Act, Federal vocational rehabilitation 

regulations, or State regulations and 

policies that are consistent with Federal 

requirements; 

(iii) Makes an independent, final decision 

following a review of the entire 

hearing record and provides the decision 

in writing, including a full report 

of the findings and the statutory, regulatory, 

or policy grounds for the decision, 

to the applicant or eligible individual 

or, as appropriate, the individual’s 

representative and to the State 

unit within 30 days of the request for 

administrative review under paragraph 

(g)(1) of this section; and 

(iv) May not delegate the responsibility 

for making the final decision 

under paragraph (g) of this section to 

any officer or employee of the designated 

State unit. 

(4) The reviewing official’s decision 

under paragraph (g) of this section is 

final unless either party brings a civil 

action under paragraph (i) of this section. 

(h) Implementation of final decisions. If 

a party brings a civil action under 

paragraph (h) of this section to challenge 

the final decision of a hearing officer 

under paragraph (e) of this section 

or to challenge the final decision of a 

State reviewing official under paragraph 

(g) of this section, the final decision 

of the hearing officer or State reviewing 

official must be implemented 

pending review by the court. 

(i) Civil action. 

(1) Any party who disagrees with the 

findings and decision of an impartial 

hearing officer under paragraph (e) of 

this section in a State that has not established 

administrative review procedures 

under paragraph (g) of this section 

and any party who disagrees with 

the findings and decision under paragraph 

(g)(3)(iii) of this section have a 

right to bring a civil action with respect 

to the matter in dispute. The action 

may be brought in any State court 

of competent jurisdiction or in a district 

court of the United States of competent 

jurisdiction without regard to 

the amount in controversy. 

(2) In any action brought under paragraph 

(i) of this section, the court— 

(i) Receives the records related to the 

impartial due process hearing and the 

records related to the administrative 

review process, if applicable; 

(ii) Hears additional evidence at the 

request of a party; and 

(iii) Basing its decision on the preponderance 

of the evidence, grants the 

relief that the court determines to be 

appropriate. 

(j) State fair hearing board. A fair 

hearing board as defined in § 361.5(b)(22) 

is authorized to carry out the responsibilities 

of the impartial hearing officer 

under paragraph (e) of this section 

in accordance with the following criteria: 

(1) The fair hearing board may conduct 

due process hearings either collectively 

or by assigning responsibility for 

conducting the hearing to one or more 

members of the fair hearing board. 

(2) The final decision issued by the 

fair hearing board following a hearing 

under paragraph (j)(1) of this section 

must be made collectively by, or by a 

majority vote of, the fair hearing 

board. 

(3) The provisions of paragraphs 

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

relate to due process hearings and of 

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

section do not apply to fair hearing 

boards under this paragraph (j). 

(k) Data collection. 

(1) The director of the designated 

State unit must collect and submit, at 

a minimum, the following data to the 

Commissioner of the Rehabilitation 

Services Administration (RSA) for inclusion 

each year in the annual report 

to Congress under section 13 of the Act: 

(i) A copy of the standards used by 

Page 59 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

State reviewing officials for reviewing 

decisions made by impartial hearing 

officers under this section. 

(ii) The number of mediations held, 

including the number of mediation 

agreements reached. 

(iii) The number of hearings and reviews 

sought from impartial hearing 

officers and State reviewing officials, 

including the type of complaints and 

the issues involved. 

(iv) The number of hearing officer decisions 

that were not reviewed by administrative 

reviewing officials. 

(v) The number of hearing decisions 

that were reviewed by State reviewing 

officials and, based on these reviews, 

the number of hearing decisions that 

were— 

(A) Sustained in favor of an applicant 

or eligible individual; 

(B) Sustained in favor of the designated 

State unit; 

(C) Reversed in whole or in part in 

favor of the applicant or eligible individual; 

and 

(D) Reversed in whole or in part in 

favor of the State unit. 

(2) The State unit director also must 

collect and submit to the Commissioner 

of RSA copies of all final decisions 

issued by impartial hearing officers 

under paragraph (e) of this section 

and by State review officials under 

paragraph (g) of this section. 

(3) The confidentiality of records of 

applicants and eligible individuals 

maintained by the State unit may not 

preclude the access of the RSA Commissioner 

to those records for the purposes 

described in this section. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

(Authority: Section 102(c) of the Act; 29 

U.S.C. 722(c)) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

Subpart C—Financing of State Vocational 

Rehabilitation Programs 

§ 361.60 Matching requirements. 

(a) Federal share. 

(1) General. Except as provided in 

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

Federal share for expenditures made by 

the State under the State plan, including 

expenditures for the provision of 

vocational rehabilitation services and 

the administration of the State plan, is 

78.7 percent. 

(2) Construction projects. The Federal 

share for expenditures made for the 

construction of a facility for community 

rehabilitation program purposes 

may not be more than 50 percent of the 

total cost of the project. 

(b) Non-Federal share. 

(1) General. Except as provided in 

paragraph (b)(2) and (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 funds 

are earmarked for— 

(i) Meeting in whole or in part the 

State’s share for establishing a community 

rehabilitation program or constructing 

a particular facility for community 

rehabilitation program purposes; 

(ii) Particular geographic areas within 

the State for any purpose under the 

State plan, other than those described 

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

accordance with the following criteria: 

(A) Before funds that are earmarked 

for a particular geographic area may be 

used as part of the non-Federal share, 

the State must notify the Secretary 

that the State cannot provide the full 

non-Federal share without using these 

funds. 

(B) Funds that are earmarked for a 

particular geographic area may be used 

as part of the non-Federal share without 

requesting a waiver of 

Page 60 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

statewideness under § 361.26. 

(C) Except as provided in paragraph 

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

funds must be used on a statewide basis 

consistent with § 361.25, unless a waiver 

of statewideness is obtained under 

§ 361.26; and 

(iii) Any other purpose under the 

State plan, provided 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: Sections 7(14), 101(a)(3), 101(a)(4) 

and 104 of the Act; 29 U.S.C. 706(14), 721(a)(3), 

721(a)(4) and 724)) 

Example for paragraph (b)(3): Contributions 

may be earmarked in accordance with 

§ 361.60(b)(3)(iii) for providing particular services 

(e.g., rehabilitation technology services); 

serving individuals with certain types 

of disabilities (e.g., individuals who are 

blind), consistent with the State’s order of 

selection, if applicable; providing services to 

special groups that State or Federal law permits 

to be targeted for services (e.g., students 

with disabilities who are receiving special 

education services), consistent with the 

State’s order of selection, if applicable; or 

carrying out particular types of administrative 

activities permissible under State law. 

Contributions also may be restricted to particular 

geographic areas to increase services 

or expand the scope of services that are 

available statewide under the State plan in 

accordance with the requirements in 

§ 361.60(b)(3)(ii). 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.61 Limitation on use of funds for 

construction expenditures. 

No more than 10 percent of a State’s 

allotment for any fiscal year under section 

110 of the Act may be spent on the 

construction of facilities for community 

rehabilitation program purposes. 

(Authority: Section 101(a)(17)(A) of the 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 2 years prior to the previous 

fiscal year. 

Example: For fiscal year 2001, a State’s 

maintenance of effort level is based on the 

amount of its expenditures from non-Federal 

sources for fiscal year 1999. Thus, if the 

State’s non-Federal expenditures in 2001 are 

less than they were in 1999, the State has a 

maintenance of effort deficit, and the Secretary 

reduces the State’s allotment in 2002 

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 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 

Page 61 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

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 2 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 

that result in a general reduction of 

programs within the State; or 

(ii) Require the State to make substantial 

expenditures in the vocational 

rehabilitation program for long-term 

purposes due to the one-time costs associated 

with the construction of a facility 

for community rehabilitation 

program purposes, the establishment of 

a facility for community rehabilitation 

program purposes, or the acquisition of 

equipment. 

(2) The Secretary may waive or modify 

the maintenance of effort requirement 

in paragraph (b) of this section or 

the 10 percent allotment limitation in 

§ 361.61 if the Secretary determines that 

a waiver or modification is necessary 

to permit the State to respond to exceptional 

or uncontrollable circumstances, 

such as a major natural 

disaster, that result in significant destruction 

of existing facilities and require 

the State to make substantial expenditures 

for the construction of a facility 

for community rehabilitation 

program purposes or the establishment 

of a facility for community rehabilitation 

program purposes in order to provide 

vocational rehabilitation services. 

(3) A written request for waiver or 

modification, including supporting justification, 

must be submitted to the 

Secretary as soon as the State determines 

that an exceptional or uncontrollable 

circumstance will prevent it 

from making its required expenditures 

from non-Federal sources. 

(Approved by the Office of Management and 

Budget under control number 1820–0500) 

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

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

[66 FR 4382, Jan. 17, 2001, as amended at 66 

FR 7253, Jan. 22, 2001] 

§ 361.63 Program income. 

(a) Definition. For purposes of this 

section, program income means gross income 

received by the State that is directly 

generated by 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 assisting Social Security 

beneficiaries and recipients to 

achieve employment outcomes, 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 and the administration of the 

State plan. Program income is considered 

earned when it is received. 

(2) Payments provided to a State 

from the Social Security Administration 

for assisting Social Security beneficiaries 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

and recipients to achieve employment 

outcomes may also be used 

to carry out programs under part B of 

Title I of the Act (client assistance), 

part B 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 cannot be used to 

meet the non-Federal share requirement 

under § 361.60. 

(Authority: Section 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 by the beginning 

of the succeeding fiscal year and 

any program income received during a 

fiscal year that is not obligated by the 

State by the beginning of the succeeding 

fiscal year remain available for 

obligation by the State during that 

succeeding fiscal year. 

(b) Federal funds appropriated for a 

fiscal year remain available for obligation 

in the succeeding fiscal year only 

to the extent that the State met the 

matching requirement for those Federal 

funds by obligating, in accordance 

with 34 CFR 76.707, the non-Federal 

share in the fiscal year for which the 

funds were appropriated. 

(Authority: Section 19 of the Act; 29 U.S.C. 

716) 

§ 361.65 Allotment and payment of Federal 

funds for vocational rehabilitation services. 

(a) Allotment. 

(1) The allotment of Federal funds for 

vocational rehabilitation services for 

each State is computed in accordance 

with the requirements of section 110 of 

the Act, and payments are made to the 

State on a quarterly basis, unless some 

other period is established by the Secretary. 

(2) If the 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: Sections 110 and 111 of the Act; 

29 U.S.C. 730 and 731) 

Subpart D [Reserved] 

Subpart E—Evaluation Standards and 

Performance Indicators 

§ 361.80 Purpose. 

The purpose of this subpart is to establish 

evaluation standards and performance 

indicators for the Program. 

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

§ 361.81 Applicable definitions. 

In addition to those definitions in 

§ 361.5(b), the following definitions 

apply to this subpart: 

Average hourly earnings means the average 

per hour earnings in the week 

prior to exiting the vocational rehabilitation 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(VR) program of an eligible 

individual who has achieved a competitive 

employment outcome. 

Business Enterprise Program (BEP) 

means an employment outcome in 

which an individual with a significant 

disability operates a vending facility 

or other small business under the management 

and supervision of a designated 

State unit (DSU). This term includes 

home industry, farming, and 

other enterprises. 

Exit the VR program means that a 

DSU has closed the individual’s record 

of VR services in one of the following 

categories: 

(1) Ineligible for VR services. 

(2) Received services under an individualized 

plan for employment (IPE) 

and achieved an employment outcome. 

(3) Received services under an IPE 

but did not achieve an employment 

outcome. 

(4) Eligible for VR services but did 

not receive services under an IPE. 

General or combined DSU means a 

DSU that does not serve exclusively individuals 

with visual impairments or 

blindness. 

Individuals from a minority background 

means individuals who report their 

race and ethnicity in any of the following 

categories: American Indian or 

Alaska Native, Asian, Black or African 

American, Native Hawaiian or Other 

Pacific Islander, or Hispanic or Latino. 

Minimum wage means the higher of 

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

the Fair Labor Standards Act of 1938, 

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

minimum wage) or applicable State 

minimum wage law. 

Non-minority individuals means individuals 

who report themselves exclusively 

as White, non-Hispanic. 

Performance period is the reporting 

period during which a DSU’s performance 

is measured. For Evaluation 

Standards 1 and 2, performance data 

must be aggregated and reported for 

each fiscal year beginning with fiscal 

year 1999. However, DSUs that exclusively 

serve individuals with visual impairments 

or blindness must report 

each year the aggregated data for the 2 

previous years for Performance Indicators 

1.1 through 1.6; the second year 

must coincide with the performance 

period for general or combined DSUs. 

Primary indicators means Performance 

Indicators 1.3, 1.4, and 1.5, which 

are specifically designed to measure— 

(1) The achievement of competitive, 

self-, or BEP employment with earnings 

equivalent to the minimum wage 

or higher, particularly by individuals 

with significant disabilities; and 

(2) The ratio between the average 

hourly earnings of individuals who exit 

the VR program in competitive, self-, 

or BEP employment with earnings 

equivalent to the minimum wage or 

higher and the State’s average hourly 

earnings for all employed individuals. 

RSA–911 means the Case Service Report 

that is submitted annually by a 

DSU as approved by the Office of Management 

and Budget (OMB). 

Self-employment means an employment 

outcome in which the individual 

works for profit or fee in his or her own 

business, farm, shop, or office, including 

sharecroppers. 

Service rate means the result obtained 

by dividing the number of individuals 

who exit the VR program after receiving 

one or more services under an IPE 

during any reporting period by the 

total number of individuals who exit 

the VR program (as defined in this section) 

during that reporting period. 

State’s average hourly earnings means 

the average hourly earnings of all persons 

in the State in which the DSU is 

located. 

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

§ 361.82 Evaluation standards. 

(a) The Secretary establishes two 

evaluation standards to evaluate the 

performance of each DSU that receives 

funds under this part. The evaluation 

standards assist the Secretary and 

each DSU to evaluate a DSU’s performance 

in serving individuals with disabilities 

under the VR program. 

(b) A DSU must achieve successful 

performance on both evaluation standards 

during each performance period. 

(c) The evaluation standards for the 

VR program are— 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

(1) Evaluation Standard 1—Employment 

outcomes. A DSU must assist any eligible 

individual, including an individual 

with a significant disability, to obtain, 

maintain, or regain high-quality employment. 

(2) Evaluation Standard 2—Equal access 

to services. A DSU must ensure that 

individuals from minority backgrounds 

have equal access to VR services. (Approved 

by the Office of Management 

and Budget under control number 1820– 

0508.) 

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

§ 361.84 Performance indicators. 

(a) The performance indicators establish 

what constitutes minimum compliance 

with the evaluation standards. 

(b) The performance indicators require 

a DSU to provide information on 

a variety of factors to enable the Secretary 

to measure compliance with the 

evaluation standards. 

(c) The performance indicators are as 

follows: 

(1) Employment outcomes. 

(i) Performance Indicator 1.1. The 

number of individuals exiting the VR 

program who achieved an employment 

outcome during the current performance 

period compared to the number of 

individuals who exit the VR program 

after achieving an employment outcome 

during the previous performance 

period. 

(ii) Performance Indicator 1.2. Of all 

individuals who exit the VR program 

after receiving services, the percentage 

who are determined to have achieved 

an employment outcome. 

(iii) Performance Indicator 1.3. Of all 

individuals determined to have 

achieved an employment outcome, the 

percentage who exit the VR program in 

competitive, self-, or BEP employment 

with earnings equivalent to at least 

the minimum wage. 

(iv) Performance Indicator 1.4. Of all 

individuals who exit the VR program in 

competitive, self-, or BEP employment 

with earnings equivalent to at least 

the minimum wage, the percentage 

who are individuals with significant 

disabilities. 

(v) Performance Indicator 1.5. The average 

hourly earnings of all individuals 

who exit the VR program in competitive, 

self-, or BEP employment with 

earnings levels equivalent to at least 

the minimum wage as a ratio to the 

State’s average hourly earnings for all 

individuals in the State who are employed 

(as derived from the Bureau of 

Labor Statistics report ‘‘State Average 

Annual Pay’’ for the most recent available 

year). 

(vi) Performance Indicator 1.6. Of all 

individuals who exit the VR program in 

competitive, self-, or BEP employment 

with earnings equivalent to at least 

the minimum wage, the difference between 

the percentage who report their 

own income as the largest single source 

of economic support at the time they 

exit the VR program and the percentage 

who report their own income as the 

largest single source of support at the 

time they apply for VR services. 

(2) Equal access to services. 

(i) Performance Indicator 2.1. The service 

rate for all individuals with disabilities 

from minority backgrounds as a 

ratio to the service rate for all non-minority 

individuals with disabilities. 

(Approved by the Office of Management and 

Budget under control number 1820–0508.) 

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

§ 361.86 Performance levels. 

(a) General. 

(1) Paragraph (b) of this section establishes 

performance levels for— 

(i) General or combined DSUs; and 

(ii) DSUs serving exclusively individuals 

who are visually impaired or 

blind. 

(2) The Secretary may establish, by 

regulations, new performance levels. 

(b) Performance levels for each performance 

indicator. 

(1)(i) The performance levels for Performance 

Indicators 1.1 through 1.6 

are— 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

Performance indicator 

Performance level by type of DSU 

General/Combined Blind 

1.1 .................................................................................. 

Equal or exceed previous performance period 

.............................................................................................

.... Same. 

1.2 .................................................................................. 

55.8% 

.............................................................................................

................................................................... 68.9%. 

1.3 .................................................................................. 

72.6% 

.............................................................................................

................................................................... 35.4%. 

1.4 .................................................................................. 

62.4% 

.............................................................................................

................................................................... 89.0%. 

1.5 .................................................................................. 

.52 (Ratio) 

.............................................................................................

............................................................ .59. 

1.6 .................................................................................. 

53.0 (Math. Difference) 

.............................................................................................

........................................ 30.4. 

 (ii) To achieve successful performance 

on Evaluation Standard 1 (Employment 

outcomes), a DSU must meet 

or exceed the performance levels established 

for four of the six performance 

indicators in the evaluation standard, 

including meeting or exceeding the 

performance levels for two of the three 

primary indicators (Performance Indicators 

1.3, 1.4, and 1.5). 

(2)(i) The performance level for Performance 

Indicator 2.1 is— 

Performance indicator Performance levels 

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

(ii) To achieve successful performance 

on Evaluation Standard 2 (Equal 

access), DSUs must meet or exceed the 

performance level established for Performance 

Indicator 2.1 or meet the performance 

requirement in paragraph 

(2)(iii) of this section. 

(iii) If a DSU’s performance does not 

meet or exceed the performance level 

required for Performance Indicator 2.1, 

or if fewer than 100 individuals from a 

minority population have exited the 

VR program during the reporting period, 

the DSU must describe the policies 

it has adopted or will adopt and 

the steps it has taken or will take to 

ensure that individuals with disabilities 

from minority backgrounds have 

equal access to VR services. 

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

§ 361.88 Reporting requirements. 

(a) The Secretary requires that each 

DSU report within 60 days after the end 

of each fiscal year the extent to which 

the State is in compliance with the 

evaluation standards and performance 

indicators and include in this report 

the following RSA–911 data: 

(1) The number of individuals who 

exited the VR program in each closure 

category as specified in the definition 

of ‘‘Exit the VR program’’ under 

§ 361.81. 

(2) The number of individuals who 

exited the VR program in competitive, 

self-, or BEP employment with earnings 

at or above the minimum wage. 

(3) The number of individuals with 

significant disabilities who exited the 

VR program in competitive, self-, or 

BEP employment with earnings at or 

above the minimum wage. 

(4) The weekly earnings and hours 

worked of individuals who exited the 

VR program in competitive, self-, or 

BEP employment with earnings at or 

above the minimum wage. 

(5) The number of individuals who 

exited the VR program in competitive, 

self-, or BEP employment with earnings 

at or above the minimum wage 

whose primary source of support at the 

time they applied for VR services was 

‘‘personal income.’’ 

(6) The number of individuals who 

exited the VR program in competitive, 

self-, or BEP employment with earnings 

at or above the minimum wage 

whose primary source of support at closure 

was ‘‘personal income.’’ 

(7) The number of individuals exiting 

the VR program who are individuals 

from a minority background. 

(8) The number of non-minority individuals 

exiting the VR program. 

(9) The number of individuals from a 

minority background exiting the VR 

program after receiving services under 

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

an IPE. 

(10) The number of non-minority individuals 

exiting the VR program after 

receiving services under an IPE. 

(b) In lieu of the report required in 

paragraph (a) of this section, a DSU 

may submit its RSA–911 data on tape, 

diskette, or any alternative electronic 

format that is compatible with RSA’s 

capability to process such an alternative, 

as long as the tape, diskette, or 

alternative electronic format includes 

the data that— 

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

through (10) of this section; and 

(2) Meet the requirements of paragraph 

(c) of this section. 

(c) Data reported by a DSU must be 

valid, accurate, and in a consistent format. 

If a DSU fails to submit data that 

are valid, accurate, and in a consistent 

format within the 60-day period, the 

DSU must develop a program improvement 

plan pursuant to § 361.89(a). 

(Approved by the Office of Management and 

Budget under control number 1820–0508.) 

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

§ 361.89 Enforcement procedures. 

(a) If a DSU fails to meet the established 

performance levels on both evaluation 

standards as required by 

§ 361.82(b), the Secretary and the DSU 

must jointly develop a program improvement 

plan that outlines the specific 

actions to be taken by the DSU to 

improve program performance. 

(b) In developing the program improvement 

plan, the Secretary considers 

all available data and information 

related to the DSU’s performance. 

(c) When a program improvement 

plan is in effect, review of the plan is 

conducted on a biannual basis. If necessary, 

the Secretary may request that 

a DSU make further revisions to the 

plan to improve performance. If the 

Secretary establishes new performance 

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

and the DSU must jointly modify the 

program improvement plan based on 

the new performance levels. The Secretary 

continues reviews and requests 

revisions until the DSU sustains satisfactory 

performance based on the current 

performance levels over a period 

of more than 1 year. 

(d) If the Secretary determines that a 

DSU with less than satisfactory performance 

has failed to enter into a program 

improvement plan or comply substantially 

with the terms and conditions 

of the program improvement 

plan, the Secretary, consistent with 

the procedures specified in § 361.11, reduces 

or makes no further payments to 

the DSU under this program until the 

DSU has met one of these two requirements 

or raised its subsequent performance 

to meet the current overall 

minimum satisfactory level on the 

compliance indicators. 

(Approved by the Office of Management and 

Budget under control number 1820–0508.) 

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

APPENDIX A TO PART 361—QUESTIONS 

AND ANSWERS 

The following questions and answers provide 

a summary of some of the most common 

and critical questions that we received regarding 

this part 361 and the applicable responses. 

As is evident from the responses, we 

maintain that redefining the term ‘‘employment 

outcome’’ for purposes of the VR program 

to mean outcomes that occur in integrated 

settings will promote the provision of 

opportunities for all VR-eligible individuals 

to pursue the types of jobs that generally are 

available to the public. 

Is Extended Employment Still a Legitimate 

Employment Option? 

Yes. Employment in a sheltered setting is 

a legitimate and valuable employment option 

for individuals with disabilities. Implementation 

of these regulations will not 

change that fact. Individuals still may 

choose to pursue long-term extended employment 

outside of the VR program, and 

these regulations ensure that those individuals’ 

needs are met by requiring the VR 

agency to make the necessary referral to 

local extended employment providers. 

Do the Regulations Restrict Individual Choice? 

No. We interpret the concept of individual 

choice in the Act as a choice among the employment 

outcomes under the VR program 

specified in the statute or by the Secretary 

in regulations. 

Extended employment (i.e., sheltered or 

Page 67 of 68 
Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM 

Page 68 of 68 

non-integrated employment) remains both 

an initial step toward achieving integrated 

employment under the VR program and a 

long-term employment option through 

sources of support other than the VR program. 

In recognizing that some individuals 

with disabilities may wish to work in an extended 

employment setting, these regulations 

require the VR agency to ensure that 

these individuals are afforded the opportunity 

to do so by referring them to local extended 

employment providers. Those providers 

currently support the vast majority of 

sheltered workers through non-VR program 

resources. Moreover, persons wishing to prepare 

for integrated employment by initially 

working in an extended employment setting 

also may do so. In these cases, the VR agency 

cannot discontinue VR services until the 

individual transitions to integrated work in 

the community. 

Can State Agencies Refuse To Serve Those With 

the Most Significant Disabilities? 

No. Both the Act and regulations guard 

against that result. Persons with disabilities 

may not be excluded from the VR program 

based on an assumption or belief that the individual 

is incapable of working in an integrated 

setting. Rather, State units are required 

to establish clear and convincing evidence 

that an individual is incapable of 

achieving an employment outcome, for purposes 

of the VR program, and must conduct 

a trial work assessment of the individual’s 

abilities before it can refuse services to any 

individual who it initially believes is incapable 

of working in an intergrated job setting. 

Are Homemaker and Unpaid Family Worker 

Considered Employment Outcomes for Purposes 

of the VR Program? 

Yes. The chief purpose of the regulations is 

to ensure that individuals with disabilities 

participating in the VR program are able to 

pursue the same type of employment opportunities 

that are available to the general 

public. Extended employment jobs, unlike 

homemakers and unpaid family workers, are 

primarily reserved for those with disabilities. 

Will the Regulations Serve To Close Down 

Sheltered Workshops? 

No. Sheltered workshops are primarily 

supported by other State, local, and private 

resources and rely very little on VR program 

funds. Persons who prefer to work in extended 

employment on a long-term basis are 

assured access to local extended employment 

programs through the referral requirements 

in the regulations. Also, those participants 

in the VR program who can best prepare for 

integrated employment by working in an extended 

employment setting as part of a 

training and assessment program are able to 

follow that path as well. Thus, extended employment 

programs and sheltered workshops 

continue to serve essentially the same role 

that they currently serve. 

[66 FR 7253, Jan. 22, 2001]