[Federal Register Volume 60, Number 96 (Thursday, May 18, 1995)]
[Proposed Rules]
[Pages 26774-26793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11910]




[[Page 26773]]

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Part II





Department of Health and Human Services





_______________________________________________________________________



Administration for Children and Families



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45 CFR Part 1385 et al.



Developmental Disabilities Program; Proposed Rule

Federal Register / Vol. 60, No. 96 / Thursday, May 18, 1995 / 
Proposed Rules

[[Page 26774]]

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Parts 1385, 1386, 1387 and 1388

RIN 0970-AB11


Developmental Disabilities Program

AGENCY: Administration on Developmental Disabilities, Administration 
for Children and Families, HHS.

ACTION: Notice of proposed rulemaking

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SUMMARY: This rule proposes clarifications and new requirements to 
implement changes made by the Developmental Disabilities Assistance and 
Bill of Rights Act Amendments of 1990 and the Developmental 
Disabilities Assistance and Bill of Rights Act Amendments of 1994.

DATES: To ensure consideration comments must be submitted on or before 
July 17, 1995.

ADDRESSES: Please address comments to: Commissioner, Administration on 
Developmental Disabilities, Room 329-D (Regulations), Hubert H. 
Humphrey Building, 200 Independence Avenue SW, Washington, DC 20201.
    It would be helpful if agencies and organizations submitted copies 
in duplicate. Two weeks after the close of the comment period, comments 
and letters will be available for public inspection in Room 309-D, 
Hubert H. Humphrey Building, 200 Independence Avenue SW, Washington, DC 
20201, Monday through Friday, 8 a.m. to 4 p.m., telephone (202) 690-
5841.

FOR FURTHER INFORMATION CONTACT: John P. Doyle, Director, 
Administration and Planning Staff, Administration on Developmental 
Disabilities, Telephone: (202) 690-5504 (Voice), (202) 690-6415 (TDD). 
These are not toll-free numbers. This document will be made available 
in accessible formats upon request.

SUPPLEMENTARY INFORMATION:

I. Program History

    In 1963, the Mental Retardation Facilities and Construction Act 
(Pub. L. 88-164) was enacted to plan activities and construct 
facilities to provide services to persons with mental retardation. This 
legislation was subsequently amended by the Developmental Disabilities 
Services and Facilities Construction Amendments of 1970 (Pub. L. 91-
517) which constituted the first Congressional effort to address the 
needs of a group of persons with disabilities designated as 
developmental disabilities. The 1970 Amendments defined developmental 
disabilities to include individuals with mental retardation, cerebral 
palsy, epilepsy and other neurological conditions closely related to 
mental retardation which originated prior to age 18 and constituted a 
substantial disability. It also created State Planning Councils to 
advocate for, plan, monitor and evaluate services for persons with 
developmental disabilities; and authorized grants for constructing, 
administering and operating University Affiliated Facilities. The 
legislation authorizing the Developmental Disabilities program has been 
revised periodically. The major changes of note included the following:
    (1) The 1975 Amendments (Pub. L. 94-103) deleted the construction 
authority, authorized studies to determine the feasibility of having 
University Affiliated Facilities establish Satellite Centers, 
established the Protection and Advocacy System and added a section on 
``Rights of the Developmentally Disabled;''
    (2) The 1978 Amendments (Pub. L. 95-602) included a functional 
definition of developmental disabilities;
    (3) The Developmental Disabilities Amendments of 1984 (Pub. L. 98-
527) added a new emphasis regarding the purpose of the program, to 
assist States to assure that persons with developmental disabilities 
receive the care, treatment and other services necessary to enable them 
to achieve their maximum potential through increased independence, 
productivity and integration into the community; and
    (4) The 1987 Amendments (Pub. L. 100-146) established an annual 
report to Congress on the Developmental Disabilities program. The 
Administration on Developmental Disabilities (ADD) compiles this report 
using information received from the State Planning Councils, the 
Protection and Advocacy Systems, the University Affiliated Programs and 
grantees of the Projects of National Significance. Also included in the 
1987 Amendments was a special 1990 Report to Congress on the scope and 
effectiveness of services provided to persons with developmental 
disabilities by State agencies and an analysis of consumer 
satisfaction. The State Planning Councils prepared the State Reports to 
ADD and this information was used as a basis for the Report to 
Congress.
    The Developmental Disabilities Assistance and Bill of Rights Act 
Amendments of 1990, Pub. L. 101-496, (the Act), extended authorization 
of appropriations for programs under the Act through Fiscal Year 1993 
and made revisions that:
    (1) Add to the purpose of the Act the commitment toward enabling 
all people with developmental disabilities, including those with severe 
disabilities, to achieve interdependence and inclusion into society;
    (2) Strengthen the independence of State Protection and Advocacy 
systems;
    (3) Establish core awards for University Affiliated Programs 
training projects; and
    (4) Broaden the purpose of Projects of National Significance to 
include supportive living and quality of life opportunities.
    The Developmental Disabilities Assistance and Bill of Rights Act 
Amendments of 1994, Pub. L. 103-230, (the Act), extends authorization 
of appropriations for programs under the Act through Fiscal Year 1996 
and made revisions that:
    (1) Include findings that emphasize respect for individual dignity, 
personal preferences, and cultural differences in the provision of 
services, supports and other assistance, and recognize that individuals 
with developmental disabilities and their families are the primary 
decision-makers regarding services, supports, and other assistance they 
receive;
    (2) Ensure that racial and ethnic individuals from diverse 
backgrounds are fully included at all levels and in all activities 
authorized under this Act. This includes language regarding unserved 
and underserved populations and ``culturally competent'' services, 
supports and other assistance;
    (3) Require State Developmental Disabilities Council activities to 
promote systemic change, capacity building and advocacy;
    (4) Clarify the responsibilities of the State Developmental 
Disabilities Council and the Designated State Agency;
    (5) Require the Protection and Advocacy System (P&A) to hire and 
maintain sufficient numbers and types of qualified staff to carry out 
the P&A's function;
    (6) Protect the confidentiality of client records;
    (7) Require development of new program standards for University 
Affiliated Programs; and
    (8) Direct the Secretary to support grants to conduct an 
investigation on the expansion of part B programs (State Developmental 
Disabilities Councils) to individuals with severe disabilities other 
than developmental disabilities. [[Page 26775]] 

II. Developmental Disabilities Program

A. Federal Assistance to State Developmental Disabilities Councils

    Formula grants are made to each State to support State 
Developmental Disabilities Councils. The responsibilities of the 
Councils are to promote, through systemic change, capacity building and 
advocacy activities; the development of a consumer and family-centered, 
comprehensive system; and, a coordinated array of services, supports 
and other assistance. These activities are designed to achieve 
independence, productivity, integration and inclusion into the 
community for individuals with developmental disabilities.

B. Protection and Advocacy of the Rights of Individuals With 
Developmental Disabilities

    Formula grants are made to States for the establishment of a system 
to protect and advocate for the rights of individuals with 
developmental disabilities. This system must have the authority to 
pursue legal, administrative and other appropriate remedies to ensure 
the protection of the rights of individuals with developmental 
disabilities who are receiving, or who are eligible to receive, 
treatment or habilitation services.

C. University Affiliated Programs

    Grants are made to universities, or to public or nonprofit entities 
associated with a college or university, to establish University 
Affiliated Programs (UAPs). Activities of University Affiliated 
Programs are to be conducted in a culturally competent manner and 
include: Interdisciplinary pre-service preparation of students and 
fellows; community service activities which include community training 
and technical assistance; and the dissemination of subsequent 
information and research findings.

D. Projects of National Significance

    This program provides funding through grants and contracts to 
public or nonprofit private entities for projects which support 
national initiatives. Such initiatives include the collection of 
necessary data; provision of technical assistance to State 
Developmental Disabilities Councils, protection and advocacy systems 
and university affiliated programs; and support to other nationally 
significant activities, such as employment and housing.
III. Discussion of Proposed Regulations

    Overall, the proposed regulations have been developed to establish 
new requirements based on the changes made by two reauthorizations: (1) 
The Developmental Disabilities Assistance and Bill of Rights Act 
Amendments of 1990 (Pub. L. 101-496) and (2) the Developmental 
Disabilities Assistance and Bill of Rights Act Amendments of 1994 (Pub. 
L. 103-230).
    Key proposed provisions are as follows:
    A. Section 1386.20, Designated State Protection and Advocacy 
System, the current rule has been revised to address requirements 
concerning the redesignation of the Protection and Advocacy System 
(1990 Amendments);
    B. Section 1386.21, Requirements of the Protection and Advocacy 
System, the regulations regarding confidentiality of client records has 
been revised pursuant to section 142(j) (1994 Amendments);
    C. Section 1386.23, Periodic reports: Protection and Advocacy 
System, regulatory language is being proposed to address the statutory 
requirement for an annual statement of objectives and priorities and a 
statement of the rationale used to establish such objectives (1990 
Amendments);
    D. Section 1386.30, State plan requirements, the regulation 
regarding State Developmental Disabilities Council responsibilities has 
been revised to address new requirements regarding the development of 
the State plan and the hiring and supervision of staff (1994 
Amendments);
    E. The current regulatory language for part 1388 has been revised 
to include new program standards for University Affiliated Programs 
(UAPs) (1994 Amendments);
    A section-by-section discussion of the changes we are proposing 
follows:

PART 1385--REQUIREMENTS APPLICABLE TO THE DEVELOPMENTAL 
DISABILITIES PROGRAM

    In Sec. 1385.1, General, the changes being proposed are to replace 
the reference to Basic State Grant with a reference to Federal 
Assistance to the State Developmental Disabilities Councils and to 
change the Protection and Advocacy System reference to ``individuals'' 
rather than ``persons'' with developmental disabilities.
    In Sec. 1385.3 Definitions, editorial changes are being proposed to 
incorporate the reference to the Administration for Children and 
Families rather than the Office of Human Development Services. This 
action is required because the Administration on Developmental 
Disabilities was made a part of the Administration for Children and 
Families. A notice was published in the Federal Register on April 18, 
1991 (See 56 FR 15885). We are also proposing to include a definition 
of ``Protection and Advocacy System'' to mean the organization or 
agency designated in a State to administer and operate a protection and 
advocacy program for individuals with developmental disabilities under 
part C of the Developmental Disabilities Assistance and Bill of Rights 
Act, as amended by Pub. L. 103-230 (42 U.S.C. 6041, 6042); and advocacy 
programs under the Protection and Advocacy for Mentally Ill Individuals 
Act 1986 (PAIMI Act), as amended (42 U.S.C. 10801 et seq.); the 
Protection and Advocacy of Individual Rights Program (PAIR), (29 U.S.C. 
794e); and the Technology-Related Assistance for Individuals with 
Disabilities Act of 1988, as amended (29 U.S.C. 2212(e)). Protection 
and Advocacy System also may be designated by the Governor of a State 
to conduct the Client Assistance Program (CAP) authorized by section 
112 of the Rehabilitation Act of 1973, as amended, (29 U.S.C. 732). 
Finally, the Protection and Advocacy System may provide advocacy 
services under other Federally funded programs.
    Section 1385.4 is amended to re-word ``persons with developmental 
disabilities'' to ``individuals with developmental disabilities'' in 
the title and paragraphs (a), (b), and (c). The statutory citation in 
paragraph's (b) and (c) have been updated to conform with the 1994 
Amendments.
    The regulations of Sec. 1385.5 Recovery of Federal funds used for 
construction of facilities and Sec. 1385.7 Waivers have been removed 
and those sections have been reserved. Such action has been done 
because section 105, Recovery, has been removed from the Act (1994 
Amendments). As indicated in the Senate Report, number 103-120, pages 
25 and 26, section 105, Recovery, has been deleted because the 
Committee understood that all facilities for which part B or part D 
funds had been used towards construction costs, have been completed for 
more than 20 years making this section no longer relevant.
    We are proposing to revise Sec. 1385.6 by using the term 
``individuals with disabilities'' (1994 Amendments). This term is meant 
to be consistent with ``handicapped person'' as defined under 45 CFR 
84.3(j). We are also proposing to include language which clarifies 
grantee responsibilities regarding affirmative action pursuant to 
section 109 of the Act (42 U.S.C. 6008) and to reference the Americans 
with Disabilities Act (42 U.S.C. 12101 et seq.) with respect to 
[[Page 26776]] employment of individuals with disabilities.
    In Sec. 1385.8, Formula for determining allotments, editorial 
changes are being proposed, which includes the deletion of the concept 
of Basic State program which is no longer applicable under the Act. 
Paragraph (c) is being revised to update references (1994 amendments).
    In Sec. 1385.9 (a) and (b), Grants administration requirements, an 
editorial change is being proposed to update the term Special Project 
to Projects of National Significance (1987 Amendments). Paragraph (d) 
addresses the issue of the Department keeping information about 
individual clients confidential when making audits and examinations and 
taking excerpts and transcripts of records of grantees and subgrantees. 
This paragraph is being revised to include a reference to part 92--
Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments for grants awarded to State 
Developmental Disabilities Councils, University Affiliated Programs and 
Projects of National Significance and to remove the reference to the 
Protection and Advocacy System. We are then proposing a new paragraph 
(e) to address the new requirement of section 142(j) and the language 
of Senate Report 120, 103rd Cong., 1st Sess., page 39 (1993). The 
Report indicated * * *'' that for any audit, report or evaluation 
required under this Act, the Secretary shall not require the P&A system 
to ``disclose the identity of, or any personally identifiable 
information related to, any individual requesting assistance under such 
program.'' This requirement is consistent with the Rehabilitation Act 
Amendments of 1992 which contains similar language pertaining to the 
confidentiality of client records during Federal reviews of P&A 
systems. The Committee does not intend to limit the monitoring 
responsibilities of the Administration on Developmental Disabilities to 
assure that P&A systems are in compliance with the Act.'' In paragraph 
(e)(1) the regulation indicates that for any audit, report or 
evaluation required under the Act, the Secretary shall not require the 
Protection and Advocacy system to ``disclose the identity of, or any 
personally identifiable information related to, any individual 
requesting assistance under such program.'' In paragraph (e)(2) the 
proposed regulation indicates that if an audit, monitoring review, 
evaluation, or other investigation by the Department produces evidence 
that the system has violated the Act or the regulations, the system 
will bear the burden of proving its compliance. The System's inability 
to establish compliance because of the confidentiality of records will 
not relieve it of this responsibility. The eligible system may elect to 
obtain a release from all individuals requesting or receiving services 
at the time of intake or application. The release shall state that only 
information directly related to client and case eligibility will be 
subject to disclosure to officials of the Department.
    ADD is particularly interested in receiving comments on the 
regulations being proposed in paragraph (e)(2).

PART 1386--FORMULA GRANT PROGRAMS

    In part 1386, subpart A--Basic requirements, we are proposing in 
Sec. 1386.1, General, that the reference to the Basic State grant 
program be deleted because there is no statutory basis for this 
language and the reference to the State Developmental Disabilities 
Councils be included in its place. We are proposing additional language 
in Sec. 1386.2(b)(1), Obligation of funds, that would implement an 
expanded definition of obligation given in section 125(c) of the Act 
(42 U.S.C. 6025(c)), as amended (1994 Amendments), regarding State 
Interagency Agreements. We are proposing several technical changes to 
paragraphs (c)(1) and (2). In paragraph (1), we are proposing to 
replace the phrase Protection and Advocacy ``office'' to Protection and 
Advocacy ``System'' and reference ``individuals'' with developmental 
disabilities rather than ``persons'' with developmental disabilities. 
In paragraph (2), we are proposing to reword the phrase 
``developmentally disabled persons'' to ``individuals with 
developmental disabilities'' (1994 Amendments); to replace the 
reference to Basic State Grants with the legislative language for Part 
B--Federal Assistance to State Developmental Disabilities Councils 
(1994 Amendments); and reword the last sentence for consistency with 
the regulatory language contained in Sec. 1386.2(a) regarding the 
Federal fiscal year.
    In part 1386, subpart B, the heading has been revised to read 
``State System for Protection and Advocacy of the Rights of Individuals 
with Developmental Disabilities.'' This revision clarifies how this 
program is referenced. Accordingly, we are proposing editorial changes 
in the regulations to reflect this change.
    We are proposing a new Sec. 1386.19, Definitions, to include 
definitions for subpart B, Sec. 1386.20 and Sec. 1386.21. ADD is 
proposing a definition of ``designating official'' to clarify who has 
the responsibility in the State to designate the Protection and 
Advocacy System under section 142 of the Act (Sec. 1386.20(a)). 
Addition of this definition will permit us to simplify the wording of 
several provisions relating to protection and advocacy agencies. We are 
then proposing the following definitions of terms used in the proposed 
regulations in Sec. 1386.21(c)(1) and (3), (Sec. 142(a)(2)(B)) and 
(Sec. 142(a)(2)(I)): ``full investigations'' means the access to 
clients, public and private facilities and entities and their staff, 
and the records regarding the operation of the institution that is 
necessary for a reasonable person to make an informed decision about 
whether the alleged or suspected abuse is taking place or has taken 
place; ``probable cause'' means a reasonable ground for belief that an 
individual or group of individuals with developmental disabilities may 
now be subject to or have been subject to abuse or neglect; and 
``record of an individual with a developmental disability'' includes 
reports prepared or received by any staff of a facility rendering care 
or treatment, or reports prepared by an agency or staff person charged 
with investigating reports of incidents of abuse or neglect, injury or 
death occurring at such facility that describes incidents of abuse, 
neglect, injury, or death occurring at such facility and the steps 
taken to investigate such incidents, and discharge planning records.
    For reasons of consistency, we are proposing to revise the heading 
of Sec. 1386.20 to read, Designated State Protection and Advocacy 
System rather than Designated State Protection and Advocacy Office.
    We are proposing a change in Sec. 1386.20(a) to include the 
proposed term ``designating official'' as defined in Sec. 1386.19.
    We also are proposing to revise Sec. 1386.20(d) to address the 
procedure to be followed in order for a State to designate a new agency 
to administer and operate the Protection and Advocacy system pursuant 
to section 142(a)(4) of the Act, (42 U.S.C. 6042(a)(4)). State 
Protection and Advocacy agencies are responsible for administering and 
operating State advocacy systems. These systems must be independent of 
State public and private service systems, provide information and 
referral, and have the authority to pursue legal, administrative and 
other appropriate remedies to ensure the protection of the rights of 
individuals with developmental disabilities and individuals with mental 
[[Page 26777]] illness. (See sections 102(2), 103 and 105 of the 
Protection and Advocacy for Mentally Ill Individuals Act of 1986, as 
amended (42 U.S.C. 10802(2), 10803 and 10805). ``The term `eligible 
system' means the system established in a State to protect and advocate 
the rights of persons with developmental disabilities under part C of 
the Developmental Disabilities Assistance and Bill of Rights Act.'' 
Therefore, the Protection and Advocacy System provides services to both 
individuals with developmental disabilities and to individuals with 
mental illness. The purpose of these proposed requirements is to ensure 
that a Protection and Advocacy System is only redesignated to a new 
agency for reasons which constitute good cause. The action giving rise 
to good cause should be of a substantial nature.
    Redesignation for good cause may include, but is not limited to, 
eliminating longstanding or pervasive inefficiency. However, merely 
technical or minor shortcomings will not support such a finding. 
Further, in order to qualify as good cause, the allegation must be made 
in good faith, which means that it was not made for the purpose of 
frustrating the accomplishment of the goals of the Act, these 
regulations, the Protection and Advocacy for Mentally Ill Individuals 
Act (42 U.S.C. 10801 et seq.), the Protection and Advocacy of 
Individual Rights Program (29 U.S.C. 794(e), the Technology-Related 
Assistance for Individuals With Disabilities Act of 1988, as amended 
(29 U.S.C. 2212(e)), and any other Federal advocacy program that is 
administered by the State Protection and Advocacy System. The 
Administration on Developmental Disabilities encourages Governors and 
Protection and Advocacy agencies to consult with one another and seek 
resolution before involving the public. In Sec. 1386.20(d)(1), we are 
proposing to provide current Protection and Advocacy agencies and the 
public a period of no less than 45 days concurrently to respond to 
notices given of the intention to redesignate the Protection and 
Advocacy agency. In developing the regulations we are proposing 
timeframes for notices which are considered timely and are similar to 
those used in other activities required by Federal regulations. We are 
also proposing to revise the requirements for contents of the public 
notice provided for in paragraph (d)(2) by requiring that it include 
the following new or revised requirements:
    (1) The Federal requirements for the Protection and Advocacy System 
for individuals with developmental disabilities (section 142 of the 
Act); and, where applicable, the requirements of the Protection and 
Advocacy for Individuals with Mental Illness Act of 1986, as amended 
(42 U.S.C. 10805 and 10821); the Protection and Advocacy of Individual 
Rights Program (29 U.S.C. 794(e) and the Client Assistance Program (29 
U.S.C. 732), of the Rehabilitation Act of 1973, as amended; the 
Technology-Related Assistance for Individuals With Disabilities Act of 
1988, as amended by Pub.L. 103-218 (Protection and Advocacy contracts 
and grants); or any other Federal advocacy program that is administered 
by the State Protection and Advocacy System;
    (2) The goals and function of the State's Protection and Advocacy 
System including the current Statement of Objectives and Priorities;
    (3) The name and address of the agency currently designated to 
administer and operate the Protection and Advocacy System; and an 
indication of whether the agency also operates other Federal advocacy 
programs;
    (4) A description of the current Protection and Advocacy agency and 
the system it administers and operates including, as applicable, 
descriptions of other Federal advocacy programs it operates;
    (5) A clear and detailed explanation of the good cause for the 
proposed redesignation;
    (6) A statement suggesting that interested persons may wish to 
write the current State Protection and Advocacy agency to obtain a copy 
of its response to the notice initiating the redesignation. Copies 
shall be provided in accessible formats to individuals with 
disabilities upon request;
    (7) The name of the new agency proposed to administer and operate 
the Protection and Advocacy System under the Developmental Disabilities 
program. This agency will be eligible to administer other Federal 
advocacy programs;
    (8) A description of the system which the new agency would 
administer and operate, including a description of all other Federal 
advocacy programs the agency would operate; and
    (9) The timetable for assumption of operations by the new agency 
and the estimated costs of any transfer and start-up operations.
    We are proposing that the public notice must include information on 
the requirements for all other Federal Protection and Advocacy Programs 
which are currently administered by the P&A agency and are subject to 
redesignation as well as the Protection and Advocacy System for 
individuals with developmental disabilities. The rationale for this 
requirement is that a redesignation of the Protection and Advocacy 
agency for individuals with developmental disabilities under section 
142 of the Act also has an impact on other Federal Protection and 
Advocacy Programs. Federal legislation makes the State's designated 
Protection and Advocacy agency for individuals with developmental 
disabilities eligible to receive funding for operating the other 
Federal advocacy programs listed above. Redesignation of the 
Developmental Disabilities agency may result in the redesignation of 
the other programs. Therefore, the regulation seeks to insure that 
individuals with other disabilities, their families and representatives 
have an opportunity to make informed comments on the proposed 
redesignation. The other new requirements for the notice are being 
included so that members of the public can become fully informed about 
the reasons for and consequences of the redesignation.
    In paragraph (d)(3) we are requiring that copies of the notice of 
proposed redesignation must be made generally available to individuals 
with developmental disabilities and individuals with mental illness who 
live in residential institutions through posting or some other means. 
The need for notice is to ensure that individuals who reside in 
institutional settings also are informed of the reasons for and the 
consequences of the proposed redesignation. The notice could be 
accomplished by mailing a copy of the original notice to such 
facilities and requesting that it be made available to residents 
through posting. This notice also could be sent to other advocacy 
groups for individuals with disabilities in the State. This new 
requirement is based on the intimate connection between the Protection 
and Advocacy program serving individuals with developmental 
disabilities and the Protection and Advocacy program serving 
individuals with mental illness. Also, we are proposing in paragraph 
(d)(3) that the public notice must be in a format accessible to 
individuals with developmental disabilities or their representatives, 
e.g., tape, diskette (section 142(a)(4)(B) of the Act).
    In paragraph (d)(4), we are proposing that after the expiration of 
the 45-day public comment period required by paragraph (d)(1), the 
designating official must conduct a public hearing on the redesignation 
proposal. After consideration of all public and agency comments, the 
designating official must give notice of the final decision to the 
currently designated agency and the public through the same means used 
[[Page 26778]] under paragraph (d)(3). If the notice to the currently 
designated agency states that the redesignation will take place, it 
must also inform the agency of its right to appeal this decision to the 
Assistant Secretary, Administration for Children and Families. The 
redesignation shall not be effective until 10 working days after 
notifying the current Protection and Advocacy agency or, if the agency 
appeals, until the Assistant Secretary has considered the appeal.
    We are proposing new requirements in Sec. 1386.20(e) to address the 
procedures by which a Protection and Advocacy agency which has been 
redesignated may appeal the designation to the Assistant Secretary. The 
Assistant Secretary will consult with administrators of Federal 
advocacy programs that will be directly affected by the proposed 
redesignation in making a final decision on the appeal, including the 
Center for Mental Health Services, the Rehabilitation Services 
Administration, the National Institute on Disability and Research, and 
any other Federal agencies which administer advocacy programs that will 
be directly affected by the proposed redesignation.
    The Administration on Developmental Disabilities is particularly 
interested in receiving comments on this area.
    In Sec. 1386.21(a) we are proposing to update the reference from 
the Basic Support Program to the State Developmental Disabilities 
Council. In paragraphs (b) (1) and (2) we are proposing to revise the 
regulations to incorporate the prohibition of compelled disclosure of 
information in client records pursuant to section 142(j) of the Act, as 
amended (1994 Amendments). This includes a reference to Federal law in 
the final sentence of paragraph (b)(1) that is consistent with the 
intent of the existing regulation, which is to allow parents or legal 
guardians access to a client's record except when such access is 
legally prohibited.
    We are proposing regulations in a new paragraph (c)(1) to indicate 
that the Protection and Advocacy System must have access to records of 
an individual with a developmental disability as provided by section 
142(a)(2)(I) of the Act and the authority necessary to conduct full 
investigations of abuse and neglect on the Protection and Advocacy 
System's determination of probable cause or if the incidents are 
reported to the System as provided by section 142(a)(2)(B).
    Questions have arisen over whether P&As are required to have 
authority to obtain records of individuals who are no longer living. 
The required authority for access to records of persons with 
developmental disabilities is described in section 142(a)(2)(I). This 
provision includes a requirement for authority to access records of 
persons who, by reason of mental or physical condition, are unable to 
authorize the System's access to such records, and are without a legal 
guardian or conservator, or for whom the legal representative is the 
State; and about whom the System has had a report of abuse or neglect 
or as the result of monitoring or other activities has probable cause 
to believe such individual has been subject to abuse or neglect. 
Section 142(f) defines ``record'' to include reports of deaths 
occurring in a facility prepared by an agency or staff person charged 
with investigating the event. Based on these provisions, ADD is 
proposing to reference, in paragraph (c)(1) the P&A's authority to 
access records of persons with developmental disabilities who are no 
longer living.
    ADD understands that P&As undertake investigations of incidents of 
abuse and neglect based on media reports, general investigations, 
inspection reports or other credible information regarding abuse and 
neglect. P&As also may use information gained through telephone calls 
or informal complaints by residents, staff, relatives or friends. The 
proposed regulations are intended to confirm the authority of P&As to 
rely on such information as grounds for investigations of incidents of 
abuse and neglect either because they are reports of incidents, or 
because they constitute ``probable cause.'' Some facilities have 
claimed that P&As must make individual-specific findings of probable 
cause before they may investigate. The definition of probable cause 
includes ``the reported existence of conditions or problems that are 
usually associated with abuse and neglect.''
    In paragraph (c)(2) we are proposing Protection and Advocacy 
Systems must have trained staff to conduct full investigations of 
suspected instances of abuse and neglect or if the incidents are 
reported to the System. In paragraph (c)(3) we are proposing to require 
that Protection and Advocacy Systems have authority to have access at 
reasonable times and locations to residents of any private or public 
facility that is providing services, support, and other assistance to 
such residents. This requirement is based on section 142(a)(2)(H) of 
the statute. In addition, the proposed paragraph (c)(3) requires that 
Protection and Advocacy Systems have authority to access at reasonable 
times and locations staff of private or public facilities when 
investigating incidents of abuse and neglect. This requirement is based 
upon section 142(a)(2)(B). ADD views the authority for access to staff 
of facilities as a necessary part of the authority to investigate 
incidents of abuse and neglect.
    Also, the Administration on Developmental Disabilities wants to 
address the concerns raised by P&As that their authority continues to 
be challenged in the areas of access to records and determining 
probable cause tied to abuse and neglect cases. The statutory 
definition of ``record,'' which appears at section 142(f) and is 
reiterated in the proposed Sec. 1386.19, encompasses the records a 
facility would have on an individual with a developmental disability, 
and reports which were prepared by investigators in connection with 
incidents of abuse or neglect. We believe this definition must be 
interpreted liberally in order to ensure proper exercise of the 
authority to investigate incidents of abuse and neglect which P&As must 
have under section 142(a)(2)(B). ADD also believes that it is critical 
to this investigative function that Systems be given access to records 
promptly. Undue delay can prevent a System from intervening to prevent 
further abuse or neglect.
    The Act and the proposed regulations refer to the authority of P&As 
to determine probable cause in connection with investigation of 
incidents of abuse and neglect. The Agency is concerned that in the 
exercise of their required authority under section 142(a)(2)(B) to 
investigate incidents based on probable cause that P&As not be unduly 
hampered. The Act does not require a judicial or other third party 
determination of whether probable cause exists. In the ordinary 
situation, a belief by P&A staff that an individual may be subject to 
or has been subject to abuse or neglect should be sufficient to 
establish probable cause. In order to clarify the meaning of probable 
cause, we have proposed a definition in Sec. 1396.19.
    In paragraph (c)(4), we are proposing that the Protection and 
Advocacy Systems must be authorized to keep confidential the names and 
identity of individuals who furnish information that forms the basis 
for a determination that probable cause exists. We believe that 
disclosure of this information would compromise the effectiveness and 
integrity of the investigation and could expose sources and already 
vulnerable clients to retaliation. Moreover, such disclosure would 
likely provide a disincentive to other potential informants to come 
forward in the future. [[Page 26779]] 
    The Administration on Developmental Disabilities recognizes that 
the requirement in the proposed regulation for access to private 
institutions may be problematic, especially relating to existing State 
law and rights of access to records and privacy issues. Therefore, we 
are particularly interested in receiving comments on the possible 
impact of these provisions on Protection and Advocacy Systems, State 
Governments and private institutions.
    A new paragraph (d) is being added which addresses the issue of a 
Protection and Advocacy System restricting the use of appropriate 
remedies on behalf of individuals with developmental disabilities 
through litigation or legal action pursuant to section 142(a)(2)(A)(i) 
and (h)(1) of the Act (1994 Amendments). We are adding a new paragraph 
(e) to address section 142(a)(2)(J) of the Act regarding hiring 
freezes, reductions in force, or prohibitions on staff travel. For 
paragraph (f) we are proposing that a Protection and Advocacy System 
may exercise their authority under State law where the authority 
exceeds the authority required by the Developmental Disabilities Act. 
However, the Protection and Advocacy System must have at least the 
authority required under the Act, and may have additional authority 
granted by the State.
    Section 1386.22 is being added to establish a new section for the 
Protection and Advocacy Systems regarding Public Notice of Federal 
Onsite Review pursuant to section 142(k) of the 1994 Amendments. Prior 
to any Federal review of the State program, a 30 day notice and an 
opportunity for public comment must be provided. As this activity is an 
on-going administrative function, such notice will not be given through 
the Federal Register.
    In Sec. 1386.23, Periodic reports: Protection and Advocacy System, 
we are proposing to revise the title from ``system'' to ``agency''. 
Also, we are deleting the current language contained in paragraph (a) 
regarding assurances of compliance as such records are on file. 
Paragraph (a) now proposes regulations regarding the submission of the 
Protection and Advocacy annual report. We are proposing that the report 
submitted by the Protection and Advocacy agency be submitted by January 
1 of each year in a format designated by the Secretary to ensure 
uniform reporting on the activities and accomplishments carried out 
under the system during the previous year for the Report to Congress. 
An Information Collection Request for Reinstatement will be submitted 
to OMB. In Sec. 1386.23(b) editorial changes are being proposed 
regarding the financial report to incorporate a reference to the 
Administration for Children and Families rather than the Office of 
Human Development Services. This Information Collection is an approved 
OMB document. We are proposing to include new requirements in 
paragraphs (c) and (d) to address the annual statement of objectives 
and priorities of the Protection and Advocacy system pursuant to 
section 142(a)(2)(C) of the Act (42 U.S.C. 6042(a)(2)(C)) and section 
107(b) of the Act (42 U.S.C. 6006(b)). ADD will be submitting an 
Information Collection Request to OMB. ADD is particularly interested 
in receiving comments on the public review and comment process for this 
report because we want to make sure that individuals with developmental 
disabilities and their families influence the development and are aware 
of the Protection and Advocacy priorities so they know what they can 
expect from the Protection and Advocacy System.
    In Sec. 1386.24 Non-allowable costs for the Protection and Advocacy 
System, we are revising paragraph (a) to replace ``persons'' with 
developmental disabilities to ``individuals'' with developmental 
disabilities in (a)(1) and renumbering current paragraph (b) as (a)(2). 
We are proposing a new paragraph (b) on attorneys fees being considered 
as program income and as such, must be used to further the objectives 
of the program pursuant to section 142(h)(2) of the Act (1990 and 1994 
Amendments).
    The Administration on Developmental Disabilities encourages a 
Protection and Advocacy System to use program standards for self-
evaluations and peer consultations to identify the need for technical 
assistance or other quality enhancement intervention. Performance 
standards include all applicable statutory and regulatory requirements 
as well as standards of quality developed in collaboration with a 
committee of representatives of State Protection and Advocacy Systems.
    In part 1386, subpart C will read--State Plan for Assisting in the 
Development of a Comprehensive System of Services and Supports for 
Individuals with Developmental Disabilities. We are proposing to revise 
the title to more accurately reflect how the provision of service 
related activities and supports are tied to the State Plan (1994 
Amendments).
    In Sec. 1386.30, State plan requirements, we are proposing to 
revise and include new regulatory language to clarify the respective 
roles and responsibilities of the State Developmental Disabilities 
Council and the Designated State Agency. Pursuant to section 124(c)(3) 
of the Act (42 U.S.C. 6024(c)(3)), we are proposing language in 
Sec. 1386.30(a) to require that the development and submission of the 
State plan is the responsibility of the State Developmental 
Disabilities Council and that the State Developmental Disabilities 
Council will consult with the Designated State Agency before submitting 
the State plan to ensure that the State plan is not in conflict with 
applicable State laws. Paragraph (a) also indicates that the designated 
State agency shall provide assurances and support services to the 
Council pursuant to section 124(d)(3)(A) (42 U.S.C. 6024(c)(3)) of the 
Act.
    We are proposing to revise paragraph (c)(1) to delete the language 
``administration of the plan'' and indicate that the State plan must 
identify the program unit(s) within the Designated State Agency 
responsible for providing assurances and fiscal and other support 
services. We are then proposing in paragraph (c)(3) to include language 
that the State Plan must address how the Developmental Disabilities 
network in the State (i.e., Developmental Disabilities Councils; 
Protection and Advocacy System and University Affiliated Program(s)) is 
working with the disabilities community to bring about broad systems 
change to benefit individuals with developmental disabilities, and, 
where applicable, the ways in which individuals with other disabilities 
may benefit as well. The current State Plan guideline has OMB approval. 
ADD will prepare an Information Collection Request to OMB based on the 
new requirements of the 1994 Amendments. We are proposing to include 
new regulatory language in Sec. 1386.30(e) to address section 
124(c)(4)(A)--Demonstration of New Approaches (1994 Amendments). The 
State Plan may provide for funding of projects to demonstrate new 
approaches to enhance the independence, productivity, and integration 
and inclusion into the community of individuals with developmental 
disabilities. Such projects are not to exceed three years in duration 
and may include assistance in developing strategies for securing funds 
for continuation of the project from sources other than funds received 
under the Act. This requirement is based on our experience in 
administering the Developmental Disabilities Program. We are then 
proposing to rename current paragraphs (e) to (f) in Sec. 1386.30. We 
are [[Page 26780]] removing the regulation on individual habilitation 
plan pursuant to the 1994 Amendments and moving human rights (current 
(e)(3) to the new (f)(2)). We are proposing a new paragraph (3) to 
address the accessibility of buildings used in connection with 
activities assisted under the Plan to ensure that individuals with 
disabilities are able to participate in the work of the Council. In 
Sec. 1386.30(f)(4) we are proposing new language to address the 
responsibility of the State Developmental Disabilities Council 
regarding budgeting, staff hiring and supervision and staff assignment 
pursuant to section 124(c) (8), (9), and (10)) of the Act (42 U.S.C. 
6024(c) (8), (9), and (10)). Of particular note, we are clarifying that 
the intended meaning of the phrase in the statute, ``consistent with 
state law'' means that the hiring of State Developmental Disabilities 
Council staff must be done in accordance with State personnel policies 
and procedures, except that a State shall not apply hiring freezes, 
reduction in force, prohibitions on staff travel, or other policies, to 
the extent that such policies would impact staff or functions funded 
with Federal funds and would prevent the Council from carrying out its 
functions under the Act.
    In Sec. 1386.31, Plan submittal and approval, we are proposing to 
add a new paragraph (a) in response to section 122(d)(1) of the Act 
(1994 Amendments) on a public review and comment process on the State 
Plan. We subsequently renumbered the current paragraphs and revised 
paragraph (b) to reference a ``final State Plan'' or ``amendment(s)'' 
to incorporate the public comment process.
    In Sec. 1386.32, Periodic Reports: Basic State grants, we are 
proposing to revise the title to read Sec. 1386.32 Periodic reports: 
Federal assistance to State Developmental Disabilities Councils (1994 
Amendments). In Sec. 1386.32(a) an editorial change is being made to 
reference the Administration for Children and Families. ADD will submit 
an Information Collection Reinstatement Request to OMB for this 
requirement. In Sec. 1386.32(b) we are proposing to revise the 
regulatory language to reference the Annual Program Performance Report 
(annual report requirements pursuant to section 107(a) of the Act (42 
U.S.C. 6006(a)), thus requiring a format designated by the Secretary. 
Use of a uniform format will facilitate Council reporting, ADD data 
collection and analysis, and preparation of the Secretary's Annual 
Report to Congress. ADD will prepare an Information Collection 
Reinstatement Request to OMB for this requirement.
    In Sec. 1386.33, Protection of employee's interests, we are 
revising paragraph (a) to update the statutory references to section 
122(c)(5)(K) of the Act (1994 Amendments) and to replace the phrase 
``alternative community living arrangements'' to ``community living 
activities.'' In a new Sec. 1386.34, entitled ``Designated State 
Agency'', we propose regulations in response to section 124(d)(2)(D) of 
the Act (1994 Amendments) on the redesignation of the Designated State 
Agency and the right to appeal by non-State agency members of the State 
Developmental Disabilities Council to the Assistant Secretary. (The 
Secretary has delegated the authority to hear such appeals to the 
Assistant Secretary for Children and Families.) We are proposing an 
editorial change to the heading of Sec. 1386.35 to read, ``Allowable 
and non-allowable costs for Federal assistance to State Developmental 
Disabilities Councils'' and an editorial change to paragraph (b)(1) to 
change the word ``persons'' to ``individuals''. We are then proposing 
to add a new paragraph (d) to clarify implementation of the non-Federal 
share requirements. We are also proposing an editorial change to the 
heading of Sec. 1386.36 to read, ``Final disapproval of the State plan 
or plan amendments'' and in paragraph (e) an editorial change is being 
proposed to incorporate the reference to the Assistant Secretary for 
Children and Families rather than the Assistant Secretary for Human 
Development Services. Finally, we are proposing a new Sec. 1386.37, 
Public Notice of Federal Onsite Review for the State Developmental 
Disabilities Councils. This requirement complements Sec. 1386.22, 
Public Notice of Federal Onsite Review for the Protection and Advocacy 
Systems. ADD wants to ensure that individuals with developmental 
disabilities are aware and have an opportunity to comment on the 
actions of the Council. Prior to a Federal review of the State program 
a 30 day notice and an opportunity for public comment must be provided. 
As this activity is an on-going administrative function, the notice is 
not being given through the Federal Register.
    The Administration on Developmental Disabilities encourages State 
Developmental Disabilities Councils to use program standards in self-
evaluations and peer consultations to identify the need for technical 
assistance or other quality enhancement intervention. Performance 
standards include all applicable statutory and regulatory requirements 
as well as standards of quality developed in collaboration with a 
committee of representatives of State Developmental Disabilities 
Councils.
    In part 1386, subpart D--Practice and Procedure for Hearings 
Pertaining to States' Conformity and Compliance with Developmental 
Disabilities State Plans, Reports and Federal Requirements, we are 
proposing an editorial change in Sec. 1386.80 Definitions, to 
incorporate the reference to the Administration for Children and 
Families rather than the Office of Human Development Services; clarify 
that the term ``Presiding officer'' means anyone designated by the 
Assistant Secretary to conduct any hearing held under this subpart; and 
include a definition of the term ``payment or allotment'' for subpart 
D. The term ``payment or allotment'' is being introduced into the 
regulations in order to ensure uniformity in the terminology used in 
subpart D to refer to assistance provided to States under Part B or C 
of the Act. In Sec. 1386.85, Filing and service of papers, in paragraph 
(a) the phrase ``HDS Hearing Clerk'' is being replaced with 
``designated individual'' to incorporate Administration for Children 
and Families procedures. As part of the notice of hearing, the 
Assistant Secretary will designate an individual to receive all papers 
filed in connection with a proceeding under subpart D.
    In Sec. 1386.90, Notice of hearing or opportunity for hearing, we 
are making editorial changes which include: the full reference to the 
State Developmental Disabilities Council; changing the Protection and 
Advocacy Office to the Protection and Advocacy System; and reference 
the designated official rather than official for the Protection and 
Advocacy System. In Sec. 1386.92, Place, we are including language on 
accessibility regarding the place of the hearing. In Sec. 1386.93, 
Issues at hearing, we are making an editorial change to paragraph 
(c)(2)(i) by deleting the (i). Also, the reference to ``the report of 
the description of the State protection and advocacy system'' in 
paragraphs (c)(2) and (d) are being deleted because the Act no longer 
requires such a report. In paragraph (c)(2), we are substituting 
references to ``the activities of the State's protection and advocacy 
system'' and providing that a ``document explaining changes in the 
activities of the State's Protection and Advocacy System on which the 
State and the Assistant Secretary have settled must be sent to the 
parties.'' In paragraph (d), we are clarifying the reference to the 
State plan under part B of the Act and adding a reference to the 
activities of the State's Protection and Advocacy System. 
[[Page 26781]] 
    In Sec. 1386.94, Request to participate in hearing, the following 
changes are being proposed in paragraphs (a), (b)(2) and (c)(1). The 
full reference of the State Developmental Disabilities Council is being 
included along with updating the language to reference the Protection 
and Advocacy program as a ``System'' rather than an ``Office.'' The 
wording ``HDS Hearing Clerk'' is being replaced with ``designated 
individual.'' We are proposing editorial changes in Sec. 1386.101, 
Authority of presiding officer, in paragraphs (a)(11) and (c). Also, we 
are updating the references in Sec. 1386.111 Decisions following 
hearing, paragraphs (c) and (d) and Sec. 1386.112 Effective date of 
decision by the Assistant Secretary, paragraphs (a) and (b) to reflect 
amendments to the Act and to make other editorial changes. The 
references to ``report for the State Protection and Advocacy system'' 
are being deleted because the Act no longer requires such a report. In 
its place we are substituting references to ``the activities of the 
State's Protection and Advocacy System'' in Secs. 1386.111(c)(1) and 
1386.112(b). The terms ``Federal financial participation,'' ``the 
State's total allotment,'' ``further payments,'' ``payments,'' 
``allotment'' and ``Federal funds'' in Sec. 1386.111(c) and 
Sec. 1386.112 (a) and (b) are being replaced by the term ``payment or 
allotment'' which will be defined in the proposed revision of 
Sec. 1386.80. In Sec. 1386.111(c)(1), we are changing the reference to 
``sections 122, 127 and 142'' to ``sections 122, 127 or 142.'' This 
change is necessary because the provision applies to hearings held 
under any of the three provisions and not only to hearings held under 
all three provisions. In Sec. 1386.111(c)(2), we are substituting a 
reference to section 127 for the current reference to section 135, 
which has been removed from the Act. We are also substituting a 
reference to section 129 for the current reference in Sec. 1386.111(d) 
to section 138.
    In Sec. 1386.112(a), we are substituting a reference to section 122 
for the reference to section 135, which has been removed from the Act. 
Section 122 is the correct reference because the provision covers 
hearings relating to the conformity of State plans with Federal 
requirements. In Sec. 1386.112(b), we are substituting references to 
sections 127 and 142 for the current references to sections 113 and 
133, which have been removed from the Act. Section 127 is the correct 
reference because the provision covers hearings relating to the State's 
compliance with the requirements of the State plan.
PART 1387--PROJECTS OF NATIONAL SIGNIFICANCE

    We are proposing to revise regulatory language in Part 1387--
Projects of National Significance, Sec. 1387.1, General requirements. 
In paragraph (a), we propose to change the phrase ``the developmentally 
disabled,'' to ``individuals with developmental disabilities'' as 
indicated in the 1994 Amendments. Regarding the announcement on 
proposed priorities, paragraph (b) requires a statutory update (1994 
Amendments). In paragraph (d), we are proposing language to more 
clearly define the type of project ADD would consider for funding with 
this limited amount of discretionary money. We are proposing that 
Projects of National Significance, other than technical assistance and 
data collection, must be exemplary and innovative models and have 
potential for replication at the local level as well as nationally, or 
otherwise meet the goals of Part E of the Act.

PART 1388--UNIVERSITY AFFILIATED PROGRAMS

    We are proposing to revise regulatory language in Part 1388--The 
University Affiliated Programs by updating the standards (section 
153(b) of the Act--1994 Amendments). The current standards for UAPs 
were published in the Federal Register on November 20, 1987. As stated 
in the Conference Report on S. 1284, the description of the purpose and 
scope of UAPs has been revised to incorporate updated concepts about 
these university-based programs. ``The description of UAPs recognizes 
the fact that UAPs are located in, or affiliated with universities, 
and, as such, provide an important foundation for higher education's 
response to the needs of individuals with developmental disabilities 
and their families. UAPs contribute to and reflect the overall mission 
of their host universities, and seek to ensure that the activities, 
resources, and expertise of the university are responsive to 
individuals with developmental disabilities and their families, 
advocacy organizations, and service systems and providers.'' Therefore, 
ADD is proposing to revise the standards to reflect this new 
description of UAPs (section 151 of the Act--Purpose and Scope of 
Activities, 1994 Amendments). The standards will continue to ``reflect 
the special needs of all individuals with developmental disabilities 
who are of various ages'' as required in section 153(b).
    The proposed program criteria are the basic requirements that a UAP 
must meet if it is to receive a grant under this program. They relate 
to: (1) The mission of the UAP; (2) the governance and administration 
of the program; (3) preparation of personnel; (4) services and supports 
regarding community training and technical assistance (direct services-
optional); and (5) dissemination of information and research findings. 
For each area, there is an introductory statement found at paragraph 
(a) and the program criteria begin with paragraph (b). Compliance with 
the program criteria is a prerequisite for the minimum funding level of 
a university affiliated program. However, compliance with the program 
criteria does not, by itself, constitute an assurance of funding. The 
Administration on Developmental Disabilities is particularly interested 
in receiving comments on the proposed program criteria.
    Also, the Administration on Developmental Disabilities will be 
issuing draft Guidelines, at a later date, to provide examples of 
Indicators of Conformance with the Program Criteria. These indicators 
would illustrate the types of measures which could be used to 
demonstrate that the program criteria have been achieved. The 
Administration on Developmental Disabilities plans to use the 
indicators of conformance as a technical assistance/partnership model 
with University Affiliated Programs to further program outcomes.
    We are proposing to revise Sec. 1388.1 Definitions, to indicate 
what is now meant by ``program criteria'' and are deleting the 
definitions for ``qualitative criteria'' and ``measurements of program 
outcome''. In addition, we are defining other terms as used in part 
1388. For example, ``accessible'', ``capacity building'' and 
``collaboration''. Section 1388.2 Program criteria--purpose remains 
unchanged. We are deleting all the current regulatory language of 
Sec. 1388.3 Program criteria--administration, Sec. 1388.5 Program 
criteria--training, Sec. 1388.6 Program criteria--technical assistance, 
and Sec. 1388.7 Program criteria--information dissemination. Of 
particular note, regarding the dissemination of information, we are 
proposing that materials disseminated by the UAP must be available in 
formats accessible to individuals with a wide range of disabilities, 
e.g., audiotape and computer disk. We are proposing changes to the 
current regulations found in Sec. 1388.4 Program criteria--services. 
Section 1388.6 Program criteria--services and supports, paragraph (c), 
will now cover Direct Services. These regulations are optional because 
the requirement that UAP's provide direct [[Page 26782]] services is 
now optional pursuant to section 151 of the Act (1994 Amendments). As 
the 1994 Amendments deleted the authority for Satellite Centers, 
Sec. 1388.8 Use of program criteria for Satellite Centers is being 
deleted and reserved. Finally, we are revising the current regulations, 
Sec. 1388.9 Peer Review to incorporate changes from the 1994 Amendments 
(section 153(f)(2)). Paragraph (a) describes the purpose of the peer 
review. The reference to Satellite Centers has been deleted and the 
provision of including on-site visits or inspection as necessary has 
been included. Paragraph (b) has been revised to simply state that 
applications for funding opportunities under part D, Section 152 of the 
Act, must be evaluated through the peer review process. In paragraph 
(c), language is being revised regarding the composition of the panel 
which is to be composed of non-Federal individuals who, by experience 
and training, are highly qualified to assess the comparative quality of 
applications for assistance.
Impact Analysis

Executive Order 12866

    Executive Order 12866 requires that regulations be reviewed to 
ensure that they are consistent with the priorities and principles set 
forth in the Executive Order. The Department has determined that this 
rule is consistent with these priorities and principles. An assessment 
of the costs and benefits of available regulatory alternatives 
(including not regulating) demonstrated that the approach taken in the 
regulation is the most cost-effective and least burdensome while still 
achieving the regulatory objectives.
    The NPRM proposes to amend current regulation to implement changes 
made by the Developmental Disabilities Assistance and Bill of Rights 
Act Amendments of 1990 (Pub. L. 101-496 and by the 1994 Amendments 
(Pub. L. 103-230). The regulations propose to provide guidance on 
redesignation of the Protection and Advocacy System and the appeal 
process; include regulations on the Protection and Advocacy annual 
statement of objectives; address State Developmental Disabilities 
Council responsibilities and those of the Designated State Agency; set 
new program standards for the University Affiliated Program; and make 
other clarifying, technical, and conforming changes.
    We estimate that these regulations will not result in additional 
costs to the Federal government, the States, universities and any other 
organizations to which they may apply.

Regulatory Flexibility Act of 1980

    Consistent with the Regulatory Flexibility Act (5 U.S.C. Ch.6), we 
try to anticipate and reduce the impact of rules and paperwork 
requirements on small businesses. For each rule with a ``significant 
economic impact on a substantial number of small entities'', we prepare 
an analysis describing the rule's impact on small entities. The primary 
impact of these regulations is on the States, which are not ``small 
entities'' within the meaning of the Act. However, they will affect 
small private institutions providing services to individuals with 
developmental disabilities. This impact will be minimal in that the 
institutions will simply be subject to review at no cost when a 
complaint is made against them. For these reasons, the Secretary 
certifies that these rules will not have a significant impact on a 
substantial number of small entities.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1980, Pub.L. 96-511, all 
Departments are required to submit to the Office of Management and 
Budget (OMB) for review and approval any reporting or recordkeeping 
requirement contained in a proposed or final rule.
    This proposed rule contains a new information collection 
requirement at Sec. 1386.23(c), an annual statement of objectives and 
priorities of the Protection and Advocacy system pursuant to section 
142(a)(2)(C) of the Act (42 U.S.C. 6042(a)(2)(C)). As required, ADD 
will submit this new information collection requirement to OMB for 
review. The other sections (listed below) which are being amended in 
this proposed rule contain information collection requirements, some 
are already approved by OMB, while others will require reinstatement to 
OMB due to requirements from the 1994 Amendments. Organizations and 
individuals desiring to submit comments on the new information 
collection requirement should direct them to the agency official 
designated for this purpose whose name appears in this preamble, and to 
the Office of Information and Regulatory Affairs, OMB, New Executive 
Office Building (Room 3002), Washington, DC 20503. ATTN: Desk Officer 
for HHS/ACF.

                        Reporting and Recordkeeping Requirements in Part 1386 of the NPRM                       
----------------------------------------------------------------------------------------------------------------
                                                                                           Annual       Annual  
    Sec. No.                              Impact                             OMB No.     number of      burden  
                                                                                        respondents     hours   
----------------------------------------------------------------------------------------------------------------
1386.23(a).....  Existing (OMB approval expired, re-approval to be           0980-0160           56        2,240
                  requested).                                                                                   
1386.23(b).....  Existing................................................    0348-0039           56          112
1386.23(c).....  New.....................................................          N/A           56        2,800
1386.30(c).....  Existing................................................    0980-0162           56        5,600
1386.32(a).....  Existing (OMB approval expired, re-approval to be           0980-0212          672        2,912
                  requested).                                                                                   
1386.32(b).....  Existing (OMB approval expired, re-approval to be           0980-0172           55        4,400
                  requested).                                                                                   
----------------------------------------------------------------------------------------------------------------

    There will be no specified format for the submittal of the State 
plan and assurances required in Sec. 1386.30. States may select any 
format they wish as long as they meet the requirements in the Act and 
these regulations.
    Recordkeeping and Reporting requirements for Part 1387 and part 
1388 will be satisfied with the submission of an acceptable grant 
application. The discretionary programs, Projects of National 
Significance (part 1387) and University Affiliated Programs (part 1388) 
use the OMB approved Standard Form 424 series, Application for Federal 
Assistance and Budget Information.

List of Subjects

45 CFR Part 1385

    Disabled, Grant programs/education, Grant programs/social programs, 
Reporting and recordkeeping requirements.

45 CFR Part 1386

    Disabled, Administrative practice and procedure, Grant programs/
education, [[Page 26783]] Grant programs/social programs, Reporting and 
recordkeeping requirements.

45 CFR Part 1387

    Disabled, Grant programs/education, Grant programs/social programs.

45 CFR Part 1388

    Colleges and universities, Grant programs/education, Grant 
programs/social programs, satellite center, university affiliated 
program.

(Catalog of Federal Domestic Assistance Program, Nos. 93.630 
Developmental Disabilities Basic Support and 93.631 Developmental 
Disabilities--Projects of National Significance, and 93.632 
Developmental Disabilities--University Affiliated Program)

    Approved: April 25, 1995.
Mary Jo Bane,
Assistant Secretary for Children and Families.

    For the reasons set forth in the preamble, subchapter I, chapter 
XIII, of title 45 of the Code of Federal Regulations is proposed to be 
amended as follows:
SUBCHAPTER I--THE ADMINISTRATION ON DEVELOPMENTAL DISABILITIES, 
DEVELOPMENTAL DISABILITIES PROGRAM

PART 1385--REQUIREMENTS APPLICABLE TO THE DEVELOPMENTAL 
DISABILITIES PROGRAM

    1. The authority citation for part 1385 continues to read as 
follows:

    Authority: 42 U.S.C. 6000 et seq.

    2. Section 1385.1 is amended by revising paragraphs (a) and (b) and 
republishing the introductory text to read as follows:


Sec. 1385.1  General.

    Except as specified in Sec. 1385.4, the requirements in this part 
are applicable to the following programs and projects:
    (a) Federal Assistance to State Developmental Disabilities 
Councils;
    (b) Protection and Advocacy of the Rights of Individuals with 
Developmental Disabilities;
* * * * *
    3. Section 1385.3 is amended by revising the definitions of ADD and 
Commissioner and adding alphabetically a definition for ACF, and 
Protection and Advocacy System, to read as follows:


Sec. 1385.3  Definitions.

* * * * *
    ACF means the Administration for Children and Families within the 
Department of Health and Human Services.
* * * * *
    ADD means the Administration on Developmental Disabilities, within 
the Administration for Children and Families.
    Commissioner means the Commissioner of the Administration on 
Developmental Disabilities, Administration for Children and Families, 
Department of Health and Human Services or his or her designee.
* * * * *
    Protection and Advocacy System means the organization or agency 
designated in a State to administer and operate a protection and 
advocacy program for individuals with developmental disabilities under 
part C of the Developmental Disabilities Assistance and Bill of Rights 
Act, as amended by Pub. L. 103-230 (42 U.S.C. 6041, 6042); and advocacy 
programs under the Protection and Advocacy for Mentally Ill Individuals 
Act of 1986 (PAIMI Act), as amended, (42 U.S.C. 10801 et seq.) the 
Protection and Advocacy of Individual Rights Program (PAIR), (29 U.S.C. 
794(e); and the Technology-Related Assistance for Individuals With 
Disabilities Act of 1988, as amended (29 U.S.C. 2212(e)). Protection 
and Advocacy System also may be designated by the Governor of a State 
to conduct the Client Assistance Program (CAP) authorized by section 
112 of the Rehabilitation Act of 1973, as amended, (29 U.S.C. 732). 
Finally, the Protection and Advocacy System may provide advocacy 
services under other Federal programs.
* * * * *
    4. Section 1385.4 is revised to read as follows:


Sec. 1385.4  Rights of individuals with developmental disabilities.

    (a) Section 110 of the Act, Rights of Individuals with 
Developmental Disabilities (42 U.S.C. 6009) is applicable to the 
programs authorized under the Act, except for the Protection and 
Advocacy System.
    (b) In order to comply with section 122(c)(5)(G) of the Act (42 
U.S.C. 6022(c)(5)(G)), regarding the rights of individuals with 
developmental disabilities, the State must meet the requirements of 45 
CFR 1386.30(e)(3).
    (c) Applications from university affiliated programs or for 
projects of national significance grants must also contain an assurance 
that the human rights of individuals assisted by these programs will be 
protected consistent with section 110 (see section 153(c)(3) and 
section 162(c)(3) of the Act).


Sec. 1385.5  [Removed and reserved]

    5. Section 1385.5, Recovery of Federal funds used for construction 
of facilities is removed and reserved.
    6. Section 1385.6 is revised to read as follows:


Sec. 1385.6  Employment of individuals with disabilities.
    Each grantee which receives Federal funding under the Act must meet 
the requirements of section 109 of the Act (42 U.S.C. 6008) regarding 
affirmative action. The grantee must take affirmative action to employ 
and advance in employment and otherwise treat qualified individuals 
with disabilities without discrimination based upon their physical or 
mental disability in all employment practices such as the following: 
Employment, upgrading, demotion or transfer, recruitment, advertising, 
layoff or termination, rates of pay or other forms of compensation, and 
selection for training, including apprenticeship. This obligation is in 
addition to the requirements of 45 CFR part 84, subpart B, prohibiting 
discrimination in employment practices on the basis of disability in 
programs receiving assistance from the Department. Recipients of funds 
under the Act also may be bound by the provisions of the Americans with 
Disabilities Act (Pub. L. 101-336, 42 U.S.C. 12101 et seq.) with 
respect to employment of individuals with disabilities. Failure to 
comply with section 109 of the Act may result in loss of Federal funds 
under the Act. If a compliance action is taken, the State will be given 
reasonable notice and an opportunity for a hearing as provided in 
subpart D of 45 CFR part 1386.


Sec. 1385.7  [Removed and reserved]

    7. Section 1385.7 Waivers, is removed and reserved.
    8. Section 1385.8 is amended by revising the introductory text to 
read as follows:


Sec. 1385.8  Formula for determining allotments.

    The Commissioner will allocate funds appropriated under the Act for 
the State Developmental Disabilities Councils and the Protection and 
Advocacy Systems on the following basis:
* * * * *
    9. Section 1385.9 is amended by revising the first sentence of 
paragraph (a); revising paragraphs (b), (c), and (d) and adding a new 
paragraph (e) to read as follows:


Sec. 1385.9  Grants administration requirements.

    (a) The following parts of title 45 CFR apply to grants funded 
under parts 1386 [[Page 26784]] and 1388 of this chapter and to grants 
for Projects of National Significance under section 162 of the Act (42 
U.S.C. 6082).
* * * * *
    (b) The Departmental Appeals Board also has jurisdiction over 
appeals by grantees which have received grants under the University 
Affiliated program or for Projects of National Significance. The scope 
of the Board's jurisdiction concerning these appeals is described in 45 
CFR part 16.
    (c) The Departmental Appeals Board also has jurisdiction to decide 
appeals brought by the States concerning any disallowances taken by the 
Commissioner with respect to specific expenditures incurred by the 
States or by contractors or subgrantees of States. This jurisdiction 
relates to funds provided under the two formula programs--part B of the 
Act--Federal Assistance to State Developmental Disabilities Councils 
and part C of the Act--Protection and Advocacy of the Rights of 
Individuals with Developmental Disabilities. Appeals filed by States 
shall be decided in accordance with 45 CFR part 16.
    (d) In making audits, examinations, excerpts and transcripts of 
records for the State Developmental Disabilities Councils, the 
University Affiliated programs, and the Projects of National 
Significance grantees and subgrantees, as provided for in 45 CFR part 
74 and part 92, the Department will keep information about individual 
clients confidential to the extent permitted by law and regulations.
    (e) (1) In making any periodic audit, report, or evaluation of the 
performance of the Protection and Advocacy System, the Secretary does 
not require the Protection and Advocacy System to disclose the identity 
of, or any other personally identifiable information related to, any 
individual requesting assistance under the program.
    (2) However, notwithstanding paragraph (e)(1) of this section, if 
an audit, monitoring review, evaluation, or other investigation by the 
Department produces evidence that the System has violated the Act or 
the regulations, the System will bear the burden of proving its 
compliance. The System's inability to establish compliance because of 
the confidentiality of records will not relieve it of this 
responsibility. The eligible system may elect to obtain a release from 
all individuals requesting or receiving services at the time of intake 
or application. The release shall state that only information directly 
related to client and case eligibility will be subject to disclosure to 
officials of the Department.

PART 1386--FORMULA GRANT PROGRAMS

    10. The authority citation for part 1386 continues to read as 
follows:

    Authority: 42 U.S.C. 6000 et seq.

Subpart A--Basic Requirements

    11. Section 1386.1 is revised to read as follows:


Sec. 1386.1  General.

    All rules under this subpart are applicable to both the State 
Developmental Disabilities Councils and the Protection and Advocacy 
System.
    12. Section 1386.2 is amended by revising paragraphs (b)(1) and (c) 
to read as follows:


Sec. 1386.2  Obligation of funds.

* * * * *
    (b) (1) A State incurs an obligation for acquisition of personal 
property or for the performance of work on the date it makes a binding, 
legally enforceable, written commitment, or when the State 
Developmental Disabilities Council enters into an Interagency Agreement 
with an agency of State government for acquisition of personal property 
or for the performance of work.
* * * * *
    (c) (1) The Protection and Advocacy System may elect to treat entry 
of an appearance in judicial and administrative proceedings on behalf 
of an individual with a developmental disability as a basis for 
obligating funds for the litigation costs. The amount of the funds 
obligated must not exceed a reasonable estimate of the costs, and the 
way the estimate was calculated must be documented.
    (2) For the purpose of this paragraph, litigation costs means 
expenses for court costs, depositions, expert witness fees, travel in 
connection with a case and similar costs and costs resulting from 
litigation in which the agency has represented an individual with 
developmental disabilities (e.g. monitoring court orders, consent 
decrees), but not for salaries of employees of the Protection and 
Advocacy System. All funds made available for Federal Assistance to 
State Developmental Disabilities Councils and to the Protection and 
Advocacy System obligated under this paragraph are subject to the 
requirement of paragraph (a) of this section. These funds, if 
reobligated, may be reobligated only within a two year period beginning 
with the first day of the Federal fiscal year in which the funds were 
originally awarded.


Sec. 1386.4  [Removed and reserved]

    13. Section 1386.4, Eligibility for services is removed and 
reserved.
    14. The heading of subpart B is revised to read as follows:

Subpart B--State System for Protection and Advocacy of the Rights 
of Individuals With Developmental Disabilities

    15. A new Sec. 1386.19 is added to include definitions as follows:


Sec. 1386.19  Definitions.

    As used in Secs. 1386.20 and 1386.21 of this part the following 
definitions apply:
    Designating official means the Governor, or other State official, 
who is empowered by the Governor or State legislature to designate the 
State official or public or private agency to be accountable for the 
proper use of funds by the State Protection and Advocacy System.
    Full investigations means the access to clients, public and private 
facilities and entities and their staff, and the records regarding the 
operation of the institution that is necessary for a reasonable person 
to make an informed decision about whether the alleged or suspected 
abuse is taking place or has taken place.
    Probable cause means a reasonable ground for belief that an 
individual or group of individuals with developmental disabilities may 
now be subject to or have been subject to abuse or neglect. The 
reported existence of conditions or problems that are usually 
associated with abuse and neglect will be Probable Cause.
    Record of an individual with a developmental disability includes 
reports prepared or received by any staff of a facility rendering care 
or treatment, or reports prepared by an agency or staff person charged 
with investigating reports of incidents of abuse or neglect, injury or 
death occurring at such facility that describes incidents of abuse, 
neglect, injury, or death occurring at such facility and the steps 
taken to investigate such incidents, and discharge planning records.
    16. Section 1386.20 is amended by revising the heading; revising 
paragraphs (a), (d), and (e); and adding a new paragraph (f) to read as 
follows:


Sec. 1386.20  Designated State Protection and Advocacy System.
    (a) The designating official must designate the State official or 
public or private agency to be accountable for the proper use of funds 
and conduct of the State Protection and Advocacy System.
* * * * * [[Page 26785]] 
    (d)(1) Prior to any redesignation of the agency which administers 
and operates the State Protection and Advocacy System, the designating 
official must give notice of the intention to make the redesignation to 
the agency currently administering and operating the State Protection 
and Advocacy System by registered or certified mail. The designating 
official must also publish a public notice of the proposed action. The 
agency and the public shall have a reasonable period of time, but not 
less than 45 days to respond to the notice.
    (2) The public notice must include:
    (i) The Federal requirements for the Protection and Advocacy system 
for individuals with developmental disabilities (section 142 of the 
Act); and, where applicable, the requirements of the Protection and 
Advocacy for Individuals with Mental Illness Act of 1986, as amended, 
(42 U.S.C. 10805 and 10821); the Protection and Advocacy of Individual 
Rights Program (29 U.S.C. 794(e) and the Client Assistance Program (29 
U.S.C. 732), of the Rehabilitation Act of 1973, as amended; the 
Technology-Related Assistance for Individuals Act of 1988, as amended 
by Pub.L. 103-218 (Protection and Advocacy contracts and grants); or 
any other Federal advocacy program that is administered by the State 
Protection and Advocacy System.
    (ii) The goals and function of the State's Protection and Advocacy 
System including the current Statement of Objectives and Priorities;
    (iii) The name and address of the agency currently designated to 
administer and operate the Protection and Advocacy System; and an 
indication of whether the agency also operates other Federal advocacy 
programs;
    (iv) A description of the current Protection and Advocacy agency 
and the system it administers and operates including, as applicable, 
descriptions of other Federal advocacy programs it operates;
    (v) A clear and detailed explanation of the good cause for the 
proposed redesignation;
    (vi) A statement suggesting that interested persons may wish to 
write the current State Protection and Advocacy agency at the address 
provided in paragraph (d)(2)(iii) of this section to obtain a copy of 
its response to the notice required by paragraph (d)(1) of this 
section. Copies shall be provided in accessible formats to individuals 
with disabilities upon request.
    (vii) The name of the new agency proposed to administer and operate 
the Protection and Advocacy System under the Developmental Disabilities 
program. This agency will be eligible to administer other Federal 
advocacy programs.
    (viii) A description of the system which the new agency would 
administer and operate, including a description of all other Federal 
advocacy programs the agency would operate; and
    (ix) The timetable for assumption of operations by the new agency 
and the estimated costs of any transfer and start-up operations.
    (3) The public notice, as required by paragraph (d)(1) of this 
section, must be in a format accessible to individuals with 
developmental disabilities or their representatives, e.g., tape, 
diskette. The designating official or entity must provide for 
publication of the notice of the proposed redesignation using the State 
register, State-wide newspapers, public service announcements on radio 
and television, or any other legally equivalent process. Copies of the 
notice must be made generally available to individuals with 
developmental disabilities and mental illness who live in residential 
facilities through posting or some other means.
    (4) After the expiration of the public comment period required in 
paragraph (d)(1) of this section, the designating official must conduct 
a public hearing on the redesignation proposal. After consideration of 
all public and agency comments, the designating official or entity must 
give notice of the final decision to the currently designated agency 
and the public through the same means used under paragraph (d)(3) of 
this section. If the notice to the currently designated agency states 
that the redesignation will take place, it also must inform the agency 
of its right to appeal this decision to the Assistant Secretary, 
Administration for Children and Families. The redesignation shall not 
be effective until 10 working days after notifying the current 
Protection and Advocacy agency or, if the agency appeals, until the 
Assistant Secretary has considered the appeal.
    (e)(1) Following notification pursuant to paragraph (d)(4) of this 
section, the Protection and Advocacy agency which is the subject of 
such action may appeal the redesignation to the Assistant Secretary. To 
do so, the Protection and Advocacy agency must submit an appeal in 
writing to the Assistant Secretary within 10 working days of receiving 
official notification under paragraph (d)(4) of this section, with a 
separate copy sent by registered or certified mail to the designating 
official or entity which made the decision concerning redesignation.
    (2) In the event that the agency subject to redesignation does 
exercise its right to appeal under paragraph (e)(1) of this section, 
the designating official or entity must give public notice of the 
Assistant Secretary's final decision regarding the appeal through the 
same means utilized under paragraph (d)(3) of this section within 10 
days of receipt of the Assistant Secretary's final decision under 
paragraph (e)(6) of this section.
    (3) The designating official or entity within 10 working days from 
the receipt of a copy of the appeal must provide written comments to 
the Assistant Secretary (with a copy sent by registered or certified 
mail to the Protection and Advocacy agency appealing under paragraph 
(e)(1) of this section), or withdraw the redesignation. The comments 
must include a summary of the public comments received in response to 
the public notice concerning the proposed redesignation under paragraph 
(d)(2) of this section, the results of the hearing provided for under 
paragraph (d)(4) of this section, and may provide any additional 
relevant information.
    (4) In the event that the designating official withdraws the 
redesignation while under appeal pursuant to paragraph (e)(1) of this 
section, the designating official must notify the Assistant Secretary, 
and the current agency, and must give public notice of his or her 
decision through the same means utilized under paragraph (d)(3) of this 
section.
    (5) As part of their submission under paragraph (e)(1) or (e)(3) of 
this section, either party may request, and the Assistant Secretary may 
grant, an opportunity for an informal meeting with the Assistant 
Secretary at which representatives of both parties will present their 
views on the issues in the appeal. The meeting will be held within 20 
working days of the submission of written comments by the designating 
official or entity under paragraph (e)(2) of this section. The 
Assistant Secretary will promptly notify the parties of the date and 
place of the meeting.
    (6) Within 30 days of the informal meeting under paragraph (e)(5) 
of this section, or, if there is no informal meeting under paragraph 
(e)(5) of this section, within 30 days of the submission under 
paragraph (e)(3) of this section, the Assistant Secretary will issue to 
the parties a final written decision on whether the redesignation was 
for good cause. Redesignation for good cause may include, but is not 
limited to, eliminating longstanding or pervasive inefficiency and 
correcting unacceptable performance. The Assistant Secretary will 
consult with [[Page 26786]] Federal advocacy programs that will be 
directly affected by the proposed redesignation in making a final 
decision on the appeal.
    (f)(1) Within 30 days after the redesignation becomes effective 
under paragraph (d)(4) of this section, the designating official must 
submit an assurance to the Assistant Secretary that the newly 
designated Protection and Advocacy agency meets the requirements of the 
statute and the regulations.
    (2) In the event that the Protection and Advocacy agency subject to 
redesignation does not exercise its rights to appeal within the period 
provided under paragraph (e)(1) of this section, the designating 
official must provide to the Assistant Secretary documentation that the 
agency was redesignated for good cause. Such documentation must clearly 
demonstrate that the Protection and Advocacy agency subject to 
redesignation was not redesignated for any actions or activities which 
were carried out under section 142 of the Act, these regulations or any 
other Federal advocacy program's legislation or regulations.
    17. Section 1386.21 is revised to read as follows:


Sec. 1386.21  Requirements of the Protection and Advocacy System.

    (a) In order for a State to receive Federal financial participation 
for Protection and Advocacy activities under this subpart, as well as 
the State Developmental Disabilities Council activities (subpart C), 
the Protection and Advocacy System must meet the requirements of 
section 142 of the Act (42 U.S.C. 6042) and that system must be 
operational.
    (b) The client's record is the property of the Protection and 
Advocacy agency which must protect it from loss, damage, tampering, or 
use by unauthorized individuals. The Protection and Advocacy agency 
must:
    (1) Keep confidential all information contained in a client's 
records, which includes, but is not limited to, information contained 
in an automated data bank. For purposes of any periodic audit, report, 
or evaluation required under the Act, the Secretary shall not require a 
program to disclose the identify of, or any other personally 
identifiable information related to, any individual requesting 
assistance under such program. This regulation does not limit access by 
parents or legal guardians of minors unless prohibited by State or 
Federal law, court order or the rules of attorney-client privilege;
    (2) Have written policies governing access to, storage of, 
duplication of, and release of information from the client's record; 
and
    (3) Obtain written consent from the client, if competent, or his or 
her guardian, before it releases information to individuals not 
otherwise authorized to receive it.
    (c) (1) A Protection and Advocacy System must have access to 
records of an individual with a developmental disability, including a 
person who is no longer living, as provided by section 142(a)(2)(I) of 
the Act and the authority necessary to conduct full investigations of 
abuse and neglect on the Protection and Advocacy System's determination 
of probable cause or if the incidents are reported to the System.
    (2) A Protection and Advocacy System must have trained staff to 
conduct full investigations of abuse and neglect upon the System's 
determination of probable cause or if the incidents are reported to the 
System.
    (3) Protection and Advocacy Systems must have authority to have 
access at reasonable times and locations to residents of any private or 
public facility that is providing services, supports, and other 
assistance to such residents as provided in section 142(a)(2)(H) of the 
Act. Systems must also have authority to have access at reasonable 
times and locations to staff of private or public facilities when 
investigating incidents of abuse and neglect under the authority 
required in section 142(a)(2)(B).
    (4) Protection and Advocacy systems must be authorized to keep 
confidential the names and identity of individuals who report incidents 
of abuse and neglect and individuals who furnish information that forms 
the basis for a determination that probable cause exists.
    (d) A Protection and Advocacy System shall not implement a policy 
or practice restricting the remedies which may be sought on the behalf 
of individuals with developmental disabilities or compromising the 
authority of the Protection and Advocacy System to pursue such remedies 
through litigation, legal action or other forms of advocacy.
    (e) A State shall not apply hiring freezes, reductions in force, 
prohibitions on staff travel, or other policies, to the extent that 
such policies would impact staff or functions funded with Federal funds 
and would prevent the system from carrying out its mandates under the 
Act.
    (f) A Protection and Advocacy System may exercise its authority 
under State law where the authority exceeds the authority required by 
the Developmental Disabilities Assistance and Bill of Rights Act, as 
amended. However, State law must not diminish the required authority of 
the Protection and Advocacy System.
    18. Section 1386.22 is added to read as follows:


Sec. 1386.22  Public notice of Federal onsite review.

    Prior to any Federal review of the State program, a 30 day notice 
and an opportunity for public comment must be provided. Reasonable 
effort shall be made by the appropriate Regional Office to seek 
comments through notification to major disability advocacy groups, the 
State Bar, other disability law resources, the State Developmental 
Disabilities Council and the University Affiliated Program, for 
example, through newsletters and publications of those organizations. 
The findings of public comments may be consolidated if sufficiently 
similar issues are raised and they shall be included in the report of 
the onsite visit.
    19. Section 1386.23 is revised to read as follows:


Sec. 1386.23  Periodic reports: Protection and Advocacy System.

    (a) By January 1 of each year the Protection and Advocacy System 
shall submit an Annual Program Performance Report as required in 
section 107(b) of the Act, in a format designated by the Secretary.
    (b) Financial status reports must be submitted by the Protection 
and Advocacy Agency according to a frequency interval specified by the 
Administration for Children and Families. In no case will such reports 
be required more frequently than quarterly.
    (c) By August 15 of each year, the Protection and Advocacy System 
shall submit an Annual Statement of Objectives and Priorities for the 
coming fiscal year as required under section 142(a)(2)(C) of the Act. 
It shall include:
    (1) The rationale for the Statement;
    (2) A budget for the System's operations for the next fiscal year;
    (3) Documentation of the process and outcome of soliciting public 
input as described in paragraph (d) of this section;
    (4) An explanation of how public comments were reflected either in 
the Statement of Objectives and Priorities or were not reflected, and 
if not, why;
    (5) A description of how the Protection and Advocacy System 
operates and how it coordinates the Protection and Advocacy program for 
individuals with developmental disabilities with the following Federal 
Advocacy programs: Protection and Advocacy of Individual Rights program 
[[Page 26787]] (PAIR) and Client Assistance Program, (CAP), 
(Rehabilitation Act), the Long Term Care Ombudsman program (Older 
Americans Act), the Protection and Advocacy System for Mentally Ill 
Individuals program (PAIMI), (Protection and Advocacy for the Mentally 
Ill Act), Assistive Technology Protection and Advocacy Projects 
(Technology-Related Assistance for Individuals with Disabilities 
Technical Assistance Act) and State Developmental Disabilities Council 
and UAP advocacy activities. This description must address the System's 
intake process, internal and external referrals of eligible clients, 
duplication and overlap of services and eligibility, streamlining of 
advocacy services, collaboration and sharing of information on service 
needs and development of Statements of Objectives and Priorities for 
the various advocacy programs; and
    (6) A description of the procedures used for informing individuals 
with developmental disabilities, their families, disability 
organizations, the State Bar Association, other disability law 
resources and the public of the Protection and Advocacy's priorities 
and services including use of referrals to other sources of legal 
advocacy.
    (d) Each fiscal year, the Protection and Advocacy Agency shall:
    (1) Obtain formal public input on its Statement of Objectives and 
Priorities;
    (2) At a minimum, publish a proposed Statement of Objectives and 
Priorities for the next fiscal year in a publication of general 
distribution and make it accessible to individuals with developmental 
disabilities and their representatives, allowing at least 45 days from 
the date of publication for comment;
    (3) Provide to the State Developmental Disabilities Council and the 
University Affiliated Program a copy of the proposed Statement of 
Objectives and Priorities for comments concurrently with the public 
notice;
    (4) Address any comments received through the public input and any 
input received from the State Developmental Disabilities Council and 
the University Affiliated Program in the final Statement submitted to 
the Department; and
    (5) Address how the State developmental disabilities network (the 
Protection and Advocacy System; State Developmental Disabilities 
Council; and the University Affiliated Program) will collaborate with 
each other and with public and private entities outside the 
developmental disabilities network.

(Information collection requirements regarding the report referenced 
in paragraph (a) will require an Information Collection Re-approval 
Request to be prepared by ADD. Previous Office of Management and 
Budget control number was 0980-0160. The requirements under 
paragraph (b) are approved under control number 0348-0039 by the 
Office of Management and Budget. Information collection requirements 
contained in paragraph (c) are new requirements pursuant to section 
142(a)(2)(C) and section 107(b) of the Act. This information will 
require Office of Management and Budget approval).

    20. Section 1386.24 is amended by revising paragraph (a), 
redesignating paragraph (b) as (a)(2); and adding a new paragraph (b) 
to read as follows:
Sec. 1386.24  Non-allowable costs for the Protection and Advocacy 
System.

    (a) Federal financial participation is not allowable for:
    (1) Costs incurred for activities on behalf of individuals with 
developmental disabilities to solve problems not directly related to 
their disabilities and which are faced by the general populace; and
    (2) * * *
    (b) Attorneys fees are considered program income pursuant to Part 
74--Administration of Grants and Part 92--Uniform Administrative 
Requirements for Grants and Cooperative Agreements to State and Local 
Governments and must be added to the funds committed to the program and 
used to further the objectives of the program. This requirement shall 
apply to all attorneys fees, including those received after the project 
period in which they were earned.
    21. The heading of subpart C is revised to read as follows:

Subpart C--State Plan for Assisting in the Development of a 
Comprehensive System of Services and Supports for Individuals With 
Developmental Disabilities

    22. Section 1386.30 is amended by revising paragraphs (a) and 
(c)(1); redesignating paragraph (e) as (f); revising newly redesignated 
paragraphs (f) (2), (3), and (4); and adding new paragraphs (c)(3) and 
(e) to read as follows:


Sec. 1386.30  State Plan requirements.

    (a) In order to receive Federal financial assistance under this 
subpart, each State Developmental Disabilities Council must prepare and 
must submit to the Secretary and have in effect a State Plan which 
meets the requirements of sections 122 and 124 of the Act (42 U.S.C. 
6022 and 6024) and these regulations. The development of the State Plan 
and applicable annual amendments, is the responsibility of the State 
Developmental Disabilities Council. The State Developmental 
Disabilities Council will provide opportunities for public input during 
planning and development of the State Plan. In addition, the State 
Developmental Disabilities Council will consult with the Designated 
State Agency before the State Plan is submitted to the Secretary to 
ensure that the State Plan is not in conflict with applicable State 
laws. The Designated State Agency shall provide support services as 
requested by and negotiated with the Council.
* * * * *
    (c) * * *
    (1) Identify the program unit(s) within the Designated State Agency 
responsible for providing assurances and fiscal and other support 
services.
* * * * *
    (3) Describe how the Developmental Disabilities network in the 
State (i.e., Developmental Disabilities Council, Protection and 
Advocacy System, and University Affiliated programs(s)) is working with 
the disabilities community to bring about broad systems change to 
benefit individuals with developmental disabilities, and, where 
applicable, the ways in which individuals with other disabilities may 
benefit as well.
* * * * *
    (e) The State Plan may provide for funding of projects to 
demonstrate new approaches to enhance the independence, productivity, 
and integration and inclusion into the community of individuals with 
developmental disabilities. Such projects are not to exceed three years 
in duration and may include assistance in developing strategies for 
securing funds for continuation of the project from sources other than 
funds received under the Act.
    (f) The State Plan must contain assurances that:
* * * * *
    (2) The human rights of individuals with developmental disabilities 
will be protected consistent with section 110 of the Act (42 U.S.C. 
6009).
    (3) Buildings used in connection with activities assisted under the 
Plan must meet all applicable provisions of Federal and State laws 
pertaining to accessibility, fire, health and safety standards.
    (4) The State Developmental Disabilities Council shall follow the 
requirements of section 124(c)(8), (9) and (10) regarding budgeting, 
staff hiring and supervision and staff assignment. Budget expenditures 
must be consistent with applicable State laws [[Page 26788]] and 
policies regarding grants and contracts and proper accounting and 
bookkeeping practices and procedures. In relation to staff hiring, the 
clause ``consistent with State law'' means that the hiring of State 
Developmental Disabilities Council staff must be done in accordance 
with State personnel policies and procedures, except that a State shall 
not apply hiring freezes, reductions in force, prohibitions on staff 
travel, or other policies, to the extent that such policies would 
impact staff or functions funded with Federal funds and would prevent 
the Council from carrying out its functions under the Act.

(Information collection requirements contained in paragraph (a) are 
approved by the Office of Management and Budget under control number 
0980-0162. ADD will prepare an Information Collection Request to OMB 
based on the new requirements of the 1994 Amendments.)

    23. Section 1386.31 is amended by redesignating the current 
paragraphs (a), (b), (c), and (d) as (b), (c), (d) and (e); adding a 
new paragraph (a); and revising the newly redesignated paragraph (b) as 
follows:


Sec. 1386.31   State Plan submittal and approval.

    (a) The public review process for the State Plan required by 
Section 122(d)(1) of the Act shall include at least:
    (1) Issuance of a public notice, announcing from the Governor or 
the Governor's designee, the availability of the proposed State Plan or 
State Plan amendment. The notice shall be published in formats 
accessible to individuals with disabilities (e.g., tape, diskette) and 
the general public, and shall provide a 45 day period for public review 
and comment.
    (2) Provisions for addressing and incorporating significant 
comments or suggestions about the proposed State Plan. Councils will 
consider and respond to suggestions which call for elimination, 
substitution, or addition of a Plan goal or objective. Councils will 
also respond to questions or comments about the use of Federal funds or 
other resources.
    (3) Upon completion of the tasks required by paragraphs (a) (1) and 
(2) of this section and submission of a State Plan to the Regional 
Office, issuance of a second public notice, also in formats accessible 
to individuals with disabilities (e.g., tape, diskette) and the general 
public, on the availability of the State Plan or Plan amendments. 
Councils may use the second public notice as the vehicle for responding 
to questions or comments referred to in paragraph (a)(2) of this 
section.
    (b) The final State Plan and, where applicable, State Plan 
amendments, must be submitted to the appropriate Regional office of the 
Department 45 days prior to the fiscal year for which it is applicable. 
Unless State law provides differently, the State Plan and amendments or 
related documents must be approved by the Governor or the Governor's 
designee as may be required by any applicable Federal issuance.
* * * * *
    24. Section 1386.32 is revised to read as follows:


Sec. 1386.32   Periodic reports: Federal assistance to State 
Developmental Disabilities Councils.

    (a) The Governor or the appropriate State financial officer must 
submit financial status reports on the programs funded under this 
subpart according to a frequency interval which will be specified by 
the Administration for Children and Families. In no case will such 
reports be required more frequently than quarterly.
    (b) By January 1 of each year an Annual Program Performance Report 
must be submitted, as required in section 107(a) of the Act (42 U.S.C. 
6006a), in a format designated by the Secretary.

(Information collection requirements contained in paragraphs (a) and 
(b) have expired and will require an Information Collection Re-
approval Request to be prepared by ADD. Previous Office of 
Management and Budget control number for paragraph (a) was 0980-0212 
and for paragraph (b) was 0980-0172. The Information Collection 
Request for Re-approval concerning the reports will be modified 
pursuant to the 1994 Amendments).

    25. Section 1386.33 is amended by revising paragraph (a) as 
follows:


Sec. 1386.33   Protection of employee's interests.

    (a) Based on section 122(c)(5)(K) of the Act (42 U.S.C. 
6022(c)(5)(K), the State plan must provide for fair and equitable 
arrangements to protect the interest of all institutional employees 
affected by actions under the plan to provide community living 
activities. Specific arrangements for the protection of affected 
employees must be developed through negotiations between the 
appropriate State authorities and employees or their representatives. 
Fair and equitable arrangements must include procedures that provide 
for the impartial resolution of disputes between the State and an 
employee concerning the interpretation, application, and enforcement of 
protection arrangements. The State must inform employees of the State's 
decision to provide for community living activities.
* * * * *
    26. Section 1386.34 is added to read as follows:


Sec. 1386.34   Designated State Agency.

    (a) If the State Developmental Disabilities Council requests a 
review by the Governor (or legislature) of the Designated State Agency, 
the Council must provide documentation of the reason for change and 
recommend a preferred Designated State Agency.
    (b) After the review is completed, a majority of the non-State 
agency members of the Council may appeal to the Assistant Secretary for 
a review of the designation of the designated State agency if the 
Council's independence as an advocate is not assured because of the 
actions or inactions of the designated State agency.
    (c) The following steps apply to the appeal of the Governor's (or 
legislature's) determination of the Designated State Agency.
    (1) Prior to an appeal to the Assistant Secretary, Administration 
for Children and Families, the State Developmental Disabilities 
Council, at the request of the non-State Agency members, must give a 30 
day written notice, by certified mail, to the Governor (or legislature) 
of the majority of non-State members' intention to appeal the 
designation of the Designated State Agency.
    (2) The appeal must clearly identify the grounds for the claim that 
the Council's independence as an advocate is not assured because of the 
actions or inactions of the designated State agency.
    (3) Upon receipt of the appeal from the State Developmental 
Disabilities Council, the Assistant Secretary will notify the State 
Developmental Disabilities Council and the Governor (or legislature), 
by certified mail, that the appeal has been received and will be acted 
upon within 60 days. The Governor (or legislature) shall within 10 
working days from the receipt of the Assistant Secretary's notification 
provide written comments to the Assistant Secretary (with a copy sent 
by registered or certified mail to the Council) on the claims in the 
Council's appeal. Either party may request, and the Assistant Secretary 
may grant, an opportunity for an informal meeting with the Assistant 
Secretary at which representatives of both parties will present their 
views on the issues in the appeal. The meeting will be held within 20 
working days of the submission of written comments by the Governor (or 
legislature). The Assistant Secretary will promptly notify the parties 
of the date and place of the meeting. [[Page 26789]] 
    (4) The Assistant Secretary will review the issue(s) and provide a 
final written decision within 60 days following receipt of the State 
Developmental Disabilities Council's appeal. If the determination is 
made that the Designated State Agency should be redesignated, the 
Governor (or legislature) must provide written assurance of compliance 
within 45 days from receipt of the decision.
    (5) During any time of this appeals process the State Developmental 
Disabilities Council may withdraw such request if resolution has been 
reached with the Governor (or legislature) on the designation of the 
Designated State Agency. The Governor (or legislature) must notify the 
Assistant Secretary in writing of such an occurrence.
    27. Section 1386.35 is amended by revising the heading and 
paragraph (b)(1) and adding new paragraphs (d), (e), and (f) to read as 
follows:


Sec. 1386.35   Allowable and non-allowable costs for Federal assistance 
to State Developmental Disabilities Councils.

* * * * *
    (b) * * *
    (1) Costs incurred by institutions or other residential or non-
residential programs which do not comply with the Congressional 
findings with respect to the rights of individuals with developmental 
disabilities in section 110 of the Act (42 U.S.C. 6009).
* * * * *
    (d) For purposes of determining aggregate minimum State share of 
expenditures, there are three categories of expenditures:
    (1) Expenditures for priority area projects carried out directly by 
the Council and Council staff, as described in section 125A(a)(2) of 
the Act, requiring no non-Federal aggregate participation;
    (2) Expenditures for priority area projects in poverty areas but 
not carried out directly by the Council and Council staff, as described 
in section 125A(a)(1) of the Act, requiring a minimum of 10 percent 
non-Federal aggregate participation; and
    (3) All other expenditures, requiring a minimum of 25 percent non-
Federal aggregate participation.
    (e) As a consequence of paragraph (d) of this section, the minimum 
aggregate non-Federal expenditure required under the Act is calculated 
as the sum of:
    (1) One-ninth of Federal expenditures for projects in poverty 
areas, such projects not being directly carried out by the Council and 
Council staff; and
    (2) Plus one-third of all other Federal expenditures except those 
supporting priority area activities directly carried out by the Council 
and Council staff.
    (f) The non-Federal expenditures must support activities authorized 
by the Act and approved by the Council, but may include non-Federal 
support for implementation activities pursuant to section 125A(a)(2) of 
the Act, as well as functions of the designated State agency.
    28. Section 1386.36 is amended by revising the section heading and 
paragraph (e) to read as follows:


Sec. 1386.36  Final disapproval of the State plan or plan amendments.

* * * * *
    (e) A State has filed its request for a hearing with the Assistant 
Secretary within 21 days of the receipt of the decision. The request 
for a hearing must be sent by certified mail to the Assistant 
Secretary. The date of mailing the request is considered the date of 
filing if it is supported by independent evidence of mailing, otherwise 
the date of receipt shall be considered the date of filing.
    29. Section 1386.37 is added to read as follows:


Sec. 1387.37  Public notice of Federal onsite review.

    Prior to any Federal review of the State Developmental Disabilities 
Council, a 30 day notice and an opportunity for comment will be 
provided. Reasonable effort will be made by the appropriate Regional 
Office to seek comments through notification to major disability 
groups, the State Protection and Advocacy agency and the University 
Affiliated Program, for example, through newsletters and publications 
of those organizations. The findings of public comments may be 
consolidated if sufficiently similar issues are raised and they will be 
included in the report of the onsite visit.

Subpart D--Practice and Procedure for Hearings Pertaining to 
States' Conformity and Compliance With Developmental Disabilities 
State Plans, Reports and Federal Requirements

    30. Section 1386.80 is revised to read as follows:


Sec. 1386.80  Definitions.

    For purposes of this subpart:
    Assistant Secretary means the Assistant Secretary for Children and 
Families (ACF) or a presiding officer.
    ADD means Administration on Developmental Disabilities, 
Administration for Children and Families.
    Presiding officer means anyone designated by the Assistant 
Secretary to conduct any hearing held under this subpart. The term 
includes the Assistant Secretary if the Assistant Secretary presides 
over the hearing.
    Payment or Allotment means an amount provided under Part B or C of 
the Developmental Disabilities Assistance and Bill of Rights Act. This 
term includes Federal funds provided under the Act irrespective of 
whether the State must match the Federal portion of the expenditure. 
This term shall include funds previously covered by the terms ``Federal 
financial participation,'' ``the State's total allotment,'' ``further 
payments,'' ``payments,'' ``allotment'' and ``Federal funds.''
    31. Section 1386.85 is amended by revising paragraph (a) to read as 
follows:


Sec. 1386.85  Filing and service of papers.

    (a) All papers in the proceedings must be filed with the designated 
individual in an original and two copies. Only the originals of 
exhibits and transcripts of testimony need be filed.
* * * * *
    32. Section 1386.90 is revised to read as follows:


Sec. 1386.90  Notice of hearing or opportunity for hearing.

    Proceedings are commenced by mailing a notice of hearing or 
opportunity for hearing from the Assistant Secretary to the State 
Developmental Disabilities Council and the Designated State Agency, or 
to the State Protection and Advocacy System or designated official. The 
notice must state the time and place for the hearing, and the issues 
which will be considered. The notice must be published in the Federal 
Register.
    33. Section 1386.92 is revised to read as follows:


Sec. 1386.92  Place.

    The hearing must be held on a date and at a time and place 
determined by the Assistant Secretary with due regard for convenience, 
and necessity of the parties or their representatives. The site of the 
hearing shall be accessible to individuals with disabilities.
    34. Section 1386.93 is amended by revising paragraphs (c)(2) and 
(d) to read as follows:
Sec. 1386.93  Issues at hearing.

* * * * *
    (c) * * *
    (2) Prior to the removal of an issue, in whole or in part, from a 
hearing involving issues relating to the conformity with Federal 
requirements under Part B of the Act, of the State plan or the 
activities of the State's Protection [[Page 26790]] and Advocacy 
System, the Assistant Secretary must provide all parties other than the 
Department and the State (see Sec. 1386.94(b)) with the statement of 
his or her intention to remove an issue from the hearings and the 
reasons for that decision. A copy of the proposed State plan provision 
or document explaining changes in the activities of the State's 
protection and advocacy system on which the State and the Assistant 
Secretary have settled must be sent to the parties. The parties must 
have an opportunity to submit in writing within 15 days their views as 
to, or any information bearing upon, the merits of the proposed 
provision and the merits of the reasons for removing the issue from the 
hearing.
    (d) In hearings involving questions of noncompliance of a State's 
operation of its program under Part B of the Act with the State plan or 
with Federal requirements or compliance of the State's Protection and 
Advocacy System with Federal requirements, the same procedure set forth 
in paragraph (c)(2) of this section must be followed with respect to 
any report or evidence resulting in a conclusion by the Assistant 
Secretary that a State has achieved compliance.
* * * * *
    35. Section 1386.94 is amended by revising paragraphs (a), (b)(2), 
and (c) to read as follows:


Sec. 1386.94  Request to participate in hearing.

    (a) The Department, the State, the State Developmental Disabilities 
Council, the Designated State Agency, and the State Protection and 
Advocacy System, as appropriate, are parties to the hearing without 
making a specific request to participate.
    (b) * * *
    (2) Any individual or group wishing to participate as a party must 
file a petition with the designated individual within 15 days after 
notice of the hearing has been published in the Federal Register, and 
must serve a copy on each party of record at that time in accordance 
with Sec. 1386.85(b). The petition must concisely state:
    (i) Petitioner's interest in the proceeding;
    (ii) Who will appear for petitioner;
    (iii) The issues the petitioner wishes to address; and
    (iv) Whether the petitioner intends to present witnesses.
* * * * *
    (c)(1) Any interested person or organization wishing to participate 
as amicus curiae must file a petition with the designated individual 
before the commencement of the hearing. The petition must concisely 
state:
    (i) The petitioner's interest in the hearing;
    (ii) Who will represent the petitioner, and
    (iii) The issues on which the petitioner intends to present 
argument.
    (2) The presiding officer may grant the petition if he or she finds 
that the petitioner has a legitimate interest in the proceedings, that 
such participation will not unduly delay the outcome and may contribute 
materially to the proper disposition of the issues.
    (3) An amicus curiae may present a brief oral statement at the 
hearing at the point in the proceedings specified by the presiding 
officer. It may submit a written statement of position to the presiding 
officer prior to the beginning of a hearing and must serve a copy on 
each party. It also may submit a brief or written statement at such 
time as the parties submit briefs and must serve a copy on each party.
    36. Section 1386.101 is amended by revising paragraphs (a)(11) and 
(c) to read as follows:


Sec. 1386.101  Authority of presiding officer.

    (a) * * *
    (11) If the presiding officer is a person other than the Assistant 
Secretary, he or she shall certify the entire record, including 
recommended findings and proposed decision, to the Assistant Secretary;
* * * * *
    (c) If the presiding officer is a person other than the Assistant 
Secretary, his or her authority is to render a recommended decision 
with respect to program requirements which are to be considered at the 
hearing. In case of any noncompliance, he or she shall recommend 
whether payments or allotments should be withheld with respect to the 
entire State plan or the activities of the State's Protection and 
Advocacy System, or whether the payments or allotments should be 
withheld only with respect to those parts of the program affected by 
such noncompliance.
    37. Section 1386.111 is amended by revising paragraphs (c) and (d) 
to read as follows:


Sec. 1386.111  Decisions following hearing.

* * * * *
    (c) If the Assistant Secretary concludes:
    (1) In the case of a hearing pursuant to sections 122, 127, or 142 
of the Act, that a State plan or the activities of the State's 
Protection and Advocacy System does not comply with Federal 
requirements, he or she shall also specify whether the State's payment 
or allotment for the fiscal year will not be authorized for the State 
or whether, in the exercise of his or her discretion, the payment or 
allotment will be limited to the parts of the State plan or the 
activities of the State's Protection and Advocacy System not affected 
by the noncompliance.
    (2) In the case of a hearing pursuant to section 127 of the Act 
that the State is not complying with the requirements of the State 
plan, he or she must also specify whether the State's payment or 
allotment will not be made available to the State or whether, in the 
exercise of his or her discretion, the payment or allotment will be 
limited to the parts of the State plan not affected by such 
noncompliance. The Assistant Secretary may ask the parties for 
recommendations or briefs or may hold conferences of the parties on 
these questions.
    (d) The decision of the Assistant Secretary under this section is 
the final decision of the Secretary and constitutes ``final agency 
action'' within the meaning of 5 U.S.C. 704 and the ``Secretary's 
action'' within the meaning of section 129 of the Act (42 U.S.C. 6029). 
The Assistant Secretary's decision must be promptly served on all 
parties and amici.
    38. Section 1386.112 is amended by revising paragraphs (a) and (b) 
to read as follows:


Sec. 1386.112  Effective date of decision by the Assistant Secretary.

    (a) If, in the case of a hearing pursuant to section 122 of the 
Act, the Assistant Secretary concludes that a State plan does not 
comply with Federal requirements, and the decision provides that the 
payment or allotment will be authorized but limited to parts of the 
State plan not affected by such noncompliance, the decision must 
specify the effective date for the authorization of the payment or 
allotment.
    (b) In the case of a hearing pursuant to sections 127 or 142 of the 
Act, if the Assistant Secretary concludes that the State is not 
complying with the requirements of the State plan or the activities of 
the State's Protection and Advocacy System do not comply with Federal 
requirements, the decision that further payments or allotments will not 
be made to the State, or will be limited to the parts of the State plan 
or activities of the State's Protection and Advocacy System not 
affected, must specify the effective date for withholding payments of 
allotments.
* * * * * [[Page 26791]] 

PART 1387--PROJECTS OF NATIONAL SIGNIFICANCE

    39. The authority citation for part 1387 continues to read as 
follows:

    Authority: 42 U.S.C. 6000 et seq.

    40. Section 1387.1 is being amended by revising paragraphs (a), 
(b), and (d) to read as follows:


Sec. 1387.1  General requirements.

    (a) All projects funded under this part must be of national 
significance and serve or relate to individuals with developmental 
disabilities to comply with section 162 of the Act.
    (b) Based on section 162(d), proposed priorities for grants and 
contracts will be published in the Federal Register and a 60 day period 
for public comments will be allowed.
* * * * *
    (d) Projects of National Significance, other than technical 
assistance and data collection grants, must be exemplary and innovative 
models and have potential for replication at the local level as well as 
nationally or otherwise meet the goals of part E of the Act.
    41. Part 1388 is revised to read as follows:

PART 1388--THE UNIVERSITY AFFILIATED PROGRAMS

Sec.
1388.1  Definitions.
1388.2  Program criteria--purpose.
1388.3  Program criteria--mission.
1388.4  Program criteria--governance and administration.
1388.5  Program criteria--preparation of personnel.
1388.6  Program criteria--services and supports.
1388.7  Program criteria--dissemination.
1388.8  [Reserved].
1388.9  Peer review.

    Authority: 42 U.S.C. 6063 et seq.


Sec. 1388.1  Definitions.

    For purposes of this part:
    Accessible means UAPs are characterized by their program and 
physical accommodation and their demonstrated commitment to the goals 
of the Americans with Disabilities Act.
    Capacity Building means that UAPs utilize a variety of approaches 
to strengthen their university and their local, State, regional and 
National communities. These approaches include, but are not limited to 
such activities as: (1) Enriching program depth and breadth, for 
example, recruiting the dental school to participate in the UAP; (2) 
acquiring additional resources, for example, grants, space, and 
volunteer manpower; and (3) carrying out systems changes, for example, 
promoting community-based programming for persons with developmental 
disabilities across all ages.
    Collaboration means that the UAP cooperates with a wide range of 
persons, systems, and agencies, whether they utilize services of the 
UAP or are involved in UAP planning and programs. These entities 
include individuals with developmental disabilities and family members, 
as well as the Developmental Disabilities Network, advocacy and other 
disability groups, university components, generic and specialized human 
service agencies, State agencies and citizen and community groups. An 
example of this cooperation is the Consumer Advisory Committee, a 
required element in each UAP.
    Culturally competent manner means provision of services, supports, 
or other assistance in a manner that is responsive to the beliefs, 
interpersonal styles, attitudes, language and behaviors of individuals 
who are receiving services, and that has the greatest likelihood of 
ensuring their maximum participation in the program.
    Diverse network means that although each UAP has the same mandates 
under the Act, the expression of these common mandates differs across 
programs. Each UAP must implement these mandates within the context of 
their host university, their location within the university, the needs 
of the local and State community, the cultural composition of their 
State, their resources and funding sources, and their institutional 
history. These factors converge to create a network of unique and 
distinct programs, bound together by common mandates but enriched by 
diverse composition.
    Interdisciplinary training means the use of individuals from 
different professional specialties for UAP training and service 
delivery.
    Lifespan approach means that UAP activities address the needs of 
individuals with disabilities who are of various ages.
    Mandated core functions means the UAP must perform: (1) 
Interdisciplinary preservice preparation; (2) community service 
activities (community training and technical assistance); and (3) 
activities related to dissemination of information and research 
findings.
    Program criteria means a statement of the Department's expectation 
regarding the direction and desired outcome of the University 
Affiliated Program's operation.
    State-of-the-art means that UAP activities are of high quality 
(using the latest technology), worthy of replication (consistent with 
available resources), and systemically evaluated.


Sec. 1388.2  Program criteria--purpose.

    The program criteria will be used to assess the quality of the 
University Affiliated Programs (UAP). The overall purpose of the 
program criteria is to assure the promotion of independence, 
productivity, integration and inclusion of individuals with 
developmental disabilities. Compliance with the program criteria is a 
prerequisite for a UAP to receive the minimum funding level of a UAP. 
However, compliance with the program criteria does not, by itself, 
assure funding.


Sec. 1388.3  Program criteria--mission.

    (a) Introduction to mission: The purpose and scope of UAP 
activities must be consistent with the Act as amended and include the 
provision of training, service, technical assistance and dissemination 
of information in a culturally competent manner. UAPs must include in 
their activities the underserved, and provide for meaningful 
participation of individuals from diverse racial and ethnic 
backgrounds. UAP principles and operations must be consistent with the 
UAP's mission statement. (The concept of ``diverse network'' as defined 
in Sec. 1388.1 of this part applies to paragraphs (b), (f), (g), and 
(h) of this section.)
    (b) The UAP must develop a written mission statement that reflects 
its values and the goals of the university in which it is located. The 
UAP's goals, objectives and activities must be consistent with the 
mission statement.
    (c) The UAP's mission and programs must reflect a life span 
approach, incorporate an interdisciplinary approach and include the 
active participation of individuals with developmental disabilities and 
their families.
    (d) The UAP programs must address the needs of individuals with 
developmental disabilities, including individuals with developmental 
disabilities who are unserved or underserved, in institutions, and on 
waiting lists.
    (e) The UAP's goals, objectives, and activities must incorporate 
and demonstrate culturally competent services and practices, which are 
in response to local culture and needs.
    (f) The UAP's mission must reflect its unique role as a bridge 
between university programs, individuals with developmental 
disabilities and their families, service agencies and the larger 
community. [[Page 26792]] 
    (g) The UAP's goals, objectives, and activities must use capacity 
building strategies to address State needs.
    (h) The UAP's goals, objectives, and activities must reflect 
interagency collaborations and strategies to effect systemic change 
within the university and in State and local communities and service 
systems.


Sec. 1388.4  Program criteria--governance and administration.

    (a) Introduction to governance and administration: The UAP must be 
associated with, or an integral part of, a university. (The concept of 
``diverse network'' as defined in Sec. 1388.1 of this part applies to 
paragraphs (b), (c), (d), (i), and (l) of this section.)
    (b) The UAP must have a written agreement or charter with the 
university that specifies the UAP designation as an official university 
component, the relationships between the UAP and other university 
components, the university commitment to the UAP, and the UAP 
commitment to the university.
    (c) Within the university, the UAP must maintain the autonomy and 
organizational structure required to carry out the UAP mission and 
provide for the mandated activities.
    (d) The UAP must be responsible to report directly to a University 
administrator who will represent the interests of the UAP within the 
University.
    (e) The University must demonstrate its support for the UAP through 
the commitment of financial and other resources.
    (f) UAP senior professional staff must hold faculty appointments in 
appropriate academic departments of the host or an affiliated 
university, consistent with university policy.
    (g) UAP faculty and staff must represent the broad range of 
disciplines and backgrounds necessary to implement the full inclusion 
of individuals with developmental disabilities in all aspects of 
society, consonant with the spirit of the Americans with Disabilities 
Act, (ADA).
    (h) The UAP must meet the requirements of section 109 of the Act 
(42 U.S.C. 6008) regarding affirmative action. The UAP must take 
affirmative action to employ and advance in employment and otherwise 
treat qualified individuals with disabilities without discrimination 
based upon their physical or mental disability in all employment 
practices.
    (i) The management practices of the UAP, as well as the 
organizational structure, must promote the role of the UAP as a bridge 
between the University and the community. The UAP must actively 
participate in community networks and include a range of collaborating 
partners.
    (j) The UAP's Consumer Advisory Committee must meet regularly. The 
membership of the Consumer Advisory Committee must reflect the racial 
and ethnic diversity of the State or community in which the UAP is 
located. The deliberations of the Consumer Advisory Committee must be 
reflected in UAP policies and programs.
    (k) The UAP must maintain collaborative relationships with the 
State Developmental Disabilities Council and the Protection and 
Advocacy System. In addition, the UAP must be a member of the State 
Developmental Disabilities Council and participate in Council meetings 
and activities, as prescribed by the Act.
    (l) The UAP must maintain collaborative relationships and be an 
active participant with the UAP network and individuals, organizations, 
State agencies and Universities.
    (m) The UAP must demonstrate the ability to leverage resources.
    (n) The UAP must have adequate space to carry out the mandated 
activities.
    (o) The UAP physical facility and all program initiatives conducted 
by the UAP must be accessible to individuals with disabilities as 
provided for by Section 504 of the Rehabilitation Act and Titles II and 
III of the Americans with Disabilities Act.
    (p) The UAP must integrate the mandated core functions into its 
activities and programs and must have a written plan for each core 
function area.
    (q) The UAP must have in place a long range strategic planning 
capability to enable the UAP to respond to emergent and future 
developments in the field.
    (r) The UAP must utilize state-of-the-art methods, including the 
active participation of individuals, families and other consumers of 
programs and services to evaluate programs. The UAP must refine and 
strengthen its programs based on evaluation findings.


Sec. 1388.5  Program criteria--preparation of personnel.

    (a) Introduction to preparation of personnel: UAP interdisciplinary 
training programs at the preservice level prepare personnel concerned 
with developmental disabilities.
    (b) Interdisciplinary training programs must be based on identified 
personnel preparation needs centered around a conceptual framework with 
identified outcomes.
    (c) The interdisciplinary training process, as defined by the UAP, 
must reflect a mix of students from diverse academic disciplines/
academic programs and cultures that reflect the diversity of the 
community. Faculty represent a variety of backgrounds and specialties, 
including individuals with disabilities and family members, and a 
variety of learning experiences, as well as reflecting the cultural 
diversity of the community. Trainees must receive credit as appropriate 
for participation in UAP training programs.
    (d) Preservice training must be integrated into all aspects of the 
UAP, including community training and technical assistance, direct 
services (if provided), and dissemination.
    (e) Trainees must be prepared to serve in a variety of roles, 
including advocacy and systems change. The UAP must encourage graduates 
to work in varied situations, settings, or jobs.
    (f) The UAP must influence University curricula to prepare 
personnel who, in their future career in a broad range of social and 
community roles, will contribute to the accommodation and inclusion of 
individuals with developmental disabilities, as mandated in the 
Americans with Disabilities Act.
    (g) The UAP core curriculum must incorporate cultural diversity and 
demonstrate cultural competence. Trainees must be prepared to address 
the needs of individuals with developmental disabilities and their 
families in a culturally competent manner.


Sec. 1388.6  Program criteria--services and supports.

    (a) Introduction to services and supports: The UAP engages in a 
variety of system interventions and may also engage in a variety of 
individual interventions.
    (b) UAP community training and technical assistance activities must 
use capacity building strategies to strengthen the capability of 
communities, systems and service providers.
    (c) Direct Services (Optional)
    (1) A UAP must integrate direct services and projects into 
community settings. These services may be provided in a service 
delivery site or training setting within the community including the 
university. Direct service projects may involve interdisciplinary 
student trainees, professionals from various disciplines, service 
providers, families and/or administrators. Direct services must be 
extended, as appropriate, to include adult and elderly individuals with 
developmental disabilities. [[Page 26793]] 
    (2) Services and projects provided in community-integrated settings 
are to be:
    (i) Scheduled at times and in places that are consistent with 
routine activities within the local community; and
    (ii) Interact with and involve community members, agencies, and 
organizations.
    (3) The bases for the services or project development must be:
    (i) A local or universal need that reflects critical problems in 
the field of developmental disabilities; or
    (ii) An emerging, critical problem that reflects current trends or 
anticipated developments in the field of developmental disabilities.
    (4) State-of-the-art and innovative practices include:
    (i) Services and project concepts and practices that facilitate and 
demonstrate independence for the individual, community integration, 
productivity, and human rights;
    (ii) Practices that are economical, accepted by various 
disciplines, and highly beneficial to individuals with developmental 
disabilities, and that are integrated within services and projects;
    (iii) Innovative cost-effective concepts and practices that are 
evaluated according to accepted practices of scientific evaluation;
    (iv) Research methods that are used to test hypotheses, validate 
procedures, and field test projects; and
    (v) Direct service and project practices and models that are 
evaluated, packaged for replication and disseminated through the 
information dissemination component.


Sec. 1388.7  Program criteria--dissemination.

    (a) Introduction to dissemination: The UAP disseminates information 
and research findings, including the empirical validation of activities 
related to training, services and supports, and contributes to the 
development of new knowledge.
    (b) The UAP must be identified to the community as a resource for 
information, produce a variety of products to promote public awareness 
and visibility of the UAP, and facilitate replication of best 
practices.
    (c) Specific target audiences must be identified for dissemination 
activities and include individuals with developmental disabilities, 
family members, service providers, administrators, policy makers, 
university faculty, researchers, and the general public.
    (d) UAP dissemination activities must be responsive to community 
requests for information and must utilize a variety of networks, 
including State Developmental Disabilities Councils, Protection and 
Advocacy Systems, other University Affiliated Programs, and State 
service systems to disseminate information to target audiences.
    (e) The process of developing and evaluating materials must utilize 
the input of individuals with developmental disabilities and their 
families.
    (f) The values of the UAP must be reflected in the language and 
images used in UAP products.
    (g) Dissemination products must reflect the cultural diversity of 
the community.
    (h) Materials disseminated by the UAP must be available in formats 
accessible to individuals with a wide range of disabilities, and 
appropriate target audiences.


Sec. 1388.8  [Reserved]


Sec. 1388.9  Peer review.

    (a) The purpose of the peer review process is to provide the 
Commissioner, ADD, with technical and qualitative evaluation of UAP 
applications, including on-site visits or inspections as necessary.
    (b) Applications for funding opportunities under Part D, section 
152 of the Act, must be evaluated through the peer review process.
    (c) Panels must be composed of non-Federal individuals who, by 
experience and training, are highly qualified to assess the comparative 
quality of applications for assistance.

[FR Doc. 95-11910 Filed 5-17-95; 8:45 am]
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