24390 Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations

DEPARTMENT OF EDUCATION

34 CFR Part 361

RIN 1820–AB13

The State Vocational Rehabilitation

Services Program

AGENCY: Department of Education.

ACTION: Final regulations.

SUMMARY: The Secretary amends the

regulations governing The State

Vocational Rehabilitation Services

Program. These regulations are needed

to implement section 12(d) of the

Rehabilitation Act of 1973 (Act), as

amended by the Rehabilitation Act

Amendments of 1992 (1992

Amendments) and the Rehabilitation

Act Amendments of 1993. Section 12(d)

of the Act requires that the Secretary

promulgate regulations establishing

requirements for the implementation of

an order of selection for the receipt of

vocational rehabilitation services. An

order of selection is required under

section 101(a)(5)(A) of the Act if a

designated State unit (DSU) determines

that it is unable to provide services to

all eligible individuals who apply for

services. If a DSU establishes an order

of selection, it must first provide

services to individuals with the most

severe disabilities before serving other

eligible individuals. The regulations are

necessary to ensure the proper

administration of the order of selection

requirements by DSUs.

EFFECTIVE DATE: These regulations take

effect on June 13, 1996.

FOR FURTHER INFORMATION CONTACT:

Suzanne Tillman, U.S. Department of

Education, 600 Independence Avenue,

S.W., Room 3220, Mary E. Switzer

Building, Washington, D.C. 20202–2735.

Telephone: (202) 205–8303. Individuals

who use a telecommunications device

for the deaf (TDD) may call the Federal

Information Relay Service (FIRS) at 1–

800–877–8339 between 8 a.m. and 8

p.m., Eastern time, Monday through

Friday.

SUPPLEMENTARY INFORMATION: The State

Vocational Rehabilitation Services

Program is a State-administered

program that provides individualized

vocational rehabilitation (VR) services

to eligible individuals with disabilities.

The purpose of the program is to assist

States in operating a comprehensive,

coordinated, effective, efficient, and

accountable program for vocational

rehabilitation designed to assess, plan,

develop, and provide VR services for

individuals with disabilities so that they

may prepare for and engage in gainful

employment.

The program supports the National

Education Goal that, by the year 2000,

every adult American, including

individuals with disabilities, will

possess the knowledge and skills

necessary to compete in a global

economy and exercise the rights and

responsibilities of citizenship.

On July 16, 1993, the Secretary

published a notice of proposed

rulemaking (NPRM) in the Federal

Register (58 FR 38482) to implement

section 12(d) of the Act, as amended by

the 1992 Amendments (Pub. L. 102–

569) and the Rehabilitation Act

Amendments of 1993 (Pub. L. 103–73),

which requires that the Secretary issue

regulations on the requirements for

implementing an order of selection by a

DSU.

Analysis of Comments and Changes

In response to the Secretary’s

invitation in the NPRM, 45 parties

submitted comments on the proposed

regulations. An analysis of the

comments and of the changes in the

regulations since publication of the

NPRM follows.

Major issues are grouped according to

subject under appropriate sections of

the regulations. Technical and other

minor changes—and suggested changes

the Secretary is not legally authorized to

make under the applicable statutory

authority—are not addressed. The

Secretary also has not addressed

comments that relate to issues that are

more appropriately dealt with in other

program regulations being developed to

implement the 1992 Amendments.

In addition, the proposed regulations

have been reviewed and revised in

accordance with the Department’s

principles for regulating, which were

developed as part of the

Administration’s regulatory reinvention

initiative under the National

Performance Review II. The principles

are designed to ensure that the

Department regulates in the most

flexible, most equitable, and least

burdensome way possible. As a result of

that review, several non-statutory

paperwork requirements in the

proposed regulations have been

eliminated or modified. These changes

are discussed in the following

paragraphs and in the section-by-section

summary.

Section 101(a)(5)(A) of the Act

requires a DSU to explain how it will

provide VR services to all eligible

individuals or, if it cannot provide

services to all these individuals, to

describe and justify the order of

selection the DSU will follow in serving

eligible individuals, with first priority

being given to individuals with the most

severe disabilities. Accordingly,

§ 361.36(a)(1) of the final regulations

requires DSUs that do not establish an

order of selection to explain how, on the

basis of its projected fiscal and

personnel resources and its assessment

of the rehabilitation needs of

individuals with severe disabilities

within the State, the DSU will continue

to serve all individuals currently

receiving services, provide assessment

services to all applicants and VR

services to all individuals determined to

be eligible in the next fiscal year, and

meet all other program requirements.

The proposed regulations would have

required each DSU that does not

establish an order of selection to

provide detailed information to support

that decision, including its projected

number of applicants, eligible

individuals, and qualified personnel,

projected costs of services and

administration, and projected revenues.

The Secretary believes that requiring all

DSUs to submit these projections is

overly burdensome and unnecessary for

those States that have not experienced

problems in serving all eligible

individuals in recent years. Thus, the

requirements in the final regulations are

more narrowly tailored to address the

underlying problem of ensuring that

DSUs do not improperly avoid

establishing an order of selection.

The final regulations establish two

different information requirements for

DSUs that do not plan to establish an

order of selection: one for DSUs that

have demonstrated the ability to serve

all eligible individuals and meet all

program requirements and one for DSUs

that have not demonstrated this ability.

The first information requirement

(§ 361.36(a)(2)) applies to DSUs whose

past practice demonstrates their ability

to serve all eligible individuals without

an order of selection. DSUs will be

subject to this requirement if they have

provided assessment services to all

applicants, provided the full range of

services to all eligible individuals, made

referral forms widely available,

conducted outreach efforts to identify

and serve those underserved in the past,

and have not delayed the development

of individualized written rehabilitation

programs (IWRPs) or the provision of

services for eligible individuals. This

provision permits these DSUs to submit

a narrative explanation of their ability in

the next year to continue to serve

everyone and meet all program

requirements.

The second information requirement

(§ 361.36(a)(3)) applies to DSUs that

have not demonstrated their ability to

serve all eligible individuals and meet

all program requirements without an
Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations 24391

order of selection. This more detailed

information requirement would apply to

DSUs that—(1) Said in their State plans

for the current or past year that they

could serve everyone, but, in fact, did

not do so; (2) Served all eligible

individuals in the current or past year

by not meeting the requirements in

§ 361.36(a)(2); or (3) Provided services

under an order of selection in the

current or preceding fiscal year, but

believe that they can serve all eligible

individuals in the next fiscal year.

These DSUs will be required to provide

information, including projections,

similar to the information that would

have been required of all DSUs under

the NPRM. Specifically, these DSUs

must describe the changed

circumstances that will enable them to

serve all eligible individuals in the

forthcoming fiscal year and must submit

the projections required under

§ 361.36(a)(3) to support this

determination, including projected

numbers of applicants, eligible

individuals, and qualified personnel,

projected costs of services and

administration, and projected revenues.

In addition, § 361.36(a)(3) requires these

DSUs to provide, as relevant,

comparable data for the current or

preceding fiscal year, or both years, of

these projected costs and resources.

These changes in the final regulations

are intended to reduce paperwork

burdens on DSUs that have a

demonstrated capacity to serve all

eligible individuals and, at the same

time, to ensure that if a DSU decides not

to implement an order of selection, even

though it has not been able to serve all

eligible persons in the past, that the

decision is supported in the State plan

by sufficient data showing the DSU’s

projected costs and resources.

Section 361.36(a)—General Provisions

• Assurance of ability to serve all

eligible individuals.

—Range of Services

Comments: Several commenters on

§ 361.36(a)(1)(i) of the proposed

regulations requested that this provision

specify that a DSU is able to provide the

full range of services listed in section

103(a) of the Act. These commenters

were concerned that a DSU could

interpret the wording ‘‘able to provide

services’’ to mean that it may avoid

establishing an order of selection if it is

able to provide some, but not all, of the

services listed in section 103(a) of the

Act.

Discussion: The Secretary agrees with

these commenters. A DSU that assures

that it is able to provide services to all

eligible individuals must be able to

provide all of the services listed in

section 103(a) of the Act.

Changes: The Secretary has revised

§ 361.36(a)(1)(i) to provide that the State

plan must contain an assurance that the

DSU is able to provide the full range of

services listed in section 103(a) of the

Act, as appropriate, to all eligible

individuals.

—Monitoring and review of assurances

Comments: Several commenters were

concerned that the Secretary would not

adequately monitor compliance with the

assurances provided by a DSU. Several

commenters recommended that the

Secretary thoroughly examine a DSU’s

decision not to implement an order of

selection and approve or disapprove

that decision, as appropriate.

One commenter feared that, in order

to avoid implementing an order of

selection, DSUs may expand counselor

caseload sizes beyond the capacity of

counselors to serve eligible individuals

in a meaningful way. Caseload sizes

could continue to grow but might not

trigger an order of selection.

One commenter suggested adding

factors to measure a DSU’s compliance

with these regulations. This commenter

also suggested that if a DSU is found in

substantial noncompliance and fails to

take corrective action, it should be

subject to financial sanctions.

Several commenters stated that a DSU

should be required to evaluate the

impact of its order of selection to

determine if there are any unintended

consequences or exclusions of specific

groups of individuals with disabilities.

Discussion: The Secretary ensures that

a DSU is complying with its assurances

through annual reviews and periodic

on-site monitoring of State vocational

rehabilitation programs required by

sections 107(a)(3)(A) and 107(a)(4)(B) of

the Act. Section 107(a)(3)(A) of the Act

requires the Secretary, as part of the

monitoring process, to conduct on-site

visits, including on-site reviews of

records, to verify that a DSU is

following requirements regarding order

of selection. Section 107(a)(4)(B)

requires the Secretary to examine, in

conducting the review and monitoring,

a DSU’s provision of services, including,

if applicable, order of selection

requirements.

Section 101(a)(7) of the Act requires a

DSU to ensure, as part of its

comprehensive system of personnel

development, that it has an adequate

supply of qualified personnel to provide

vocational rehabilitation services. The

regulations require DSUs that do not

establish an order of selection to satisfy

all VR program requirements, including

those relating to the comprehensive

system of personnel development. The

Secretary also reviews and monitors

compliance with section 101(a)(7) of the

Act.

The Secretary does not believe it is

necessary to add factors to measure a

DSU’s compliance with the order of

selection requirements of the State plan.

A DSU’s compliance with the order of

selection requirements will be

monitored like any other State plan

requirement, and a DSU’s

noncompliance with these requirements

will be dealt with like any other finding

of noncompliance with the State plan

requirements.

The Secretary believes that a DSU

(along with the State Rehabilitation

Advisory Council (Council), if the DSU

has a Council), should evaluate the

impact of its order of selection as part

of its administration of the program and

would expect a discussion of this

impact in its annual evaluation of the

program.

Changes: None.

• Explanation of how a DSU will

serve all eligible individuals.

—Detailed nature of explanation

Comments: Several commenters

opposed the proposed requirement that

a DSU provide a detailed explanation of

the methods by which it will provide

services to all eligible individuals

because they believe it is overly

burdensome. One commenter believed

that the required projections in

§ 361.36(a)(1)(ii) of the proposed

regulations might prevent closer

cooperation between consumer groups

and DSUs because consumer groups

might believe that the incidence and

prevalence of their disability is greater

than indicated in the statistical data

used by the DSU.

Several commenters believed that

there is no practical way for a DSU to

make the required projections because

of the uncertainty of future funding

levels and of the effect of the revised

eligibility requirements under the Act.

One commenter stated that if

projections are required, the Secretary

should keep documentation to a

minimum. This commenter requested

that a DSU be able to use existing data,

e.g., Federal census and population

data, to make its projections.

Discussion: The legislative history

accompanying the 1992 Amendments to

the order of selection requirement

indicates an expectation on the part of

the Congress that the Secretary will

promulgate regulations that will obligate

States wishing to avoid establishing an

order of selection to prove that they are

indeed able to serve all eligible

individuals. Nevertheless, the data
24392 Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations

projections required in the proposed

regulations have been significantly

reduced in accordance with the

Department’s principles for regulating.

Application of the remaining

documentation requirements is limited

to—(1) Those DSUs that were unable to

serve all eligible individuals (including

DSUs that established an order of

selection) in the current or preceding

fiscal year, but contend they will be able

to do so in the next fiscal year; and (2)

Those DSUs that were able to serve all

eligible individuals in the current or

preceding fiscal year only by not

meeting the requirements in

§ 361.36(a)(2). The Secretary believes

that the documentation requirements

remaining in the regulations to support

a DSU’s conclusion that it is able to

serve all eligible individuals, even

though it has been unable to serve all

eligible persons in the past, is fully

consistent with congressional intent.

The Secretary believes that the

required explanation will not impose

any additional data collection burdens

on a DSU. The Secretary believes that

existing information in a DSU’s required

statewide studies and annual

evaluations, comprehensive statewide

assessments of the rehabilitation needs

of individuals with severe disabilities,

comprehensive system of personnel

development, and budget data would

enable a DSU to provide the required

explanation without any need for

additional data collection.

The Secretary believes that a DSU

should be able to predict funding levels

for the program during the upcoming

fiscal year through use of State and

Federal budget data.

The Secretary believes that Federal

census and population data alone are

not sufficient for a DSU to make the

required projections. These data are not

updated often enough for a DSU to rely

solely on these sources in making its

projections, but may be useful in

conjunction with information from a

DSU’s statewide studies, comprehensive

statewide assessments, comprehensive

system of personnel development, and

budget data.

Changes: The Secretary has revised

§ 361.36(a)(1)(ii) of the proposed

regulations to reduce the data

projections that a DSU must provide as

part of its explanation of how it is able

to serve all eligible individuals. This

provision has been relocated to

§ 361.36(a)(3) of the final regulations

and applies only to—(1) DSUs that were

unable to serve all eligible individuals

during the current or preceding fiscal

year; and (2) DSUs that contend that

they served all eligible individuals in

the preceding and current fiscal years,

but cannot attest to meeting the program

requirements listed in § 361.36(a)(2) for

both those years.

—Projections for serving all eligible

individuals with disabilities

Comments: Several commenters

suggested that the Secretary require a

DSU to provide separate projections for

serving individuals with non-severe,

severe, and the most severe disabilities

in providing the data in § 361.36(a)(1)(ii)

(A) and (B) of the proposed regulations.

These commenters believed that the

approach taken in the proposed

regulations would allow a DSU to

average the costs of serving all

populations, and the commenters

recommended that a DSU be required to

break out the costs of serving

individuals with severe and the most

severe disabilities. Commenters

contended that the average projected

cost of serving all individuals is

substantially less than the cost of

serving the subgroup of individuals

with the most severe disabilities

because of the variety of services and

supports that individuals in this

category require. One of these

commenters also believed that

providing specific data on each of these

populations would help to determine

the extent to which a DSU has engaged

in aggressive outreach efforts to serve a

greater number of individuals with the

most severe disabilities.

One commenter requested that, in

making its projections, a DSU be

required to take into consideration the

likelihood that more individuals will be

applying for services as a result of the

revised eligibility requirements

established under the 1992

Amendments and that more of these

individuals will be individuals with the

most severe disabilities because of the

expanded requirements to provide

personal assistance and rehabilitation

technology services.

Discussion: As discussed previously,

the Secretary has significantly revised

the proposed regulations to require

DSUs to submit projections as part of

their State plan only in limited

circumstances. Specifically,

§ 361.36(a)(3) requires DSUs that were

unable to serve all eligible individuals

during the current or previous fiscal

year, but believe that they do not need

to establish an order of selection in the

next fiscal year, to include in their State

plans the projected numbers of eligible

individuals, the projected costs of

serving those individuals, the projected

revenues, and the projected number of

qualified personnel. (These State plan

requirements also apply to DSUs that do

not establish an order of selection but

cannot provide the assurances in

§ 361.36(a)(2).) However, any DSU that

does not establish an order of selection

must still consider the rehabilitation

needs of individuals with severe

disabilities as part of its explanation

under § 361.36(a)(1)(i), even though the

final regulations do not require separate

projections for individuals with nonsevere, severe, and most severe

disabilities under § 361.36(a)(3).

The Secretary agrees that averaging

the costs of serving all eligible

individuals would not provide an

accurate estimate of the costs of serving

individuals with severe and the most

severe disabilities if a State relied solely

on cost data for years prior to the

enactment of the 1992 Amendments in

making its projections. The Secretary

believes that in making projections with

respect to the cost of serving all eligible

individuals, a DSU must consider the

costs of serving individuals with severe

disabilities.

The Secretary agrees that more

individuals with severe disabilities and

individuals with the most severe

disabilities have become eligible to

receive services under the revised

eligibility requirements in the 1992

Amendments. However, the Secretary

believes that any significant expansion

in the number of eligible individuals

that is attributable to the revised

eligibility criteria has already taken

place. Consequently, the Secretary

believes there is no need to require

DSUs under § 361.36(a)(3) to provide

separate projections for serving

individuals with non-severe, severe, and

most severe disabilities as long as the

projected number of all eligible

individuals and the projected costs of

serving those individuals is provided.

Changes: The Secretary has revised

§ 361.36(a)(1)(ii) of the proposed

regulations to reduce the amount of data

and related explanations that must be

submitted as part of the State plan. In

addition, the regulations require that

this data be included as part of the State

plan only if—(1) The DSU was unable

to serve all eligible individuals in the

current or preceding fiscal year; or (2)

The DSUs did not meet the

requirements in § 361.36(a)(2) in serving

all eligible individuals in the current

and preceding fiscal years. This

provision has been relocated to

§ 361.36(a)(3) in the final regulations.

—Cost-containment

Comments: Several commenters

suggested that a DSU be required to

control costs before implementing an

order of selection. One commenter

suggested adding a new requirement to

the regulations that a DSU, prior to
Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations 24393

implementing an order of selection,

implement methods to control costs,

including, but not limited to, rigorous

administrative controls and oversight,

aggressively pursuing comparable

services and benefits, paying vendors

based on performance outcomes,

developing equitable financial need

policies, and establishing collaborative

program funding through interagency

agreements that will enable the DSU to

provide services to all eligible persons.

Another commenter requested that a

DSU that is unable to secure its full

Federal allotment for the program due to

insufficient State match be required to

demonstrate efforts to obtain the full

match in order to be able to implement

an order of selection. This commenter

also requested that the Secretary

question or not approve a DSU’s

decision to implement an order of

selection if it is unable to fill vacant

counselor positions due to a statewide

freeze on hiring, since counselor salaries

are primarily funded by Federal funds.

On the other hand, several

commenters requested that a DSU be

prohibited from establishing

inappropriate, arbitrary, or groundless

policy restrictions on the provision of

services that are intended to avoid

implementation of an order of selection.

Some of these commenters

recommended that the Secretary

establish an appeal process to the

Rehabilitation Services Administration

(RSA) Regional Offices so that parties

may challenge these types of

restrictions.

Discussion: The Secretary agrees that

a DSU should undertake all efforts to

control costs before it opts to establish

an order of selection. Some of the means

suggested by commenters for controlling

costs are already Federal requirements

(e.g., program costs must be reasonable

and necessary and DSUs must pursue

comparable services and benefits before

providing most services), while others

are State options (e.g., paying vendors

based on performance outcomes,

developing equitable financial need

policies, and establishing collaborative

program funding through interagency

agreements). The Secretary encourages

DSUs to use these State options

whenever possible to contain costs.

In conjunction with a DSU’s

determination of whether it needs to

establish an order of selection, a DSU

should consider whether the adoption

of certain cost containment measures

would enable the DSU to serve all

eligible individuals. Adoption of cost

containment measures, therefore,

should be considered both at the time

the DSU develops its State plan

submission on order of selection prior to

the beginning of the fiscal year and

whenever changed circumstances

during the fiscal year warrant

reevaluation of the need to establish an

order of selection in accordance with

§ 361.36(b). If a DSU undertakes cost

containment strategies and is still

unable to serve all eligible individuals,

it is required to establish an order of

selection for services.

The Secretary does not believe there

is authority to establish a link between

a DSU’s ability to meet its full matching

requirement—and therefore earn its

entire allotment—and its right to

implement an order of selection. In fact,

the inability of a DSU to obtain its full

matching contribution may be a factor

in its need to establish an order of

selection, since a DSU would have

fewer program funds available because

of insufficient State dollars and the loss

of some Federal funds.

As previously noted, the Secretary

agrees that DSUs need to proceed

carefully in establishing an order of

selection. Therefore, the Secretary

requires, under § 361.36(e)(1), that a

DSU consult with and seriously

consider the advice of the Council

regarding the need to establish an order

of selection. The Secretary does not

believe it is necessary or advisable to

establish an appeal process that is

specifically for order of selection

compliance issues. Section 107(c) of the

Act provides a general appeals process

for substantial noncompliance with any

State plan requirement under this

program.

Changes: None.

—Assessment of rehabilitation needs of

individuals with severe disabilities

Comments: One commenter requested

that the provision in

§ 361.36(a)(1)(ii)(B)(1) of the proposed

regulations requiring a DSU to assess

the rehabilitation needs of ‘‘individuals

with severe disabilities’’ within the

State be changed to require a DSU to

assess the needs of ‘‘individuals with

the most severe disabilities.’’ The

commenter believed that this change

would be consistent with section

101(a)(5)(A) of the Act.

Discussion: Section 101(a)(5)(A) of the

Act provides that the State plan shall

contain the plans, policies, and methods

to be followed in carrying out the State

plan and in its administration and

supervision, including the results of a

comprehensive, statewide assessment of

the rehabilitation needs of ‘‘individuals

with severe disabilities’’ residing within

the State. Therefore, § 361.36(a)(1)(i) of

the final regulations correctly tracks the

language in section 101(a)(5)(A) of the

Act. The Secretary notes, however, that

the broad category of ‘‘individuals with

severe disabilities’’ would include as a

subcategory ‘‘individuals with the most

severe disabilities.’’

Changes: None.

—Interagency cooperative agreements

Comments: One commenter requested

that the provision in

§ 361.36(a)(1)(ii)(B)(4) of the proposed

regulations, which highlighted or

emphasized the consideration of

cooperative agreements serving certain

groups of individuals with disabilities,

be changed to read ‘‘including

individuals served by the Individuals

with Disabilities Education Act, * * *

and any other cooperative agreements’’

in order to ensure that equal weight is

given to all cooperative arrangements.

One commenter recommended that

the Secretary require a DSU to include

in its projections estimates of the

number of individuals with severe

disabilities that will be provided

services under the interagency

cooperative arrangement with programs

that rely on Javits-Wagner-O’Day Act

(JWOD Act) set-asides.

Discussion: The Secretary believes

that requiring in the State plan separate

estimates of the number of individuals

with disabilities to be served under

interagency cooperative arrangements is

overly burdensome. As long as the DSU

considers these agreements when

ascertaining the projected numbers of

eligible individuals and the projected

costs of administering its program, there

is no need to provide a separate

breakdown of the number of applicants

or eligible individuals receiving services

under each type of agreement.

Changes: In accordance with the

Department’s principles for regulating,

the Secretary has revised the proposed

regulations to eliminate the requirement

that the DSU include estimates of the

number of individuals to be served

under interagency cooperative

agreements as part of its projected costs

of administering the program.

—Development of order of selection as

a contingency plan

Comments: Several commenters

requested that a DSU be required to

develop an order of selection regardless

of whether it needs to be implemented

in the current fiscal year. These

commenters believed it is important for

each DSU to have an order of selection

available as a contingency measure.

Discussion: There is no statutory

authority to require a DSU to develop an

order of selection if a DSU determines

it is presently able to serve all eligible

individuals and will be able to do so

throughout the fiscal year. Section

101(a)(5)(A) of the Act requires a DSU
24394 Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations

to establish an order of selection only if

it is unable to serve all eligible

individuals.

A DSU could, however, choose to

develop the priority categories in an

order of selection in anticipation of

possible future need, but would still be

required at the time of implementation

of the order of selection to meet the

public participation requirements of

section 101(a)(23) of the Act, including

consultation with the Council.

Changes: None.

• Order of selection.

—Applicability of order of selection to

funds not included in State match or

Federal allotment

Comments: One commenter requested

that the order of selection requirement

not apply to service funds that are not

included in the State match or Federal

allotment.

Discussion: The order of selection

requirement applies to all expenditures

under the State plan, including

expenditures made with Federal funds

and DSU expenditures made with nonFederal funds that are necessary to meet

a DSU’s matching and maintenance-ofeffort requirements.

Changes: None.

—Outcome and service goals

Comments: One commenter suggested

adding a paragraph to § 361.36(a)(2) of

the proposed regulations requiring a

DSU to show the outcome and service

goals and the time in which they may

be achieved for individuals. The

commenter believed that this reporting

requirement should be added to ensure

that the Secretary will know with

specificity the types of services and

service outcomes being provided, either

if a DSU elects to establish and

implement an order of selection or if a

DSU assures that it is able to serve all

eligible individuals. According to the

commenter, if a DSU establishes an

order of selection for services, it will be

very important for evaluation purposes

to define the mix of services, goals, and

timelines for providing services to

individuals with the most severe

disabilities.

Discussion: The Secretary agrees with

the change suggested by the commenter.

Section 101(a)(5)(A) of the Act requires

a DSU to show the outcomes and service

goals, and the time within which they

may be achieved, for individuals

provided services under an order of

selection established by a DSU. Section

101(a)(10)(A) of the Act requires a DSU

to include in its State plan the

outcomes, service goals, and service

costs for individuals under each priority

category in a DSU’s order of selection.

Changes: The Secretary has revised

§ 361.36(a)(2) of the proposed

regulations to provide that a DSU’s

order of selection must include the

order to be followed in selecting eligible

individuals to be provided services, a

justification of that order of selection,

and a description of the outcome and

service goals and service costs for

individuals with disabilities in each

priority category within the order and

the time within which these goals may

be achieved. This provision has been

relocated to § 361.36(a)(1)(ii) of the final

regulations.

Section 361.36(b)—Time for

Determining Need for and

Implementation of an Order of Selection

—Implementation of an order of

selection and opening and closing of

priority categories during the fiscal

year

Comments: One commenter

recommended requiring a DSU to

periodically review whether it needs to

establish an order of selection. This

commenter also recommended requiring

a DSU to periodically update its

projections under § 361.36(a)(1) of the

proposed regulations so that the DSU,

with advice and input from the Council

(if the DSU has a Council), can make

decisions with current information.

One commenter recommended that

the regulations require a DSU to

reevaluate its decision not to establish

an order of selection at some regular

interval identified in the regulations,

rather than permit the DSU to determine

the timing of its reevaluation.

Otherwise, the commenter feared that

many DSUs would delay reevaluation

and likely be forced to implement an

order of selection on an emergency

basis.

One commenter suggested that a DSU

submit reports to the Secretary and to

the Council comparing the actual costs

and numbers of individuals served with

its projections under § 361.36(a)(1) of

the proposed regulations and any

adjustments to the projections.

Other commenters suggested that a

DSU be required, no later than 45 days

after the end of each quarter, to submit

a report on how service and expenditure

levels for that quarter and cumulatively

for the fiscal year compare to the

projections made by the DSU under

§ 361.36(a)(1) of the proposed

regulations. These commenters believed

that this type of reporting would allow

the Secretary to track the accuracy of a

DSU’s projections. Other commenters

recommended requiring a DSU to

submit quarterly reports to the Secretary

on the accuracy of a DSU’s projections

and the need to establish an order of

selection.

One commenter inquired whether a

DSU may implement an order of

selection during the fiscal year, rather

than at the beginning of the fiscal year.

This commenter believed that requiring

a DSU to establish an order of selection

at the beginning of each fiscal year

might cause a DSU to be overly

conservative and to close more priority

categories than is necessary.

One commenter inquired whether a

DSU may adjust, during the fiscal year,

which priority categories are open and

closed.

Discussion: The Secretary considers

DSU reevaluation of the need to

establish an order of selection necessary

to the proper management of the

program. However, the Secretary does

not believe that requiring reevaluation

at regular intervals during the course of

each fiscal year is necessary. A

requirement of this type would be

overly burdensome and would apply an

inflexible standard to determinations

that are best governed by a DSU’s

individual circumstances. The

regulations, therefore, require a DSU to

reevaluate its decision not to implement

an order of selection for services, in

consultation with the Council,

whenever changed circumstances, such

as a decrease in its fiscal or personnel

resources or an increase in program

costs, indicate that it may no longer be

able to provide the full range of services

to all eligible individuals. In addition,

documentation related to reevaluations

is to be provided to the Council, as well

as to the Department during RSA’s

monitoring and review of the order of

selection requirement under sections

107(a)(3)(A) and 107(a)(4)(B) of the Act.

A DSU is required to determine the

need for an order of selection prior to

the beginning of the fiscal year and to

reevaluate that need during the year

under § 361.36(b) if circumstances

change after the beginning of the fiscal

year. If changed circumstances warrant

establishing an order of selection during

the fiscal year, a DSU may implement

an order of selection at that time. The

Secretary prefers, however, for a DSU to

implement an order of selection at the

beginning of the fiscal year if it foresees

any circumstances that may affect its

ability to serve all eligible individuals

throughout the year. The preparations

needed to establish and implement an

order of selection take time. During this

time, resources may be further strained.

Thus, the Secretary believes that a

conservative approach toward

implementing an order of selection and

opening priority categories is preferable

so that sufficient resources are available
Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations 24395

throughout the year to serve all

individuals with severe disabilities,

including individuals with the most

severe disabilities.

If a DSU implements an order of

selection during the fiscal year, rather

than at the outset, and thereafter cannot

serve all individuals with severe and the

most severe disabilities, it would be out

of compliance with the order of

selection requirement.

The Secretary believes that a DSU

may use its discretion as to the timing

for opening and closing priority

categories as long as the order of

categories is maintained. When

considering whether to open a category,

a DSU should evaluate not only current

resources but also the impact that

continuing to serve these eligible

individuals under this category will

have on resources expected to be

available in the next fiscal year, or

possibly beyond.

Changes: The Secretary has revised

§ 361.36(e)(1) to provide that the DSU

shall consult with and seriously

consider the advice of the Council

regarding the need to establish an order

of selection, including any reevaluation

of the need to establish an order of

selection under § 361.36(b)(2).

Section 361.36(c)—Establishing an

Order of Selection.

—Further guidance on factors to be

considered in establishing an order of

selection

Comments: Several commenters

recommended that the Secretary

provide further guidance on what

factors a DSU should use in establishing

an order of selection. One of these

commenters suggested adding five

factors that a DSU should consider in

establishing an order of selection: Lower

levels of educational achievement;

longer lengths of unemployment, underemployment, or lower level jobs; lower

levels of self-esteem and self-worth;

need for two or more services; and need

for services for a longer length of time.

One commenter requested that a

statement be added to § 361.36(c)

indicating that the criteria for

determining which individuals are

individuals with the most severe

disabilities must be equally applicable

to, and not lead to the exclusion of,

transitioning students. This commenter

was concerned that a DSU may define

an ‘‘individual with the most severe

disability’’ by using factors, such as an

employment history of repeated failures,

that may exclude youth with severe

disabilities.

Discussion: In establishing an order of

selection a DSU can only consider

severity of disability. The Secretary

believes that an order of selection must

be based on the factors or criteria

contained in the definition of an

‘‘individual with a severe disability’’ in

section 7(15)(A) of the Act. An

‘‘individual with a severe disability’’ is

defined as an individual with a

disability (1) who has a severe physical

or mental impairment that seriously

limits one or more functional capacities

(such as mobility, communication, selfcare, self-direction, interpersonal skills,

work tolerance, or work skills) in terms

of employment outcome; (2) whose

vocational rehabilitation can be

expected to require multiple vocational

rehabilitation services over an extended

period of time; and (3) who has one or

more physical or mental disabilities, as

identified in section 7(15)(A) of the Act,

or any other disability or disabilities

that cause comparable substantial

functional limitation.

In determining which individuals

with severe disabilities are individuals

with the most severe disabilities, for

purposes of providing them with the

highest priority in an order of selection,

a DSU cannot merely apply the criteria

in this definition. Because individuals

with the most severe disabilities are a

subgroup of individuals with severe

disabilities, the Secretary believes that a

DSU must refine these criteria to

identify this subgroup.

A DSU may refine these factors, for

example, by basing its order of selection

on the number and degree of functional

limitations, the amount of time

vocational rehabilitation services would

be needed, and the number of

vocational rehabilitation services

needed. When refining these factors, a

DSU may choose to refine one factor or

a combination of factors. The purpose of

refining these factors is to link the

nature and depth of the individual’s

functional limitations with the need for

multiple and complex services that

require an extended period of time for

completion.

A DSU could refine the first criterion

by requiring that an individual

demonstrate limitations in three or more

functional capacities, such as mobility,

communication, self-care, self-direction,

interpersonal skills, work tolerance, or

work skills. Alternatively, a DSU could

specify the degree of functional

limitations within one or more

functional capacities by requiring that

an individual demonstrate a minimum

number of specific functional

limitations, such as five specific

functional limitations, within one or

more functional capacities.

Possible examples of specific

functional limitations within the

functional capacity of self-direction

include—(1) Purposeless shifting from

one activity to another; (2) Inability to

follow through with and complete

assignments; (3) Problems related to

time management; (4) Making decisions

impulsively without consideration for

previous plans or experience; (5)

Limitations in gathering, organizing,

and analyzing information; (6)

Difficulties in adapting to changing

work requirements; and (7) Inability to

monitor work performance and to adjust

behaviors and activities if the current

performance is not adequate.

A DSU could refine the second

criterion by specifying the minimum

number of vocational rehabilitation

services required by the individual or by

specifying the extended period of time

required for the provision of services.

For example, in order to link the

complexity or substantiality of the

services provided to the severity of

functional limitations, a DSU could

establish a criterion that an individual

require 2 or more major services that

will be at least 12 months in duration.

Major services could be defined as those

services described in section 103(a) of

the Act, excluding diagnostic services;

supportive services, such as

maintenance and transportation, that

complement the provision of major

services; and the counseling, guidance,

and service coordination provided to

every eligible individual.

A DSU could base the minimum time

period required for the provision of

multiple vocational rehabilitation

services on a DSU’s experience with the

length of time necessary for individuals

with severe disabilities to achieve an

employment outcome. This extended

period of time could be defined as the

period of time at the upper end of the

range required for individuals with

severe disabilities to achieve an

employment outcome, after eliminating

any exceptional cases.

Socioeconomic factors, such as levels

of educational achievement or length of

unemployment or underemployment,

and personal traits, such as levels of

self-esteem, however, cannot be used in

establishing an order of selection

because these factors are not measures

of severity of disability or even

measures of disability. For example,

using a factor such as low level of

educational achievement would tend to

include individuals whose disabilities

were acquired at birth or during the

developmental years while excluding

individuals whose disabilities were

acquired after having completed high

levels of education, even though both

groups of individuals might

demonstrate equal substantial
24396 Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations

functional limitations and have an equal

need for multiple services over an

extended period of time. Using a factor

such as an employment history of

repeated failures would have the effect

of excluding youth who may have little

or no employment history.

Changes: The Secretary has revised

§ 361.36(c) by adding a new paragraph

(1) that states that an order of selection

must be based on a refinement of the

three criteria in the definition of

‘‘individual with a severe disability’’ in

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

• Priority for individuals with the

most severe disabilities.

—Federal criteria for defining

individuals with the most severe

disabilities

Comments: Several commenters

expressed concern about the potential

for an individual to be denied services

if the individual moves to a State in

which the DSU uses different criteria for

determining which individuals have the

most severe disabilities. One commenter

inquired as to whether there will be a

consistent procedure for determining

severity of disability, and other

commenters requested that the

regulations include appropriate criteria

for defining ‘‘most severe.’’

Discussion: There is no statutory

authority for the Secretary to establish

Federal criteria to determine which

individuals are individuals with the

most severe disabilities. Section

101(a)(5) of the Act mandates that each

DSU has the responsibility to develop

its own criteria in this regard.

Changes: None.

—Functional limitations

Comments: One commenter requested

that the Secretary clarify that a DSU

may base an order of selection on

limitations of functional capacities in

addition to those listed in the statutory

definition of ‘‘individual with a severe

disability’’ in section 7(15)(A)(i) of the

Act.

Another commenter suggested that

the Secretary encourage DSUs to

determine which individuals are the

most severely disabled based on the

types of functional limitations specified

in the definition of ‘‘developmental

disability’’ in section 6001(5) of the

Developmental Disabilities and Bill of

Rights Act (DD Act). ‘‘Developmental

disability’’ is defined, in part, as a

severe, chronic disability that results in

substantial functional limitations in

three or more of the following areas of

major life activity: (1) Self-care. (2)

Receptive and expressive language. (3)

Learning. (4) Mobility. (5) Self-direction.

(6) Capacity for independent living. (7)

Economic self-sufficiency.

Discussion: A DSU may base an order

of selection on limitations of functional

capacities in addition to those

functional capacities listed in section

7(15)(A)(i) of the Act. This listing is not

all-inclusive because it is preceded by

the words ‘‘such as.’’ However,

functional limitations under this

program must affect the achievement of

an employment outcome. The DD Act

definition specifies functional

limitations that affect major life

activities. Under The State Vocational

Rehabilitation Services Program, some

of the functional areas specified in the

DD Act, such as economic selfsufficiency and capacity for

independent living, would not

necessarily be considered a functional

limitation that impedes the achievement

of an employment outcome, but rather

would be considered a potential

outcome or benefit of the VR program.

Therefore, they could not be used as a

factor in determining severity of

disability under the VR program. As

part of a review of a DSU’s criteria for

identifying individuals with the most

severe disabilities, the Secretary would

assess the appropriateness of using

particular different functional

capacities.

Changes: None.

• Factors that cannot be used in

determining order of selection of eligible

individuals.

—Applying eligibility restrictions to

order of selection decisions

Comments: Several commenters

opposed applying eligibility restrictions

to order of selection decisions. These

commenters stated that the eligibility

and order of selection requirements are

intended to stand alone under the Act.

Discussion: The Secretary agrees that

the eligibility requirements and the

order of selection requirements are

separate requirements. Eligibility

determinations can be based only on the

statutory eligibility criteria in section

102(a)(1) of the Act. Determinations of

the order of serving eligible individuals

can be based only on severity of

disability in accordance with section

101(a)(5)(A) of the Act. Neither

determination can be based on any of

the factors in § 361.36(c)(2).

Changes: None.

—Residency prohibition

Comments: One commenter believed

that the residency prohibition needed to

be clarified because, as worded in the

NPRM, it would encourage individuals

who live in one State to apply for

services in another State.

Discussion: The Secretary’s intention

was to prohibit an order of selection

from being based on any particular

durational residency requirement as

long as the individual is present in the

State and can complete a program of

services. The Secretary did not intend to

address the issue of the ability of

residents of one State to receive VR

services in another State.

Changes: The Secretary has revised

§ 361.36(c)(1)(i) of the proposed

regulations to prohibit an order of

selection from being based on any

duration of residency requirement,

provided the individual is present in the

State. This provision has been relocated

to § 361.36(c)(2)(i) of the final

regulations.

—Type of disability prohibition

—Individuals who are blind or visuallyimpaired

Comments: One commenter urged the

Secretary to ensure that State

rehabilitation agencies that serve only

individuals who are blind or visually

impaired be permitted to continue to

serve these individuals if those agencies

are operating under an order of

selection. In addition, this commenter

recommended that State rehabilitation

agencies that serve all individuals with

disabilities be required to recognize

blindness as a severe disability for

purposes of order of selection.

Discussion: If a DSU that serves only

individuals who are blind or visually

impaired is unable to serve all eligible

individuals, it must prioritize according

to severity of disability.

An individual who is blind or

visually impaired must be assessed like

all other eligible individuals with

disabilities according to the three

criteria in the definition of an

‘‘individual with a severe disability’’ in

section 7(15)(A) of the Act. A DSU may

not determine that an individual who is

blind or visually impaired automatically

meets this definition, i.e., that every

individual who is blind or visually

impaired is an individual with a severe

disability or an individual with a most

severe disability. An individual who is

blind, however, would automatically

satisfy the third element in the

definition because ‘‘blindness’’ is

included among the listing of physical

or mental disabilities that the Act

recognizes as causing substantial

functional limitation.

In addition, if an individual is

determined blind pursuant to Title II or

Title XVI of the Social Security Act,

section 102(a)(2) of the Rehabilitation

Act considers that individual to have a

severe physical or mental impairment

that seriously limits one or more

functional capacities in terms of an

employment outcome, thus satisfying

the first criterion in the definition of an
Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations 24397

‘‘individual with a severe disability.’’

There is no basis in the Act, however,

for automatically determining that an

individual who is blind or visually

impaired would require multiple

vocational rehabilitation services over

an extended period of time.

Changes: None.

—Individuals with disabilities of

alcoholism and other drug abuse

Comments: One commenter was

concerned that individuals with

disabilities of alcoholism and other drug

abuse would not receive fair

consideration under an order of

selection. In order to ensure fair

consideration for these individuals, the

commenter requested that criteria be

added that require a DSU to include

among individuals with the most severe

disabilities those individuals with

chronic relapsing conditions.

Discussion: Section 105(a)(5)(A)

requires a DSU, not the Secretary, to

establish criteria for determining which

individuals with severe disabilities are

individuals with the most severe

disabilities. Any criteria established by

a DSU for identifying individuals with

the most severe disabilities should

apply equally to individuals with

chronic and individuals with acute

disabling conditions. Many individuals

with chronic relapsing conditions, such

as alcohol or drug abuse, may

experience substantial functional

limitations and require multiple

vocational rehabilitation services over

an extended period of time. However,

an assessment of whether a particular

individual with a disability meets these

criteria, including an assessment of an

individual who is disabled because of

alcohol or drug abuse, must be done on

a case-by-case basis.

Changes: None.

—Source of referral prohibition

Comments: One commenter inquired

whether the emphasis on interagency

cooperative arrangements in the Act

allows a DSU to establish a priority

under an order of selection for eligible

individuals referred by school systems

under the Individuals with Disabilities

Education Act (IDEA) or the Carl D.

Perkins Vocational and Applied

Education Act (Perkins Act).

Discussion: A DSU may not establish

a priority under an order of selection for

eligible individuals referred by school

systems under IDEA or the Perkins Act

because the source of referral is not

necessarily an indicator of severity of

disability. While some of these

individuals might be individuals with

severe or the most severe disabilities, all

individuals referred by schools under

these programs may not necessarily

meet these criteria. This determination

must be made on an individual basis.

Changes: None.

—Prohibition against using type of

expected employment outcome

Comments: Several commenters

opposed this prohibition. Several

commenters contended that the purpose

of the Title I program is to assist

individuals with disabilities to enter

into gainful employment, and, therefore,

the type of expected employment

outcome should be used as a factor in

establishing an order of selection. One

commenter contended that one of the

evaluation standards for the program to

be developed by the Secretary under

section 106(a)(2) of the Act may relate

to the achievement of competitive

employment outcomes and an increase

in post-placement earnings. The

commenter believed it is unfair to

evaluate a DSU on the level of earnings

of the individuals it places in

employment if it cannot use type of

employment and amount of earnings as

a factor in establishing an order of

selection.

Finally, one commenter inquired

whether, given the increased emphasis

in the Act on supported employment, a

DSU should be permitted to establish a

priority in its order of selection for

eligible individuals whose employment

outcome is in a supported employment

setting.

Discussion: Individuals with multiple

functional limitations and a need for

multiple services over an extended

period of time will have varying

expected employment outcomes,

including competitive employment,

supported employment, and other types

of employment. Thus, type of expected

employment outcome and level of postplacement earnings are not indicative of

severity of disability and cannot be used

as criteria for determining the level of

severity of disability.

Although an individual whose

employment outcome is in a supported

employment setting would be included

in the group of individuals with the

most severe disabilities because

supported employment services under

the Act can only be provided to

individuals with the most severe

disabilities, a DSU cannot give

individuals whose employment

outcome is in a supported employment

setting priority over other individuals

with the most severe disabilities who

have different employment outcome

goals.

Changes: None.

—Prohibition against considering the

particular service needs of an

individual or anticipated cost of

services required by an individual

Comments: Several commenters

opposed these prohibitions. Several

commenters questioned the logic of

prohibiting consideration of service

needs when establishing an order of

selection because the need for multiple

services is part of the definition of

‘‘individual with a severe disability.’’

One commenter also pointed out that

this restriction is contrary to previous

RSA sub-regulatory guidance that has

allowed DSUs to use service needs and

costs in establishing priority categories

for individuals with non-severe

disabilities. Finally, one commenter

inquired whether it is consistent with

the Act for a DSU to establish a priority

in its order of selection for eligible

individuals who require rehabilitation

technology devices and services.

Several commenters believed that the

Secretary should revise the regulations

to allow a DSU to develop an IWRP for

only non-purchased services if

resources are not available to also

provide purchased services. These

commenters requested that a DSU that

has established an order of selection for

services be allowed to provide a priority

to persons who do not have a severe or

most severe disability and who need

only non-purchased services as long as

adequate resources are available to serve

first those individuals who are the most

severely disabled.

Discussion: The Secretary agrees that

clarification is needed. This provision is

intended to prohibit a DSU from giving

priority to an individual who has one or

more specific service needs over another

individual who has different service

needs. For example, a DSU is prohibited

from giving priority to individuals who

require physical restoration services

over individuals who require vocational

training. A DSU is also prohibited from

giving priority to individuals who

require rehabilitation technology

devices and services, as raised by one

commenter, over any other individual

who requires a different service.

One of the examples provided in the

preamble to the proposed regulations to

illustrate this provision may have

caused confusion. The example stated

that a DSU is prohibited from

establishing an order of selection that

gives priority to individuals who require

short-term services over individuals

who require long-term services. Since a

DSU is required to consider, in

establishing its order of selection, an

individual’s need for vocational

rehabilitation services over an extended

period of time under the second factor

of the definition of ‘‘individual with a
24398 Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations

severe disability,’’ the use of the words

‘‘short-term’’ and ‘‘long-term’’ was

inappropriate. The example was

intended to illustrate the principle that

the cost of services cannot be a factor in

an order of selection and that DSUs

cannot give priority to individuals who

need short-term, less costly services

over individuals who need longer term

and more costly services.

The Secretary believes that there is no

basis under the Act for exempting from

the order of selection requirement the

provision of non-purchased services.

The Act does not draw any distinction

between the provision of purchased and

non-purchased vocational rehabilitation

services with respect to a DSU’s

determination of the order in which it

will provide services to eligible

individuals if it cannot serve all eligible

individuals. The order must be

predicated, as section 101(a)(5)(A)

requires, on severity of disability:

Individuals with the most severe

disabilities must be served first.

This means, for example, that if a

DSU has established three service

categories for serving eligible

individuals (i.e., individuals with the

most severe disabilities, individuals

with severe disabilities, and individuals

with non-severe disabilities), then it

must be able to provide all needed

services, whether purchased or not, to

all individuals with the most severe

disabilities before serving any

individuals with severe disabilities. In

addition, it must be able to provide all

needed services to all individuals with

severe disabilities before serving any

individuals in the last category who

have less than severe disabilities. An

individual’s need for only nonpurchased services cannot override this

order.

Thus, the Secretary believes that a

DSU cannot establish a priority category

anywhere in its order of selection that

provides solely for the provision of nonpurchased services, even among

individuals with non-severe disabilities.

This interpretation represents a policy

reversal by RSA of its position in

subregulatory guidance (RSA-MT–92–

17, March 20, 1992), which permitted a

DSU to give a service priority to nonseverely disabled individuals whose

rehabilitation needs do not require the

expenditure of case service funds (i.e.,

individuals who need only counseling,

guidance, and placement services that

can be provided by DSU staff) over other

non-severely disabled individuals.

To address the concern of some DSUs

on this issue, the Secretary has

proposed regulations for this program in

34 CFR 361.37(c) that were published in

the Federal Register on December 15,

1995 (60 FR 64476) and that would

provide a limited exception to this

prohibition. These proposed regulations

would authorize any DSU that has

implemented an order of selection to

establish an expanded information and

referral program that includes the

provision of job referral services to

eligible individuals who are not being

served under a DSU’s order of selection,

provided that certain State plan

requirements are met. These

requirements include a description in

the State plan of the level of

commitment of staff and other resources

for this purpose and an assurance that

funds to carry out this program will

supplement and not supplant funds

available for providing VR services to

eligible individuals who are able to be

served under the DSU’s order of

selection.

Changes: The Secretary has clarified

§ 361.36(c)(1)(vi) of the proposed

regulations by providing that the need

for specific services by an individual

cannot be the basis for an order of

selection. This provision has been

relocated to § 361.36(c)(2)(vi) of the final

regulations.

—Income level of the individual or the

individual’s family

Comments: Several commenters

recommended that a DSU be permitted

to give priority to persons on public

assistance in its order of selection

because these individuals have a greater

need for services than those who have

larger incomes.

Discussion: A DSU may not give

priority to persons on public assistance

under its order of selection because use

of public assistance is a socioeconomic

factor that may not necessarily be

related to the presence of a disability or

to the severity of that disability.

Individuals who are on public

assistance and who are included in a

priority category currently being served

by a DSU can receive services. As noted

in the preamble to the NPRM, however,

the income level of an individual or the

individual’s family can be a factor only

in determining whether an individual is

required by a DSU to pay part of the cost

of a service. This is a State option

permitted under current regulations in

34 CFR 361.47(a).

Changes: None.

—Transitioning students

Comments: One commenter believed

the intent of section 101(a)(24)(A) (i),

(ii), and (iii) of the Act is to ensure that

all eligible students receive services in

a timely manner and to ensure that there

is no gap in services between the school

system and the vocational rehabilitation

system.

One commenter inquired how a DSU

will handle transitioning special

education students if an order of

selection is implemented. Specifically,

the commenter inquired whether a

student who is receiving vocational

rehabilitation services would continue

to receive services if the student falls

outside of the priority categories being

served under an order of selection

established by a DSU.

Another commenter was concerned

that transitioning students would be

placed on waiting lists for services. This

commenter recommended requiring a

DSU operating under an order of

selection to include in its State plan the

plans, policies, and procedures to

identify how the DSU will work with

education officials and others to meet

the needs of transitioning youth and to

otherwise fulfill their obligations under

the Act concerning the provision of

transition services.

Discussion: Even though section

101(a)(24)(A) (i), (ii), and (iii) of the Act

strengthen the provisions for transition

services to students with disabilities, a

student who is determined eligible for

services after a DSU implements an

order of selection will be served only if

the student is among those individuals

included in a priority category that is

currently being served under the DSU’s

order of selection.

Section 361.36(d)(3), however,

provides that a DSU must ensure that it

will continue to provide all needed

services under an IWRP to any eligible

individual who has begun to receive

services prior to the effective date of the

order of selection, irrespective of the

severity of the individual’s disability.

Thus, for example, if a transitioning

student with severe disabilities is

receiving vocational rehabilitation

services under an IWRP prior to the

effective date of the order of selection,

the student will continue to receive all

needed services even if the DSU is able

under its order of selection to initiate

services only to individuals with the

most severe disabilities.

Transitioning students who are not

included in a priority category that is

currently being served under a DSU’s

order of selection will be placed on a

waiting list unless services were begun

prior to the implementation of the order

of selection.

Changes: None.

—Individuals with less severe

disabilities

Comments: One commenter inquired

whether individuals with less severe

disabilities will be systematically left

out of the process in those DSUs that

implement an order of selection. This
Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations 24399

commenter feared that the proposed

regulations permit a DSU to refuse

services to an individual because his or

her disability is not severe enough.

One commenter inquired whether a

DSU may limit the number of

individuals with non-severe disabilities

who may be served under an order of

selection so that there will be funds

available to serve individuals with a

severe disability who may apply for

services.

Discussion: The order of selection

requirement mandates that services be

provided first to individuals with the

most severe disabilities before serving

other eligible individuals. This means

that individuals with the most severe

disabilities are served before individuals

with severe disabilities and individuals

with non-severe disabilities. A DSU that

implements an order of selection may be

unable to serve eligible individuals with

non-severe disabilities.

The Secretary urges DSUs operating

under an order of selection to be

conservative in assessing their ability to

serve individuals other than those with

the most severe disabilities before

opening additional priority categories.

This approach is needed to ensure that

sufficient resources are available

throughout the year to serve individuals

under higher priority categories (i.e.,

individuals with most severe disabilities

and individuals with severe disabilities)

who apply for services and become

eligible after the beginning of the fiscal

year. As stated previously, the Secretary

prefers this conservative approach since

a potential increase in the number of

applicants with severe disabilities might

affect the DSU’s ability to comply with

the order of selection requirements

throughout the year.

Changes: None.

Section 361.36(d)—Administrative

Requirements

—Identify the order of selection as a

State-imposed requirement

Comments: One commenter

recommended deleting this

requirement. The commenter stated that

the only legally permissible reason for

implementing an order of selection

policy is resource limitations. Since

funding for the program is a shared

responsibility of State and Federal

governments, the commenter believed

there was no reason to attribute resource

shortfalls exclusively to a State.

Discussion: The Secretary believes

that the commenter misinterpreted this

provision of the proposed regulations.

The intent of the provision was for a

DSU to identify its particular order of

selection policy as a State-imposed

requirement (not the order of selection

requirement itself, which is a Federal

requirement) since this policy is a State

rule or policy relating to the

administration or operation of the

program under section 17 of the Act.

Nevertheless, the Secretary believes that

there is no reason to particularly

highlight this one State-imposed

requirement in the regulations over

other State-imposed requirements, such

as a State’s financial needs test. The

Secretary intends to address Stateimposed requirements in general in

other regulations for this program.

Changes: The Secretary has deleted

the requirement in § 361.36(d)(2) of the

proposed regulations that a DSU

identify its order of selection policy as

a State-imposed requirement.

—Written policies

Comments: Several commenters

suggested that written policies for an

order of selection include requirements

that the policies must provide that

affected individuals are notified of the

State’s particular order of selection, the

priority category to which they have

been assigned, and their right to appeal

assignment to a particular priority

category.

One commenter suggested revising

§ 361.36(d)(3) of the proposed

regulations to provide that a DSU must

establish written policies related to the

development, establishment, and

administration of the order of selection

that should include, but not be limited

to, the following: (1) Consultation with

the Council. (2) Staff orientation and

training. (3) Notification to individuals

applying for services, or in an

appropriate case, the parent, family

member, guardian, advocate, or

authorized representative of such an

individual. (4) Monitoring procedures.

(5) Caseload management. (6)

Evaluation of effectiveness of the order

of selection. The commenter believed

that these policies should be required

since they include important

accountability elements.

Discussion: The Secretary agrees that

a DSU must ensure that each eligible

individual is informed of the priority

categories that have been established in

a DSU’s order of selection, of the

particular priority category to which he

or she has been assigned, and of his or

her right to appeal assignment to a

particular priority category under the

State’s procedures for reviewing

rehabilitation counselor or coordinator

determinations. The Secretary believes

these are basic procedural rights that

eligible individuals have under this

program. These notification

requirements are specified in

§ 361.36(d)(2).

In accordance with the Department’s

principles for regulating, however, the

Secretary has eliminated the

requirement in the proposed regulations

that DSUs establish written policies

related to the development,

establishment, and administration of its

order of selection. The Secretary

believes that requiring DSUs to establish

written policies covering all aspects of

the implementation of an order of

selection is overly burdensome.

Nevertheless, the Secretary encourages a

DSU to develop policies, as needed, to

ensure proper administration of its

order of selection, including policies in

areas such as staff orientation and

training, monitoring procedures,

caseload management, and evaluation

and management of the order of

selection.

Changes: The Secretary has revised

§ 361.36(d)(3) of the proposed

regulations to require a DSU to notify all

eligible individuals of the priority

categories in a DSU’s order of selection,

their assignment to a particular

category, and their right to appeal

assignment to a particular priority

category. This provision has been

relocated to § 361.36(d)(2) of the final

regulations.

—Continuity of services

Comments: One commenter requested

clarification of this provision. The

commenter noted that a person could

have a completed and signed IWRP, but

not yet have begun to receive services

under the IWRP. This commenter

requested that the regulations be revised

to provide that anyone with a completed

and signed IWRP must continue to

receive services in accordance with

their approved IWRP, irrespective of the

severity of their disability. Another

commenter inquired whether the

continuity of services requirement

entitles an individual who is receiving

services under one DSU’s order of

selection to receive services from a DSU

in another State if that individual moves

and falls outside of the priority

categories being served by the DSU in

the second State.

Discussion: The continuity of services

requirement ensures that an eligible

individual who has begun to receive

services under an IWRP prior to the

effective date of a DSU’s order of

selection will continue to receive all

needed services, including services that

may be necessary because of

amendments to the IWRP, irrespective

of the severity of that individual’s

disability.

An eligible individual who has a

completed IWRP, but who has not

begun to receive services under that
24400 Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations

IWRP, would not be covered by this

requirement. This means that the

continuity of services requirement does

not apply to any services provided in

developing an eligible individual’s

IWRP. This requirement takes effect at

the point in the rehabilitation process

when services leading to an

employment outcome have been

initiated under an IWRP. Finally, the

continuity of services requirement is

DSU-specific and does not entitle an

individual who is receiving services

under one DSU’s order of selection to

receive services under another DSU’s

order of selection if the individual is not

included among the individuals being

served under the second DSU’s order of

selection.

Changes: The Secretary has revised

§ 361.36(d)(4) of the proposed

regulations to ensure that a DSU

continues to provide all services needed

by any eligible individual who has

begun to receive services ‘‘under an

IWRP’’ prior to the effective date of the

order of selection, irrespective of the

severity of the individual’s disability.

This change is necessary to clarify that

it is the receipt of services under an

IWRP that triggers the continuity of

services requirement. This provision has

been relocated to § 361.36(d)(3) of the

final regulations.

—Third-party funding arrangements

Comments: One commenter

recommended that the Secretary permit

third-party funding arrangements that

conflict with a DSU’s order of selection

if these arrangements reflect priorities in

national or State policy. Another

commenter feared that requiring DSUs

to renegotiate third-party arrangements

will result in a considerable reduction

in resources to serve individuals with

disabilities.

One commenter recommended that

the Secretary provide a further

explanation of how a DSU can ensure

that its third-party arrangements are

‘‘consistent’’ with its order of selection

for services. This commenter also

requested that the Secretary take into

consideration the practical difficulties

for a provider of renegotiating a contract

midstream. Another commenter

inquired whether cooperative

arrangements, like third-party

arrangements, must be consistent with a

DSU’s order of selection.

One commenter questioned whether a

DSU may select a category of

individuals for priority under its order

of selection because that category is

funded by targeted funds from another

agency.

Discussion: The Secretary believes

that a DSU’s funding arrangements for

providing services, such as third-party

arrangements and cooperative

arrangements, cannot override its order

of selection if those funds are used

under the State plan. For example, a

DSU that receives third-party funding to

serve individuals with mental illness

may not serve individuals with mental

illness who fall outside of the priority

categories being served under the order

of selection. This is necessary to ensure

that an order of selection is applied

fairly and evenly to all individuals

regardless of whether funding

arrangements are in place to serve

individuals from particular disability

groups. If a funding arrangement is

inconsistent with a DSU’s order of

selection, a DSU must renegotiate these

arrangements so that individuals are

served in a manner consistent with the

DSU’s order of selection.

Changes: The phrase ‘‘under the State

plan’’ has been added to § 361.36(d)(4)

to clarify that any funding arrangements

that are used by a DSU to provide

services under the State plan must be

consistent with a DSU’s order of

selection.

—Other requirements

Comments: Several commenters were

concerned that there is an inadequate

number of counselors qualified to

properly evaluate severity of disability.

These commenters suggested that the

Secretary ensure that qualified

counselors are available to evaluate

individuals to determine whether they

will receive services under an order of

selection.

Discussion: Section 101(a)(7) of the

Act requires a DSU to develop a

comprehensive system of personnel

development to ensure that an adequate

supply of qualified State rehabilitation

professional and paraprofessionals is

available in the State. The Secretary

believes that this provision mandates

that staff in sufficient numbers be

qualified to properly evaluate functional

limitations for purposes of determining

severity of disability. The Secretary

believes that all DSUs operating under

an order of selection must provide staff

with appropriate training to be able to

make these determinations.

Changes: None.

Section 361.36(e)—State Rehabilitation

Advisory Council

Comments: One commenter

recommended that the Secretary

highlight the responsibility of the DSU

to seek and seriously consider the

advice of the Council on DSU criteria

for determining which individuals are

individuals with the most severe

disabilities.

Several commenters suggested that a

DSU that has implemented an order of

selection be required to consult other

advisory boards, service providers,

advocacy organizations, consumers,

family members, and rehabilitation

vendors, in addition to the Council,

regarding the content of the order of

selection. One of these commenters

stated that this consultation is necessary

because the composition of the Council

may not ensure sufficient or equal

representation by persons of different

disabilities, such as persons with mental

illness.

Several commenters recommended

that the Secretary add a new § 361.36(f)

stating that the client assistance

program and other parties must be

consulted, under section 101(a)(23)(C)

of the Act, before revisions are made to

a DSU’s order of selection.

Discussion: The Secretary does not

believe that it is necessary to further

highlight the responsibility of a DSU to

seek and seriously consider the advice

of the Council when developing the

criteria for determining which

individuals are the most severely

disabled. The Secretary believes that

§ 361.36(e)(3) sufficiently highlights this

responsibility.

The Secretary agrees with the

commenters who suggest that advisory

boards, other than the Council, service

providers, advocacy organizations,

consumers, family members,

rehabilitation vendors, and the director

of the client assistance program (CAP)

are valuable sources of information and

should be consulted by a DSU in

determining the content of its order of

selection. The Secretary believes that

consultation with these and other

groups as to the content of the DSU’s

order of selection is sufficiently

addressed under sections 101(a)(18),

101(a)(23), and 105(b)(1) of the Act.

These statutory provisions provide for

broad public participation in the

development of the State plan and of

policies governing the provision of

vocational rehabilitation services under

the plan.

Changes: None.

Additional comment

—Development of IWRP

Comments: Several commenters

requested that a DSU not be required to

develop an IWRP for all individuals

eligible for vocational rehabilitation

services under the Act if the DSU

cannot serve all eligible individuals and

is providing services under an order of

selection. These commenters stated that

requiring a DSU that has implemented

an order of selection to develop IWRPs

for all eligible individuals, regardless of
Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations 24401

whether the individual could currently

be served, would result in unnecessary

work for vocational rehabilitation

counselors and would give false hope to

individuals who fall outside of the

categories being served.

Discussion: The Secretary

understands the concern expressed by

these commenters and is addressing this

issue in other vocational rehabilitation

program regulations. The proposed

regulations concerning development of

an IWRP for this program published in

the Federal Register on December 15,

1995 (60 FR 64476, proposed

§ 361.45(a)) would require a DSU that

has implemented an order of selection

to develop an IWRP only for each

eligible individual that it is able to

serve.

Changes: None.

Executive Order 12866

Assessment of Costs and Benefits

These final regulations have been

reviewed in accordance with Executive

Order 12866. Under the terms of the

order the Secretary has assessed the

potential costs and benefits of this

regulatory action.

The potential costs associated with

the final regulations are those resulting

from statutory requirements and those

determined by the Secretary to be

necessary for administering this

program effectively and efficiently.

In assessing the potential costs and

benefits—both quantitative and

qualitative—of these regulations, the

Secretary has determined that the

benefits of the regulations justify the

costs.

The Secretary has also determined

that this regulatory action does not

unduly interfere with State, local, and

tribal governments in the exercise of

their governmental functions.

Summary of Potential Benefits Relative

to Potential Costs of the Regulatory

Provisions Discussed Previously in This

Preamble

The Secretary believes that the final

regulations represent the least

burdensome way to implement the

statutory requirement that a DSU

explain the methods by which it will

serve all eligible individuals for VR

services or, in the alternative, establish

and justify the order of selection it shall

follow in serving first those individuals

with the most severe disabilities. In

addition, the Secretary believes that the

regulations present the most effective

means of ensuring that DSUs do not

improperly avoid establishing an order

of selection (i.e., failing to establish an

order of selection even though the DSU

cannot serve all eligible individuals).

Reduction of burden on DSUs and other

benefits resulting from the final

regulations are discussed in the

following paragraphs of this section and

throughout the analysis of comments

and changes section of the preamble.

Reduction of Paperwork Burden on

Grantees

As stated previously in this preamble,

review of the final regulations in

accordance with the Department’s

principles for regulating resulted in two

major, burden-reducing changes from

the proposed regulations. First, under

the final regulations, DSUs that have

successfully served all eligible

individuals in the past are not required

to include detailed projections (e.g.,

projected number of eligible

individuals, projected program costs

and revenues) as part of their

explanation of how they will continue

to serve everyone and meet all other

program requirements in the next year.

As long as a DSU can provide the

assurances required in the regulations to

confirm its past ability to serve all

eligible individuals, the DSU’s

explanation under § 361.36(a)(1) is not

subject to minimum content

requirements. Second, the regulations

reduce the number of data projections

and related demonstrations that must be

included as part of the explanation for

DSUs that have been unable to serve all

eligible individuals in the past. The

remaining projections are needed to

indicate whether a DSU that has been

unable to serve all eligible individuals

previously can serve everyone in the

next year.

Evaluation of Need to Establish an

Order of Selection

Once a DSU decides, prior to the

beginning of the fiscal year, that it does

not need to establish an order of

selection, the final regulations require

the DSU to reevaluate this decision

whenever changed circumstances

indicate that it may no longer be able to

serve all eligible individuals. DSUs,

therefore, are responsible for

determining whether they need to

implement an order of selection after

the start of the year. The Secretary

prefers this flexible approach rather

than imposing in the regulations a

specific time when all DSUs must

reevaluate the need to establish an order

of selection, as some commenters on the

proposed regulations suggested.

Instructions for Establishing an Order of

Selection

Section 361.36(c) provides, for DSUs

unable to serve all eligible individuals,

clear directives on how to establish an

order of selection for providing services.

In addition, this section includes

specific factors that cannot be used in

developing an order of selection. Many

commenters on the proposed

regulations had requested clarification

as to whether these factors could be

considered in formulating specific

priority categories under an order of

selection.

Additional Benefits

The final regulations include

provisions intended to enhance the

protection of individuals with

disabilities by DSUs operating under an

order of selection. For example, the

regulations require DSUs to notify all

eligible individuals of the priority

categories in the State’s order of

selection, as well as their assignment to

a particular category. Additionally, the

regulations require DSUs to continue to

serve any eligible individual who has

begun to receive services under an

IWRP prior to the effective date of the

order of selection, irrespective of the

severity of the individual’s disability.

Paperwork Reduction Act of 1995

Under the Paperwork Reduction Act

of 1995, no persons are required to

respond to a collection of information

unless it displays a valid OMB control

number. The valid OMB control number

assigned to the collection of information

in these final regulations is displayed at

the end of the affected section of the

regulations.

Intergovernmental Review

This program is subject to the

requirements of Executive Order 12372

and the regulations in 34 CFR Part 79.

The objective of the Executive order is

to foster an intergovernmental

partnership and a strengthened

federalism by relying on processes

developed by State and local

governments for coordination and

review of proposed Federal financial

assistance.

In accordance with the order, this

document is intended to provide early

notification of the Secretary’s specific

plans and actions for this program.

Assessment of Educational Impact

In the notice of proposed rulemaking,

the Secretary requested comments on

whether the proposed regulations would

require transmission of information that

is being gathered by or is available from

any other agency or authority of the

United States.

Based on the response to the proposed

regulations and on its own review, the

Department has determined that the
24402 Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations

regulations in this document do not

require transmission of information that

is being gathered by or is available from

any other agency or authority of the

United States.

List of Subjects in 34 CFR Part 361

Administrative practice and

procedures, Grant programs—education,

Grant programs—social programs,

Reporting and recordkeeping

requirements, Vocational rehabilitation.

(Catalog of Federal Domestic Assistance

Number 84.126—The State Vocational

Rehabilitation Services Program)

Dated: March 4, 1996.

Richard W. Riley,

Secretary of Education.

The Secretary amends Part 361 of

Title 34 of the Code of Federal

Regulations as follows:

PART 361—THE STATE VOCATIONAL

REHABILITATION SERVICES

PROGRAM

1. The authority citation for Part 361

continues to read as follows:

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

otherwise noted.

2. Section 361.36 is revised to read as

follows:

§ 361.36 Ability to serve all eligible

individuals; order of selection for services.

(a) General provisions.

(1) The State plan must contain—

(i) An assurance that the designated

State unit is able to provide the full

range of services listed in section 103(a)

of the Act, as appropriate, to all eligible

individuals. The assurance must be

supported by an explanation that

satisfies the requirements of paragraph

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

describes how, on the basis of the

designated State unit’s projected fiscal

and personnel resources and its

assessment of the rehabilitation needs of

individuals with severe disabilities

within the State, it will—

(A) Continue to provide services to all

individuals currently receiving services;

(B) Provide assessment services to all

individuals expected to apply for

services in the next fiscal year;

(C) Provide services to all individuals

who are expected to be determined

eligible in the next fiscal year; and

(D) Meet all program requirements; or

(ii) The order to be followed in

selecting eligible individuals to be

provided services, a justification of that

order of selection, and a description of

the outcome and service goals and

service costs to be achieved for

individuals with disabilities in each

category within the order and the time

within which these goals may be

achieved.

(2) For those designated State units

that provided assurances in their State

plans for the current fiscal year and the

preceding fiscal year that they are able

to provide the full range of services, as

appropriate, to all eligible individuals,

the explanation required by paragraph

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

statement that, during the current fiscal

year and the preceding fiscal year, the

DSU has in fact—

(i) Provided assessment services to all

applicants and the full range of services,

as appropriate, to all eligible

individuals;

(ii) Made referral forms widely

available throughout the State;

(iii) Conducted outreach efforts to

identify and serve individuals with

disabilities who have been unserved or

underserved by the vocational

rehabilitation system; and

(iv) Not delayed, through waiting lists

or other means, determinations of

eligibility, the development of

individualized written rehabilitation

programs (IWRPs) for individuals

determined eligible, or the provision of

services for eligible individuals for

whom IWRPs have been developed.

(3) For those designated State units

unable to provide the full range of

services to all eligible individuals

during the current or preceding fiscal

year, or unable to provide the statement

required in paragraph (a)(2) of this

section, the explanation required by

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

include—

(i) A description of the circumstances

that have changed that will allow the

DSU to meet the requirements of

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

next fiscal year, including a description

of—

(A) The estimated number of and

projected costs of serving, in the next

fiscal year, individuals with existing

IWRPs;

(B) The projected number of

individuals with disabilities who will

apply for services and will be

determined eligible in the next fiscal

year and the projected costs of serving

those individuals;

(C) The projected costs of

administering the program in the next

fiscal year, including, but not limited to,

costs of staff salaries and benefits,

outreach activities, and required

statewide studies; and

(D) The projected revenues and

projected number of qualified personnel

for the program in the next fiscal year;

(ii) Comparable data, as relevant, for

the current or preceding fiscal year, or

for both years, of the costs listed in

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

this section and the resources identified

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

and an explanation of any projected

increases or decreases in these costs and

resources; and

(iii) A demonstration that the

projected revenues and the projected

number of qualified personnel for the

program in the next fiscal year are

adequate to cover the costs identified in

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

this section so as to ensure the provision

of the full range of services, as

appropriate, to all eligible individuals.

(b) Time for determining need for an

order of selection.

(1) The designated State unit shall

determine, prior to the beginning of

each fiscal year, whether to establish

and implement an order of selection.

(2) If the designated State unit

determines that it does not need to

establish an order of selection, it shall

reevaluate this determination whenever

changed circumstances during the

course of a fiscal year, such as a

decrease in its fiscal or personnel

resources or an increase in its program

costs, indicate that it may no longer be

able to provide the full range of services,

as appropriate, to all eligible

individuals.

(c) Establishing an order of selection.

(1) Basis for order of selection. An

order of selection must be based on a

refinement of the three criteria in the

definition of ‘‘individual with a severe

disability’’ in section 7(15)(A) of the

Act.

(2) Factors that cannot be used in

determining order of selection of eligible

individuals. An order of selection may

not be based on any other factors,

including—

(i) Any duration of residency

requirement, provided the individual is

present in the State;

(ii) Type of disability;

(iii) Age, gender, race, color, creed, or

national origin;

(iv) Source of referral;

(v) Type of expected employment

outcome;

(vi) The need for specific services or

anticipated cost of services required by

an individual; or

(vii) The income level of an

individual or an individual’s family.

(3) Priority for individuals with the

most severe disabilities. The State plan

must assure that those individuals with

the most severe disabilities are selected

for service before other individuals with

disabilities. The designated State unit

shall establish criteria for determining

which individuals are individuals with

the most severe disabilities. The criteria

must be consistent with the definition of
Federal Register / Vol. 61, No. 94 / Tuesday, May 14, 1996 / Rules and Regulations 24403

‘‘individual with a severe disability’’ in

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

requirements in paragraphs (c)(1) and

(2) of this section.

(d) Administrative requirements. In

administering the order of selection, the

designated State unit shall—

(1) Implement the order of selection

on a statewide basis;

(2) Notify all eligible individuals of

the priority categories in a State’s order

of selection, their assignment to a

particular category, and their right to

appeal their category assignment;

(3) Continue to provide all needed

services to any eligible individual who

has begun to receive services under an

IWRP prior to the effective date of the

order of selection, irrespective of the

severity of the individual’s disability;

(4) Ensure that its funding

arrangements for providing services

under the State plan, including thirdparty arrangements and awards under

the establishment authority, are

consistent with the order of selection. If

any funding arrangements are

inconsistent with the order of selection,

the designated State unit shall

renegotiate these funding arrangements

so that they are consistent with the

order of selection.

(e) State Rehabilitation Advisory

Council. The designated State unit shall

consult with and seriously consider the

advice of the State Rehabilitation

Advisory Council regarding the—

(1) Need to establish an order of

selection, including any reevaluation of

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

section;

(2) Priority categories of the particular

order of selection;

(3) Criteria for determining

individuals with the most severe

disabilities; and

(4) Administration of the order of

selection.

(Approved by the Office of Management and

Budget under control number 1820–0500.)

(Authority: Secs. 7(15)(A); 12(d); 17;

101(a)(4); 101(a)(5)(A); 101(a)(7);

101(a)(11)(A); 101(a)(15)(D); 101(a)(24);

101(a)(30); 101(a)(36)(A)(ii); 107(a)(4)(B); and

504(a) of the Act; 29 U.S.C. 706(15)(A),

711(d), 716, 721(a)(4), 721(a)(5)(A), 721(a)(7),

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

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

794(a))

[FR Doc. 96–11808 Filed 5–13–96; 8:45 am]

BILLING CODE 4000–01–P