4380 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

DEPARTMENT OF EDUCATION

34 CFR Part 361

RIN 1820–AB50

State Vocational Rehabilitation

Services Program

AGENCY: Office of Special Education and

Rehabilitative Services, Department of

Education.

ACTION: Final regulations.

SUMMARY: The Secretary amends the

regulations governing the State

Vocational Rehabilitation Services

Program. These amendments implement

changes to the Rehabilitation Act of

1973 made by the Rehabilitation Act

Amendments of 1998 that were

contained in Title IV of the Workforce

Investment Act of 1998 (WIA), enacted

on August 7, 1998, and as further

amended in 1998 by technical

amendments in the Reading Excellence

Act and the Carl D. Perkins Vocational

and Applied Technology Education Act

Amendments of 1998 (hereinafter

collectively referred to as the 1998

Amendments).

DATES: These regulations are effective

February 16, 2001. However, affected

parties do not have to comply with the

information collection requirements in

§§ 361.10, 361.12, 361.13, 361.14,

361.15, 361.16, 361.17, 361.18, 361.19,

361.20, 361.21, 361.22, 361.23, 361.24,

361.25, 361.26, 361.27, 361.28, 361.29,

361.30, 361.31, 361.32, 361.34, 361.35,

361.36, 361.37, 361.38, 361.40, 361.41,

361.46, 361.47, 361.48, 361.49, 361.50,

361.51, 361.52, 361.53, 361.54, 361.55,

361.57, 361.60 and 361.62 until the

Department of Education publishes in

the Federal Register the control

numbers assigned by the Office of

Management and Budget (OMB) to these

information collection requirements.

Publication of the control numbers

notifies the public that OMB has

approved these information collection

requirements under the Paperwork

Reduction Act of 1995.

FOR FURTHER INFORMATION CONTACT:

Beverlee Stafford, U.S. Department of

Education, 400 Maryland Avenue, SW.,

room 3014, Mary E. Switzer Building,

Washington, DC 20202–2531.

Telephone (202) 205–8831. If you use a

telecommunications device for the deaf

(TDD), you may call (202) 205–5538.

Individuals with disabilities may

obtain this document in an alternative

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

audiotape, or computer diskette) on

request to Katie Mincey, Director,

Alternate Formats Center, U.S.

Department of Education, 400 Maryland

Avenue, SW., room 1000, Mary E.

Switzer Building, Washington, DC

20202–2531. Telephone (202) 260–9895.

If you use a telecommunications device

for the deaf (TDD), you may call the

Federal Information Relay Service

(FIRS) at 1–800–877–8339.

SUPPLEMENTARY INFORMATION: The State

Vocational Rehabilitation Services

Program (VR program) is authorized by

Title I of the Rehabilitation Act of 1973,

as amended (Act) (29 U.S.C. 701–744).

The VR program provides support to

each State to assist it in operating a

statewide comprehensive, coordinated,

effective, efficient, and accountable

State program, as an integral part of a

statewide workforce investment system,

to assess, plan, develop, and provide

vocational rehabilitation (VR) services

for individuals with disabilities so that

those individuals may prepare for and

engage in gainful employment

consistent with their strengths,

priorities, concerns, abilities,

capabilities, interests, and informed

choice.

On February 28, 2000, we published

a notice of proposed rulemaking

(NPRM) for this part in the Federal

Register (65 FR 10620). In the preamble

to the NPRM, we discussed on pages

10620 through 10630 the major changes

proposed to the regulations in 34 CFR

part 361 as a result of the 1998

Amendments. These included the

following:

• Streamlining the regulatory

requirements pertaining to the State

plan for the VR program by changing

several State plan descriptions or

assurances to program requirements that

need not be addressed in the State plan.

These proposed changes were intended

to reduce the paperwork burden

associated with the development of the

State plan.

• Amending the regulations to reflect

the responsibilities of the designated

state unit (DSU or State unit) as a

required partner in the One-Stop service

delivery system (One-Stop system)

established under Title I of the WIA,

Pub. L. 105–22. For example, we

proposed amending § 361.4 to include

among the regulations applicable to the

VR program the One-Stop system

requirements in 20 CFR part 662 and the

civil rights requirements in 29 CFR part

37. In addition to these changes and, as

noted later, amending other sections of

the current regulations to reflect

requirements in WIA, we discuss in

some detail in the preamble to the

NPRM (65 FR 10620 and 10621) the

relationship between the VR program,

the One-Stop system in general, and

persons with disabilities. We suggest

that you refer to that discussion for

additional guidance in coordinating

between One-Stop system components.

• Amending § 361.5 to include a new

definition of the term ‘‘fair hearing

board,’’ a revised definition of ‘‘physical

or mental impairment,’’ a new

definition of the term ‘‘qualified and

impartial mediator,’’ and several new

statutory definitions found in WIA,

including ‘‘local workforce investment

board,’’ ‘‘State workforce investment

board,’’ and ‘‘Statewide workforce

investment system.’’

• Amending § 361.10 to require that

each State submit its State plan for the

VR program on the same date that it

submits either a State plan under

section 112 of WIA or a State unified

plan under section 501 of that Act.

• Amending § 361.13 to expand the

list of activities that are the

responsibility of the DSU.

• Amending § 361.18(c) to require, as

appropriate, DSUs to address in a

written plan their retraining,

recruitment, hiring, and other strategies

to ensure that their personnel meet the

statutory standards related to the

comprehensive system of personnel

development.

• Amending § 361.22 to reflect new

statutory requirements that foster the

transition of students from educational

to VR services.

• Amending § 361.23 to reflect both

the VR program’s responsibilities as a

partner of the One-Stop system under

WIA and the requirements in the 1988

Amendments related to interagency

coordination between the VR program

and other components of the statewide

workforce investment system under

WIA.

• Amending § 361.26 to reflect the

authority of States to use geographically

earmarked funds without requesting a

waiver of statewideness.

• Amending § 361.29 to guide States

in developing a required

comprehensive, forward-thinking plan

for administering and improving their

VR programs.

• Conforming § 361.30 solely to the

requirement in the Act that DSUs

provide VR services to eligible

American Indians to the same extent as

other significant populations of

individuals with disabilities.

• Amending § 361.31 to conform to

the requirement in the Act that the DSU

establish cooperative agreements with

private nonprofit VR service providers.

• Removing § 361.33 of the current

regulations (regarding the use,

assessment, and support of community

rehabilitation programs) since these

requirements are addressed in other

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4381

regulatory sections and reserving this

section for future use.

• Amending § 361.35 to reflect the

requirement in section 101(a)(18) of the

Act that the State reserve a portion of its

allotment under section 110 of the Act

to further innovation and expansion of

its VR program.

• Amending § 361.36 to incorporate

the requirement in the 1998

Amendments that individuals who do

not meet the State’s order of selection

criteria for receiving services be

provided access to the DSU’s

information and referral system under

§ 361.37.

• Amending § 361.37 to reflect new

requirements in the Act for referring

individuals, including eligible

individuals who do not meet the State’s

order of selection criteria for receiving

services, to those components of the

statewide workforce investment system

best suited to meet an individual’s

employment needs.

• Amending § 361.42 to implement

new requirements in the Act regarding

presumptive eligibility for Social

Security recipients and beneficiaries

and the use of trial work experiences as

part of the assessment for determining

eligibility, to revise regulatory

requirements concerning extended

evaluations, and to identify the type of

personnel who must conduct eligibility

determinations.

• Amending § 361.45 to implement

new requirements in the Act that

expand an eligible individual’s options

for developing the Individualized Plan

for Employment (IPE), enable

individuals to receive technical

assistance in developing their IPEs,

specify the information that the DSU

must provide to the eligible individual

during IPE development, and detail

applicable procedural requirements.

• Amending § 361.47 to require the

States to determine, with input from the

State Rehabilitation Councils, the type

of documentation that they will

maintain for each applicant and eligible

individual to meet the content items

that must be included in each

individual’s record of services.

• Amending § 361.52 to implement

the expanded authority in the Act

requiring that applicants and eligible

individuals be able to exercise informed

choice throughout the rehabilitation

process.

• Amending § 361.53 to require

interagency agreements between the

DSU and other appropriate public

entities to ensure that eligible

individuals with disabilities receive, in

a timely manner, necessary services to

which each party to the agreement has

an obligation, or the authority, to

contribute.

• Amending § 361.54 to expand the

list of VR services exempt from State

financial needs tests to include

interpreter services for individuals who

are deaf or hard of hearing, reader

services for individuals who are blind,

and personal assistant services. Also,

this section was amended to prohibit

States from applying financial needs

tests to individuals receiving

Supplemental Security Income (SSI) or

Social Security Disability Insurance

(SSDI).

• Re-titling and Amending § 361.56 to

better reflect the requirements that must

be met before the State unit can close

the record of services for an individual

who has achieved an employment

outcome.

• Amending § 361.57 to implement

new requirements in the 1998

Amendments regarding mediation and

administrative review of disputes

regarding the provision of VR services to

applicants or eligible individuals.

• Amending § 361.60 to reflect the

elimination of statutory authority for the

innovation and expansion grant

program and to implement new

statutory provisions regarding the use of

geographically limited earmarked funds

as part of the State’s non-Federal share.

These final regulations contain

several significant changes from the

NPRM. We fully explain each of these

changes in the Analysis of Comments

and Changes in the appendix at the end

of these final regulations.

Analysis of Comments and Changes

In response to our invitation in the

NPRM, 109 parties submitted comments

on the proposed regulations. An

analysis of the comments and of the

changes in the regulations since

publication of the NPRM is published as

an appendix at the end of these final

regulations.

We discuss substantive issues under

the sections of the regulations to which

they pertain. Generally, we do not

address technical and other minor

changes—and suggested changes that

the law does not authorize the Secretary

to make.

National Education Goals

The eight National Education Goals

focus the Nation’s education reform

efforts and provide a framework for

improving teaching and learning.

These regulations address the

National Education Goal that every

adult American, including individuals

with disabilities, will possess the

knowledge and skills necessary to

compete in a global economy and

exercise the rights and responsibilities

of citizenship.

Executive Order 12866

We have reviewed these final

regulations in accordance with

Executive Order 12866. Under the terms

of the order, we have 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

we have determined to be necessary for

administering this program effectively

and efficiently.

In assessing the potential costs and

benefits—both quantitative and

qualitative—of these final regulations,

we have determined that the benefits of

the final regulations justify the costs.

We also have determined that this

regulatory action does not unduly

interfere with State, local, and tribal

governments in the exercise of their

governmental functions.

Summary of Potential Costs and

Benefits

We discussed the potential costs and

benefits of these final regulations in the

preamble to the NPRM (65 FR 10630

and 10631) and throughout the sectionby-section analysis (65 FR 10621

through 10630). Our analysis of

potential costs and benefits generally

remains the same as in the NPRM,

although we include additional

discussion of potential costs and

benefits in the Appendix to these final

regulations titled Analysis of Comments

and Changes.

Intergovernmental Review

This program is subject to Executive

Order 12372 and the regulations in 34

CFR part 79. One of the objectives of the

Executive order is to foster an

intergovernmental partnership and a

strengthened federalism. The Executive

order relies on processes developed by

State and local governments for

coordination and review of proposed

Federal financial assistance.

This document provides early

notification of our specific plans and

actions for this program.

Federalism

Executive Order 13132 requires us to

ensure meaningful and timely input by

State and local elected officials in the

development of regulatory policies that

have federalism implications.

‘‘Federalism implications’’ means

substantial direct effects on the States,

on the relationship between the

National Government and the States, or

on the distribution of power and

4382 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

responsibilities among the various

levels of government.

These regulations implement various

statutory changes to the State Vocational

Rehabilitation Services Program. We do

not believe that these regulations have

federalism implications as defined in

Executive Order 13132 or that they

preempt State law. Accordingly, the

Secretary has determined that these

regulations do not contain policies that

have federalism implications.

Assessment of Educational Impact

In the NPRM we requested comments

on whether the proposed regulations

would require transmission of

information that any other agency or

authority of the United States gathers or

makes available.

Based on the response to the NPRM

and our review, we have determined

that these final regulations do not

require transmission of information that

any other agency or authority of the

United States gathers or makes

available.

Electronic Access to This Document

You may view this document, as well

as all other Department of Education

documents published in the Federal

Register, in text or Adobe Portable

Document Format (PDF) on the Internet

at either of the following sites:

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

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

To use PDF you must have Adobe

Acrobat Reader, which is available free

at either of the previous sites. If you

have questions about using PDF, call the

U.S. Government Printing Office (GPO),

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

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

Note: The official version of this document

is the document published in the Federal

Register. Free Internet access to the official

edition of the Federal Register and the Code

of Federal Regulations is available on GPO

Access at: http://www.access.gpo.gov/nara/

index.html

(Catalog of Federal Domestic Assistance

Number: 84.126 State Vocational

Rehabilitation Services Program)

List of Subjects in 34 CFR Part 361

Reporting and recordkeeping

requirements, State-administered grant

program—education, Vocational

rehabilitation.

Dated: December 7, 2000.

Richard W. Riley,

Secretary of Education.

For the reasons discussed in the

preamble, the Secretary amends title 34

of the Code of Federal Regulations by

revising part 361 to read as follows:

PART 361—STATE VOCATIONAL

REHABILITATION SERVICES

PROGRAM

Subpart A—General

Sec.

361.1 Purpose.

361.2 Eligibility for a grant.

361.3 Authorized activities.

361.4 Applicable regulations.

361.5 Applicable definitions.

Subpart B—State Plan and Other

Requirements for Vocational Rehabilitation

Services

361.10 Submission, approval, and

disapproval of the State plan.

361.11 Withholding of funds.

Administration

361.12 Methods of administration.

361.13 State agency for administration.

361.14 Substitute State agency.

361.15 Local administration.

361.16 Establishment of an independent

commission or a State Rehabilitation

Council.

361.17 Requirements for a State

Rehabilitation Council.

361.18 Comprehensive system of personnel

development.

361.19 Affirmative action for individuals

with disabilities.

361.20 Public participation requirements.

361.21 Consultations regarding the

administration of the State plan.

361.22 Coordination with education

officials.

361.23 Requirements related to the

statewide workforce investment system.

361.24 Cooperation and coordination with

other entities.

361.25 Statewideness.

361.26 Waiver of statewideness.

361.27 Shared funding and administration

of joint programs.

361.28 Third-party cooperative

arrangements involving funds from other

public agencies.

361.29 Statewide assessment; annual

estimates; annual State goals and

priorities; strategies; and progress

reports.

361.30 Services to American Indians.

361.31 Cooperative agreements with private

nonprofit organizations.

361.32 Use of profitmaking organizations

for on-the-job training in connection

with selected projects.

361.33 [Reserved.]

361.34 Supported employment State plan

supplement.

361.35 Innovation and expansion activities.

361.36 Ability to serve all eligible

individuals; order of selection for

services.

361.37 Information and referral services.

361.38 Protection, use, and release of

personal information.

361.39 State-imposed requirements.

361.40 Reports.

Provision and Scope of Services

361.41 Processing referrals and

applications.

361.42 Assessment for determining

eligibility and priority for services.

361.43 Procedures for ineligibility

determination.

361.44 Closure without eligibility

determination.

361.45 Development of the individualized

plan for employment.

361.46 Content of the individualized plan

for employment.

361.47 Record of services.

361.48 Scope of vocational rehabilitation

services for individuals with disabilities.

361.49 Scope of vocational rehabilitation

services for groups of individuals with

disabilities.

361.50 Written policies governing the

provision of services for individuals with

disabilities.

361.51 Standards for facilities and

providers of services.

361.52 Informed choice.

361.53 Comparable services and benefits.

361.54 Participation of individuals in cost

of services based on financial need.

361.55 Annual review of individuals in

extended employment or other

employment under special certificate

provisions of the Fair Labor Standards

Act.

361.56 Requirements for closing the record

of services of an individual who has

achieved an employment outcome.

361.57 Review of determinations made by

designated State unit personnel.

Subpart C—Financing of State Vocational

Rehabilitation Programs

361.60 Matching requirements.

361.61 Limitation on use of funds for

construction expenditures.

361.62 Maintenance of effort requirements.

361.63 Program income.

361.64 Obligation of Federal funds and

program income.

361.65 Allotment and payment of Federal

funds for vocational rehabilitation

services.

Subpart D—[Reserved]

Subpart E—Evaluation Standards and

Performance Indicators

361.80 Purpose.

361.81 Applicable definitions.

361.82 Evaluation standards.

361.84 Performance indicators.

361.86 Performance levels.

361.88 Reporting requirements.

361.89 Enforcement procedures.

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

otherwise noted.

Subpart A—General

§ 361.1 Purpose.

Under the State Vocational

Rehabilitation Services Program

(Program), the Secretary provides grants

to assist States in operating statewide

comprehensive, coordinated, effective,

efficient, and accountable programs,

each of which is—

(a) An integral part of a statewide

workforce investment system; and

(b) Designed to assess, plan, develop,

and provide vocational rehabilitation

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4383

services for individuals with

disabilities, consistent with their

strengths, resources, priorities,

concerns, abilities, capabilities,

interests, and informed choice, so that

they may prepare for and engage in

gainful employment.

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

U.S.C. 720(a)(2))

§ 361.2 Eligibility for a grant.

Any State that submits to the

Secretary a State plan that meets the

requirements of section 101(a) of the Act

and this part is eligible for a grant under

this Program.

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

U.S.C. 721(a))

§ 361.3 Authorized activities.

The Secretary makes payments to a

State to assist in—

(a) The costs of providing vocational

rehabilitation services under the State

plan; and

(b) Administrative costs under the

State plan.

(Authority: Section 111(a)(1) of the Act; 29

U.S.C. 731(a)(1))

§ 361.4 Applicable regulations.

The following regulations apply to

this Program:

(a) The Education Department General

Administrative Regulations (EDGAR) as

follows:

(1) 34 CFR part 74 (Administration of

Grants and Agreements with Institutions

of Higher Education, Hospitals, and

other Non-profit Organizations), with

respect to subgrants to entities that are

not State or local governments or Indian

tribal organizations.

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

(3) 34 CFR part 77 (Definitions that

Apply to Department Regulations).

(4) 34 CFR part 79 (Intergovernmental

Review of Department of Education

Programs and Activities).

(5) 34 CFR part 80 (Uniform

Administrative Requirements for Grants

and Cooperative Agreements to State

and Local Governments), except for

§ 80.24(a)(2).

(6) 34 CFR part 81 (General Education

Provisions Act—Enforcement).

(7) 34 CFR part 82 (New Restrictions

on Lobbying).

(8) 34 CFR part 85 (Governmentwide

Debarment and Suspension

(Nonprocurement) and

Governmentwide Requirements for

Drug-Free Workplace (Grants)).

(9) 34 CFR part 86 (Drug and Alcohol

Abuse Prevention).

(b) The regulations in this part 361.

(c) 20 CFR part 662 (Description of

One-Stop Service Delivery System

under Title I of the Workforce

Investment Act of 1998).

(d) 29 CFR part 37, to the extent

programs and activities are being

conducted as part of the One-Stop

service delivery system under section

121(b) of the Workforce Investment Act

of 1998.

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

709(c))

§ 361.5 Applicable definitions.

(a) Definitions in EDGAR. The

following terms used in this part are

defined in 34 CFR 77.1:

Department

EDGAR

Fiscal year

Nonprofit

Private

Public

Secretary

(b) Other definitions. The following

definitions also apply to this part:

(1) Act means the Rehabilitation Act

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

seq.).

(2) Administrative costs under the

State plan means expenditures incurred

in the performance of administrative

functions under the vocational

rehabilitation program carried out under

this part, including expenses related to

program planning, development,

monitoring, and evaluation, including,

but not limited to, expenses for—

(i) Quality assurance;

(ii) Budgeting, accounting, financial

management, information systems, and

related data processing;

(iii) Providing information about the

program to the public;

(iv) Technical assistance and support

services to other State agencies, private

nonprofit organizations, and businesses

and industries, except for technical

assistance and support services

described in § 361.49(a)(4);

(v) The State Rehabilitation Council

and other advisory committees;

(vi) Professional organization

membership dues for designated State

unit employees;

(vii) The removal of architectural

barriers in State vocational

rehabilitation agency offices and Stateoperated rehabilitation facilities;

(viii) Operating and maintaining

designated State unit facilities,

equipment, and grounds;

(ix) Supplies;

(x) Administration of the

comprehensive system of personnel

development described in § 361.18,

including personnel administration,

administration of affirmative action

plans, and training and staff

development;

(xi) Administrative salaries, including

clerical and other support staff salaries,

in support of these administrative

functions;

(xii) Travel costs related to carrying

out the program, other than travel costs

related to the provision of services;

(xiii) Costs incurred in conducting

reviews of determinations made by

personnel of the designated State unit,

including costs associated with

mediation and impartial due process

hearings under § 361.57; and

(xiv) Legal expenses required in the

administration of the program.

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

705(1))

(3) American Indian means an

individual who is a member of an

Indian tribe.

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

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

(4) Applicant means an individual

who submits an application for

vocational rehabilitation services in

accordance with § 361.41(b)(2).

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

709(c))

(5) Appropriate modes of

communication means specialized aids

and supports that enable an individual

with a disability to comprehend and

respond to information that is being

communicated. Appropriate modes of

communication include, but are not

limited to, the use of interpreters, open

and closed captioned videos,

specialized telecommunications

services and audio recordings, Brailled

and large print materials, materials in

electronic formats, augmentative

communication devices, graphic

presentations, and simple language

materials.

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

709(c))

(6) Assessment for determining

eligibility and vocational rehabilitation

needs means, as appropriate in each

case—

(i)(A) A review of existing data—

(1) To determine if an individual is

eligible for vocational rehabilitation

services; and

(2) To assign priority for an order of

selection described in § 361.36 in the

States that use an order of selection; and

(B) To the extent necessary, the

provision of appropriate assessment

activities to obtain necessary additional

data to make the eligibility

determination and assignment;

(ii) To the extent additional data are

necessary to make a determination of

the employment outcomes and the

nature and scope of vocational

4384 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

rehabilitation services to be included in

the individualized plan for employment

of an eligible individual, a

comprehensive assessment to determine

the unique strengths, resources,

priorities, concerns, abilities,

capabilities, interests, and informed

choice, including the need for

supported employment, of the eligible

individual. This comprehensive

assessment—

(A) Is limited to information that is

necessary to identify the rehabilitation

needs of the individual and to develop

the individualized plan of employment

of the eligible individual;

(B) Uses as a primary source of

information, to the maximum extent

possible and appropriate and in

accordance with confidentiality

requirements—

(1) Existing information obtained for

the purposes of determining the

eligibility of the individual and

assigning priority for an order of

selection described in § 361.36 for the

individual; and

(2) Information that can be provided

by the individual and, if appropriate, by

the family of the individual;

(C) May include, to the degree needed

to make such a determination, an

assessment of the personality, interests,

interpersonal skills, intelligence and

related functional capacities,

educational achievements, work

experience, vocational aptitudes,

personal and social adjustments, and

employment opportunities of the

individual and the medical, psychiatric,

psychological, and other pertinent

vocational, educational, cultural, social,

recreational, and environmental factors

that affect the employment and

rehabilitation needs of the individual;

and

(D) May include, to the degree

needed, an appraisal of the patterns of

work behavior of the individual and

services needed for the individual to

acquire occupational skills and to

develop work attitudes, work habits,

work tolerance, and social and behavior

patterns necessary for successful job

performance, including the use of work

in real job situations to assess and

develop the capacities of the individual

to perform adequately in a work

environment;

(iii) Referral, for the provision of

rehabilitation technology services to the

individual, to assess and develop the

capacities of the individual to perform

in a work environment; and

(iv) An exploration of the individual’s

abilities, capabilities, and capacity to

perform in work situations, which must

be assessed periodically during trial

work experiences, including

experiences in which the individual is

provided appropriate supports and

training.

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

705(2))

(7) Assistive technology device means

any item, piece of equipment, or

product system, whether acquired

commercially off the shelf, modified, or

customized, that is used to increase,

maintain, or improve the functional

capabilities of an individual with a

disability.

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

705(3))

(8) Assistive technology service means

any service that directly assists an

individual with a disability in the

selection, acquisition, or use of an

assistive technology device, including—

(i) The evaluation of the needs of an

individual with a disability, including a

functional evaluation of the individual

in his or her customary environment;

(ii) Purchasing, leasing, or otherwise

providing for the acquisition by an

individual with a disability of an

assistive technology device;

(iii) Selecting, designing, fitting,

customizing, adapting, applying,

maintaining, repairing, or replacing

assistive technology devices;

(iv) Coordinating and using other

therapies, interventions, or services

with assistive technology devices, such

as those associated with existing

education and rehabilitation plans and

programs;

(v) Training or technical assistance for

an individual with a disability or, if

appropriate, the family members,

guardians, advocates, or authorized

representatives of the individual; and

(vi) Training or technical assistance

for professionals (including individuals

providing education and rehabilitation

services), employers, or others who

provide services to, employ, or are

otherwise substantially involved in the

major life functions of individuals with

disabilities, to the extent that training or

technical assistance is necessary to the

achievement of an employment outcome

by an individual with a disability.

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

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

(9) Community rehabilitation

program.

(i) Community rehabilitation program

means a program that provides directly

or facilitates the provision of one or

more of the following vocational

rehabilitation services to individuals

with disabilities to enable those

individuals to maximize their

opportunities for employment,

including career advancement:

(A) Medical, psychiatric,

psychological, social, and vocational

services that are provided under one

management.

(B) Testing, fitting, or training in the

use of prosthetic and orthotic devices.

(C) Recreational therapy.

(D) Physical and occupational

therapy.

(E) Speech, language, and hearing

therapy.

(F) Psychiatric, psychological, and

social services, including positive

behavior management.

(G) Assessment for determining

eligibility and vocational rehabilitation

needs.

(H) Rehabilitation technology.

(I) Job development, placement, and

retention services.

(J) Evaluation or control of specific

disabilities.

(K) Orientation and mobility services

for individuals who are blind.

(L) Extended employment.

(M) Psychosocial rehabilitation

services.

(N) Supported employment services

and extended services.

(O) Services to family members if

necessary to enable the applicant or

eligible individual to achieve an

employment outcome.

(P) Personal assistance services.

(Q) Services similar to the services

described in paragraphs (A) through (P)

of this definition.

(ii) For the purposes of this definition,

the word program means an agency,

organization, or institution, or unit of an

agency, organization, or institution, that

provides directly or facilitates the

provision of vocational rehabilitation

services as one of its major functions.

(10) Comparable services and benefits

means—

(i) Services and benefits that are—

(A) Provided or paid for, in whole or

in part, by other Federal, State, or local

public agencies, by health insurance, or

by employee benefits;

(B) Available to the individual at the

time needed to ensure the progress of

the individual toward achieving the

employment outcome in the

individual’s individualized plan for

employment in accordance with

§ 361.53; and

(C) Commensurate to the services that

the individual would otherwise receive

from the designated State vocational

rehabilitation agency.

(ii) For the purposes of this definition,

comparable benefits do not include

awards and scholarships based on merit.

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

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

(11) Competitive employment means

work—

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4385

(i) In the competitive labor market

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

(ii) For which an individual is

compensated at or above the minimum

wage, but not less than the customary

wage and level of benefits paid by the

employer for the same or similar work

performed by individuals who are not

disabled.

(Authority: Sections 7(11) and 12(c) of the

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

(12) Construction of a facility for a

public or nonprofit community

rehabilitation program means—

(i) The acquisition of land in

connection with the construction of a

new building for a community

rehabilitation program;

(ii) The construction of new

buildings;

(iii) The acquisition of existing

buildings;

(iv) The expansion, remodeling,

alteration, or renovation of existing

buildings;

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

soil investigation, if necessary, in

connection with the construction

project;

(vi) The acquisition of initial fixed or

movable equipment of any new, newly

acquired, newly expanded, newly

remodeled, newly altered, or newly

renovated buildings that are to be used

for community rehabilitation program

purposes; and

(vii) Other direct expenditures

appropriate to the construction project,

except costs of off-site improvements.

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

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

(13) Designated State agency or State

agency means the sole State agency,

designated in accordance with

§ 361.13(a), to administer, or supervise

the local administration of, the State

plan for vocational rehabilitation

services. The term includes the State

agency for individuals who are blind, if

designated as the sole State agency with

respect to that part of the plan relating

to the vocational rehabilitation of

individuals who are blind.

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

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

721(a)(2)(A))

(14) Designated State unit or State

unit means either—

(i) The State vocational rehabilitation

bureau, division, or other organizational

unit that is primarily concerned with

vocational rehabilitation or vocational

and other rehabilitation of individuals

with disabilities and that is responsible

for the administration of the vocational

rehabilitation program of the State

agency, as required under § 361.13(b); or

(ii) The State agency that is primarily

concerned with vocational

rehabilitation or vocational and other

rehabilitation of individuals with

disabilities.

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

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

721(a)(2)(B))

(15) Eligible individual means an

applicant for vocational rehabilitation

services who meets the eligibility

requirements of § 361.42(a).

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

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

(16) Employment outcome means,

with respect to an individual, entering

or retaining full-time or, if appropriate,

part-time competitive employment in

the integrated labor market to the

greatest extent practicable; supported

employment; or any other type of

employment, including selfemployment, telecommuting, or

business ownership, that is consistent

with an individual’s strengths,

resources, priorities, concerns, abilities,

capabilities, interests, and informed

choice.

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

and 102(b)(3)(A) of the Act; 29 U.S.C.

705(11), 709(c), 720(a)(2), and 722(b)(3)(A))

(17) Establishment, development, or

improvement of a public or nonprofit

community rehabilitation program

means—

(i) The establishment of a facility for

a public or nonprofit community

rehabilitation program as defined in

paragraph (b)(18) of this section to

provide vocational rehabilitation

services to applicants or eligible

individuals;

(ii) Staffing, if necessary to establish,

develop, or improve a community

rehabilitation program for the purpose

of providing vocational rehabilitation

services to applicants or eligible

individuals, for a maximum period of 4

years, with Federal financial

participation available at the applicable

matching rate for the following levels of

staffing costs:

(A) 100 percent of staffing costs for

the first year.

(B) 75 percent of staffing costs for the

second year.

(C) 60 percent of staffing costs for the

third year.

(D) 45 percent of staffing costs for the

fourth year; and

(iii) Other expenditures related to the

establishment, development, or

improvement of a community

rehabilitation program that are

necessary to make the program

functional or increase its effectiveness

in providing vocational rehabilitation

services to applicants or eligible

individuals, but are not ongoing

operating expenses of the program.

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

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

(18) Establishment of a facility for a

public or nonprofit community

rehabilitation program means—

(i) The acquisition of an existing

building and, if necessary, the land in

connection with the acquisition, if the

building has been completed in all

respects for at least 1 year prior to the

date of acquisition and the Federal share

of the cost of acquisition is not more

than $300,000;

(ii) The remodeling or alteration of an

existing building, provided the

estimated cost of remodeling or

alteration does not exceed the appraised

value of the existing building;

(iii) The expansion of an existing

building, provided that—

(A) The existing building is complete

in all respects;

(B) The total size in square footage of

the expanded building, notwithstanding

the number of expansions, is not greater

than twice the size of the existing

building;

(C) The expansion is joined

structurally to the existing building and

does not constitute a separate building;

and

(D) The costs of the expansion do not

exceed the appraised value of the

existing building;

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

soil investigation, if necessary in

connection with the acquisition,

remodeling, alteration, or expansion of

an existing building; and

(v) The acquisition of fixed or

movable equipment, including the costs

of installation of the equipment, if

necessary to establish, develop, or

improve a community rehabilitation

program.

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

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

(19) Extended employment means

work in a non-integrated or sheltered

setting for a public or private nonprofit

agency or organization that provides

compensation in accordance with the

Fair Labor Standards Act and any

needed support services to an

individual with a disability to enable

the individual to continue to train or

otherwise prepare for competitive

employment, unless the individual

through informed choice chooses to

remain in extended employment.

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

709(c))

(20) Extended services means ongoing

support services and other appropriate

services that are needed to support and

4386 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

maintain an individual with a most

significant disability in supported

employment and that are provided by a

State agency, a private nonprofit

organization, employer, or any other

appropriate resource, from funds other

than funds received under this part and

34 CFR part 363 after an individual with

a most significant disability has made

the transition from support provided by

the designated State unit.

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

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

(21) Extreme medical risk means a

probability of substantially increasing

functional impairment or death if

medical services, including mental

health services, are not provided

expeditiously.

(Authority: Sections 12(c) and

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

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

(22) Fair hearing board means a

committee, body, or group of persons

established by a State prior to January

1, 1985 that—

(i) Is authorized under State law to

review determinations made by

personnel of the designated State unit

that affect the provision of vocational

rehabilitation services; and

(ii) Carries out the responsibilities of

the impartial hearing officer in

accordance with the requirements in

§ 361.57(j).

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

709(c))

(23) Family member, for purposes of

receiving vocational rehabilitation

services in accordance with § 361.48(i),

means an individual—

(i) Who either—

(A) Is a relative or guardian of an

applicant or eligible individual; or

(B) Lives in the same household as an

applicant or eligible individual;

(ii) Who has a substantial interest in

the well-being of that individual; and

(iii) Whose receipt of vocational

rehabilitation services is necessary to

enable the applicant or eligible

individual to achieve an employment

outcome.

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

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

(24) Governor means a chief executive

officer of a State.

(Authority: Section 7(15) of the Act; 29

U.S.C. 705(15))

(25) Impartial hearing officer.

(i) Impartial hearing officer means an

individual who—

(A) Is not an employee of a public

agency (other than an administrative

law judge, hearing examiner, or

employee of an institution of higher

education);

(B) Is not a member of the State

Rehabilitation Council for the

designated State unit;

(C) Has not been involved previously

in the vocational rehabilitation of the

applicant or eligible individual;

(D) Has knowledge of the delivery of

vocational rehabilitation services, the

State plan, and the Federal and State

regulations governing the provision of

services;

(E) Has received training with respect

to the performance of official duties;

and

(F) Has no personal, professional, or

financial interest that would be in

conflict with the objectivity of the

individual.

(ii) An individual is not considered to

be an employee of a public agency for

the purposes of this definition solely

because the individual is paid by the

agency to serve as a hearing officer.

(Authority: Section 7(16) of the Act; 29

U.S.C. 705(16))

(26) Indian tribe means any Federal or

State Indian tribe, band, rancheria,

pueblo, colony, or community,

including any Alaskan native village or

regional village corporation (as defined

in or established pursuant to the Alaska

Native Claims Settlement Act).

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

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

(27) Individual who is blind means a

person who is blind within the meaning

of applicable State law. (Authority:

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

709(c))

(28) Individual with a disability,

except as provided in § 361.5(b)(29),

means an individual—

(i) Who has a physical or mental

impairment;

(ii) Whose impairment constitutes or

results in a substantial impediment to

employment; and

(iii) Who can benefit in terms of an

employment outcome from the

provision of vocational rehabilitation

services.

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

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

(29) Individual with a disability, for

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

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

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

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

means an individual—

(i) Who has a physical or mental

impairment that substantially limits one

or more major life activities;

(ii) Who has a record of such an

impairment; or

(iii) Who is regarded as having such

an impairment.

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

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

(30) Individual with a most significant

disability means an individual with a

significant disability who meets the

designated State unit’s criteria for an

individual with a most significant

disability. These criteria must be

consistent with the requirements in

§ 361.36(d)(1) and (2).

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

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

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

(31) Individual with a significant

disability means an individual with a

disability—

(i) Who has a severe physical or

mental impairment that seriously limits

one or more functional capacities (such

as mobility, communication, self-care,

self-direction, interpersonal skills, work

tolerance, or work skills) in terms of an

employment outcome;

(ii) Whose vocational rehabilitation

can be expected to require multiple

vocational rehabilitation services over

an extended period of time; and

(iii) Who has one or more physical or

mental disabilities resulting from

amputation, arthritis, autism, blindness,

burn injury, cancer, cerebral palsy,

cystic fibrosis, deafness, head injury,

heart disease, hemiplegia, hemophilia,

respiratory or pulmonary dysfunction,

mental retardation, mental illness,

multiple sclerosis, muscular dystrophy,

musculo-skeletal disorders, neurological

disorders (including stroke and

epilepsy), spinal cord conditions

(including paraplegia and quadriplegia),

sickle cell anemia, specific learning

disability, end-stage renal disease, or

another disability or combination of

disabilities determined on the basis of

an assessment for determining eligibility

and vocational rehabilitation needs to

cause comparable substantial functional

limitation.

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

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

(32) Individual’s representative means

any representative chosen by an

applicant or eligible individual, as

appropriate, including a parent,

guardian, other family member, or

advocate, unless a representative has

been appointed by a court to represent

the individual, in which case the courtappointed representative is the

individual’s representative.

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

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

(33) Integrated setting,—

(i) With respect to the provision of

services, means a setting typically found

in the community in which applicants

or eligible individuals interact with

non-disabled individuals other than

non-disabled individuals who are

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4387

providing services to those applicants or

eligible individuals;

(ii) With respect to an employment

outcome, means a setting typically

found in the community in which

applicants or eligible individuals

interact with non-disabled individuals,

other than non-disabled individuals

who are providing services to those

applicants or eligible individuals, to the

same extent that non-disabled

individuals in comparable positions

interact with other persons.

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

709(c))

(34) Local workforce investment board

means a local workforce investment

board established under section 117 of

the Workforce Investment Act of 1998.

(Authority: Section 7(25) of the Act; 29

U.S.C. 705(25))

(35) Maintenance means monetary

support provided to an individual for

expenses, such as food, shelter, and

clothing, that are in excess of the normal

expenses of the individual and that are

necessitated by the individual’s

participation in an assessment for

determining eligibility and vocational

rehabilitation needs or the individual’s

receipt of vocational rehabilitation

services under an individualized plan

for employment.

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

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

(i) Examples: The following are

examples of expenses that would meet

the definition of maintenance. The

examples are illustrative, do not address

all possible circumstances, and are not

intended to substitute for individual

counselor judgment.

Example 1: The cost of a uniform or other

suitable clothing that is required for an

individual’s job placement or job-seeking

activities.

Example 2: The cost of short-term shelter

that is required in order for an individual to

participate in assessment activities or

vocational training at a site that is not within

commuting distance of an individual’s home.

Example 3: The initial one-time costs, such

as a security deposit or charges for the

initiation of utilities, that are required in

order for an individual to relocate for a job

placement.

Example 4: The costs of an individual’s

participation in enrichment activities related

to that individual’s training program.

(ii) [Reserved]

(36) Mediation means the act or

process of using an independent third

party to act as a mediator, intermediary,

or conciliator to assist persons or parties

in settling differences or disputes prior

to pursuing formal administrative or

other legal remedies. Mediation under

the program must be conducted in

accordance with the requirements in

§ 361.57(d) by a qualified and impartial

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

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

709(c))

(37) Nonprofit, with respect to a

community rehabilitation program,

means a community rehabilitation

program carried out by a corporation or

association, no part of the net earnings

of which inures, or may lawfully inure,

to the benefit of any private shareholder

or individual and the income of which

is exempt from taxation under section

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

of 1986.

(Authority: Section 7(26) of the Act; 29

U.S.C. 705(26))

(38) Ongoing support services, as used

in the definition of ‘‘Supported

employment’’

(i) Means services that are—

(A) Needed to support and maintain

an individual with a most significant

disability in supported employment;

(B) Identified based on a

determination by the designated State

unit of the individual’s need as

specified in an individualized plan for

employment; and

(C) Furnished by the designated State

unit from the time of job placement

until transition to extended services,

unless post-employment services are

provided following transition, and

thereafter by one or more extended

services providers throughout the

individual’s term of employment in a

particular job placement or multiple

placements if those placements are

being provided under a program of

transitional employment;

(ii) Must include an assessment of

employment stability and provision of

specific services or the coordination of

services at or away from the worksite

that are needed to maintain stability

based on—

(A) At a minimum, twice-monthly

monitoring at the worksite of each

individual in supported employment; or

(B) If under specific circumstances,

especially at the request of the

individual, the individualized plan for

employment provides for off-site

monitoring, twice monthly meetings

with the individual;

(iii) Consist of—

(A) Any particularized assessment

supplementary to the comprehensive

assessment of rehabilitation needs

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

section;

(B) The provision of skilled job

trainers who accompany the individual

for intensive job skill training at the

work site;

(C) Job development and training;

(D) Social skills training;

(E) Regular observation or supervision

of the individual;

(F) Follow-up services including

regular contact with the employers, the

individuals, the parents, family

members, guardians, advocates or

authorized representatives of the

individuals, and other suitable

professional and informed advisors, in

order to reinforce and stabilize the job

placement;

(G) Facilitation of natural supports at

the worksite;

(H) Any other service identified in the

scope of vocational rehabilitation

services for individuals, described in

§ 361.48; or

(I) Any service similar to the foregoing

services.

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

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

(39) Personal assistance services

means a range of services provided by

one or more persons designed to assist

an individual with a disability to

perform daily living activities on or off

the job that the individual would

typically perform without assistance if

the individual did not have a disability.

The services must be designed to

increase the individual’s control in life

and ability to perform everyday

activities on or off the job. The services

must be necessary to the achievement of

an employment outcome and may be

provided only while the individual is

receiving other vocational rehabilitation

services. The services may include

training in managing, supervising, and

directing personal assistance services.

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

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

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

(40) Physical and mental restoration

services means—

(i) Corrective surgery or therapeutic

treatment that is likely, within a

reasonable period of time, to correct or

modify substantially a stable or slowly

progressive physical or mental

impairment that constitutes a

substantial impediment to employment;

(ii) Diagnosis of and treatment for

mental or emotional disorders by

qualified personnel in accordance with

State licensure laws;

(iii) Dentistry;

(iv) Nursing services;

(v) Necessary hospitalization (either

inpatient or outpatient care) in

connection with surgery or treatment

and clinic services;

(vi) Drugs and supplies;

(vii) Prosthetic and orthotic devices;

(viii) Eyeglasses and visual services,

including visual training, and the

4388 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

examination and services necessary for

the prescription and provision of

eyeglasses, contact lenses, microscopic

lenses, telescopic lenses, and other

special visual aids prescribed by

personnel that are qualified in

accordance with State licensure laws;

(ix) Podiatry;

(x) Physical therapy;

(xi) Occupational therapy;

(xii) Speech or hearing therapy;

(xiii) Mental health services;

(xiv) Treatment of either acute or

chronic medical complications and

emergencies that are associated with or

arise out of the provision of physical

and mental restoration services, or that

are inherent in the condition under

treatment;

(xv) Special services for the treatment

of individuals with end-stage renal

disease, including transplantation,

dialysis, artificial kidneys, and supplies;

and

(xvi) Other medical or medically

related rehabilitation services.

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

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

(41) Physical or mental impairment

means—

(i) Any physiological disorder or

condition, cosmetic disfigurement, or

anatomical loss affecting one or more of

the following body systems:

neurological, musculo-skeletal, special

sense organs, respiratory (including

speech organs), cardiovascular,

reproductive, digestive, genitourinary,

hemic and lymphatic, skin, and

endocrine; or

(ii) Any mental or psychological

disorder such as mental retardation,

organic brain syndrome, emotional or

mental illness, and specific learning

disabilities.

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

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

(42) Post-employment services means

one or more of the services identified in

§ 361.48 that are provided subsequent to

the achievement of an employment

outcome and that are necessary for an

individual to maintain, regain, or

advance in employment, consistent with

the individual’s strengths, resources,

priorities, concerns, abilities,

capabilities, interests, and informed

choice.

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

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

Note to paragraph (b)(42): Postemployment services are intended to ensure

that the employment outcome remains

consistent with the individual’s strengths,

resources, priorities, concerns, abilities,

capabilities, interests, and informed choice.

These services are available to meet

rehabilitation needs that do not require a

complex and comprehensive provision of

services and, thus, should be limited in scope

and duration. If more comprehensive services

are required, then a new rehabilitation effort

should be considered. Post-employment

services are to be provided under an

amended individualized plan for

employment; thus, a re-determination of

eligibility is not required. The provision of

post-employment services is subject to the

same requirements in this part as the

provision of any other vocational

rehabilitation service. Post-employment

services are available to assist an individual

to maintain employment, e.g., the

individual’s employment is jeopardized

because of conflicts with supervisors or coworkers, and the individual needs mental

health services and counseling to maintain

the employment; to regain employment, e.g.,

the individual’s job is eliminated through

reorganization and new placement services

are needed; and to advance in employment,

e.g., the employment is no longer consistent

with the individual’s strengths, resources,

priorities, concerns, abilities, capabilities,

interests, and informed choice.

(43) Qualified and impartial

mediator.

(i) Qualified and impartial mediator

means an individual who—

(A) Is not an employee of a public

agency (other than an administrative

law judge, hearing examiner, employee

of a State office of mediators, or

employee of an institution of higher

education);

(B) Is not a member of the State

Rehabilitation Council for the

designated State unit;

(C) Has not been involved previously

in the vocational rehabilitation of the

applicant or eligible individual;

(D) Is knowledgeable of the vocational

rehabilitation program and the

applicable Federal and State laws,

regulations, and policies governing the

provision of vocational rehabilitation

services;

(E) Has been trained in effective

mediation techniques consistent with

any State-approved or -recognized

certification, licensing, registration, or

other requirements; and

(F) Has no personal, professional, or

financial interest that would be in

conflict with the objectivity of the

individual during the mediation

proceedings.

(ii) An individual serving as a

mediator is not considered to be an

employee of the designated State agency

or designated State unit for the purposes

of this definition solely because the

individual is paid by the designated

State agency or designated State unit to

serve as a mediator.

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

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

(44) Rehabilitation engineering means

the systematic application of

engineering sciences to design, develop,

adapt, test, evaluate, apply, and

distribute technological solutions to

problems confronted by individuals

with disabilities in functional areas,

such as mobility, communications,

hearing, vision, and cognition, and in

activities associated with employment,

independent living, education, and

integration into the community.

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

U.S.C. 709(c))

(45) Rehabilitation technology means

the systematic application of

technologies, engineering

methodologies, or scientific principles

to meet the needs of, and address the

barriers confronted by, individuals with

disabilities in areas that include

education, rehabilitation, employment,

transportation, independent living, and

recreation. The term includes

rehabilitation engineering, assistive

technology devices, and assistive

technology services.

(Authority: Section 7(30) of the Act; 29

U.S.C. 705(30))

(46) Reservation means a Federal or

State Indian reservation, public domain

Indian allotment, former Indian

reservation in Oklahoma, and land held

by incorporated Native groups, regional

corporations, and village corporations

under the provisions of the Alaska

Native Claims Settlement Act.

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

U.S.C. 741(c))

(47) Sole local agency means a unit or

combination of units of general local

government or one or more Indian tribes

that has the sole responsibility under an

agreement with, and the supervision of,

the State agency to conduct a local or

tribal vocational rehabilitation program,

in accordance with the State plan.

(Authority: Section 7(24) of the Act; 29

U.S.C. 705(24))

(48) State means any of the 50 States,

the District of Columbia, the

Commonwealth of Puerto Rico, the

United States Virgin Islands, Guam,

American Samoa, and the

Commonwealth of the Northern Mariana

Islands.

(Authority: Section 7(32) of the Act; 29

U.S.C. 705(32))

(49) State workforce investment board

means a State workforce investment

board established under section 111 of

the Workforce Investment Act of 1998.

(Authority: Section 7(33) of the Act; 29

U.S.C. 705(33))

(50) Statewide workforce investment

system means a system described in

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4389

section 111(d)(2) of the Workforce

Investment Act of 1998.

(Authority: Section 7(34) of the Act; 29

U.S.C. 705(34))

(51) State plan means the State plan

for vocational rehabilitation services

submitted under § 361.10.

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

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

(52) Substantial impediment to

employment means that a physical or

mental impairment (in light of attendant

medical, psychological, vocational,

educational, communication, and other

related factors) hinders an individual

from preparing for, entering into,

engaging in, or retaining employment

consistent with the individual’s abilities

and capabilities.

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

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

(53) Supported employment means—

(i) Competitive employment in an

integrated setting, or employment in

integrated work settings in which

individuals are working toward

competitive employment, consistent

with the strengths, resources, priorities,

concerns, abilities, capabilities,

interests, and informed choice of the

individuals with ongoing support

services for individuals with the most

significant disabilities—

(A) For whom competitive

employment has not traditionally

occurred or for whom competitive

employment has been interrupted or

intermittent as a result of a significant

disability; and

(B) Who, because of the nature and

severity of their disabilities, need

intensive supported employment

services from the designated State unit

and extended services after transition as

described in paragraph (b)(20) of this

section to perform this work; or

(ii) Transitional employment, as

defined in paragraph (b)(54) of this

section, for individuals with the most

significant disabilities due to mental

illness.

(Authority: Section 7(35) of the Act; 29

U.S.C. 705(35))

(54) Supported employment services

means ongoing support services and

other appropriate services needed to

support and maintain an individual

with a most significant disability in

supported employment that are

provided by the designated State unit—

(i) For a period of time not to exceed

18 months, unless under special

circumstances the eligible individual

and the rehabilitation counselor or

coordinator jointly agree to extend the

time to achieve the employment

outcome identified in the

individualized plan for employment;

and

(ii) Following transition, as postemployment services that are

unavailable from an extended services

provider and that are necessary to

maintain or regain the job placement or

advance in employment.

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

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

(55) Transition services means a

coordinated set of activities for a

student designed within an outcomeoriented process that promotes

movement from school to post-school

activities, including postsecondary

education, vocational training,

integrated employment (including

supported employment), continuing and

adult education, adult services,

independent living, or community

participation. The coordinated set of

activities must be based upon the

individual student’s needs, taking into

account the student’s preferences and

interests, and must include instruction,

community experiences, the

development of employment and other

post-school adult living objectives, and,

if appropriate, acquisition of daily living

skills and functional vocational

evaluation. Transition services must

promote or facilitate the achievement of

the employment outcome identified in

the student’s individualized plan for

employment.

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

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

(56) Transitional employment, as used

in the definition of ‘‘Supported

employment,’’ means a series of

temporary job placements in

competitive work in integrated settings

with ongoing support services for

individuals with the most significant

disabilities due to mental illness. In

transitional employment, the provision

of ongoing support services must

include continuing sequential job

placements until job permanency is

achieved.

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

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

(57) Transportation means travel and

related expenses that are necessary to

enable an applicant or eligible

individual to participate in a vocational

rehabilitation service, including

expenses for training in the use of

public transportation vehicles and

systems.

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

723(a)(8))

(i) Examples: The following are

examples of expenses that would meet

the definition of transportation. The

examples are purely illustrative, do not

address all possible circumstances, and

are not intended to substitute for

individual counselor judgment.

Example 1: Travel and related expenses

for a personal care attendant or aide if the

services of that person are necessary to

enable the applicant or eligible individual to

travel to participate in any vocational

rehabilitation service.

Example 2: The purchase and repair of

vehicles, including vans, but not the

modification of these vehicles, as

modification would be considered a

rehabilitation technology service.

Example 3: Relocation expenses incurred

by an eligible individual in connection with

a job placement that is a significant distance

from the eligible individual’s current

residence.

(ii) [Reserved]

(58) Vocational rehabilitation

services—

(i) If provided to an individual, means

those services listed in § 361.48; and

(ii) If provided for the benefit of

groups of individuals, also means those

services listed in § 361.49.

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

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

Subpart B—State Plan and Other

Requirements for Vocational

Rehabilitation Services

§ 361.10 Submission, approval, and

disapproval of the State plan.

(a) Purpose. For a State to receive a

grant under this part, the designated

State agency must submit to the

Secretary, and obtain approval of, a

State plan that contains a description of

the State’s vocational rehabilitation

services program, the plans and policies

to be followed in carrying out the

program, and other information

requested by the Secretary, in

accordance with the requirements of

this part.

(b) Separate part relating to the

vocational rehabilitation of individuals

who are blind. If a separate State agency

administers or supervises the

administration of a separate part of the

State plan relating to the vocational

rehabilitation of individuals who are

blind, that part of the State plan must

separately conform to all requirements

under this part that are applicable to a

State plan.

(c) State unified plan. The State may

choose to submit the State plan for

vocational rehabilitation services as part

of the State unified plan under section

501 of the Workforce Investment Act of

1998. The portion of the State unified

plan that includes the State plan for

vocational rehabilitation services must

meet the State plan requirements in this

part.

4390 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

(d) Public participation. Prior to the

adoption of any substantive policies or

procedures governing the provision of

vocational rehabilitation services under

the State plan, including making any

substantive amendment to those

policies and procedures, the designated

State agency must conduct public

meetings throughout the State, in

accordance with the requirements of

§ 361.20.

(e) Duration. The State plan remains

in effect subject to the submission of

modifications the State determines to be

necessary or the Secretary may require

based on a change in State policy, a

change in Federal law, including

regulations, an interpretation of the Act

by a Federal court or the highest court

of the State, or a finding by the

Secretary of State noncompliance with

the requirements of the Act or this part.

(f) Submission of the State plan. The

State must submit the State plan for

approval—

(1) To the Secretary on the same date

that the State submits a State plan

relating to the statewide workforce

investment system under section 112 of

the Workforce Investment Act of 1998;

(2) As part of the State unified plan

submitted under section 501 of that Act;

or

(3) To the Secretary on the same date

that the State submits a State unified

plan under section 501 of that Act that

does not include the State plan under

this part.

(g) Annual submission. (1) The State

must submit to the Secretary for

approval revisions to the State plan in

accordance with paragraph (e) of this

section and 34 CFR 76.140.

(2) The State must submit to the

Secretary reports containing annual

updates of the information required

under §§ 361.18, 361.29, and 361.35 and

any other updates of the information

required under this part that are

requested by the Secretary.

(3) The State is not required to submit

policies, procedures, or descriptions

required under this part that have been

previously submitted to the Secretary

and that demonstrate that the State

meets the requirements of this part,

including any policies, procedures, or

descriptions submitted under this part

that are in effect on August 6, 1998.

(h) Approval. The Secretary approves

any State plan and any revisions to the

State plan that conform to the

requirements of this part and section

101(a) of the Act.

(i) Disapproval. The Secretary

disapproves any State plan that does not

conform to the requirements of this part

and section 101(a) of the Act, in

accordance with the following

procedures:

(1) Informal resolution. Prior to

disapproving any State plan, the

Secretary attempts to resolve disputes

informally with State officials.

(2) Notice. If, after reasonable effort

has been made to resolve the dispute, no

resolution has been reached, the

Secretary provides notice to the State

agency of the intention to disapprove

the State plan and of the opportunity for

a hearing.

(3) State plan hearing. If the State

agency requests a hearing, the Secretary

designates one or more individuals,

either from the Department or

elsewhere, not responsible for or

connected with the administration of

this Program, to conduct a hearing in

accordance with the provisions of 34

CFR part 81, subpart A.

(4) Initial decision. The hearing officer

issues an initial decision in accordance

with 34 CFR 81.41.

(5) Petition for review of an initial

decision. The State agency may seek the

Secretary’s review of the initial decision

in accordance with 34 CFR part 81.

(6) Review by the Secretary. The

Secretary reviews the initial decision in

accordance with 34 CFR 81.43.

(7) Final decision of the Department.

The final decision of the Department is

made in accordance with 34 CFR 81.44.

(8) Judicial review. A State may

appeal the Secretary’s decision to

disapprove the State plan by filing a

petition for review with the United

States Court of Appeals for the circuit in

which the State is located, in

accordance with section 107(d) of the

Act.

(Authority: Sections 101(a) and (b), and

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

U.S.C. 721(a) and (b), and 727(d))

§ 361.11 Withholding of funds.

(a) Basis for withholding. The

Secretary may withhold or limit

payments under section 111 or 622(a) of

the Act, as provided by section 107(c)

and (d) of the Act, if the Secretary

determines that—

(1) The State plan, including the

supported employment supplement, has

been so changed that it no longer

conforms with the requirements of this

part or 34 CFR part 363; or

(2) In the administration of the State

plan, there has been a failure to comply

substantially with any provision of that

plan or a program improvement plan

established in accordance with section

106(b)(2) of the Act.

(b) Informal resolution. Prior to

withholding or limiting payments in

accordance with this section, the

Secretary attempts to resolve disputed

issues informally with State officials.

(c) Notice. If, after reasonable effort

has been made to resolve the dispute, no

resolution has been reached, the

Secretary provides notice to the State

agency of the intention to withhold or

limit payments and of the opportunity

for a hearing.

(d) Withholding hearing. If the State

agency requests a hearing, the Secretary

designates one or more individuals,

either from the Department or

elsewhere, not responsible for or

connected with the administration of

this Program, to conduct a hearing in

accordance with the provisions of 34

CFR part 81, subpart A.

(e) Initial decision. The hearing officer

issues an initial decision in accordance

with 34 CFR 81.41.

(f) Petition for review of an initial

decision. The State agency may seek the

Secretary’s review of the initial decision

in accordance with 34 CFR 81.42.

(g) Review by the Secretary. The

Secretary reviews the initial decision in

accordance with 34 CFR 81.43.

(h) Final decision of the Department.

The final decision of the Department is

made in accordance with 34 CFR 81.44.

(i) Judicial review. A State may appeal

the Secretary’s decision to withhold or

limit payments by filing a petition for

review with the U.S. Court of Appeals

for the circuit in which the State is

located, in accordance with section

107(d) of the Act.

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

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

and (2), and 727(d))

Administration

§ 361.12 Methods of administration.

The State plan must assure that the

State agency, and the designated State

unit if applicable, employs methods of

administration found necessary by the

Secretary for the proper and efficient

administration of the plan and for

carrying out all functions for which the

State is responsible under the plan and

this part. These methods must include

procedures to ensure accurate data

collection and financial accountability.

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

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

§ 361.13 State agency for administration.

(a) Designation of State agency. The

State plan must designate a State agency

as the sole State agency to administer

the State plan, or to supervise its

administration in a political subdivision

of the State by a sole local agency, in

accordance with the following

requirements:

(1) General. Except as provided in

paragraphs (a)(2) and (3) of this section,

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the State plan must provide that the

designated State agency is one of the

following types of agencies:

(i) A State agency that is primarily

concerned with vocational

rehabilitation or vocational and other

rehabilitation of individuals with

disabilities; or

(ii) A State agency that includes a

vocational rehabilitation unit as

provided in paragraph (b) of this

section.

(2) American Samoa. In the case of

American Samoa, the State plan must

designate the Governor.

(3) Designated State agency for

individuals who are blind. If a State

commission or other agency that

provides assistance or services to

individuals who are blind is authorized

under State law to provide vocational

rehabilitation services to individuals

who are blind, and this commission or

agency is primarily concerned with

vocational rehabilitation or includes a

vocational rehabilitation unit as

provided in paragraph (b) of this

section, the State plan may designate

that agency as the sole State agency to

administer the part of the plan under

which vocational rehabilitation services

are provided for individuals who are

blind or to supervise its administration

in a political subdivision of the State by

a sole local agency.

(b) Designation of State unit.

(1) If the designated State agency is

not of the type specified in paragraph

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

designated State agency specified in

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

primarily concerned with vocational

rehabilitation or vocational and other

rehabilitation of individuals with

disabilities, the State plan must assure

that the agency (or each agency if two

agencies are designated) includes a

vocational rehabilitation bureau,

division, or unit that—

(i) Is primarily concerned with

vocational rehabilitation or vocational

and other rehabilitation of individuals

with disabilities and is responsible for

the administration of the State agency’s

vocational rehabilitation program under

the State plan;

(ii) Has a full-time director;

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

whom are employed full time on the

rehabilitation work of the organizational

unit; and

(iv) Is located at an organizational

level and has an organizational status

within the State agency comparable to

that of other major organizational units

of the agency.

(2) In the case of a State that has not

designated a separate State agency for

individuals who are blind, as provided

for in paragraph (a)(3) of this section,

the State may assign responsibility for

the part of the plan under which

vocational rehabilitation services are

provided to individuals who are blind

to one organizational unit of the

designated State agency and may assign

responsibility for the rest of the plan to

another organizational unit of the

designated State agency, with the

provisions of paragraph (b)(1) of this

section applying separately to each of

these units.

(c) Responsibility for administration.

(1) At a minimum, the following

activities are the responsibility of the

designated State unit or the sole local

agency under the supervision of the

State unit:

(i) All decisions affecting eligibility

for vocational rehabilitation services,

the nature and scope of available

services, and the provision of these

services.

(ii) The determination to close the

record of services of an individual who

has achieved an employment outcome

in accordance with § 361.56.

(iii) Policy formulation and

implementation.

(iv) The allocation and expenditure of

vocational rehabilitation funds.

(v) Participation as a partner in the

One-Stop service delivery system under

Title I of the Workforce Investment Act

of 1998, in accordance with 20 CFR part

662.

(2) The responsibility for the

functions described in paragraph (c)(1)

of this section may not be delegated to

any other agency or individual.

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

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

§ 361.14 Substitute State agency.

(a) General provisions.

(1) If the Secretary has withheld all

funding from a State under § 361.11, the

State may designate another agency to

substitute for the designated State

agency in carrying out the State’s

program of vocational rehabilitation

services.

(2) Any public or nonprofit private

organization or agency within the State

or any political subdivision of the State

is eligible to be a substitute agency.

(3) The substitute agency must submit

a State plan that meets the requirements

of this part.

(4) The Secretary makes no grant to a

substitute agency until the Secretary

approves its plan.

(b) Substitute agency matching share.

The Secretary does not make any

payment to a substitute agency unless it

has provided assurances that it will

contribute the same matching share as

the State would have been required to

contribute if the State agency were

carrying out the vocational

rehabilitation program.

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

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

§ 361.15 Local administration.

(a) If the State plan provides for the

administration of the plan by a local

agency, the designated State agency

must—

(1) Ensure that each local agency is

under the supervision of the designated

State unit and is the sole local agency

as defined in § 361.5(b)(47) that is

responsible for the administration of the

program within the political subdivision

that it serves; and

(2) Develop methods that each local

agency will use to administer the

vocational rehabilitation program, in

accordance with the State plan.

(b) A separate local agency serving

individuals who are blind may

administer that part of the plan relating

to vocational rehabilitation of

individuals who are blind, under the

supervision of the designated State unit

for individuals who are blind.

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

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

§ 361.16 Establishment of an independent

commission or a state rehabilitation

council.

(a) General requirement. Except as

provided in paragraph (b) of this

section, the State plan must contain one

of the following two assurances:

(1) An assurance that the designated

State agency is an independent State

commission that—

(i) Is responsible under State law for

operating, or overseeing the operation

of, the vocational rehabilitation program

in the State and is primarily concerned

with vocational rehabilitation or

vocational and other rehabilitation

services, in accordance with

§ 361.13(a)(1)(i);

(ii) Is consumer-controlled by persons

who—

(A) Are individuals with physical or

mental impairments that substantially

limit major life activities; and

(B) Represent individuals with a

broad range of disabilities, unless the

designated State unit under the

direction of the commission is the State

agency for individuals who are blind;

(iii) Includes family members,

advocates, or other representatives of

individuals with mental impairments;

and

(iv) Conducts the functions identified

in § 361.17(h)(4).

(2) An assurance that—

4392 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

(i) The State has established a State

Rehabilitation Council (Council) that

meets the requirements of § 361.17;

(ii) The designated State unit, in

accordance with § 361.29, jointly

develops, agrees to, and reviews

annually State goals and priorities and

jointly submits to the Secretary annual

reports of progress with the Council;

(iii) The designated State unit

regularly consults with the Council

regarding the development,

implementation, and revision of State

policies and procedures of general

applicability pertaining to the provision

of vocational rehabilitation services;

(iv) The designated State unit

transmits to the Council—

(A) All plans, reports, and other

information required under this part to

be submitted to the Secretary;

(B) All policies and information on all

practices and procedures of general

applicability provided to or used by

rehabilitation personnel providing

vocational rehabilitation services under

this part; and

(C) Copies of due process hearing

decisions issued under this part and

transmitted in a manner to ensure that

the identity of the participants in the

hearings is kept confidential; and

(v) The State plan, and any revision

to the State plan, includes a summary of

input provided by the Council,

including recommendations from the

annual report of the Council, the review

and analysis of consumer satisfaction

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

reports prepared by the Council, and the

designated State unit’s response to the

input and recommendations, including

explanations of reasons for rejecting any

input or recommendation of the

Council.

(b) Exception for separate State

agency for individuals who are blind. In

the case of a State that designates a

separate State agency under

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

the State plan under which vocational

rehabilitation services are provided to

individuals who are blind, the State

must either establish a separate State

Rehabilitation Council for each agency

that does not meet the requirements in

paragraph (a)(1) of this section or

establish one State Rehabilitation

Council for both agencies if neither

agency meets the requirements of

paragraph (a)(1) of this section.

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

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

§ 361.17 Requirements for a state

rehabilitation council.

If the State has established a Council

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

must meet the following requirements:

(a) Appointment.

(1) The members of the Council must

be appointed by the Governor or, in the

case of a State that, under State law,

vests authority for the administration of

the activities carried out under this part

in an entity other than the Governor

(such as one or more houses of the State

legislature or an independent board),

the chief officer of that entity.

(2) The appointing authority must

select members of the Council after

soliciting recommendations from

representatives of organizations

representing a broad range of

individuals with disabilities and

organizations interested in individuals

with disabilities. In selecting members,

the appointing authority must consider,

to the greatest extent practicable, the

extent to which minority populations

are represented on the Council.

(b) Composition.

(1) General. Except as provided in

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

Council must be composed of at least 15

members, including—

(i) At least one representative of the

Statewide Independent Living Council,

who must be the chairperson or other

designee of the Statewide Independent

Living Council;

(ii) At least one representative of a

parent training and information center

established pursuant to section 682(a) of

the Individuals with Disabilities

Education Act;

(iii) At least one representative of the

Client Assistance Program established

under 34 CFR part 370, who must be the

director of or other individual

recommended by the Client Assistance

Program;

(iv) At least one qualified vocational

rehabilitation counselor with knowledge

of and experience with vocational

rehabilitation programs who serves as

an ex officio, nonvoting member of the

Council if employed by the designated

State agency;

(v) At least one representative of

community rehabilitation program

service providers;

(vi) Four representatives of business,

industry, and labor;

(vii) Representatives of disability

groups that include a cross section of—

(A) Individuals with physical,

cognitive, sensory, and mental

disabilities; and

(B) Representatives of individuals

with disabilities who have difficulty

representing themselves or are unable

due to their disabilities to represent

themselves;

(viii) Current or former applicants for,

or recipients of, vocational

rehabilitation services;

(ix) In a State in which one or more

projects are carried out under section

121 of the Act (American Indian

Vocational Rehabilitation Services), at

least one representative of the directors

of the projects;

(x) At least one representative of the

State educational agency responsible for

the public education of students with

disabilities who are eligible to receive

services under this part and part B of

the Individuals with Disabilities

Education Act;

(xi) At least one representative of the

State workforce investment board; and

(xii) The director of the designated

State unit as an ex officio, nonvoting

member of the Council.

(2) Employees of the designated State

agency. Employees of the designated

State agency may serve only as

nonvoting members of the Council. This

provision does not apply to the

representative appointed pursuant to

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

(3) Composition of a separate Council

for a separate State agency for

individuals who are blind. Except as

provided in paragraph (b)(4) of this

section, if the State establishes a

separate Council for a separate State

agency for individuals who are blind,

that Council must—

(i) Conform with all of the

composition requirements for a Council

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

except the requirements in paragraph

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

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

and

(ii) Include—

(A) At least one representative of a

disability advocacy group representing

individuals who are blind; and

(B) At least one representative of an

individual who is blind, has multiple

disabilities, and has difficulty

representing himself or herself or is

unable due to disabilities to represent

himself or herself.

(4) Exception. If State law in effect on

October 29, 1992 requires a separate

Council under paragraph (b)(3) of this

section to have fewer than 15 members,

the separate Council is in compliance

with the composition requirements in

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

this section if it includes at least one

representative who meets the

requirements for each of those

paragraphs.

(c) Majority.

(1) A majority of the Council members

must be individuals with disabilities

who meet the requirements of

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

the designated State unit.

(2) In the case of a separate Council

established under § 361.16(b), a majority

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of the Council members must be

individuals who are blind and are not

employed by the designated State unit.

(d) Chairperson. The chairperson

must be—

(1) Selected by the members of the

Council from among the voting

members of the Council, subject to the

veto power of the Governor; or

(2) In States in which the Governor

does not have veto power pursuant to

State law, the appointing authority

described in paragraph (a)(1) of this

section must designate a member of the

Council to serve as the chairperson of

the Council or must require the Council

to designate a member to serve as

chairperson.

(e) Terms of appointment.

(1) Each member of the Council must

be appointed for a term of no more than

3 years, and each member of the

Council, other than a representative

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

of this section, may serve for no more

than two consecutive full terms.

(2) A member appointed to fill a

vacancy occurring prior to the end of

the term for which the predecessor was

appointed must be appointed for the

remainder of the predecessor’s term.

(3) The terms of service of the

members initially appointed must be, as

specified by the appointing authority as

described in paragraph (a)(1) of this

section, for varied numbers of years to

ensure that terms expire on a staggered

basis.

(f) Vacancies.

(1) A vacancy in the membership of

the Council must be filled in the same

manner as the original appointment,

except the appointing authority as

described in paragraph (a)(1) of this

section may delegate the authority to fill

that vacancy to the remaining members

of the Council after making the original

appointment.

(2) No vacancy affects the power of

the remaining members to execute the

duties of the Council.

(g) Conflict of interest. No member of

the Council shall cast a vote on any

matter that would provide direct

financial benefit to the member or the

member’s organization or otherwise give

the appearance of a conflict of interest

under State law.

(h) Functions. The Council must, after

consulting with the State workforce

investment board—

(1) Review, analyze, and advise the

designated State unit regarding the

performance of the State unit’s

responsibilities under this part,

particularly responsibilities related to—

(i) Eligibility, including order of

selection;

(ii) The extent, scope, and

effectiveness of services provided; and

(iii) Functions performed by State

agencies that affect or potentially affect

the ability of individuals with

disabilities in achieving employment

outcomes under this part;

(2) In partnership with the designated

State unit—

(i) Develop, agree to, and review State

goals and priorities in accordance with

§ 361.29(c); and

(ii) Evaluate the effectiveness of the

vocational rehabilitation program and

submit reports of progress to the

Secretary in accordance with

§ 361.29(e);

(3) Advise the designated State agency

and the designated State unit regarding

activities carried out under this part and

assist in the preparation of the State

plan and amendments to the plan,

applications, reports, needs

assessments, and evaluations required

by this part;

(4) To the extent feasible, conduct a

review and analysis of the effectiveness

of, and consumer satisfaction with—

(i) The functions performed by the

designated State agency;

(ii) The vocational rehabilitation

services provided by State agencies and

other public and private entities

responsible for providing vocational

rehabilitation services to individuals

with disabilities under the Act; and

(iii) The employment outcomes

achieved by eligible individuals

receiving services under this part,

including the availability of health and

other employment benefits in

connection with those employment

outcomes;

(5) Prepare and submit to the

Governor and to the Secretary no later

than 90 days after the end of the Federal

fiscal year an annual report on the status

of vocational rehabilitation programs

operated within the State and make the

report available to the public through

appropriate modes of communication;

(6) To avoid duplication of efforts and

enhance the number of individuals

served, coordinate activities with the

activities of other councils within the

State, including the Statewide

Independent Living Council established

under 34 CFR part 364, the advisory

panel established under section

612(a)(21) of the Individuals with

Disabilities Education Act, the State

Developmental Disabilities Planning

Council described in section 124 of the

Developmental Disabilities Assistance

and Bill of Rights Act, the State mental

health planning council established

under section 1914(a) of the Public

Health Service Act, and the State

workforce investment board;

(7) Provide for coordination and the

establishment of working relationships

between the designated State agency

and the Statewide Independent Living

Council and centers for independent

living within the State; and

(8) Perform other comparable

functions, consistent with the purpose

of this part, as the Council determines

to be appropriate, that are comparable to

the other functions performed by the

Council.

(i) Resources.

(1) The Council, in conjunction with

the designated State unit, must prepare

a plan for the provision of resources,

including staff and other personnel, that

may be necessary and sufficient for the

Council to carry out its functions under

this part.

(2) The resource plan must, to the

maximum extent possible, rely on the

use of resources in existence during the

period of implementation of the plan.

(3) Any disagreements between the

designated State unit and the Council

regarding the amount of resources

necessary to carry out the functions of

the Council must be resolved by the

Governor, consistent with paragraphs

(i)(1) and (2) of this section.

(4) The Council must, consistent with

State law, supervise and evaluate the

staff and personnel that are necessary to

carry out its functions.

(5) Those staff and personnel that are

assisting the Council in carrying out its

functions may not be assigned duties by

the designated State unit or any other

agency or office of the State that would

create a conflict of interest.

(j) Meetings. The Council must—

(1) Convene at least four meetings a

year in locations determined by the

Council to be necessary to conduct

Council business. The meetings must be

publicly announced, open, and

accessible to the general public,

including individuals with disabilities,

unless there is a valid reason for an

executive session; and

(2) Conduct forums or hearings, as

appropriate, that are publicly

announced, open, and accessible to the

public, including individuals with

disabilities.

(k) Compensation. Funds

appropriated under Title I of the Act,

except funds to carry out sections 112

and 121 of the Act, may be used to

compensate and reimburse the expenses

of Council members in accordance with

section 105(g) of the Act.

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

725)

4394 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

§ 361.18 Comprehensive system of

personnel development.

The State plan must describe the

procedures and activities the State

agency will undertake to establish and

maintain a comprehensive system of

personnel development designed to

ensure an adequate supply of qualified

rehabilitation personnel, including

professionals and paraprofessionals, for

the designated State unit. If the State

agency has a State Rehabilitation

Council, this description must, at a

minimum, specify that the Council has

an opportunity to review and comment

on the development of plans, policies,

and procedures necessary to meet the

requirements of paragraphs (b) through

(d) of this section. This description must

also conform with the following

requirements:

(a) Data system on personnel and

personnel development. The State plan

must describe the development and

maintenance of a system by the State

agency for collecting and analyzing on

an annual basis data on qualified

personnel needs and personnel

development, in accordance with the

following requirements:

(1) Data on qualified personnel needs

must include—

(i) The number of personnel who are

employed by the State agency in the

provision of vocational rehabilitation

services in relation to the number of

individuals served, broken down by

personnel category;

(ii) The number of personnel

currently needed by the State agency to

provide vocational rehabilitation

services, broken down by personnel

category; and

(iii) Projections of the number of

personnel, broken down by personnel

category, who will be needed by the

State agency to provide vocational

rehabilitation services in the State in 5

years based on projections of the

number of individuals to be served,

including individuals with significant

disabilities, the number of personnel

expected to retire or leave the field, and

other relevant factors.

(2) Data on personnel development

must include—

(i) A list of the institutions of higher

education in the State that are preparing

vocational rehabilitation professionals,

by type of program;

(ii) The number of students enrolled

at each of those institutions, broken

down by type of program; and

(iii) The number of students who

graduated during the prior year from

each of those institutions with

certification or licensure, or with the

credentials for certification or licensure,

broken down by the personnel category

for which they have received, or have

the credentials to receive, certification

or licensure.

(b) Plan for recruitment, preparation,

and retention of qualified personnel.

The State plan must describe the

development, updating, and

implementation of a plan to address the

current and projected needs for

personnel who are qualified in

accordance with paragraph (c) of this

section. The plan must identify the

personnel needs based on the data

collection and analysis system

described in paragraph (a) of this

section and must provide for the

coordination and facilitation of efforts

between the designated State unit and

institutions of higher education and

professional associations to recruit,

prepare, and retain personnel who are

qualified in accordance with paragraph

(c) of this section, including personnel

from minority backgrounds and

personnel who are individuals with

disabilities.

(c) Personnel standards.

(1) The State plan must include the

State agency’s policies and describe the

procedures the State agency will

undertake to establish and maintain

standards to ensure that all professional

and paraprofessional personnel needed

within the designated State unit to carry

out this part are appropriately and

adequately prepared and trained,

including—

(i) Standards that are consistent with

any national or State-approved or

-recognized certification, licensing, or

registration requirements, or, in the

absence of these requirements, other

comparable requirements (including

State personnel requirements) that

apply to the profession or discipline in

which that category of personnel is

providing vocational rehabilitation

services; and

(ii) To the extent that existing

standards are not based on the highest

requirements in the State, the steps the

State is currently taking and the steps

the State plans to take to retrain or hire

personnel to meet standards that are

based on the highest requirements in the

State, including measures to notify State

unit personnel, the institutions of higher

education identified under paragraph

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

agencies of these steps and the timelines

for taking each step. The steps taken by

the State unit under this paragraph must

be described in a written plan that

includes—

(A) Specific strategies for retraining,

recruiting, and hiring personnel;

(B) The specific time period by which

all State unit personnel will meet the

standards described in paragraph

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

(C) Procedures for evaluating the State

unit’s progress in hiring or retraining

personnel to meet applicable personnel

standards within the time period

established under paragraph (c)(1)(ii)(B)

of this section; and

(D) In instances in which the State

unit is unable to immediately hire new

personnel who meet the requirements in

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

initial minimum qualifications that the

designated State unit will require of

newly hired personnel and a plan for

training those individuals to meet

applicable requirements within the time

period established under paragraph

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

(2) As used in this section—

(i) Highest requirements in the State

applicable to that profession or

discipline means the highest entry-level

academic degree needed for any

national or State-approved or

-recognized certification, licensing,

registration, or, in the absence of these

requirements, other comparable

requirements that apply to that

profession or discipline. The current

requirements of all State statutes and

regulations of other agencies in the State

applicable to that profession or

discipline must be considered and must

be kept on file by the designated State

unit and available to the public.

(ii) Profession or discipline means a

specific occupational category,

including any paraprofessional

occupational category, that—

(A) Provides rehabilitation services to

individuals with disabilities;

(B) Has been established or designated

by the State unit; and

(C) Has a specified scope of

responsibility.

(d) Staff development.

(1) The State plan must include the

State agency’s policies and describe the

procedures and activities the State

agency will undertake to ensure that all

personnel employed by the State unit

receive appropriate and adequate

training, including a description of—

(i) A system of staff development for

rehabilitation professionals and

paraprofessionals within the State unit,

particularly with respect to assessment,

vocational counseling, job placement,

and rehabilitation technology; and

(ii) Procedures for acquiring and

disseminating to rehabilitation

professionals and paraprofessionals

within the designated State unit

significant knowledge from research and

other sources.

(2) The specific training areas for staff

development must be based on the

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4395

needs of each State unit and may

include, but are not limited to—

(i) Training regarding the Workforce

Investment Act of 1998 and the

amendments to the Rehabilitation Act of

1973 made by the Rehabilitation Act

Amendments of 1998;

(ii) Training with respect to the

requirements of the Americans with

Disabilities Act, the Individuals with

Disabilities Education Act, and Social

Security work incentive programs,

including programs under the Ticket to

Work and Work Incentives

Improvement Act of 1999, training to

facilitate informed choice under this

program, and training to improve the

provision of services to culturally

diverse populations; and

(iii) Activities related to—

(A) Recruitment and retention of

qualified rehabilitation personnel;

(B) Succession planning; and

(C) Leadership development and

capacity building.

(e) Personnel to address individual

communication needs. The State plan

must describe how the State unit—

(1) Includes among its personnel, or

obtains the services of, individuals able

to communicate in the native languages

of applicants and eligible individuals

who have limited English speaking

ability; and

(2) Includes among its personnel, or

obtains the services of, individuals able

to communicate with applicants and

eligible individuals in appropriate

modes of communication.

(f) Coordination with personnel

development under the Individuals with

Disabilities Education Act. The State

plan must describe the procedures and

activities the State agency will

undertake to coordinate its

comprehensive system of personnel

development under the Act with

personnel development under the

Individuals with Disabilities Education

Act.

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

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

§ 361.19 Affirmative action for individuals

with disabilities.

The State plan must assure that the

State agency takes affirmative action to

employ and advance in employment

qualified individuals with disabilities

covered under and on the same terms

and conditions as stated in section 503

of the Act.

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

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

§ 361.20 Public participation requirements.

(a) Conduct of public meetings. The

State plan must assure that prior to the

adoption of any substantive policies or

procedures governing the provision of

vocational rehabilitation services under

the State plan, including making any

substantive amendments to the policies

and procedures, the designated State

agency conducts public meetings

throughout the State to provide the

public, including individuals with

disabilities, an opportunity to comment

on the policies or procedures.

(b) Notice requirements. The State

plan must assure that the designated

State agency, prior to conducting the

public meetings, provides appropriate

and sufficient notice throughout the

State of the meetings in accordance

with—

(1) State law governing public

meetings; or

(2) In the absence of State law

governing public meetings, procedures

developed by the designated State

agency in consultation with the State

Rehabilitation Council.

(c) Summary of input of the State

Rehabilitation Council. The State plan

must provide a summary of the input of

the State Rehabilitation Council, if the

State agency has a Council, into the

State plan and any amendment to the

plan, in accordance with

§ 361.16(a)(2)(v).

(d) Special consultation requirements.

The State plan must assure that the

State agency actively consults with the

director of the Client Assistance

Program, the State Rehabilitation

Council, if the State agency has a

Council, and, as appropriate, Indian

tribes, tribal organizations, and native

Hawaiian organizations on its policies

and procedures governing the provision

of vocational rehabilitation services

under the State plan.

(e) Appropriate modes of

communication. The State unit must

provide to the public, through

appropriate modes of communication,

notices of the public meetings, any

materials furnished prior to or during

the public meetings, and the policies

and procedures governing the provision

of vocational rehabilitation services

under the State plan.

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

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

and 725(c)(3))

§ 361.21 Consultations regarding the

administration of the state plan.

The State plan must assure that, in

connection with matters of general

policy arising in the administration of

the State plan, the designated State

agency takes into account the views of—

(a) Individuals and groups of

individuals who are recipients of

vocational rehabilitation services or, as

appropriate, the individuals’

representatives;

(b) Personnel working in programs

that provide vocational rehabilitation

services to individuals with disabilities;

(c) Providers of vocational

rehabilitation services to individuals

with disabilities;

(d) The director of the Client

Assistance Program; and

(e) The State Rehabilitation Council, if

the State has a Council.

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

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

§ 361.22 Coordination with education

officials.

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

The State plan must contain plans,

policies, and procedures for

coordination between the designated

State agency and education officials

responsible for the public education of

students with disabilities that are

designed to facilitate the transition of

students with disabilities from the

receipt of educational services in school

to the receipt of vocational

rehabilitation services under the

responsibility of the designated State

agency.

(2) These plans, policies, and

procedures in paragraph (a)(1) of this

section must provide for the

development and approval of an

individualized plan for employment in

accordance with § 361.45 as early as

possible during the transition planning

process but, at the latest, by the time

each student determined to be eligible

for vocational rehabilitation services

leaves the school setting or, if the

designated State unit is operating under

an order of selection, before each

eligible student able to be served under

the order leaves the school setting.

(b) Formal interagency agreement.

The State plan must include

information on a formal interagency

agreement with the State educational

agency that, at a minimum, provides

for—

(1) Consultation and technical

assistance to assist educational agencies

in planning for the transition of students

with disabilities from school to postschool activities, including vocational

rehabilitation services;

(2) Transition planning by personnel

of the designated State agency and

educational agency personnel for

students with disabilities that facilitates

the development and completion of

their individualized education programs

(IEPs) under section 614(d) of the

Individuals with Disabilities Education

Act;

(3) The roles and responsibilities,

including financial responsibilities, of

4396 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

each agency, including provisions for

determining State lead agencies and

qualified personnel responsible for

transition services; and

(4) Procedures for outreach to and

identification of students with

disabilities who are in need of transition

services. Outreach to these students

should occur as early as possible during

the transition planning process and

must include, at a minimum, a

description of the purpose of the

vocational rehabilitation program,

eligibility requirements, application

procedures, and scope of services that

may be provided to eligible individuals.

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

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

§ 361.23 Requirements related to the

statewide workforce investment system.

(a) Responsibilities as a partner of the

One-Stop service delivery system. As a

required partner in the One-Stop service

delivery system (which is part of the

statewide workforce investment system

under Title I of the Workforce

Investment Act of 1998), the designated

State unit must carry out the following

functions consistent with the Act, this

part, Title I of the Workforce Investment

Act of 1998, and the regulations in 20

CFR part 662:

(1) Make available to participants

through the One-Stop service delivery

system the core services (as described in

20 CFR 662.240) that are applicable to

the Program administered by the

designated State unit under this part.

(2) Use a portion of funds made

available to the Program administered

by the designated State unit under this

part, consistent with the Act and this

part, to—

(i) Create and maintain the One-Stop

service delivery system; and

(ii) Provide core services (as described

in 20 CFR 662.240).

(3) Enter into a memorandum of

understanding (MOU) with the Local

Workforce Investment Board under

section 117 of the Workforce Investment

Act of 1998 relating to the operation of

the One-Stop service delivery system

that meets the requirements of section

121(c) of the Workforce Investment Act

and 20 CFR 662.300, including a

description of services, how the cost of

the identified services and operating

costs of the system will be funded, and

methods for referrals.

(4) Participate in the operation of the

One-Stop service delivery system

consistent with the terms of the MOU

and the requirements of the Act and this

part.

(5) Provide representation on the

Local Workforce Investment Board

under section 117 of the Workforce

Investment Act of 1998.

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

assure that the designated State unit or

the designated State agency enters into

cooperative agreements with the other

entities that are partners under the OneStop service delivery system under Title

I of the Workforce Investment Act of

1998 and replicates those agreements at

the local level between individual

offices of the designated State unit and

local entities carrying out the One-Stop

service delivery system or other

activities through the statewide

workforce investment system.

(2) Cooperative agreements developed

under paragraph (b)(1) of this section

may provide for—

(i) Intercomponent training and

technical assistance regarding—

(A) The availability and benefits of,

and information on eligibility standards

for, vocational rehabilitation services;

and

(B) The promotion of equal, effective

and meaningful participation by

individuals with disabilities in the OneStop service delivery system and other

workforce investment activities through

the promotion of program accessibility

consistent with the requirements of the

Americans with Disabilities Act of 1990

and section 504 of the Act, the use of

nondiscriminatory policies and

procedures, and the provision of

reasonable accommodations, auxiliary

aids and services, and rehabilitation

technology for individuals with

disabilities;

(ii) The use of information and

financial management systems that link

all of the partners of the One-Stop

service delivery system to one another

and to other electronic networks,

including nonvisual electronic

networks, and that relate to subjects

such as employment statistics, job

vacancies, career planning, and

workforce investment activities;

(iii) The use of customer service

features such as common intake and

referral procedures, customer databases,

resource information, and human

services hotlines;

(iv) The establishment of cooperative

efforts with employers to facilitate job

placement and carry out other activities

that the designated State unit and the

employers determine to be appropriate;

(v) The identification of staff roles,

responsibilities, and available resources

and specification of the financial

responsibility of each partner of the

One-Stop service delivery system with

respect to providing and paying for

necessary services, consistent with the

requirements of the Act, this part, other

Federal requirements, and State law;

and

(vi) The specification of procedures

for resolving disputes among partners of

the One-Stop service delivery system.

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

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

of the Workforce Investment Act of 1998; 29

U.S.C. 2841 and 2864)

§ 361.24 Cooperation and coordination

with other entities.

(a) Interagency cooperation. The State

plan must describe the designated State

agency’s cooperation with and use of

the services and facilities of Federal,

State, and local agencies and programs,

including programs carried out by the

Under Secretary for Rural Development

of the Department of Agriculture and

State use contracting programs, to the

extent that those agencies and programs

are not carrying out activities through

the statewide workforce investment

system.

(b) Coordination with the Statewide

Independent Living Council and

independent living centers. The State

plan must assure that the designated

State unit, the Statewide Independent

Living Council established under 34

CFR part 364, and the independent

living centers established under 34 CFR

part 366 have developed working

relationships and coordinate their

activities.

(c) Cooperative agreement with

recipients of grants for services to

American Indians.

(1) General. In applicable cases, the

State plan must assure that the

designated State agency has entered into

a formal cooperative agreement with

each grant recipient in the State that

receives funds under part C of the Act

(American Indian Vocational

Rehabilitation Services).

(2) Contents of formal cooperative

agreement. The agreement required

under paragraph (a)(1) of this section

must describe strategies for

collaboration and coordination in

providing vocational rehabilitation

services to American Indians who are

individuals with disabilities,

including—

(i) Strategies for interagency referral

and information sharing that will assist

in eligibility determinations and the

development of individualized plans for

employment;

(ii) Procedures for ensuring that

American Indians who are individuals

with disabilities and are living near a

reservation or tribal service area are

provided vocational rehabilitation

services; and

(iii) Provisions for sharing resources

in cooperative studies and assessments,

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4397

joint training activities, and other

collaborative activities designed to

improve the provision of services to

American Indians who are individuals

with disabilities.

(d) Reciprocal referral services

between two designated State units in

the same State. If there is a separate

designated State unit for individuals

who are blind, the two designated State

units must establish reciprocal referral

services, use each other’s services and

facilities to the extent feasible, jointly

plan activities to improve services in the

State for individuals with multiple

impairments, including visual

impairments, and otherwise cooperate

to provide more effective services,

including, if appropriate, entering into a

written cooperative agreement.

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

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

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

§ 361.25 Statewideness.

The State plan must assure that

services provided under the State plan

will be available in all political

subdivisions of the State, unless a

waiver of statewideness is requested

and approved in accordance with

§ 361.26.

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

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

§ 361.26 Waiver of statewideness.

(a) Availability. The State unit may

provide services in one or more political

subdivisions of the State that increase

services or expand the scope of services

that are available statewide under the

State plan if—

(1) The non-Federal share of the cost

of these services is met from funds

provided by a local public agency,

including funds contributed to a local

public agency by a private agency,

organization, or individual;

(2) The services are likely to promote

the vocational rehabilitation of

substantially larger numbers of

individuals with disabilities or of

individuals with disabilities with

particular types of impairments; and

(3) For purposes other than those

specified in § 361.60(b)(3)(i) and

consistent with the requirements in

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

its State plan, and the Secretary

approves, a waiver of the statewideness

requirement, in accordance with the

requirements of paragraph (b) of this

section.

(b) Request for waiver. The request for

a waiver of statewideness must—

(1) Identify the types of services to be

provided;

(2) Contain a written assurance from

the local public agency that it will make

available to the State unit the nonFederal share of funds;

(3) Contain a written assurance that

State unit approval will be obtained for

each proposed service before it is put

into effect; and

(4) Contain a written assurance that

all other State plan requirements,

including a State’s order of selection

requirements, will apply to all services

approved under the waiver.

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

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

§ 361.27 Shared funding and

administration of joint programs.

(a) If the State plan provides for the

designated State agency to share

funding and administrative

responsibility with another State agency

or local public agency to carry out a

joint program to provide services to

individuals with disabilities, the State

must submit to the Secretary for

approval a plan that describes its shared

funding and administrative

arrangement.

(b) The plan under paragraph (a) of

this section must include—

(1) A description of the nature and

scope of the joint program;

(2) The services to be provided under

the joint program;

(3) The respective roles of each

participating agency in the

administration and provision of

services; and

(4) The share of the costs to be

assumed by each agency.

(c) If a proposed joint program does

not comply with the statewideness

requirement in § 361.25, the State unit

must obtain a waiver of statewideness,

in accordance with § 361.26.

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

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

§ 361.28 Third-party cooperative

arrangements involving funds from other

public agencies.

(a) The designated State unit may

enter into a third-party cooperative

arrangement for providing or

administering vocational rehabilitation

services with another State agency or a

local public agency that is furnishing

part or all of the non-Federal share, if

the designated State unit ensures that—

(1) The services provided by the

cooperating agency are not the

customary or typical services provided

by that agency but are new services that

have a vocational rehabilitation focus or

existing services that have been

modified, adapted, expanded, or

reconfigured to have a vocational

rehabilitation focus;

(2) The services provided by the

cooperating agency are only available to

applicants for, or recipients of, services

from the designated State unit;

(3) Program expenditures and staff

providing services under the

cooperative arrangement are under the

administrative supervision of the

designated State unit; and

(4) All State plan requirements,

including a State’s order of selection,

will apply to all services provided

under the cooperative program.

(b) If a third party cooperative

agreement does not comply with the

statewideness requirement in § 361.25,

the State unit must obtain a waiver of

statewideness, in accordance with

§ 361.26.

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

709(c))

§ 361.29 Statewide assessment; annual

estimates; annual State goals and priorities;

strategies; and progress reports.

(a) Comprehensive statewide

assessment. (1) The State plan must

include—

(i) The results of a comprehensive,

statewide assessment, jointly conducted

by the designated State unit and the

State Rehabilitation Council (if the State

unit has a Council) every 3 years

describing the rehabilitation needs of

individuals with disabilities residing

within the State, particularly the

vocational rehabilitation services needs

of—

(A) Individuals with the most

significant disabilities, including their

need for supported employment

services;

(B) Individuals with disabilities who

are minorities and individuals with

disabilities who have been unserved or

underserved by the vocational

rehabilitation program carried out under

this part; and

(C) Individuals with disabilities

served through other components of the

statewide workforce investment system

as identified by those individuals and

personnel assisting those individuals

through the components of the system;

and

(ii) An assessment of the need to

establish, develop, or improve

community rehabilitation programs

within the State.

(2) The State plan must assure that the

State will submit to the Secretary a

report containing information regarding

updates to the assessments under

paragraph (a) of this section for any year

in which the State updates the

assessments.

(b) Annual estimates. The State plan

must include, and must assure that the

State will annually submit a report to

the Secretary that includes, State

estimates of—

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(1) The number of individuals in the

State who are eligible for services under

this part;

(2) The number of eligible individuals

who will receive services provided with

funds provided under part B of Title I

of the Act and under part B of Title VI

of the Act, including, if the designated

State agency uses an order of selection

in accordance with § 361.36, estimates

of the number of individuals to be

served under each priority category

within the order; and

(3) The costs of the services described

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

including, if the designated State agency

uses an order of selection, the service

costs for each priority category within

the order.

(c) Goals and priorities.

(1) In general. The State plan must

identify the goals and priorities of the

State in carrying out the program.

(2) Council. The goals and priorities

must be jointly developed, agreed to,

reviewed annually, and, as necessary,

revised by the designated State unit and

the State Rehabilitation Council, if the

State unit has a Council.

(3) Submission. The State plan must

assure that the State will submit to the

Secretary a report containing

information regarding revisions in the

goals and priorities for any year in

which the State revises the goals and

priorities.

(4) Basis for goals and priorities. The

State goals and priorities must be based

on an analysis of—

(i) The comprehensive statewide

assessment described in paragraph (a) of

this section, including any updates to

the assessment;

(ii) The performance of the State on

the standards and indicators established

under section 106 of the Act; and

(iii) Other available information on

the operation and the effectiveness of

the vocational rehabilitation program

carried out in the State, including any

reports received from the State

Rehabilitation Council under

§ 361.17(h) and the findings and

recommendations from monitoring

activities conducted under section 107

of the Act.

(5) Service and outcome goals for

categories in order of selection. If the

designated State agency uses an order of

selection in accordance with § 361.36,

the State plan must identify the State’s

service and outcome goals and the time

within which these goals may be

achieved for individuals in each priority

category within the order.

(d)Strategies. The State plan must

describe the strategies the State will use

to address the needs identified in the

assessment conducted under paragraph

(a) of this section and achieve the goals

and priorities identified in paragraph (c)

of this section, including—

(1) The methods to be used to expand

and improve services to individuals

with disabilities, including how a broad

range of assistive technology services

and assistive technology devices will be

provided to those individuals at each

stage of the rehabilitation process and

how those services and devices will be

provided to individuals with disabilities

on a statewide basis;

(2) Outreach procedures to identify

and serve individuals with disabilities

who are minorities and individuals with

disabilities who have been unserved or

underserved by the vocational

rehabilitation program;

(3) As applicable, the plan of the State

for establishing, developing, or

improving community rehabilitation

programs;

(4) Strategies to improve the

performance of the State with respect to

the evaluation standards and

performance indicators established

pursuant to section 106 of the Act; and

(5) Strategies for assisting other

components of the statewide workforce

investment system in assisting

individuals with disabilities.

(e) Evaluation and reports of progress.

(1) The State plan must include—

(i) The results of an evaluation of the

effectiveness of the vocational

rehabilitation program; and

(ii) A joint report by the designated

State unit and the State Rehabilitation

Council, if the State unit has a Council,

to the Secretary on the progress made in

improving the effectiveness of the

program from the previous year. This

evaluation and joint report must

include—

(A) An evaluation of the extent to

which the goals and priorities identified

in paragraph (c) of this section were

achieved;

(B) A description of the strategies that

contributed to the achievement of the

goals and priorities;

(C) To the extent to which the goals

and priorities were not achieved, a

description of the factors that impeded

that achievement; and

(D) An assessment of the performance

of the State on the standards and

indicators established pursuant to

section 106 of the Act.

(2) The State plan must assure that the

designated State unit and the State

Rehabilitation Council, if the State unit

has a Council, will jointly submit to the

Secretary an annual report that contains

the information described in paragraph

(e)(1) of this section.

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

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

§ 361.30 Services to American Indians.

The State plan must assure that the

designated State agency provides

vocational rehabilitation services to

American Indians who are individuals

with disabilities residing in the State to

the same extent as the designated State

agency provides vocational

rehabilitation services to other

significant populations of individuals

with disabilities residing in the State.

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

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

§ 361.31 Cooperative agreements with

private nonprofit organizations.

The State plan must describe the

manner in which cooperative

agreements with private nonprofit

vocational rehabilitation service

providers will be established.

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

721(a)(24)(B))

§ 361.32 Use of profitmaking organizations

for on-the-job training in connection with

selected projects.

The State plan must assure that the

designated State agency has the

authority to enter into contracts with

for-profit organizations for the purpose

of providing, as vocational

rehabilitation services, on-the-job

training and related programs for

individuals with disabilities under the

Projects With Industry program, 34 CFR

part 379, if the designated State agency

has determined that for-profit agencies

are better qualified to provide needed

vocational rehabilitation services than

nonprofit agencies and organizations.

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

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

§ 361.33 [Reserved]

§ 361.34 Supported employment State plan

supplement.

(a) The State plan must assure that the

State has an acceptable plan under 34

CFR part 363 that provides for the use

of funds under that part to supplement

funds under this part for the cost of

services leading to supported

employment.

(b) The supported employment plan,

including any needed annual revisions,

must be submitted as a supplement to

the State plan submitted under this part.

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

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

§ 361.35 Innovation and expansion

activities.

(a) The State plan must assure that the

State will reserve and use a portion of

the funds allotted to the State under

section 110 of the Act—

(1) For the development and

implementation of innovative

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4399

approaches to expand and improve the

provision of vocational rehabilitation

services to individuals with disabilities,

particularly individuals with the most

significant disabilities, consistent with

the findings of the comprehensive,

statewide assessment of the

rehabilitation needs of individuals with

disabilities under § 361.29(a) and the

State’s goals and priorities under

§ 361.29(c); and

(2) To support the funding of—

(i) The State Rehabilitation Council, if

the State has a Council, consistent with

the resource plan identified in

§ 361.17(i); and

(ii) The Statewide Independent Living

Council, consistent with the plan

prepared under 34 CFR 364.21(i).

(b) The State plan must—

(1) Describe how the reserved funds

will be used; and

(2) Include, on an annual basis, a

report describing how the reserved

funds were used during the preceding

year.

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

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

§ 361.36 Ability to serve all eligible

individuals; order of selection for services.

(a) General provisions.

(1) The designated State unit either

must be able to provide the full range

of services listed in section 103(a) of the

Act and § 361.48, as appropriate, to all

eligible individuals or, in the event that

vocational rehabilitation services cannot

be provided to all eligible individuals in

the State who apply for the services,

include in the State plan the order to be

followed in selecting eligible

individuals to be provided vocational

rehabilitation services.

(2) The ability of the designated State

unit to provide the full range of

vocational rehabilitation services to all

eligible individuals must be supported

by a determination that satisfies the

requirements of paragraph (b) or (c) of

this section and a determination that, on

the basis of the designated State unit’s

projected fiscal and personnel resources

and its assessment of the rehabilitation

needs of individuals with significant

disabilities within the State, it can—

(i) Continue to provide services to all

individuals currently receiving services;

(ii) Provide assessment services to all

individuals expected to apply for

services in the next fiscal year;

(iii) Provide services to all individuals

who are expected to be determined

eligible in the next fiscal year; and

(iv) Meet all program requirements.

(3) If the designated State unit is

unable to provide the full range

vocational rehabilitation services to all

eligible individuals in the State who

apply for the services, the State plan

must—

(i) Show the order to be followed in

selecting eligible individuals to be

provided vocational rehabilitation

services;

(ii) Provide a justification for the

order of selection;

(iii) Identify service and outcome

goals and the time within which the

goals may be achieved for individuals in

each priority category within the order,

as required under § 361.29(c)(5); and

(iv) Assure that—

(A) In accordance with criteria

established by the State for the order of

selection, individuals with the most

significant disabilities will be selected

first for the provision of vocational

rehabilitation services; and

(B) Individuals who do not meet the

order of selection criteria will have

access to services provided through the

information and referral system

established under § 361.37.

(b) Basis for assurance that services

can be provided to all eligible

individuals.

(1) For a designated State unit that

determined, for the current fiscal year

and the preceding fiscal year, that it is

able to provide the full range of services,

as appropriate, to all eligible

individuals, the State unit, during the

current fiscal and preceding fiscal year,

must have in fact—

(i) Provided assessment services to all

applicants and the full range of services,

as appropriate, to all eligible

individuals;

(ii) Made referral forms widely

available throughout the State;

(iii) Conducted outreach efforts to

identify and serve individuals with

disabilities who have been unserved or

underserved by the vocational

rehabilitation system; and

(iv) Not delayed, through waiting lists

or other means, determinations of

eligibility, the development of

individualized plans for employment

for individuals determined eligible for

vocational rehabilitation services, or the

provision of services for eligible

individuals for whom individualized

plans for employment have been

developed.

(2) For a designated State unit that

was unable to provide the full range of

services to all eligible individuals

during the current or preceding fiscal

year or that has not met the

requirements in paragraph (b)(1) of this

section, the determination that the

designated State unit is able to provide

the full range of vocational

rehabilitation services to all eligible

individuals in the next fiscal year must

be based on—

(i) Circumstances that have changed

that will allow the designated State unit

to meet the requirements of paragraph

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

year, including—

(A) An estimate of the number of and

projected costs of serving, in the next

fiscal year, individuals with existing

individualized plans for employment;

(B) The projected number of

individuals with disabilities who will

apply for services and will be

determined eligible in the next fiscal

year and the projected costs of serving

those individuals;

(C) The projected costs of

administering the program in the next

fiscal year, including, but not limited to,

costs of staff salaries and benefits,

outreach activities, and required

statewide studies; and

(D) The projected revenues and

projected number of qualified personnel

for the program in the next fiscal year;

(ii) Comparable data, as relevant, for

the current or preceding fiscal year, or

for both years, of the costs listed in

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

this section and the resources identified

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

and an explanation of any projected

increases or decreases in these costs and

resources; and

(iii) A determination that the

projected revenues and the projected

number of qualified personnel for the

program in the next fiscal year are

adequate to cover the costs identified in

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

this section to ensure the provision of

the full range of services, as appropriate,

to all eligible individuals.

(c) Determining need for establishing

and implementing an order of selection.

(1) The designated State unit must

determine, prior to the beginning of

each fiscal year, whether to establish

and implement an order of selection.

(2) If the designated State unit

determines that it does not need to

establish an order of selection, it must

reevaluate this determination whenever

changed circumstances during the

course of a fiscal year, such as a

decrease in its fiscal or personnel

resources or an increase in its program

costs, indicate that it may no longer be

able to provide the full range of services,

as appropriate, to all eligible

individuals, as described in paragraph

(a)(2) of this section.

(3) If a DSU establishes an order of

selection, but determines that it does

not need to implement that order at the

beginning of the fiscal year, it must

continue to meet the requirements of

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

must implement the order of selection

4400 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

by closing one or more priority

categories.

(d) Establishing an order of selection.

(1) Basis for order of selection. An

order of selection must be based on a

refinement of the three criteria in the

definition of ‘‘individual with a

significant disability’’ in section

7(21)(A) of the Act and § 361.5(b)(31).

(2) Factors that cannot be used in

determining order of selection of eligible

individuals. An order of selection may

not be based on any other factors,

including—

(i) Any duration of residency

requirement, provided the individual is

present in the State;

(ii) Type of disability;

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

national origin;

(iv) Source of referral;

(v) Type of expected employment

outcome;

(vi) The need for specific services or

anticipated cost of services required by

an individual; or

(vii) The income level of an

individual or an individual’s family.

(e) Administrative requirements. In

administering the order of selection, the

designated State unit must—

(1) Implement the order of selection

on a statewide basis;

(2) Notify all eligible individuals of

the priority categories in a State’s order

of selection, their assignment to a

particular category, and their right to

appeal their category assignment;

(3) Continue to provide all needed

services to any eligible individual who

has begun to receive services under an

individualized plan for employment

prior to the effective date of the order

of selection, irrespective of the severity

of the individual’s disability; and

(4) Ensure that its funding

arrangements for providing services

under the State plan, including 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 must

renegotiate these funding arrangements

so that they are consistent with the

order of selection.

(f) State Rehabilitation Council. The

designated State unit must consult with

the State Rehabilitation Council, if the

State unit has a Council, regarding the—

(1) Need to establish an order of

selection, including any reevaluation of

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

section;

(2) Priority categories of the particular

order of selection;

(3) Criteria for determining

individuals with the most significant

disabilities; and

(4) Administration of the order of

selection.

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

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

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

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

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

and 794(a))

§ 361.37 Information and referral services.

(a) General provisions. The State plan

must assure that—

(1) The designated State agency will

implement an information and referral

system adequate to ensure that

individuals with disabilities, including

eligible individuals who do not meet the

agency’s order of selection criteria for

receiving vocational rehabilitation

services if the agency is operating on an

order of selection, are provided accurate

vocational rehabilitation information

and guidance (which may include

counseling and referral for job

placement) using appropriate modes of

communication to assist them in

preparing for, securing, retaining, or

regaining employment; and

(2) The designated State agency will

refer individuals with disabilities to

other appropriate Federal and State

programs, including other components

of the statewide workforce investment

system.

(b) Criteria for appropriate referrals.

In making the referrals identified in

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

designated State unit must—

(1) Refer the individual to Federal or

State programs, including programs

carried out by other components of the

statewide workforce investment system,

best suited to address the specific

employment needs of an individual

with a disability; and

(2) Provide the individual who is

being referred—

(i) A notice of the referral by the

designated State agency to the agency

carrying out the program;

(ii) Information identifying a specific

point of contact within the agency to

which the individual is being referred;

and

(iii) Information and advice regarding

the most suitable services to assist the

individual to prepare for, secure, retain,

or regain employment.

(c) Order of selection. In providing the

information and referral services under

this section to eligible individuals who

are not in the priority category or

categories to receive vocational

rehabilitation services under the State’s

order of selection, the State unit must

identify, as part of its reporting under

section 101(a)(10) of the Act and

§ 361.40, the number of eligible

individuals who did not meet the

agency’s order of selection criteria for

receiving vocational rehabilitation

services and did receive information

and referral services under this section.

(Authority: Sections 101(a)(5)(D) and (20)

and 101(a)(10)(C)(ii) of the Act; 29 U.S.C.

721(a)(5)(D) and (20) and (a)(10)(C)(ii))

§ 361.38 Protection, use, and release of

personal information.

(a) General provisions.

(1) The State agency and the State

unit must adopt and implement written

policies and procedures to safeguard the

confidentiality of all personal

information, including photographs and

lists of names. These policies and

procedures must ensure that—

(i) Specific safeguards are established

to protect current and stored personal

information;

(ii) All applicants and eligible

individuals and, as appropriate, those

individuals’ representatives, service

providers, cooperating agencies, and

interested persons are informed through

appropriate modes of communication of

the confidentiality of personal

information and the conditions for

accessing and releasing this

information;

(iii) All applicants or their

representatives are informed about the

State unit’s need to collect personal

information and the policies governing

its use, including—

(A) Identification of the authority

under which information is collected;

(B) Explanation of the principal

purposes for which the State unit

intends to use or release the

information;

(C) Explanation of whether providing

requested information to the State unit

is mandatory or voluntary and the

effects of not providing requested

information;

(D) Identification of those situations

in which the State unit requires or does

not require informed written consent of

the individual before information may

be released; and

(E) Identification of other agencies to

which information is routinely released;

(iv) An explanation of State policies

and procedures affecting personal

information will be provided to each

individual in that individual’s native

language or through the appropriate

mode of communication; and

(v) These policies and procedures

provide no fewer protections for

individuals than State laws and

regulations.

(2) The State unit may establish

reasonable fees to cover extraordinary

costs of duplicating records or making

extensive searches and must establish

policies and procedures governing

access to records.

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4401

(b) State program use. All personal

information in the possession of the

State agency or the designated State unit

must be used only for the purposes

directly connected with the

administration of the vocational

rehabilitation program. Information

containing identifiable personal

information may not be shared with

advisory or other bodies that do not

have official responsibility for

administration of the program. In the

administration of the program, the State

unit may obtain personal information

from service providers and cooperating

agencies under assurances that the

information may not be further

divulged, except as provided under

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

section.

(c) Release to applicants and eligible

individuals.

(1) Except as provided in paragraphs

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

requested in writing by an applicant or

eligible individual, the State unit must

make all requested information in that

individual’s record of services

accessible to and must release the

information to the individual or the

individual’s representative in a timely

manner.

(2) Medical, psychological, or other

information that the State unit

determines may be harmful to the

individual may not be released directly

to the individual, but must be provided

to the individual through a third party

chosen by the individual, which may

include, among others, an advocate, a

family member, or a qualified medical

or mental health professional, unless a

representative has been appointed by a

court to represent the individual, in

which case the information must be

released to the court-appointed

representative.

(3) If personal information has been

obtained from another agency or

organization, it may be released only by,

or under the conditions established by,

the other agency or organization.

(4) An applicant or eligible individual

who believes that information in the

individual’s record of services is

inaccurate or misleading may request

that the designated State unit amend the

information. If the information is not

amended, the request for an amendment

must be documented in the record of

services, consistent with § 361.47(a)(12).

(d) Release for audit, evaluation, and

research. Personal information may be

released to an organization, agency, or

individual engaged in audit, evaluation,

or research only for purposes directly

connected with the administration of

the vocational rehabilitation program or

for purposes that would significantly

improve the quality of life for applicants

and eligible individuals and only if the

organization, agency, or individual

assures that—

(1) The information will be used only

for the purposes for which it is being

provided;

(2) The information will be released

only to persons officially connected

with the audit, evaluation, or research;

(3) The information will not be

released to the involved individual;

(4) The information will be managed

in a manner to safeguard confidentiality;

and

(5) The final product will not reveal

any personal identifying information

without the informed written consent of

the involved individual or the

individual’s representative.

(e) Release to other programs or

authorities.

(1) Upon receiving the informed

written consent of the individual or, if

appropriate, the individual’s

representative, the State unit may

release personal information to another

agency or organization for its program

purposes only to the extent that the

information may be released to the

involved individual or the individual’s

representative and only to the extent

that the other agency or organization

demonstrates that the information

requested is necessary for its program.

(2) Medical or psychological

information that the State unit

determines may be harmful to the

individual may be released if the other

agency or organization assures the State

unit that the information will be used

only for the purpose for which it is

being provided and will not be further

released to the individual.

(3) The State unit must release

personal information if required by

Federal law or regulations.

(4) The State unit must release

personal information in response to

investigations in connection with law

enforcement, fraud, or abuse, unless

expressly prohibited by Federal or State

laws or regulations, and in response to

an order issued by a judge, magistrate,

or other authorized judicial officer.

(5) The State unit also may release

personal information in order to protect

the individual or others if the individual

poses a threat to his or her safety or to

the safety of others.

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

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

§ 361.39 State-imposed requirements.

The designated State unit must, upon

request, identify those regulations and

policies relating to the administration or

operation of its vocational rehabilitation

program that are State-imposed,

including any regulations or policy

based on State interpretation of any

Federal law, regulations, or guideline.

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

714)

§ 361.40 Reports.

(a) The State plan must assure that the

designated State agency will submit

reports, including reports required

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

the Act—

(1) In the form and level of detail and

at the time required by the Secretary

regarding applicants for and eligible

individuals receiving services under

this part; and

(2) In a manner that provides a

complete count (other than the

information obtained through sampling

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

the Act) of the applicants and eligible

individuals to—

(i) Permit the greatest possible crossclassification of data; and

(ii) Protect the confidentiality of the

identity of each individual.

(b) The designated State agency must

comply with any requirements

necessary to ensure the accuracy and

verification of those reports.

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

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

Provision and Scope of Services

§ 361.41 Processing referrals and

applications.

(a) Referrals. The designated State

unit must establish and implement

standards for the prompt and equitable

handling of referrals of individuals for

vocational rehabilitation services,

including referrals of individuals made

through the One-Stop service delivery

systems established under section 121

of the Workforce Investment Act of

1998. The standards must include

timelines for making good faith efforts

to inform these individuals of

application requirements and to gather

information necessary to initiate an

assessment for determining eligibility

and priority for services.

(b) Applications.

(1) Once an individual has submitted

an application for vocational

rehabilitation services, including

applications made through common

intake procedures in One-Stop centers

established under section 121 of the

Workforce Investment Act of 1998, an

eligibility determination must be made

within 60 days, unless—

(i) Exceptional and unforeseen

circumstances beyond the control of the

designated State unit preclude making

an eligibility determination within 60

days and the designated State unit and

4402 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

the individual agree to a specific

extension of time; or

(ii) An exploration of the individual’s

abilities, capabilities, and capacity to

perform in work situations is carried out

in accordance with § 361.42(e) or, if

appropriate, an extended evaluation is

carried out in accordance with

§ 361.42(f).

(2) An individual is considered to

have submitted an application when the

individual or the individual’s

representative, as appropriate—

(i)(A) Has completed and signed an

agency application form;

(B) Has completed a common intake

application form in a One-Stop center

requesting vocational rehabilitation

services; or

(C) Has otherwise requested services

from the designated State unit;

(ii) Has provided to the designated

State unit information necessary to

initiate an assessment to determine

eligibility and priority for services; and

(iii) Is available to complete the

assessment process.

(3) The designated State unit must

ensure that its application forms are

widely available throughout the State,

particularly in the One-Stop centers

established under section 121 of the

Workforce Investment Act of 1998.

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

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

and 722(a)(6))

§ 361.42 Assessment for determining

eligibility and priority for services.

In order to determine whether an

individual is eligible for vocational

rehabilitation services and the

individual’s priority under an order of

selection for services (if the State is

operating under an order of selection),

the designated State unit must conduct

an assessment for determining eligibility

and priority for services. The

assessment must be conducted in the

most integrated setting possible,

consistent with the individual’s needs

and informed choice, and in accordance

with the following provisions:

(a) Eligibility requirements.

(1) Basic requirements. The

designated State unit’s determination of

an applicant’s eligibility for vocational

rehabilitation services must be based

only on the following requirements:

(i) A determination by qualified

personnel that the applicant has a

physical or mental impairment.

(ii) A determination by qualified

personnel that the applicant’s physical

or mental impairment constitutes or

results in a substantial impediment to

employment for the applicant.

(iii) A determination by a qualified

vocational rehabilitation counselor

employed by the designated State unit

that the applicant requires vocational

rehabilitation services to prepare for,

secure, retain, or regain employment

consistent with the applicant’s unique

strengths, resources, priorities,

concerns, abilities, capabilities,

interests, and informed choice.

(iv) A presumption, in accordance

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

that the applicant can benefit in terms

of an employment outcome from the

provision of vocational rehabilitation

services.

(2) Presumption of benefit. The

designated State unit must presume that

an applicant who meets the eligibility

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

(ii) of this section can benefit in terms

of an employment outcome unless it

demonstrates, based on clear and

convincing evidence, that the applicant

is incapable of benefiting in terms of an

employment outcome from vocational

rehabilitation services due to the

severity of the applicant’s disability.

(3) Presumption of eligibility for

Social Security recipients and

beneficiaries.

(i) Any applicant who has been

determined eligible for Social Security

benefits under Title II or Title XVI of the

Social Security Act is—

(A) Presumed eligible for vocational

rehabilitation services under paragraphs

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

(B) Considered an individual with a

significant disability as defined in

§ 361.5(b)(31).

(ii) If an applicant for vocational

rehabilitation services asserts that he or

she is eligible for Social Security

benefits under Title II or Title XVI of the

Social Security Act (and, therefore, is

presumed eligible for vocational

rehabilitation services under paragraph

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

to provide appropriate evidence, such as

an award letter, to support that

assertion, the State unit must verify the

applicant’s eligibility under Title II or

Title XVI of the Social Security Act by

contacting the Social Security

Administration. This verification must

be made within a reasonable period of

time that enables the State unit to

determine the applicant’s eligibility for

vocational rehabilitation services within

60 days of the individual submitting an

application for services in accordance

with § 361.41(b)(2).

(4) Achievement of an employment

outcome. Any eligible individual,

including an individual whose

eligibility for vocational rehabilitation

services is based on the individual being

eligible for Social Security benefits

under Title II or Title XVI of the Social

Security Act, must intend to achieve an

employment outcome that is consistent

with the applicant’s unique strengths,

resources, priorities, concerns, abilities,

capabilities, interests, and informed

choice.

(i) The State unit is responsible for

informing individuals, through its

application process for vocational

rehabilitation services, that individuals

who receive services under the program

must intend to achieve an employment

outcome.

(ii) The applicant’s completion of the

application process for vocational

rehabilitation services is sufficient

evidence of the individual’s intent to

achieve an employment outcome, and

no additional demonstration on the part

of the applicant is required for purposes

of satisfying paragraph (a)(4) of this

section.

(5) Interpretation. Nothing in this

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

to be construed to create an entitlement

to any vocational rehabilitation service.

(b) Interim determination of eligibility.

(1) The designated State unit may

initiate the provision of vocational

rehabilitation services for an applicant

on the basis of an interim determination

of eligibility prior to the 60-day period

described in § 361.41(b)(2).

(2) If a State chooses to make interim

determinations of eligibility, the

designated State unit must—

(i) Establish criteria and conditions

for making those determinations;

(ii) Develop and implement

procedures for making the

determinations; and

(iii) Determine the scope of services

that may be provided pending the final

determination of eligibility.

(3) If a State elects to use an interim

eligibility determination, the designated

State unit must make a final

determination of eligibility within 60

days of the individual submitting an

application for services in accordance

with § 361.41(b)(2).

(c) Prohibited factors.

(1) The State plan must assure that the

State unit will not impose, as part of

determining eligibility under this

section, a duration of residence

requirement that excludes from services

any applicant who is present in the

State.

(2) In making a determination of

eligibility under this section, the

designated State unit also must ensure

that—

(i) No applicant or group of applicants

is excluded or found ineligible solely on

the basis of the type of disability; and

(ii) The eligibility requirements are

applied without regard to the—

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

national origin of the applicant;

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4403

(B) Type of expected employment

outcome;

(C) Source of referral for vocational

rehabilitation services; and

(D) Particular service needs or

anticipated cost of services required by

an applicant or the income level of an

applicant or applicant’s family.

(d) Review and assessment of data for

eligibility determination. Except as

provided in paragraph (e) of this

section, the designated State unit—

(1) Must base its determination of

each of the basic eligibility requirements

in paragraph (a) of this section on—

(i) A review and assessment of

existing data, including counselor

observations, education records,

information provided by the individual

or the individual’s family, particularly

information used by education officials,

and determinations made by officials of

other agencies; and

(ii) To the extent existing data do not

describe the current functioning of the

individual or are unavailable,

insufficient, or inappropriate to make an

eligibility determination, an assessment

of additional data resulting from the

provision of vocational rehabilitation

services, including trial work

experiences, assistive technology

devices and services, personal

assistance services, and any other

support services that are necessary to

determine whether an individual is

eligible; and

(2) Must base its presumption under

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

applicant who has been determined

eligible for Social Security benefits

under Title II or Title XVI of the Social

Security Act satisfies each of the basic

eligibility requirements in paragraph (a)

of this section on determinations made

by the Social Security Administration.

(e) Trial work experiences for

individuals with significant disabilities.

(1) Prior to any determination that an

individual with a disability is incapable

of benefiting from vocational

rehabilitation services in terms of an

employment outcome because of the

severity of that individual’s disability,

the designated State unit must conduct

an exploration of the individual’s

abilities, capabilities, and capacity to

perform in realistic work situations to

determine whether or not there is clear

and convincing evidence to support

such a determination.

(2)(i) The designated State unit must

develop a written plan to assess

periodically the individual’s abilities,

capabilities, and capacity to perform in

work situations through the use of trial

work experiences, which must be

provided in the most integrated setting

possible, consistent with the informed

choice and rehabilitation needs of the

individual.

(ii) Trial work experiences include

supported employment, on-the-job

training, and other experiences using

realistic work settings.

(iii) Trial work experiences must be of

sufficient variety and over a sufficient

period of time for the designated State

unit to determine that—

(A) There is sufficient evidence to

conclude that the individual can benefit

from the provision of vocational

rehabilitation services in terms of an

employment outcome; or

(B) There is clear and convincing

evidence that the individual is

incapable of benefiting from vocational

rehabilitation services in terms of an

employment outcome due to the

severity of the individual’s disability.

(iv) The designated State unit must

provide appropriate supports, including

assistive technology devices and

services and personal assistance

services, to accommodate the

rehabilitation needs of the individual

during the trial work experiences.

(f) Extended evaluation for certain

individuals with significant disabilities.

(1) Under limited circumstances if an

individual cannot take advantage of trial

work experiences or if options for trial

work experiences have been exhausted

before the State unit is able to make the

determinations described in paragraph

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

State unit must conduct an extended

evaluation to make these

determinations.

(2) During the extended evaluation

period, vocational rehabilitation

services must be provided in the most

integrated setting possible, consistent

with the informed choice and

rehabilitation needs of the individual.

(3) During the extended evaluation

period, the designated State unit must

develop a written plan for providing

services necessary to make a

determination under paragraph

(e)(2)(iii) of this section.

(4) During the extended evaluation

period, the designated State unit

provides only those services that are

necessary to make the determinations

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

section and terminates extended

evaluation services when the State unit

is able to make the determinations.

(g) Data for determination of priority

for services under an order of selection.

If the designated State unit is operating

under an order of selection for services,

as provided in § 361.36, the State unit

must base its priority assignments on—

(1) A review of the data that was

developed under paragraphs (d) and (e)

of this section to make the eligibility

determination; and

(2) An assessment of additional data,

to the extent necessary.

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

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

102(a)(2), 102(a)(3), 102(a)(4)(A), 102(a)(4)(B),

102(a)(4)(C), 103(a)(1), 103(a)(9), 103(a)(10)

and 103(a)(14) of the Act; 29 U.S.C.

705(2)(A), 705(2)(B)(ii)(I), 705(2)(C),

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

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

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

and 723(a)(14))

Note to § 361.42: Clear and convincing

evidence means that the designated State unit

shall have a high degree of certainty before

it can conclude that an individual is

incapable of benefiting from services in terms

of an employment outcome. The ‘‘clear and

convincing’’ standard constitutes the highest

standard used in our civil system of law and

is to be individually applied on a case-bycase basis. The term clear means

unequivocal. For example, the use of an

intelligence test result alone would not

constitute clear and convincing evidence.

Clear and convincing evidence might include

a description of assessments, including

situational assessments and supported

employment assessments, from service

providers who have concluded that they

would be unable to meet the individual’s

needs due to the severity of the individual’s

disability. The demonstration of ‘‘clear and

convincing evidence’’ must include, if

appropriate, a functional assessment of skill

development activities, with any necessary

supports (including assistive technology), in

real life settings. (S. Rep. No. 357, 102d

Cong., 2d. Sess. 37–38 (1992))

§ 361.43 Procedures for ineligibility

determination.

If the State unit determines that an

applicant is ineligible for vocational

rehabilitation services or determines

that an individual receiving services

under an individualized plan for

employment is no longer eligible for

services, the State unit must—

(a) Make the determination only after

providing an opportunity for full

consultation with the individual or, as

appropriate, with the individual’s

representative;

(b) Inform the individual in writing,

supplemented as necessary by other

appropriate modes of communication

consistent with the informed choice of

the individual, of the ineligibility

determination, including the reasons for

that determination, the requirements

under this section, and the means by

which the individual may express and

seek remedy for any dissatisfaction,

including the procedures for review of

State unit personnel determinations in

accordance with § 361.57;

(c) Provide the individual with a

description of services available from a

4404 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

client assistance program established

under 34 CFR part 370 and information

on how to contact that program;

(d) Refer the individual to other

training or employment-related

programs that are part of the One-Stop

service delivery system under the

Workforce Investment Act; and

(e) Review within 12 months and

annually thereafter if requested by the

individual or, if appropriate, by the

individual’s representative any

ineligibility determination that is based

on a finding that the individual is

incapable of achieving an employment

outcome. This review need not be

conducted in situations in which the

individual has refused it, the individual

is no longer present in the State, the

individual’s whereabouts are unknown,

or the individual’s medical condition is

rapidly progressive or terminal.

(Authority: Sections 102(a)(5) and 102(c) of

the Act; 29 U.S.C. 722(a)(5) and 722(c))

§ 361.44 Closure without eligibility

determination.

The designated State unit may not

close an applicant’s record of services

prior to making an eligibility

determination unless the applicant

declines to participate in, or is

unavailable to complete, an assessment

for determining eligibility and priority

for services, and the State unit has made

a reasonable number of attempts to

contact the applicant or, if appropriate,

the applicant’s representative to

encourage the applicant’s participation.

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

709(c))

§ 361.45 Development of the individualized

plan for employment.

(a) General requirements. The State

plan must assure that—

(1) An individualized plan for

employment (IPE) meeting the

requirements of this section and

§ 361.46 is developed and implemented

in a timely manner for each individual

determined to be eligible for vocational

rehabilitation services or, if the

designated State unit is operating under

an order of selection in accordance with

§ 361.36, for each eligible individual to

whom the State unit is able to provide

services; and

(2) Services will be provided in

accordance with the provisions of the

IPE.

(b) Purpose. 

(1) The designated State unit must

conduct an assessment for determining

vocational rehabilitation needs, if

appropriate, for each eligible individual

or, if the State is operating under an

order of selection, for each eligible

individual to whom the State is able to

provide services. The purpose of this

assessment is to determine the

employment outcome, and the nature

and scope of vocational rehabilitation

services to be included in the IPE.

(2) The IPE must—

(i) Be designed to achieve the specific

employment outcome that is selected by

the individual consistent with the

individual’s unique strengths, resources,

priorities, concerns, abilities,

capabilities, interests, and informed

choice; and

(ii) To the maximum extent

appropriate, result in employment in an

integrated setting.

(c) Required information. The State

unit must provide the following

information to each eligible individual

or, as appropriate, the individual’s

representative, in writing and, if

appropriate, in the native language or

mode of communication of the

individual or the individual’s

representative:

(1) Options for developing an IPE.

Information on the available options for

developing the IPE, including the option

that an eligible individual or, as

appropriate, the individual’s

representative may develop all or part of

the IPE—

(i) Without assistance from the State

unit or other entity; or

(ii) With assistance from—

(A) A qualified vocational

rehabilitation counselor employed by

the State unit;

(B) A qualified vocational

rehabilitation counselor who is not

employed by the State unit; or

(C) Resources other than those in

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

(2) Additional information.

Additional information to assist the

eligible individual or, as appropriate,

the individual’s representative in

developing the IPE, including—

(i) Information describing the full

range of components that must be

included in an IPE;

(ii) As appropriate to each eligible

individual—

(A) An explanation of agency

guidelines and criteria for determining

an eligible individual’s financial

commitments under an IPE;

(B) Information on the availability of

assistance in completing State unit

forms required as part of the IPE; and

(C) Additional information that the

eligible individual requests or the State

unit determines to be necessary to the

development of the IPE;

(iii) A description of the rights and

remedies available to the individual,

including, if appropriate, recourse to the

processes described in § 361.57; and

(iv) A description of the availability of

a client assistance program established

under 34 CFR part 370 and information

on how to contact the client assistance

program.

(d) Mandatory procedures. The

designated State unit must ensure that—

(1) The IPE is a written document

prepared on forms provided by the State

unit;

(2) The IPE is developed and

implemented in a manner that gives

eligible individuals the opportunity to

exercise informed choice, consistent

with § 361.52, in selecting—

(i) The employment outcome,

including the employment setting;

(ii) The specific vocational

rehabilitation services needed to

achieve the employment outcome,

including the settings in which services

will be provided;

(iii) The entity or entities that will

provide the vocational rehabilitation

services; and

(iv) The methods available for

procuring the services;

(3) The IPE is—

(i) Agreed to and signed by the

eligible individual or, as appropriate,

the individual’s representative; and

(ii) Approved and signed by a

qualified vocational rehabilitation

counselor employed by the designated

State unit;

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

any amendments to the IPE are provided

to the eligible individual or, as

appropriate, to the individual’s

representative, in writing and, if

appropriate, in the native language or

mode of communication of the

individual or, as appropriate, the

individual’s representative;

(5) The IPE is reviewed at least

annually by a qualified vocational

rehabilitation counselor and the eligible

individual or, as appropriate, the

individual’s representative to assess the

eligible individual’s progress in

achieving the identified employment

outcome;

(6) The IPE is amended, as necessary,

by the individual or, as appropriate, the

individual’s representative, in

collaboration with a representative of

the State unit or a qualified vocational

rehabilitation counselor (to the extent

determined to be appropriate by the

individual), if there are substantive

changes in the employment outcome,

the vocational rehabilitation services to

be provided, or the providers of the

vocational rehabilitation services;

(7) Amendments to the IPE do not

take effect until agreed to and signed by

the eligible individual or, as

appropriate, the individual’s

representative and by a qualified

vocational rehabilitation counselor

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4405

employed by the designated State unit;

and

(8) An IPE for a student with a

disability receiving special education

services is developed—

(i) In consideration of the student’s

IEP; and

(ii) In accordance with the plans,

policies, procedures, and terms of the

interagency agreement required under

§ 361.22.

(e) Standards for developing the IPE.

The designated State unit must establish

and implement standards for the prompt

development of IPEs for the individuals

identified under paragraph (a) of this

section, including timelines that take

into consideration the needs of the

individuals.

(f) Data for preparing the IPE.

(1) Preparation without

comprehensive assessment. To the

extent possible, the employment

outcome and the nature and scope of

rehabilitation services to be included in

the individual’s IPE must be determined

based on the data used for the

assessment of eligibility and priority for

services under § 361.42.

(2) Preparation based on

comprehensive assessment.

(i) If additional data are necessary to

determine the employment outcome and

the nature and scope of services to be

included in the IPE of an eligible

individual, the State unit must conduct

a comprehensive assessment of the

unique strengths, resources, priorities,

concerns, abilities, capabilities,

interests, and informed choice,

including the need for supported

employment services, of the eligible

individual, in the most integrated

setting possible, consistent with the

informed choice of the individual in

accordance with the provisions of

§ 361.5(b)(6)(ii).

(ii) In preparing the comprehensive

assessment, the State unit must use, to

the maximum extent possible and

appropriate and in accordance with

confidentiality requirements, existing

information that is current as of the date

of the development of the IPE,

including—

(A) Information available from other

programs and providers, particularly

information used by education officials

and the Social Security Administration;

(B) Information provided by the

individual and the individual’s family;

and

(C) Information obtained under the

assessment for determining the

individual’s eligibility and vocational

rehabilitation needs.

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

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

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

722(b)(2), 722(c) and 723(a)(1))

§ 361.46 Content of the individualized plan

for employment.

(a) Mandatory components.

Regardless of the approach in

§ 361.45(c)(1) that an eligible individual

selects for purposes of developing the

IPE, each IPE must include—

(1) A description of the specific

employment outcome that is chosen by

the eligible individual that—

(i) Is consistent with the individual’s

unique strengths, resources, priorities,

concerns, abilities, capabilities, career

interests, and informed choice; and

(ii) To the maximum extent

appropriate, results in employment in

an integrated setting;

(2) A description of the specific

rehabilitation services under § 361.48

that are—

(i) Needed to achieve the employment

outcome, including, as appropriate, the

provision of assistive technology

devices, assistive technology services,

and personal assistance services,

including training in the management of

those services; and

(ii) Provided in the most integrated

setting that is appropriate for the

services involved and is consistent with

the informed choice of the eligible

individual;

(3) Timelines for the achievement of

the employment outcome and for the

initiation of services;

(4) A description of the entity or

entities chosen by the eligible

individual or, as appropriate, the

individual’s representative that will

provide the vocational rehabilitation

services and the methods used to

procure those services;

(5) A description of the criteria that

will be used to evaluate progress toward

achievement of the employment

outcome; and

(6) The terms and conditions of the

IPE, including, as appropriate,

information describing—

(i) The responsibilities of the

designated State unit;

(ii) The responsibilities of the eligible

individual, including—

(A) The responsibilities the individual

will assume in relation to achieving the

employment outcome;

(B) If applicable, the extent of the

individual’s participation in paying for

the cost of services; and

(C) The responsibility of the

individual with regard to applying for

and securing comparable services and

benefits as described in § 361.53; and

(iii) The responsibilities of other

entities as the result of arrangements

made pursuant to the comparable

services or benefits requirements in

§ 361.53.

(b) Supported employment

requirements. An IPE for an individual

with a most significant disability for

whom an employment outcome in a

supported employment setting has been

determined to be appropriate must—

(1) Specify the supported employment

services to be provided by the

designated State unit;

(2) Specify the expected extended

services needed, which may include

natural supports;

(3) Identify the source of extended

services or, to the extent that it is not

possible to identify the source of

extended services at the time the IPE is

developed, include a description of the

basis for concluding that there is a

reasonable expectation that those

sources will become available;

(4) Provide for periodic monitoring to

ensure that the individual is making

satisfactory progress toward meeting the

weekly work requirement established in

the IPE by the time of transition to

extended services;

(5) Provide for the coordination of

services provided under an IPE with

services provided under other

individualized plans established under

other Federal or State programs;

(6) To the extent that job skills

training is provided, identify that the

training will be provided on site; and

(7) Include placement in an integrated

setting for the maximum number of

hours possible based on the unique

strengths, resources, priorities,

concerns, abilities, capabilities,

interests, and informed choice of

individuals with the most significant

disabilities.

(c) Post-employment services. The IPE

for each individual must contain, as

determined to be necessary, statements

concerning—

(1) The expected need for postemployment services prior to closing

the record of services of an individual

who has achieved an employment

outcome;

(2) A description of the terms and

conditions for the provision of any postemployment services; and

(3) If appropriate, a statement of how

post-employment services will be

provided or arranged through other

entities as the result of arrangements

made pursuant to the comparable

services or benefits requirements in

§ 361.53.

(d) Coordination of services for

students with disabilities who are

receiving special education services.

The IPE for a student with a disability

who is receiving special education

services must be coordinated with the

4406 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

IEP for that individual in terms of the

goals, objectives, and services identified

in the IEP.

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

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

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

§ 361.47 Record of services.

(a) The designated State unit must

maintain for each applicant and eligible

individual a record of services that

includes, to the extent pertinent, the

following documentation:

(1) If an applicant has been

determined to be an eligible individual,

documentation supporting that

determination in accordance with the

requirements under § 361.42.

(2) If an applicant or eligible

individual receiving services under an

IPE has been determined to be

ineligible, documentation supporting

that determination in accordance with

the requirements under § 361.43.

(3) Documentation that describes the

justification for closing an applicant’s or

eligible individual’s record of services if

that closure is based on reasons other

than ineligibility, including, as

appropriate, documentation indicating

that the State unit has satisfied the

requirements in § 361.44.

(4) If an individual has been

determined to be an individual with a

significant disability or an individual

with a most significant disability,

documentation supporting that

determination.

(5) If an individual with a significant

disability requires an exploration of

abilities, capabilities, and capacity to

perform in realistic work situations

through the use of trial work

experiences or, as appropriate, an

extended evaluation to determine

whether the individual is an eligible

individual, documentation supporting

the need for, and the plan relating to,

that exploration or, as appropriate,

extended evaluation and documentation

regarding the periodic assessments

carried out during the trial work

experiences or, as appropriate, the

extended evaluation, in accordance with

the requirements under § 361.42(e) and

(f).

(6) The IPE, and any amendments to

the IPE, consistent with the

requirements under § 361.46.

(7) Documentation describing the

extent to which the applicant or eligible

individual exercised informed choice

regarding the provision of assessment

services and the extent to which the

eligible individual exercised informed

choice in the development of the IPE

with respect to the selection of the

specific employment outcome, the

specific vocational rehabilitation

services needed to achieve the

employment outcome, the entity to

provide the services, the employment

setting, the settings in which the

services will be provided, and the

methods to procure the services.

(8) In the event that the IPE provides

for services or an employment outcome

in a non-integrated setting, a

justification to support the nonintegrated setting.

(9) In the event that an individual

obtains competitive employment,

verification that the individual is

compensated at or above the minimum

wage and that the individual’s wage and

level of benefits are not less than that

customarily paid by the employer for

the same or similar work performed by

non-disabled individuals in accordance

with § 361.5(b)(11)(ii).

(10) In the event that an individual

obtains an employment outcome in an

extended employment setting in a

community rehabilitation program or

any other employment under section

14(c) of the Fair Labor Standards Act,

documentation of the results of the

annual reviews required under § 361.55,

the individual’s input into those

reviews, and the individual’s or, if

appropriate, the individual’s

representative’s acknowledgement that

those reviews were conducted.

(11) Documentation concerning any

action or decision resulting from a

request by an individual under § 361.57

for a review of determinations made by

designated State unit personnel.

(12) In the event that an applicant or

eligible individual requests under

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

record of services be amended and the

documentation is not amended,

documentation of the request.

(13) In the event an individual is

referred to another program through the

State unit’s information and referral

system under § 361.37, including other

components of the statewide workforce

investment system, documentation on

the nature and scope of services

provided by the designated State unit to

the individual and on the referral itself,

consistent with the requirements of

§ 361.37.

(14) In the event an individual’s

record of service is closed under

§ 361.56, documentation that

demonstrates the services provided

under the individual’s IPE contributed

to the achievement of the employment

outcome.

(15) In the event an individual’s

record of service is closed under

§ 361.56, documentation verifying that

the provisions of § 361.56 have been

satisfied.

(b) The State unit, in consultation

with the State Rehabilitation Council if

the State has a Council, must determine

the type of documentation that the State

unit must maintain for each applicant

and eligible individual in order to meet

the requirements in paragraph (a) of this

section.

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

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

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

(d))

§ 361.48 Scope of vocational rehabilitation

services for individuals with disabilities.

As appropriate to the vocational

rehabilitation needs of each individual

and consistent with each individual’s

informed choice, the designated State

unit must ensure that the following

vocational rehabilitation services are

available to assist the individual with a

disability in preparing for, securing,

retaining, or regaining an employment

outcome that is consistent with the

individual’s strengths, resources,

priorities, concerns, abilities,

capabilities, interests, and informed

choice:

(a) Assessment for determining

eligibility and priority for services by

qualified personnel, including, if

appropriate, an assessment by personnel

skilled in rehabilitation technology, in

accordance with § 361.42.

(b) Assessment for determining

vocational rehabilitation needs by

qualified personnel, including, if

appropriate, an assessment by personnel

skilled in rehabilitation technology, in

accordance with § 361.45.

(c) Vocational rehabilitation

counseling and guidance, including

information and support services to

assist an individual in exercising

informed choice in accordance with

§ 361.52.

(d) Referral and other services

necessary to assist applicants and

eligible individuals to secure needed

services from other agencies, including

other components of the statewide

workforce investment system, in

accordance with §§ 361.23, 361.24, and

361.37, and to advise those individuals

about client assistance programs

established under 34 CFR part 370.

(e) In accordance with the definition

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

restoration services, to the extent that

financial support is not readily available

from a source other than the designated

State unit (such as through health

insurance or a comparable service or

benefit as defined in § 361.5(b)(10)).

(f) Vocational and other training

services, including personal and

vocational adjustment training, books,

tools, and other training materials,

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4407

except that no training or training

services in an institution of higher

education (universities, colleges,

community or junior colleges,

vocational schools, technical institutes,

or hospital schools of nursing) may be

paid for with funds under this part

unless maximum efforts have been

made by the State unit and the

individual to secure grant assistance in

whole or in part from other sources to

pay for that training.

(g) Maintenance, in accordance with

the definition of that term in

§ 361.5(b)(35).

(h) Transportation in connection with

the rendering of any vocational

rehabilitation service and in accordance

with the definition of that term in

§ 361.5(b)(57).

(i) Vocational rehabilitation services

to family members, as defined in

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

individual if necessary to enable the

applicant or eligible individual to

achieve an employment outcome.

(j) Interpreter services, including sign

language and oral interpreter services,

for individuals who are deaf or hard of

hearing and tactile interpreting services

for individuals who are deaf-blind

provided by qualified personnel.

(k) Reader services, rehabilitation

teaching services, and orientation and

mobility services for individuals who

are blind.

(l) Job-related services, including job

search and placement assistance, job

retention services, follow-up services,

and follow-along services.

(m) Supported employment services

in accordance with the definition of that

term in § 361.5(b)(54).

(n) Personal assistance services in

accordance with the definition of that

term in § 361.5(b)(39).

(o) Post-employment services in

accordance with the definition of that

term in § 361.5(b)(42).

(p) Occupational licenses, tools,

equipment, initial stocks, and supplies.

(q) Rehabilitation technology in

accordance with the definition of that

term in § 361.5(b)(45), including

vehicular modification,

telecommunications, sensory, and other

technological aids and devices.

(r) Transition services in accordance

with the definition of that term in

§ 361.5(b)(55).

(s) Technical assistance and other

consultation services to conduct market

analyses, develop business plans, and

otherwise provide resources, to the

extent those resources are authorized to

be provided through the statewide

workforce investment system, to eligible

individuals who are pursuing selfemployment or telecommuting or

establishing a small business operation

as an employment outcome.

(t) Other goods and services

determined necessary for the individual

with a disability to achieve an

employment outcome.

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

U.S.C. 723(a))

§ 361.49 Scope of vocational rehabilitation

services for groups of individuals with

disabilities.

(a) The designated State unit may also

provide for the following vocational

rehabilitation services for the benefit of

groups of individuals with disabilities:

(1) The establishment, development,

or improvement of a public or other

nonprofit community rehabilitation

program that is used to provide

vocational rehabilitation services that

promote integration and competitive

employment, including, under special

circumstances, the construction of a

facility for a public or nonprofit

community rehabilitation program.

Examples of ‘‘special circumstances’’

include the destruction by natural

disaster of the only available center

serving an area or a State determination

that construction is necessary in a rural

area because no other public agencies or

private nonprofit organizations are

currently able to provide vocational

rehabilitation services to individuals.

(2) Telecommunications systems that

have the potential for substantially

improving vocational rehabilitation

service delivery methods and

developing appropriate programming to

meet the particular needs of individuals

with disabilities, including telephone,

television, video description services,

satellite, tactile-vibratory devices, and

similar systems, as appropriate.

(3) Special services to provide

nonvisual access to information for

individuals who are blind, including the

use of telecommunications, Braille,

sound recordings, or other appropriate

media; captioned television, films, or

video cassettes for individuals who are

deaf or hard of hearing; tactile materials

for individuals who are deaf-blind; and

other special services that provide

information through tactile, vibratory,

auditory, and visual media.

(4) Technical assistance and support

services to businesses that are not

subject to Title I of the Americans with

Disabilities Act of 1990 and that are

seeking to employ individuals with

disabilities.

(5) In the case of any small business

enterprise operated by individuals with

significant disabilities under the

supervision of the designated State unit,

including enterprises established under

the Randolph-Sheppard program,

management services and supervision

provided by the State unit along with

the acquisition by the State unit of

vending facilities or other equipment,

initial stocks and supplies, and initial

operating expenses, in accordance with

the following requirements:

(i) ‘‘Management services and

supervision’’ includes inspection,

quality control, consultation,

accounting, regulating, in-service

training, and related services provided

on a systematic basis to support and

improve small business enterprises

operated by individuals with significant

disabilities. ‘‘Management services and

supervision’’ may be provided

throughout the operation of the small

business enterprise.

(ii) ‘‘Initial stocks and supplies’’

includes those items necessary to the

establishment of a new business

enterprise during the initial

establishment period, which may not

exceed 6 months.

(iii) Costs of establishing a small

business enterprise may include

operational costs during the initial

establishment period, which may not

exceed 6 months.

(iv) If the designated State unit

provides for these services, it must

ensure that only individuals with

significant disabilities will be selected

to participate in this supervised

program.

(v) If the designated State unit

provides for these services and chooses

to set aside funds from the proceeds of

the operation of the small business

enterprises, the State unit must

maintain a description of the methods

used in setting aside funds and the

purposes for which funds are set aside.

Funds may be used only for small

business enterprises purposes, and

benefits that are provided to operators

from set-aside funds must be provided

on an equitable basis.

(6) Other services that promise to

contribute substantially to the

rehabilitation of a group of individuals

but that are not related directly to the

individualized plan for employment of

any one individual. Examples of those

other services might include the

purchase or lease of a bus to provide

transportation to a group of applicants

or eligible individuals or the purchase

of equipment or instructional materials

that would benefit a group of applicants

or eligible individuals.

(7) Consultative and technical

assistance services to assist educational

agencies in planning for the transition of

students with disabilities from school to

post-school activities, including

employment.

4408 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

(b) If the designated State unit

provides for vocational rehabilitation

services for groups of individuals, it

must—

(1) Develop and maintain written

policies covering the nature and scope

of each of the vocational rehabilitation

services it provides and the criteria

under which each service is provided;

and

(2) Maintain information to ensure the

proper and efficient administration of

those services in the form and detail and

at the time required by the Secretary,

including the types of services

provided, the costs of those services,

and, to the extent feasible, estimates of

the numbers of individuals benefiting

from those services.

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

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

and 723(b))

§ 361.50 Written policies governing the

provision of services for individuals with

disabilities.

(a) Policies. The State unit must

develop and maintain written policies

covering the nature and scope of each of

the vocational rehabilitation services

specified in § 361.48 and the criteria

under which each service is provided.

The policies must ensure that the

provision of services is based on the

rehabilitation needs of each individual

as identified in that individual’s IPE and

is consistent with the individual’s

informed choice. The written policies

may not establish any arbitrary limits on

the nature and scope of vocational

rehabilitation services to be provided to

the individual to achieve an

employment outcome. The policies

must be developed in accordance with

the following provisions:

(b) Out-of-State services.

(1) The State unit may establish a

preference for in-State services,

provided that the preference does not

effectively deny an individual a

necessary service. If the individual

chooses an out-of-State service at a

higher cost than an in-State service, if

either service would meet the

individual’s rehabilitation needs, the

designated State unit is not responsible

for those costs in excess of the cost of

the in-State service.

(2) The State unit may not establish

policies that effectively prohibit the

provision of out-of-State services.

(c) Payment for services.

(1) The State unit must establish and

maintain written policies to govern the

rates of payment for all purchased

vocational rehabilitation services.

(2) The State unit may establish a fee

schedule designed to ensure a

reasonable cost to the program for each

service, if the schedule is—

(i) Not so low as to effectively deny

an individual a necessary service; and

(ii) Not absolute and permits

exceptions so that individual needs can

be addressed.

(3) The State unit may not place

absolute dollar limits on specific service

categories or on the total services

provided to an individual.

(d) Duration of services.

(1) The State unit may establish

reasonable time periods for the

provision of services provided that the

time periods are—

(i) Not so short as to effectively deny

an individual a necessary service; and

(ii) Not absolute and permit

exceptions so that individual needs can

be addressed.

(2) The State unit may not establish

absolute time limits on the provision of

specific services or on the provision of

services to an individual. The duration

of each service needed by an individual

must be determined on an individual

basis and reflected in that individual’s

individualized plan for employment.

(e) Authorization of services. The

State unit must establish policies related

to the timely authorization of services,

including any conditions under which

verbal authorization can be given.

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

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

§ 361.51 Standards for facilities and

providers of services.

(a) Accessibility of facilities. The State

plan must assure that any facility used

in connection with the delivery of

vocational rehabilitation services under

this part meets program accessibility

requirements consistent with the

requirements, as applicable, of the

Architectural Barriers Act of 1968, the

Americans with Disabilities Act of 1990,

section 504 of the Act, and the

regulations implementing these laws.

(b) Affirmative action. The State plan

must assure that community

rehabilitation programs that receive

assistance under part B of Title I of the

Act take affirmative action to employ

and advance in employment qualified

individuals with disabilities covered

under and on the same terms and

conditions as in section 503 of the Act.

(c) Special communication needs

personnel. The designated State unit

must ensure that providers of vocational

rehabilitation services are able to

communicate—

(1) In the native language of

applicants and eligible individuals who

have limited English speaking ability;

and

(2) By using appropriate modes of

communication used by applicants and

eligible individuals.

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

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

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

§ 361.52 Informed choice.

(a) General provision. The State plan

must assure that applicants and eligible

individuals or, as appropriate, their

representatives are provided

information and support services to

assist applicants and eligible

individuals in exercising informed

choice throughout the rehabilitation

process consistent with the provisions

of section 102(d) of the Act and the

requirements of this section.

(b) Written policies and procedures.

The designated State unit, in

consultation with its State

Rehabilitation Council, if it has a

Council, must develop and implement

written policies and procedures that

enable an applicant or eligible

individual to exercise informed choice

throughout the vocational rehabilitation

process. These policies and procedures

must provide for—

(1) Informing each applicant and

eligible individual (including students

with disabilities who are making the

transition from programs under the

responsibility of an educational agency

to programs under the responsibility of

the designated State unit), through

appropriate modes of communication,

about the availability of and

opportunities to exercise informed

choice, including the availability of

support services for individuals with

cognitive or other disabilities who

require assistance in exercising

informed choice throughout the

vocational rehabilitation process;

(2) Assisting applicants and eligible

individuals in exercising informed

choice in decisions related to the

provision of assessment services;

(3) Developing and implementing

flexible procurement policies and

methods that facilitate the provision of

vocational rehabilitation services and

that afford eligible individuals

meaningful choices among the methods

used to procure vocational

rehabilitation services;

(4) Assisting eligible individuals or, as

appropriate, the individuals’

representatives in acquiring information

that enables them to exercise informed

choice in the development of their IPEs

with respect to the selection of the—

(i) Employment outcome;

(ii) Specific vocational rehabilitation

services needed to achieve the

employment outcome;

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4409

(iii) Entity that will provide the

services;

(iv) Employment setting and the

settings in which the services will be

provided; and

(v) Methods available for procuring

the services; and

(5) Ensuring that the availability and

scope of informed choice is consistent

with the obligations of the designated

State agency under this part.

(c) Information and assistance in the

selection of vocational rehabilitation

services and service providers. In

assisting an applicant and eligible

individual in exercising informed

choice during the assessment for

determining eligibility and vocational

rehabilitation needs and during

development of the IPE, the designated

State unit must provide the individual

or the individual’s representative, or

assist the individual or the individual’s

representative in acquiring, information

necessary to make an informed choice

about the specific vocational

rehabilitation services, including the

providers of those services, that are

needed to achieve the individual’s

employment outcome. This information

must include, at a minimum,

information relating to the—

(1) Cost, accessibility, and duration of

potential services;

(2) Consumer satisfaction with those

services to the extent that information

relating to consumer satisfaction is

available;

(3) Qualifications of potential service

providers;

(4) Types of services offered by the

potential providers;

(5) Degree to which services are

provided in integrated settings; and

(6) Outcomes achieved by individuals

working with service providers, to the

extent that such information is

available.

(d) Methods or sources of information.

In providing or assisting the individual

or the individual’s representative in

acquiring the information required

under paragraph (c) of this section, the

State unit may use, but is not limited to,

the following methods or sources of

information:

(1) Lists of services and service

providers.

(2) Periodic consumer satisfaction

surveys and reports.

(3) Referrals to other consumers,

consumer groups, or disability advisory

councils qualified to discuss the

services or service providers.

(4) Relevant accreditation,

certification, or other information

relating to the qualifications of service

providers.

(5) Opportunities for individuals to

visit or experience various work and

service provider settings.

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

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

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

§ 361.53 Comparable services and

benefits.

(a) Determination of availability. The

State plan must assure that prior to

providing any vocational rehabilitation

services, except those services listed in

paragraph (b) of this section, to an

eligible individual, or to members of the

individual’s family, the State unit must

determine whether comparable services

and benefits, as defined in

§ 361.5(b)(10), exist under any other

program and whether those services and

benefits are available to the individual

unless such a determination would

interrupt or delay—

(1) The progress of the individual

toward achieving the employment

outcome identified in the

individualized plan for employment;

(2) An immediate job placement; or

(3) The provision of vocational

rehabilitation services to any individual

who is determined to be at extreme

medical risk, based on medical evidence

provided by an appropriate qualified

medical professional.

(b) Exempt services. The following

vocational rehabilitation services

described in § 361.48(a) are exempt from

a determination of the availability of

comparable services and benefits under

paragraph (a) of this section:

(1) Assessment for determining

eligibility and vocational rehabilitation

needs.

(2) Counseling and guidance,

including information and support

services to assist an individual in

exercising informed choice.

(3) Referral and other services to

secure needed services from other

agencies, including other components of

the statewide workforce investment

system, if those services are not

available under this part.

(4) Job-related services, including job

search and placement assistance, job

retention services, follow-up services,

and follow-along services.

(5) Rehabilitation technology,

including telecommunications, sensory,

and other technological aids and

devices.

(6) Post-employment services

consisting of the services listed under

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

section.

(c) Provision of services.

(1) If comparable services or benefits

exist under any other program and are

available to the individual at the time

needed to ensure the progress of the

individual toward achieving the

employment outcome in the

individual’s IPE, the designated State

unit must use those comparable services

or benefits to meet, in whole or part, the

costs of the vocational rehabilitation

services.

(2) If comparable services or benefits

exist under any other program, but are

not available to the individual at the

time needed to ensure the progress of

the individual toward achieving the

employment outcome in the

individual’s IPE, the designated State

unit must provide vocational

rehabilitation services until those

comparable services and benefits

become available.

(d) Interagency coordination.

(1) The State plan must assure that the

Governor, in consultation with the

entity in the State responsible for the

vocational rehabilitation program and

other appropriate agencies, will ensure

that an interagency agreement or other

mechanism for interagency coordination

takes effect between the designated

State vocational rehabilitation unit and

any appropriate public entity, including

the State entity responsible for

administering the State medicaid

program, a public institution of higher

education, and a component of the

statewide workforce investment system,

to ensure the provision of vocational

rehabilitation services (other than those

services listed in paragraph (b) of this

section) that are included in the IPE,

including the provision of those

vocational rehabilitation services during

the pendency of any interagency dispute

in accordance with the provisions of

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

(2) The Governor may meet the

requirements of paragraph (d)(1) of this

section through—

(i) A State statute or regulation;

(ii) A signed agreement between the

respective officials of the public entities

that clearly identifies the

responsibilities of each public entity for

the provision of the services; or

(iii) Another appropriate mechanism

as determined by the designated State

vocational rehabilitation unit.

(3) The interagency agreement or

other mechanism for interagency

coordination must include the

following:

(i) Agency financial responsibility. An

identification of, or description of a

method for defining, the financial

responsibility of the public entity for

providing the vocational rehabilitation

services other than those listed in

paragraph (b) of this section and a

provision stating the financial

4410 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

responsibility of the public entity for

providing those services.

(ii) Conditions, terms, and procedures

of reimbursement. Information

specifying the conditions, terms, and

procedures under which the designated

State unit must be reimbursed by the

other public entities for providing

vocational rehabilitation services based

on the terms of the interagency

agreement or other mechanism for

interagency coordination.

(iii) Interagency disputes. Information

specifying procedures for resolving

interagency disputes under the

interagency agreement or other

mechanism for interagency

coordination, including procedures

under which the designated State unit

may initiate proceedings to secure

reimbursement from other public

entities or otherwise implement the

provisions of the agreement or

mechanism.

(iv) Procedures for coordination of

services. Information specifying policies

and procedures for public entities to

determine and identify interagency

coordination responsibilities of each

public entity to promote the

coordination and timely delivery of

vocational rehabilitation services other

than those listed in paragraph (b) of this

section.

(e) Responsibilities under other law.

(1) If a public entity (other than the

designated State unit) is obligated under

Federal law (such as the Americans

with Disabilities Act, section 504 of the

Act, or section 188 of the Workforce

Investment Act) or State law, or

assigned responsibility under State

policy or an interagency agreement

established under this section, to

provide or pay for any services

considered to be vocational

rehabilitation services (e.g., interpreter

services under § 361.48(j)), other than

those services listed in paragraph (b) of

this section, the public entity must

fulfill that obligation or responsibility

through—

(i) The terms of the interagency

agreement or other requirements of this

section;

(ii) Providing or paying for the service

directly or by contract; or

(iii) Other arrangement.

(2) If a public entity other than the

designated State unit fails to provide or

pay for vocational rehabilitation

services for an eligible individual as

established under this section, the

designated State unit must provide or

pay for those services to the individual

and may claim reimbursement for the

services from the public entity that

failed to provide or pay for those

services. The public entity must

reimburse the designated State unit

pursuant to the terms of the interagency

agreement or other mechanism

described in paragraph (d) of this

section in accordance with the

procedures established in the agreement

or mechanism pursuant to paragraph

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

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

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

§ 361.54 Participation of individuals in

cost of services based on financial need.

(a) No Federal requirement. There is

no Federal requirement that the

financial need of individuals be

considered in the provision of

vocational rehabilitation services.

(b) State unit requirements. 

(1) The State unit may choose to

consider the financial need of eligible

individuals or individuals who are

receiving services through trial work

experiences under § 361.42(e) or during

an extended evaluation under

§ 361.42(f) for purposes of determining

the extent of their participation in the

costs of vocational rehabilitation

services, other than those services

identified in paragraph (b)(3) of this

section.

(2) If the State unit chooses to

consider financial need—

(i) It must maintain written policies—

(A) Explaining the method for

determining the financial need of an

eligible individual; and

(B) Specifying the types of vocational

rehabilitation services for which the

unit has established a financial needs

test;

(ii) The policies must be applied

uniformly to all individuals in similar

circumstances;

(iii) The policies may require different

levels of need for different geographic

regions in the State, but must be applied

uniformly to all individuals within each

geographic region; and

(iv) The policies must ensure that the

level of an individual’s participation in

the cost of vocational rehabilitation

services is—

(A) Reasonable;

(B) Based on the individual’s financial

need, including consideration of any

disability-related expenses paid by the

individual; and

(C) Not so high as to effectively deny

the individual a necessary service.

(3) The designated State unit may not

apply a financial needs test, or require

the financial participation of the

individual—

(i) As a condition for furnishing the

following vocational rehabilitation

services:

(A) Assessment for determining

eligibility and priority for services

under § 361.48(a), except those nonassessment services that are provided to

an individual with a significant

disability during either an exploration

of the individual’s abilities, capabilities,

and capacity to perform in work

situations through the use of trial work

experiences under § 361.42(e) or an

extended evaluation under § 361.42(f).

(B) Assessment for determining

vocational rehabilitation needs under

§ 361.48(b).

(C) Vocational rehabilitation

counseling and guidance under

§ 361.48(c).

(D) Referral and other services under

§ 361.48(d).

(E) Job-related services under

§ 361.48(l).

(F) Personal assistance services under

§ 361.48(n).

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

interpreter services under § 361.48(j),

reader services under § 361.48(k)) that

an individual with a disability requires

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

794) or the Americans with Disabilities

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

regulations implementing those laws, in

order for the individual to participate in

the VR program as authorized under this

part; or

(ii) As a condition for furnishing any

vocational rehabilitation service if the

individual in need of the service has

been determined eligible for Social

Security benefits under Titles II or XVI

of the Social Security Act.

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

709(c))

§ 361.55 Annual review of individuals in

extended employment or other employment

under special certificate provisions of the

Fair Labor Standards Act.

The State plan must assure that the

designated State unit—

(a) Annually reviews and reevaluates

the status of each individual with a

disability served under the vocational

rehabilitation program who has

achieved an employment outcome

either in an extended employment

setting in a community rehabilitation

program or in any other employment

setting in which the individual is

compensated in accordance with section

14(c) of the Fair Labor Standards Act for

2 years after the individual achieves the

employment outcome (and thereafter if

requested by the individual or, if

appropriate, the individual’s

representative) to determine the

interests, priorities, and needs of the

individual with respect to competitive

employment or training for competitive

employment;

(b) Enables the individual or, if

appropriate, the individual’s

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4411

representative to provide input into the

review and reevaluation and documents

that input in the record of services,

consistent with § 361.47(a)(10), with the

individual’s or, as appropriate, the

individual’s representative’s signed

acknowledgment that the review and

reevaluation have been conducted; and

(c) Makes maximum efforts, including

identifying and providing vocational

rehabilitation services, reasonable

accommodations, and other necessary

support services, to assist the

individuals identified in paragraph (a)

of this section in engaging in

competitive employment as defined in

§ 361.5(b)(11).

(Authority: Section 101(a)(14) of the Act; 29

U.S.C. 721(a)(14))

§ 361.56 Requirements for closing the

record of services of an individual who has

achieved an employment outcome.

The record of services of an

individual who has achieved an

employment outcome may be closed

only if all of the following requirements

are met:

(a) Employment outcome achieved.

The individual has achieved the

employment outcome that is described

in the individual’s IPE in accordance

with § 361.46(a)(1) and is—

(1) Consistent with the individual’s

strengths, resources, priorities,

concerns, abilities, capabilities,

interests, and informed choice; and (2)

In the most integrated setting possible,

consistent with the individual’s

informed choice.

(b) Employment outcome maintained.

The individual has maintained the

employment outcome for an appropriate

period of time, but not less than 90

days, necessary to ensure the stability of

the employment outcome, and the

individual no longer needs vocational

rehabilitation services.

(c) Satisfactory outcome. At the end of

the appropriate period under paragraph

(b) of this section, the individual and

the qualified rehabilitation counselor

employed by the designated State unit

consider the employment outcome to be

satisfactory and agree that the

individual is performing well in the

employment.

(d) Post-employment services. The

individual is informed through

appropriate modes of communication of

the availability of post-employment

services.

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

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

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

§ 361.57 Review of determinations made

by designated State unit personnel.

(a) Procedures. The designated State

unit must develop and implement

procedures to ensure that an applicant

or eligible individual who is dissatisfied

with any determination made by

personnel of the designated State unit

that affects the provision of vocational

rehabilitation services may request, or,

if appropriate, may request through the

individual’s representative, a timely

review of that determination. The

procedures must be in accordance with

paragraphs (b) through (k) of this

section:

(b) General requirements.

(1) Notification. Procedures

established by the State unit under this

section must provide an applicant or

eligible individual or, as appropriate,

the individual’s representative notice

of—

(i) The right to obtain review of State

unit determinations that affect the

provision of vocational rehabilitation

services through an impartial due

process hearing under paragraph (e) of

this section;

(ii) The right to pursue mediation

under paragraph (d) of this section with

respect to determinations made by

designated State unit personnel that

affect the provision of vocational

rehabilitation services to an applicant or

eligible individual;

(iii) The names and addresses of

individuals with whom requests for

mediation or due process hearings may

be filed;

(iv) The manner in which a mediator

or impartial hearing officer may be

selected consistent with the

requirements of paragraphs (d) and (f) of

this section; and

(v) The availability of the client

assistance program, established under

34 CFR part 370, to assist the applicant

or eligible individual during mediation

sessions or impartial due process

hearings.

(2) Timing. Notice described in

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

provided in writing—

(i) At the time the individual applies

for vocational rehabilitation services

under this part;

(ii) At the time the individual is

assigned to a category in the State’s

order of selection, if the State has

established an order of selection under

§ 361.36;

(iii) At the time the IPE is developed;

and

(iv) Whenever vocational

rehabilitation services for an individual

are reduced, suspended, or terminated.

(3) Evidence and representation.

Procedures established under this

section must—

(i) Provide an applicant or eligible

individual or, as appropriate, the

individual’s representative with an

opportunity to submit during mediation

sessions or due process hearings

evidence and other information that

supports the applicant’s or eligible

individual’s position; and

(ii) Allow an applicant or eligible

individual to be represented during

mediation sessions or due process

hearings by counsel or other advocate

selected by the applicant or eligible

individual.

(4) Impact on provision of services.

The State unit may not institute a

suspension, reduction, or termination of

vocational rehabilitation services being

provided to an applicant or eligible

individual, including evaluation and

assessment services and IPE

development, pending a resolution

through mediation, pending a decision

by a hearing officer or reviewing official,

or pending informal resolution under

this section unless—

(i) The individual or, in appropriate

cases, the individual’s representative

requests a suspension, reduction, or

termination of services; or

(ii) The State agency has evidence that

the services have been obtained through

misrepresentation, fraud, collusion, or

criminal conduct on the part of the

individual or the individual’s

representative.

(5) Ineligibility. Applicants who are

found ineligible for vocational

rehabilitation services and previously

eligible individuals who are determined

to be no longer eligible for vocational

rehabilitation services pursuant to

§ 361.43 are permitted to challenge the

determinations of ineligibility under the

procedures described in this section.

(c) Informal dispute resolution. The

State unit may develop an informal

process for resolving a request for

review without conducting mediation or

a formal hearing. A State’s informal

process must not be used to deny the

right of an applicant or eligible

individual to a hearing under paragraph

(e) of this section or any other right

provided under this part, including the

right to pursue mediation under

paragraph (d) of this section. If informal

resolution under this paragraph or

mediation under paragraph (d) of this

section is not successful in resolving the

dispute within the time period

established under paragraph (e)(1) of

this section, a formal hearing must be

conducted within that same time

period, unless the parties agree to a

specific extension of time.

4412 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

(d) Mediation.

(1) The State must establish and

implement procedures, as required

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

to allow an applicant or eligible

individual and the State unit to resolve

disputes involving State unit

determinations that affect the provision

of vocational rehabilitation services

through a mediation process that must

be made available, at a minimum,

whenever an applicant or eligible

individual or, as appropriate, the

individual’s representative requests an

impartial due process hearing under this

section.

(2) Mediation procedures established

by the State unit under paragraph (d)

must ensure that—

(i) Participation in the mediation

process is voluntary on the part of the

applicant or eligible individual, as

appropriate, and on the part of the State

unit;

(ii) Use of the mediation process is

not used to deny or delay the

applicant’s or eligible individual’s right

to pursue resolution of the dispute

through an impartial hearing held

within the time period specified in

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

other rights provided under this part. At

any point during the mediation process,

either party or the mediator may elect to

terminate the mediation. In the event

mediation is terminated, either party

may pursue resolution through an

impartial hearing;

(iii) The mediation process is

conducted by a qualified and impartial

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

who must be selected from a list of

qualified and impartial mediators

maintained by the State—

(A) On a random basis;

(B) By agreement between the director

of the designated State unit and the

applicant or eligible individual or, as

appropriate, the individual’s

representative; or

(C) In accordance with a procedure

established in the State for assigning

mediators, provided this procedure

ensures the neutrality of the mediator

assigned; and

(iv) Mediation sessions are scheduled

and conducted in a timely manner and

are held in a location and manner that

is convenient to the parties to the

dispute.

(3) Discussions that occur during the

mediation process must be kept

confidential and may not be used as

evidence in any subsequent due process

hearings or civil proceedings, and the

parties to the mediation process may be

required to sign a confidentiality pledge

prior to the commencement of the

process.

(4) An agreement reached by the

parties to the dispute in the mediation

process must be described in a written

mediation agreement that is developed

by the parties with the assistance of the

qualified and impartial mediator and

signed by both parties. Copies of the

agreement must be sent to both parties.

(5) The costs of the mediation process

must be paid by the State. The State is

not required to pay for any costs related

to the representation of an applicant or

eligible individual authorized under

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

(e) Impartial due process hearings.

The State unit must establish and

implement formal review procedures, as

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

section, that provide that—

(1) A hearing conducted by an

impartial hearing officer, selected in

accordance with paragraph (f) of this

section, must be held within 60 days of

an applicant’s or eligible individual’s

request for review of a determination

made by personnel of the State unit that

affects the provision of vocational

rehabilitation services to the individual,

unless informal resolution or a

mediation agreement is achieved prior

to the 60th day or the parties agree to

a specific extension of time;

(2) In addition to the rights described

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

applicant or eligible individual or, if

appropriate, the individual’s

representative must be given the

opportunity to present witnesses during

the hearing and to examine all witnesses

and other relevant sources of

information and evidence;

(3) The impartial hearing officer

must—

(i) Make a decision based on the

provisions of the approved State plan,

the Act, Federal vocational

rehabilitation regulations, and State

regulations and policies that are

consistent with Federal requirements;

and

(ii) Provide to the individual or, if

appropriate, the individual’s

representative and to the State unit a

full written report of the findings and

grounds for the decision within 30 days

of the completion of the hearing; and

(4) The hearing officer’s decision is

final, except that a party may request an

impartial review under paragraph (g)(1)

of this section if the State has

established procedures for that review,

and a party involved in a hearing may

bring a civil action under paragraph (i)

of this section.

(f) Selection of impartial hearing

officers. The impartial hearing officer

for a particular case must be selected—

(1) From a list of qualified impartial

hearing officers maintained by the State

unit. Impartial hearing officers included

on the list must be—

(i) Identified by the State unit if the

State unit is an independent

commission; or

(ii) Jointly identified by the State unit

and the State Rehabilitation Council if

the State has a Council; and

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

(ii) By agreement between the director

of the designated State unit and the

applicant or eligible individual or, as

appropriate, the individual’s

representative.

(g) Administrative review of hearing

officer’s decision. The State may

establish procedures to enable a party

who is dissatisfied with the decision of

the impartial hearing officer to seek an

impartial administrative review of the

decision under paragraph (e)(3) of this

section in accordance with the

following requirements:

(1) A request for administrative

review under paragraph (g) of this

section must be made within 20 days of

the mailing of the impartial hearing

officer’s decision.

(2) Administrative review of the

hearing officer’s decision must be

conducted by—

(i) The chief official of the designated

State agency if the State has established

both a designated State agency and a

designated State unit under § 361.13(b);

or

(ii) An official from the office of the

Governor.

(3) The reviewing official described in

paragraph (g)(2)(i) of this section—

(i) Provides both parties with an

opportunity to submit additional

evidence and information relevant to a

final decision concerning the matter

under review;

(ii) May not overturn or modify the

hearing officer’s decision, or any part of

that decision, that supports the position

of the applicant or eligible individual

unless the reviewing official concludes,

based on clear and convincing evidence,

that the decision of the impartial

hearing officer is clearly erroneous on

the basis of being contrary to the

approved State plan, the Act, Federal

vocational rehabilitation regulations, or

State regulations and policies that are

consistent with Federal requirements;

(iii) Makes an independent, final

decision following a review of the entire

hearing record and provides the

decision in writing, including a full

report of the findings and the statutory,

regulatory, or policy grounds for the

decision, to the applicant or eligible

individual or, as appropriate, the

individual’s representative and to the

State unit within 30 days of the request

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4413

for administrative review under

paragraph (g)(1) of this section; and

(iv) May not delegate the

responsibility for making the final

decision under paragraph (g) of this

section to any officer or employee of the

designated State unit.

(4) The reviewing official’s decision

under paragraph (g) of this section is

final unless either party brings a civil

action under paragraph (i) of this

section.

(h) Implementation of final decisions.

If a party brings a civil action under

paragraph (h) of this section to

challenge the final decision of a hearing

officer under paragraph (e) of this

section or to challenge the final decision

of a State reviewing official under

paragraph (g) of this section, the final

decision of the hearing officer or State

reviewing official must be implemented

pending review by the court.

(i) Civil action.

(1) Any party who disagrees with the

findings and decision of an impartial

hearing officer under paragraph (e) of

this section in a State that has not

established administrative review

procedures under paragraph (g) of this

section and any party who disagrees

with the findings and decision under

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

a right to bring a civil action with

respect to the matter in dispute. The

action may be brought in any State court

of competent jurisdiction or in a district

court of the United States of competent

jurisdiction without regard to the

amount in controversy.

(2) In any action brought under

paragraph (i) of this section, the court—

(i) Receives the records related to the

impartial due process hearing and the

records related to the administrative

review process, if applicable;

(ii) Hears additional evidence at the

request of a party; and

(iii) Basing its decision on the

preponderance of the evidence, grants

the relief that the court determines to be

appropriate.

(j) State fair hearing board. A fair

hearing board as defined in

§ 361.5(b)(22) is authorized to carry out

the responsibilities of the impartial

hearing officer under paragraph (e) of

this section in accordance with the

following criteria:

(1) The fair hearing board may

conduct due process hearings either

collectively or by assigning

responsibility for conducting the

hearing to one or more members of the

fair hearing board.

(2) The final decision issued by the

fair hearing board following a hearing

under paragraph (j)(1) of this section

must be made collectively by, or by a

majority vote of, the fair hearing board.

(3) The provisions of paragraphs

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

relate to due process hearings and of

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

section do not apply to fair hearing

boards under this paragraph (j).

(k) Data collection.

(1) The director of the designated

State unit must collect and submit, at a

minimum, the following data to the

Commissioner of the Rehabilitation

Services Administration (RSA) for

inclusion each year in the annual report

to Congress under section 13 of the Act:

(i) A copy of the standards used by

State reviewing officials for reviewing

decisions made by impartial hearing

officers under this section.

(ii) The number of mediations held,

including the number of mediation

agreements reached.

(iii) The number of hearings and

reviews sought from impartial hearing

officers and State reviewing officials,

including the type of complaints and

the issues involved.

(iv) The number of hearing officer

decisions that were not reviewed by

administrative reviewing officials.

(v) The number of hearing decisions

that were reviewed by State reviewing

officials and, based on these reviews,

the number of hearing decisions that

were—

(A) Sustained in favor of an applicant

or eligible individual;

(B) Sustained in favor of the

designated State unit;

(C) Reversed in whole or in part in

favor of the applicant or eligible

individual; and

(D) Reversed in whole or in part in

favor of the State unit.

(2) The State unit director also must

collect and submit to the Commissioner

of RSA copies of all final decisions

issued by impartial hearing officers

under paragraph (e) of this section and

by State review officials under

paragraph (g) of this section.

(3) The confidentiality of records of

applicants and eligible individuals

maintained by the State unit may not

preclude the access of the RSA

Commissioner to those records for the

purposes described in this section.

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

U.S.C. 722(c))

Subpart C—Financing of State

Vocational Rehabilitation Programs

§ 361.60 Matching requirements.

(a) Federal share.

(1) General. Except as provided in

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

Federal share for expenditures made by

the State under the State plan, including

expenditures for the provision of

vocational rehabilitation services and

the administration of the State plan, is

78.7 percent.

(2) Construction projects. The Federal

share for expenditures made for the

construction of a facility for community

rehabilitation program purposes may

not be more than 50 percent of the total

cost of the project.

(b) Non-Federal share.

(1) General. Except as provided in

paragraph (b)(2) and (3) of this section,

expenditures made under the State plan

to meet the non-Federal share under this

section must be consistent with the

provisions of 34 CFR 80.24.

(2) Third party in-kind contributions.

Third party in-kind contributions

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

be used to meet the non-Federal share

under this section.

(3) Contributions by private entities.

Expenditures made from contributions

by private organizations, agencies, or

individuals that are deposited in the

account of the State agency or sole local

agency in accordance with State law

and that are earmarked, under a

condition imposed by the contributor,

may be used as part of the non-Federal

share under this section if the funds are

earmarked for—

(i) Meeting in whole or in part the

State’s share for establishing a

community rehabilitation program or

constructing a particular facility for

community rehabilitation program

purposes;

(ii) Particular geographic areas within

the State for any purpose under the

State plan, other than those described in

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

accordance with the following criteria:

(A) Before funds that are earmarked

for a particular geographic area may be

used as part of the non-Federal share,

the State must notify the Secretary that

the State cannot provide the full nonFederal share without using these funds.

(B) Funds that are earmarked for a

particular geographic area may be used

as part of the non-Federal share without

requesting a waiver of statewideness

under § 361.26.

(C) Except as provided in paragraph

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

must be used on a statewide basis

consistent with § 361.25, unless a

waiver of statewideness is obtained

under § 361.26; and

(iii) Any other purpose under the

State plan, provided the expenditures

do not benefit in any way the donor, an

individual to whom the donor is related

by blood or marriage or with whom the

donor has a close personal relationship,

4414 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

or an individual, entity, or organization

with whom the donor shares a financial

interest. The Secretary does not

consider a donor’s receipt from the State

unit of a grant, subgrant, or contract

with funds allotted under this part to be

a benefit for the purposes of this

paragraph if the grant, subgrant, or

contract is awarded under the State’s

regular competitive procedures.

(Authority: Sections 7(14), 101(a)(3),

101(a)(4) and 104 of the Act; 29 U.S.C.

706(14), 721(a)(3), 721(a)(4) and 724))

Example for paragraph (b)(3):

Contributions may be earmarked in

accordance with § 361.60(b)(3)(iii) for

providing particular services (e.g.,

rehabilitation technology services); serving

individuals with certain types of disabilities

(e.g., individuals who are blind), consistent

with the State’s order of selection, if

applicable; providing services to special

groups that State or Federal law permits to

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

disabilities who are receiving special

education services), consistent with the

State’s order of selection, if applicable; or

carrying out particular types of

administrative activities permissible under

State law. Contributions also may be

restricted to particular geographic areas to

increase services or expand the scope of

services that are available statewide under

the State plan in accordance with the

requirements in § 361.60(b)(3)(ii).

§ 361.61 Limitation on use of funds for

construction expenditures.

No more than 10 percent of a State’s

allotment for any fiscal year under

section 110 of the Act may be spent on

the construction of facilities for

community rehabilitation program

purposes.

(Authority: Section 101(a)(17)(A) of the Act;

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

§ 361.62 Maintenance of effort

requirements.

(a) General requirements.

(1) The Secretary reduces the amount

otherwise payable to a State for a fiscal

year by the amount by which the total

expenditures from non-Federal sources

under the State plan for the previous

fiscal year were less than the total of

those expenditures for the fiscal year 2

years prior to the previous fiscal year.

Example: For fiscal year 2001, a State’s

maintenance of effort level is based on the

amount of its expenditures from non-Federal

sources for fiscal year 1999. Thus, if the

State’s non-Federal expenditures in 2001 are

less than they were in 1999, the State has a

maintenance of effort deficit, and the

Secretary reduces the State’s allotment in

2002 by the amount of that deficit.

(2) If, at the time the Secretary makes

a determination that a State has failed

to meet its maintenance of effort

requirements, it is too late for the

Secretary to make a reduction in

accordance with paragraph (a)(1) of this

section, then the Secretary recovers the

amount of the maintenance of effort

deficit through audit disallowance.

(b) Specific requirements for

construction of facilities. If the State

provides for the construction of a

facility for community rehabilitation

program purposes, the amount of the

State’s share of expenditures for

vocational rehabilitation services under

the plan, other than for the construction

of a facility for community

rehabilitation program purposes or the

establishment of a facility for

community rehabilitation purposes,

must be at least equal to the

expenditures for those services for the

second prior fiscal year. If a State fails

to meet the requirements of this

paragraph, the Secretary recovers the

amount of the maintenance of effort

deficit through audit disallowance.

(c) Separate State agency for

vocational rehabilitation services for

individuals who are blind. If there is a

separate part of the State plan

administered by a separate State agency

to provide vocational rehabilitation

services for individuals who are blind—

(1) Satisfaction of the maintenance of

effort requirements under paragraphs (a)

and (b) of this section are determined

based on the total amount of a State’s

non-Federal expenditures under both

parts of the State plan; and

(2) If a State fails to meet any

maintenance of effort requirement, the

Secretary reduces the amount otherwise

payable to the State for that fiscal year

under each part of the plan in direct

relation to the amount by which

expenditures from non-Federal sources

under each part of the plan in the

previous fiscal year were less than they

were for that part of the plan for the

fiscal year 2 years prior to the previous

fiscal year.

(d) Waiver or modification.

(1) The Secretary may waive or

modify the maintenance of effort

requirement in paragraph (a)(1) of this

section if the Secretary determines that

a waiver or modification is necessary to

permit the State to respond to

exceptional or uncontrollable

circumstances, such as a major natural

disaster or a serious economic

downturn, that—

(i) Cause significant unanticipated

expenditures or reductions in revenue

that result in a general reduction of

programs within the State; or

(ii) Require the State to make

substantial expenditures in the

vocational rehabilitation program for

long-term purposes due to the one-time

costs associated with the construction of

a facility for community rehabilitation

program purposes, the establishment of

a facility for community rehabilitation

program purposes, or the acquisition of

equipment.

(2) The Secretary may waive or

modify the maintenance of effort

requirement in paragraph (b) of this

section or the 10 percent allotment

limitation in § 361.61 if the Secretary

determines that a waiver or

modification is necessary to permit the

State to respond to exceptional or

uncontrollable circumstances, such as a

major natural disaster, that result in

significant destruction of existing

facilities and require the State to make

substantial expenditures for the

construction of a facility for community

rehabilitation program purposes or the

establishment of a facility for

community rehabilitation program

purposes in order to provide vocational

rehabilitation services.

(3) A written request for waiver or

modification, including supporting

justification, must be submitted to the

Secretary as soon as the State

determines that an exceptional or

uncontrollable circumstance will

prevent it from making its required

expenditures from non-Federal sources.

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

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

§ 361.63 Program income.

(a) Definition. For purposes of this

section, program income means gross

income received by the State that is

directly generated by an activity

supported under this part.

(b) Sources. Sources of program

income include, but are not limited to,

payments from the Social Security

Administration for assisting Social

Security beneficiaries and recipients to

achieve employment outcomes,

payments received from workers’

compensation funds, fees for services to

defray part or all of the costs of services

provided to particular individuals, and

income generated by a State-operated

community rehabilitation program.

(c) Use of program income.

(1) Except as provided in paragraph

(c)(2) of this section, program income,

whenever earned, must be used for the

provision of vocational rehabilitation

services and the administration of the

State plan. Program income is

considered earned when it is received.

(2) Payments provided to a State from

the Social Security Administration for

assisting Social Security beneficiaries

and recipients to achieve employment

outcomes may also be used to carry out

programs under part B of Title I of the

Act (client assistance), part B of Title VI

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4415

of the Act (supported employment), and

Title VII of the Act (independent living).

(3) The State is authorized to treat

program income as—

(i) An addition to the grant funds to

be used for additional allowable

program expenditures, in accordance

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

(ii) A deduction from total allowable

costs, in accordance with 34 CFR

80.25(g)(1).

(4) Program income cannot be used to

meet the non-Federal share requirement

under § 361.60.

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

728; 34 CFR 80.25)

§ 361.64 Obligation of Federal funds and

program income.

(a) Except as provided in paragraph

(b) of this section, any Federal funds,

including reallotted funds, that are

appropriated for a fiscal year to carry

out a program under this part that are

not obligated by the State by the

beginning of the succeeding fiscal year

and any program income received

during a fiscal year that is not obligated

by the State by the beginning of the

succeeding fiscal year remain available

for obligation by the State during that

succeeding fiscal year.

(b) Federal funds appropriated for a

fiscal year remain available for

obligation in the succeeding fiscal year

only to the extent that the State met the

matching requirement for those Federal

funds by obligating, in accordance with

34 CFR 76.707, the non-Federal share in

the fiscal year for which the funds were

appropriated.

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

716)

§ 361.65 Allotment and payment of Federal

funds for vocational rehabilitation services.

(a) Allotment.

(1) The allotment of Federal funds for

vocational rehabilitation services for

each State is computed in accordance

with the requirements of section 110 of

the Act, and payments are made to the

State on a quarterly basis, unless some

other period is established by the

Secretary.

(2) If the State plan designates one

State agency to administer, or supervise

the administration of, the part of the

plan under which vocational

rehabilitation services are provided for

individuals who are blind and another

State agency to administer the rest of the

plan, the division of the State’s

allotment is a matter for State

determination.

(b) Reallotment.

(1) The Secretary determines not later

than 45 days before the end of a fiscal

year which States, if any, will not use

their full allotment.

(2) As soon as possible, but not later

than the end of the fiscal year, the

Secretary reallots these funds to other

States that can use those additional

funds during the current or subsequent

fiscal year, provided the State can meet

the matching requirement by obligating

the non-Federal share of any reallotted

funds in the fiscal year for which the

funds were appropriated.

(3) Funds reallotted to another State

are considered to be an increase in the

recipient State’s allotment for the fiscal

year for which the funds were

appropriated.

(Authority: Sections 110 and 111 of the Act;

29 U.S.C. 730 and 731)

Subpart D—[Reserved]

Subpart E—Evaluation Standards and

Performance Indicators

§ 361.80 Purpose.

The purpose of this subpart is to

establish evaluation standards and

performance indicators for the Program.

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

§ 361.81 Applicable definitions.

In addition to those definitions in

§ 361.5(b), the following definitions

apply to this subpart:

Average hourly earnings means the

average per hour earnings in the week

prior to exiting the vocational

rehabilitation (VR) program of an

eligible individual who has achieved a

competitive employment outcome.

Business Enterprise Program (BEP)

means an employment outcome in

which an individual with a significant

disability operates a vending facility or

other small business under the

management and supervision of a

designated State unit (DSU). This term

includes home industry, farming, and

other enterprises.

Exit the VR program means that a

DSU has closed the individual’s record

of VR services in one of the following

categories:

(1) Ineligible for VR services.

(2) Received services under an

individualized plan for employment

(IPE) and achieved an employment

outcome.

(3) Received services under an IPE but

did not achieve an employment

outcome.

(4) Eligible for VR services but did not

receive services under an IPE.

General or combined DSU means a

DSU that does not serve exclusively

individuals with visual impairments or

blindness.

Individuals from a minority

background means individuals who

report their race and ethnicity in any of

the following categories: American

Indian or Alaska Native, Asian, Black or

African American, Native Hawaiian or

Other Pacific Islander, or Hispanic or

Latino.

Minimum wage means the higher of

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

the Fair Labor Standards Act of 1938, 29

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

minimum wage) or applicable State

minimum wage law.

Non-minority individuals means

individuals who report themselves

exclusively as White, non-Hispanic.

Performance period is the reporting

period during which a DSU’s

performance is measured. For

Evaluation Standards 1 and 2,

performance data must be aggregated

and reported for each fiscal year

beginning with fiscal year 1999.

However, DSUs that exclusively serve

individuals with visual impairments or

blindness must report each year the

aggregated data for the 2 previous years

for Performance Indicators 1.1 through

1.6; the second year must coincide with

the performance period for general or

combined DSUs.

Primary indicators means

Performance Indicators 1.3, 1.4, and 1.5,

which are specifically designed to

measure—

(1) The achievement of competitive,

self-, or BEP employment with earnings

equivalent to the minimum wage or

higher, particularly by individuals with

significant disabilities; and

(2) The ratio between the average

hourly earnings of individuals who exit

the VR program in competitive, self-, or

BEP employment with earnings

equivalent to the minimum wage or

higher and the State’s average hourly

earnings for all employed individuals.

RSA–911 means the Case Service

Report that is submitted annually by a

DSU as approved by the Office of

Management and Budget (OMB).

Self-employment means an

employment outcome in which the

individual works for profit or fee in his

or her own business, farm, shop, or

office, including sharecroppers.

Service rate means the result obtained

by dividing the number of individuals

who exit the VR program after receiving

one or more services under an IPE

during any reporting period by the total

number of individuals who exit the VR

program (as defined in this section)

during that reporting period.

State’s average hourly earnings means

the average hourly earnings of all

persons in the State in which the DSU

is located.

4416 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

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

§ 361.82 Evaluation standards.

(a) The Secretary establishes two

evaluation standards to evaluate the

performance of each DSU that receives

funds under this part. The evaluation

standards assist the Secretary and each

DSU to evaluate a DSU’s performance in

serving individuals with disabilities

under the VR program.

(b) A DSU must achieve successful

performance on both evaluation

standards during each performance

period.

(c) The evaluation standards for the

VR program are—

(1) Evaluation Standard 1—

Employment outcomes. A DSU must

assist any eligible individual, including

an individual with a significant

disability, to obtain, maintain, or regain

high-quality employment.

(2) Evaluation Standard 2—Equal

access to services. A DSU must ensure

that individuals from minority

backgrounds have equal access to VR

services. (Approved by the Office of

Management and Budget under control

number 1820–0508.)

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

§ 361.84 Performance indicators.

(a) The performance indicators

establish what constitutes minimum

compliance with the evaluation

standards.

(b) The performance indicators

require a DSU to provide information on

a variety of factors to enable the

Secretary to measure compliance with

the evaluation standards.

(c) The performance indicators are as

follows:

(1) Employment outcomes. 

(i) Performance Indicator 1.1. The

number of individuals exiting the VR

program who achieved an employment

outcome during the current performance

period compared to the number of

individuals who exit the VR program

after achieving an employment outcome

during the previous performance period.

(ii) Performance Indicator 1.2. Of all

individuals who exit the VR program

after receiving services, the percentage

who are determined to have achieved an

employment outcome.

(iii) Performance Indicator 1.3. Of all

individuals determined to have

achieved an employment outcome, the

percentage who exit the VR program in

competitive, self-, or BEP employment

with earnings equivalent to at least the

minimum wage.

(iv) Performance Indicator 1.4. Of all

individuals who exit the VR program in

competitive, self-, or BEP employment

with earnings equivalent to at least the

minimum wage, the percentage who are

individuals with significant disabilities.

(v) Performance Indicator 1.5. The

average hourly earnings of all

individuals who exit the VR program in

competitive, self-, or BEP employment

with earnings levels equivalent to at

least the minimum wage as a ratio to the

State’s average hourly earnings for all

individuals in the State who are

employed (as derived from the Bureau

of Labor Statistics report ‘‘State Average

Annual Pay’’ for the most recent

available year).

(vi) Performance Indicator 1.6. Of all

individuals who exit the VR program in

competitive, self-, or BEP employment

with earnings equivalent to at least the

minimum wage, the difference between

the percentage who report their own

income as the largest single source of

economic support at the time they exit

the VR program and the percentage who

report their own income as the largest

single source of support at the time they

apply for VR services.

(2) Equal access to services.

(i) Performance Indicator 2.1. The

service rate for all individuals with

disabilities from minority backgrounds

as a ratio to the service rate for all nonminority individuals with disabilities.

(Approved by the Office of Management and

Budget under control number 1820–0508.)

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

§ 361.86 Performance levels.

(a) General.

(1) Paragraph (b) of this section

establishes performance levels for—

(i) General or combined DSUs; and

(ii) DSUs serving exclusively

individuals who are visually impaired

or blind.

(2) The Secretary may establish, by

regulations, new performance levels.

(b) Performance levels for each

performance indicator.

(1)(i) The performance levels for

Performance Indicators 1.1 through 1.6

are—

Performance indicator

Performance level by type of DSU

General/Combined Blind

1.1 .............................................................. Equal or exceed previous performance period ........................................................ Same.

1.2 .............................................................. 55.8% ........................................................................................................................ 68.9%.

1.3 .............................................................. 72.6% ........................................................................................................................ 35.4%.

1.4 .............................................................. 62.4% ........................................................................................................................ 89.0%.

1.5 .............................................................. .52 (Ratio) ................................................................................................................. .59.

1.6 .............................................................. 53.0 (Math. Difference) ............................................................................................. 30.4.

(ii) To achieve successful performance

on Evaluation Standard 1 (Employment

outcomes), a DSU must meet or exceed

the performance levels established for

four of the six performance indicators in

the evaluation standard, including

meeting or exceeding the performance

levels for two of the three primary

indicators (Performance Indicators 1.3,

1.4, and 1.5).

(2)(i) The performance level for

Performance Indicator 2.1 is—

Performance indicator Performance

levels

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

(ii) To achieve successful performance

on Evaluation Standard 2 (Equal access),

DSUs must meet or exceed the

performance level established for

Performance Indicator 2.1 or meet the

performance requirement in paragraph

(2)(iii) of this section.

(iii) If a DSU’s performance does not

meet or exceed the performance level

required for Performance Indicator 2.1,

or if fewer than 100 individuals from a

minority population have exited the VR

program during the reporting period, the

DSU must describe the policies it has

adopted or will adopt and the steps it

has taken or will take to ensure that

individuals with disabilities from

minority backgrounds have equal access

to VR services.

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

§ 361.88 Reporting requirements.

(a) The Secretary requires that each

DSU report within 60 days after the end

of each fiscal year the extent to which

the State is in compliance with the

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4417

evaluation standards and performance

indicators and include in this report the

following RSA–911 data:

(1) The number of individuals who

exited the VR program in each closure

category as specified in the definition of

‘‘Exit the VR program’’ under § 361.81.

(2) The number of individuals who

exited the VR program in competitive,

self-, or BEP employment with earnings

at or above the minimum wage.

(3) The number of individuals with

significant disabilities who exited the

VR program in competitive, self-, or BEP

employment with earnings at or above

the minimum wage.

(4) The weekly earnings and hours

worked of individuals who exited the

VR program in competitive, self-, or BEP

employment with earnings at or above

the minimum wage.

(5) The number of individuals who

exited the VR program in competitive,

self-, or BEP employment with earnings

at or above the minimum wage whose

primary source of support at the time

they applied for VR services was

‘‘personal income.’’

(6) The number of individuals who

exited the VR program in competitive,

self-, or BEP employment with earnings

at or above the minimum wage whose

primary source of support at closure

was ‘‘personal income.’’

(7) The number of individuals exiting

the VR program who are individuals

from a minority background.

(8) The number of non-minority

individuals exiting the VR program.

(9) The number of individuals from a

minority background exiting the VR

program after receiving services under

an IPE.

(10) The number of non-minority

individuals exiting the VR program after

receiving services under an IPE.

(b) In lieu of the report required in

paragraph (a) of this section, a DSU may

submit its RSA–911 data on tape,

diskette, or any alternative electronic

format that is compatible with RSA’s

capability to process such an

alternative, as long as the tape, diskette,

or alternative electronic format includes

the data that—

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

through (10) of this section; and

(2) Meet the requirements of

paragraph (c) of this section.

(c) Data reported by a DSU must be

valid, accurate, and in a consistent

format. If a DSU fails to submit data that

are valid, accurate, and in a consistent

format within the 60-day period, the

DSU must develop a program

improvement plan pursuant to

§ 361.89(a). (Approved by the Office of

Management and Budget under control

number 1820–0508.)

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

§ 361.89 Enforcement procedures.

(a) If a DSU fails to meet the

established performance levels on both

evaluation standards as required by

§ 361.82(b), the Secretary and the DSU

must jointly develop a program

improvement plan that outlines the

specific actions to be taken by the DSU

to improve program performance.

(b) In developing the program

improvement plan, the Secretary

considers all available data and

information related to the DSU’s

performance.

(c) When a program improvement

plan is in effect, review of the plan is

conducted on a biannual basis. If

necessary, the Secretary may request

that a DSU make further revisions to the

plan to improve performance. If the

Secretary establishes new performance

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

and the DSU must jointly modify the

program improvement plan based on the

new performance levels. The Secretary

continues reviews and requests

revisions until the DSU sustains

satisfactory performance based on the

current performance levels over a period

of more than 1 year.

(d) If the Secretary determines that a

DSU with less than satisfactory

performance has failed to enter into a

program improvement plan or comply

substantially with the terms and

conditions of the program improvement

plan, the Secretary, consistent with the

procedures specified in § 361.11,

reduces or makes no further payments

to the DSU under this program until the

DSU has met one of these two

requirements or raised its subsequent

performance to meet the current overall

minimum satisfactory level on the

compliance indicators.

(Approved by the Office of Management and

Budget under control number 1820–0508.)

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

Appendix

Analysis of Comments and Changes

Note: The following appendix will not

appear in the Code of Federal Regulations.

Section 361.4—Applicable Regulations

Comments: Several commenters requested

clarification of proposed § 361.4(c) and (d)

that made applicable to the VR program the

regulations implementing the One-Stop

system under Title I of the WIA. In

particular, these commenters requested that

the Secretary assure in this section that the

regulations governing the One-Stop system

do not conflict with the regulations in part

361 and that the One-Stop system

requirements would not apply if conflicts

between regulatory provisions arise.

Discussion: Proposed § 361.4(c) listed the

regulations in 20 CFR part 662 (Description

of One-Stop Service Delivery System under

Title I of WIA) among the regulations

applicable to the VR program. Similarly,

proposed § 361.4(d) identified the civil rights

protections under 29 CFR part 37

(Implementation of the Nondiscrimination

and Equal Opportunity Provisions of WIA) as

applicable to VR program activities that are

conducted as part of the One-Stop system.

Citing these parts of Federal regulations is

intended solely as a means of notifying State

units of their regulatory obligations as OneStop system partners.

Moreover, both Title I of WIA and its

implementing regulations specify that

partner programs, such as the VR program,

are to participate in applicable One-Stop

system activities in a manner that is

consistent with the Federal law authorizing

the individual partner program (see e.g.,

section 121(b)(1)(A)(ii) of WIA; 20 CFR

662.230(d)). We interpret this requirement to

mean that the DSU administering the VR

program in the State must partner with the

other components of the One-Stop system in

accordance with the requirements of both

Title I of the Rehabilitation Act of 1973 and

these final regulations. Given that condition

on One-Stop system participation, and the

fact that these regulations generally govern

State conduct, we do not consider it

appropriate to include in the regulations the

assurances sought by the commenters.

However, we emphasize that we have worked

closely with the U.S. Department of Labor to

ensure that the One-Stop system regulations

do not conflict with VR program

requirements. Despite these efforts, we urge

State units and others to inform us of any

apparent conflicts between regulatory

provisions that arise so that we, along with

the Department of Labor, can address any

inconsistencies that might remain.

Changes: None.

Section 361.5(b)—Applicable Definitions

• General

Comments: Several commenters asked that

additional terms be defined in the final

regulations. One commenter requested that a

definition of ‘‘informed choice’’ be added to

the regulations. Other commenters asked that

separate definitions of the terms ‘‘qualified

vocational rehabilitation counselor’’ and

‘‘qualified vocational rehabilitation counselor

employed by the designated State unit’’ be

included among the regulatory definitions.

Finally, some commenters asked that

‘‘rehabilitation engineering’’ be defined in

the final regulations since that term is used

in the definition of ‘‘rehabilitation

technology,’’ while others suggested that

‘‘mediation’’ be defined in the final

regulations in order to clarify the scope of the

mediation process.

Discussion: We do not believe it is

necessary to define ‘‘informed choice’’ in the

final regulations. Section 361.52 of both the

proposed and final regulations, which tracks

section 102(d) of the Act, enumerates the

critical aspects of informed choice and

reflects the statutory emphasis that

individuals participating in the VR program

must be able to exercise informed choice

4418 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

throughout the entire rehabilitation process.

That section of the regulations also retains

additional choice-related provisions from the

current regulations, including, in § 361.52(c),

the types of information that must be

provided for an individual to exercise choice

in selecting VR services and service

providers. Thus, § 361.52, as a whole,

contains a comprehensive list of

requirements intended to ensure that

individuals are given meaningful choices,

and the opportunity to exercise those

choices, in each aspect of their rehabilitation,

as the Act intends.

For further discussion of our decision to

not define ‘‘informed choice,’’ please see the

analysis of comments to § 361.52 in this

appendix.

We agree that clarification is needed

concerning the distinction between a

‘‘qualified vocational rehabilitation

counselor’’ and a ‘‘qualified vocational

rehabilitation counselor employed by the

DSU.’’ However, we do not believe that

defining these terms would provide the

necessary clarification since States can

readily determine which counselors they

employ. Rather, we think it would be more

helpful to further explain the differences

between the functions that must be

performed by DSU and non-DSU counselors.

That discussion can be found in the analysis

of comments received under § 361.45.

We agree that retaining the current

regulatory definition of ‘‘rehabilitation

engineering’’ would be beneficial.

Finally, the 1998 Amendments introduced

mediation as another means for individuals

and State units to resolve disputes regarding

the provision of VR services. Although

mediation is new to the VR program, it has

been used for years in other programs as a

less adversarial process for resolving disputes

than formal due process hearings or court

litigation. The NPRM provided guidance to

States in developing their systems of

mediation by defining the statutory term

‘‘qualified and impartial mediator.’’

However, we agree that defining ‘‘mediation’’

in the regulations would provide further

clarification.

We believe it is important that the

regulations give States sufficient flexibility to

establish mediation procedures that best

meet the needs of individuals with

disabilities in the State and the needs of the

State unit. At the same time, for efficiency

purposes, we feel that the definition of

‘‘mediation’’ in the final regulations should

allow for States to conduct mediations under

the VR program in a manner that is

consistent with those conducted by the State

under similar programs. We believe that a

definition that is based on relevant portions

of the definition of ‘‘mediation’’ in the

Federal regulations governing the Client

Assistance Program (CAP) in 34 CFR 370.6(b)

serves both of those purposes.

Changes: We have amended the proposed

regulations to include definitions of the

terms ‘‘mediation’’ and ‘‘rehabilitation

engineering.’’ These definitions are located in

§ 361.5(b)(36) and (b)(44), respectively,

meaning that other definitions in the

proposed regulations have been renumbered

in the final regulations.

• Administrative costs under the State

plan

Comments: One commenter asked why the

listing of costs in the proposed definition of

‘‘administrative costs under the State plan’’

was preceded by the term ‘‘including’’ rather

than ‘‘including, but not limited to,’’ as in the

current regulations. This same commenter

also asked what is meant by ‘‘support

services’’ to other entities, which was listed

as an administrative cost under

§ 361.5(b)(2)(iv) of the proposed regulations.

Discussion: The proposed definition of

‘‘administrative costs under the State plan,’’

which tracks the definition in section 7(1) of

the Act, does not differ substantively from

the previous regulatory definition. However,

because we interpret the statutory definition

to allow for ‘‘administrative costs’’ other than

those listed in the Act, we agree with the

commenter that the definition should specify

that the scope of administrative costs is not

limited to the costs listed in the definition.

‘‘Support services to other State agencies,

private nonprofit organizations, and

businesses and industries,’’ which is

referenced in section 7(1)(D) of the Act, as

well as in § 361.5(b)(2)(iv), can include

activities such as training the staff of the

One-Stop system on disability issues,

providing organizations with materials and

advice on auxiliary aids and services and

other accessibility issues, reviewing

employers’ workplace policies and hiring

practices, and other activities that would

facilitate and promote the employment of

individuals with disabilities. The scope of

support services that a State unit may

provide would differ depending upon the

circumstances in that State.

Changes: We have amended the definition

of ‘‘administrative costs under the State

plan’’ to clarify that the scope of

administrative costs under the program

includes, but is not limited to, the costs listed

in the definition.

• Appropriate modes of communication

Comments: Several commenters requested

that we amend the proposed definition of

‘‘appropriate modes of communication’’ to

include additional communication modes

that are available for individuals who are

deaf or hard of hearing.

Discussion: The definition of ‘‘appropriate

modes of communication’’ in the proposed

regulations, which was the same as the

previous regulatory definition, was not

intended as a comprehensive list of

communication modes used by persons with

disabilities. Accordingly, the definition

specified that the scope of appropriate modes

was not limited to the identified examples

and allowed for other modes as they are

needed.

Changes: None.

• Assessment for determining eligibility

and vocational rehabilitation needs

Comments: One commenter asked that this

proposed definition be amended to ensure

that the information used in assessing

eligibility, order of selection category, and

vocational rehabilitation needs of an

individual with a disability is provided by

professionals with expertise in the

individual’s disabling condition or

conditions. This commenter also asked that

we revise the proposed regulations to require

that appropriate modes of communication are

used in the course of conducting

assessments.

Discussion: The points made by the

commenter relate to important elements of

the assessment process. However, we believe

those points are sufficiently addressed by

other requirements in the regulations. For

example, § 361.42(a) of both the proposed

and final regulations requires that

determinations of eligibility be made by

qualified personnel. Similarly, § 361.18(e)

requires that the State unit be able to

communicate with applicants, as well as

eligible individuals, through appropriate

modes of communication. Because these

requirements apply to the State unit as it

conducts assessments and fulfills its other

functions, we do not consider it necessary to

amend the proposed definition as the

commenter requested.

Changes: None.

• Comparable services and benefits

Comments: One commenter asked that the

proposed definition be revised to specifically

exclude the personal resources of the eligible

individual from the scope of ‘‘comparable

services and benefits’’ that the State unit

must use before expending program funds in

support of VR services.

In addition, a number of commenters asked

whether a ‘‘ticket’’ issued to an individual

with a disability under the Ticket to Work

and Work Incentives Improvement Act of

1999, Pub. L. 106–170 (TWWIIA) constitutes

a comparable service or benefit. Several other

commenters stated that a Plan for Achieving

Self-Support (PASS) issued by the Social

Security Administration (SSA) should not be

treated as a comparable service or benefit.

Discussion: The proposed regulatory

definition of comparable services and

benefits—services and benefits that are

provided or paid for by other Federal, State

or local public agencies, by health insurance,

or by employee benefits—did not include the

eligible individual’s personal resources.

Nonetheless, an individual may be asked to

participate in the costs of certain VR services

to the extent that the State unit uses a

financial needs test that is consistent with

the requirements in § 361.54 of the

regulations.

Because Social Security recipients with

disabilities are issued ‘‘tickets’’ under

TWWIIA in order to receive training and

employment-related services from an

employment network as defined in that act,

we believe that the ticket constitutes a

comparable service and benefit under the VR

program. Thus, to the extent that a ticket

holder is receiving services from another

entity that is serving as that individual’s

employment network, the DSU need not

expend VR program funds on services that

are comparable to the services the individual

is already receiving. On the other hand, if the

individual initially chooses the DSU as its

employment network under TWWIIA, or

otherwise transfers his or her ticket to the

DSU, then the individual would be served

solely by the DSU, and the ticket would not

be considered a comparable service and

benefit.

On a related point, we note that DSUs must

accept a ticket as sufficient evidence that the

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4419

ticket holder has a disability, is receiving

Social Security benefits, and therefore is

presumptively eligible under the VR program

(see § 361.42(a)(3) of the final regulations).

Finally, we agree with the commenters’

assertion that a PASS does not constitute a

comparable service or benefit. Simply stated,

a PASS is a mechanism made available to

SSDI beneficiaries under the Social Security

Act that enables its holder to conserve certain

amounts of his or her own income or

resources for purposes of supporting himself

or herself in the future. Thus, because a

PASS is not a source of support for VR

services, we do not view it as a comparable

benefit that the DSU can look to as an

alternative to expending VR program funds.

Changes: None.

• Competitive employment

Comments: One commenter questioned the

basis for the requirement that ‘‘competitive

employment’’ be limited to employment

outcomes in integrated settings. A second

commenter asked that we broaden the

definition of ‘‘competitive employment’’ in

the proposed regulations to include

employment under the Javits-Wagner-O’Day

(JWOD) program if that employment is

chosen by the eligible individual.

Discussion: The proposed definition of

‘‘competitive employment’’ was the same as

that found in the previous regulations.

Although the term is not defined in the Act,

section 7(11), the statutory definition of

‘‘employment outcome’’ does refer to

competitive employment in the integrated

labor market. On that basis, and in light of

the great emphasis that the Act places on

maximizing the integration into society of

persons with disabilities, it has been our

longstanding policy to define ‘‘competitive

employment’’ to mean employment in an

integrated setting (at or above minimum

wage). For further information on the

integrated setting (and wage) components of

the ‘‘competitive employment’’ definition,

please refer to the relevant discussion in the

preamble to the previous regulations (62 FR

6310 through 6311).

Whether an employment outcome meets

the regulatory definition of ‘‘competitive

employment’’ is to be determined on case-bycase basis. If a particular job, including a job

secured under the JWOD program, is

integrated (i.e., the individual with a

disability interacts with non-disabled

persons to the same extent that non-disabled

individuals in comparable positions interact

with other persons; § 361.5(b)(33)(ii) of the

final regulations) and the individual is

compensated at or above the minimum wage

(and not less than the customary wage and

benefit level paid by the employer for the

same or similar work performed by

individuals who are not disabled;

§ 361.5(b)(11)(ii) of the final regulations),

then that position would be considered

competitive employment. In fact, we expect

that many jobs secured under JWOD service

contracts would meet these criteria. On the

other hand, employment in a non-integrated

setting such as a sheltered workshop would

not qualify as competitive employment

regardless of whether the position is obtained

under a JWOD contract or another program

or arrangement.

Changes: None.

• Employment outcome

Comments: A number of commenters

recommended that we expand the definition

of ‘‘employment outcome’’ in the proposed

regulations (i.e., entering or retaining full- or

part-time competitive, supported, or other

employment) to include ‘‘advancing in’’

appropriate employment. This change, the

commenters believe, would encourage DSUs

to look beyond entry-level employment

options for eligible individuals.

Another commenter asked that we define

‘‘part-time employment’’ in the final

regulations. This commenter expressed

concern about DSUs expending resources on

individuals who might work very few hours

in the course of a week or a month.

Discussion: The chief purpose of the VR

program is to assist eligible individuals with

disabilities to achieve high-quality

employment outcomes consistent with the

individual’s strengths, resources, priorities,

concerns, abilities, capabilities, interests, and

informed choice. Because that standard is

reflected in the definition of the term

‘‘employment outcome,’’ we believe that the

regulations sufficiently support the

commenters’ point that individuals with

disabilities who are currently employed

should be able to receive VR services in order

to advance in their careers.

Additionally, the availability of VR

services for purposes of ‘‘advancing in’’

employment is addressed in other parts of

the regulations. For example,

§ 361.46(a)(1)(i)) of the final regulations also

specifies that the employment outcome

identified in the individualized plan for

employment, i.e., the employment goal the

individual must pursue with the assistance of

the State unit, must be consistent with the

individual’s unique strengths, resources,

priorities, concerns, abilities, capabilities,

career interests, and informed choice. That

section requires that States look beyond

options in entry-level employment for VR

program participants who are capable of

more challenging work. Specifically, the

eligible individual should be assisted in

pursuing the job that reflects his or her

strengths, resources, abilities, and other

employment factors previously listed. We

suggest that you consult Rehabilitation

Services Administration (RSA) Policy

Directive 97–04 for a more complete

discussion of the scope and selection of

employment outcomes for eligible

individuals.

We have not defined ‘‘part-time

employment’’ as used in the proposed

definition of ‘‘employment outcome.’’ We

note that most employers generally consider

any job of less than 35 hours per week to be

part-time. Yet, we do not believe that it

would be appropriate to require a minimum

number of hours for part-time work secured

through the VR program.

Although we think that instances in which

eligible individuals work only a handful of

hours per week are limited, we do not want

to discourage State units from serving

potential part-time workers who, with the

State unit’s support, may increase their hours

or even become employed full-time at a later

date.

Changes: None.

• Fair Hearing Board

Comments: One commenter suggested

modifying the proposed regulations to

require a State’s fair hearing board to include

at least one individual with a disability.

Discussion: By defining ‘‘fair hearing

board’’ in the proposed regulations, we

intended to clarify past confusion about the

scope of the fair hearing board exception to

the due process requirements under section

102(c)(6)(A) of the Act. In particular, the

proposed regulations specified in § 361.57(j)

that for a State’s pre-1985 fair hearing board

to qualify under the exception, that board

must be comprised of a group of persons that

acts collectively when issuing final decisions

to resolve disputes concerning the provision

of VR services to applicants or eligible

individuals.

These proposed requirements were

intended to address instances in which some

States had misinterpreted the exception as

enabling a single administrative law judge or

other official of a State office of hearing

examiners to carry out hearings under

§ 361.57 without following the procedural

requirements in that section. In response, we

modeled the proposed definition after the

actual State fair hearing board that served as

the catalyst for the statutory exception in the

1986 Amendments to the Rehabilitation Act.

Because those few States with hearing boards

that qualify under the exception have long

followed this authorized State process for

resolving individual disputes under the VR

program, we do not believe it is necessary or

prudent to impose special membership

requirements on those boards through

regulations. We do, however, encourage the

few fair hearing board States to consider

qualified individuals with disabilities when

vacancies on these boards arise.

Changes: None.

• Maintenance

Comments: Several commenters objected to

the use of examples following this definition,

stating that the information included in the

examples should be placed in sub-regulatory

guidance. Other commenters supported the

use of the examples in the proposed

regulations.

In addition, one commenter asked that we

clarify the types of ‘‘enrichment activities’’

that would fall under the fourth example to

the proposed definition, while another asked

that we eliminate that example altogether.

Discussion: As we have stated in preambles

to prior versions of the VR program

regulations, we believe that the limited use

of examples following the regulatory

definition of ‘‘maintenance’’ is helpful in

understanding the types of services that

maintenance may include. The examples are

purely illustrative and are not meant to limit

or exclude other types of services that could

be considered maintenance.

The fourth example to both the proposed

and previous regulatory definition stated that

maintenance can include the costs of an

individual’s ‘‘participation in enrichment

activities’’ related to the individual’s

training. This example was added to the

previous regulations in 1997 in response to

the requests of public commenters who noted

that some DSUs establish limits in

4420 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

maintenance budgets that preclude

individuals from participating in enrichment

activities (e.g., student trips, visits to

museums, supplemental lectures, etc.) that

are often important components of a

student’s training program. The

‘‘enrichment’’ example was intended to

encourage DSUs to factor in these extra costs

when developing an individualized plan for

employment (IPE) for a student so that the

individual can take advantage of

supplemental enrichment activities as

appropriate.

Changes: None.

• Personal assistance services

Comments: One commenter questioned the

point at which a State unit can provide

personal assistance services to an individual

with a disability.

Discussion: The proposed definition,

which was the same as that in the previous

regulations, specified that ‘‘personal

assistance services’’ (i.e., services designed to

assist persons with disabilities in daily living

activities) must be necessary to the

achievement of an employment outcome and

may be provided only while the individual

is receiving other VR services. As long as

those conditions are met, personal assistance

services, as defined in § 361.5(b)(39) of the

regulations, can be made available at any

stage in the VR process, including during the

assessment for determining the individual’s

eligibility and priority for VR services.

Changes: None.

• Physical and mental restoration services

Comments: One commenter asked us to

require that all services listed in the

proposed definition of ‘‘physical and mental

restoration services’’ be provided by

personnel who are qualified in accordance

with applicable State licensure laws. Another

commenter asked that the definition in the

final regulations specifically refer to

‘‘assistive listening and alerting devices.’’

Finally, one commenter asked that the

regulations prohibit a State unit from

providing physical or mental restoration

services if other resources are available.

Discussion: The proposed regulations

followed the scope of physical and mental

restoration services specified in section

103(a)(6) of the Act, and we do not believe

that it would be appropriate to apply, solely

through regulations, State licensure

requirements on the provision of additional

restoration services. However, a State may, if

it has not done so already, choose to establish

licensure or other qualified personnel

requirements for providers of physical and

mental restoration services. Those States

would need to address those requirements in

its written policies on the nature and scope

of services developed under § 361.50.

We do not believe it is necessary to list

additional restoration services in the final

regulatory definition. Additional medical or

medically related services that an individual

needs in order to achieve an employment

outcome are authorized under

§ 361.5(b)(40)(xvi).

Similarly, the commenter’s concerns about

using other resources before expending VR

funds in support of restoration services is

fully addressed elsewhere in the regulations.

Section 361.48(e) of both the proposed and

final regulations, under which restoration

services are authorized, specifies that those

services can be made available only to the

extent that financial support for the services

is not available from other sources. The

application of the more general comparable

services and benefit requirements in § 361.53

produces the same result.

Changes: None.

• Physical or mental impairment

Comments: Several commenters

questioned the proposed revision to the

previous regulatory definition of ‘‘physical or

mental impairment’’ to mirror the definition

used in the regulations implementing section

504 of the Act (section 504) (34 CFR 104.3)

and the Americans with Disabilities Act

(ADA). The commenters stated that using the

ADA or section 504 definition may create

confusion, conflict with existing definitions

in State law, and weaken the eligibility

criteria of the VR program. Several other

commenters supported the revised definition,

stating that consistency across Federal

disability laws leads to more effective

administration of the VR and other programs.

Discussion: As noted in the preamble

discussion of the changes to the definition of

‘‘physical or mental impairment’’ proposed

in the NPRM (65 FR 10622), the revised

definition does not impact on the

employment-related eligibility criteria under

the VR program. The changes to the

definition in the previous regulations were

proposed in an effort to make the VR program

regulations more consistent with other

Federal disability laws that define ‘‘physical

or mental impairment.’’ We agree with those

commenters who indicated that consistency

with the definition used in the ADA and

section 504 regulations increases efficiency

and actually lessens confusion by eliminating

the need to duplicate efforts in assessing

whether an individual has an impairment.

Again, the changes address only whether an

impairment exists; eligibility for VR services

remains dependent on whether an individual

also satisfies the eligibility criteria that are

focused on employment (i.e., the impairment

results in a substantial impediment to

employment and the other criteria in

§ 361.42(a)).

Also, we do not believe that the proposed

definition restricted the scope of physical or

mental impairments that satisfied the

previous regulatory definition or that the

proposed definition conflicted with

definitions of the same term in State law. If

such a conflict exists, we ask that the State

seek technical assistance from RSA in

modifying its requirements in order to ensure

that the State does not employ additional or

more restrictive eligibility criteria for

individuals to receive VR services as

compared to the criteria specified in these

final regulations.

Changes: None.

• Post-employment services

Comments: One commenter requested that

the proposed regulations be modified to

eliminate the availability of post-employment

services for purposes of ‘‘advancing’’ in

employment.

Discussion: Although the term ‘‘postemployment services’’ is not defined in the

Act, section 103(a)(18) of the Act specifically

authorizes post-employment services that are

necessary to assist an individual with a

disability to retain, regain, or advance in

employment. The proposed definition, which

followed the definition in the previous

regulations, supported the use of postemployment services to enable persons to

‘‘advance’’ in employment. As in the

previous regulations, the note that followed

the proposed definition offered additional

guidance regarding the provision of postemployment services.

Changes: None.

• Qualified and impartial mediator

Comments: We received many comments

on the proposed definition of ‘‘qualified and

impartial mediator.’’ First, several

commenters stated that requiring mediators

to be ‘‘trained in effective mediation

techniques consistent with any Stateapproved or -recognized certification,

licensing, registration, or other

requirements* * *’’ establishes too

restrictive a standard for mediators. Others

sought additional guidance on how to

implement this requirement if the State has

not established applicable certification or

other requirements. In addition, several

commenters asked whether the prohibition

on public agency employees serving as

mediators under the proposed definition

applies to those from a State Office of

Dispute Resolution who conduct mediations

across multiple State programs.

Aside from those issues, some commenters

asked that we clarify whether a qualified and

impartial mediator could also serve as an

impartial hearing officer in resolving

individual disputes that arise under the VR

program. Other commenters voiced support

for the proposed definition and for the

emphasis given to mediation in the proposed

regulations.

Discussion: In establishing the general

guidelines that govern mediations, section

102(c)(4) of the Act requires that mediations

be conducted by a ‘‘qualified and impartial

mediator who is trained in effective

mediation techniques.’’ We defined

‘‘qualified and impartial mediator’’ in the

proposed regulations as a means of providing

guidance to the States in identifying or

training available mediators.

As indicated previously, we are aware that

many States already use mediation to resolve

disputes arising under other authorities (e.g.,

the Individuals with Disabilities Education

Act (IDEA) or family law statutes) and that

education, experience, or other qualification

standards for mediators may vary from State

to State. Thus, the proposed requirement that

mediators under the VR program be trained

consistent with applicable certification or

other requirements was intended to ensure

that mediators of disputes arising under the

VR program are sufficiently qualified and

that the State unit is able to use its State’s

existing pool of qualified mediators.

We fully agree that mediators in a State

Office of Dispute Resolution or other similar

office should be able to conduct mediations

under the VR program, and we have modified

the proposed definition to accommodate that

situation. This change is analogous to the

provision that enables administrative law

judges and hearing examiners in the State to

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4421

serve as impartial hearing officers even

though those individuals are public

employees (see the definition of ‘‘impartial

hearing officer’’ in § 361.5(b)(25)).

In addition, although we believe that it is

not generally the case, if there are no

recognized credentialing or qualification

standards for mediators in the State, then the

Act and these final regulations require only

that the State unit ensure that its mediators

are trained in effective mediation techniques

and meet the other components of the

definition in § 361.5(b)(43).

It is critical that qualified and impartial

mediators be neutral in facilitating the

resolution of disputes regarding the provision

of services to applicants or eligible

individuals under the VR program.

Therefore, we modeled the impartiality

requirements in the proposed definition of

‘‘qualified and impartial mediator’’ after

similar requirements in the previous

definition of ‘‘impartial hearing officer.’’

Nevertheless, we realize that many States,

particularly rural States with relatively small

populations, have difficulty maintaining an

appropriate pool of individuals to serve as

hearing officers. It is not unusual in these or

other States for hearing officers also to be

trained as mediators, and we interpret the

Act as allowing individuals to serve as both

mediators and hearing officers under the VR

program, provided they meet the applicable

qualifications for each position. However, we

also interpret the statutory requirement that

mediators and hearing officers be impartial

(see section 102(c)(4)(B)(iii) of the Act in

reference to mediators and sections 7(16) and

102(c)(5) of the Act in reference to hearing

officers) to preclude the same individual

from serving as both mediator and hearing

officer in the same case.

Changes: We have revised the definition of

‘‘qualified and impartial mediator’’ to allow

employees of a State office of mediators or

similar office to serve as qualified and

impartial mediators under the VR program.

• Substantial impediment to employment

Comments: One commenter suggested that

‘‘communication’’ be listed among the

attendant factors in the definition that could

indicate the existence of a ‘‘substantial

impediment to employment,’’ since

communication plays a critical role in the

individual’s ability to function in the

workplace. Other commenters requested that

the proposed definition be revised to include

examples of how the attendant medical

factors are applied if medical measures are

taken and result in mitigating functional

limitations.

Discussion: We agree that communication

competence is crucial to success in the

workplace. Although the proposed and

previous regulations stated explicitly that a

‘‘substantial impediment to employment’’

could be measured in terms of ‘‘other

factors,’’ we agree that ‘‘communication’’

should be added to the specific factors listed

in the final regulatory term.

We suspect that those commenters who

suggested that the final regulations explain

how attendant medical factors indicating the

existence of a ‘‘substantial impediment to

employment’’ are assessed if medical

measures that mitigate functional limitations

(also referred to as ‘‘mitigating measures’’)

are taken are questioning the application to

the VR program of recent Supreme Court case

law interpreting the ADA. The relevant cases

require that any mitigating measures (e.g.,

medication) that an individual is using to

lessen the effects of that person’s impairment

be taken into account in determining whether

the individual has a disability under the

ADA (i.e., an impairment that substantially

limits one or more major life activities).

It is not clear, however, that the Court’s

decisions apply to the VR program eligibility

criterion that an individual’s impairment

constitutes a substantial impediment to

employment, since that provision and ADA

language in question are not identical.

Moreover, the purpose of the ADA, which is

a civil rights statute, differs from that of the

VR program, which provides Federal funding

to assist individuals with disabilities enter

into employment. We are not aware of any

instances in which States, based on these

cases, have altered their processes for

assessing an individual’s eligibility for the

VR program; nor would we encourage them

to do so.

Changes: None.

• Supported employment

Comments: Some commenters requested

clarification of what it means to be ‘‘working

toward competitive employment’’ for

purposes of meeting the definition of

‘‘supported employment’’ in the proposed

regulations. These commenters also asked

whether the fact that an individual in

supported employment is working toward

competitive employment affects the 18-

month limit on supported employment

services provided by the State unit.

Discussion: The 1998 Amendments

expanded the prior statutory definition of

‘‘supported employment’’ (‘‘competitive

work in an integrated setting with ongoing

supports’’) to also include ‘‘employment in

integrated settings in which individuals are

working toward competitive work’’ in order

to cover persons who are working in

supported employment settings but are

making less than the minimum wage.

‘‘Competitive employment,’’ which we have

long viewed as synonymous with the term

‘‘competitive work’’ used in the supported

employment definition, generally refers to

employment that is performed in an

integrated setting for which the individual is

compensated at or above the minimum wage.

Thus, as long as an individual receiving

ongoing support services while working in an

integrated setting is also progressing or

moving toward the minimum wage level,

then the individual’s job is considered

‘‘supported employment.’’ We note, however,

that an individual in supported employment

working toward competitive employment

would not be considered to have achieved a

‘‘competitive employment’’ outcome until

the individual is earning at least the

minimum wage consistent with the

definition of ‘‘competitive employment’’ in

§ 361.5(b)(11).

We also note that the change to the

statutory definition of ‘‘supported

employment’’ does not affect the 18-month

period for which the DSU can provide

supported employment services. Once that

18 months has passed (and unless the special

circumstances warrant an extension),

ongoing services, if needed, must be

provided by a provider of extended services

(see § 361.5(b)(20) of the final regulations)

regardless of whether the individual has yet

to receive at least the minimum wage.

Changes: None.

• Transportation

Comments: Five commenters asked that the

examples following the proposed definition

of ‘‘transportation’’ be deleted. Another

commenter supported specifically the

example stating that the modification of a

vehicle is a rehabilitation technology, rather

than a transportation, service. Another

commenter asked that we include in the final

regulations specific authority for DSUs to pay

for the repair and maintenance of vehicles.

Discussion: We have found that the

examples following the previous regulatory

definition of ‘‘transportation,’’ which were

largely the same as those included in the

proposed regulations, were helpful to State

agency personnel, individuals with

disabilities, and others in clarifying the scope

of transportation services authorized under

the VR program. As we have always

maintained, these examples are purely

illustrative and are not meant to provide a

comprehensive set of allowable

transportation services.

Thus, because other authorized

‘‘transportation’’ services exist, and should

be considered in light of the needs of the

individual, we do not believe it is necessary

to specify additional transportation costs in

the regulations. We do note, however, that

the second example to the proposed

definition identifies the ‘‘purchase and

repair’’ of vehicles as an example of an

authorized transportation expense. We view

the vehicle ‘‘repair and maintenance’’

expense identified by the commenter as

covered by that example and, therefore,

authorized. We would also instruct each DSU

to include in its written policies governing

the nature and scope of services under

§ 361.50(a) any additional transportation

expenses that the DSU generally provides.

Changes: None.

Section 361.10 Submission, Approval, and

Disapproval of the State Plan

Comments: Commenters expressed concern

that the proposed regulations would require

the State unit to hold public meetings

throughout the State prior to adopting any

new substantive policy or procedure

concerning the provision of VR services or

substantively amending an existing servicerelated policy or procedure. Consequently,

many commenters viewed the provision as

both burdensome and costly. Some of these

commenters suggested that the State unit be

permitted to adopt new policies and

procedures (and make any amendments to

existing policies) initially in accordance with

applicable State laws and later invite public

comment and input on those additions or

changes during the State’s public meetings

on the State plan. Other commenters sought

clarification of what constituted a

‘‘substantive’’ policy, procedure, or

amendment and asked who would determine

whether a policy is ‘‘substantive.’’

4422 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

Additional comments on this section of the

proposed regulations reflected concerns

about the different dates that govern the

submission of the VR State plan. These

commenters recommended that all States be

required to submit updates and revisions to

their State plans by the same date.

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

Act requires the State to hold public

meetings prior to adopting policies or

procedures governing the provision of

services under the State plan. This

requirement is essentially the same as the

statutory requirements concerning public

meetings that preceded the 1998

Amendments. Thus, we interpret the

requirement in section 101(a)(16)(A) of the

Act in the same manner as we have

historically, i.e., the public is to be given the

opportunity to comment on the State plan

prior to the State unit adopting substantive

policies and procedures (and any

amendments thereto) governing the provision

of vocational rehabilitation services under

the plan. Typically, a State unit fulfills this

requirement by taking comment on new

policies during public meetings on State plan

revisions and updates. Regardless of the

timing of the State’s public meetings,

however, section 101(a)(16)(A) clearly

requires that these meetings for receiving

public input be held prior to States adopting

new or revised policies affecting the

provision of VR services. Implementing new

policies in advance of the public meetings is

not permitted.

We also note that section 101(a)(16)(B) of

the Act and § 361.21 of both the previous and

the proposed regulations required the

designated State agency to consult with

certain groups on matters of general policy

arising in the administration of the State

plan. In addition, a State unit that has a State

Rehabilitation Council (Council), in

accordance with section 101(a)(21)(A)(ii)(II)

of the Act and § 361.16(a) of the regulations

(again, both previous and proposed), must

consult with the Council regarding the

development, implementation, and revision

of State policies and procedures of general

applicability pertaining to the provision of

vocational rehabilitation services. Each of the

public comment or consultation

requirements specified in the proposed

regulations, and the resulting burden, was

imposed by the Act, and each was intended

to ensure that the State unit accounts for the

diverse needs of its State’s disability

population before modifying its serviceprovision practices.

Nonetheless, in an effort to reduce the

burden on the States, we incorporated into

both the proposed and final regulations the

term ‘‘substantive’’ to clarify that States need

not hold public meetings on policy or

procedural changes that are merely technical

or do not affect the provision of VR services

in any substantive manner. Longstanding

RSA guidance (see PD–90–08 and PAC–90–

05) provides additional information on the

scope of this requirement. We note that the

determination of whether a specific policy or

procedure is sufficiently ‘‘substantive’’ to

warrant public input is made by the State

unit. Yet, we strongly urge State units to

consult with their Councils in assessing

whether proposed policy changes are

‘‘substantive’’ or in developing evaluative

criteria for the State unit to use in making

that assessment.

Section 101(a)(1)(A) of the Act requires the

State to submit its State plan for the VR

program on the same date that its submits its

plan under section 112 of WIA. In addition,

section 501 of WIA authorizes the State to

submit a State unified plan in place of both

a WIA section 112 plan and separate State

plans for those WIA partner programs,

including the VR program. We believe that in

order to foster collaboration and cooperation

between the VR program and other

components of the One-Stop service delivery

system, a State plan for the VR program that

is not included in the State’s unified plan

should be submitted on the same date as that

unified plan. That view is reflected in

§ 361.10(f)(3) of the proposed and the final

regulations.

Changes: None

Section 361.16 Establishment of an

Independent Commission or a State

Rehabilitation Council

Comments: One commenter expressed

concern that the proposed regulations failed

to require the State unit to provide

documents to the Council in alternative

formats and in a timely manner. As a result,

this commenter stated that Council members

who are blind will not have sufficient

opportunity to review and respond to

information provided by the State unit.

Discussion: This section of the proposed

regulations made only technical changes to

the previous regulations in order to conform

to statutory changes in the 1998

Amendments to the Act. We do not believe

that a regulatory change to this provision is

warranted based on the comment received.

Providing information in appropriate formats

to Council members with disabilities falls

under the State unit’s general responsibility

under section 504(a) of the Act to not

exclude, on the basis of disability, any

individual from participating in programs or

activities receiving Federal financial

assistance. Moreover, Federal regulations at

34 CFR 104.4(b)(1)(vi) specify that a

recipient’s responsibility under section 504

of the Act extends to the participation of

individuals with disabilities on advisory

boards. Thus, as in many other instances in

which it distributes written materials, the

State unit must ensure that Council members

who are blind or otherwise disabled are able

to review information that the State unit

transmits to the Council, as well as

participate generally in Council activities.

Changes: None.

Section 361.17 Requirements for a State

Rehabilitation Council

Comments: We received several comments

regarding the composition requirements of

the Council. One commenter requested

clarification as to whether an entity that is a

required member of the Council could select

someone other than a member of that entity

as its representative to the Council.

Several commenters suggested that the

regulations specify that the ‘‘nonvoting’’

membership status of Council members who

are employees of the designated State agency

does not apply to the representative of the

CAP. This change, the commenters assert, is

necessary since the CAPs in some States are

components of the designated State agency

that administers the VR program. The

commenters raised questions regarding the

required Council membership of a

representative of the directors of the

American Indian VR services projects

authorized under section 121 of the Act.

Some of these commenters indicated that the

Council should include members from each

of the section 121 projects and that a single

representative of all the directors could not

adequately represent all American Indian VR

service projects in the State. Other

commenters described situations in which a

section 121 project is ‘‘headquartered’’ in one

State but has a service area that extends

across State lines into another State and

asked whether that project must be

represented on the Council of each State that

it serves.

One commenter questioned whether a

Council member could be appointed to the

State Workforce Investment Board (SWIB)

under section 111 of WIA in order to satisfy

the requirement in the proposed regulations

that the Council include a member of the

SWIB. This commenter stated that otherwise

this requirement would be difficult to meet

given the limited pool of persons interested

in serving on the Council as evidenced by the

difficulty Councils experience in filling

vacancies as they occur.

Finally, we received several comments

indicating that the proposed regulations

failed to incorporate the new statutory

requirement that the majority of members to

a Council for a State agency for the blind

must be individuals who are blind.

Discussion: Section 105(b) of the Act

contains the membership requirements for

the Council to ensure that various

constituencies of the VR program have a

voice in the conduct of the VR program in

the State. Section 105(b)(3) requires that the

Governor, after soliciting recommendations

from organizations representing individuals

with disabilities, appoint members to the

Council in accordance with the membership

criteria in section 105(b)(1) of the Act.

The question as to whether an entity can

be represented on the Council by someone

other than one of its own members or

employees has been raised in the past. With

few exceptions, the Council membership

requirements in section 105(b)(1) of the Act

state that a ‘‘representative’’ of an identified

entity must serve on the Council. The Act

does not require that the ‘‘representative’’ be

an employee or member of the required

entity. Thus, we interpret section 105(b) of

the Act and § 361.17(b) of the regulations to

allow an entity that is required to be

represented on the Council to be represented

by someone who is not an employee or

member of that organization.

Recommendations of appropriate

representatives can be made by the

organizations themselves, although final

appointment authority rests with the

Governor. Moreover, we would expect that

such a Council member would be closely

affiliated with and knowledgeable about the

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4423

organization or entity whose interests the

individual is charged with representing.

We agree that the non-voting status of State

agency or State unit employees under

§ 361.17(b)(2) of the proposed regulations

does not apply to Council members

representing the State’s CAP pursuant to

proposed § 361.17(b)(1)(iii).

Questions regarding Council representation

of the section 121 project directors have been

raised frequently since the passage of the

1998 Amendments to the Act. Moreover, the

commenters’ concerns as to whether one

project director can sufficiently represent the

interests of several independent projects

serving different populations of American

Indians have generated the most debate. Yet,

the requirement in proposed

§ 361.17(b)(1)(ix) enabling one person to

represent all section 121 project directors in

the State came directly from section

105(b)(1)(ix) of the Act. This requirement

appears to reflect an intent of Congress to

minimize the burden on States and to ensure

that the size of the Councils not be so large

as to become unmanageable. Nevertheless,

we urge the directors of section 121 projects

in the same State to collaborate more

extensively than they may have in the past

and to work to ensure that their collective

views are represented on the Council. We

also note that neither the Act nor regulations

prohibit the Governor from appointing to the

Council more than one representative of the

State’s section 121 projects (or other groups)

if warranted as long as the remaining

composition requirements in the Act and

regulations (e.g., the requirement that a

majority of Council members be individuals

with disabilities) are met. As for section 121

projects that are ‘‘headquartered’’ in one

State but serve those in another State, it is

our understanding that to the extent this

occurs, affected projects primarily serve

American Indians with disabilities in the

State in which the project is located and

serve only a relatively small area in a

neighboring State. We do not believe that the

Council must include a representative of a

section 121 project serving American Indians

with disabilities in the State if that project is

primarily located, and serves those, in

another State. In that instance,

§ 361.17(b)(1)(ix) of the final regulations

would apply only to the State in which the

project is located. The Governor, however,

always has the discretion to appoint to the

Council a representative of an out-of-State

project that also serves American Indians

with disabilities in the Governor’s State.

Since the time that the Council

requirements came into effect, questions

regarding whether the same individual can

fulfill more than one role on the Council

have been raised often. In response, we

consistently have taken the position that an

individual may represent only one entity on

the Council even though that same

individual may qualify under more than one

of the composition requirements. We

recognize that some States have difficulty

maintaining a sufficient pool of qualified

individuals to serve on statewide Councils

and that the 1998 Amendments to the Act

added three new required members to the

Council. Nevertheless, section 105(b) of the

Act establishes a minimum number of

members for the Council, each of whom

represents a specific component of the

disability community. Because each member

represents a different interest, sometimes one

that is divergent from that of other members,

we maintain that each organizational

requirement must be met separately. Thus, a

Council member who serves on the SWIB

cannot represent both the SWIB and another

organization on the Council.

We agree with the commenters who

pointed out the discrepancy between the Act

and the regulations regarding the

membership requirements that apply to a

Council for a separate State agency that

administers the VR program for individuals

who are blind. These commenters correctly

noted that the proposed regulations did not

specify, as does the statute, that the majority

of members of these Councils must be

individuals who are blind. This omission

was inadvertent, and we agree that it needs

to be corrected in the final regulations.

Changes: We have revised § 361.17(b)(2) of

the proposed regulations to clarify that the

CAP representative is, in all instances, a

voting member of the Council. In addition,

we have modified § 361.17(c) to reflect the

requirement in section 105(b)(4)(B) of the Act

that a majority of the members on a Council

for a separate State agency for the blind must

be individuals who are blind.

Section 361.18(c) Comprehensive System of

Personnel Development—Personnel

Standards

Comments: Some commenters expressed

concern with the indication in the preamble

to the NPRM that statewide ‘‘multi-tiered’’

personnel standards could be used by the

State unit in establishing standards for its

rehabilitation personnel. Other commenters

suggested that the proposed regulations be

revised to require that all rehabilitation

counselors obtain a Master’s degree

consistent with the national certification

standards for rehabilitation counselors.

In addition, a number of commenters

sought waiver or ‘‘grandfather’’ provisions in

the final regulations that would exempt

current rehabilitation counselors and other

professionals from the State’s personnel

standards. On a related point, some

commenters asked whether currently

employed rehabilitation counselors who do

not meet the State unit’s personnel standards

can continue to serve as counselors while

training to meet the standard.

Additionally, several commenters viewed

the requirement in the proposed regulations

that the State unit develop a written plan for

retraining, recruiting, and hiring staff to meet

applicable personnel standards as unduly

burdensome. Other commenters supported

this requirement and suggested that the

written plan be developed with input from

the Council.

Finally, several commenters suggested that

RSA define the professional and

paraprofessional disciplines for which a State

unit must establish personnel standards,

while others asked what standards the State

unit should apply to professions or

paraprofessions for which no certification or

similar criteria exist.

Discussion: The preamble discussion in the

NPRM concerning the ability of State units to

use the same multi-tiered personnel

standards as those applied by other State

agencies to its rehabilitation staff was

intended to clarify the level of flexibility the

proposed regulations give State units in

ensuring that its personnel are qualified

within the meaning of the Act. Typically,

multi-tiered certification systems require

rehabilitation counselors to reach a certain

academic level depending on the amount of

experience the individual has had in that

field. As we indicated in the NPRM (65 FR

10623), because the Act clearly allows State

units to base their personnel standards on

applicable State standards, it is permissible

for a DSU to apply the multi-tiered counselor

certification criteria of, for example, the State

Workers’ Compensation program to DSU

counselors if the counselors of both agencies

perform similar functions. The Act gives

State units that discretion, and that same

discretion also prohibits requiring by Federal

regulations that all State unit counselors

obtain a Master’s degree consistent with the

national rehabilitation counselor certification

standards as sought by some commenters.

Nonetheless, as we stressed in the preamble

to the NPRM, we encourage each State unit

to ensure that its personnel standards

promote quality among its counselors and

other staff, and we caution State units not to

employ minimally qualified individuals by

routinely substituting ‘‘equivalent

experience’’ for higher-level degree criteria.

The Act does not authorize

‘‘grandfathering’’ or the waiving of personnel

standards for current staff. Rather, section

101(a)(7)(B)(ii) of the Act compels the State

unit, if its current personnel does not meet

the ‘‘highest requirements in the State’’ (i.e.,

the highest entry-level academic degree

needed for the applicable State or national

certification, licensing, or registration

requirements—see § 361.18(b)(2)(i) of the

final regulations), to retrain existing staff, as

well as recruit new employees, to meet the

personnel standards applicable to each

profession.

The written plan under § 361.18(c)(ii) that

describes the retraining, recruitment, and

other efforts of a State unit whose current

personnel standards do not conform to the

highest requirements in the State is based on

the requirement in the Act that directs the

State to provide this information in its State

plan. More importantly, however, we believe

that the limited components of the written

plan (e.g., retraining, recruiting, and hiring

steps, timelines for those efforts, procedures

for evaluating progress, etc.) are essential to

ensuring that the State unit employs a fully

qualified staff that is best able to meet the

diverse needs of individuals with disabilities.

Any burden associated with developing the

plan, we believe, is caused by the intent of

the Act. The narrow scope of required plan

components is expected to provide States

with a helpful framework for fulfilling their

personnel development responsibilities and

improving their service delivery capacity.

As we have stated in the past, we recognize

the many constraints faced by State agencies

in securing a fully qualified staff, not the

least of which is the time that it takes to

4424 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

retrain existing staff. Thus, current

counselors who, pursuant to the State unit’s

plan under § 361.18(c)(1)(ii), are working

toward applicable qualification standards can

continue to perform their counselor

functions. The Act establishes an expectation

that rehabilitation counselors and other staff

will become qualified consistent with the

highest applicable personnel standards in the

State. Accordingly, the requirements in the

regulations are intended to ensure that the

State unit can continue to serve persons with

disabilities while it progresses as rapidly as

possible toward the point at which all of its

staff, both current and new hires, meet the

highest qualifications that the State applies to

their professions.

We also emphasize the importance of the

role of the Council in the area of personnel

development. Section 361.18(a) of the final

regulations requires that the Council, if it

exists, have an opportunity to review and

comment on the development of all plans,

policies, and procedures necessary to meet

the State unit’s obligations under the

comprehensive system of personnel

development (CSPD). As with each of the

Council’s functions, we view the Council’s

input into the development of the State unit’s

personnel policies, procedures, and

standards as vital toward ensuring that those

efforts result in a State unit workforce that is

fully capable of meeting the training and

employment needs of persons with

disabilities in the State.

We decline to define the professional and

paraprofessional disciplines for which a State

unit must establish personnel standards, as

some commenters requested. While a State

unit must apply to its staff the highest

personnel requirements that exist in the State

and that apply to each profession,

determining the types of professionals and

paraprofessionals needed to effectively

administer its VR program and establishing

the scope of functions for each job are the

responsibility of the State unit. It is the State

unit that can best judge its staffing needs and

establish staffing arrangements that meet the

particular needs of that agency’s service

recipients. In the preamble to the NPRM,

however, we did provide some guidance on

the categories of professional and

paraprofessional disciplines most closely

associated with the VR program for which

the State unit should give priority in

developing both specific job criteria and

appropriate qualification standards. Those

professions include rehabilitation counselors,

vocational evaluators, job coaches for

individuals in supported employment or

transitional employment, job development

and job placement specialists, and personnel

who provide medical or psychological

services to individuals with disabilities.

As a final matter, we note that if there are

no State or national licensing, certification,

or registration requirements for a given

profession established by the State unit, then

both the Act and the final regulations require

the State to use other ‘‘comparable

requirements’’ (such as State personnel

requirements) for that profession or

discipline. The scope of these ‘‘comparable

requirements’’ (e.g., degree criteria, work

experience, etc.) that are applied to jobs for

which no licensing or similar requirements

exist is left to the reasonable judgement of

the State unit.

Changes: None.

Section 361.22 Coordination With

Education Officials

Comments: Some commenters opposed the

requirement in the proposed regulations that

the State unit complete the IPE for students

eligible for VR services before they leave

school. These commenters stated, for

example, that the proposed requirement

would be impracticable for State units to

fulfill, would lead to rashly formulated IPEs,

or would exceed applicable statutory

requirements. Other commenters supported

requiring completion of the IPE before the

student leaves school and viewed the

requirement in the proposed regulations as

essential if transition planning is to prove

effective.

In addition, one commenter requested that

the proposed regulations be revised to

require that the formal interagency agreement

between the State unit and educational

agencies specify both the manner and the

time in which State unit staff will participate

in transition planning for students with

disabilities. Another commenter suggested

that each agreement include provisions for

resolving disputes regarding the agencies’

financial responsibilities in paying for

transition services and for enabling students

to retain assistive technology provided by

schools that the student needs following

transition.

Discussion: The proposed requirement that

State units provide for the development and

completion of the IPE before students who

are eligible for VR services leave the school

setting was carried over from the previous

regulations. As we have indicated from the

time the previous regulations were published

in 1997, we believe that requiring IPE

completion before eligible students with

disabilities leave school is entirely consistent

with the emphasis on transition in both the

Act and its legislative history (see Senate

Report 102–357). That emphasis was only

heightened by the requirement in the 1998

Amendments that State units increase their

participation in transition planning and

related activities. More importantly,

requiring the IPE to be in place before the

student exits school is essential toward

ensuring a smooth transition process, one in

which students do not suffer unnecessary

delays in services and can continue the

progress toward employment that they began

making while in school. In fact, it is in

support of that effort that we have made two

clarifications in these final regulations: (1)

that designated State agencies should be

involved in the transition planning process

as early as possible; and (2) that the IPE must

be ‘‘approved’’ (i.e., agreed to and signed by

the individual and the DSU) prior to the

student leaving school, as opposed to simply

‘‘completed’’ as stated in the proposed

regulations.

We have determined it necessary to clarify

in the final regulations steps that the

designated State agency must take, at a

minimum, when conducting the statutorily

required outreach to students with

disabilities. It is essential for the designated

State agency to inform these students of the

purpose of the VR program, the application

procedures, the eligibility requirements, and

the potential scope of services that may be

available. This information should be

provided as early as possible during the

transition planning process in order to enable

students with disabilities to make an

informed choice on whether to apply for VR

services while still in school.

We are not aware that State units have had

great difficulty in completing IPEs for

students. As before, the final regulations

require that if the State is operating under an

order of selection, only the IPEs of those

students that the State unit can serve under

the order must be developed before the

student leaves school. Moreover, we believe

that State units will be even better prepared

to fulfill this requirement as they become

more active in transition planning for special

education and other students with

disabilities (e.g., those students receiving

services pursuant to section 504 of the Act

or the IDEA) and in generally coordinating

with school officials.

We believe, as did some commenters, that

the extent to which the State unit should be

involved in transition planning for

individual students with disabilities should

be based on the needs of the student.

However, we also believe that it is important

for the designated State agency to participate

actively throughout the transition planning

process, not just when the student is nearing

graduation. Early involvement by the

designated State agency can be very

beneficial in terms of assisting the student to

make the transition from school to

employment. For this reason, these final

regulations clarify that the designated State

agency should become involved in the

transition planning process as early as

possible. The designated State agency and

the State education agency should negotiate

more specific provisions, as part of their

interagency agreement, to ensure that the

students’ needs are met in a timely manner.

Congress clearly envisioned that that

approach be followed in developing the

terms of the State’s interagency agreement

(see e.g., Conference Report 105–659, page

354). Also left to local discretion is the scope

of components, other than those limited

components specified in the Act and clarified

previously, that should be included in the

agreement. Some of the additional agreement

items identified by commenters may be

considered in that regard.

However, in response to the commenter’s

suggestion that each agreement should

include provisions for resolving disputes in

paying for transition services, we note that

State units are authorized to pay for only

transition services for students who have

been determined eligible under the VR

program and who have an approved IPE.

Thus, as long as those criteria have been met,

and the IPE specifies those transition services

necessary for the successful implementation

of the IPE, we anticipate that disputes of the

type raised by the commenter will not be

prevalent.

Changes: We have amended § 361.22(a) of

the proposed regulations to clarify that the

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4425

IPE for a student determined to be eligible for

vocational rehabilitation services must be

developed and approved before the student

leaves the school setting and as early as

possible during the transition planning

process. In addition, we have amended

§ 361.22(b)(4) of the proposed regulations to

clarify information that must be provided by

the designated State agency, at a minimum,

when conducting outreach to students with

disabilities, and we have clarified that

outreach should begin as early as possible

during the transition planning process.

Section 361.23 Requirements Related to the

Statewide Workforce Investment System

Comments: We received a great many

comments on this section of the proposed

regulations that raise important policy issues

and questions of interpretation that relate not

only to the proposed regulations, but also to

WIA and the regulations in 20 CFR part 662.

Most commenters requested more detail in

the final regulations that elaborates on how

the VR program is to fulfill the requirements

in proposed § 361.23(a). For example, several

commenters asked that we specify in the

final regulations those core services under

WIA that the VR program is expected to

provide in accordance with proposed

§ 361.23(a)(1), while others asked that we

explain which activities related to ‘‘creating

and maintaining’’ the One-Stop system under

§ 361.23(a)(2) are allowable under the VR

program.

Some of the commenters on this proposed

section also urged us to identify in the final

regulations certain restrictions in the Act

(e.g., the order of selection requirements

under section 101(a)(5)) that may affect the

extent to which State units can contribute to

the cost of One-Stop system services or other

One-Stop system activities. Of critical

importance to the final regulations, most

commenters stressed, is the need to address

the responsibility of all WIA partner

programs to serve individuals with

disabilities.

Other commenters asked that we add to the

One-Stop system responsibilities listed in

proposed § 361.23(a) other items that are

necessary for DSUs to effectively participate

with other partner programs of the One-Stop

system, including methods for allocating

costs between programs, methods for

ensuring proportionality between the

partner’s financial participation in the OneStop system and the resulting benefits it

receives, and methods for resolving disputes

regarding funding that may arise between

partner programs.

Several other commenters identified

additional components that they suggested be

included in the required cooperative

agreements between the designated State

agency and those entities administering other

One-Stop system partner programs. In

addition, some commenters asked whether

the requirement that State units, through the

cooperative agreements, promote

participation by individuals with disabilities

in the One-Stop system also requires that

State units pay the cost of reasonable

accommodations at the One-Stop system

center or other locations.

Discussion: As we discussed at some

length in the preamble to the NPRM (65 FR

10620, 10621, and 10624), we restated in

§ 361.23(a) of the proposed regulations the

responsibilities of One-Stop system partners,

including the VR program, that are described

in the regulations implementing Title I of

WIA (20 CFR part 662). That effort was

intended solely to inform State units of the

One-Stop system responsibilities to which

they are subject under WIA. We also asked

that commenters raise specific interpretive or

policy questions related to these One-Stop

system responsibilities so that we may

address, through appropriate guidance, those

most pressing matters that DSUs face as they

participate in the One-Stop service delivery

system. Most of the comments received on

this section of the proposed regulations focus

on those types of questions.

Although we anticipate addressing in

future guidance materials, and in cooperation

with other appropriate Federal agencies, the

workforce policy questions posed by the

commenters, we do note that many of the

issues raised are impacted by a number of

key One-Stop system principles embedded in

WIA, its implementing regulations, and these

final regulations.

First, participation by DSUs in the OneStop system must be performed in a manner

that is consistent with the legal requirements

applicable to the VR program (i.e., the Act

and these final regulations). Thus, the DSUs’

participation in the cost of core services or

any other One-Stop system activities cannot,

for example, result in expenditures for

services to individuals who do not meet the

priority for services in the order of selection

under which a DSU is currently operating

(although the DSU can participate, as

appropriate, in the cost of intake and other

expenditures that would normally be borne

by the DSU prior to determining eligibility

and the individual’s priority category under

the State’s order of selection; see the

discussion in the following section of this

analysis of comments for further information

on the relationship between order of

selection requirements and participation in

One-Stop system activities.) The fact that

DSUs must comply with the Act and the VR

program regulations in the course of

participating in the One-Stop system, we

believe, was made clear in the proposed

regulations, as it is in Title I of WIA and the

regulations implementing that title.

Compliance with the ADA and section 504

of the Act represents another key issue that

directly impacts the One-Stop system. In

sum, those laws obligate One-Stop system

centers and their partners to make their

services accessible to individuals with

disabilities. Thus, we, along with the

Department of Labor and many of the

commenters, have emphasized that the legal

responsibility for assisting persons with

disabilities does not fall to the DSU alone.

Consequently, individuals with disabilities

are likely to receive services through a

variety of arrangements (e.g., through the

One-Stop system center, through a

combination of core services at the One-Stop

system center and specialized VR services

from the DSU, etc.) depending on the

configuration and structure of the local OneStop system. Nonetheless, because the

universal access principles reflected in the

ADA and section 504 relate to the

responsibilities of non-DSU entities and

because these final regulations establish

requirements for designated State agencies

and designated State units administering VR

programs, we do not believe this section

should be revised to address the application

of the ADA and section 504 to the One-Stop

system generally. Those responsibilities are

fully addressed in WIA, particularly in

section 188 of that act and its implementing

regulations, 29 CFR part 37, which establish

the civil rights protections that must be

provided by the State and local workforce

development systems.

Many of the commenters also raised

important issues related to collaboration

between the DSU and its One-Stop system

partners. In response, we note that those

issues can, and should, be addressed through

the development of the memorandum of

understanding (MOU) governing the

operation of the One-Stop system referred to

in § 361.23(a)(3) or through the cooperative

agreements developed between these same

parties under § 361.23(b). In fact, some of the

suggested items, including the methods for

funding One-Stop system costs among

partner programs, are addressed in the

regulations implementing title I of WIA (see

MOU requirements in 20 CFR 662.300).

Rather than specifying additional MOU or

cooperative agreement components in these

final regulations, we would urge DSUs and

their One-Stop system partners to determine

which components, other than those

specified in the MOU requirements in 20

CFR part 662 and the agreement components

in § 361.23(b) of these final regulations,

would be most appropriate to address given

State and local circumstances.

We do believe it is necessary, however, to

clarify one technical item related to the

cooperative agreement under § 361.23(b) that

some commenters raised. The commenters

appeared to interpret § 361.23(b)(2)(i)(B) as

requiring DSUs to pay for reasonable

accommodations, auxiliary aids, and other

services for persons with disabilities

participating in the One-Stop system. Yet,

that proposed section, which comes directly

from section 101(a)(11)(A)(i)(II) of the Act,

states only that DSUs, in promoting

meaningful participation by persons with

disabilities in One-Stop system and other

workforce investment activities through

program accessibility, may provide training

and technical assistance to its One-Stop

system partners on how to provide

reasonable accommodations and auxiliary

aids and services. Neither the relevant

statutory provision nor the proposed

regulatory section questioned by commenters

instructs DSUs to pay the costs of providing

individuals with disabilities access to the

One-Stop system. In fact, as previously

noted, that responsibility falls to the OneStop system pursuant to the ADA and section

504.

Changes: None.

Section 361.31 Cooperative Agreements

With Private Nonprofit Organizations

Comments: None.

Discussion: We wish to clarify the

relationship between these final regulations

4426 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

and potential agreements that DSUs may

enter into with employment networks

authorized under the recently enacted

TWWIIA. In particular, we note that neither

the Act nor the regulations, including the

requirement in section 101(a)(24)(B) of the

Act and § 361.31 of the regulations that the

DSU enter into cooperative agreements under

the VR program with private nonprofit VR

service providers, are intended to limit or

prohibit the establishment of a fee-for-service

or other reimbursement type agreement

between DSUs and employment networks.

Typically, fee-for-service arrangements

enable private service providers to purchase

from the DSU services that are needed by an

individual with a disability who is not a VR

program participant.

On a related note, we also emphasize that

nothing in the Act or these regulations would

affect the ability of a DSU to serve as an

employment network as authorized under

TWWIIA.

Changes: None.

Section 361.36 Ability To Serve All Eligible

Individuals; Order of Selection for Services

Comments: One commenter suggested that

this section of the proposed regulations be

strengthened to ensure that States preserve

resources and provide needed services to

individuals with significant disabilities,

particularly as the State unit becomes more

closely linked to, and participates in, the

One-Stop system under WIA.

Discussion: As we discussed in the

previous section, we agree that the policy

behind the order of selection requirements in

the Act and regulations—to preserve the

fiscal and personnel resources of the DSU so

that those with the most significant

disabilities can receive the full range of VR

services that they need to become

appropriately employed—must be

safeguarded. However, we believe those

safeguards are in place. As a required partner

in the One-Stop system, the State unit must

participate toward the development and

maintenance of an effective One-Stop system

at the local level. Moreover, Title I of WIA

and the regulations implementing that title

clearly condition that participation on

compliance with the Rehabilitation Act and

these regulations. Thus, the order of selection

requirements in section 101(a)(5) of the Act

and these regulations, or any other statutory

or regulatory requirement applicable to the

VR program, must be followed in the course

of participating in One-Stop system

activities. If the State is operating on an order

of selection because it cannot serve all

eligible individuals given its current level of

VR program resources, then the State unit

can pay only for services (i.e., services

beyond intake and assessment that are

necessary to determine whether an

individual is eligible under the program and,

if so, to determine the individual’s priority

category under the order of selection) for the

individuals who qualify for services under

that order, regardless of whether those

services are provided within or apart from

the One-Stop system center. The severity of

an individual’s disability or the cost of the

individual’s program of services can have no

bearing on the scope of services the

individual receives.

Changes: We have made one clarifying

change to § 361.36(c) of the proposed

regulations that was not based on public

comment. This proposed section has been

revised to clarify that a DSU that has

developed but not implemented an order of

selection must continue to provide the full

range of services, as appropriate, to all

eligible individuals.

Section 361.42 Assessment for Determining

Eligibility and Priority for Services

Comments: Several commenters

recommended requiring in this section of the

final regulations a written assessment for

determining eligibility and priority for

services by a qualified VR counselor

employed by the DSU, as a means of

emphasizing the importance of the

professional opinion of the VR counselor.

These commenters also proposed that this

written assessment be included with the

information given to the eligible individual

during IPE development.

Some commenters opposed the eligibility

provisions stated in proposed § 361.42(a)(i)

and (ii) (i.e., determinations by qualified

personnel that the applicant has a physical

or mental impairment and the impairment

constitutes or results in a substantial

impediment to employment) on the basis that

neither provision required that the applicable

determination be made by a qualified

employee of the DSU. These commenters

stated that all eligibility-related

determinations should be made by the DSU.

Several commenters opposed § 361.42(a)(3)

of the proposed regulations, which

implemented the statutory requirements

regarding presumptive VR program eligibility

for individuals receiving SSI or SSDI under

the Social Security Act. These commenters

stated that a categorical presumption of

eligibility for this group of individuals could

be misconstrued as creating an entitlement to

VR services, could lead to efforts to extend

presumptive eligibility inappropriately to

other groups with common characteristics,

and may undermine the individualized

nature of the VR program. Some of the

commenters asserted that a presumption of

eligibility should be able to be rebutted by a

showing that an individual receiving SSI or

SSDI does not meet one or more of the

eligibility criteria. Other commenters

suggested that presumptive eligibility for

these individuals should apply to only those

Social Security recipients or beneficiaries

seeking to earn wages as opposed to those

intending to become homemakers.

On the other hand, several commenters

supported the proposed requirements

regarding presumptive VR program eligibility

for individuals receiving SSI or SSDI. Some

noted that the relevant statutory provision,

section 102(a)(3) of the Act, already has been

effective in reducing the time expended on

eligibility determinations, thereby allowing

counselors and individuals to focus on IPE

development and initiating needed services.

Many commenters opposed the manner in

which the proposed regulations implemented

the passage in section 102(a)(3)(ii) of the Act

that states that Social Security recipients are

presumed eligible under the VR program

‘‘provided that the individual intends to

achieve an employment outcome.’’

Specifically, these commenters believed that

completion of the application process, as

described in the proposed regulations, is

insufficient evidence of the individual’s

intent to achieve an employment outcome.

They urged that the applicable paragraph in

the proposed regulations be stricken on the

basis that DSUs make eligibility-related

decisions not only at the time of application

but throughout the VR process.

Several commenters opposed authorizing

DSUs, under § 361.42(b) of the proposed

regulations, to make interim determinations

of eligibility. Most of these commenters

questioned the statutory authority for the

proposed section or viewed the provision as

unnecessary since all eligibility

determinations must be completed within 60

days from the time the individual applies for

VR services. On the other hand, many

commenters supported the proposed interim

eligibility authority and the fact that using it

rests with the discretion of the DSU.

Several commenters supported proposed

§ 361.42(c)(1) that the DSU will not impose,

as part of the eligibility determination

process, a duration of residence requirement

that excludes from services any applicant

who is present in the State. Two commenters

suggested that the proposed language more

closely track the Act by applying the

prohibition not only to applicants but to any

individual who is present in the State. Other

commenters supported retaining specific

language stating that a requirement for an

applicant to be present in the State cannot be

used to circumvent an individual’s choice of

an out-of-State service provider.

We received many comments on proposed

§ 361.42(e), which implemented new

statutory requirements regarding the use of

trial work experiences as part of the process

for determining eligibility for VR services.

Several commenters responded to our request

in the preamble to the NPRM that they

identify examples of trial work experiences,

other than supported employment and onthe-job training, that DSUs might employ.

Suggestions included contract or production

work in the individual’s own home,

internships, unpaid work experiences, onthe-job evaluations, job shadowing,

structured volunteer experiences in real work

settings, and community-based work

assessments with supports, among others.

Many commenters suggested that the final

regulations authorize a DSU to consider trial

work that the individual performed

previously, and that is documented, for

purposes of meeting the requirement that it

assess the individual’s capacity to perform

trial work before the individual is

determined too severely disabled to achieve

an employment outcome (and, therefore,

ineligible). These commenters also

recommended that the final regulations

clarify that trial work experiences need not

be used for all individuals with significant

disabilities or in instances in which an

individual’s ability to achieve an

employment outcome is not in question.

A number of commenters opposed the

requirement in proposed § 361.42(e)(2)(i) that

the DSU develop a written plan to assess the

individual’s capacity to perform in realistic

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4427

work settings. These commenters noted that

the Act does not require a written plan and

that the proposed provision could have the

unintended effect of delaying services to the

individual. Other commenters expressed

concern that the trial work assessment for an

individual appeared open-ended and,

therefore, recommended that the regulations

apply a specific time limit to the use of trial

work for purposes of determining eligibility.

One commenter questioned the authority

for the proposed regulatory requirement that

DSUs provide appropriate supports,

including assistive technology devices and

services and personal assistance services, to

accommodate the rehabilitation needs of an

individual while performing trial work. In

contrast, another commenter stated that it is

vital for DSUs to provide the supports and

assistive technology that are needed for an

individual during the trial work period.

Several commenters recommended

deleting proposed § 361.42(h), which

authorized the continued use of extended

evaluations in instances in which trial work

experience options have been exhausted or

cannot be used by the individual. These same

commenters suggested that the 18-month

time limit that applied to extended

evaluation under the current regulations be

applied to trial work experience options.

Some of the commenters also questioned the

authority for keeping the extended evaluation

option in the regulations, while others

suggested that since trial work experiences

were available to most individuals with

significant disabilities, the extended

evaluation authority is no longer necessary or

is inconsistent with the Act’s preference for

finding most applicants eligible for the VR

program. In contrast, a number of

commenters supported retaining the

extended evaluation requirements.

Discussion: We agree that the professional

opinion of the VR counselor is critical in

assessing an individual’s eligibility and

priority for services. Both the Act and the

regulations specify that qualified personnel

must conduct assessments under the VR

program. Although we suspect that most

States develop written assessments, we do

not think it is necessary to require by

rulemaking that the assessment itself be in

writing. Thus, State units may continue to

require written eligibility assessments, or

otherwise attest to an individual’s eligibility

and priority of service category under an

existing order of selection, as they deem

appropriate. We do note, however, that the

DSU is required to document, in some

fashion, support for determinations of

eligibility as part of the record of services

required under § 361.47 of the regulations.

Whether that documentation is the

assessment itself or some other combination

of information, again, lies with the discretion

of the DSU.

We believe that proposed § 361.42(a)(1)(i)

and (ii) and the references to ‘‘qualified

personnel’’ in each of the provisions are

consistent with the Act. We interpret the

requirements in section 103(a)(1) of the Act

(requiring assessments for determining

eligibility and rehabilitation to be conducted

by ‘‘qualified personnel’’) and section

102(a)(6) of the Act (requiring eligibility

determinations to be conducted by the

designated State unit) the same as we have

historically since neither statutory provision

changed in the 1998 Amendments.

Specifically, the Act authorizes qualified

professionals, both DSU and non-DSU

employees, to determine the existence of an

impairment and to determine whether the

impairment results in a substantial

impediment to employment (i.e., whether the

first two eligibility criteria have been met.)

The requirement in section 102(a)(4)(B) of the

Act regarding the use of determinations made

by officials of other agencies also supports

this position. Assuming the DSU can confirm

that a qualified professional has determined

that the individual has met those criteria, the

DSU counselor then assesses whether the

individual requires VR services to obtain and

retain work in the individual’s chosen field

that is appropriate to his or her abilities (i.e.,

the third criterion of eligibility.) The

individual is presumed to have met the

fourth criterion—that the individual can

benefit from VR services under

§ 361.42(a)(1)(iv). This framework, which we

believe is required by the Act, is intended to

ensure that the DSU controls the eligibility

process at the same time that it facilitates

more timely assessments that allow for

existing information from other sources to be

taken into account.

The 1998 Amendments specify that those

who qualify for SSI or SSDI are presumed

eligible for the VR program. As we discussed

extensively in the preamble to NPRM (65 FR

10625 and 10626), we believe that this

change was adopted in the 1998

Amendments to streamline eligibility and

expedite necessary VR services for those

Social Security recipients since each category

of recipients already has met stringent

disability criteria under the Social Security

Act and clearly needs VR services in order

to achieve appropriate employment. We do

not believe that this presumption will be

misconstrued as changing the nature of the

VR program to a program under which

individuals are entitled to services without

pursuing a job. In fact, section 102(a)(3)(B) of

the Act and § 361.42(a)(5) of these final

regulations specify that nothing in the

presumptive eligibility requirement creates

an entitlement to VR services, meaning that

individuals with disabilities are not

automatically entitled to VR services but,

rather, must expect to achieve an

employment outcome as a result of receiving

those services. The final regulations

implement that expectation by ensuring that

all applicants, including those receiving SSI

or SSDI, are informed of the employmentrelated nature of the VR program during the

application process.

We also disagree with the assertion that a

categorical presumption of eligibility for

individuals receiving SSI or SSDI will lead

to categorical eligibility for other groups and

undermine the individualized nature of the

VR program. Prior to the 1998 Amendments,

disabled SSI recipients were statutorily

presumed to have a physical or mental

impairment that constituted a substantial

impediment to employment (i.e., were

presumed to have met the first two eligibility

criteria in § 361.42(a)(1) of the regulations),

as well as a severe disability. Section

102(a)(3) of the 1998 reauthorized Act

expanded this presumption by giving

presumptive VR program eligibility (i.e. a

presumption that individuals meet all of the

eligibility criteria under the VR program) to

this same population. The presumption

applies only to these persons and is not

written to broadly cover other groups that do

not qualify under the stringent disabilityrelated criteria applied by the Social Security

Administration. Also, the individualized

nature of the VR program (i.e., that services

are provided under an IPE to meet an

individual’s rehabilitation needs and assist

an individual to achieve an employment

outcome) is unaffected by this requirement

that only addresses eligibility for services.

As section 102(a)(3)(A)(ii) of the Act makes

clear, a DSU can rebut the presumption that

an SSI or SSDI recipient is eligible under the

VR program if it can demonstrate by clear

and convincing evidence that the individual

is incapable of benefiting in terms of an

employment outcome from VR services due

to the severity of the individual’s disability.

In response to the commenter’s contentions,

we maintain that a presumption of eligibility

can be rebutted only on this basis.

We also do not believe that presumptive

eligibility for SSI or SSDI recipients should

be restricted to those seeking certain types of

employment outcomes. As we have long

required, eligibility requirements are not to

be applied with regard to the type of

expected employment outcome that the

applicant seeks (see § 361.42(c)(2)(ii)(B) of

these final regulations). Thus, whether an

individual seeks a self-employment, another

wage-earning employment, a homemaker, or

other outcome cannot be used as a factor in

determining the individual’s eligibility for

VR services or affect the presumptive

eligibility of an individual receiving SSI or

SSDI.

We believe that completion of the

application process after the DSU has

informed the individual that he or she must

seek an employment outcome to receive VR

services is sufficient evidence that any

individual, including SSI and SSDI

recipients, ‘‘intends to achieve an

employment outcome,’’ as section

102(a)(3)(ii) specifies. While we understand

that some commenters are concerned that

disabled Social Security recipients in

particular will seek VR services without

intending to work, we find that concern

unfounded. We referred in the preamble to

the NPRM to an obvious fact—that all

applicants for VR services, not only those

who qualify for SSI or SSDI, must intend to

work to receive VR services. Thus, ensuring

that the DSU explains the employmentrelated nature of the VR program as part of

the application process ensures that

applicants understand what is expected of

them before participating in the program.

Thus, the proposed regulatory method of

ensuring an individual’s intent to work

fulfills an expectation that applies to all

applicants for VR services and streamlines,

rather than hinders, the eligibility process for

SSI and SSDI recipients, as the Act intends.

Additionally, we disagree with the

contention that an individual’s intent to

4428 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

achieve an employment outcome constitutes

an additional eligibility-related criterion that

must be applied throughout the VR process.

Eligibility is assessed at the outset of the

rehabilitation process, at a point when the

final regulations require that the DSU apprise

individuals of the nature of the program. As

always, if an individual becomes too severely

disabled to achieve an employment outcome

(as supported by clear and convincing

evidence) or, for whatever reason, stops

participating in the VR program, then the

DSU need not continue serving that

individual. That approach applies no less to

SSI recipients or SSDI beneficiaries than it

does to any other participant in the VR

program. Yet, as long as the individual

continues to participate in the program, there

exists a presumption that the individual

intends to work.

We agree with those commenters who

supported proposed § 361.42(b) that would

allow DSUs to make interim determinations

of eligibility for individuals who the DSU

reasonably believes will be eligible for VR

services at the end of the statutory 60-day

period for making eligibility decisions. We

emphasize that this provision is an option for

DSUs to expedite further the delivery of

services to individuals while the DSU awaits

information to permit a final eligibility

determination. DSUs are not required to

implement provisions for interim

determinations of eligibility.

We also agree with the commenters who

stressed the importance of language in

section 101(a)(12) of the Act that prohibits a

State from establishing any residence

requirement that excludes from services any

individual who is present in the State.

However, we believe that the proposed

regulatory language sufficiently tracks the

statutory requirement that was not changed

by the 1998 Amendments. Again, we believe

it is important to clarify, as explained in the

Senate Committee Report on the

Rehabilitation Act Amendments of 1998, that

the requirement for an individual to be

present in the State in order to be eligible to

receive services should not be interpreted in

any way to circumvent an individual’s choice

of an out-of-State provider (Senate Report

105–166, p. 13). The committee further stated

that, with regard to out-of-State placements,

the requirement that an individual be present

in the State must be imposed at the time of

the eligibility determination and may not be

used as a means of denying the continuation

of services that are being provided in an outof-State setting.

As we explained more fully in the

preamble to the NPRM (65 FR 10626 and

10627), the Act specifies that DSUs must

explore an individual’s abilities, capabilities,

and capacity to perform in work settings

through the use of trial work experiences

before it can demonstrate that an individual

is too severely disabled to benefit from VR

services in terms of an employment outcome

and, consequently, is ineligible under the

program. We believe that this requirement

establishes the fairest standard for assessing

whether an individual with a significant

disability is in fact capable of achieving

employment. We also appreciate the trial

work examples that commenters shared and

note that these types of work options (e.g.,

supported employment, on-the-job training,

internships, job shadowing, structured

volunteer experiences in real work settings,

and community-based work assessments

with appropriate supports) should be

considered by others as they seek to expand

the scope of trial work experiences available

to applicants with significant disabilities.

Nevertheless, we believe that

§ 361.42(e)(2)(ii) of the regulations is

sufficiently broad to encompass each of these

examples and that a change to that provision

is not necessary.

In addition, we interpret the Act to clearly

require DSUs to give individuals trial work

experiences before deciding that an

individual is ineligible under the VR program

due to the severity of the individual’s

disability. Accordingly, a DSU cannot meet

the requirement that it use trial work to

assess eligibility by simply securing

documentation that addresses the

individual’s success in performing work

previously. Using documentation in that

regard runs the risk of violating the scope of

the mandate in section 102(a)(2)(B) of the

Act, specifically that trial work options be

sufficiently varied and take place over a

sufficient period of time for the DSU to either

conclude that the individual is eligible for

VR services or (based on clear and

convincing evidence) that the individual is

incapable of benefiting from the provision of

VR services in terms of an employment

outcome. Given the State units’ expertise in

conducting assessments, and without

knowing the validity of the documentation

that exists or the circumstances that might

have changed since the time the individual

previously worked, we believe that it is

appropriate to require that, before

determining that an individual cannot benefit

from VR services, the DSU give the

individual a variety of trial work options

regardless of the individual’s past work

history or assessments.

We do not believe that the written plan for

providing trial work experiences as required

in § 361.42(e)(2)(i) of the regulations is

inconsistent with the Act or will cause delays

in service delivery. On the contrary, we

believe that requiring a written plan to assess

an individual’s abilities, capabilities, and

capacities to perform in realistic work

settings is a logical means of fulfilling the

requirements in section 102(a)(2)(B) of the

Act. The written plan will ensure that the

assessment process is conducted in a

deliberate and well-formulated manner, thus

giving an individual a full opportunity to

demonstrate his or her capabilities and

enabling the DSU to accurately gauge

whether the individual can achieve

employment. Also, we feel that any burden

or minor delay associated with developing

the written plan is clearly justified given that

the individual risks being found ineligible,

and precluded from receiving services

altogether, if trial work options are not wellplanned and prove unsuccessful.

We recognize the concerns of those

commenters who requested that time limits

be included in the regulations to ensure that

trial work opportunities do not extend

beyond a reasonable length. Yet, we believe

the timeframes that are the most reasonable

and appropriate already were built into the

proposed regulations. Specifically,

§ 361.42(e)(2)(iii) of the regulations requires

that the DSU assess the individual’s capacity

to work in realistic work settings through the

use of trial work experiences that are

provided over a sufficient period of time for

the DSU to determine either that the

individual is eligible for VR services or that

there exists clear and convincing evidence

that the individual cannot benefit from VR

services in terms of an employment outcome

due to the severity of the individual’s

disability. Because trial work is intended to

result in either a determination of eligibility

or a determination of ineligibility that is

sufficiently supported, trial work

opportunities must be provided until the

point that the DSU can reach one of these

two conclusions. Thus, specific time periods

that would serve to discontinue trial work

requirements before the DSU has reached

either result would serve to undermine the

purpose behind those very same

requirements.

We do not believe that the requirement in

§ 361.42(e)(2)(iv) of the regulations that the

DSU provide individuals with appropriate

support services, such as assistive technology

devices and services and personal assistance

services, during trial work falls beyond the

scope of the Act. Section 102(a)(2)(B) of the

Act states explicitly that trial work

experiences are to be afforded ‘‘with

appropriate supports provided by the

designated State unit.’’ Clearly, assistive

technology devices and services and personal

assistance services are authorized services

available to individuals pursuing

employment, including supported

employment, through the VR program (see

e.g., section 102(b)(3)(B)(i)(I) of the Act).

Accordingly, we believe it is entirely

appropriate to interpret the DSU’s

responsibility to provide ‘‘necessary

supports’’ during the trial work period to

cover these same services.

We also disagree that the authority

concerning extended evaluations should be

deleted in the final regulations. Although the

Act clearly places a priority on using trial

work experiences in the course of

assessments, Congress recognized the need to

allow for extended evaluations in those

limited instances in which a real work test

is impossible or the State unit has exhausted

its trial work options without reaching a

determination of eligibility. That point is

reflected in the legislative history to the trial

work provisions in the Act, specifically in

Senate Report 105–166, pages 9 and 10.

Changes: None.

Section 361.45 Development of the

Individualized Plan for Employment

Comments: Several commenters

recommended that the final regulations

clarify that the DSU is not required to pay for

the costs of technical assistance in IPE

development that is provided by sources

other than DSU personnel. On the other

hand, other commenters suggested that the

DSU be required to pay for the costs of the

technical assistance provided by non-DSU

sources, asserting that such a requirement

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4429

would be consistent with the individual’s

opportunity to exercise informed choice in

selecting DSU or non-DSU assistance for

purposes of developing the individual’s IPE.

Many commenters sought more

explanatory information in the final

regulations that details the role of the

qualified VR counselor employed by the DSU

in developing and approving the IPE and IPE

amendments and in reviewing the IPE

annually. These commenters indicated that

the ‘‘diminished role for the DSU counselor’’

in the proposed regulations was inconsistent

with the Act and other regulatory

requirements. The commenters also stated

that a DSU-employed counselor must

conduct the required annual review of the

IPE and assess the individual’s progress

toward achieving the identified employment

outcome since the DSU is responsible for the

proper delivery of services and the outcome

of the individual’s participation in the

program. Other commenters suggested that

we distinguish between the roles of the

‘‘qualified vocational rehabilitation

counselor’’ and the ‘‘qualified vocational

rehabilitation counselor employed by the

designated State unit’’ by defining each term

in the final regulations.

Some commenters suggested that this

section of the proposed regulations be

revised to prohibit VR counselors employed,

or previously employed, by an agency or

organization that may provide services under

an individual’s IPE from assisting the

individual in developing the IPE. These

commenters urged that a prohibition of this

type be implemented in order to guard

against conflicts of interest on the part of the

counselor that could otherwise jeopardize the

individual’s ability to exercise informed

choice in selecting services and service

providers included in the IPE.

In addition, a number of commenters

opposed § 361.45(e) of the proposed

regulations, which required the DSU to

establish and implement standards,

including timelines, for the prompt

development of IPEs. These commenters

viewed this proposed section as beyond the

scope of the Act. Other commenters

recommended either requiring by regulations

a specific time period governing IPE

development and implementation (e.g., 30

days from the date eligibility is determined)

or defining the term ‘‘timely’’ as it applies to

IPE development.

Discussion: Pursuant to section 102(b) of

the Act and § 361.45(c) of the final

regulations, the DSU must inform eligible

individuals of the range of available options

in obtaining assistance for purposes of

developing the IPE (e.g., developing the IPE

with DSU assistance, with non-DSU

assistance, or on one’s own). Since IPE

development assistance from non-DSU

sources is authorized, the regulations do not

prohibit the DSU from supporting the costs

of that assistance. At the same time, however,

we agree that the DSU need not pay the costs

of assistance provided by non-DSU sources if

it so chooses. Thus, it falls within the

discretion of the DSU to determine whether,

and under what circumstances, it will pay for

technical assistance in IPE development from

sources other than the DSU.

We believe that the proposed regulations

accurately reflected the scope of functions

that the Act reserves to the DSU, as well as

the broad authority for non-DSU counselors

to assist in the development and review of

IPEs at the individual’s discretion. As some

commenters pointed out, a qualified VR

counselor who is employed by the DSU must

approve and sign the IPE and any

amendments to the IPE (see section

102(b)(2)(C)(ii) and (b)(2)(E) of the Act). The

proposed regulations followed the framework

established by the Act, i.e., by enabling

individuals to receive assistance in IPE

development from whichever source (if any)

that they choose and ensuring that the DSU

maintains final IPE approval authority as the

Act requires. We do not believe that

additional regulatory provisions in this area,

including definitions, are needed.

While we note, as we did in the preamble

to the NPRM, that the DSU also is

responsible for ensuring that the individual’s

IPE is reviewed annually, we do not agree

that that review must necessarily be

conducted by a DSU counselor. As discussed

in greater detail in the NPRM preamble (65

FR 10626 and 10627), Congress intended to

distinguish between IPE functions that must

be performed by a qualified VR counselor

employed by the DSU and related functions

that may be performed by a qualified VR

counselor or other person who is not

employed by the State unit. Thus, in addition

to enabling individuals to secure assistance

from outside the DSU in developing the IPE

and IPE amendments, the DSU can meet its

responsibility to ensure that the IPE is

reviewed at least annually with the

individual by conducting the review itself or,

at the individual’s discretion, by approving

the results of a review appropriately

conducted by a qualified VR counselor from

outside the DSU.

At the same time, however, we do

appreciate the commenters concerns

regarding the potential conflicts of interest,

including potential limits on the exercise of

informed choice, that may arise if the

counselor or other person assisting the

individual in developing (or amending) the

IPE is employed or otherwise affiliated with

an organization that may provide services to

the individual under that IPE. However,

without information indicating whether that

problem exists or the resulting effects that an

existing problem has on participants in the

program, we are not inclined to restrict,

through these final regulations, the

individual’s choice of assistants in

developing the IPE. Nonetheless, we

emphasize that DSUs must ensure that

individuals are given full opportunities to

exercise informed choice in the selection of

services and service providers consistent

with the requirements of section 102(d) of the

Act and § 361.52 of these final regulations.

Accordingly, we would expect DSUs to

address any situation, if it arises, in which

it believes that a counselor employed by a

service provider is unduly influencing an

individual during IPE development to obtain

services through that counselor’s employer

without providing the individual with

sufficient choices.

We maintain that requirements in

§ 361.45(e) regarding DSU standards,

including timelines, for the prompt

development of IPEs are entirely consistent

with the Act. In particular, section 101(a)(9)

of the Act requires that the individual’s IPE

be developed and implemented ‘‘in a timely

manner’’ subsequent to the determination of

eligibility. In fact, both this regulatory

requirement and the statutory provision on

which it is based precede the 1998

Amendments. We continue to believe that

the regulatory standards and timelines called

for under § 361.45(e) of the regulations are

necessary to guard against delays in service

delivery that are, in turn, caused by delays

in the IPE development process. We

emphasize that DSUs need not meet this

requirement by establishing an arbitrary time

limit to apply to the development of all IPEs.

Instead, State units are expected to develop

general standards to guide the timely

development of IPEs and, as part of those

standards, flexible timelines that take into

account the specific needs of the individual.

Changes: None.

Section 361.47 Record of Services

Comments: Some commenters generally

supported the modifications to record of

services requirements that we proposed in

the NPRM. One commenter supported the

new flexibility given to DSUs in determining

the sources of documentation it will use to

meet the required components of the record

of services, but asked that RSA identify

minimum documentation types in the final

regulations. Several commenters opposed the

expansion of the service record requirements

beyond those in the previous regulations.

Several other commenters asked that we

clarify the scope of § 361.47(a)(7) of the

proposed regulations, which required

documentation in the service record

describing the extent to which the applicant

or eligible individual exercised informed

choice regarding assessment services and

regarding the employment outcome, VR

services, and other components of the IPE.

Some commenters suggested that this

proposed requirement be replaced by a

provision requiring simply that the DSU

document that the individual was provided

an opportunity to exercise informed choice.

Other commenters stated that it would be

difficult to meet the proposed requirement in

instances in which the DSU is not directly

involved in the development of the IPE.

Many commenters opposed the newly

proposed § 361.47(b), which would require

that the DSU consult with the State

Rehabilitation Council in determining the

type of documentation that it will maintain

for each applicant and eligible individual.

These commenters believed that the

proposed provision would expand the

functions of the Council beyond those

functions required by the Act. Due to the

voluntary nature of the Council, the

commenters asserted, it would be

inappropriate to expect members of the

Council to be involved in the DSU’s day-today operations, including the setting of

documentation requirements. Other

commenters supported requiring the Council

to be involved in establishing the DSU’s

documentation requirements.

Discussion: We revised § 361.47(a) of the

previous regulations to identify minimum

4430 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

documentation standards that will enable

DSUs to demonstrate that certain service

delivery requirements, as they apply to

applicants and eligible individuals

participating in the VR program, have been

met. While we identified in this proposed

section those critical service delivery

requirements that must be documented, we

sought to provide greater flexibility to DSUs

in determining the manner in which they

would comply (i.e., determining the types of

documentation each would use to comply)

with the stated requirements. We believe that

the proposed regulations provided that

flexibility, while identifying only those

requirements of the rehabilitation process

that are most necessary to address in the

record of services. Those proposed

requirements that were not drawn from the

previous regulations represented important

aspects of the 1998 Amendments that we

believe the DSU, and we, must monitor to

ensure the proper implementation of the

program.

In addition, we believe that § 361.47(a)(7)

of the proposed regulations established an

appropriate standard for DSUs to meet in

documenting compliance with a most critical

aspect of the VR program—giving individuals

the opportunity to exercise informed choice

throughout the rehabilitation process.

Accordingly, we do not believe that a simple

statement that the applicant or eligible

individual was provided an opportunity to

exercise informed choice reflects either the

scope or the importance of the choice-related

requirements in the Act. Among those

requirements, section 102(d) of the Act and

§ 361.52 of the final regulations specify that

applicants and eligible individuals must be

given opportunities to exercise informed

choice in selecting assessment services and

in selecting an employment outcome, the VR

services needed to achieve that outcome, the

entities providing services, and the methods

used to secure the services. Thus, given the

emphasis accorded choice under the Act, we

believe it is appropriate and prudent to

require documentation describing the extent

to which the applicant or eligible individual

exercised informed choice in accordance

with the Act’s requirements. As for those

instances in which an individual elects to

develop an IPE without the DSU’s assistance,

we would expect the DSU to inform

individuals about the availability and

opportunities to exercise informed choice (as

it is required to do under section 102(d)(1)

of the Act), obtain information from the

individual on the extent to which he or she

exercised choice during IPE development,

and supplement that information with

additional information available to the DSU

in order to meet the documentation

requirement in § 361.47(a)(7).

As we stated in the preamble to the NPRM,

we think it is necessary that the DSU consult

with the Council, if it has a Council, in

determining the type of documentation that

the DSU will maintain in the record of

services for each applicant and eligible

individual. Section 101(a)(16)(B)(v) of the

Act requires the State unit to take into

account, in connection with matters of

general policy arising in the administration

of the State plan, the views of the Council

and other specified groups. The document

types that will comprise the records of

services maintained by the DSU relate

directly to the DSU’s ability to demonstrate

its compliance with important service

provision requirements in the law, as well as

its ability to justify its decisions (e.g.,

eligibility determinations) regarding the

individual’s participation under the VR

program. We maintain, therefore, that the

DSU’s documentation standards for fulfilling

the record of services requirements in this

section of the regulations constitute a policy

of general applicability on which the

Council’s input is required. Moreover, we do

not believe that the consultation required

under this section of the regulations expands

the Council’s functions beyond the scope of

the statute, particularly the broad scope of

review, analysis, and advisory functions

carried out by the Council under section

105(c)(1) of the Act.

Changes: None.

Section 361.48 Scope of Vocational

Rehabilitation Services for Individuals With

Disabilities

Comments: Several commenters requested

that we revise § 361.48(j) of the proposed

regulations to more clearly describe the type

of interpreter and other communication

access services that are authorized under the

program. Other commenters requested

clarification regarding the scope of assistance

for eligible individuals seeking selfemployment, telecommuting, or business

ownership outcomes that is authorized under

proposed § 361.48(s). One of these

commenters requested guidance on how

these services relate to the entrepreneurial

services available through the State

workforce investment system.

Discussion: We agree with the suggestion

that the scope of authorized interpreter

services under proposed § 361.48(j) needs to

be clarified in the final regulations. In

particular, we believe that we need to clarify

that sign language interpreter and oral

interpreter services are authorized under that

section.

Regarding § 361.48(s), we have received

several inquiries, in addition to the noted

comments, asking us to clarify the scope of

resources that are authorized to be provided

through the statewide workforce investment

system in order to clarify the extent of the

State unit’s obligation under proposed

§ 361.48(s). This provision restates section

103(a)(13) of the Act.

Section 112 of Title I of WIA requires that

each participating State submit to the

Department of Labor a State plan that

describes its statewide workforce investment

system and the employment and training

activities that it will support with WIA Title

I funds. The specific employment and

training activities included in the plan are

determined individually by each State,

depending on the needs and economic

conditions in that State. Therefore, the scope

of resources authorized under the VR

program for self-employed persons,

telecommuters, and small business owners

will depend on the extent to which the

State’s workforce development system, as

described in the State plan under section 112

of WIA, provides support to individuals

pursuing that type of work. Given the

variances in workforce investment systems

across the States, we do not believe that it is

practical to revise the language in proposed

§ 361.48(s) that aligned the resources

authorized under the VR program with those

that the State makes available under WIA.

Finally, we believe it is important to note

that the list of authorized services in this

section of the regulations is not exhaustive

and that § 361.48(t) specifically authorizes

‘‘other goods and services’’ that the DSU and

individual determine to be necessary for the

individual to achieve an employment

outcome.

Changes: We have revised § 361.48(j) of the

proposed regulations by referring specifically

to sign language interpreter and oral

interpreter services as included within the

scope of authorized services for individuals

who are deaf or hard of hearing.

Section 361.50 Written Policies Governing

the Provision of Services for Individuals With

Disabilities

Comments: One commenter requested

changes to § 361.50(b)(1) of the proposed

regulations, which authorized States to

establish preferences for in-State services

under certain conditions. The commenter

contends that this provision, which was

included in the previous regulations, has

been subject to misuse and misinterpretation.

In response, the commenter suggests

restricting DSU preferences for in-State

services to instances in which the in-State

service is equivalent to and likely to have the

same results as an out-of-State service.

Discussion: Section 361.50(b)(1) authorizes

a DSU to establish a preference for in-State

services in instances in which necessary

services are available both within and

outside the State. The preference (i.e., the

State not taking responsibility for the costs of

an out-of-State service that exceeds the costs

of the same service provided in-State) is

dependent on the in-State service meeting

the individual’s rehabilitation needs. For that

reason, we believe that the provision

establishes an appropriate standard, one that

has the same effect as that of requiring

equivalency between in-State and out-ofState services.

Changes: None.

Section 361.51 Standards for Facilities and

Providers of Services

Comments: Many commenters expressed

concern about the omission in the proposed

regulations of the designated State unit’s

current regulatory responsibility to issue

minimum standards for facilities and service

providers. The commenters believed that

omitting these requirements from the final

regulations will have the effect of holding

community providers and facilities to a lower

standard than that which must be met by the

State agency administering the VR program.

The concern was that VR program

participants receiving services from private

providers would be adversely affected. These

commenters encouraged us to maintain the

current regulatory standards in the final

regulations.

The commenters on this section were

concerned mostly about the proposed

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4431

removal of the previous regulatory provisions

requiring providers of vocational

rehabilitation services to use qualified

personnel. For example, one party stated that

financial constraints on community facilities

may reduce a facility’s capacity to maintain

the same qualified personnel standards that

section 101(a)(7) of the Act imposes on State

agencies; nevertheless, this commenter

believed that regulatory requirements should

be developed to ensure a reasonable level of

professional qualifications at provider

facilities. Other commenters stated that

individuals who are blind or visually

impaired in particular, and all individuals

with disabilities generally, must be assured

that private facilities and providers of

services under the VR program have proper

qualifications beyond native language skills

and the ability to use appropriate modes of

communication (two current standards that

were retained in the proposed regulations). In

addition, many of the commenters expressed

concern that the proposed regulations, unlike

the previous regulations, did not require VR

service providers to have adequate and

appropriate policies and procedures to

prevent fraud, waste, and abuse.

Discussion: We had proposed to remove

the regulatory requirements governing

personnel and other standards for providers

of VR services on the basis that the explicit

statutory authority supporting those

requirements was removed by the 1998

Amendments. Specifically, the 1998

Amendments removed provisions previously

contained in section 12(e) of the Act that had

required the Secretary to promulgate

regulations pertaining to the selection of VR

services and VR service providers. In

accordance with the prior Act, § 361.51 of the

previous regulations included procedures to

prevent fraud, waste, and abuse among

service providers and procedures to ensure

that service providers complied with

applicable standards, such as those related to

qualified personnel. The requirements in

§ 361.51 of the proposed regulations that

were retained from the previous regulations

relating to the accessibility of facilities,

affirmative action for qualified individuals

with disabilities, and special communication

needs personnel also were retained in the

1998 Amendments.

We have interpreted Congress’ removal of

standards governing personnel and fraud,

waste, and abuse from the Act as intended to

give States greater discretion in determining

how best to ensure that service providers

used by the DSU are capable of providing

necessary VR services and meeting the needs

of VR program participants. In other words,

Congress determined that States could ensure

the quality of personnel and administrative

efficiency among the service providers it uses

by following applicable State rules. We want

to emphasize that removing this particular

requirement from the final regulations does

not absolve State units from ensuring that

entities providing services under the VR

program meet applicable State laws that

impose personnel standards and other

safeguards on parties providing services

under State-administered programs. We

believe that this responsibility of the DSU, as

well as the DSU’s general responsibilities

under OMB Circular A–87 and the Education

Department General Administrative

Regulations (EDGAR) to administer the VR

program and the expenditure of VR program

funds efficiently and effectively, ensures that

the removal of previous regulatory standards

for service providers will not have an adverse

impact on the program.

Changes: None.

Section 361.52 Informed Choice

Comments: As with proposed § 361.5(b)

discussed previously, a number of

commenters requested that we define the

term ‘‘informed choice’’ in this section of the

final regulations.

Another commenter suggested that this

section of the proposed regulations be

revised to ensure that participants in the VR

program are able to exercise informed choice

in selecting their vocational rehabilitation

counselor. Specifically, the commenter

suggested that participants, prior to selecting

a counselor, be given a list of counselors in

the local office of the State unit, a statement

of the counselors’ qualifications, and the

opportunity to interview a number of

counselors.

Other commenters suggested that DSUs

make available to individuals information

concerning the outcomes that individuals

achieve in working with specific service

providers. The commenters asked that this

information be included in the scope of

information that DSUs must provide

individuals under § 361.52(c). Other

commenters proposed revisions to

§ 361.52(d), which identifies sample methods

or sources of information that the DSU may

use to make available required information

on services and service providers.

Specifically, one commenter requested that

DSUs make available to individuals

information on nationwide services and

service providers, as well as service-related

information issued by national consumer

groups.

Discussion: We have long been asked to

define the term ‘‘informed choice’’ in

regulations and have refrained on the basis

that the current regulations establish

appropriate guidelines governing the

informed choice process, while leaving some

discretion to DSUs, in conjunction with their

Councils, if they have Councils, to determine

how best to secure information and make that

information available to participants so that

they may exercise choice. The 1998

Amendments give even greater emphasis to

informed choice, specifically in section

102(d), which identifies each of the stages at

which choices must be given (essentially all

stages of the rehabilitation process), requires

the DSU to inform individuals about the

availability of and the opportunity to exercise

informed choice, and requires that the DSU

assist individuals as is necessary so that they

may make informed choices. We believe that

this proposed section of the regulations

sufficiently reflected the significant scope of

the choice provisions in the Act and retained

a number of key portions from the previous

regulations that serve to guide DSUs in

developing their choice-related policies. We

again emphasize the crucial role that the

Council must play in that regard.

Although we maintain that, at this point,

defining ‘‘informed choice’’ in the

regulations would not be appropriate, we

have established additional guidance

materials designed to facilitate the choice

process, most notably as part of the RSA

Monitoring Guide for FY 2000. We intend to

develop additional policy directives that will

also assist in that effort.

Section 361.45 of the regulations, which

implements section 102(b)(1) of the Act,

specifies the range of options available to

individuals in securing assistance in

developing their IPEs, including assistance

provided by DSU or non-DSU counselors or

from other sources. However, neither that

provision nor the broad choice requirements

in section 102(d) of the Act establish a basis

for requiring DSUs to provide individuals

with their choice of VR counselors. At the

same time, we note that the Act and the final

regulations do not prevent a State from giving

individuals the opportunity to exercise

informed choice in selecting counselors. RSA

guidance to the States (Program Assistance

Circular 88–03, dated June 7, 1988)

underscores the importance of an effective

counseling relationship between the

applicant or eligible individual and the DSU

counselor. Thus, we would urge DSUs, taking

into account caseload levels and other

staffing considerations, to assign counselors

to individuals in a manner that they believe

will result in a most effective match. Given

the obvious effect that that match has on the

successful rehabilitation of the individual,

we also indicate in the guidance that, if an

individual requests a change in counselor

and the request is denied, the individual can

appeal the determination through the DSU’s

due process procedures.

Section 361.52(c) of the proposed

regulations listed the minimum scope of

information that State units were required to

provide to individuals, or assist the

individual in acquiring, to enable the

individual to make informed choices about

the services, service providers, and outcome

identified in the IPE. We agree with the

commenter that the minimum information

related to services and service providers

specified in this section (e.g., cost, consumer

satisfaction, qualifications, degree of

integration, etc.) also should mention the

types of outcomes that individuals have

achieved in working with certain providers.

Section 361.52(d) identifies specific

methods and sources of information that the

DSU may use to provide individuals with

sufficient information about services and

service providers. Since this provision is not

a comprehensive listing of methods and

sources, we note that DSUs and individuals

may use any other methods and sources of

information that are available to enable the

individual to exercise choice. We agree that

participants and State units may benefit

greatly by securing information from national

consumer groups or other national

organizations with specialized expertise in

particular disabilities, rehabilitation

methods, and services. In addition, methods

involving experiences that participants may

use to gain information about types of

employment outcomes, services, and service

providers may prove helpful. We encourage

4432 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

DSUs to assist individuals in obtaining useful

information from many other appropriate

sources.

Changes: We have revised § 361.52(c) of

the proposed regulations to clarify that

information and assistance provided under

that section also must assist individuals in

exercising informed choice among

assessment services. In addition, we have

included service provider outcomes in the

scope of information relating to the selection

of vocational rehabilitation services and

service providers. We have deleted the terms

‘‘local’’ and ‘‘state and regional’’ from

§ 361.52(d) and have added references to

methods involving visiting or experiencing

various settings to the list of potential

methods or sources of obtaining information.

Section 361.53 Comparable Services and

Benefits

Comments: One commenter expressed

concern that the requirement in the proposed

regulations that DSUs provide services to an

individual while waiting for identified

comparable services and benefits to become

available may serve as a disincentive for

individuals to pursue the alternative benefits

or services at the appropriate time. The

commenter recommended that DSUs be able

to discontinue services if an individual

refuses to pursue the comparable benefits or

services.

Another commenter noted that the

proposed regulations did not include the

statutory exemption in section

101(a)(8)(A)(ii) of the Act that states that

awards and scholarships based on merit are

not considered comparable services and

benefits under the program.

Discussion: Both section 102(b)(3)(E)(ii) of

the Act and § 361.46(a)(6)(ii)(C)) of the

regulations require that the IPE identify the

individual’s responsibilities with regard to

applying for and securing comparable

services and benefits. Thus, the law

anticipates that State units and individuals

will work out the extent of those

responsibilities through the IPE development

process. For that reason, we do not believe

that § 361.53(c)(2), which is unchanged from

the previous regulations, would create the

disincentive envisioned by the commenter as

long as the individual is fully apprised of,

and is assisted in fulfilling, his or her

responsibilities in securing other services

once they become available.

We recognize that this section of the

proposed regulations did not refer to the

statutory exception to comparable services

and benefits for scholarships and awards

based on merit. However, this exemption is

addressed in the definition of the term

‘‘comparable services and benefits’’ in

§ 361.5(b)(10). We think the exception is best

addressed in the definition itself since it is

the definition that specifies the scope of

comparable services and benefits under the

program.

Changes: None.

Section 361.54 Participation of Individuals

in Cost of Services Based on Financial Need

Comments: Many commenters supported

the proposed expansion of those services that

would be exempt from State financial needs

tests, meaning that individuals could not be

required to contribute to the cost of those

services. One commenter suggested that the

proposed exemption of interpreter services,

reader services, and personal assistance

services from financial needs tests be limited

to the provision of those services during the

assessment phase of the VR process. Another

commenter supporting the proposal asked

that we also emphasize that the DSU still

must seek and use comparable services and

benefits to pay for exempted services.

In addition, in response to our request for

comments on the appropriate scope of

services that should be exempted from

financial needs tests, a number of

commenters requested that the proposed

listing be expanded to specifically include

assistive communication devices,

rehabilitation engineering services, and other

access-type services.

Other commenters strongly opposed the

proposed expansion of the list of services

exempted from financial needs tests under

the prior regulations. Some of these

commenters stated that the proposed

expansion would undermine the DSU’s

longstanding option of considering the

financial need of program participants and

would weaken the DSU’s ability to conserve

VR program funds.

In addition, many commenters supported

the proposed prohibition in the NPRM on

applying financial needs tests to eligible

individuals receiving SSI or SSDI. Other

commenters supported prohibiting the

application of financial needs tests only to

individuals receiving SSI since SSI eligibility

is based on the individual’s financial need as

opposed to SSDI beneficiaries who may have

assets that they could contribute to the cost

of vocational rehabilitation services.

A significant number of commenters

opposed the proposed exemption of SSI

recipients and SSDI beneficiaries from the

DSU’s financial needs assessments on the

basis that DSUs often consider the resources

of the individual’s entire household, as

opposed to those of the individual only, in

determining the level of resources the

individual must contribute to the program of

VR services. While these commenters agreed

that DSUs could disregard an individual’s

actual SSI or SSDI cash payment, the

commenters recommended that DSUs be able

to consider the overall financial status of the

individual and the individual’s household

when assessing the individual’s financial

need under the VR program.

Discussion: In the NPRM, we proposed to

expand the scope of services exempt from

State financial needs tests under the prior

regulations to include certain services (i.e.,

interpreter, reader, and personal assistance

services) needed to participate in the VR

program, as well as any service needed by a

recipient of SSI or SSDI.

The purpose of the proposal to exempt

from State financial needs tests interpreter,

reader, and personal assistance services was

to ensure access to the VR program. As we

discussed in the preamble to the NPRM (65

FR 10629), the additional services that we

proposed excluding from State financial

needs tests enable individuals to participate

in training or employment-related services

that they are seeking through the VR

program. Typically, individuals do not apply,

nor are they determined eligible, under the

VR program solely to receive these accesstype services. Rather, these services are

provided in conjunction with employment

and training services sought by the

individual participating in the VR program.

In fact, the distinguishing feature of these

access services is that participation in the VR

program is not possible without these

services being afforded. Thus, placing an

additional burden on the individual to

participate in the cost of accessing the VR

program, in our view, is inappropriate and

contrary to both the purpose of the VR

program and the principles in section of 504

of the Act and the ADA, which safeguard

participation by persons with disabilities in

federally funded (under section 504) or

public (under the ADA) programs.

As many of the commenters pointed out,

we realize that access-type services other

than the three additional services that the

NPRM would have exempted from financial

needs tests (i.e., interpreter, reader, and

personal assistance services) clearly exist and

that individuals might need those services in

order to participate in the VR program. In

light of the extensive public comment we

received on that point, and the fact that the

limited scope of exempted services in the

proposed regulations would not ensure that

persons with certain disabilities are able to

participate in the VR program, we have

modified the proposed regulations to more

clearly reflect the DSU’s responsibility to

ensure that all persons with disabilities do

not incur the disability-related costs of

accessing the VR program. Specifically, the

final regulations prohibit the application of

State financial needs tests to the provision of

any auxiliary aid or service that would be

necessary under section 504 of the Act or the

ADA in order for an individual with a

disability to participate in the VR program.

Thus, the final regulations, in effect, ensure

that individuals are able to receive, at no

additional cost to themselves, aids and

services to which they are already entitled

under section 504 or the ADA.

We note that interpreter and reader

services—two services proposed to be

exempt from financial needs tests in the

NPRM—generally would be covered under

the section 504- and ADA-based standard in

the final regulations if those services are

needed in order for the individual to access

other VR services. In addition, the final

regulations, like the NPRM, identify personal

assistance services as a separate category of

services exempt from financial needs tests.

While personal assistance services, as

defined in the VR program regulations, might

not necessarily be provided by public

programs under section 504 or the ADA,

those services are often critical for

individuals with significant disabilities to be

able to access employment and training

under the VR program. As we indicated in

the preamble to the NPRM, we believe it is

important to exempt these services from

financial needs tests as well. We also believe

that retaining from the NPRM the exemption

for personal assistance services will remove

a significant disincentive toward pursuing

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4433

employment for those with the most

significant disabilities.

We also note, however, that the final

regulations do not alter the State unit’s

responsibility to seek comparable services

and benefits that can meet the individual’s

interpreter, reader, personal assistant, or

other access needs. Nor does it affect entities

outside of the DSU from meeting their

responsibilities under section 504 of the Act,

the ADA, or other laws. In fact, we expect

that some of those entities are likely to be

public agencies with which the State unit is

required to enter into an interagency

agreement in order for both parties to fulfill

their responsibilities toward individuals with

disabilities (see § 361.53(d) of the final

regulations).

With regard to the proposed prohibition on

applying financial needs tests to individuals

who receive SSI or SSDI, we continue to

believe that it is appropriate to exempt those

persons from DSU financial needs tests given

the Act’s emphasis on streamlining access to

VR services for disabled Social Security

recipients. Moreover, as we discussed in the

preamble to the NPRM (65 FR 10629), this

change to the prior regulations facilitates the

primary goal behind referring SSI recipients

and SSDI beneficiaries to the VR program—

supporting their efforts (and reducing

disincentives) to pursue gainful employment

and no longer require Social Security

support.

Our rationale for exempting individuals

receiving SSI benefits, or a combination of

SSI and SSDI benefits, from State-imposed

financial needs tests is further supported by

the fact that these persons already have gone

through a rigorous, federally mandated

financial needs test that is typically more

restrictive than those tests employed at the

State level. To qualify for SSI, individual

recipients must have very limited, if any,

monthly income—individual or household—

or other assets. These individuals generally

live at or below the federally established

poverty level. Consequently, SSI recipients

clearly have a limited ability to contribute to

the costs of VR services. Requiring these

same persons to undergo an additional

financial needs test at the State level would

serve only to unnecessarily delay the

provision of VR services.

On the other hand, the rationale behind

exempting from DSU financial needs tests

individuals receiving SSDI benefits alone is

based on three critical points. First, SSA, as

a matter of policy, has deemed it necessary

to award SSDI beneficiaries monthly cash

assistance due to their inability to work.

While it is true that SSDI benefits are

awarded on the basis of earnings and years

worked as opposed to extreme financial

need, SSA has determined that these

individuals can no longer work due to their

disabilities and, therefore, cannot earn

income to support themselves or their

families. SSDI payments are intended to

cover a person’s living expenses. Once a

person achieves an employment outcome

earning sufficient wages, as determined by

SSA, the individual would be removed from

the SSDI rolls.

Second, many State and Federal agencies

currently are working to remove as many

disincentives as possible for individuals with

disabilities, including individuals with

significant disabilities receiving Social

Security benefits, to return to work. For

example, Congress has adopted changes to

Social Security laws not to penalize persons

(i.e., not to eliminate or reduce Social

Security benefits, including health care

coverage) for working since individual’s

wages are often insufficient to cover costly

medical and other living expenses.

Previously, many individuals with

disabilities chose to remain on SSDI, at

Federal expense, rather than risk losing

health care coverage. Imposing a financial

needs test on this same population that is

seeking VR services in order to achieve an

employment outcome, in effect, creates an

additional disincentive to work and could

adversely affect the results sought through

the revised Social Security laws and other

reforms.

Third, it is important to note that SSA

reimburses State VR agencies for the costs

incurred in serving an SSI or SSDI recipient

when that individual achieves an

employment outcome (i.e., substantial

gainful activity under Social Security laws)

for a specified period of time. Thus, as far as

those SSI and SSDI recipients who

successfully achieve employment outcomes

under the VR program are concerned, there

is ultimately little financial burden on the

DSU in serving these persons to justify

transferring that burden to individuals.

Changes: We have amended the proposed

regulations to exempt from DSU financial

needs tests any service that constitutes an

auxiliary aid or service afforded the

individual under section 504 of the Act or

the ADA in order for the individual to

participate in the VR program.

Section 361.56 Requirements for Closing

the Record of Services of an Individual Who

Has Achieved an Employment Outcome

Comments: Several commenters expressed

concern about proposed § 361.56(a), which

required, as a condition of closing the

individual’s record of services, that the

employment outcome achieved by the

individual be the same as that described in

the individual’s IPE. These commenters

viewed the provision as inappropriate since

amending the IPE to specify a new

employment outcome is not always possible,

for example when the individual is

unavailable to sign an amended IPE.

Other commenters questioned § 361.56(c)

of the proposed regulations, which required

an agreement between the individual and the

DSU counselor that the employment outcome

is satisfactory and that the individual is

performing well in the employment before

the DSU can close the individual’s record of

services. These commenters suggested that

the proposed provision might lead to

differences of opinion between the counselor

and the individual as to whether the outcome

is ‘‘satisfactory’’ and thus preclude the State

unit from appropriately closing the service

record.

Discussion: We agree that in very limited

instances it may be impractical for the DSU

and the individual, together, to amend the

individual’s IPE to reflect the ultimate

employment outcome that the individual

obtains while participating in the VR

program. Yet, we believe that in most

instances necessary amendments to the IPE

can be accomplished since the DSU and the

individual need not approve and sign the

amended IPE simultaneously. Moreover, the

required consistency between the IPE and the

individual’s outcome, in our view, is

warranted in order to preserve the usefulness

of the IPE development process.

With respect to the comments on proposed

§ 361.56(c), we note that this provision in the

NPRM was substantially the same as the

previous regulatory provision. In addition,

we are not aware of any reported problems

regarding the implementation of this

provision through RSA monitoring activities,

referrals to the Client Assistance Program, or

due process hearings. More importantly,

given that employee and counselor

satisfaction is a critical factor toward

assessing the stability of the individual’s job,

we believe that the provision should be

retained in the final regulations.

Changes: None

Section 361.57 Review of Determinations

Made by Designated State Unit Personnel

Comments: One commenter suggested

revising § 361.57(a) of the proposed

regulations to require the State unit to

provide in writing all agency decisions that

result in a suspension, termination, or denial

of services. This commenter explained that

requiring written notification of service

denials would be consistent with procedural

safeguards in other Federal programs.

We received several comments regarding

proposed § 361.57(b), the general

requirements governing State due process

procedures. Specifically, commenters

expressed dissatisfaction with proposed

§ 361.57(b)(3)(ii) regarding representation

during mediation sessions and formal due

process hearings. One commenter suggested

revising that paragraph to exclude the use of

attorneys during mediation and to require the

use of attorneys during the formal hearing

process. The commenter expressed concern

that the use of attorneys during mediation

would alter the informal nature of that

process. Conversely, the commenter

explained, individuals who are not

represented by attorneys during the formal

hearing are at a distinct disadvantage since

the State unit, in general, is represented in

hearings by an attorney.

At least one commenter questioned

whether mediation should be voluntary on

the part of the State unit. The commenter

suggested revising proposed § 361.57(d)(2)(i)

to require the State unit to participate in good

faith in the mediation process whenever

mediation is requested by the individual.

Commenters suggested that

§ 361.57(d)(2)(ii) of the proposed regulations

be modified to allow the mediator, in

addition to the parties to the mediation, to

terminate the mediation process. The

commenters stated that it is common practice

to give mediators that authority.

A few commenters raised concerns about

proposed § 361.57(d)(2)(iii), which governs

the manner in which mediators are assigned

to a particular case and lists of qualified and

4434 Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations

impartial mediators are maintained. One

commenter described the meticulous and

thoughtful steps used in one State to assign

the mediator who is most appropriate to each

case. Another commenter suggested that the

regulations require that the State unit and the

Council agree to the list of mediators as they

do for impartial hearing officers.

The final set of comments regarding the

proposed mediation procedures pertain to

the requirements governing mediation

agreements under proposed § 361.57(d)(4).

One commenter stated that mediators do not

‘‘issue’’ mediation agreements as that

provision suggests. Several commenters

urged us to make mediation agreements

binding on all parties in order to create

greater incentive to pursue mediation.

We received many comments regarding the

requirement in proposed § 361.57(e)(1) that

hearings generally be conducted within 45

days of an individual’s request for review of

a State unit decision that affects the

provision of services to the individual. With

one exception, all commenters indicated that

it is overly burdensome to require the State

unit to conduct informal reviews, mediation,

and the formal hearing within the same 45-

day period. Some suggested that the 45-day

clock not begin until after an informal review

and, if applicable, the mediation process are

completed. Others suggested that the time

period be extended by a certain number of

days (e.g., 10 days) to allow for mediation to

occur. Still others suggested that the

regulations allow separate time periods for

each phase of dispute resolution and that the

time periods run consecutively.

Several commenters suggested that

§ 361.57(g)(3)(iii) of the proposed regulations

be modified to eliminate the 30-day deadline

by which a reviewing official must render a

decision.

Finally, we received several comments

asking that the final regulations include a

time limit (e.g., 30 days) for the filing of civil

actions under § 361.57(i) of the proposed

regulations.

Discussion: The issue concerning requiring

that all agency decisions that result in a

suspension, termination, or denial of services

be provided in writing has been brought to

our attention many times since the adoption

of the 1998 Amendments. Section 361.57(a)

conforms to the statutory requirements in

section 102(c) of the Act. The Act does not

require a written decision in order for an

individual to initiate an appeal under this

section. An individual may appeal ‘‘any

determination.’’ Therefore, we do not require

designated State unit personnel to issue

decisions pertaining to the provision of

services in writing, but we encourage the use

of written decisions whenever practicable.

With respect to the comments pertaining to

legal representation, we share the concern

that individuals sometimes are at a

disadvantage if they are not represented by

an attorney during the formal hearing

process, especially if the designated State

unit is represented by an attorney. However,

we do not share the concern that attorneys

used during the mediation process

necessarily change the nature of mediation.

Nonetheless, the proposed requirements

regarding representation during the

mediation and hearing stages reflect the

broad authority in section 102(c)(3)(B) of the

Act for individuals to select the

representative of their choice.

The 1998 Amendments to the Act added

mediation as a new method of resolving

disputes between individuals and the State

unit. Thus, it is not surprising that many

commenters sought further clarification of

the requirements in the proposed regulations

that impact the States’ implementation of

mediation procedures.

Section 361.57(d)(2)(i) conforms to the

statutory language of section 102(c)(4)(B)(i) of

the Act, which requires that the DSU’s

mediation procedures ensure that the

mediation process ‘‘is voluntary on the part

of the parties. . . . ’’ (emphasis added).

Therefore, Congress intended the mediation

process to be voluntary on the part of both

parties rather than giving only the individual

the discretion to participate in mediation as

one commenter suggested. We also believe

that allowing mediation to be voluntary on

the part of both parties is necessary since

mediation is successful only if both parties

participate willingly in an effort to resolve

their dispute. We do note, however, that the

State unit’s decision to agree to pursue

mediation should be made on a case-by-case

basis. It is neither appropriate nor consistent

with the intent of the Act for a DSU to follow

a general policy of never participating in

mediation.

Our intent behind § 361.57(d)(2)(ii) of the

proposed regulations was to ensure that

either party may change its mind about

participating in mediation, even after the

mediation process has begun, and at that

point pursue a due process hearing. We

sought to ensure that individuals in

particular are never locked into a less formal

dispute resolution process that they believe

to be futile. Consistent with this approach,

we also agree with the suggestion that

mediators should be allowed to terminate the

mediation process and that amending the

regulations to reflect that point would not

alter the intended effect of this proposed

section.

We proposed a process in § 361.57(d)(2)(iii)

of the proposed regulations that is similar to

that which the Act applies to the selection of

impartial hearing officers. In particular, we

sought to ensure the same neutrality on the

part of the mediators that exists for hearing

officers. However, we believe that States with

established processes for assigning mediators

to a case should be allowed to continue

appointing mediators in that fashion,

provided that the process used ensures

neutrality.

In response to the comments on proposed

§ 361.57(d)(2)(iii) and the development of the

State’s list of available mediators, we note

that section 102(c)(4)(C) of the Act does not

require the State to develop the list of

mediators through the joint efforts of the

State unit and the Council. Many States have

developed an ‘‘Office of Dispute Resolution’’

or similar office to handle all mediations

across multiple State agencies. These offices

typically employ mediators or contract with

private mediators to conduct mediations

involving State-administered programs. The

proposed regulations were intended to give

States as much flexibility as possible in

establishing mediation policies and using

existing mediation processes.

Many individuals representing CAPs and

DSUs have urged us to interpret section

102(c)(4) of the Act to require that a

mediation agreement be binding on all

parties. We believe that, if the outcome of

mediation (i.e., a mediation agreement) were

binding, then conceivably neither party

could pursue a formal hearing afterward.

That type of restriction would be contrary to

the scope of due process procedures that are

available under the Act.

In light of the overwhelming support for

extending the 45-day period for holding due

process hearings under proposed

§ 361.57(e)(1), we agree that the period

should be extended to 60 days in the final

regulations. We do not believe that the time

period should be extended any longer since

section 102(c) of the Act clearly envisions a

due process system that is timely, quick, and

equitable.

We believe that the 30-day period for an

appropriate official to review a hearing

officer’s decision under proposed

§ 361.57(g)(3)(iii) is reasonable. This is the

same time period that applied to the review

of hearing decisions by the State unit director

under the previous regulations. Although

State-level review of hearing decisions, if

established by the State, now must be

conducted by an official of an entity

overseeing the DSU, we see no reason for

modifying the current time period.

We consider it inappropriate for us to

establish a time limit for the filing of civil

actions in disputes arising under the VR

program. The State’s Rules of Civil Procedure

or the Federal Rules of Civil Procedure,

depending on the appropriate forum, dictate

the applicable deadline for filing an action in

civil court.

Changes: We have made the following

modifications to proposed § 361.57(d):

authorizing mediators to terminate

mediations (§ 361.57(d)(2)(ii)); authorizing

States with an established method of

assigning mediators to use that process in

assigning mediators for the VR program

provided the process ensures neutrality on

the part of mediators (§ 361.57(d)(2)(iii)); and,

in adopting a technical but important

revision suggested by some commenters,

clarifying that mediators assist in developing

rather than ‘‘issue’’ mediation agreements

(§ 361.57(d)(4)). We also have modified

proposed § 361.57(e)(1) to require that

hearings be conducted within 60, rather than

45, days from the individual’s request for

review of a DSU decision.

Section 361.60 Matching Requirements

Comments: One commenter wrote in

support of the proposed change in

§ 361.60(b)(3)(ii) that would authorize a State

to use funds that are earmarked for a

particular geographic area within the State as

part of its non-Federal share without

obtaining a waiver of statewideness if the

State determines and informs the RSA

Commissioner that it cannot provide the full

amount of its non-Federal share without

using the earmarked funds. This commenter

indicated that the provision was needed

Federal Register / Vol. 66, No. 11 / Wednesday, January 17, 2001 / Rules and Regulations 4435

since many State legislatures appropriate

most, but not all, of the funds needed to

match the full amount of Federal funds

available under the program.

Discussion: Although section 101(a)(4)(B)

of the Act is intended to assist some States

in meeting their matching obligations, we

wish to reemphasize that statewideness

requirements still apply to the Federal VR

program funds that the State receives in

return for contributing geographically limited

earmarked funds to its non-Federal share. For

further discussion of the effect of this change

from the previous regulations, please refer to

the preamble to the NPRM (65 FR 10630).

Changes: None.

Sections 361.80–361.89 Evaluation

Standards and Performance Indicators

Comments: None.

Discussion: The Evaluation Standards and

Performance Indicators for the VR program

were published in the Federal Register on

June 5, 2000 (65 FR 35792) and became

effective on July 5, 2000. Because these

performance measures are part of the

regulations implementing the VR program

(34 CFR 361), we have added the measures

and their corresponding requirements to the

final regulations in this publication. The

Evaluation Standards and Performance

Indicators are located in §§ 361.80 through

361.89 of Subpart E. For guidance in

implementing the performance measures, we

suggest you consult the preamble to the prior

Federal Register publication of the measures

(65 FR 35792).

Changes: We have amended the proposed

regulations to include Subpart E, ‘‘Evaluation

Standards and Performance Indicators,’’ and

the corresponding provisions in §§ 361.80

through 361.89 that were previously

published. The requirements in these

sections are the same as those published in

the Federal Register on June 5, 2000.

[FR Doc. 01–512 Filed 1–16–01; 8:45 am]

BILLING CODE 4000–01–U