I 
118TH CONGRESS 
1ST SESSION H. R. 1263 
To assist employers providing employment under special certificates issued 
under section 14(c) of the Fair Labor Standards Act of 1938 in trans-
forming their business and program models to models that support indi-
viduals with disabilities through competitive integrated employment, to 
phase out the use of such special certificates, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 28, 2023 
Mr. SCOTT of Virginia (for himself and Mrs. RODGERS of Washington) intro-
duced the following bill; which was referred to the Committee on Edu-
cation and the Workforce 
A BILL 
To assist employers providing employment under special cer-
tificates issued under section 14(c) of the Fair Labor 
Standards Act of 1938 in transforming their business 
and program models to models that support individuals 
with disabilities through competitive integrated employ-
ment, to phase out the use of such special certificates, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Transformation to 
Competitive Integrated Employment Act’’. 
SEC. 2. TABLE OF CONTENTS. 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
Sec. 3. Purposes. 
TITLE I—COMPETITIVE INTEGRATED EMPLOYMENT 
TRANSFORMATION GRANT PROGRAMS 
Sec. 101. Program authorized. 
Sec. 102. State grant program. 
Sec. 103. Certificate holder grant program. 
TITLE II—PHASE OUT OF SPECIAL CERTIFICATES UNDER 
SECTION 14(C) OF THE FAIR LABOR STANDARDS ACT OF 1938 
Sec. 201. Transition to fair wages for individuals with disabilities. 
Sec. 202. Prohibition on new special certificates; sunset. 
TITLE III—TECHNICAL ASSISTANCE AND DISSEMINATION 
Sec. 301. Technical Assistance and dissemination. 
TITLE IV—REPORTING AND EVALUATION 
Sec. 401. Impact evaluation and reporting. 
Sec. 402. Wage and hour reports. 
TITLE V—GENERAL PROVISIONS 
Sec. 501. Definitions. 
Sec. 502. Authorization of appropriations. 
SEC. 3. PURPOSES. 
The purposes of this Act are to— 
(1) assist employers with special certificates 
issued under section 14(c) of the Fair Labor Stand-
ards Act of 1938 (29 U.S.C. 214(c)) to transform 
their business and program operations to models 
that support individuals with disabilities to find and 
retain work in competitive integrated employment; 
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(2) ensure individuals with disabilities, families 
of such individuals, State and local governments, 
and other stakeholders are involved in the trans-
formations described in paragraph (1); 
(3) ensure individuals employed in programs 
using such special certificates transition to competi-
tive integrated employment positions and, as needed, 
to integrated services that support them in their 
homes and in community settings; 
(4) identify models and processes for shifting 
business and program models from such special cer-
tificates to competitive integrated employment mod-
els and integrated community participation and 
wraparound services, and to share that information 
with other such special certificate holders, State and 
local entities, and other service providers for individ-
uals with disabilities; and 
(5) support States and local governments as 
they revise and implement their Olmstead plans and 
local plans, respectively, in order to improve com-
petitive integrated employment outcomes for individ-
uals with disabilities through all State workforce de-
velopment systems. 
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TITLE 
I—COMPETITIVE 
INTE-
GRATED 
EMPLOYMENT 
TRANSFORMATION 
GRANT 
PROGRAMS 
SEC. 101. PROGRAM AUTHORIZED. 
From the amounts appropriated to carry out this 
title, the Secretary of Labor shall award grants under sec-
tions 102 and 103, on a competitive basis, to States and 
eligible entities to assist employers who were issued special 
certificates in transforming their business and program 
models from providing employment using such special cer-
tificates to business and program models that employ and 
support individuals with disabilities by— 
(1) providing competitive integrated employ-
ment, including by compensating all employees of 
the employer at a rate that is— 
(A) not less than 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)) 
or the rate specified in the applicable State or 
local minimum wage law; and 
(B) not less than the customary rate paid 
by the employer for the same or similar work 
performed by other employees who are not indi-
viduals with disabilities, and who are similarly 
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situated in similar occupations by the same em-
ployer and who have similar training, experi-
ence, and skills; 
(2) assisting individuals with disabilities who 
were employed by the employer in finding and re-
taining work in competitive integrated employment, 
which work may be with the employer after such 
transformation or in another competitive integrated 
employment setting; 
(3) providing integrated community participa-
tion and wraparound services for individuals with 
disabilities; and 
(4) ensuring all such services and other non- 
employment services offered under, or with assist-
ance from, such a grant comply with the require-
ments for home and community-based services under 
the Home and Community-Based Services (HCBS) 
final rule published on January 16, 2014 (79 Fed. 
Reg. 2948), or a successor rule. 
SEC. 102. STATE GRANT PROGRAM. 
(a) APPLICATION.— 
(1) IN GENERAL.—To be eligible to receive a 
grant under this section, a State shall submit an ap-
plication to the Secretary at such time, in such man-
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ner, and including such information as the Secretary 
may reasonably require. 
(2) CONTENTS.—Each application submitted 
under paragraph (1) shall include— 
(A) a description of the status of the em-
ployers in the State providing employment 
using special certificates, including— 
(i) the number of employers in the 
State using special certificates to employ 
and pay individuals with disabilities; 
(ii) the number of employers described 
in clause (i) that also employ individuals 
with disabilities in competitive integrated 
employment, which shall include employers 
providing such employment in combination 
with integrated services; 
(iii) the number of employees em-
ployed 
under 
a 
special 
certificate, 
disaggregated by— 
(I) employer; and 
(II) demographic characteristics, 
including gender, race, ethnicity, and 
type of disability, unless indicating 
such characteristics would disclose 
personally identifiable information; 
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(iv) the average, median, minimum, 
and maximum number of hours such em-
ployees work per week, disaggregated by 
employer, and reported for the State as a 
whole; and 
(v) the average, median, minimum, 
and maximum hourly wage for such em-
ployees, disaggregated by employer, and 
reported for the State as a whole; 
(B) a description of the activities of the 
State with respect to competitive integrated em-
ployment for individuals with disabilities, in-
cluding, as applicable— 
(i) a copy of the State plan for car-
rying out the Employment First initiative; 
(ii) a copy of the Olmstead plan of the 
State; 
(iii) a description of activities related 
to the development and promotion of 
ABLE accounts; and 
(iv) a description of the medical as-
sistance provided by the State through a 
Medicaid buy-in eligibility pathway under 
subclause (XV) or (XVI) of section 
1902(a)(10)(A)(ii) of the Social Security 
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Act (42 U.S.C. 1396a(a)(10)(A)(ii)), in-
cluding any premiums or other cost shar-
ing imposed on individuals who enroll in 
the State Medicaid program through such 
a pathway; 
(C) a description of activities to be funded 
under the grant, and the goals of such activi-
ties, including— 
(i) the process to be used to identify 
each employer in the State that will trans-
form its business and program models 
from employing individuals with disabilities 
using special certificates to employing indi-
viduals with disabilities in competitive inte-
grated employment settings, or a setting 
involving a combination of competitive in-
tegrated employment and integrated serv-
ices; 
(ii) the number of such employers in 
the State that will carry out a trans-
formation described in clause (i); 
(iii) the service delivery infrastructure 
that will be implemented in the State to 
support individuals with disabilities who 
have been employed under special certifi-
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cates through such a transformation, in-
cluding 
providing 
enhanced 
integrated 
services to support individuals with the 
most significant disabilities; 
(iv) a description of the process to re-
cruit and engage Federal, State, and local 
governments and nonprofit and private em-
ployers to hire individuals with disabilities 
into competitive integrated employment 
who have been employed under special cer-
tificates; 
(v) the competitive integrated employ-
ment and integrated services that will be 
implemented in the State to support such 
individuals; 
(vi) a timeline for phasing out employ-
ment using special certificates in the State, 
which shall not extend past the date on 
which the legal effect of such certificates 
expires under section 14(c)(7) of the Fair 
Labor Standards Act of 1938 (29 U.S.C. 
214(c)(7)), as added by title II; 
(vii) a timeline for the expansion of 
employers that will provide competitive in-
tegrated employment, or a combination of 
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competitive integrated employment and in-
tegrated services, to individuals with dis-
abilities who have been employed by such 
employers under special certificates; 
(viii) a description of the expanded 
competitive integrated employment and in-
tegrated services to be provided to such in-
dividuals as a result of transformations de-
scribed in clause (i); and 
(ix) a description of the process to be 
used to engage stakeholders in such trans-
formations; 
(D) a description of how the activities 
under the grant will coordinate and align Fed-
eral, State, and local programs, agencies, and 
funding in the transformations described in 
subparagraph (C)(i); 
(E) a description of the State’s evaluation 
plan to determine the social and economic im-
pact of the grant, including the impact (as 
measured throughout the transformation and 
the 2-year period after the State has phased out 
employment using special certificates) on— 
(i) the employment status of individ-
uals with disabilities in the State, including 
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the number of hours worked, average 
wages, and job satisfaction, of such indi-
viduals; and 
(ii) changes in provider capacity to 
support competitive integrated employment 
and integrated services; 
(F) assurances that— 
(i) the activities carried out under the 
grant will result in each employer in the 
State that provides employment using spe-
cial certificates on the date of enactment of 
this Act transforming as described in sub-
paragraph (C)(i); 
(ii) individuals with the most signifi-
cant disabilities, including intellectual and 
developmental disabilities, who will be af-
fected by such a transformation will be 
given priority in receiving the necessary 
competitive integrated employment sup-
ports and integrated services to succeed 
during and after such a transformation; 
(iii) each individual in the State who 
is employed under a special certificate will, 
as a result of such a transformation, be 
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employed in competitive integrated employ-
ment; 
(iv) at a minimum, the State agencies 
responsible for developmental disability 
services, Medicaid, education, vocational 
rehabilitation, 
mental 
health 
services, 
transportation, and workforce development 
agree to be partners in the goals of the 
grant; 
(v) until the date that is 2 years after 
the legal effect of special certificates ex-
pires under section 14(c)(7) of the Fair 
Labor Standards Act of 1938 (29 U.S.C. 
214(c)(7)), as added by title II, the State 
will comply with requirements of the Sec-
retary with respect to the collection of 
data, and will require employers providing 
employment under special certificates in 
the State to comply with such require-
ments; 
(vi) the State will cooperate with the 
evaluation under title IV by providing all 
data required and allow the evaluation of 
activities under the grant; 
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(vii) the State will establish an advi-
sory council described in paragraph (3) to 
monitor and guide the process of trans-
forming business and program models of 
employers in the State as described in sub-
paragraph (C)(i); 
(viii) the State will cooperate with the 
nonprofit entity carrying out technical as-
sistance and dissemination activities under 
title III; 
(ix) all integrated services and non- 
employment services offered by employers 
in the State will comply with— 
(I) the requirements for home 
and community-based services under 
the 
Home 
and 
Community-Based 
Services (HCBS) final rule published 
on January 16, 2014 (79 Fed. Reg. 
2948), or a successor rule; 
(II) the holding of the Olmstead 
decision; and 
(III) the Americans with Disabil-
ities Act of 1990 (42 U.S.C. 12101 et 
seq.); and 
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mental disabilities, who are or were employed 
under a special certificate, who shall comprise 
not less than 25 percent of the members. 
(B) A family member of an individual with 
an intellectual or developmental disability who 
is employed under a special certificate. 
(C) A family member of an individual with 
an intellectual or developmental disability who 
is employed in competitive integrated employ-
ment. 
(D) An employer providing competitive in-
tegrated employment. 
(E) An employer providing employment 
under special certificates. 
(F) A representative of a nonprofit agency 
or organization specializing in competitive inte-
grated employment. 
(G) A representative of the State develop-
mental disability agency. 
(H) A representative of the State voca-
tional rehabilitation agency, as such term is 
used under the Rehabilitation Act of 1973 (29 
U.S.C. 701 et seq.). 
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(N) A representative of the State Medicaid 
office. 
(O) Representatives of other State agencies 
and disability organizations and other disability 
related offices and groups with expertise in 
competitive integrated employment. 
(b) GEOGRAPHIC DIVERSITY.—To the extent prac-
ticable, the Secretary shall distribute grant funds under 
this section equitably among geographic areas of the 
United States, and take into account rural and urban di-
versity. 
(c) DURATION OF AWARDS.—A grant under this sec-
tion shall be awarded for a period of 5 years. 
(d) LIMIT ON AWARD NUMBER.—A State may only 
be awarded 1 grant under this section. 
(e) AMOUNT OF AWARDS.—A grant awarded under 
this section may not be made in an amount that is less 
than $2,000,000, or more than $10,000,000 for the 5 year 
grant period. 
(f) ADDITIONAL FUNDING FOR SUPPORTED EMPLOY-
MENT SERVICES.— 
(1) IN GENERAL.—Title VI of the Rehabilita-
tion Act of 1973 is amended— 
(A) in section 603 (29 U.S.C. 795h)— 
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(i) in subsection (a), by adding at the 
end the following: 
‘‘(3) REFERENCES.—For purposes of this sub-
section, any reference to sums or amounts appro-
priated under this title shall not be considered to in-
clude the amounts appropriated under section 
611(e).’’; 
(ii) in subsection (c)— 
(I) by inserting ‘‘or a grant 
under section 611’’ after ‘‘allotment 
under this title’’; and 
(II) by inserting ‘‘or such grant’’ 
after ‘‘such allotment’’; and 
(iii) in subsection (d)— 
(I) by inserting ‘‘or a grant 
under section 611’’ after ‘‘allotment 
under this title’’; and 
(II) by inserting ‘‘or such grant’’ 
after ‘‘such allotment’’; 
(B) in section 604(b)(2) (29 U.S.C. 
795i(b)(2)), by inserting ‘‘(including through a 
grant awarded under section 611)’’ after ‘‘this 
title’’; 
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(C) in section 610 (29 U.S.C. 795o), by in-
serting ‘‘, except for section 611,’’ after ‘‘this 
title’’; and 
(D) by adding at the end the following: 
‘‘SEC. 611. ADDITIONAL FUNDING FOR CERTAIN STATES 
WITH COMPETITIVE INTEGRATED EMPLOY-
MENT. 
‘‘(a) GRANTS.—From amounts appropriated under 
subsection (e), the Secretary shall award a grant under 
this section to each eligible State that submits an applica-
tion under subsection (c) for the purposes described in sec-
tion 604. 
‘‘(b) ELIGIBILITY.— 
‘‘(1) IN GENERAL.—A State is eligible for a 
grant under this section for a fiscal year if the 
State— 
‘‘(A) is eligible for an allotment under sec-
tion 603(a) for the fiscal year; and 
‘‘(B) has successfully completed a grant 
under section 102 of the Transformation to 
Competitive Integrated Employment Act during 
that fiscal year or the preceding fiscal year, as 
determined under paragraph (2). 
‘‘(2) SUCCESSFULLY COMPLETING A COMPETI-
TIVE INTEGRATED EMPLOYMENT GRANT.—A State 
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has successfully completed a grant under section 
102 of the Transformation to Competitive Inte-
grated Employment Act if, at the conclusion of the 
5-year period of the grant, the Secretary deter-
mines— 
‘‘(A) the State has complied with all re-
quirements under such section for such grant; 
‘‘(B) the State has ceased issuing special 
certificates under section 14(c) of the Fair 
Labor Standards Act of 1938 (29 U.S.C. 
214(c)); and 
‘‘(C) no special certificates issued under 
such section have any force or effect. 
‘‘(c) APPLICATION.—A State seeking a grant under 
this section shall submit an application to the Secretary 
at such time, in such manner, and containing such infor-
mation as the Secretary may reasonably require, including 
information demonstrating the State has successfully com-
plied with the requirements under subsection (b)(2). 
‘‘(d) AWARDS.— 
‘‘(1) IN GENERAL.—A grant to a State under 
this section shall be awarded in an amount deter-
mined under paragraph (2) for a fiscal year, except 
as provided under paragraph (3). 
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‘‘(2) AMOUNT.—Subject to available appropria-
tions under subsection (e), the amount of a grant 
under this section to a State for a fiscal year shall 
be equal to 25 percent of the amount allotted to 
such State under subsection (a) of section 603 for 
the preceding fiscal year (excluding any additional 
amounts allotted to the State under subsection (b) 
of such section). 
‘‘(3) CONTINUED COMPLIANCE.—If a State re-
ceiving a grant under this section ceases compliance 
with subparagraph (B) or (C) of subsection (b)(2) 
for a fiscal year— 
‘‘(A) no amounts shall be awarded through 
such grant for such fiscal year; or 
‘‘(B) in a case in which such amounts have 
already been awarded to the State for such fis-
cal year, the State shall return to the Secretary 
such amounts. 
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated for each of fiscal years 
2028 through 2032 such sums as may be necessary to 
carry out this section.’’. 
(2) TABLE OF CONTENTS.—The table of con-
tents in section 1(b) of the Rehabilitation Act of 
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1973 is amended by adding after the item relating 
to section 610 the following: 
‘‘Sec. 611. Additional funding for certain States with competitive integrated 
employment.’’. 
SEC. 103. CERTIFICATE HOLDER GRANT PROGRAM. 
(a) IN GENERAL.—To be eligible to receive a grant 
under this section, an eligible entity shall submit an appli-
cation to the Secretary at such time, in such manner, and 
including such information as the Secretary may reason-
ably require. 
(b) CONTENTS.—Each application submitted under 
subsection (a) shall include— 
(1) the status of the eligible entity’s use of spe-
cial certificates to employ individuals with disabil-
ities, including— 
(A)(i) the number of employees the eligible 
entity employs using such special certificates at 
the time of submission of the application; 
(ii) the aggregate demographic profile of 
such employees, including gender, race, and 
type of disability of such employees, unless indi-
cating such demographic profile would disclose 
personally identifiable information; and 
(iii) an historical accounting, covering each 
of the previous 4 fiscal years, of— 
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(I) the number of employees with a 
disability working for a wage that is— 
(aa) less than 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)) or the rate 
specified in the applicable State or 
local minimum wage law; or 
(bb) less than the customary rate 
paid by the employer for the same or 
similar work performed by other em-
ployees who are not individuals with 
disabilities, and who are similarly sit-
uated in similar occupations by the 
same employer and who have similar 
training, experience, and skills; 
(II) an aggregate demographic profile 
of such employees including gender, race, 
ethnicity, age, and type of disability; 
(B) the average, minimum, maximum, and 
range of hourly wages paid to employees em-
ployed using such special certificates during the 
previous year; 
(C) during the preceding 5 fiscal years, the 
number 
of 
individuals 
with 
disabilities, 
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disaggregated by fiscal year, who have been 
transitioned by the eligible entity from employ-
ment under such special certificates to competi-
tive integrated employment; and 
(D) a description of the business and pro-
gram models (including the financial and orga-
nizational structure) of the eligible entity that 
is using the special certificates, including— 
(i) the number and types of contracts 
the entity has entered into during the pre-
ceding 5 fiscal years to supply goods or 
services and under which individuals with 
or without disabilities are employed; 
(ii) the budget and the funding struc-
ture, including all sources of funding, for 
the preceding 5 fiscal years; 
(iii) the human resource structure; 
and 
(iv) the entities partnering with the 
eligible entity as described in subsection 
(h)(2); 
(2) a description of activities to be funded 
under the grant, and the goals of such activities, in-
cluding— 
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(A) a description of the business and pro-
gram models of competitive integrated employ-
ment or a combination of competitive integrated 
employment and integrated services into which 
the models of the eligible entity will transform, 
including the business plan, employment struc-
ture, and leadership organization of the eligible 
entity; 
(B) a description of— 
(i) the integrated services to be pro-
vided by the eligible entity; or 
(ii) the eligible entity’s process for re-
ferring an individual requiring such serv-
ices to a provider of such services to en-
sure that the individual receives such serv-
ices; 
(C) after the transformation of the eligible 
entity’s business and program models as de-
scribed in subparagraph (A), the number of em-
ployees that will be employed under such mod-
els; 
(D) the date on which the eligible entity 
will discontinue using special certificates, and 
the funding structure the eligible entity will use 
to provide competitive integrated employment 
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or a combination of such employment and inte-
grated services; and 
(E) the process to be used for the trans-
formation of the eligible entity’s business and 
program models as described in subparagraph 
(A), including— 
(i) redesign of contracts; 
(ii) changes in funding sources; 
(iii) staff training on competitive inte-
grated employment support and practices; 
(iv) input from key stakeholders, in-
cluding individuals with disabilities, their 
families, and other local stakeholders; and 
(v) a description of the individuals 
who will be responsible for the development 
and implementation of such process; 
(3) a description of the process to recruit and 
engage Federal, State, and local governments and 
nonprofit and private employers to hire individuals 
with disabilities who have been employed under spe-
cial certificates; 
(4) a timeline of activities to be implemented 
and goals to be reached on at least a quarterly basis 
during the 3-year grant period; 
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(5) a description of how the activities under the 
grant will coordinate and align Federal, State, and 
local programs, agencies, and funding in the trans-
formation described in paragraph (2)(A); 
(6) assurances that— 
(A) the activities carried out under the 
grant will result in the transformation described 
in paragraph (2)(A); 
(B) individuals with disabilities who are 
employed by the eligible entity under special 
certificates will be employed in competitive inte-
grated employment; 
(C) the eligible entity will comply with the 
requirements of the Secretary with respect to 
the collection of data; 
(D) the eligible entity will cooperate with 
the evaluation described in title IV by providing 
all data required and allow evaluation of the ac-
tivities under the grant; and 
(E) the eligible entity will cooperate with 
the nonprofit entity carrying out technical as-
sistance and dissemination required under title 
III; 
(7) a description of the eligible entity’s evalua-
tion plan to determine the impact of the grant; 
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(8) assurances of collaboration and support 
from all State entities, including the State Medicaid 
agency, the State developmental disability agency, 
the State vocational rehabilitation agency, the State 
department of education, the State board, the local 
board, and other State and local governmental enti-
ties and organizations that support transformations 
to providing competitive integrated employment and 
integrated services for employees employed under a 
special certificate; and 
(9) such other information and assurances as 
the Secretary may reasonably require. 
(c) GEOGRAPHIC DIVERSITY.—To the extent prac-
ticable, the Secretary shall distribute grant funds under 
this section equitably among geographic areas of the 
United States, and shall take into account rural and urban 
diversity. 
(d) PROGRAM SIZE.—To the extent practicable, the 
Secretary shall distribute grant funds under this section 
equitably among eligible entities providing employment 
using special certificates serving different numbers of indi-
viduals. 
(e) DURATION OF AWARDS.— 
(1) GRANT PERIOD.—A grant awarded under 
this section shall be awarded for a period of 3 years. 
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