An Act to amend the Vocational Rehabilitation Act so as to promote and assist in the extension and improvement of vocational rehabilitation services, provide for a more effective use of available Federal funds, and otherwise improve the provisions of that Act, and for other purposes
PL 83-565 (S.2759), enacted 08/03/1954

652 
PUBLIC LAW 565-AUG. 3, 1954 
[68 ST A T . 
Public Law 565 
CHAPTER 655 
August 3, 1954 
IS. 2759] 
AN ACT 
To amend the Vocational Rehabilitation Act so as to promote and assist in the 
extension and improvement of vocational rehabilitation services, provide for 
a more effective use of available Federal funds, and otherwise improve the 
provisions of that Act, and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
h a'b^rV°TL u ^n United States of America in Congress assembled, That this Act may be 
Amendment s o
f cited as the "Vocational Rehabilitation Amendments of 1954". 
1954. 
41 Stat. 735. 
AMENDMENTS TO T H E V OCATIONAL REHABILITATION ACT 
SEC. 2. The Vocational Rehabilitation Act (29 U. S. C. ch. 4) is 
amended to read as follows: 
Types of grants. 
AvaUabUity. 
AUTHORIZATION OF APPROPRIATIONS FOR GRANTS ; PURPOSES FOR W H I C H 
AVAILABLE 
"SECTION 1. For the purpose of assisting the States in rehabilitating 
physically handicapped individuals so that they may prepare for and 
engage in remunerative employment to the extent of their capabilities, 
thereby increasing not only their social and economic well-being but 
also the productive capacity of the Nation, there are hereby authorized 
to be appropriated for the fiscal year ending June 30, 1955, the sum of 
$30,000,000, for the fiscal year ending June 30, 1956, the sum of 
$45,000,000, for the fiscal year ending June 30, 1957, the sum of 
$55,000,000, for the fiscal year ending June 30, 1958, the sum of $65,-
000,000, and for each fiscal year thereafter such sums as Congress may 
determine, for grants to carry out the purposes of this Act. The 
sums so appropriated for any fiscal year shall be available for— 
"(1) grants to States under section 2 to assist them in meeting 
the costs of vocational rehabilitation services; 
"(2) 
grants to States under section 3 to assist them in initiat-
ing projects for the extension and improvement of their vocational 
rehabilitation services; and 
"(3) grants to States and to public and other nonprofit organ-
izations and agencies under section 4 to assist in meeting the costs 
of projects for research, demonstrations, training, and trainee-
ships, and special projects, which hold promise of making a sub-
stantial contribution to the solution of vocational rehabilitation 
problems common to a number of States, including temporary 
assistance in initiating a substantial nationwide expansion of 
vocational rehabilitation programs in the States. 
The portion of such sums which shall be available for each of such 
three types of grants shall be specified in the Act appropriating such 
sums, except that the first $23,000,000 of the aggregate sums so appro-
priated for any fiscal year shall be available for grants to States under 
section 2 to assist them in meeting the costs of vocational rehabilitation 
services. 
"GRANTS TO STATES FOR VOCATIONAL REHABILITATION SERVICES 
"SEC. 2. (a) (1) From the sums available for any fiscal year for 
grants to States to assist them in meeting the costs of vocational reha-
bilitation services, each State shall be entitled to an allotment of an 
amount which bears the same ratio to such sums as the product of (A) 
the population of the State and (B) the square of its allotment per-
centage (as defined in section 11 (h)) bears to the sum of the corre-
sponding products for all the States. 
68 
S T A T . ] 
PUBLIC LAW 565-AUG- 3, 1954 
653 
"(2) The allotment to any State for anj fiscal year, as computed 
under the provisions of paragraph (1), which is less than such State's 
base allotment, shall, notwithstanding such provisions, be increased to 
the amount of such base allotment. 
"(3) For the purposes of this section, a State's base allotment is an 
amount equal to the amount allotted to such State for expenditures, 
under its State plan approved under this Act, for the fiscal year ending 
June 30,1954 (which, in the case of the District of Columbia, shall be 
the amount appropriated to the Secretary for such fiscal year for pro-
viding rehabilitation services in the District of Columbia), increased 
by a uniform percentage which, if applied to the amounts so allotted 
to all the States, would increase the total of sucli allotments to 
$23,000,000. 
"(4) The allotment to any State, as computed under the provisions 
of paragraph (1) for any fiscal year, which is greater than such 
State's base allotment by a percentage in excess of one and one-half 
times the percentage by which the sums available for allotments under 
this section for such year exceed $23,000,000, shall be reduced by the 
amount of such excess. 
"(5) Sums equal to the reductions effected under paragraph (4) for 
any fiscal year shall be added to the allotments of other States as com-
puted under paragraph (1) for such year as follows: 
"(A) The allotment of any State as so computed which is less than 
such State's base allotment, shall be increased to the amount of such 
base allotment. 
"(B) The remainder of such sums shall be used to increase by a uni-
form percentage the allotment of each of the States whose allotments 
were not subject to reduction under paragraph (4), but with such 
adjustments as may be necessary to prevent the allotment of any of 
such States from being so increased as to require reduction under 
paragraph (4). 
"(b) (1) From each State's allotment under this section for any 
fiscal year ending after June 30, 1962, the Secretary shall pay to such 
State an amount equal to the Federal share (determined as provided 
in section 11 (i)) of the cost of vocational rehabilitation services under 
the plan for such State approved under section 5, including expendi-
tures for the administration of the State plan. 
"(2) From each State's allotment under this section for any fiscal 
year ending prior to July 1, 1962, the Secretary shall make payments 
to such State, with respect to the cost of vocational rehabilitation 
services under the plan of such State approved under section 5, includ-
ing expenditures for the administration of the State plan, determined 
as follows: 
"(A) A portion of such allotment equal to the State's base 
allotment shall be available for payment to such State of its 
adjusted Federal share of such cost of vocational rehabilitation 
services. 
"(B) After such portion has been paid in full, any remaining 
portions of a State's allotment shall be available for payment to 
such State of an amount equal to its Federal share (determined as 
provided in section 11 (i)) of such cost for which payments have 
not been made under subparagraph (A). 
" (3) For the purposes of this subsection— 
"(A) a State's adjusted Federal share for any fiscal year 
means— 
"(i) in the case of any fiscal year ending prior to July 1, 
1959, the 1954 Federal share for such State; and 
"(ii) in the case of the fiscal year ending June 30, 1960, 
June 30, 1961, or June 30, 1962, the Federal share for such 
Base allotmeni:. 
Adjusted Federal 
share. 
654 
PUBLIC LAW 565-AUG. 3, 1954 
[68 S T A T -
1 9 5 4 F e d e r a l 
share. 
1954 State funds. 
Services for the 
blind. 
Division of a l -
lotment. 
Separate F e d • 
eral shares. 
*
'
^ 
State for such year increased (if it is less than such State's 
1954 Federal share) or decreased (if it is greater than such 
State's 1954 Federal share) by 75 per centum, 50 per centum, 
and 25 per centum, respectively, of the difference between 
such Federal share for the year involved and the 1954 Federal 
share. 
"(B) A State's 1954 Federal share means the percentage which 
(i) the base allotment of such State is of (ii) the sum of such 
allotment and the amount of 1954 State funds. 
"(C) The 1954 State funds for any State shall be the amount 
of State and other non-Federal funds available for expenditures, 
under such State's plan approved under this Act, for the fiscal 
year ending June 30,1954, as estimated by the Secretary for pur-
poses of determining such State's allotment for such year for such 
expenditures, except that the 1954 State funds for the District of 
Columbia shall be the amount appropriated for such fiscal year 
out of the general fund of the District of Columbia for vocational 
rehabilitation. 
"(c) If in any State there is, during the fiscal year ending June 30, 
1954, a State agency administering or supervising the administration 
of the part of the State plan under which vocational rehabilitation 
services are provided for the blind, separate from the State agency 
administering or supervising the administration of the remainder of 
the State plan— 
"(1) for each consecutive fiscal year during which there are 
such separate agencies, the portion of such State's allotment which 
is equal to such State's base allotment shall be divided between the 
two agencies in the same proportion as the amount allotted to the 
State under this Act for expenditures during the fiscal year end-
ing June 30,1954, was divided between such agencies; 
"(2) for each such consecutive fiscal year ending prior to July 
1,1962, separate Federal shares shall be established for such agen-
cies for purposes of subsection (b) (2), and for such purposes— 
^ 
"(A.) the 1954 Federal share for each shall be the percent-
age which (i) the portion of the State's allotment for the 
fiscal year ending June 30, 1954, which was made available 
to each, is of (ii) the portion of the sum of such allotment 
' 
and the amount of 1954 State funds available to each for 
expenditures, under the State plan approved under this Act, 
during such year; and 
"(B) the portion of the allotment referred to in subsection 
( b ) ( 2 ) ( A ) for each shall be the portion of the State's allot-
ment allocated to each pursuant to paragraph (1) of this 
' 
subsection. 
a 
B a s i s 
ments. 
GRANTS TO STATES FOR EXTENSION AND IMPROVEMENT PROJECTS 
of allot- 
"SEC. 3. (a) '1) From the sums available for any fiscal year for 
grants to States to assist them in initiating projects for the extension 
and improvement of vocational rehabilitation services, each State 
shall be entitled to an allotment of an amount bearing the same ratio 
to such sums as the population of such State bears to the population of 
all the States. 
The allotment to any State under the preceding sen-
tence for any fiscal year which is less than $5,000 (or such other amount 
as may be specified as a minimum allotment in the Act appropriating 
such sums for such year) shall be increased to that amount, the total 
of the increases thereby required being derived by proportionately 
reducing the allotments to each of the remaining States under the 
preceding sentence, but with such adjustments as may be necessary to 
68 
S T A T . ] 
PUBLIC LAW 565-AUG. 3, 1954 
656 
prevent the allotment of any of such remaining States from being 
thereby reduced to less than that amount. 
"(2) From each State's allotment under this section for any fiscal 
year, the Secretary shall pay to such State a portion of the cost of 
approved projects for the extension and improvement of vocational 
rehabilitation services (including their administration) under the 
State plan. 
The Secretary shall approve any project for purposes 
of this section only if the plan of such State approved under section 5 
includes such project or is modified to include it and only if he finds 
the project constitutes an extension or improvement of vocational 
rehabilitation services under the State plan or will contribute mate-
rially to such an extension or improvement. 
"(b) Payments under this section with respect to any project may 
be made for a period of not to exceed three years beginning with the 
commencement of the first fiscal year for which any payment is made 
with respect to such project from an allotment under this section. 
To 
the extent permitted by the State's allotment under this section, such 
payments with respect to any project shall be equal to 75 per centum 
of the cost of such project, except that, at the request of the State, such 
payments may be less than such percentage of the cost of such project. 
"(c) No payment may be made from an allotment under this section 
with respect to any cost with respect to which any payment is made 
under section 2. 
"GRANTS FOR SPECIAL PROJECTS 
"SEC. 4. (a) From the sums available therefor for any fiscal year, 
the Secretary shall make grants to States and public and other non-
profit organizations and agencies (1) for paying part of the cost of 
projects for research, demonstrations, training, and traineeships, and 
projects for the establishment of special facilities and services, which, 
in the judgment of the Secretary, hold promise of making a substantial 
contribution to the solution of vocational rehabilitation problems 
common to all or several States, and (2) for planning, preparing for, 
and initiating, during the fiscal year ending June 30, 1955, and the 
fiscal year ending June 30, 1956, a substantial nationwide expansion 
of vocational rehabilitation programs in the States. 
No grant shall 
be made under clause (1) or clause (2) of this subsection for furnish-
ing to an individual any one course of study extending for a period in 
excess of two years. Any ^rant of funds under this subsection which 
will be used for direct services to physically handicapped individuals 
or for establishing facilities which will render direct services to such 
individuals must have the prior approval of the appropriate State 
agency. 
"(b) The Secretary shall be authorized to cooperate in assisting 
with the financing of a pilot demonstration rehabilitation center in the 
metropolitan Washington area to be used as a guide for rehabilitation 
centers which may be set up later in other parts of the country. 
Sums 
made available for such a pilot demonstration center in the Washing-
ton area may be used during such initial period as the Secretary may 
determine for such services as hospitalization, domiciliary care, and 
rehabilitation training, including costs of board and room of trainees 
and other services essential to the program, as in the discretion of the 
Secretary deems desirable. 
The services of such a pilot demonstra-
tion rehabilitation center in the metropolitan Washington area shall 
be made available to area civil service employees as well as to other 
patients. 
"(c) Payments under this section may be made in advance or by way 
of reimbursement for services performed and purchases made, as may 
HEW payment. 
Project approval. 
Duration. 
Restriction. 
Research, train-
ing, etc. 
Program expan-
sion. 
Limitations. 
Direct servicei; 
Approval. 
Dem o n s t r ation 
r e h a b i l i t a t i o n 
c e n t e r , Washing-
ton, D. C., area. 
Payments. 
656 
PUBLIC LAW 565-AUG. 3, 1954 
[68 S T A T . 
National A d v i -
sory C o u n c i l on 
V o c a t i o n a l Re-
habilitation. 
Members. 
Term of office. 
Duties. 
P e r 
diem 
ments. 
p a y 
Report to C o n -
gress. 
be determined by the Secretary; and shall be made on such conditions 
as the Secretary finds necessary to carry out the purposes of this section. 
"(d) (1) There is hereby established in the Department of Health, 
Education, and Welfare a National Advisory Council on Vocational 
Rehabilitation, consisting of the Secretary, or his designee, who shall 
be Chairman, and twelve members appointed without regard to civil-
service laws by the Secretary. The twelve appointed members shall 
be leaders in fields concerned with vocational rehabilitation or in pub-
lic affairs, and six of such twelve shall be selected from leading med-
ical, educational, or scientific authorities who are outstanding for their 
work in the vocational rehabilitation of physically handicapped 
individuals. Three of the twelve appointed members shall be persons 
who are themselves physically handicapped. Each appointed member 
of the Council shall hold office for a term of four years, except that any 
member appointed to fill a vacancy occurring prior to the expiration 
of the term for which his predecessor is appointed shall be appointed 
for the remainder of such term and except that, of the members first 
appointed, three shall hold office for a term of three years, three shall 
hold office for a term of two years, and three shall hold office for a term 
of one year, as designated by the Secretary at the time of appointment. 
None of such twelve members shall be eligible for reappointment until 
a year has elapsed after the end of his preceding term. 
"(2) The Council is authorized to review applications for special 
projects submitted to the Secretary under this section and recommend 
to the Secretary for grants under this section any such projects or any 
projects initiated by it which it believes show promise of making 
valuable contributions to the vocational rehabilitation of physically 
handicapped individuals. The Secretary is authorized to utilize the 
services of any member or members of the Council in connection with 
matters relating to the administration of this section, for such periods, 
in addition to conference periods, as he may determine. 
"(3) Appointed members of the Council, while attending meetings 
of the Council or while otherwise serving at the request of the Secre-
tary, shall be entitled to receive compensation at a rate to be fixed by 
the Secretary, but not exceeding $50 per diem, and shall also be entitled 
to receive an allowance for actual and necessary traveling and subsis-
tence expenses while so serving away from their places of residence. 
"(4) The Secretary shall transmit to the Congress annually a report 
concerning the special projects initiated under this section, the recom-
mendations of the National Advisory Council on Vocational Rehabili-
tation, and any action taken with respect to such recommendations. 
Requirements. 
"STATE PLANS 
"SEC. 5. (a) To be approvable under this Act, a State plan for voca-
tional rehabilitation services shall— 
"(1) designate the State agency administering or supervising 
the administration of vocational education in the State, or a State 
rehabilitation agency 
(primarily concerned with vocational 
rehabilitation), as the sole State agency to administer the plan, 
or to supervise its administration in a political subdivision of the 
State by a sole local agency of such political subdivision, except 
that where under the State's law the State blind commission, or 
other agency which provides assistance or services to the adult 
blind, is authorized to provide them vocational rehabilitation 
services, such State blind commission or other State agency may 
be designated as the sole State agency to administer the part of 
the plan under which vocational rehabilitation services are pro-
vided for the blind (or to supervises the administration of such 
68 S T A T . ] 
PUBLIC LAW 565-AUG- 3, 1954 
657 
part in a political subdivision of the State by a sole local agency 
of such political subdivision) and the State vocational education 
agency or the State rehabilitation agency shall be designated as 
the sole State agency with respect to the rest of the State plan; 
"(2) provide that the head of the vocational rehabilitation 
bureau, division, or other unit of a State vocational education 
agency designated pursuant to paragraph (1), shall be subject 
only to the supervision and direction of such agency or its execu-
tive officer; 
"(3) provide for financial participation by the State, and pro-
vide that the plan shall be in effect in all political subdivisions of 
the State; 
"(4) show the plan, policies, and methods to be followed in 
carrying out the work under the State plan and in its adminis-
tration and supervision, and in case vocational rehabilitation 
services cannot be provided all eligible physically handicapped 
individuals who apply for such services, show the order to be 
followed in selecting those to whom vocational rehabilitation serv-
ices will be provided; 
"(5) provide such methods of administration, other than 
methods relating to the establishment and maintenance of per-
sonnel standards, as are found by the Secretary to be necessary 
for the proper and efficient administration of the plan; 
"(6) contain (A) provisions relating to the establishment and 
maintenance of personnel standards, including provisions relating 
to the tenure, selection, appointment, and qualifications of per-
sonnel, and (B) provisions relating to the establishment and 
maintenance of minimum standards governmg the facilities and 
personnel utilized in the provision of vocational rehabilitation 
services, but the Secretary shall exercise no authority with respect 
to the selection, method of selection, tenure of office, or compen-
sation of any individual employed in accordance with such 
provisions; 
"(7) provide that, in addition to training, maintenance, place-
ment, and guidance, physical restoration services will be pro-
vided under the plan; 
"(8) provide that the State agency will make such reports, 
in such form and containing such information, as the Secretary 
may from time to time reasonably require to carry out his func-
tions under this Act, and comply with such provisions as he may 
from time to time find necessary to assure the correctness and 
verification of such reports; 
"(9) provide for cooperation by the State agency with, and 
the utilization of the services of, the State agency administering 
the State's public assistance program, and the Bureau of Old-Age 
and Survivors Insurance (Department of Health, Education, and 
Welfare) and of other Federal, State, and local public agencies 
providing services relating to vocational rehabilitation services; 
"(10) provide for entering into cooperative arrangements with 
the system of public employment offices in the State and the 
maximum utilization of the job placement and employment coun-
seling services and other services and facilities of such offices; 
and 
"(11) provide that vocational rehabilitation services provided 
under the State plan shall be available to any civil employee of 
the United States disabled while in the performance of his duty 
on the same terms and conditions as apply to other persons. 
"(b) The Secretary shall approve any plan which the Secretary 
Approval. 
finds fulfills the conditions specified in subsection (a) of this section. 
39777 0-—55—pt. 1-
658 
PUBLIC LAW 565-AUG. 3, 1954 
[68 
S T A T . 
Withholdin g 
payments. 
of 
Appeal. 
60 Stat. 237. 
5 u s e 1001 note. 
"(c) Whenever the Secretary, after reasonable notice and oppor-
tunity for hearing to the State agency administering or supervising 
the administration of the State plan approved under this section, finds 
that— 
"(1) the plan has been so changed that it no longer complies 
with the requirements of subsection (a) of this section; or 
"(2) in the administration of the plan there is a failure to com-
ply substantially with any such provision; 
the Secretary shall notify such State agency that no further payments 
will be made to the State under section 2 or 3 (or, in his discretion, that 
further payments will not be made to the State for projects under or 
parts of the State plan affected by such failure), until he is satisfied 
that there is no longer any such failure. 
Until he is so satisfied the 
Secretary shall make no further payments to such State under section 
2 or 3 (or shall limit payments to projects under or parts of the State 
plan in which there is no such failure). 
"(d) If any State is dissatisfied with the Secretary's action under 
subsection (c) of this section, such State may appeal to the United 
States district court for the district where the capital of such State is 
located and judicial review of such action shall be on the record in 
accordance with the provisions of the Administrative Procedure Act. 
u 
METHOD OF COMPUTING AND MAKING PAYMENTS 
"SEC. 6. The method of computing and paying amounts pursuant to 
section 2 or 3 shall be as follows: 
"(1) The Secretary shall, prior to the beginning of each calendar 
quarter or other period prescribed by him, estimate the amount to be 
paid to each State under the provisions of such section for such period, 
such estimate to be based on such records of the State and information 
furnished by it, and such other investigation, as the Secretary may 
find necessary. 
"(2) The Secretary shall pay, from the allotment available therefor, 
the amount so estimated by him for such period, reduced or increased, 
as the case may be, by any sum (not previously adjusted under this par-
agraph) by which he finds that his estimate of the amount to be paid 
the State for any prior period under such section was greater or less 
than the amount which should have been paid to the State for such 
prior period under such section. 
Such payments shall be made prior 
to audit or settlement by the General Accounting Office, shall be made 
through the disbursing facilities of the Treasury Department, and 
shall be made in such installments as the Secretary may determine. 
ii 
studies, etc. 
T e c h n i c a l 
as-
sistance, etc. 
Training. 
ADMINISTRATION 
"SEC. 7. (a) In carrying out his duties under this Act, the Secre-
tary shall— 
" (1) make studies, investigations, demonstrations, and reports 
with respect to abilities, aptitudes, and capacities of physically 
handicapped individuals, development of their potentialities, and 
their utilization in gainful and suitable employment; 
"(2) cooperate with and render technical assistance to States in 
matters relating to the vocational rehabilitation of physically 
handicapped individuals; 
"(3) provide short-term training and instruction in technical 
matters relating to vocational rehabilitation services, including the 
establishment and maintenance of such research fellowships and 
traineeships, with such stipends and allowances (including travel 
and subsistence expenses), as he may deem necessary, except that 
no such training or instruction (or fellowship or scholarship) shall 
68 
S T A T . ] 
PUBLIC LAW 56 5-AUG. 3, 1954 
659 
be provided any individual for any one course of study for a period 
in excess of two years; and 
"(4) disseminate information as to the studies, investigations, 
demonstrations, and reports referred to in paragraph (1) and 
other matters relating to vocational rehabilitation services, and 
otherwise promote the cause of rehabilitation of physically handi-
capped individuals and their greater utilization in gainful and 
suitable employment. 
"(b) The Secretary is authorized to make rules and regulations 
governing the administration of this Act, and to delegate to any officer 
or employee of the United States such of his powers and duties, except 
the making of rules and regulations, as he finds necessary in carrying 
out the purposes of this Act. 
Information, etc. 
Rules and regu-
lations. 
PROMOTION OF EMPLOYMENT OPPORTUNITIES 
"SEC. 8. The Secretary of Labor and the Secretary of Health, Edu-
cation, and Welfare shall cooperate in developing, and in recom-
mending to the appropriate State agencies, policies and procedures 
which will facilitate the placement in employment of handicapped, 
individuals who have received rehabilitation services under State 
vocational rehabilitation programs, and, together with the chairman 
of the President's Committee on Employment of the Physically 
Handicapped, shall develop and recommend methods which will 
assure maximum utilization of services which that committee, and 
cooperating State and local organizations, are able to render in 
promoting job opportunities for such individuals. 
ii REPORTS 
"SEC. 9. Annual reports shall be made to the Congress by the Secre-
tary as to the administration of this Act. 
u 
AUTHORIZATION OF APPROPRIATION FOR ADMINISTRATION 
"SEC. 10. There are hereby authorized to be included for each fiscal 
year in the appropriations for the Department of Health, Education, 
and Welfare such sums as are necessary to administer the provisions 
of this Act. 
"DEFINITIONS 
"SEC. 11. For the purposes of this Act— 
"(a) The term 'vocational rehabilitation services' means diagnostic 
and related services (including transportation) incidental to the 
determination of eligibility for and the nature and scope of services to 
be provided; training, guidance and placement services for physically 
handicapped individuals; and, in the case of any such individual 
found to require financial assistance with respect thereto, after full 
consideration of his eligibility for any similar benefit by way of pen-
sion, compensation, and insurance, any other goods and services nec-
essary to render such individual fit to engage in a remunerative 
occupation (including remunerative homebound work), including the 
following physical restoration and other goods and services— 
"(1) corrective surgery or therapeutic treatment necessary to 
correct or substantially modify a physical or mental condition 
which is stable or slowly progressive and constitutes a substantial 
handicap to employment, but is of such a nature that such cor-
"Vocational re-
habilitation serv-
i c e s " . 
660 
PUBLIC LAW 565-AUG. 3, 1954 
[68 STAT. 
rection or modification may reasonably be expected to eliminate 
or substantially reduce such handicap within a reasonable length 
of time; 
"(2) necessary hospitalization in connection with surgery or 
treatment specified in paragraph (1); 
"(3) such prosthetic devices as are essential to obtaining or 
retaining employment; 
"(4) maintenance, not exceeding the estimated cost of subsist-
' ' 
. 
ence, during rehabilitation; 
"(5) tools, equipment, initial stocks and supplies (including 
equipment and initial stocks and supplies for vending stands), 
books, and training materials, to any or all of which the State 
may retain legal title; and 
"(6) transportation (except where necessary in connection with 
determination of eligibility or nature and scope of services) and 
occupational licenses. 
Such term also includes— 
"(7) the acquisition of vending stands or other equipment and 
initial stocks and supplies for use by severely handicapped indi-
viduals in any type of small business the operation of which will 
be improved through management and supervision by the State 
agency; and 
"(8) the establishment of public and other nonprofit rehabil-
itation facilities to provide services for physically handicapped 
individuals and the establishment of public and other nonprofit 
workshops for the severely handicapped, 
"phy s icai 1 y 
«r\)\ xhe term 'physically handicapped individual' means any indi-
h a n d i c a p p e d i n d i - 
• -,^ 
4 
•, 
• 
i 
i 
-
i 
i
i
T 
I - T , 
^ • ^ 
• 
viduai8.'» 
vidual who is under a physical or mental disability which constitutes 
a substantial handicap to employment, but which is of such a nature 
that vocational rehabilitation services may reasonably be expected to 
render him fit to engage in a remunerative occupation. 
faciHt^**"''""^"°" 
" (^) "^^^ term 'rehabilitation facility' means a facility operated for 
the primary purpose of assisting in the rehabilitation of physically 
handicapped individuals— 
"(1) which provides one or more of the following types of 
services: 
"(A) testing, fitting, or training in the use of prosthetic 
devices; 
"(B) prevocational or conditioning therapy; 
"(C) physical or occupational therapy; 
"(D) adj ustment training; or 
"(E) evaluation or control of special disabilities; or 
"(2) through w^hich is provided an integrated program of med-
ical, psychological, social, and vocational evaluation and services 
under competent professional supervision: Provided, 
That the 
major portion of such evaluation and services is furnished within 
the facility and that all medical and related health services are 
prescribed by, or are under the formal supervision of, persons 
licensed to practice medicine or surgery in the State. 
"Workshop." 
"(d) The term 'workshop' means a place where any manufacture 
or handiwork is carried on and which is operated for the primary pur-
pose of providing remunerative employment to severely handicapped 
individuals who cannot be readily absorbed in the competitive labor 
market. 
"Nonprofit." 
"^g^ The term 'nonprofit', when used with respect to a rehabilita-
tion facility or a workshop, means a rehabilitation facility and a 
workshop, respectively, owned and operated by a corporation or asso-
ciation, no part of the net earnings of which inures, or may lawfully 
inure, to the benefit of any private shareholder or individual and the 
68 
S T A T . ] 
PUBLIC LAW 565-AUG. 3, 1954 
661 
income of which is exempt from taxation under section 101 (6) of the 
Internal Revenue Code. 
"(f) Establishment of a workshop or rehabilitation 
facility 
means— 
"(1) in the case of a workshop, the expansion, remodeling, or 
alteration of existing buildings, necessary to adapt such buildings 
to workshop purposes or to increase the employment opportunities 
in workshops, and the acquisition of initial equipment necessary 
for new workshops or to increase the employment opportunities 
in workshops; and 
"(2) in the case of a rehabilitation facility, the expansion, re-
modeling, or alteration of existing buildings, and initial equip-
ment of such buildings, necessary to adapt such buildings to 
rehabilitation facility purposes or to increase their effectiveness 
for such purposes (subject, however, to such limitations as the 
Secretary may by regulations prescribe in order to prevent impair-
ment of the objectives of, or duplication of, other Federal laws 
providing Federal assistance to States in the construction of such 
facilities) and initial staffing thereof (for a period not exceeding 
one year). 
"(g) The term 'State' includes Alaska, the District of Columbia, 
Hawaii, the Virgin Islands, and Puerto Rico, and for purposes of 
section 4, includes also Guam. 
"(h) (1) The 'allotment percentage' for any State shall be 100 per 
centum less that percentage which bears the same ratio to 50 per 
centum as the per capita income of such State bears to the per capita 
income of the continental United States (excluding Alaska), except 
that (A) the allotment percentage shall in no case be more than 75 
per centum or less than 33l^ per centum, and (B) the allotment per-
centage for Hawaii shall be 50 per centum, and the allotment percent-
age for Alaska, Puerto Rico, and the Virgin Islands shall be 75 per 
centum. 
"(2) The allotment percentages shall be promulgated by the Secre-
tary between July 1 and August 31 of each even-numbered year, on 
the basis of the average of the per capita incomes of the States and of 
the continental United States for the three most recent consecutive 
years for which satisfactory data are available from the Department 
of Commerce. 
Such promulgation shall be conclusive for each of the 
two fiscal years in the period beginning July 1 next succeeding such 
promulgation: Promded^ That the Secretary shall promulgate such 
percentages as soon as possible after the enactment of the Vocational 
Rehabilitation Amendments (jf 1954, which promulgation shall be 
conclusive for the three fiscal years in the period ending June 30,1957. 
"(i) The 'Federal share' for any State for any fiscal year (other 
than the fiscal year ending June 30, 1954) shall be 100 per centum 
less that percentage which bears the same ratio to 40 per centum as 
the per capita income of such State bears to the per capita income of 
the continental United States (excluding Alaska), except that (A) 
the Federal share shall in no case be more than 70 per centum or less 
than 50 per centum, and (B) the Federal share for Hawaii and Alaska 
shall be 60 per centum, and the Federal share for Puerto Rico and 
the Virgin Islands shall be 70 per centum. 
In computing the Federal 
share of a State for a .year, the Secretary shall use the same figures 
for per capita incomes of the States and of the United States as he used 
in computing the allotment percentage of such State for such year. 
"(j) The population of the several States shall be determined on the 
basis of the latest figures furnished by the Department of Commerce, 
"(k) The term 'Secretary', except when the context otherwise 
requires, means the Secretary of Health, Education, and Welfare, 
E St abl i shtne nt. 
Workshop. 
Rehab H i t ation 
facility. 
"Allotment 
centage." 
' F e d e r a l 
State 
tion. 
p o p u 1 a -
'Secretary. 
662 
PUBLIC LAW 565-AUG. 3, 1954 
[68 STAT-
(( 
TRANSITION PROVISIONS 
>
; 
. 
' '• 
' 
"SEO. 12. (a) In the case of any State which, immediately prior 
to July 1, 1954, was carrying on a vocational rehabilitation program 
. } . . . - ! 
under a State plan approved under this Act, such State plan shall be 
deemed to be a State plan approved under section 5 of this Act until 
(1) the Secretary finds, after reasonable notice and opportunity for a 
hearing to the State agency, that such plan has been so changed that it 
no longer complies with any provision required to be included in such 
plan under this Act as in effect prior to the enactment of the Vocational 
Rehabilitation Amendments of 1954, or in the administration of such 
plan there is a failure to comply substantially with any such provision, 
or (2) the plan is superseded by a plan approved under section 5 of 
this Act, or (3) July 1,1955, whichever occurs first. 
"(b) Sums appropriated for grants to States for the fiscal year end-
ing June 30, 1955, pursuant to the Vocational Rehabilitation Act in 
effect prior to the enactment of the Vocational Rehabilitation Amend-
ments of 1954 (including the portion of sums made available to the 
Secretary for rehabilitation services in the District of Columbia) 
shall be deemed to have been made available for grants to States 
5 ' 
under section 2 of this Act. 
Payments made from such sums to a 
State prior to the enactment of the Vocational Rehabilitation Amend-
ments of 1954 (including payments made from such sums before or 
;
>
a > , 
after such enactment for vocational rehabilitation services in the 
District of Columbia) shall be deemed to have been paid under this 
Act from the State's allotment under such section 2. 
,-;: 
• - , - , -.y 
" S H O R T TITLE 
••£.•.-• 
:;•;/... 
"SEC. 13. This Act may be cited as the 'Vocational Rehabilitation 
Act'." 
^
.
. ^^^^, 
,
,
^
_
^
^
.
^
^ ^^,^^,_ .^^^ ^
^
,
^
^
^ ^
^
,
,
^
^
^
^ ,
.
.
^
^
^
^
^
^
^
^
^ ^
^
,
. .,„^, .. .^ 
VOCATIONAL REHABILITATION PROGRAM I N THE DISTRICT OF COLUMBIA 
vernme''nt°^*^' 
SEC. 3. (a) The persouuel, property, and records wMch the Direc-
tor of the Bureau of the Budget determines relate primarily to the 
provision of vocational rehabilitation services in the District of Colum-
bia or the performance of functions of a State licensing agency under 
49 Stat. 1559. 
the Act of Juue 20, 1936 (20 TJ. S. C, ch. 6A), shall be transferred, 
within ninety days after the enactment of this Act, from the Depart-
ment of Health, Education, and Welfare to the municipal government 
of the District of Columbia for use in providing such services and 
performing such functions in the District of Columbia. 
(b) The Board of Commissioners of the District of Columbia is 
hereby authorized, within available appropriations and allotted funds, 
to take such action as may be necessary to secure for the District of 
29 use 4p' 
Columbia the benefits of the Vocational Rehabilitation Act, as 
amended by this Act, and the Act of June 20,1936 (20 U. S. C, ch. 6A). 
(c) Notwithstanding anything to the contrary in section 2 or any 
other provision of this Act, the Secretary of Health, Education, and 
Welfare is authorized to continue the performance of functions 
relating to the provision of vocational rehabilitation services in the 
District of Columbia and to use appropriations available therefor 
until completion of the transfer provided in subsection (a) in like 
manner as such functions were being performed and appropriations 
used by* such Secretary immediately prior to the enactment of this 
"'""'"" '"- 
Act. 
68 
S T A T . ] 
PUBLIC LAW 565-A.UG. 3, 1954 
66S. 
AMENDMENTS TO THE RANDOLPH-SllEPPARD VENDING STAND ACT 
SEC. 4. (a) The first section of the Act entitled "An Act to author-
ize the operation of stands in Federal buildings by blind persons, to 
enlarge the economic opportunities of the blind, and for other pur-
poses", approved June 20, 1936, as amended (20 U. S. C, sec. 107), is 
amended to read as follows: "That for the purpose of providing blind 
persons with remunerative employment, enlarging the economic 
opportunities of the blind, and stimulating the blind to greater efforts 
in striving to make themselves self-supporting, blind persons licensed 
under the provisions of this Act shall be authorized to operate vending 
stands on any Federal property where such vending stands may be 
properly and satisfactorily operated by blind persons. In authorizing 
the operation of vending stands on Federal property, preference shall 
be given, so far as feasible, to blind persons licensed by a State agency 
as provided in this Act; and the head of each department or agency 
in control of the maintenance, operation, and protection of Federal 
property shall, after consultation with the Secretary, and with the 
approval of the President, prescribe regulations designed to assure 
such preference (including assignment of vending machine income 
to achieve and protect such preference) for such licensed blind persons 
without unduly inconveniencing such departments and agencies or 
adversely affecting the interests of the United States." 
(b) (1) Section 2 (a) of such Act of June 20, 1936, as amended 
(20 U. S. C, sec. 107a), is amended by striking out "in Federal and 
other buildings" where it appears in paragraph (1) and inserting in 
lieu thereof "on Federal and other property", and by amending para-
graph (4) to read as follows: 
"(4) Designate as provided in section 3 of this Act the State com-
mission for the blind in each State, or, in any State in which there is 
no such commission, some other public agency to issue licenses to blind 
persons who are citizens of the United States and at least twenty-one 
years of age for the operating of vending stands on Federal and other 
property in such State for the vending of newspapers, periodicals, con-
fections, tobacco products, articles dispensed automatically or in con-
tainers or wrapping in which they are placed before receipt by the 
vending stand, and such other articles as may be approved for each 
property by the department or agency in control of the maintenance, 
operation, and protection thereof and the State licensing agency in 
accordance with the regulations prescribed pursuant to the first sec-
tion: Provided^ That (A) effective four years after the enactment of 
the Vocational Rehabilitation Amendments of 1954, in any State hav-
ing an approved plan for vocational rehabilitation pursuant to the 
Vocational Rehabilitation Act, the licensing agency to be designated 
hereunder shall be the State agency designated pursuant to section 5 
(a) (1) of such Act as the sole State agency with respect to vocational 
rehabilitation of the blind; and (B) prior to such time, no license shall 
be granted except upon certification by a vocational rehabilitation 
agency that the individual is qualified to operate a vending stand." 
(2) Paragraph (5) of such subsection is amended by inserting 
", including the issuance of rules and regulations," after "steps". 
(c) Section 2 (b) of such Act of June 20, 1936, as amended, is 
amended by striking out the third sentence thereof. 
(d) Section 2 (c) of such Act of June 20, 1936, as amended, is 
amended to read as follows: 
"(c) The State licensing agency designated by the Secretary is 
authorized, with the approval of the head of the department or agency 
in control of the maintenance, operation, and protection of the Federal 
property on which the stand is to be located but subject to regulations 
Blind persons. 
Vending s t a n d 
operation. 
C o n c e s s i o n -
s t a n d opp ortuni-
ties. 
S t a t e licensing 
agencies. 
Restrictions. 
29 u s e 41. 
29 u s e 35. 
HEWregulations. 
20 u s e 107a(b). 
20 u s e 107a(c). 
Loc a t i o n and 
type of stand. 
664 
PUBLIC LAW 565-AUG. 3, 1954 
[68 ST A T 
prescribed pursuant to the first section, to select a location for such 
stand and the type of stand to be provided." 
(e) Section 3 of such Act of June 20,1936, as amended (20 U. S. C , 
state licensing gee, 107b), is amended to read as follows: 
^^Application for 
"SEC. 3, A State commission for the blind or other State agency de-
designation. 
slriug to be designated as the licensing agency shall, with the approval 
of the chief executive of the State, make application to the Secretary 
and agree— 
"(1) to cooperate with the Secretary in carrying out the pur-
pose of this Act; 
"(2) to provide for each licensed blind person such vending 
stand equipment, and adequate initial stock of suitable articles to 
be vended therefrom, as may be necessary: Provided^ however^ 
That such equipment and stock may be owned by the licensing 
agency for use of the blind, or by the blind individual to whom the 
license is issued: And provided further^ That if ownership of such 
equipment is vested in the blind licensee, (A) the State licensing 
agency shall retain a first option to repurchase such equipment and 
(B) in the event such individual dies or for any other reason ceases 
to be a licensee or transfers to another vending stand, ownership of 
such equipment shall become vested in the State licensing agency 
(for transfer to a successor licensee) subject to an obligation on the 
part of the State licensing agency to pay to such individual (or to 
• ' , ,. 
his estate) the fair value of his interest therein as later determined 
in accordance with regulations of the State licensing agency and 
after opportunity for a fair hearing. 
"(3) that if any funds are set aside, or caused to be set aside, 
from the proceeds of the operation of the vending stands such 
" 
^ , ,; ., 
funds shall be set aside, or caused to be set aside, only to the extent 
necessary for and may be used only for the purposes of (A) main-
tenance and replacement of equipment; (B) the purchase of new 
equipment; (C) management services; and (D) assuring a fair 
minimum return to operators of vending stands: Provided^ hoto-
ever^ That in no event shall the amount of such funds to be set 
aside from the proceeds of any vending stand exceed a reasonable 
amount which shall be determined by the Secretary; 
"(4) to make such reports in such form and containing such 
information as the Secretary may from time to time require and 
to comply with such provisions as he may from time to time find 
necessary to assure the correctness and verification of such reports; 
' • 
"(5) to issue such regulations, consistent with the provisions of 
this Act, as may be necessary for the operation of this program; 
"(6) to provide to any blind licensee dissatisfied with any action 
arising from the operation or administration of the vending 
stand program an opportunity for a fair hearing." 
'" '" 
(f) Section 6 of such Act of June 20,1936, as amended (20 U. S. C, 
sec. 107e), is amended by adding at the end thereof the following new 
subsections: 
'Federal prop- 
"(d) The term 'Federal property' means any building, land, or other 
real property owned, leased, or occupied by any department or agency 
of the United States or any instrumentality wholly owned by the 
United States, or by any department or agency of the District of 
Columbia or any Territory or possession of the United States. 
"Secretary." 
"^^^ T^\\Q, term 'Secretary' means the Secretary of Health, Educa-
tion, and Welfare." 
(g) Such Act of June 20,1936, as amended, is amended by renumber-
20 use io7f. 
ing section 7 as section 8, and by inserting immediately after section 6 
the following new section: 
erty. 
68 S T A T . ] 
PUBLIC LAW 565-AUG- 3, 1954 
665 
"SEC. 7. In the case of any State which, immediately prior to July 
1, 1964, was performing the functions of a State licensing agency 
pursuant to an application for designation approved under this Act, 
such application shall be deemed to be an application approved under 
section 3 of this Act, as amended by the Vocational Kehabilitation 
Amendments of 1954, until (1) the Secretary finds, after reasonable 
notice and opportunity for a hearing to the State licensing agency, 
tliat the provisions contained in such application have been changed 
so that it no longer complies with any provisions required to be 
included in such application under this Act, as in effect prior to 
July 1, 1954, or that in the administration of the program there is a 
failure to comply substantially with any such provision, or (2) the 
application is superseded by an application approved under section 3 
of this Act after July 1, 1954, or (3) July 1, 1955, whichever first 
occurs." 
State acting as 
licensing a g e nc y
r 
before July 1,1954. 
Status. 
PRESIDENT'S COMMITTEE ON EMPLOYMENT OF T H E PHYSICALLY 
HANDICAPPED 
SEC. 5. The joint resolution entitled "Joint resolution authorizing 
an appropriation for the work of the President's Committee on 
National Employ the Physically Handicapped Week", approved 
July 11,1949 (63 Stat. 409), is amended by striking out "$75,000" and 
inserting in lieu thereof "$225,000". 
Appropriation. 
UNITED STATES EMPLOYMENT SERVICES 
SEC. 6. (a) The first sentence of subsection (a) of section 3 of the 
Act of June 6, 1933, as amended (29 U. S. C , sec. 49b), is hereby 
amended by inserting after "gainful occupations," the following: 
"including employment counseling and placement services for handi-
capped persons,". 
(b) Section 8 of such Act, as amended (29 U. S. C , sec. 49g), is 
further amended by inserting after the first sentence thereof a new 
sentence to read as follows: "Such plans shall include provision for the 
promotion and development of employment opportunities for handi-
capped persons and for job counseling and placement of such persons, 
and for the designation of at least one person in each State or Federal 
employment office, whose duties shall include the effectuation of such 
purposes." 
48 Stat, 114. 
HOMEBOUND PHYSICALLY HANDICAPPED INDIVIDUALS 
SEC. 7. The Secretary of Health, Education, and Welfare shall make 
a thorough study of existing programs for teaching and training 
handicapped persons, commonly known as shut-ins, whose disabilities 
confine them to their homes or beds, for the purpose of ascertaining 
whether additional or supplementary programs or services are neces-
sary, particularly in rural areas, in order to provide adequate general 
ameliorative and vocational training for such handicapped persons. 
The Secretary shall report to the Congress not later than six months 
after the date of enactment of this Act the results of such study, 
together with such recommendations as may be desirable. 
study of existing 
proE^rams. 
R e p o r t to Con-
gress. 
E F F E C T I V E DATE 
SEC. 8. The amendments made by this Act shall become effective 
July 1,1954. 
Approved August 3, 1954.