[Federal Register: January 17, 2001 (Volume 66, Number 11)]
[Rules and Regulations]               
[Page 4379-4435]
>From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17ja01-17]                         


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Part VI





Department of Education





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34 CFR Part 361



State Vocational Rehabilitation Services Program; Final Rule


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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.

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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 Secs. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 361.13 to expand the list of activities that 
are the responsibility of the DSU.
     Amending Sec. 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 Sec. 361.22 to reflect new statutory requirements 
that foster the transition of students from educational to VR services.
     Amending Sec. 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 Sec. 361.26 to reflect the authority of States to 
use geographically earmarked funds without requesting a waiver of 
statewideness.
     Amending Sec. 361.29 to guide States in developing a 
required comprehensive, forward-thinking plan for administering and 
improving their VR programs.
     Conforming Sec. 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 Sec. 361.31 to conform to the requirement in the 
Act that the DSU establish cooperative agreements with private 
nonprofit VR service providers.
     Removing Sec. 361.33 of the current regulations (regarding 
the use, assessment, and support of community rehabilitation programs) 
since these requirements are addressed in other

[[Page 4381]]

regulatory sections and reserving this section for future use.
     Amending Sec. 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 Sec. 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 Sec. 361.37.
     Amending Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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 section-by-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

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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


Sec. 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

[[Page 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))


Sec. 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))


Sec. 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))


Sec. 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 (State-Administered 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 
Sec. 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))


Sec. 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 Sec. 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 State-operated 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 Sec. 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 Sec. 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 
Sec. 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 
Sec. 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

[[Page 4384]]

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 Sec. 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 
Sec. 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--

[[Page 4385]]

    (i) In the competitive labor market that is performed on a full-
time or part-time 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 Sec. 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 Sec. 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 
Sec. 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 self-employment, 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

[[Page 4386]]

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 Sec. 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 Sec. 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 
Sec. 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 
Secs. 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 
Sec. 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 court-appointed 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

[[Page 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 
Sec. 361.57(d) by a qualified and impartial mediator as defined in 
Sec. 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 Sec. 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

[[Page 4388]]

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 Sec. 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): Post-employment 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 co-workers, 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

[[Page 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 Sec. 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 post-employment 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 outcome-oriented 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 
Sec. 361.48; and
    (ii) If provided for the benefit of groups of individuals, also 
means those services listed in Sec. 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


Sec. 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.

[[Page 4390]]

    (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 Sec. 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 Secs. 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))


Sec. 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


Sec. 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))


Sec. 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,

[[Page 4391]]

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 
Sec. 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))


Sec. 361.14  Substitute State agency.

    (a) General provisions.
    (1) If the Secretary has withheld all funding from a State under 
Sec. 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))


Sec. 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 
Sec. 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))

Sec. 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 Sec. 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 Sec. 361.17(h)(4).
    (2) An assurance that--

[[Page 4392]]

    (i) The State has established a State Rehabilitation Council 
(Council) that meets the requirements of Sec. 361.17;
    (ii) The designated State unit, in accordance with Sec. 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 Sec. 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 Sec. 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))


Sec. 361.17  Requirements for a state rehabilitation council.

    If the State has established a Council under Sec. 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 Sec. 361.5(b)(29) and are not 
employed by the designated State unit.
    (2) In the case of a separate Council established under 
Sec. 361.16(b), a majority

[[Page 4393]]

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 Sec. 361.29(c); and
    (ii) Evaluate the effectiveness of the vocational rehabilitation 
program and submit reports of progress to the Secretary in accordance 
with Sec. 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)

[[Page 4394]]

Sec. 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

[[Page 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))


Sec. 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))


Sec. 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 Sec. 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))


Sec. 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))

Sec. 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 Sec. 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 post-school 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

[[Page 4396]]

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))


Sec. 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 One-Stop 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 One-Stop 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 One-Stop 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)


Sec. 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,

[[Page 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))


Sec. 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 Sec. 361.26.

(Authority: Section 101(a)(4) of the Act; 29 U.S.C. 721(a)(4))


Sec. 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 Sec. 361.60(b)(3)(i) 
and consistent with the requirements in Sec. 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 non-Federal 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))


Sec. 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 Sec. 361.25, the State unit must obtain a 
waiver of statewideness, in accordance with Sec. 361.26.

(Authority: Section 101(a)(2)(A) of the Act; 29 U.S.C. 721(a)(2)(A))


Sec. 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 Sec. 361.25, the State unit must obtain a 
waiver of statewideness, in accordance with Sec. 361.26.

(Authority: Section 12(c) of the Act; 29 U.S.C. 709(c))

Sec. 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, d