[Federal Register: February 28, 2000 (Volume 65, Number 39)]
[Proposed Rules]               
[Page 10619-10665]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28fe00-28]                         

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Part III

Department of Education

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34 CFR Part 361

The State Vocational Rehabilitation Services Program; Proposed Rule


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DEPARTMENT OF EDUCATION

34 CFR Part 361

RIN 1820-AB50

 
The State Vocational Rehabilitation Services Program

AGENCY: Office of Special Education and Rehabilitative Services, 
Department of Education.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to amend the regulations governing the 
State Vocational Rehabilitation Services Program. These amendments are 
needed to implement changes to the Rehabilitation Act of 1973 made by 
the Rehabilitation Act Amendments of 1998, 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: We must receive your comments on or before April 28, 2000.

ADDRESSES: Address all comments about these proposed regulations to 
Fredric K. Schroeder, U.S. Department of Education, 400 Maryland 
Avenue, SW., room 3028, Mary E. Switzer Building, Washington, DC 20202-
2531. If you prefer to send your comments through the Internet, use the 
following address: comments@ed.gov.
    You must include the term ``VR Regulations'' in the subject line of 
your electronic message.
    If you want to comment on the information collection requirements, 
you must send your comments to the Office of Management and Budget at 
the address listed in the Paperwork Reduction Act section of this 
preamble. You may also send a copy of these comments to the Department 
representative named in this section.

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 
alternate 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:

Invitation To Comment

    We invite you to submit comments regarding these proposed 
regulations. To ensure that your comments have maximum effect in 
developing the final regulations, we urge you to identify clearly the 
specific section or sections of the proposed regulations that each of 
your comments addresses and to arrange your comments in the same order 
as the proposed regulations.
    We invite you to assist us in complying with the specific 
requirements of Executive Order 12866 and its overall requirement of 
reducing regulatory burden that might result from these proposed 
regulations. Please let us know of any further opportunities we should 
take to reduce potential costs or increase potential benefits while 
preserving the effective and efficient administration of the program.
    During and after the comment period, you may inspect all public 
comments about these proposed regulations in room 3014, Mary E. Switzer 
Building, 330 C Street, SW., Washington, DC, between the hours of 8:30 
a.m. and 4 p.m., Eastern time, Monday through Friday of each week 
except Federal holidays.

Assistance to Individuals With Disabilities in Reviewing the 
Rulemaking Record

    On request, we will supply an appropriate aid, such as a reader or 
print magnifier, to an individual with a disability who needs 
assistance to review the comments or other documents in the public 
rulemaking record for these proposed regulations. If you want to 
schedule an appointment for this type of aid, you may call (202) 205-
8113 or (202) 260-9895. If you use a TDD, you may call the Federal 
Information Relay Service at 1-800-877-8339.

Background

    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.
    The 1998 Amendments made substantial changes to Title I of the Act, 
such as expanding options for individual choice, streamlining 
administrative procedures, facilitating the development of State goals 
and strategies to accomplish those goals, modifying due process 
provisions, requiring trial work experiences as part of the eligibility 
assessment for certain individuals with significant disabilities, and 
linking the VR program to a State's workforce investment system under 
Title I of the Workforce Investment Act of 1998 (WIA). This notice of 
proposed rulemaking (NPRM) proposes regulatory changes that would 
implement these and all other provisions in Title I, Parts A and B, of 
the Act as adopted in the 1998 Amendments, with the exception of the 
client assistance program (CAP) described in section 112 of the Act. 
Changes to the CAP regulations (34 CFR part 370) are being implemented 
through a separate rulemaking document.
    In addition, the proposed regulations were developed in light of 
new requirements related to the VR program under WIA. A designated 
State unit (DSU or State unit) operating a VR program is a required 
partner in the State One-Stop service delivery system (One-Stop system) 
established under Title I of WIA. As a required partner, the State unit 
must fulfill certain responsibilities related to that system. Those 
responsibilities, as well as the requirements for coordination between 
the VR program and other One-Stop system partners, are addressed in 
Sec. 361.23 of the proposed regulations.
    In general, the establishment of a One-Stop system is a cornerstone 
of reforms to Federal education and training programs. This delivery 
system streamlines access to numerous workforce investment and 
educational and other human resource services, activities, and 
programs. Rather than requiring individuals and employers to seek 
workforce development information and services at several different 
locations, which is often costly, discouraging, and confusing, WIA 
requires States and communities to coordinate multiple workforce 
development programs and resources for individuals at the ``street 
level'' through a user-friendly One-Stop system. This system will 
simplify and

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expand access to services for job seekers, including those with 
disabilities, and for employers.
    In particular, participation in the One-Stop system by State units 
administering VR programs will result in enhancing the range and 
quality of services accessible to program participants. The 
collaboration of the DSU with other partners through the One-Stop 
system is intended to produce better information, more comprehensive 
services, easier access to services, and improved long-term employment 
outcomes. The effective participation of the VR program in the One-Stop 
system, therefore, is critical to enhancing the VR program itself, as 
well as the workforce investment system in each State and local area.
    Given this close relationship between the partners of the One-Stop 
service delivery system contemplated under WIA, as well as the non-
discrimination requirements in the Americans with Disabilities Act 
(ADA), section 504 of the Rehabilitation Act (section 504), and section 
188 of WIA, we emphasize that all partner programs, not just the VR 
program, have a legal responsibility to serve persons with 
disabilities. To receive services under the VR program, individuals 
must meet specific program eligibility criteria, including a narrower 
definition of ``individual with a disability'' (see Sec. 361.5(b)(28) 
and Sec. 361.42(a) of the proposed regulations) than the more general 
definition of that term found in the ADA, section 504, and the 
regulations implementing section 188 of WIA (29 CFR part 37). The 
broader definition, which is also specified in Sec. 361.5(b)(29) of the 
proposed regulations, covers those with an impairment that 
substantially limits one or more major life activities, those with a 
record of such an impairment, or those regarded as having such an 
impairment. It is this broader population of individuals with 
disabilities that the workforce system has a legal obligation to serve, 
meaning that some individuals may receive the full scope of needed 
services through the One-Stop system without accessing the VR program 
at all, while others may be referred to the State unit for a program of 
VR services or receive a combination of services from the VR program 
and other One-Stop system partners. In addition, some individuals who 
are eligible for VR services may choose not to participate in the VR 
program and, therefore, also may be served exclusively by other partner 
programs of the One-stop system. The broader definition in 
Sec. 361.5(b)(29) of the proposed regulations, which is the same as 
that in the ADA, section 504, and 29 CFR part 37, applies to certain 
areas of the VR program that are unrelated to eligibility (e.g., 
membership on the State Rehabilitation Council under Sec. 361.17 and 
organizational requirements in Sec. 361.13).

Changes to Current Regulations

    Each of the substantive changes to the current VR program 
regulations proposed in this NPRM are based on statutory changes or are 
otherwise considered necessary to the effective administration of the 
VR program. The remaining changes to the current regulations are 
technical in nature, meaning that they are needed to conform to 
language used in the Act (e.g., substituting the term ``individual with 
a significant disability'' for the previously used term ``individual 
with a severe disability''), remove requirements that were eliminated 
in the 1998 Amendments, or add provisions that were included as part of 
the statutory amendments. The following sections of the current 
regulations either would be unchanged by this NPRM or would include 
only technical changes and, therefore, are not discussed in the 
following section-by-section analysis: Sec. 361.1, Sec. 361.2, 
Sec. 361.3, Sec. 361.4, Sec. 361.11, Sec. 361.12, Sec. 361.14, 
Sec. 361.16, Sec. 361.17, Sec. 361.19, Sec. 361.20, Sec. 361.21, 
Sec. 361.25, Sec. 361.32, Sec. 361.34, Sec. 361.40, Sec. 361.55, 
Sec. 361.61, Sec. 361.63, Sec. 361.64, and Sec. 361.65.
    Additionally, in an effort to reduce the paperwork burden 
associated with developing the State plan for the VR program, the NPRM 
would significantly reduce the number of descriptions or assurances 
that must be submitted as part of the State plan. The following 
sections (which are not otherwise discussed in the section-by-section 
analysis), in addition to including technical changes as previously 
explained, also include requirements that would be removed from the 
State plan under this NPRM: Sec. 361.13, Sec. 361.15, Sec. 361.27, 
Sec. 361.28, Sec. 361.38, Sec. 361.39, Sec. 361.41, Sec. 361.43, 
Sec. 361.44, Sec. 361.49, Sec. 361.50, Sec. 361.51, and Sec. 361.62. 
Because the underlying requirements in these sections are considered 
essential to the proper and efficient administration of the VR program, 
however, they would be retained in the NPRM as requirements of the 
program even though they would no longer be components of the State 
plan.
    In addition, some of the sections of the current regulations that 
would be substantively amended by the NPRM also would be removed from 
the content of the State plan. Substantive changes to those sections, 
as well as the removal of State plan requirements (where applicable), 
are outlined in the section-by-section analysis.
    The State plan content requirements that remain in the NPRM are 
those that are required by statute. The same reduced State plan 
requirements would apply both to VR State plans submitted as part of a 
State unified plan under section 501 of the Workforce Investment Act 
and to VR plans submitted separately under Title I of the Act and 34 
CFR part 361. In either instance, we believe that the reduced number of 
State plan requirements will enable State VR agencies to better focus 
on the needs of its consumers and its program without expending an 
inordinate amount of time in compiling its State plan.

Section-by-Section Summary

Section 361.4  Applicable Regulations

    This proposed section identifies the same list of regulations 
applicable to the VR program found in the current regulations, with two 
significant additions--the regulations in 20 CFR part 662 (which 
implements the One-Stop system requirements under Title I of WIA) and 
29 CFR part 37 (which implements the civil rights requirements under 
section 188 of WIA and applies to activities of the VR program that are 
conducted as part of the One-Stop system). Thus, in addition to 
following the proposed regulations and those regulations in the 
Education Department General Administrative Regulations listed in 
proposed Sec. 361.4, individuals should consult the WIA implementing 
regulations, including the nondiscrimination requirements in 29 CFR 
37.5 (which, for example, prohibits discrimination on the basis of 
participation in an activity receiving funds under Title I of WIA), 
when conducting VR program activities as part of the One-Stop system.

Section 361.5  Applicable Definitions

Fair Hearing Board
    The proposed regulations include a new definition of the term 
``fair hearing board'' that is based on the longstanding authority in 
the Act for State fair hearing boards to review disputes between State 
units and individual VR consumers. Specifically, section 102(c)(6)(A) 
of the Act allows a State fair hearing board established prior to 1985 
to carry out the responsibilities of an impartial hearing officer in 
conducting due process hearings under the VR program. The proposed 
regulatory definition, coupled with the requirements that apply to fair 
hearing boards under Sec. 361.57(i), is intended to

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clarify confusion about the scope of the fair hearing board exception 
to the due process requirements in section 102(c)(6)(A) of the Act.
    The term ``fair hearing board'' would be defined as ``a committee, 
body, or group of persons'' that is authorized by State law to review 
VR service-related determinations made by designated State unit 
personnel and that carries out the hearing officer's responsibilities 
in accordance with Sec. 361.57. The requirement in the definition and, 
more specifically, in Sec. 361.57(i) that the fair hearing board act as 
a collective body of persons is designed to address the 
misunderstanding that a single individual can issue final hearing 
decisions on behalf of a fair hearing board. The ``fair hearing board 
exception'' in section 102(c)(6) of the Act exempts the limited number 
of States from the statutory due process hearing procedures if a board 
or group of reviewing officials takes the place of an individual 
hearing officer.
    Some fair hearing boards fulfill their role by appointing an 
individual board member or other official to conduct due process 
hearings, reviewing the hearing officer's recommended decision, and 
issuing the final decision in a given case (subject to review by a 
civil court). Those arrangements would continue to be appropriate under 
the proposed regulations. On the other hand, in States in which a sole 
administrative law judge or other hearing official conducts due process 
hearings under the VR program, each of the procedural safeguards that 
apply to due process hearings under the Act must be implemented since a 
single reviewing official does not constitute a ``fair hearing board.''
Physical or Mental Impairment
    The term ``physical or mental impairment'' as defined in the 
current regulations has been revised to track the definition of that 
same term in the ADA and in the regulations implementing section 504 
(see 34 CFR 104.3). The revised definition is intended not to alter the 
scope of physical or mental impairments that are covered under the 
current regulatory definition, but rather to clarify that an individual 
who is found to have an impairment for purposes of ADA or section 504 
would be considered to have an impairment for purposes of the VR 
program. We note, however, that this change does not have an impact on 
the employment-related eligibility criteria under the VR program. For 
example, the requirement that the individual's impairment constitute or 
result in a substantial impediment to employment, as well as the rest 
of the criteria in Sec. 361.42(a), still must be met for an individual 
to be found eligible for VR services.
Qualified and Impartial Mediator
    The proposed regulations also include a new definition of the term 
``qualified and impartial mediator.'' This proposed definition 
identifies the qualifications that we believe are essential for an 
individual to mediate disputes between applicants or eligible 
individuals and the designated State unit. The Act requires that 
mediation, which State units must make available consistent with the 
procedural requirements in proposed Sec. 361.57(c) of the proposed 
regulations, be conducted by ``qualified and impartial'' mediators who 
are trained in effective mediation techniques. In addition to the 
statute, the proposed definition draws a number of elements from the 
current regulatory definition of ``impartial hearing officer.'' The 
proposed regulations would also require, however, that mediators be 
trained in effective mediation techniques consistent with any 
applicable State certification, license, registration, or other 
requirements in light of the fact that some States have established 
certification or other criteria for individuals who mediate disputes 
involving public agencies.
Workforce Definitions
    The proposed regulations also include several new statutory 
definitions from WIA. The defined terms--``local workforce investment 
board,'' ``State workforce investment board,'' and ``Statewide 
workforce investment system''--are used elsewhere in the proposed 
regulations to address required coordination between the VR program and 
other components of the workforce investment system established under 
WIA.

Section 361.10  Submission, Approval, and Disapproval of the State Plan

    This section of the proposed regulations makes mostly technical 
changes to the current regulations in order to conform to the statutory 
amendments. In addition, the proposed regulations would require each 
State to 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. Essentially, a State would 
have three options for submitting its VR State plan: (1) Submit a 
separate VR State plan on the same date as the State submits its State 
plan under section 112 of WIA (see section 101(a)(1)(A)). (2) Include 
the VR program as part of the State unified plan submitted under 
section 501 of WIA. (3) Submit a separate VR State plan on the same 
date as it submits its State unified plan (that does not include the VR 
program) under section 501 of WIA.
    Those States that choose to submit a State unified plan under 
section 501 of WIA should consult the ``State Unified Plan--Planning 
Guidance'' issued by the U.S. Department of Labor and published in the 
Federal Register on January 14, 2000 (65 FR 2463 through 2489). As 
stated previously, the State plan content requirements in the proposed 
regulations are those that are required by statute. The State unified 
plan guidance also identifies these same State plan requirements for 
inclusion in a State unified plan. Thus, the State plan for the VR 
program, whether submitted as part of a State unified plan in an effort 
to coordinate across programs or submitted as a separate State plan as 
has been done in the past, would be required to address the same State 
plan requirements as specified in the proposed regulations. In 
addition, those States submitting a State plan for the VR program apart 
from other programs still must coordinate closely with the other 
partners of the One-Stop service delivery system established under WIA. 
The interagency coordination requirements throughout the proposed 
regulations, including those in Sec. 361.23, serve as important 
standards for improving services to individuals with disabilities 
across the State's One-Stop system.

Section 361.13  State Agency for Administration

    This section of the proposed regulations is the same as that in the 
current regulations except for technical changes to conform to the Act 
and an addition to the list of activities that are the responsibility 
of the designated State unit. Specifically, Sec. 361.13(c) of the 
proposed regulations would require that the State unit be responsible 
for participating as a partner in the One-Stop system under Title I of 
WIA in accordance with the WIA implementing regulations issued by the 
U.S. Department of Labor.

Section 361.18(c)  Comprehensive System of Personnel Development--
Personnel Standards

    Proposed Sec. 361.18(c), which contains the requirements governing 
DSU personnel standards, includes the sole substantive changes to the 
comprehensive system of personnel development under the current 
regulations.
    The Act requires the DSU to establish standards to ensure that all 
State rehabilitation professionals and

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paraprofessionals needed to carry out the VR program are qualified 
consistent with applicable certification, licensing, or registration 
requirements. The Act also requires that the standards implemented by 
the DSU be based on ``the highest requirements in the State,'' a term 
defined in both the current and proposed regulations to refer to the 
highest entry-level academic degree needed for any national or State 
certification, licensing, or registration applicable to a given 
profession. Thus, DSUs must develop personnel standards requiring VR 
program professionals and paraprofessionals to meet the degree 
criterion of the certification, license, or registration requirements 
appropriate to their profession. To the extent that the DSU's current 
personnel do not meet the degree criterion, or a higher entry-level 
degree criterion is applied to the same category of personnel by 
another State agency, section 101(a)(7)(B)(ii) of the Act requires the 
DSU to take steps to ensure that its personnel meet the highest degree 
requirement in the State. In an effort to foster State progress in this 
area, proposed Sec. 361.18(c) would modify the current regulations by 
requiring the DSU to describe in a written plan its retraining, 
recruitment, and hiring strategies, timeframes for DSU personnel to 
meet applicable standards, procedures for evaluating the DSU's progress 
in employing a staff that is qualified within the meaning of the Act, 
and other plan components. We believe the written plan is critical to 
the ability of DSUs to ensure the high quality of its VR staff and, 
consequently, the high quality of the program that the staff 
administers. Nevertheless, we are interested in receiving public 
comment on whether the proposed requirements of the written plan should 
be reduced, expanded, or modified in any way.
    Additionally, the Rehabilitation Services Administration (RSA) has 
received a number of inquiries from DSUs in States that have 
established multi-tier certification systems for rehabilitation 
counselors employed by State Workers' Compensation or other programs. 
These certification systems include different academic degree 
requirements depending upon the extent of the individual's experience 
in the rehabilitation counseling field. For example, State 
rehabilitation counselor certification may be available to individuals 
who have a Bachelor's degree and a certain number of years of 
applicable experience or have a Master's degree and fewer years of 
experience. If the job functions carried out by counselors employed by 
the VR and Workers' Compensation programs are similar, it is 
permissible for the DSU to base its personnel standards for VR 
counselors on the multi-tiered certification used by the Workers' 
Compensation program. However, both research findings and the widely 
held opinion in the disability community support the position that an 
advanced degree (e.g., a Master's degree in Rehabilitation Counseling) 
is important to a VR counselor's capability to assess the specialized 
needs of individuals with disabilities and to assist those individuals 
in developing an appropriate program of services to address those 
needs. Thus, we strongly encourage States not to employ minimally 
qualified individuals, i.e., those with Bachelor's degrees, by 
routinely substituting ``equivalent experience'' for higher-level 
degree criteria.
    We continue to recognize the need to safeguard DSU employment 
opportunities for individuals who, because of their disability, are 
prohibited from obtaining the license or certification applicable to 
their particular profession. As RSA has previously stated, to the 
extent that certification and licensing requirements are discriminatory 
on the basis of disability, these issues should be addressed as 
compliance issues under section 504 of the Act and the Americans with 
Disabilities Act (ADA). Nevertheless, we remain aware of the particular 
difficulty experienced by blind individuals who, historically, have 
been excluded on the basis of their disability from becoming certified 
orientation and mobility instructors. The proposed regulations, like 
the current regulations, would not inhibit DSUs or other VR service 
providers from hiring blind individuals as orientation and mobility 
instructors, even though those individuals may not meet current 
certification requirements. To the extent that a DSU employs blind 
individuals who do not meet the ``highest requirements in the State'' 
applicable to the orientation and mobility profession, the State 
agency's detailed plan under paragraph (c)(1)(ii) of this proposed 
section would identify the State's strategies, timeframe, and 
evaluation procedures related to the retraining of these employees to 
meet the highest requirements. In addition, the Secretary will continue 
to support the development of alternative certification standards for 
orientation and mobility instructors in order to ensure that 
individuals who are blind can meet necessary certification standards 
within the timeframe outlined in the DSU's plan under paragraph 
(c)(1)(ii) of this proposed section.
    Finally, RSA has received inquiries concerning whether DSUs should 
focus their efforts on developing personnel standards for certain 
professions rather than others. We interpret the Act to require that 
the DSU establish and implement appropriate, certification-based 
standards for all categories of professionals and paraprofessionals 
needed to conduct the VR program. Nevertheless, in light of the 
difficulty States may experience in developing numerous standards at 
the same time, we would expect DSUs to give priority to those 
professions that are generally considered most critical to the success 
of the VR program. Accordingly, RSA encourages DSUs to give highest 
priority to establishing standards for vocational rehabilitation 
counselors. Priority should also be given to vocational evaluators, job 
coaches for individuals in supported employment or transitional 
employment, job development and job placement specialists, and 
personnel who provide medical or psychological services to individuals 
with disabilities.

Section 361.22  Coordination With Education Officials

    We have amended this section of the current regulations to conform 
to the revised statutory requirements governing coordination between 
vocational rehabilitation and education agencies in the State. As in 
the past, the proposed regulatory requirements are intended to assist 
in the timely and efficient transition of students with disabilities 
from the receipt of educational services in school to the receipt of 
vocational rehabilitation services from the designated State agency. 
This intent is clearly reflected in the Conference Report (No. 105-659) 
to the 1998 Amendments, as is the expectation that the transition 
services provisions in the Act not be used to shift the responsibility 
of service delivery from education to rehabilitation during the 
transition years. Rather, those provisions are intended to define the 
role of the rehabilitation system as primarily one of planning for the 
student's years after leaving school. To that end, the proposed 
regulations would require State VR agencies to develop an 
individualized plan for employment (IPE) for a student determined to be 
eligible for VR services before the student leaves the school setting.
    However, the proposed regulations also incorporate the new 
statutory components of the interagency agreement, including those 
under which

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the State VR agency assists in transition planning and in the 
development of the student's individualized education program (IEP) 
under the Individuals with Disabilities Education Act. The VR agency is 
authorized to assist educational agencies in these areas, and is 
encouraged to do so in Conference Report No. 105-659, without 
determining whether the student is eligible under the VR program or 
developing an IPE under section 102(b) of the Rehabilitation Act.

Section 361.23  Requirements Related to the Statewide Workforce 
Investment System

    This section of the current regulations has been revised 
significantly to reflect both the VR program's responsibilities as a 
partner of the One-Stop system under WIA and the requirements in the 
1998 Amendments related to interagency coordination between the VR 
program and other components of the statewide workforce investment 
system under WIA (i.e., other partners of the One-Stop system).
    Specifically, Sec. 361.23(a) would restate the requirements in 20 
CFR 662.230 (which, along with the other provisions of part 662, 
implements the statutory requirements under Title I of WIA related to 
partners of the One-Stop system) by specifying the specific 
responsibilities that the VR program must fulfill as a partner in that 
system. Restating these requirements from the WIA implementing 
regulations in these proposed regulations is intended to inform State 
units of their WIA-related responsibilities that are in addition to the 
responsibilities that apply solely to VR programs. As indicated in the 
Background section of this preamble, we expect the State unit's 
participation in the One-Stop system to lead to improved access to 
better quality and more comprehensive services, including services 
provided by other entities, and to improved long-term employment 
outcomes for individuals with disabilities. We note that the VR 
program's participation in the One-Stop system signifies an important 
step in improving services overall for individuals with disabilities. 
We also note, however, that in meeting their One-Stop system 
responsibilities, State units, like all partners of the One-Stop 
system, must comply with the requirements of the law authorizing their 
program, meaning that the requirements of the Act and the proposed 
regulations must be met in the course of participating in One-stop 
system activities.
    Aside from the other issues that individuals might address in their 
comments on the proposed regulations, we recognize that commenters may 
request additional policy or interpretative guidance on these new One-
Stop system responsibilities of the State unit that are specified in 
Title I of WIA, the WIA implementing regulations (20 CFR 662), and now 
in 361.23(a) of the proposed regulations. Accordingly, we ask that 
commenters on the proposed regulations identify specific questions that 
they consider most pertinent to the State unit's ability to operate an 
effective VR program as part of the statewide workforce investment 
system, including questions related to the list of One-Stop system 
responsibilities. We intend to help inform VR agencies and other One-
Stop system partners about the required role of the VR program by 
responding to appropriate questions in a subsequent policy issuance, 
possibly an appendix to the final regulations that follow these 
proposed regulations.
    Section 361.23(b) of the proposed regulations largely track the 
statutory requirements related to cooperative agreements between the 
designated State agency and other entities that are components of the 
statewide workforce investment system under Title I of WIA (i.e., other 
One-Stop system partners). Coupled with the responsibilities in 
paragraph (a) of this proposed section, proposed paragraph (b) is 
intended to enhance coordination throughout the One-Stop service 
delivery system and ensure that interagency coordination between the 
State unit and other partners of the One-Stop system will enable 
individuals with disabilities to receive needed services provided by 
multiple sources. To that end, both the Act and proposed regulations 
require State units to enter into cooperative agreements with other 
partners of the One-Stop system and work toward increasing the capacity 
of those partners, and the One-Stop service delivery system as a whole, 
to better address the needs of individuals with disabilities.
    It also should be noted that proposed Sec. 361.23(b) differs from 
the current regulations since it follows the Act's emphasis on 
coordination between employment training programs across the State's 
One-Stop service delivery and workforce systems. Those Federal, State, 
and local programs that are not part of the workforce system but, 
nevertheless, are appropriate parties with which the VR agency should 
partner are addressed in Sec. 361.24 of the proposed regulations.

Section 361.24  Cooperation and Coordination With Other Entities

    In following the framework of section 101(a)(11) of the Act, 
Sec. 361.24 of the proposed regulations does not specify, to the extent 
done in Sec. 361.23 of the current regulations, the programs with which 
the designated State agency must cooperate. Rather, the proposed 
regulations, which largely track the revised Act, rely on the State 
agency to partner with, and use the facilities and services of, 
appropriate agencies and programs that it identifies.

Section 361.26  Waiver of Statewideness

    This section of the proposed regulations is largely unchanged from 
the current regulations. The chief substantive change, which concerns 
the authority of States to use geographically earmarked funds (State 
funds only) without requesting a waiver of statewideness, is more fully 
discussed in Sec. 361.60 of this section-by-section analysis.

Section 361.29  Statewide Assessment; Annual Estimates; Annual State 
Goals and Priorities; Strategies; and Progress Reports

    This section, which closely tracks section 101(a)(15) of the Act, 
is intended to guide States in developing a comprehensive, forward-
thinking plan for administering and improving their VR programs. The 
logical, systemic framework of this section--the statewide needs 
assessment, followed by the annual service and cost estimates, the 
DSU's goals and priorities for the program, its strategies for 
achieving those goals, and its reports of progress--would replace 
several sections of the current regulations that address some of the 
same requirements. This section also takes the place of the strategic 
plan provisions of the current regulations since those provisions were 
removed from the Act as part of the 1998 Amendments.

Section 361.30  Services to American Indians

    Proposed Sec. 361.30 is a newly titled section that tracks section 
101(a)(13) of the Act in requiring that DSUs provide vocational 
rehabilitation services to American Indians who are eligible under the 
VR program to the same extent that it provides services to other 
significant populations of individuals with disabilities. Because the 
American Indian population is the sole ``special group'' listed in 
Sec. 361.30 of the current regulations (i.e., American Indians, U.S. 
civil employees, and public safety officers) that is specified in the 
1998

[[Page 10625]]

Amendments, we have changed the title and scope of this proposed 
section.

Section 361.31  Cooperative Agreements With Private Nonprofit 
Organizations

    Proposed Sec. 361.31 would revise the current regulations to 
implement section 101(a)(24)(B) of the Act, which requires a 
description in the State plan of the manner in which the DSU will 
establish cooperative agreements with private nonprofit vocational 
rehabilitation service providers. This section of the current 
regulations addresses the use of community resources in providing 
vocational rehabilitation services, a requirement that was removed from 
the Act and, therefore, this proposed section.

Section 361.33  [Reserved]

    We propose to remove Sec. 361.33 of the current regulations and 
reserve that section for future use. The requirements in the current 
regulatory section regarding the use, assessment, and support of 
community rehabilitation programs are fully addressed in other 
reorganized sections of the proposed regulations. For example, the 
requirement that DSUs assess the need to establish, develop, and 
improve community rehabilitation programs in the State, and the DSUs' 
strategies for addressing those needs, are contained in the 
comprehensive assessment and strategy provisions in proposed 
Sec. 361.29(a)(1)(i) and (d)(3), respectively. Moreover, proposed 
Sec. 361.31 requires the DSU to establish cooperative agreements with 
private nonprofit vocational rehabilitation service providers, such as 
community rehabilitation programs. Consequently, Sec. 361.33 of the 
current regulations is considered redundant and, therefore, no longer 
necessary.

Section 361.35  Innovation and Expansion Activities

    Although the separate funding authority and other provisions 
related to the strategic plan have been removed from the Act, section 
101(a)(18) of the Act, in part, retains a requirement that the State 
reserve a portion of its allotment under section 110 of the Act to 
further innovation and expansion of its VR program. Proposed 
Sec. 361.35 would revise the current regulations to track this 
statutory requirement.

Section 361.36  Ability To Serve All Eligible Individuals; Order of 
Selection for Services

    This proposed section largely tracks Sec. 361.36 of the current 
regulations, except that the proposed State plan content requirements 
that remain from this section of the current regulations are those that 
are specified in the Act. The proposed regulations also would 
incorporate additional requirements adopted as part of the 1998 
Amendments, including the requirement 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.

Section 361.37  Information and Referral Services

    Proposed Sec. 361.37 would implement the requirements in sections 
101(a)(5) and (20) of the Act regarding information and referral 
systems. The Act applies several new criteria for information and 
referral programs under the VR program, including procedures for 
referring individuals to those components of the statewide workforce 
investment system best suited to meet the individual's employment needs 
and informational requirements that specify the type of information 
individuals must receive as part of their referrals (e.g., notice to 
the agency receiving the referral, a contact person in the receiving 
agency, etc.). These requirements are addressed in paragraph (b) of 
this proposed section.
    Section 361.37(c) of the current regulations authorized the State 
unit to establish an expanded information and referral services program 
for providing counseling, guidance, and referral for job placement to 
eligible individuals who do not meet the priority category or 
categories for receiving vocational rehabilitation services under the 
order of selection established by a State. This authority, which was 
discretionary under the current regulations, has been modified in the 
1998 Amendments to require the DSU to provide access to the information 
and referral services that it establishes under this section to those 
eligible individuals who do not meet the State's order of selection 
criteria. Thus, a DSU operating under an order of selection must assist 
eligible individuals who otherwise would not receive services from the 
State unit to secure needed employment assistance from other entities, 
particularly other program components of the statewide workforce 
investment system.

Section 361.42  Assessment for Determining Eligibility and Priority for 
Services

    We propose to modify Sec. 361.42 to implement new provisions in the 
Act regarding presumptive eligibility for Social Security recipients 
and beneficiaries (section 102(a)(3) of the Act) and the use of trial 
work experiences as part of the assessment for determining eligibility 
(sections 7(2)(D) and 102(a)(2)(B) of the Act). In addition, we propose 
to revise the requirements in Sec. 361.42(d) of the current regulations 
concerning extended evaluation and to clarify the current regulatory 
requirement in Sec. 361.42(a)(1) by identifying the type of personnel 
that must conduct eligibility determinations. We also propose to remove 
from the State plan several assurances from the current regulations 
related to the eligibility criteria and procedures.
    Section 361.42 specifies the requirements related to assessments 
for determining eligibility for vocational rehabilitation services and 
priority for services under an order of selection. As in current 
regulations, proposed Sec. 361.42(a) specifies the criteria for 
determining eligibility under the VR program. Specifically, this 
section would require, as it has in the past, that an individual's 
eligibility be based on the following determinations: (1) The 
individual has a physical or mental impairment. (2) The impairment 
results in a substantial impediment to employment. (3) The individual 
requires vocational rehabilitation services to prepare for, enter into, 
engage in, or retain gainful employment consistent with the applicant's 
strengths, resources, priorities, concerns, abilities, capabilities, 
and informed choice. The Act requires that assessments for determining 
eligibility be conducted both by qualified personnel (section 103(a)(1) 
of the Act) and by the DSU (section 102(a)(6) of the Act). Consistent 
with these statutory emphases (and RSA policy that key programmatic 
decisions, including those related to eligibility determinations, be 
made by qualified personnel employed by the State), the proposed 
regulations would specify that qualified personnel must determine the 
existence of an impairment and whether the impairment results in a 
substantial impediment to employment, and that qualified vocational 
rehabilitation counselors employed by the DSU must determine whether 
the individual requires vocational rehabilitation services.
    Section 361.42(a)(3) of the proposed regulations would implement 
the new statutory requirement in section 102(a)(3) of the Act 
concerning presumptive eligibility for Supplemental Security Income 
(SSI) recipients and Social Security Disability Insurance (SSDI) 
beneficiaries. Prior to the 1998 Amendments, disabled SSI recipients 
and SSDI beneficiaries were

[[Page 10626]]

statutorily presumed to have both a physical or mental impairment that 
constituted a substantial impediment to employment (i.e., that these 
individuals satisfy the first two of the three eligibility criteria) 
and a severe disability. Section 102(a)(3) of the Act expanded the 
first of these two presumptions by requiring that disabled SSI 
recipients and SSDI beneficiaries be presumed eligible for vocational 
rehabilitation services. These individuals satisfy all of the 
previously mentioned three eligibility criteria, including the 
criterion that the individual requires VR services; i.e., that the 
individual requires VR services in order to prepare for, enter into, or 
retain employment consistent with the individual's unique strengths, 
resources, priorities, concerns, abilities, capabilities, interests, 
and informed choice. This change was intended to streamline eligibility 
for a specific population of individuals who have already satisfied 
stringent disability-related assessments under the Social Security Act. 
The proposed regulations reflect the statutory changes.
    The Act states that individuals with disabilities receiving SSI or 
SSDI benefits are presumed eligible under the VR program provided they 
intend to achieve an employment outcome consistent with their unique 
strengths, resources, priorities, concerns, abilities, capabilities, 
interests, and informed choice. The Conference Report for the 1998 
Amendments (Conference Report 105-659, pp. 354-355) interprets this 
language to mean that SSI- or SSDI-eligible individuals must 
demonstrate their desire to work in order to receive vocational 
rehabilitation services. Because we believe all applicants for VR 
services must intend to work to receive services, the proposed 
regulations would implement the Conference Report language by requiring 
DSUs to inform individuals, through the application process for VR 
services, that individuals receiving VR services must intend to achieve 
an employment outcome. Consequently, an individual's completion of the 
application process would demonstrate the individual's desire to 
achieve an employment outcome.
    We believe that these proposed regulatory requirements strike an 
appropriate balance between ensuring that applicants are fully aware of 
the employment-related purpose of the VR program (as opposed to 
entitlement programs like SSI and SSDI) and fulfilling the statutory 
mandate that SSI recipients and SSDI beneficiaries be considered 
presumptively eligible for the VR program. We note that the expectation 
that an applicant receiving SSI or SSDI support, like any applicant, 
intends to become employed or maintain employment by receiving VR 
services does not constitute a new or additional criterion of 
eligibility. The eligibility criteria for the VR program specified in 
section 102(a)(1) of the Act were unchanged by the 1998 Amendments. The 
proposed regulations give meaning to congressional intent that SSI 
recipients and SSDI beneficiaries, in particular, be given ready access 
to services necessary for the achievement of an appropriate employment 
outcome by avoiding unnecessary and duplicative assessments.
    Proposed Sec. 361.42(b) would expressly authorize States to provide 
VR services to individuals with disabilities through more immediate 
determinations of eligibility. Specifically, this proposed provision 
would allow DSUs to make interim determinations of eligibility for 
individuals who the DSU reasonably believes will be eligible for VR 
services at the end of the statutory 60-day period for making 
eligibility decisions. If a DSU elects to implement this option, the 
proposed regulations would require the DSU to make a final 
determination of eligibility within 60 days from the time the 
individual applies for VR services, as required under Sec. 361.41(b)(1) 
of the current regulations. In addition, the DSU must establish 
criteria for using interim eligibility determinations (e.g., interim 
eligibility given if the DSU is awaiting documentation from another 
agency), develop procedures for making those determinations, and 
determine the scope of services that would be available pending final 
eligibility determinations. States may find this authority particularly 
useful with regard to SSI or SSDI recipients who, by virtue of section 
102(a)(3) of the Act, are presumed eligible under the VR program and 
may begin to receive VR services prior to the end of the 60-day period 
while the DSU awaits documentation from the Social Security 
Administration.
    Section 101(a)(12) of the Act, which would be implemented in 
Sec. 361.42(c) of the proposed regulations, states that the State plan 
must include an assurance that the State will not impose a residence 
requirement that excludes from services any individual who is present 
in the State. This provision preexisted, and was left unchanged by, the 
1998 Amendments. However, we believe it is important to clarify, as 
explained in the Senate Committee Report on the Rehabilitation Act 
Amendments of 1998, that the requirement for an individual to be 
present in the State in order to be eligible to receive services should 
not be interpreted in any way to circumvent an individual's choice of 
an out-of-State provider (Senate Report 105-166, p.13). The committee 
further stated that, with regard to out-of-State placements, the 
requirement that an individual be present in the State must be imposed 
at the time of the eligibility determination and may not be used as a 
means of denying the continuation of services that are being provided 
in an out-of-State setting.
    Paragraph (d) of this proposed section would clarify the extent to 
which DSUs can rely on determinations made by other agencies as a basis 
for eligibility determinations under the VR program. Section 
101(a)(4)(B) of the Act specifies that determinations made by officials 
of other agencies regarding whether an applicant is an individual with 
a disability or an individual with a significant disability are to be 
used, to the extent appropriate and consistent with applicable 
statutory requirements, to assist the DSU in making determinations 
related to eligibility for VR services. In order to implement this 
provision in a manner that is consistent with the specific statutory 
mandate in section 102(a)(3)(A)(ii) of the Act that SSI recipients and 
SSDI beneficiaries be presumed eligible under the VR program, 
Sec. 361.42(d)(2) of the proposed regulations would expand upon section 
104(a)(4)(B) of the Act as it applies to determinations made by 
officials of the Social Security Administration. Specifically, 
paragraph (d)(2) would require that the DSU use determinations made by 
the Social Security Administration as evidence that an individual is 
receiving SSI or SSDI benefits and, therefore, is presumed to meet each 
criterion of eligibility under the VR program. We note that this 
proposed paragraph would constitute an exception to the general 
requirement in proposed Sec. 361.42(a) that a VR counselor employed by 
the DSU determine that an individual requires VR services. This 
interpretation is essential, we believe, to ensure that SSI and SSDI 
recipients be considered presumptively eligible for VR services and 
receive VR services in a timely manner.
    Section 7(2) of the Act revised the definition of ``assessment for 
determining eligibility and vocational rehabilitation needs'' by 
changing the statutory emphasis on ``extended evaluation'' to a new 
approach referred to as an exploration of the individual's abilities, 
capabilities, and capacity to perform in work situations, through the 
use of trial work experiences. If a DSU

[[Page 10627]]

believes that an applicant for VR services is incapable of benefiting 
in terms of an employment outcome from VR services due to the severity 
of the individual's disability (and, therefore, would be ineligible 
under section 102(a)(2)(A) of the Act), the DSU must, in most 
instances, assess whether the individual can work by placing the 
individual in a trial work setting with appropriate supports. The Act 
requires that trial work experiences be of sufficient variety and over 
a sufficient period of time to determine the eligibility of the 
individual or to determine the existence of clear and convincing 
evidence that the individual is incapable of benefiting in terms of an 
employment outcome from VR services due to the severity of the 
individual's disability (section 102(a)(2)(B) of the Act). The Senate 
Committee Report accompanying S. 1579, from which the requirements 
came, notes that the trial work experiences may include supported 
employment, on-the-job training, and other experiences using realistic 
work settings (Senate Report 105-166, p. 9).
    Proposed Sec. 361.42(e) would implement the requirements for trial 
work experiences by requiring the DSU to develop a written plan for 
assessing an individual's ability to perform in a real work setting and 
requiring that trial placements for assessment purposes be as realistic 
as possible, meaning that the trial work must occur in the most 
integrated setting possible, consistent with the informed choice and 
rehabilitation needs of the individual. We are particularly interested 
in public comments identifying other types of trial work experiences, 
in addition to supported employment and on-the-job training, that may 
be appropriate. We consider the requirement for trial work experiences 
a critical element in determining eligibility in instances in which the 
DSU is concerned that the severity of an individual's disability 
indicates that the individual may be unable to benefit in terms of an 
employment outcome from VR services.
    We emphasize that an individual may not be determined to be 
ineligible for VR services due to the unavailability of trial work 
settings since an inability to find suitable trial work would not 
constitute clear and convincing evidence that the individual cannot 
benefit from VR services in terms of an employment outcome. In these 
limited circumstances, the DSU may conduct an extended evaluation to 
determine the individual's eligibility for services. Though the Act 
emphasizes the use of trial work experiences for assessment purposes, 
the Congress recognized the need to allow extended evaluation as an 
alternative if a real work test is impossible or if the State VR agency 
has exhausted other options without reaching a determination of 
eligibility (See Senate Report 105-166, pp. 9-10). Accordingly, 
proposed Sec. 361.42(f) would retain limited requirements for an 
extended evaluation that would be based on a written plan for 
determining eligibility and would provide for VR services in the most 
integrated setting possible, consistent with the informed choice and 
rehabilitation needs of the individual.
    Finally, we recognize that this section of the current regulations 
includes a note explaining how to interpret the term ``clear and 
convincing evidence.'' The information in that note--e.g., that clear 
and convincing evidence be determined on a case-by-case basis, 
constitutes the highest standard used in our civil system of law, and 
requires that the designated State unit have a high degree of certainty 
before concluding that an individual is incapable of benefiting from 
services in terms of an employment outcome--still includes useful 
guidance material for purposes of satisfying the clear and convincing 
evidentiary standard. Thus, as specified in the note, the review of 
existing information still would not provide clear and convincing 
evidence, meaning that, for example, the use of an intelligence test 
result alone would not constitute clear and convincing evidence. On the 
other hand, clear and convincing evidence could include a description 
of assessments, including situational assessments and supported 
employment assessments, from service providers who have concluded that 
they would be unable to meet the individual's needs due to the severity 
of the individual's disability. Also, under the proposed regulations, a 
demonstration of clear and convincing evidence requires that the 
designated State unit explore the applicant's abilities, capabilities, 
and capacity to perform in work situations and provide appropriate 
supports. Nevertheless, the note in the current regulations has been 
removed from the proposed regulations, and the content of the note has 
been discussed here in this preamble in order to distinguish between 
regulatory requirements and guidance material. We are interested in 
commenters' views on whether this information should be reinserted into 
the final regulations.

Section 361.45  Development of the Individualized Plan for Employment

    We propose to revise Sec. 361.45 to implement new provisions in 
section 102(b)(1) of the Act. Like the statute, the proposed 
regulations expand an eligible individual's options for developing the 
IPE, enable individuals to receive technical assistance in developing 
their IPEs, and specify the information that the DSU must provide to 
the eligible individual during IPE development. This proposed section 
tracks section 102(b)(2) of the Act by prescribing procedural 
requirements related to the development of IPEs, including the 
requirement that the IPE and any amendments to the IPE be approved and 
signed by a qualified vocational rehabilitation counselor employed by 
the DSU. In addition, several portions of this proposed section (as 
well as other proposed sections) have been removed from the State plan 
in an effort to both streamline the State plan and reduce paperwork 
burden on State agencies.
    Proposed Sec. 361.45(b)(1) reflects the new statutory requirement 
in section 102(b)(1) of the Act authorizing an eligible individual or, 
as appropriate, an individual's representative to develop all or part 
of the IPE without any assistance, with assistance from a qualified VR 
counselor (who may or may not be employed by the DSU), or with 
technical assistance from additional resources outside of the DSU. 
Additional resources may include independent living centers, community 
rehabilitation programs, family members, friends, or other programs and 
individuals.
    The statutory options for developing the IPE were adopted from the 
changes proposed by the Senate in S. 1579. In the report accompanying 
S. 1579, the Senate committee stated that these changes enable eligible 
individuals to determine the extent to which the State VR agency would 
assist in the development of their IPEs (Senate Report 105-166, pp. 22-
23). The committee noted that, although the plan's effect is 
conditioned on the approval and signature of both the eligible 
individual and a qualified VR counselor employed by the DSU, the new 
requirements were intended to empower individuals with disabilities to 
have greater control in developing their IPEs to address their unique 
needs. In addition, the committee noted its intent that, in many 
instances, rehabilitation counselors are likely to serve more as 
facilitators of plan development than they did in the past.
    Consistent with the language in the Senate Report, the proposed 
regulations place the responsibility on the eligible individual or, as 
appropriate, the individual's representative to decide whether, and to 
what extent, the DSU or other entity will assist in the development of 
the individual's IPE.

[[Page 10628]]

Regardless of the option chosen, however, the DSU counselor does retain 
approval (and signature) authority. In addition, it should be noted 
that the DSU is responsible for ensuring that each IPE is reviewed 
annually by the individual and a qualified VR counselor who, at the 
individual's request, may or may not be employed by the DSU. This 
responsibility is reflected in Sec. 361.45(d)(5).
    Proposed Sec. 361.45(b)(2) describes other information that the DSU 
must provide to an eligible individual or, as appropriate, the 
individual's representative, including descriptions of the full range 
of components that must be included in an IPE, the rights and remedies 
available to the individual, the availability of a client assistance 
program, and information on how to contact that program. The DSU must 
also provide, as appropriate, an explanation of agency guidelines and 
criteria associated with financial commitments concerning an IPE, 
information on the availability of assistance in completing DSU forms 
required as part of the IPE, and any additional information that the 
eligible individual requests or the DSU determines to be necessary.
    As in section 102(b)(2)(B) of the Act, proposed Sec. 361.45(c) 
requires that the IPE be developed in a manner that gives the 
individual the opportunity to exercise informed choice in selecting the 
employment outcome, the specific VR services needed to achieve the 
employment outcome, the entity or entities that will provide the 
services, and the methods available for procuring the services. We note 
that informed choice also applies to the selection of both the 
employment setting and the setting in which VR services are provided as 
part of the selection of the employment outcome and services 
respectively. Several of the remaining provisions in this proposed 
section simply track statutory requirements. In addition, proposed 
Sec. 361.45(c)(8)--requiring that an IPE for a student with a 
disability who is receiving special education services be developed in 
consideration of the student's IEP and in accordance with the plans, 
policies, procedures, and interagency agreement required in proposed 
Sec. 361.22--is retained from the current regulations as a necessary 
safeguard.
    The terms ``long-term vocational goal,'' ``intermediate 
rehabilitation objectives,'' and ``individualized written 
rehabilitation program'' would be removed from this section of the 
current regulations since these terms are no longer used in the Act.

Section 361.46  Content of the Individualized Plan for Employment

    Proposed Sec. 361.46 identifies the mandatory content components of 
the IPE, as specified in section 102(b)(3) of the Act. These components 
must be included in each IPE regardless of the approach that the 
individual selects under proposed Sec. 361.45(b)(1) for developing the 
IPE.
    Because proposed Sec. 361.46 simply amends current regulations by 
tracking statutory changes, the proposed changes to this section, other 
than the burden-reducing step of removing the requirements of this 
section from the State plan, are purely technical. Also, as in proposed 
Sec. 361.45, the terms ``long-term vocational goal,'' ``intermediate 
rehabilitation objectives,'' and ``individualized written 
rehabilitation program'' would be removed from this section of the 
current regulations since these terms are no longer used in the Act.

Section 361.47  Record of Services

    We propose to modify the regulatory requirements related to the 
record of services by requiring 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. The proposed regulations also add limited content items that 
are related to an individual's participation in the VR program.
    We believe that States should be given the discretion to determine 
which sources of documentation to use to meet the record of services 
requirements (RSA typically examines records of services as part of its 
periodic monitoring of a State's administration of the VR program). We 
further believe that consultation with the State Rehabilitation Council 
(if the State has a Council) is warranted since deciding which type of 
documentation is sufficient to support determinations affecting an 
individual's participation in the VR program (e.g., eligibility 
determinations that must be documented under paragraph (a)(1) of this 
proposed section) would constitute a policy of general applicability.
    The proposed regulations would also move certain content 
requirements from Sec. 361.46 of the current regulations to the record 
of services section of the regulations. Documentation requirements 
specified in proposed Sec. 361.47(a)(2) (ineligibility determinations), 
(a)(13) (referrals), and (a)(14) (achievement of an employment 
outcome), we believe, are more likely to be viewed as components of the 
individual's record rather than the individual's program of services.
    The proposed regulations also incorporate new statutory 
requirements (e.g., Sec. 361.47(a)(10) related to the annual reviews of 
individuals in extended employment).
    The remaining documentation requirements in proposed 
Sec. 361.47(a)(4) (level of significance of the disability), (a)(6) 
(IPE), (a)(9) (verification of competitive employment), and (a)(11) 
(results of mediation or due process hearing) represent documentation 
requirements that we consider necessary to ensure that important 
program requirements are met with respect to each individual 
participating in the VR program.
    Finally, this proposed section would amend the current regulations 
by no longer requiring that the record of services requirements be 
addressed in the list of assurances of the State plan.

Section 361.52 Informed Choice

    Proposed Sec. 361.52 would implement the expanded authority in 
section 102(d) the Act requiring that applicants and eligible 
individuals be able to exercise informed choice throughout the 
rehabilitation process. This proposed section would largely track the 
statutory requirements provisions and also would retain the current 
regulatory provisions that specify types of information that could 
assist eligible individuals to exercise informed choice in the 
selection of VR services and service providers.

Section 361.53 Comparable Services and Benefits

    Section 101(a)(8) of the Act expands the longstanding provisions 
regarding comparable services and benefits to require interagency 
agreements between the designated State agency and other appropriate 
public entities (including the State agency administering the State's 
medicaid program, public institutions of higher education, and other 
components of the statewide workforce investment system) 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. The statutory requirements 
related to this enhanced interagency coordination would be implemented 
in paragraph (d) of this proposed section.

[[Page 10629]]

Section 361.54 Participation of Individuals in Cost of Services Based 
on Financial Need

    This section of the proposed regulations largely tracks the 
requirements in the current regulations related to financial needs 
tests with two primary changes.
    First, the list of VR services that are currently exempted from 
State financial needs tests (e.g., assessment and counseling and 
guidance), meaning that a State unit cannot require an individual to 
contribute to the cost of those services, has been expanded to include 
interpreter services for individuals who are the deaf or hard of 
hearing, reader services for individuals who are blind, and personal 
assistance services. We are proposing to exempt these services from 
financial need assessments since each service is provided to enable an 
individual to access the VR program or participate in a program of 
vocational rehabilitation services. Individuals do not apply, nor are 
they eligible, under the VR program solely to receive these types of 
support services. Rather, these services allow persons to communicate 
or perform daily living functions in the course of receiving other VR 
services that are necessary to their training for employment.
    We are interested in commenters' views on this proposed change and 
request public comment on whether this list of access services that 
would be exempted from financial needs tests under this section should 
be modified in any way. We also would like to point out that exempting 
these additional services from financial needs tests would not affect a 
State unit's or other service provider's responsibility to comply with 
section 504 of the Act, the Americans with Disabilities Act, or other 
Federal statutes and regulations regarding individuals with 
disabilities. To the extent an entity is obligated under Federal law to 
provide an accommodation or an auxiliary aid to a VR program 
participant at no cost to the individual, that entity must provide the 
necessary service and fulfill those requirements that apply to it.
    The proposed regulations also would prohibit State units from 
applying financial needs tests to individuals receiving SSI or SSDI. As 
with the requirement that SSI recipients and SSDI beneficiaries be 
presumed eligible under the VR program, this proposed change is 
intended to increase efficiency in the way State agencies serve those 
with disabilities who receive Social Security.
    Typically SSI recipients (based on limited income and resources) 
and SSDI beneficiaries (based on an inability to engage in substantial 
gainful activity without assistance such as VR services) have limited 
ability to contribute to the cost of VR services and, thus, are 
unlikely to meet the State criteria for contributing to service costs. 
SSI recipients, in fact, have already been determined by the Social 
Security Administration (SSA) to fall below federally established 
income and resource standards. The proposed regulations would ensure 
that those receiving Social Security disability benefits receive timely 
VR services without being subject to a largely duplicative (at least 
with regard to SSI recipients), and unnecessary, financial need test as 
a condition of receiving needed services.
    More importantly, exempting SSI recipients and SSDI beneficiaries 
from financial needs assessments would support the chief goal behind 
the practice of referring these individuals to the VR program: Enabling 
individuals to become gainfully employed and to no longer require 
Social Security benefits. Requiring Social Security recipients, who 
typically have very limited resources, to contribute to the cost of VR 
services serves as a disincentive for these individuals to pursue 
gainful employment through the VR program. Instead, the proposed 
regulations would support individuals' efforts to pursue employment and 
avoid Social Security disability benefits. Moreover, the proposed 
regulations would not overly burden State units since SSA reimburses 
State units for the cost of VR services provided to eligible 
individuals receiving SSI and SSDI after the individual has engaged in 
substantial gainful activity consistent with SSA criteria.
    Finally, we believe that the benefits afforded by the changes to 
this section--e.g., streamlining the process for accessing VR services 
and reducing disincentives for remaining on public assistance--outweigh 
any costs to States since many States use financial needs tests only in 
very limited circumstances.

Section 361.56 Requirements for Closing the Record of Services of an 
Individual Who Has Achieved an Employment Outcome

    We propose to modify Sec. 361.56 of the current regulations to 
better reflect the requirement that the components of that section must 
be met before the DSU can close the record of services for an 
individual who has achieved an employment outcome. Accordingly, the 
title of Sec. 361.56 of the current regulations (``Individuals 
determined to have achieved an employment outcome'') would be changed 
in the proposed regulations to ``Requirements for closing the record of 
services of an individual who has achieved an employment outcome.'' 
Proposed Sec. 361.56 would also be removed from the State plan list of 
assurances.
    In order to close the individual's record of services, this 
proposed section would require that the individual achieve the 
employment described in the individual's IPE and maintain the 
employment outcome for an appropriate period of time, but not for less 
than 90 days. Also, the individual and the qualified VR counselor 
employed by the DSU must consider the employment outcome to be 
satisfactory and agree that the individual is performing well in the 
employment. Each of the proposed provisions is based on criteria 
specified in Sec. 361.56 of the current regulations. In addition, the 
proposed regulations would require DSUs to inform individuals of the 
availability of post-employment services that may be provided after the 
record of services is closed. We consider each of the proposed 
provisions to be important protection for individuals by ensuring that 
the individual's employment outcome is sufficiently stable and that the 
individual no longer requires VR services to maintain the employment.

Section 361.57 Review of the Designated State Unit Personnel 
Determinations

    Section 361.57 of the proposed regulations would implement section 
102(c) of the Act by describing the procedural requirements for 
resolving disputes between individual applicants or eligible 
individuals in the VR program and the DSU. The proposed regulations 
would largely track current regulatory requirements related to informal 
resolution procedures, due process hearings, selection of impartial 
hearing officers, and other items. In addition, the proposed 
regulations would establish requirements for implementing two new 
procedures that were adopted in the 1998 Amendments to the Act--
mediation and administrative review of hearing officer decisions. 
Finally, under this proposed section, the DSU would no longer be 
required to include its due process procedures as part of its State 
plan submission.
    Designated State units are required by statute to establish 
mediation procedures in an effort to resolve disputes in a more timely 
and less confrontational manner and to reduce the number of formal, 
adversarial hearings. We note, however, that the Act prohibits DSUs 
from using mediation as

[[Page 10630]]

a means of denying or delaying an individual's right to a hearing. 
Consequently, the proposed regulations would clarify that an applicant 
or eligible individual must be given a hearing within 45 days from the 
individual's request for review if, by that time, the dispute has not 
been resolved informally or through mediation. Additionally, mediation 
sessions must be conducted by ``qualified and impartial mediators,'' a 
term that is defined in Sec. 361.5(b)(38) of the proposed regulations.
    States also have the option of developing administrative review 
procedures through which parties can seek review of hearing officer 
decisions by the designated State agency (that oversees the DSU) or the 
Office of the Governor. The 1998 Amendments provides for this 
administrative review process in place of the prior authority for DSU 
directors to review hearing decisions, an authority that has been 
removed from the Act.
    The proposed regulations also track the statute by explicitly 
informing parties to disputes concerning the provision of VR services 
that they may challenge final agency decisions in civil court.
    We also propose to clarify one point related to representation 
during mediation sessions and hearings. Paragraph (a)(3)(ii) of this 
proposed section, which, consistent with section 102(c)(3)(B) of the 
Act, gives individuals the opportunity to be represented in mediation 
sessions or formal hearings by counsel or another advocate that they 
select, is to be interpreted broadly. In other words, the individual, 
as the party to the dispute, has full discretion to choose an attorney, 
a guardian, family member, a friend, or other person to serve as his or 
her advocate during mediation or a hearing.

Section 361.60   Matching Requirements

    Proposed Sec. 361.60 would revise current regulatory matching 
requirements for the VR program to reflect a number of statutory 
changes made by the 1998 Amendments. Specifically, this proposed 
section would omit the current provisions related to the innovation and 
expansion grant program since the authority for that program has been 
removed from the Act. In addition, the regulatory requirements 
governing sources of State matching funds (i.e., the State's non-
Federal share) would be revised to reflect the new statutory provisions 
governing the use of geographically limited earmarked funds as part of 
a State's non-Federal share.
    Section 361.60(b)(3)(ii) of the proposed regulations would 
implement section 101(a)(4)(B) of the Act. Section 101(a)(4)(B) of the 
Act authorizes a State to use funds that are earmarked for a particular 
geographic area within the State as part of its non-Federal share 
without obtaining a waiver of statewideness. In these instances, the 
State must first determine and inform the RSA Commissioner that it 
cannot provide the full amount of its non-Federal share without using 
the earmarked funds.
    Although section 101(a)(4)(B) of the Act is intended to assist some 
States in meeting their matching obligations, we emphasize that the Act 
does not permit States to restrict the use of any Federal funds 
received under the VR program to certain geographic areas unless the 
State obtains a waiver of statewideness from the Commissioner of RSA. 
In the absence of RSA approval, VR services are to be made generally 
available to individuals with disabilities across the State. The 
statewideness requirements also apply to the Federal VR program funds 
that the State receives in return for contributing geographically 
limited earmarked funds to its non-Federal share. In other words, 
without a waiver, Federal funds that are matched by privately donated 
funds must be used on a statewide basis and cannot flow entirely back 
to the particular geographic area for which the privately donated funds 
were earmarked.

Goals 2000: Educate America Act

    The Goals 2000: Educate America Act (Goals 2000) focuses the 
Nation's education reform efforts on the eight National Education Goals 
and provides a framework for meeting them. Goals 2000 promotes new 
partnerships to strengthen schools and expands the Department's 
capacities for helping communities to exchange ideas and obtain 
information needed to achieve the goals.
    These proposed regulations would address the National Education 
Goal that, by the year 2000, every adult American, including 
individuals with disabilities, will possess the knowledge and skills 
necessary to compete in a global economy and exercise the rights and 
responsibilities of citizenship.

Executive Order 12866

1. Potential Costs and Benefits

    Under Executive Order 12866, we have assessed the potential costs 
and benefits of this regulatory action. The potential costs associated 
with the proposed regulations are those resulting from statutory 
requirements and those we have determined as necessary for 
administering this program effectively and efficiently. Elsewhere in 
this SUPPLEMENTARY INFORMATION section we identify and explain burdens 
specifically associated with information collection requirements. See 
the heading Paperwork Reduction Act of 1995.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of these proposed regulations, we have determined that 
the benefits would justify the costs.
    We have also determined that this regulatory action would not 
unduly interfere with State, local, and tribal governments in the 
exercise of their governmental functions.
Summary of Potential Costs and Benefits
    We believe that the NPRM would substantially improve the State VR 
Services Program and would yield substantial benefits in terms of 
program management, efficiency, and effectiveness. We also believe that 
the proposed regulations represent the least burdensome way to 
implement the 1998 Amendments to Title I of the Act and fulfill 
important policy objectives that we consider to be essential to the 
success of the program. The NPRM would further reduce paperwork or 
process requirements that currently apply to DSUs and enhance the 
flexibility of DSUs to meet non-statutory requirements. Increased 
flexibility of DSUs and other benefits resulting from the proposed 
regulations are discussed in the following paragraphs of this section 
and throughout the section-by-section summary of the preamble.

Definitions and Examples

    The proposed regulations would incorporate certain definitions 
under the Workforce Investment Act to give a complete listing of 
defined terms that apply to the VR program. For purposes of further 
clarification, the NPRM also includes definitions of two terms that are 
used in the program but are not defined in the Act--``fair hearing 
board'' and ``qualified and impartial mediator.''
    We have also provided additional clarifying information in the 
proposed regulations through the limited use of examples. In the past, 
many in the vocational rehabilitation community have stated that they 
find this information more accessible and more useful if it is included 
in the regulations rather than issued separately by RSA as 
subregulatory guidance. Nevertheless, we emphasize that the examples in 
the proposed regulations are purely

[[Page 10631]]

illustrative and are not intended to restrict State flexibility.

Reduction of Grantee Burden

    Non-statutory paperwork requirements have been eliminated or 
consolidated throughout the NPRM in an effort to reduce regulatory 
burden on States. In particular, as noted earlier in this preamble, the 
NPRM would significantly reduce the number of requirements that apply 
to the DSU's State plan submission. A list of the sections of the 
current regulations that have been removed from content of the State 
plan is provided in the Background section of this preamble. Additional 
burden-reducing steps taken in the NPRM are explained in the section-
by-section summary. Those paperwork requirements that would remain in 
the proposed regulations are considered essential to the proper 
administration of the program.

Enhanced Protections for Individuals With Disabilities

    The proposed regulations include several provisions that are 
intended to ensure that individuals with disabilities are more readily 
provided VR services without unnecessary delay. For example, 
Sec. 361.42 (Assessment for determining eligibility and priority for 
services) would provide several safeguards for individuals receiving 
SSI or SSDI benefits (who, therefore, are presumed eligible under the 
VR program) to ensure that an individual's SSI or SSDI status is 
verified quickly and that these individuals receive VR services in a 
timely manner as the statute intends.
    As a second example, Sec. 361.57 (Review of State unit personnel 
decisions) would clarify that the use of mediation or informal means to 
resolve disputes between VR agencies and consumers must not serve to 
delay an individual's right to a due process hearing within 45 days of 
a request for review. Proposed Sec. 361.57 as a whole is designed to 
expedite resolution of disputes and avoid disruptions in services.

Additional Benefits

    Aside from establishing certain regulatory safeguards to address 
specific issues that arise under the VR program, the NPRM generally 
follows the statutory framework of giving States significant 
flexibility in operating their VR programs and assisting individuals 
with disabilities to achieve high-quality employment. Also, the NPRM 
closely links the VR program to the State workforce investment system 
as is required by the Act. Several sections of the NPRM--e.g., 
Sec. 361.23 (Requirements related to the statewide workforce investment 
system) and Sec. 361.37 (Information and referral services)--foster 
increased coordination between VR and the other employment training 
programs in the workforce system to ensure that individuals with 
disabilities receive necessary rehabilitation and other services 
enabling them to achieve an appropriate employment outcome.

2. Clarity of the Regulations

    Executive Order 12866 and the President's Memorandum of June 1, 
1998 on ``Plain Language in Government Writing'' require each agency to 
write regulations that are easy to understand.
    The Secretary invites comments on how to make these proposed 
regulations easier to understand, including answers to questions such 
as the following:
    * Are the requirements in the proposed regulations clearly 
stated?
    * Do the proposed regulations contain technical terms or 
other wording that interferes with their clarity?
    * Does the format of the proposed regulations (grouping and 
order of sections, use of headings, paragraphing, etc.) aid or reduce 
their clarity?
    * Would the proposed regulations be easier to understand if 
we divided them into more (but shorter) sections? (A ``section'' is 
preceded by the symbol ``Sec. '' and a numbered heading; for example, 
Sec. 361.42 Assessment for determining eligibility and priority for 
services.)
    * Could the description of the proposed regulations in the 
SUPPLEMENTARY INFORMATION section of this preamble be more helpful in 
making the proposed regulations easier to understand? If so, how?
    * What else could we do to make the proposed regulations 
easier to understand?
    Send any comments that concern how the Department could make these 
proposed regulations easier to understand to the person listed in the 
ADDRESSES section of the preamble.

Regulatory Flexibility Act Certification

    The Secretary certifies that these proposed regulations would not 
have a significant economic impact on a substantial number of small 
entities. These regulations would impact some public institutions of 
higher education (IHEs) by requiring States to develop formal 
agreements between State VR agencies and public IHEs for purposes of 
providing necessary VR services to eligible individuals attending those 
IHEs. However, because these proposed regulations impose only minimal 
requirements on IHEs and otherwise would affect only States and State 
agencies, the regulations would not have a significant impact on small 
entities. States and State agencies are not defined as ``small 
entities'' in the Regulatory Flexibility Act.

Paperwork Reduction Act of 1995

    Sections 361.10, 361.12, 361.13, 361.15, 361.16, 361.17, 361.18, 
361.19, 361.20, 361.21, 361.22, 361.23, 361.24, 361.25, 361.29, 361.30, 
361.31, 361.32, 361.34, 361.35, 361.36; 361.37, 361.40, 361.46, 361.51, 
361.52, 361.53, and 361.55 contain information collection requirements. 
Information collection requirements that pertain to State 
recordkeeping, but are not associated with the State plan, are 
contained in Secs. 361.14, 361.26, 361.27, 361.28, 361.38, 361.41, 
361.47, 361.48, 361.49, 361.50, 361.54, 361.57, 361.60 and 361.62.
    Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the 
Department of Education has submitted a copy of these sections to the 
Office of Management and Budget (OMB) for its review.

Collection of Information: The State Vocational Rehabilitation 
Services Program

    States are eligible to apply for grants under these proposed 
regulations. The information to be collected includes State plan 
assurances and descriptions to meet statutory requirements and other 
required information that the Department considers important to the 
efficient and effective administration of the program. Required 
information that is unrelated to the State plan is necessary for 
purposes of Department monitoring of program performance and 
compliance.
    The Department needs and uses the information related to the State 
plan for the VR program in order to ensure compliance with Federal 
requirements. An approved State plan is necessary for a State to 
receive a grant under the VR program. All State plan information is to 
be collected and reported once unless the State has submitted the 
information previously or determines that modifications are necessary, 
or the Secretary requires modifications due to changes in State policy, 
Federal law (including regulations), interpretation of the Act by a 
Federal court or the highest court in the State, or a finding by the 
Secretary of State noncompliance with the requirements of the Act. 
However, consistent with statutory requirements, the following State 
plan information must be submitted annually: Information relating to 
the comprehensive system of personnel development under Sec. 361.18; 
reports

[[Page 10632]]

relating to assessments, estimates, goals and priorities, and reports 
of progress under Sec. 361.29; reports on the use of funds reserved for 
innovation and expansion activities under Sec. 361.35; input provided 
by the State Rehabilitation Council on State plan revisions in 
accordance with Sec. 361.16; and other State plan updates of 
information required under the proposed regulations that are requested 
by the Secretary.
    Annual reporting and recordkeeping burden for this collection of 
information is estimated to average 12,220 hours for each response for 
82 respondents, including the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collection of information. 
Thus, we estimate the total annual reporting and recordkeeping burden 
for this collection to be 1,002,050 hours.
    If you want to comment on the information collection requirements, 
please send your comments to the Office of Information and Regulatory 
Affairs, OMB, Room 10235, New Executive Office Building, Washington, DC 
20503; Attention: Desk Officer for U.S. Department of Education. You 
may also send a copy of these comments to the Department representative 
named in the ADDRESSES section of this preamble.
    We consider your comments on this proposed collections of 
information in--
    * Deciding whether the proposed collection is necessary for 
the proper performance of our functions, including whether the 
information will have practical use;
    * Evaluating the accuracy of our estimate of the burden of 
the proposed collection, including the validity of our methodology and 
assumptions;
    * Enhancing the quality, usefulness, and clarity of the 
information we collect; and
    * Minimizing the burden on those who must respond. This 
includes exploring the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology; e.g., permitting electronic submission of 
responses.
    OMB is required to make a decision concerning the collection of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, to ensure that OMB gives your comments full consideration, 
it is important that OMB receives the comments within 30 days of 
publication. This does not affect the deadline for your comments to us 
on the proposed regulations.

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 strengthening 
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.

Assessment of Educational Impact

    The Secretary particularly requests comments on whether these 
proposed regulations would 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 the 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 the PDF you must have the Adobe Acrobat Reader Program with 
Search, which is available free at either of the previous sites. If you 
have questions about using the 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: February 22, 2000.
Richard W. Riley,
Secretary of Education.

    For the reasons discussed in the preamble, the Secretary proposes 
to amend 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 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.

[[Page 10633]]

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 State unit personnel determinations.
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.

    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 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 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

[[Page 10634]]

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 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.

[[Page 10635]]

    (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--
    (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 independent State commission, board, or other agency that 
has vocational rehabilitation, or vocational and other rehabilitation, 
as its primary function.

(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

[[Page 10636]]

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 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(i).

(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).


[[Page 10637]]


(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 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))

    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.

    (36) 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))

    (37) 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 i