HomeMy WebLinkAboutState Vocational Rehab- ADA CompliantFEDERAL REGISTER
Vol. 81 Friday,
No. 161 August 19, 2016
Part IV
Department of Education
34 CFR Parts 361, 363, and 397
State Vocational Rehabilitation Services Program; State Supported
Employment Services Program; Limitations on Use of Subminimum Wage;
Final Rule
55630 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
DEPARTMENT OF EDUCATION
34 CFR Parts 361, 363, and 397
ED -2015 -OSERS -0001 ]
RIN 1820-AB70
State Vocational Rehabilitation
Services Program; State Supported
Employment Services Program;
Limitations on Use of Subminimum
Wage
AGENCY: Office of Special Education and
Rehabilitative Services, Department of
Education.
ACTION: Final regulations.
SUMMARY: The Secretary amends the
regulations governing the State
Vocational Rehabilitation Services
program and the State Supported
Employment Services program to
implement changes to the Rehabilitation
Act of 1973, as amended by the
Workforce Innovation and Opportunity
Act (WIOA) signed into law on July 22,
2014. The Secretary also updates,
clarifies, and improves the prior
regulations.
Finally, the Secretary issues new
regulations regarding limitations on the
use of subminimum wages that are
added by WIOA and under the purview
of the Department.
DATES: These regulations are effective
on September 19, 2016, except for
amendatory instructions 2, 3, and 4
amending 34 CFR 361. 10, 361. 23, and
361. 40, which are effective October 18,
2016.
FOR FURTHER INFORMATION CONTACT: Ed
Anthony, U. S. Department of Education,
400 Maryland Avenue SW., Room 5086,
Potomac Center Plaza ( PCP),
Washington, DC 20202-2800.
Telephone: ( 202) 245-7488 or by email:
Edward.Anthony@ed.gov.
If you use a telecommunications
device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay
Service (FRS), toll free, at 1-800- 877-
8339.
SUPPLEMENTARY INFORMATION:
Executive Summary
Purpose of This Regulatory Action:
Individuals with disabilities represent a
vital and integral part of our society,
and we are committed to ensuring that
individuals with disabilities have
opportunities to compete for and enjoy
high quality employment in the 21st
century global economy. Some
individuals with disabilities face
particular barriers to employment in
integrated settings that pays competitive
wages, provides opportunities for
advancement, and leads to economic
self-sufficiency. Ensuring workers with
disabilities have the supports and the
opportunities to acquire the skills that
they need to pursue in -demand jobs and
careers is critical to growing our
economy, assuring that everyone who
works hard is rewarded, and building a
strong middle class. To help achieve
this priority for individuals with
disabilities, the Rehabilitation Act of
1973 ( Act), as amended by the
Workforce Innovation and Opportunity
Act (WIOA) (P. L. 113-128), signed into
law on July 22, 2014, seeks to empower
individuals with disabilities to
maximize employment, economic self-
sufficiency, independence, and
inclusion in and integration into
society.
To implement the changes to the Act
made by WIOA, the Secretary amends
the regulations governing the State
Vocational Rehabilitation Services
program (VR program) ( 34 CFR part 361)
and State Supported Employment
Services program (Supported
Employment program) (34 CFR part
363), administered by the Rehabilitation
Services Administration (RSA), within
the Office of Special Education and
Rehabilitative Services. In addition, the
Secretary updates and clarifies prior
regulations to improve the operation of
the program. Finally, the Secretary
promulgates regulations in new 34 CFR
part 397 that implement the limitations
on the payment of subminimum wages
to individuals with disabilities in
section 511 of the Act that fall under the
purview of the Secretary.
Summary of the Major Provisions of
This Regulatory Action: We summarize
here those regulatory changes needed to
implement the amendments to the Act
made by WIOA for each part in the
order it appears in the Code of Federal
Regulations ( CFR).
State Vocational Rehabilitation
Services Program
WIOA makes significant changes to
title I of the Act that affect the VR
program. First, WIOA strengthens the
alignment of the VR program with other
core components of the workforce
development system by imposing
requirements governing unified strategic
planning, common performance
accountability measures, and the one-
stop delivery system. This alignment
brings together entities responsible for
administering separate workforce and
employment, educational, and other
human resource programs to collaborate
in the creation of a seamless customer -
focused service delivery network that
integrates service delivery across
programs, enhances access to the
programs' services, and improves long-
term employment outcomes for
individuals receiving assistance. In so
doing, WIOA places heightened
emphasis on coordination and
collaboration at the Federal, State, and
local levels to ensure a streamlined and
coordinated service delivery system for
job -seekers, including those with
disabilities, and employers. Therefore,
the Departments of Education and Labor
are issuing joint final regulations to
implement jointly administered
activities under title I of WIOA (e.g.,
those related to Unified or Combined
State Plans, performance accountability,
and the one-stop delivery system),
applicable to the workforce
development system' s core programs
Adult, Dislocated Worker, and Youth
programs; Adult Education and Family
Literacy Act programs; Wagner-Peyser
Employment Services program; and the
VR program). The joint final regulations,
along with the Analysis of Comments
and Changes to those regulations, are
set forth in a separate regulatory action
published elsewhere in this issue of the
Federal Register.
To implement WIOA' s corresponding
major changes to title I of the Act, we:
Amend § 361. 10 to require that all
assurances and descriptive information
previously submitted through the stand-
alone VR State Plan and supported
employment supplement be submitted
through the VR services portion of the
Unified or Combined State Plan under
section 102 or section 103, respectively,
of WIOA.
Clarify in § 361. 29 that States report
to the Secretary updates to the statewide
needs assessment and goals and
priorities, estimates of the numbers of
individuals with disabilities served
through the VR program and the costs
of serving them, and reports of progress
on goals and priorities at such time and
in such manner determined by the
Secretary to align the reporting of this
information with the submission of the
Unified or Combined State Plans and
their modifications.
Clarify in § 361. 20 when designated
State agencies must conduct public
hearings to obtain comment on
substantive changes to policies and
procedures governing the VR program.
Remove § 361. 80 through § 361. 89
and replace with § 361. 40 to cross-
reference the joint regulations for the
common performance accountability
measures for the core programs of the
workforce development system.
Provide a cross-reference in
361. 23, regarding the roles and
responsibilities of the VR program in the
one-stop delivery system to the joint
regulations implementing requirements
for the one-stop delivery system.
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Second, the Act, as amended by
WIOA, emphasizes the achievement of
competitive integrated employment.
The foundation of the VR program is the
principle that individuals with
disabilities, including those with the
most significant disabilities, are capable
of achieving high quality, competitive
integrated employment when provided
the necessary services and supports. To
increase the employment of individuals
with disabilities in the competitive
integrated labor market, the workforce
system must provide individuals with
disabilities opportunities to participate
in job -driven training and to pursue
high quality employment outcomes. The
amendments to the Act—from the stated
purpose of the Act, to the expansion of
services designed to maximize the
potential of individuals with
disabilities, including those with the
most significant disabilities, to achieve
competitive integrated employment,
and, finally, to the inclusion of
limitations on the payment of
subminimum wages to individuals with
disabilities—reinforce the congressional
intent that individuals with disabilities,
with appropriate supports and services,
are able to achieve the same kinds of
competitive integrated employment as
non -disabled individuals. Consequently,
we make extensive changes to part 361,
including:
The inclusion of a new definition of
competitive integrated employment"
in § 361. 5( c)( 9) that combines, clarifies,
and enhances the two separate
definitions of " competitive
employment" and " integrated setting"
for the purpose of employment under
the VR program in prior § 361. 5( b)( 11)
and (b)( 33)( ii).
The incorporation of the principle
that individuals with disabilities,
including those with the most
significant disabilities, are capable of
achieving high quality competitive
integrated employment, when provided
the necessary services and support,
throughout part 361, from the statement
of program purpose in § 361. 1 to the
requirement in § 361. 46( a) that the
individualized plan for employment
include a specific employment goal
consistent with the general goal of
competitive integrated employment.
The revision of the definition of
employment outcome" in
361. 5( c)( 15) that specifically identifies
customized employment as an
employment outcome under the VR
program, and requires that all
employment outcomes achieved
through the VR program be in
competitive integrated employment or
supported employment, thereby
eliminating uncompensated outcomes,
such as homemakers and unpaid family
workers, from the scope of the
definition for purposes of the VR
program.
To assist designated State units
DSUs) to implement the change in the
definition of " employment outcome"
and to ensure that individuals with
disabilities did not experience a
disruption in services, the Department
proposed in the Notice of Proposed
Rulemaking (NPRM) published on April
16, 2015 ( 80 FR 21059), a transition
period of six months following the
effective date of the final regulations,
during which period DSUs would
complete the provision of vocational
rehabilitation services to, and close the
service records of, individuals pursuing
uncompensated outcomes, such as
homemakers and unpaid family
workers, in accordance with
individualized plans for employment
that were approved prior to the effective
date of these final regulations. In
consideration of the comments received,
the Secretary has extended the
transition period in these final
regulations. DSUs may continue to
provide services to individuals with
uncompensated employment goals on
their individualized plans for
employment, approved prior to the
effective date of these final regulations,
until June 30, 2017, unless a longer
period of time is required based on the
needs of the individual with the
disability as determined by the
vocational rehabilitation counselor and
the individual with a disability, as
documented in the individual' s service
record.
We also amend numerous other
provisions throughout part 361 to
address the expansion of available
services, requirements related to the
development of the individualized plan
for employment, and order of selection
for services, all of which are intended to
maximize the potential for individuals
with disabilities to prepare for, obtain,
retain, and advance in the same high
quality jobs and high -demand careers as
persons without disabilities.
Third, WIOA emphasizes the
provision of services to students and
youth with disabilities to ensure that
they have meaningful opportunities to
receive the services, including training
and other supports, they need to achieve
employment outcomes in competitive
integrated employment. The Act, as
amended by WIOA, expands not only
the population of students with
disabilities who may receive vocational
rehabilitation services but also the
breadth of services that the VR agencies
may provide to youth and students with
disabilities who are transitioning from
school to postsecondary education and
employment. We implement the
emphasis on serving students and youth
with disabilities contained in the
amendments to the Act made by WIOA
in many regulatory changes to part 361
by:
Including in § 361. 5( c)( 51) and
c)( 58), respectively, new definitions of
student with a disability" and " youth
with a disability." After further analysis
of the comments received, the
Department has determined that the
definition of " student with a disability"
applies to all students enrolled in
educational programs, including
postsecondary education programs, so
long as they satisfy the age requirements
set forth in final § 361. 5( c)( 51). The
definition is also inclusive of secondary
students who are homeschooled, as well
as students in other non-traditional
secondary educational programs. We
have incorporated this broader
interpretation of the definition in final
361. 5( c)( 51), which we believe will
increase the potential for DSUs to
maximize the use of funds reserved for
the provision of pre-employment
transition services by increasing the
number of students who may receive
these services.
Implementing in § 361. 48( a) the
requirements of new sections 110(d) and
113 of the Act requiring States to reserve
at least 15 percent of their Federal
allotment to provide and arrange for, in
coordination with local educational
agencies, the provision of pre-
employment transition services to
students with disabilities. We have
maintained our interpretation of
for purposes of
pre-employment transition services, as
potentially eligible,"
meaning all students with disabilities,
regardless of whether they have applied
for or been determined eligible for the
VR program. The Department believes
this is the broadest legally supportable
interpretation and is consistent with the
congressional intent.
Amending § 361. 29( a) to require
that the comprehensive statewide needs
assessment include an assessment of the
needs of students and youth with
disabilities for vocational rehabilitation
services, including the needs of students
with disabilities for pre-employment
transition services.
Clarifying in § 361. 49 the technical
assistance DSUs may provide to
educational agencies and permitting the
provision of transition services for the
benefit of groups of students and youth
with disabilities.
Clarifying in § 361. 22( c) that
nothing in this part is to be construed
as reducing the responsibility of the
local educational agencies or any other
55632 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
agencies under the Individuals with
Disabilities Education Act (IDEA) to
provide or pay for transition services
that are also considered to be special
education or related services under the
IDEA necessary for the provision of a
free appropriate public education to
students with disabilities.
In addition to the preceding changes
implementing the three major goals of
the Act, as amended by WIOA, we have
made changes to the regulations
governing the comprehensive system of
personnel development and the fiscal
administration of the VR program. In
order for DSUs to recruit qualified
personnel to provide services to
individuals with disabilities, including
students and youth with disabilities,
and carry out their responsibilities
under the Act, we have made changes
by:
Amending § 361. 18 governing the
comprehensive system of personnel
development by establishing minimum
educational and experience
requirements and eliminating the
requirement to retrain staff not meeting
the DSU' s personnel standard for
qualified staff.
Revising proposed § 361. 18( c)( 2)( ii)
in these final regulations to provide a
more complete list of the skills and
knowledge needed to meet the needs of
employers and individuals with
disabilities in the 21st century evolving
labor market.
Finally, we make changes to part 361
to improve the fiscal administration of
the VR program by:
Clarifying in § 361. 5( b) the
applicability to the VR program of the
definitions contained in 2 CFR part 200,
Uniform Administrative Requirements,
Cost Principles, and Audit
Requirements and making numerous
other conforming changes to align this
part with 2 CFR part 200 to ensure
consistency.
Adding a new paragraph (a)( 3) to
361. 65 requiring the State to reserve
not less than 15 percent of its allotment
for the provision of pre-employment
transition services.
Amending § 361. 65( b)( 2) to clarify
that reallotment occurs in the fiscal year
the funds were appropriated and the
funds may be obligated or expended
during the period of performance,
provided that matching requirements
are met.
Adding a new paragraph (b)( 3) to
361. 65 establishing the Secretary' s
authority to determine the criteria to be
used to reallot funds when the amount
requested exceeds the amount of funds
available for reallotment.
Since publication of the NPRM, as a
result of further Departmental review,
we clarify in § 361. 63 the requirements
for the use of program income.
State Supported Employment Services
Program
Under the State Supported
Employment Services program
Supported Employment program)
authorized under title VI of the Act (29
U. S. C. 795g et seq.), the Secretary
provides grants to assist States in
developing and implementing
collaborative programs with appropriate
entities to provide supported
employment services for individuals
with the most significant disabilities,
including youth with the most
significant disabilities, to enable them to
achieve supported employment
outcomes in competitive integrated
employment. Grants made under the
Supported Employment program
supplement grants issued to States
under the VR program (34 CFR part
361).
WIOA makes several significant
changes to title VI of the Act, which
governs the Supported Employment
program. All of the amendments to title
VI are consistent with those made
throughout the Act, namely to maximize
the potential of individuals with
disabilities, especially those with the
most significant disabilities, to achieve
competitive integrated employment and
to expand services for youth with the
most significant disabilities. We
implement the changes made to the
Supported Employment program by
WIOA in these final regulations by:
Requiring in § 363. 1 that supported
employment be in competitive
integrated employment or, if not, in an
integrated setting in which the
individual is working toward
competitive integrated employment on a
short-term basis. As a result of
comments received, we revised the
proposed short-term basis period to
allow for an extension of the six-month
period for up to a total of 12 months
based on the needs of the individual,
and the individual has demonstrated
progress toward competitive earnings
based on information contained in the
service record.
Extending in § 363. 50( b)( 1) the time
from 18 months to 24 months for the
provision of supported employment
services.
Requiring in § 363. 22 a reservation
of 50 percent of a State' s allotment
under this part for the provision of
supported employment services,
including extended services, to youth
with the most significant disabilities.
Requiring in § 363. 23 not less than
a 10 percent match for the amount of
funds reserved to serve youth with the
most significant disabilities.
Reducing in § 363. 51 the amount of
funds that may be spent on
administrative costs.
In response to comments received, we
revised §§ 363. 53, 363. 54, and 363. 55 to
clarify the requirements for the
transition of individuals with the most
significant disabilities from supported
employment services to extended
services, the achievement of a supported
employment outcome, and the closure
of service records. We have redesignated
proposed § 363. 55 as final § 363. 56.
Limitations on the Use of Subminimum
Wage
Section 511 of the Act, as added by
WIOA, imposes requirements on
employers who hold special wage
certificates under the Fair Labor
Standards Act (FLSA) that must be
satisfied before the employers may hire
youth with disabilities at subminimum
wages or continue to employ
individuals with disabilities of any age
at the subminimum wage level. Section
511 also establishes the roles and
responsibilities of the DSUs for the VR
program and State and local educational
agencies in assisting individuals with
disabilities, including youth with
disabilities, to maximize opportunities
to achieve competitive integrated
employment through services provided
by VR and local educational agencies.
The addition of section 511 to the Act
is consistent with all other amendments
to the Act made by WIOA. Throughout
the Act, Congress emphasizes that
individuals with disabilities, including
those with the most significant
disabilities, can achieve competitive
integrated employment if provided the
necessary supports and services. The
limitations imposed by section 511
reinforce this belief by requiring
individuals with disabilities, including
youth with disabilities, to satisfy certain
service -related requirements in order to
start or maintain, as applicable,
subminimum wage employment. To
implement the requirements of section
511 that fall under the purview of the
Department, we are issuing new
regulations in part 397, including:
Section 397. 1, describing the
purpose of this part and § 397. 2 setting
forth the Department' s jurisdiction.
Section 397. 10, requiring the DSU,
in consultation with the State
educational agency, to develop a
process that ensures students and youth
with disabilities receive documentation
demonstrating completion of the various
activities required by section 511 of the
Act, such as, to name a few, the receipt
of transition services under the IDEA
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and pre-employment transition services
under section 113 of the Act, as
appropriate.
Sections 397. 20 and 397. 30,
establishing the activities that must be
completed by youth with disabilities
prior to obtaining employment at
subminimum wage and the
documentation that the DSUs and local
educational agencies, as appropriate,
must provide to demonstrate
completion of those activities, required
by section 511( a)( 2) of the Act. These
include completing pre-employment
transition services in final § 361. 48( a)
and the determination of eligibility or
ineligibility for vocational rehabilitation
services in final §§ 361. 42 and 361. 43.
Section 397. 40, establishing the
documentation that DSUs must provide
to individuals with disabilities of any
age who are employed at a subminimum
wage upon the completion of certain
information and career counseling -
related services, as required by section
511( c) of the Act.
Section 397. 31, prohibiting a local
educational agency or a State
educational agency from entering into a
contract with an entity that employs
individuals at subminimum wages for
the purpose of operating a program
under which a youth with a disability
is engaged in work compensated at a
subminimum wage.
Section 397. 50 authorizing a DSU to
review individual documentation,
required by this part, for all individuals
with disabilities who are employed at
the subminimum wage level, that is
maintained by employers who hold
special wage certificates under the
FLSA.
In response to comments received, we
made revisions to the final regulations
to specify that intervals for providing
career counseling and information and
referral services to individuals of any
age employed by section 14( c) entities
will be calculated based upon the date
the individual becomes known to the
DSU starting July 22, 2016.
Additionally, we included a time frame
in the final regulations of 45 days but,
in the case of extenuating
circumstances, no later than 90 days, for
the DSU to provide documentation of
completed activities to individuals with
disabilities. We also added provisions
that establish minimal information that
must be contained in the documentation
required by part 397, as well as other
administrative requirements related to
the documentation process. Finally, we
determined that section 14( c) entities
have a potential financial interest in
providing some of the services and
activities required in the final
regulations. Consequently, we inserted
language prohibiting the use of these
entities in providing these required
services or activities, stating that a
contractor may not be an entity holding
a special wage certificate under section
14( c) of the FLSA and that a DSU' s
contractor, for the purpose of
conducting the review of documentation
authorized under the final regulations,
may not be an entity holding a special
wage certificate under section 14( c) of
the FLSA.
We fully explain the regulations
described in this Executive Summary,
along with all other significant changes
to parts 361, 363, and 397 following the
publication of the NPRM, in the
Analysis of Comments and Changes
section of this preamble.
Costs and Benefits: The potential
costs associated with this regulatory
action are those resulting from statutory
requirements and those we have
determined as necessary for
administering the Department' s
programs and activities. Further
information related to costs and benefits
may be found in the Regulatory Impact
Analysis section later in this preamble.
Public Comment: In response to our
invitation in the NPRM, more than
1, 100 parties submitted comments on
the proposed regulations amending the
VR program (part 361), amending the
Supported Employment program (part
363), and adding part 397 implementing
the new provisions in section 511 of the
Act, as amended by WIOA. We discuss
substantive issues within each part, by
section or subject. Generally, we do not
address technical and other minor
changes.
Analysis of Comments and Changes:
Part 361 State Vocational
Rehabilitation Services Program
Following a description of the
organizational changes to part 361 in
these final regulations, we present the
Analysis of Comments and Changes in
three sections. In section A, we discuss
provisions in part 361 that apply
generally to the administration of the
VR program and to the provision of
vocational rehabilitation services to
individuals with disabilities. In section
B, we discuss provisions related to the
transition of students and youth with
disabilities from school to
postsecondary education and
employment. Finally, in section C, we
discuss the fiscal administration of the
VR program.
Due to extensive changes, we
published the entire part 361 in the
NPRM, which included conforming and
technical changes. We did not propose
substantive changes to all sections of
this part. Thus, we did not intend to
make all regulations within this part
available for public comment.
Consequently, we do not address the
comments we received on the following
sections: §§ 361. 5( c)( 18), 361. 5( c)( 24),
361. 5( c)( 27), 361. 5( c)( 28), 361. 5( c)( 29),
361. 5( c)( 30), 361. 5( c)( 34), 361. 5( c)( 40),
361. 5( c)( 43), 361. 5( c)( 57), 361. 47,
361. 52, 361. 56, and 361. 57. Finally, we
generally do not discuss differences
between the NPRM and these final
regulations that are technical or
conforming in nature.
Organizational Changes
Although the regulations maintain
subparts A, B, and C of part 361, we
make organizational changes to other
subparts within this part. First, we
incorporate new subparts D, E, and F,
where we place the three subparts
discussed in a separate, but related,
regulatory action (the joint regulations
issued by the Departments of Education
and Labor implementing jointly
administered requirements governing all
six core programs of the workforce
development system, including the VR
program, contained in title I of WIOA)
published elsewhere in this issue of the
Federal Register. Please see that
regulatory action for more information
about how these subparts are
incorporated into part 361. Second, we
remove prior §§ 361. 80 through 361. 89,
since the VR program -specific standards
and indicators are no longer applicable.
Finally, we eliminate Appendix A to
prior part 361— Questions and
Responses. The Department intends to
issue guidance on various areas covered
in the final regulations, including some
that had been covered by prior
Appendix A, in the near future.
A. Provisions of General Applicability
Section A includes the Analysis of
Comments and Changes to the
regulations in subparts A and B of part
361 that pertain to the administration of
the VR program generally and to the
provision of vocational rehabilitation
services to individuals with disabilities
of any age. The analysis is presented by
topical headings relevant to sections of
the regulations in the order they appear
in part 361 as listed. We discuss some
of these same regulations in section B of
the Analysis of Comments and Changes
as they relate specifically to the
transition of students and youth with
disabilities from school to post -school
activities, including final §§ 361. 24,
361.46, 361.48(b), and 361.49.
Topical Headings
Purpose (§ 361. 1)
Authorized Activities (§ 361. 3)
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Applicable Regulations (§ 361. 4)
Training on 2 CFR part 200 Requirements
Third -Party In -Kind Contributions
Applicable Definitions (§ 361. 5)
Administrative Cost (§ 361. 5( c)( 2))
Supervisory Personnel
Travel Costs
Depreciation
Infrastructure Costs for the Workforce
Development System and Capital
Expenditures
Assessment for Determining Eligibility and
Vocational Rehabilitation Needs
361. 5( c)( 5))
Competitive Integrated Employment
361. 5( c)( 9))
Competitive Integrated Employment
Subminimum Wage and Sheltered
Employment
Public Benefits
Full-and Part -Time Employment
Minimum Wage Rates
Customary Wages
Comparable Training, Skills, and
Experience
Self -Employment
Documentation of Competitive Earnings
Subsistence Occupations
Integrated Location—General
Typically Found in the Community
Level of Interaction Among Individuals
With and Without Disabilities
Work Unit
Interaction During Performance of Job
Duties
Opportunities for Advancement
Construction of a Facility for a Public or
Nonprofit Community Rehabilitation
Program (§ 361. 5( c)( 10))
Customized Employment (§ 361. 5( c)( 11))
Employment Outcome (§ 361. 5( c)( 15))
Statutory Basis
Informed Choice
Legitimacy of Homemaker Outcomes
Availability of Services
Disproportionate Impact
Resources for Service Provision
Feasibility Studies
Transition Period
Indian; American Indian; Indian American;
Indian Tribe (§ 361. 5( c)( 25))
Informed Choice
Supported Employment Definitions
Transition -Related Definitions
Submission, Approval, and Disapproval of
the State Plan (§ 361. 10)
Content and Submission of the VR Services
Portion of the Unified or Combined State
Plan
Time Estimated for Submission
Alignment of Program and Fiscal Years
Other Comments
Requirements for a State Rehabilitation
Council (§ 361. 17)
Establishment of a State Rehabilitation
Council
Additional Members
Terms of Appointment
Coordination With One -Stop Centers
Comprehensive System of Personnel
Development (§ 361. 18)
Data Report for Comprehensive System of
Personnel Development (§ 361. 18( a))
Applicability of Educational and Experiential
Requirements to Vocational
Rehabilitation Counselors (§ 361. 18( c)( 1))
Applicability of Standards to Other
Personnel
De-Professionalization and Diminution of
Vocational Rehabilitation Counseling
State Job Classification Minimum
Qualifications
Additional or Substitute Qualifications
Interplay Between National or State -
Approved Certification or Licensure
Standards and Minimal Educational and
Experiential Requirements
Succession Planning
Re -Training of Staff Not Meeting Personnel
Standards
Standards of Personnel Development—Other
Comparable Requirements
361. 18( c)( 1))
Meaning of " A 21st Century Understanding
of the Evolving Labor Force and the
Needs of Individuals with Disabilities"
Staff Development (§ 361. 18( d))
Training Areas for Staff Development
Public Participation Requirements (§ 361. 20)
Public Hearings for Changes in an Order of
Selection
Public Meetings of the State Rehabilitation
Council
Substantive and Administrative Changes
Public Comment Through Electronic
Means
Requirements Related to the Statewide
Workforce Development System
361. 23)
Cooperation and Coordination With Other
Entities (§ 361. 24)
General
Cooperation and Collaboration With Other
Agencies and Entities
Non -Educational Agencies
Federal Agreements
Guidance on the Braiding of Funds
Requirements for Training
Notification of the Client Assistance
Program
Requirements for Third -Party Cooperative
Arrangements (§ 361. 28)
In -Kind Contributions
Students Who Are Eligible or Potentially
Eligible for Services
Statewide Assessment; Annual Estimates;
Annual State Goals and Priorities;
Strategies; and Reports of Progress
361. 29)
Comprehensive Statewide Needs
Assessment
Annual Estimates and Reports of Progress
Provision of Training and Services for
Employers (§ 361. 32)
Innovation and Expansion Activities
361. 35)
Resource Plans for Statewide Independent
Living Councils
Innovative Approaches With Components
of the Workforce Development System
Ability To Serve All Eligible Individuals;
Order of Selection for Services (§ 361. 36)
Individuals Who Require Specific Services
and Equipment To Maintain
Employment
Information and Referral
Monitoring by the State Rehabilitation
Council
Order of Selection Criteria
Prohibited Factors
Pre -Employment Transition Services
Information and Referral Programs (§ 361. 37)
Benefits Planning
Referral Options
Follow -Up
Independent Living Services
Protection, Use, and Release of Personal
Information (§ 361. 38)
Reports; Evaluation Standards and
Performance Indicators (§ 361. 40)
Pre -Employment Transition Services
Standards and Indicators
Program Year
Performance Accountability Regulations
Cumulative Caseload Report (RSA -113)
States With Two VR Agencies
Reporting Burden
RSA -911 Case Service Report
Assessment for Determining Eligibility and
Priority for Services (§ 361.42)
Advancing in Employment and Other
Eligibility Criteria
Substantial Impediment to Employment
Prohibited Factors
Residency
Compliance Threshold
Entities Holding Special Wage Certificates
Extended Evaluation and Trial Work
Experiences
Development of the Individualized Plan for
Employment (§ 361. 45)
Time Frame for Developing the
Individualized Plan for Employment
Options for Developing the Individualized
Plan for Employment
Data for Preparing the Individualized Plan
for Employment
Content of the Individualized Plan for
Employment (§ 361. 46)
Scope of Vocational Rehabilitation
Services for Individuals With Disabilities
Services for Individuals Who Have
Applied or Been Determined Eligible for
Vocational Rehabilitation Services
361.48( b))
Advanced Training
Other Services
Scope of Vocational Rehabilitation Services
for Groups of Individuals With
Disabilities (§ 361. 49( a))
Establishment, Development, or
Improvement of Community
Rehabilitation Programs
Technical Assistance to Businesses
Establishment, Development, or
Improvement of Assistive Technology
Programs
Advanced Training
Comparable Services and Benefits (§ 361. 53)
Accommodations and Auxiliary Aids and
Services
Pre -Employment Transition Services and
Personally Prescribed Devices
Interagency Agreements
Semi -Annual and Annual Review of
Individuals in Extended Employment
and Other Employment Under Special
Certificate Provisions of the Fair Labor
Standards Act (§ 361. 55)
Effective Date
Who is subject to the requirements?
Documentation
Costs of Conducting the Reviews
Informed Choice
Retroactive Reviews
Cross -Reference With 34 CFR 397. 40
Individuals With a Record of Service
55635Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
Purpose (§ 361. 1)
Comments: A few commenters
supported the replacement of the term
gainful employment" with the term
competitive integrated employment"
and the inclusion of the term " economic
self-sufficiency" in proposed § 361. 1. In
addition, many commenters sought
clarification of the term " economic self-
sufficiency" as used in this regulation
and requested that we define it in
361. 5( c). Of these commenters, most
suggested that the term " economic self-
sufficiency" may deter individuals with
disabilities who are receiving public
benefits from applying for vocational
rehabilitation services. Additionally,
some commenters suggested that DSUs
may use economic self-sufficiency to
determine that individuals with
disabilities who wish to maintain their
public benefits are ineligible for
vocational rehabilitation services. Some
commenters indicated that individuals
with intellectual or developmental
disabilities may never achieve earnings,
through competitive integrated
employment, sufficient to cease
receiving public benefits. Two
commenters viewed " economic self-
sufficiency" as a criterion within both
the definitions of " employment
outcome" and " competitive integrated
employment," and requested that we
identify criteria that DSUs may use to
determine when individuals achieve
this level of employment and are
rehabilitated enough to no longer need
vocational rehabilitation services.
Discussion: We appreciate comments
supporting inclusion of the terms
competitive integrated employment"
and " economic self-sufficiency" in final
361. 1. We agree that inclusion of these
terms in the regulation reflects the spirit
of the Act in general, and is consistent
with specific amendments to section
100( a) of the Act made by WIOA. While
we understand commenters' requests for
a definition of " economic self-
sufficiency," the Act, as amended by
WIOA, does not define the term. We
believe that the use of the term in final
361. 1( b) is consistent with its common
understanding and refers to the
situation in which an individual can
support him-or herself financially with
minimal or no reliance on public
benefits or assistance from other
persons. Therefore, we do not define the
term " economic self-sufficiency." In
addition, use of the term " economic
self-sufficiency" in section 100( a)( 2)( B)
of the Act, as amended by WIOA, and
in final § 361. 1( b) does not require the
individual to achieve economic self-
sufficiency—either as a prerequisite for
receipt of services or as an outcome
resulting from vocational rehabilitation
services provided. Rather, the term as
used in the Act, as amended by WIOA,
and in these final regulations merely
requires that the vocational
rehabilitation services provided to an
individual be consistent with the
individual' s strengths, resources,
priorities, concerns, abilities,
capabilities, interests, informed choice,
and economic self-sufficiency.
Vocational rehabilitation services
ideally should assist an individual to
achieve a competitive integrated
employment outcome that will enable
the individual to become economically
self-sufficient, but there is no
requirement in either the Act or these
final regulations that an individual
achieve economic self-sufficiency or a
specific level of financial independence.
Section 102( a) of the Act, as amended
by WIOA, does not include economic
self-sufficiency among the eligibility
criteria. Inclusion of the term in final
361. 1( b) does not alter the eligibility
criteria for the program in final
361. 42( a)( 1). We encourage DSUs to
conduct outreach to individuals with
disabilities and service providers to
clarify any misperception that the use of
this term implies that individuals with
disabilities may no longer receive
vocational rehabilitation services for the
purpose of achieving an employment
outcome in competitive integrated
employment or supported employment
if they wish to maintain their public
benefits. We also encourage DSUs to
provide vocational counseling and
guidance and benefits planning services
to these individuals to assist them in
better understanding the impact of
participation in the VR program and
employment on their public benefits.
Economic self-sufficiency is not a
component of the definitions of
competitive integrated employment"
and " employment outcome" in sections
7( 5) and 7( 11), respectively, of the Act,
as amended by WIOA. We disagree that
the implementing regulations for the
definitions of these terms in final
361. 5( c)( 9) and 361. 5( c)( 15) should be
revised to incorporate criteria related to
the achievement of economic self-
sufficiency as suggested by the
commenter. We believe the wages and
benefits criteria, especially as contained
in the definition for " competitive
integrated employment" in final
361. 5( c)( 9), are consistent with those
set forth in the statutory definition in
section 7( 5) of the Act.
Changes: None.
Authorized Activities (§ 361. 3)
Comments: None.
Discussion: Upon further review of
361. 3, we have determined a change is
needed to clarify that the use of VR
program funds to pay for the
infrastructure costs of the one-stop
delivery system established by title I of
WIOA is an authorized activity under
the VR program. Section 121( h) of title
I of WIOA requires one-stop partners,
including the VR program, to pay a
proportional share of the one-stop
system' s infrastructure costs. These
costs satisfy the definition of
administrative costs" in final
361. 5( c)( 2) because such expenditures
constitute operating and maintenance
costs, which are permissible
administrative costs under the VR
program. We have revised final
361. 3( b) to specify that one-stop
infrastructure costs are considered
administrative costs under the VR
services portion of the Unified or
Combined State Plan and, therefore, are
authorized activities under the VR
program. In making this change, we
ensure consistency with final
361. 5( c)( 2)( viii), as well as jointly
administered requirements governing
the one-stop delivery system contained
in joint regulations published elsewhere
in this issue of the Federal Register.
Changes: We have revised final
361. 3( b) to specify that the use of VR
program funds to pay for one-stop
system infrastructure costs is an
authorized activity of the program as an
administrative cost.
Applicable Regulations (§ 361. 4)
Training on 2 CFR Part 200
Requirements
Comments: Two commenters
requested the Department provide
training on 2 CFR part 200
requirements, focusing on definitions
and general applicability.
Discussion: The Department has
conducted a number of Webinars and
developed technical assistance materials
to assist grantees in implementing 2
CFR part 200 requirements and will
continue to do so as needed. The
Department maintains a technical
assistance Web page for grantees
regarding the requirements set forth in
2 CFR part 200, which may be accessed
at www.ed.gov. The Department will
consider future Webinars, as
appropriate.
Changes: None.
Third -Party In -Kind Contributions
Comments: None.
Discussion: As specified under final
361. 60( b)( 2), third -party in-kind
contributions may not be used to meet
the non -Federal share for match
55636 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
purposes under the VR program. This
prohibition against the use of third -
party in-kind contributions under the
VR program has been in place since
1997. Upon further Departmental review
regarding this long-standing prohibition,
we have determined it necessary to
revise final § 361. 4( d). In so doing, the
Secretary clarifies that 2 CFR
200. 306( b), which allows third party in-
kind contributions to be used as part of
a non -Federal entity' s cost sharing or
matching when such contributions meet
certain criteria, does not apply to the VR
program. The Secretary believes this
technical change will eliminate any
confusion expressed by commenters in
relation to final § 361. 60(b)( 2).
Changes: We have amended the
applicable regulations in final § 361. 4( d)
to specify that 2 CFR 200.306(b), as it
pertains to the acceptance of third -party
in-kind contributions, is not applicable
to the VR program.
Applicable Definitions (§ 361. 5)
Administrative Cost (§ 361. 5( c)( 2))
Supervisory Personnel
Comments: One commenter
recommended that we consider costs for
local level supervisors who do not
perform counseling duties, but who
directly supervise counselors, to be
direct service costs rather than
administrative costs.
Discussion: We disagree with the
recommendation to consider the costs
for local level supervisors who do not
perform counseling duties, but who
directly supervise counselors, to be
direct service costs, rather than
administrative costs." Final
361. 5( c)( 2)( xi) specifies that
administrative salaries constitute
administrative costs." Administrative
salaries are those personnel costs paid
to individuals who are not providing
direct services to VR program applicants
and consumers, and may include
clerical and managerial salaries.
Therefore, we consider costs for
supervisors who do not provide direct
services to he administrative costs in
support of vocational rehabilitation
services, rather than costs for the actual
provision of such services.
Changes: None.
Travel Costs
Comments: Two commenters
indicated that the instructions for
completing the Annual Vocational
Rehabilitation Program/ Cost Report
RSA -2) in Policy Directive (PD) 14-02
requiring DSUs to report staff travel
costs as " administrative costs" appear to
conflict with proposed § 361. 5( c)( 2)( xii),
which specifically excludes travel costs
related to the provision of services from
administrative costs."
One commenter recommended we
clarify that grantees may consider travel
costs incurred in the provision of
vocational rehabilitation services as a
service -related cost, rather than an
administrative cost. Specifically, the
commenter requested that the final
regulations clarify that travel costs
incurred in the provision of pre-
employment transition services may be
paid from the funds reserved for that
purpose. This commenter also suggested
that the Department update reporting
instructions accordingly.
Discussion: We appreciate the
commenters' observation that the
definition of " administrative costs" in
proposed § 361. 5( c)( 2)( xii) appears to
conflict with the instructions for
completing the RSA -2 with regard to
staff travel costs. The Department will
review and update previously issued
guidance as necessary to ensure
consistency with these final regulations.
We agree that travel costs incurred
directly as a result of providing
vocational rehabilitation services
constitute service -related costs, not
administrative costs" for purposes of
the VR program. Therefore, DSUs may
pay for travel costs incurred as a direct
result of providing pre-employment
transition services to students with
disabilities, including travel to
individualized education program
meetings, from the funds reserved for
the provision of those services. Travel
costs incurred as a result of providing
other vocational rehabilitation services
to students with disabilities may not be
paid from the funds reserved for the
provision of pre-employment transition
services because such travel would be
beyond the scope of section 113 of the
Act, as amended by WIOA, and final
361. 48( a). While travel costs incurred
as a result of providing other vocational
rehabilitation services to students with
disabilities who have been determined
eligible for vocational rehabilitation
services may not be paid from the funds
reserved for the provision of pre-
employment transition services, they
still would be service -related, not
administrative, costs. Staff travel costs
incurred for other purposes, such as
attending regional meetings or trainings,
satisfy the definition of " administrative
costs" and must be reported as such on
the RSA -2. DSUs must have an
established system of internal controls
sufficient to record and track
administrative expenditures associated
with authorized activities so they can be
distinguished from authorized service -
related costs. In this way, DSUs are able
to satisfy accounting and reporting
requirements set forth in final § 361. 12
and Uniform Guidance on financial
management in 2 CFR 200. 302.
Changes: None.
Depreciation
Comments: One commenter requested
that we clarify whether DSUs must
classify depreciation for administrative
facilities as administrative costs.
Discussion: Final § 361. 5( c)( 2)
provides several examples of
administrative costs; however, the
examples provided are not exhaustive.
DSUs must treat depreciation in
accordance with the Uniform Guidance
requirements, as set forth in 2 CFR
200. 436, and report it accordingly.
Therefore, DSUs must report
depreciation for facilities used for the
administration of the VR program as
administrative costs.
Changes: None.
Infrastructure Costs for the Workforce
Development System and Capital
Expenditures
Comments: None.
Discussion: After further analysis of
proposed § 361. 5( c)( 2), we made a
technical change in final
361. 5( c)( 2)( viii) to specify that costs to
support the infrastructure of the one-
stop delivery system established under
title I of WIOA are " administrative
costs" for purposes of the VR program.
Section 121( h) of WIOA requires one-
stop partners, including the VR
program, to pay a proportional share of
the one-stop system' s infrastructure
costs. We believe these costs satisfy the
definition of " administrative costs" in
final § 361. 5( c)( 2)( viii) because these
expenditures constitute operational and
maintenance costs. We have revised
final § 361. 5( c)( 2)( viii) to specify
operational and maintenance costs, for
purposes of the definition of
administrative costs" under the VR
program, include one-stop system
infrastructure costs. This technical
change ensures consistency with final
361. 3( b) and the jointly administered
requirements governing the one-stop
system, as set forth in the joint
regulations published elsewhere in this
issue of the Federal Register.
Additionally, we made a change to
final § 361. 5( c)( 2)( viii) to conform to the
Uniform Guidance in 2 CFR part 200. In
accordance with 2 CFR 200.439(b)( 3),
capital expenditures for improvements
to land, buildings, or equipment which
materially increase their value or useful
life are unallowable as a direct cost,
except with the prior written approval
of the Department. Therefore, we have
revised final § 361. 5( c)( 2)( viii) to delete
a clause that had excluded capital
55637Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
expenditures from the definition of
administrative costs" for purposes of
the VR program. Pursuant to this
change, DSUs must treat capital
expenditures as " administrative costs"
for purposes of the VR program. This
technical change enables grantees to
report these costs more accurately as an
administrative cost on the RSA -2 VR
Program Cost Report.
Changes: We have revised final
361. 5( c)( 2)( viii) to specify that the
definition of " administrative costs"
includes those costs associated with
operating and maintaining the
infrastructure of the one-stop system.
In addition, we have deleted the
reference to " not including capital
expenditures as defined in 2 CFR
200. 13" from final § 361. 5( c)( 2)( viii).
Assessment for Determining Eligibility
and Vocational Rehabilitation Needs
361. 5( c)( 5))
Comments: A few commenters
supported the definition of " assessment
for determining eligibility and
vocational rehabilitation needs" in
proposed § 361. 5( c)( 5). Some
commenters disagreed with the
requirement in the definition that, if
additional data are needed to determine
the employment outcome and the
vocational rehabilitation services to be
included in the individualized plan for
employment, the DSU can conduct a
comprehensive assessment that, in part,
relies to the maximum extent possible
on information obtained from
experiences in integrated employment
and other settings in the community.
Another commenter requested
clarification as to whether the use of
information obtained from prior
experiences within integrated
employment settings or other integrated
community settings could include
internships or other unpaid work
experiences.
Discussion: We appreciate the support
for proposed § 361. 5( c)( 5), as well as the
concerns and requests for clarification.
Section 7( 2)( B)( v) of the Act, as
amended by WIOA, and final
361. 5( c)( 5)( ii)(E) allow a DSU, when
conducting the comprehensive
assessment to determine the vocational
rehabilitation needs and employment
outcome for inclusion in the
individualized plan for employment, to
rely, in part, on the applicant' s
participation in integrated employment
settings to the maximum extent
possible. However, neither the Act nor
the final regulations require that the
individual be paid during these
experiences. Therefore, section 7( 2) of
the Act and final § 361. 5( c)( 5)( ii) do not
prohibit DSUs from using unpaid
internships or work experiences during
the assessment process. We received
other comments concerning a perceived
conflict between this definition and
proposed § 361. 42( c)( 2), which prohibits
a DSU from considering an individual' s
work history when determining an
applicant' s eligibility for vocational
rehabilitation services, and contracting
with community rehabilitation
programs that hold subminimum wage
certificates issued by the Department of
Labor under section 14( c) of the FLSA
when conducting assessments. We
address these comments in the Analysis
of Comments and Changes of the
Assessment for Determining Eligibility
and Priority for Services section.
Changes: None.
Competitive Integrated Employment
361. 5( c)( 9))
Competitive Integrated Employment
The overarching principle of the Act,
as amended by WIOA, that individuals
with disabilities are capable of
achieving full integration into all
aspects of life, including employment, is
most evident in the definition of
competitive integrated employment"
in section 7( 5) of the Act and the
interweaving of the term throughout the
many provisions of the statute. Because
of its central importance to the purpose
of the VR program, we received
extensive comments on the definition in
proposed § 361. 5( c)( 9), expressing both
strong support for, and opposition to,
the proposed definition. The vast
majority of public comment on the
definition focused on the criteria that an
employment location must satisfy if it is
to be considered integrated. Some
commenters expressed support for the
definition in general, and the criteria for
an integrated location specifically, for
several reasons, including the
definition' s specificity that the
commenters believe will ensure
individuals with disabilities are
working in integrated employment
settings, and the impact the definition
can have in curtailing the low
expectations for individuals with
disabilities who are relegated to
segregated employment with little
opportunity for advancement. However,
many commenters opposed the
definition, expressing concern that it
would restrict or eliminate
subminimum wage and sheltered
employment for individuals with
disabilities, or limit the ability of these
individuals to choose among these
options. We appreciate the support for
the definition, and discuss the detailed
comments in opposition to, and requests
for clarification of, the proposed
definition under the topical headings
that follow.
Subminimum Wage and Sheltered
Employment
Comments: Many commenters urged
us to protect or not to eliminate the
payment of subminimum wages to
individuals with disabilities and
sheltered employment. One of these
commenters stated that not all
individuals can be paid minimum
wages, and that the employment must
be profitable for both parties. Similarly,
another commenter stated that if entities
holding subminimum wage certificates
were forced to pay less productive
individuals with disabilities minimum
wages, they would lose business to
companies overseas. Likewise, some
commenters stated that sheltered
employment is needed to protect
individuals with intellectual disabilities
and other significant disabilities from
abuse. A few commenters expressed
their concern that the integrated
location criteria of the definition
devalue the employment of individuals
with disabilities who cannot work in
these settings.
Many commenters opposed the
definition because it would limit an
individual' s choice of subminimum
wage and sheltered employment
options. Some of these commenters
asked that we create an exception from
the criteria for individuals who choose
to work in a segregated or sheltered
setting if all other criteria regarding
competitive earnings and opportunities
for advancement are satisfied.
Discussion: We acknowledge that
many commenters on part 361 in
general, and the definition of
competitive integrated employment"
specifically, are concerned that these
final regulations will eliminate or
restrict the ability of individuals with
disabilities, particularly those with the
most significant disabilities, to be paid
subminimum wages by entities holding
certificates issued by the Department of
Labor under section 14( c) of the FLSA,
as well as sheltered employment.
Although we recognize the concerns
expressed by these commenters, we
emphasize that the definition of
competitive integrated employment"
and its use throughout final part 361 are
intended to ensure that all individuals
with disabilities served through the VR
program are provided every opportunity
to achieve employment with earnings
comparable to those paid to individuals
without disabilities in a setting that
allows them to interact with individuals
who do not have disabilities.
Nonetheless, nothing in title I of the
Act, as amended by WIOA, or the
55638 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
regulations in final part 361 affects the
FLSA in any manner. Later in this
Analysis of Comments and Changes, we
address limitations on the use of
subminimum wage in section 511 of the
Act and final 34 CFR part 397. In
addition, the definition " competitive
integrated employment" in final
361. 5( c)( 9) does not prohibit or
eliminate sheltered employment. As
explained in final regulations published
on January 21, 2001, we agree that
extended employment programs have
traditionally served as a safety net for
individuals with significant disabilities
who cannot perform work in an
integrated setting in the community or
who choose to work only among their
disabled peers ( 66 FR 7250). The
Secretary does not devalue the dignity
or the worth of extended employment
programs or the individuals who work
in those settings. Rather, the definition
of " competitive integrated employment"
reflects the heightened emphasis
throughout the Act, as amended by
WIOA, that individuals with
disabilities, including those with the
most significant disabilities, can achieve
employment in the community and
economic self-sufficiency if provided
appropriate services and supports.
Because DSUs have been unable to
assist individuals with disabilities to
obtain sheltered employment through
the VR program since October 2001, the
vast majority of individuals have
accessed sheltered employment through
other sources or on their own initiative.
Therefore, the Secretary believes the
definition in final § 361. 5( c)( 9) will not
affect the availability of sheltered
employment for individuals who choose
this form of employment, or for whom
it is a legitimate and necessary option.
Furthermore, while the Act, as
amended by WIOA, places a premium
on the ability of individuals with
disabilities to exercise informed choice
throughout the vocational rehabilitation
process, we do not agree that the final
regulations in part 361 generally and the
definition specifically are inconsistent
with that emphasis. In fact, an
individual with a disability may pursue
any form of employment he or she
chooses. However, if the individual
wishes to receive vocational
rehabilitation services, he or she must
intend to achieve an " employment
outcome," which is defined in final
361. 5( c)( 15) for purposes of the VR
program as employment in competitive
integrated employment or supported
employment. If the individual chooses
to pursue work that does not satisfy the
definition of " employment outcome" for
purposes of the VR program, such as
sheltered employment, the individual
must seek services from another agency
or provider. In such circumstances,
these final regulations require the DSU
to refer that individual to local extended
employment providers or other Federal,
State, or local programs ( e.g.,
community rehabilitation programs,
State Use programs, and centers for
independent living) that can meet the
individual' s needs. The referral
requirements in final § 361. 37 also
ensure that individuals receive
sufficient information concerning the
scope of the VR program and
opportunities for individuals with
disabilities to pursue competitive
integrated employment. This
information enables individuals to make
a fully informed choice regarding
whether to pursue competitive
integrated employment through the VR
program or subminimum wage and
extended employment through other
sources.
The Secretary believes these final
regulations ensure that the VR program
promotes to the maximum extent
possible opportunities for individuals
with disabilities, particularly those with
significant disabilities, to pursue
competitive integrated employment
options. Moreover, final § 361. 52
requires each DSU to preserve
individual choice in the manner in
which the Act intends for individuals
who choose to pursue employment
outcomes within the scope of the VR
program.
Finally, section 7( 5) of the Act, as
amended by WIOA, does not permit an
exception to the definition' s
requirements for individuals who
choose subminimum wage and or
sheltered employment. In fact, such an
exception would be inconsistent with
the plain meaning of the criteria
contained in the statutory definition in
section 7( 5) of the Act. Therefore, we
lack the statutory authority to create
such an exception in final § 361. 5( c)( 9).
Changes: None.
Public Benefits
Comments: One commenter requested
that we clarify the effect of the
definition of " competitive integrated
employment" on the eligibility of
individuals with disabilities for Social
Security benefits. One commenter
expressed concern that the criteria
would cause individuals to lose needed
benefits provided through Medicaid and
other sources.
Discussion: We recognize that some
individuals are reluctant to pursue
employment through the VR program
due to their perceptions of the negative
impact employment may have on the
public benefits, including Medicaid and
other sources, on which they rely for
financial and medical support. To
enable individuals with disabilities to
better understand the effects of
employment on Social Security and
other benefits and make well-informed
decisions about the employment goals
that best suit their needs, section
102(b)( 2) of the Act, as amended by
WIOA, and final § 361. 45( c)( 2) require
DSUs to provide benefits planning
information, including information
about work incentives provided through
the Social Security Administration
SSA), to these individuals during the
process for developing the
individualized plan for employment.
For further information, see the
Development of the Individualized Plan
for Employment section later in this
Analysis of Comments and Changes.
Changes: None.
Full-and Part -Time Employment
Comments: A few commenters
requested that we define or clarify the
terms " full-time" and " part-time"
employment as they are used in the
definition of " competitive integrated
employment." These commenters asked
whether there is a minimum number of
hours that an individual must work for
the employment to satisfy the
requirements of the definition, as well
as the definition of an " employment
outcome." A few commenters expressed
concern that on-call or temporary
employment is not within the scope of
the definition because it is not
considered full-or part-time scheduled
employment. They stated that many
entry-level individuals are employed in
on-call positions and that permitting
this form of employment could enable
individuals with intellectual disabilities
to maintain employment.
Discussion: The reference to full-and
part-time work in the definitions for the
terms " employment outcome" and
competitive integrated employment,"
for purposes of the VR program, is not
new. The definition for " employment
outcome" has remained consistent since
the 1992 Amendments to the Act and
the 1997 VR program regulations (62 FR
6334 ( Feb. 11, 1997)). Although
competitive integrated employment" is
a new term in the Act, as amended by
WIOA, and these final regulations, the
term and its definition are consistent
with that for " competitive employment"
in prior § 361. 5( b)( 11), which dates back
to the 1997 VR program regulations.
Because these definitions have existed
for approximately 20 years without
substantial change, we do not believe it
necessary to define " full-time" or " part-
time" in final part 361. " Full-time" and
55639Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
part-time" have their common
meanings and may vary across sectors of
the economy. Generally, individuals are
considered to be employed full-time if
they work 40 hours per week. However,
it is not uncommon for full-time
employees to work fewer hours, such as
35 hours per week, depending on the
terms of employment established by the
employer. " Part-time" employment is
employment for any number of hours
less than that of full-time employment
for the particular work performed.
Nowhere in the statutory definitions of
competitive integrated employment"
or " employment outcome," or any other
provision of the Act, as amended by
WIOA, is a minimum number of hours
that an individual must work for the
employment to be considered full-or
part-time specified, and we decline to
do so in these final regulations, relying
on the terms' common understanding.
Finally, we clarify in this discussion
that the definitions of " competitive
integrated employment" and
employment outcome," as set forth in
the Act and these final regulations, do
not require that the individual' s
employment be regularly scheduled, as
suggested by the commenter. Thus,
DSUs may assist individuals to obtain
temporary or on-call employment so
long as all the criteria of the definitions
are satisfied.
Changes: None.
Minimum Wage Rates
Comments: Some commenters
expressed strong support for the
competitive earnings criteria in
proposed § 361. 5( c)( 9)( i). We also
received comments recommending
changes to the criteria or requesting
clarification. One commenter stated that
the requirement that the individual' s
wages equal or exceed the higher of the
Federal, or applicable State or local
minimum wage rates adds unnecessary
complexity to the vocational
rehabilitation process. This commenter
recommended that we apply a single
standard of the Federal minimum wage
rate to all employment outcomes
achieved through the VR program, or
that we apply the minimum wage rate
in effect in the place of the individual' s
employment, and not the individual' s
place of residence.
Discussion: We appreciate the strong
support for the competitive earnings
criteria and respond here to the requests
for clarification. We disagree with the
request to avoid complexity by using
only the Federal minimum wage as the
measure of competitive earnings.
Section 7( 5)( A)(i)(I)(aa) of the Act, as
amended by WIOA, requires that the
individual' s earnings equal or exceed
the Federal, State, or applicable local
minimum wage rate, whichever is
higher, for the employment to satisfy the
definition of " competitive integrated
employment." Final § 361. 5( c)( 9)( i)(A)
mirrors the statutory definition in this
respect. Given the specific statutory
requirement, we lack the statutory
authority to restrict this requirement in
the final regulation. In addition, the
definition focuses on the wages paid by
the employer, who is subject to the
minimum wage laws applicable to the
place of employment. Consequently, we
agree with the commenter that the
determination of whether the
individual' s earnings satisfy the
definition's criteria should be based on
the minimum wage rate applicable to
the individual' s place of employment,
and not his or her place of residence.
Changes: We have revised final
361. 5( c)( 9)( i)( A) to clarify that the
applicable State and local minimum
wage laws are those that apply to the
place of employment.
Customary Wages
Comments: One commenter
recommended that we revise the
definition to emphasize that the intent
of the law and the regulations is to
ensure that wages and benefits paid to
individuals with disabilities are
comparable to the prevailing wage and
benefits of individuals without
disabilities.
Discussion: Section 7( 5)( A)(i)(I)(bb) of
the Act, as amended by WIOA, and final
361. 5( c)( 9)( i)( B) require that the
individual with the disability be
compensated at a rate comparable to the
customary rate paid by the employer for
the same or similar work performed by
individuals without disabilities for the
employment to be considered
competitive integrated employment.
The Secretary emphasizes that this
provision in both the Act and the final
regulations mirrors the definition of
competitive employment" in prior
361. 5( b)( 11)( ii) (see 66 FR 4379 ( Jan.
17, 2001)), which formed the basis for
the definition in the Act. We also note
that the commenter' s recommendation
would not limit the criterion to the
wages paid by the employer, as do the
statutory and final regulatory definition,
but would appear to extend the criterion
to the prevailing wages paid to
individuals without disabilities in
similar positions generally. For these
reasons the recommendation is not
consistent with the criterion in the
statutory definition and, thus, we do not
have the authority to expand the
regulatory definition in final
361. 5( c)( 9)( i)( B) as the commenter
suggests.
Changes: None.
Comparable Training, Skills, and
Experience
Comments: Two commenters
requested that we clarify the meaning of
comparable training, skills, and
experience" as used in the definition,
and how this concept could be
quantified.
Discussion: Section 7( 5)( A)(i)(I)(bb) of
the Act, as amended by WIOA, and final
361. 5( c)( 9)( i)(B) require the DSU to
take into account the training,
experience, and level of skills possessed
by employees without disabilities in
similar positions when determining
whether the earnings of the individual
with a disability are comparable. We do
not believe that it is possible to quantify
this comparison. Instead, the
determination is based on the vocational
rehabilitation counselor' s knowledge of
the training, skills, and experience
needed to perform the job generally and
required by the employer specifically. In
this way, the DSU can ensure that the
individual with the disability is
compensated in a manner comparable to
that of employees without disabilities in
all critical respects, and is not paid at
a lower rate simply on the basis of his
or her disability.
Changes: None.
Self -Employment
Comments: One commenter noted the
proposed definition recognizes that
individuals, with or without disabilities,
in self-employment may not receive an
income from the business equal to or
exceeding applicable minimum wage
rates, particularly in the early stages of
operation. The commenter requested
clarification regarding the reason the
definition proscribes an individual with
a disability in self-employment from
what other successful entrepreneurs
have the option to practice. Another
commenter asked if individuals who
achieve self-employment are included
in the calculations of the performance
accountability measures assessing
employment in the second and fourth
quarters after exit from the VR program,
since their employment and wages are
not captured in Unemployment
Insurance wage systems.
Discussion: We want to clarify that
section 7( 5)( A)(i)(II) of the Act, as
amended by WIOA, and final
361. 5( c)( 9)( i)(C) do not prevent, as the
commenter indicates, an individual
with a disability who is self-employed
from receiving earnings comparable to
those achieved by individuals without
disabilities in similar occupations. As
explained in the preamble to the NPRM,
the statutory and regulatory definitions
55640 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
recognize that individuals with
disabilities, as well as individuals
without disabilities, may experience
difficulty in generating sufficient
income from their self-employment
ventures, that will enable them to
achieve earnings equal to or exceeding
the applicable minimum wage rate,
especially in the early stages of the
business operations. Thus, final
361. 5( c)( 9)( i)(C) provides that a self-
employed individual with a disability in
the start-up phase of a business venture
who is making less than the applicable
minimum wage can meet the definition
of " competitive integrated
employment."
Furthermore, individuals who receive
services through the VR program to
assist with the achievement of self-
employment outcomes are considered
participants" as that term is defined
under the joint final regulations
implementing the jointly administered
performance accountability system
requirements of section 116 of title I of
WIOA, published elsewhere in this
issue of the Federal Register, and must
be taken into account when calculating
a DSU' s performance on those measures.
Since the employment status and
earnings of self-employed individuals
are not captured through the
unemployment insurance wage system,
a DSU may use supplemental wage
information to obtain the data necessary
for the calculation of its performance.
For further information concerning the
definition of " participant" for purposes
of the performance accountability
measures under section 116 of WIOA
and the data needed to calculate these
measures, particularly data related to
supplemental information when
quarterly wage records are not available,
see the analysis of comments on the
joint performance final regulations
published elsewhere in this issue of the
Federal Register.
Changes: None.
Documentation of Competitive Earnings
Comments: One commenter asked
what documentation a DSU is required
to use when verifying the criteria for
competitive earnings, including that the
wages are equal to, or exceed, the
applicable wage rate for the locality;
that the individual' s wages and benefits
are comparable to those earned by
individuals without disabilities in
similar positions and who possess the
same level of training, skills, and
experience; that the individual has the
same opportunities for advancement as
do persons without disabilities in
similar positions; and the income level
of an individual who has achieved self-
employment.
Discussion: Final § 361. 47( a)( 9)
requires the DSU to maintain a record
of services for each individual served
through the VR program that includes
documentation verifying if the
individual has achieved competitive
integrated employment, including
whether the individual has obtained
employment with competitive earnings.
Final § 361.47(b) does not prescribe the
necessary documentation, but directs
the DSU, in consultation with the State
Rehabilitation Council, to determine the
type of documentation needed to meet
the requirements of § 361. 47( a).
However, examples of documentation
that a DSU may use include, as
appropriate for the type of employment,
unemployment insurance wage records,
tax returns, earnings statements from
the employer, and self-reported
information.
Changes: None.
Subsistence Occupations
Comments: Some commenters
responded to the statement in the
NPRM' s preamble indicating that we
interpret subsistence employment as a
form of self-employment common to
cultures of many American Indian
tribes, or to the definition of
subsistence" under 34 CFR part 371
governing the American Indian
Vocational Rehabilitation Services
AIVRS) program (see NPRM, Workforce
Innovation and Opportunity Act,
Miscellaneous Program Changes, 80 FR
20988, 20994- 20998 (April 16, 2015)).
Several commenters asked whether the
interpretation of the self-employment
criteria within the definition of
competitive integrated employment"
in proposed § 361. 5( c)( 9) that includes
subsistence activities is limited to
individuals served through the AIVRS
program under 34 CFR part 371 or to
American Indians and Alaska Natives.
Of these, one commenter noted that
subsistence activities are not only
culturally relevant for American Indians
and Alaska Natives, but that they are
also vital to many individuals who live
in rural areas with limited competitive
employment options. One commenter
requested that we clarify the meaning of
culturally appropriate" as used in the
definition of " subsistence" and the
preamble to the NPRM by providing
examples. Another commenter asked
what limits would be placed on hobbies
as self-employment outcomes if
subsistence outcomes were available to
all individuals served through the VR
program. In addition, several
commenters requested that we revise
the definition of " employment
outcome" for purposes of the VR
program to include within its scope
subsistence activities.
Discussion: In the NPRM covering
amendments made by WIOA to the
miscellaneous programs authorized by
the Act, the Secretary proposed a
definition of " subsistence" in 34 CFR
371. 6 for purposes of the AIVRS
program (80 FR 20988, 20995). Under
that definition, " subsistence" means a
form of self-employment in which
individuals use culturally relevant or
traditional methods to produce goods or
services for household consumption or
non-commercial barter and trade that
constitute an important basis for the
individual' s livelihood. To ensure
consistency in the interpretation of the
definition of " competitive integrated
employment" for the purposes of the VR
program and the AIVRS program, and in
light of the definition of " subsistence"
in final 34 CFR 371. 6, the Secretary
stated in the preamble to the NPRM to
the VR regulations that the Department
interprets subsistence employment as a
form of self-employment common to
cultures of many American Indian
tribes. The Secretary believes that
consistency in interpretation and
implementation of the regulations
governing the VR and AIVRS programs
is essential given the large number of
American Indians and Alaska Natives
with disabilities who are eligible for
services from both programs, some of
whom may be served by the programs
sequentially or even simultaneously.
The Secretary does not intend the
statement in the NPRM covering the
proposed regulations in part 361, or the
inclusion of the definition of
subsistence" only in 34 CFR 371. 6, to
limit the provision of services designed
to assist individuals to achieve
subsistence occupations to those served
through the AIVRS program. DSUs may
assist American Indians and Alaska
Natives served through the VR program
to achieve subsistence occupations as a
form of self-employment under the
limited circumstances set forth in the
definition in 34 CFR 371. 6, which the
Department applies in the same manner
to the VR program.
While the Secretary believes that, as
the statement in the NPRM indicates,
subsistence occupations are most
culturally relevant to American Indian
and Alaska Native tribes, the Secretary
recognizes that they may also be
culturally relevant to other small groups
of individuals who may traditionally
engage in these occupations, such as
those in the outlying areas. Thus, DSUs
may find it appropriate to assist
individuals from cultures other than
American Indian and Alaska Native
tribes to achieve self-employment in
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subsistence occupations that meet the
definition of 34 CFR 371. 6. However,
because the definition of " subsistence"
in 34 CFR 371. 6 requires that the
subsistence occupation be culturally
relevant to the individual, the Secretary
declines to extend the applicability of
subsistence occupations to other
individuals with disabilities served
through the VR and AIVRS programs
solely on the basis of their location in
rural areas.
Examples of subsistence occupations
that are culturally relevant to American
Indians or Alaska Natives include the
exchange of fish caught, or grain raised,
by the individual with the disability for
other goods produced by other members
of the tribe that are needed by the
individual to live and maintain his or
her home. Given, however, the large
number of American Indian tribes,
including Alaska Native villages and
regional corporations, and their widely
varying cultural practices, any list of
further examples of culturally relevant
practices would also be incomplete and
may exclude cultural practices that are
unique to some tribes. Since the
definition of " subsistence" in final 34
CFR 371. 6 requires that the activity
constitute an important basis of the
individual' s livelihood, DSUs cannot
provide vocational rehabilitation
services to individuals to enable them to
engage in mere hobbies that do not serve
this same purpose.
Finally, the definition of
employment outcome" in final
361. 5( c)( 15) encompasses all forms of
competitive integrated employment,
including self-employment. Because we
consider subsistence occupations to be
a form of self-employment, these
occupations are already within the
scope of the definition of " employment
outcome" and it is not necessary to
revise the definition to include a
specific reference to subsistence.
Changes: None.
Integrated Location— General
Comments: As stated in the
introduction to this section, the majority
of commenters who commented on the
definition of " competitive integrated
employment" focused on the integrated
location component of the definition in
proposed § 361. 5( c)( 9)(ii),which
requires that the individual perform
work in a location that meets two
distinct criteria. The location must be a
setting: (1) Typically found in the
community; and (2) where the employee
with a disability interacts for the
purpose of performing the duties of the
position with other employees within
the particular work unit and the entire
work site, and, as appropriate to the
work performed, other persons ( e.g.,
customers and vendors), who are not
individuals with disabilities (not
including supervisory personnel or
individuals who are providing services
to the employee) to the same extent that
employees who are not individuals with
disabilities and who are in comparable
positions interact with these persons.
Of the commenters who strongly
supported the criteria, several requested
that we make additional changes to this
particular component of the definition
by: (1) Adding language that the criteria
should not he used to exclude
individuals from the VR program due to
concerns about their ability to meet the
standard, and emphasizing that
individuals with disabilities, including
those with the most significant
disabilities, are capable of achieving
high quality competitive integrated
employment when provided the
necessary skills and supports; (2)
specifically excluding from the scope of
the definition employment in
businesses owned by community
rehabilitation providers, group or
enclave settings, affirmative industries,
social enterprises, or any other form of
non-traditional work unit; and (3)
changing the term " competitive
integrated employment" to " competitive
integrated individualized employment"
to be clear that employment through the
VR program is individualized.
Many of the commenters who
opposed the integrated location criteria
in proposed § 361. 5( c)( 9)( ii) requested
that we replace them with those in the
statutory definition because they believe
that: (1) Some of the proposed criteria
are not mandated by WIOA; (2) some of
the proposed criteria are too strict and
would result in the loss of employment
opportunities that pay good wages and
benefits; and ( 3) the statutory language
would maintain work options and
choice for consumers.
Some commenters inquired about the
impact of the definition on the
employment, by community
rehabilitation programs, of individuals
with disabilities, particularly those who
are blind and visually impaired, in
managerial and other positions. These
commenters stated that employment in
these positions was in an integrated
location under prior guidance issued by
the Department, specifically technical
assistance circular 06-01 entitled
Factors State Vocational Rehabilitation
Agencies Should Consider When
Determining Whether a Job Position
Within a Community Rehabilitation
Program is Deemed to be in an
Integrated Setting for Purposes of the
Vocational Rehabilitation Program" and
dated November 21, 2005. One
commenter requested that we clarify
whether the employment of individuals
with disabilities in call centers operated
by community rehabilitation providers
occurs in an integrated location.
Another commenter requested that we
clarify the impact of the criteria on
employment in the business enterprise
vending) program for individuals who
are blind under the Randolph -Sheppard
Act, as well as State industries programs
for the blind.
Discussion: We appreciate the strong
support for § 361. 5( c)( 9)( ii).We also
recognize those comments opposing,
and requesting clarification of, the
criteria. Before addressing the specific
comments, the Secretary believes, as
stated in the NPRM, that the definition
of " competitive integrated employment"
in section 7( 5) of the Act, as amended
by WIOA, for the most part incorporates
the definition of " integrated setting" in
prior § 361. 5( b)( 33)( ii). Therefore, the
substance of the definitions of
competitive integrated employment"
in final § 361. 5( c)( 9)( ii) and " integrated
setting" in final § 361. 5( c)( 32)( ii), for
purposes of the VR program, with
respect to the integrated nature of the
employment location is familiar to
DSUs and does not diverge from prior
regulations, long-standing Department
policy, practice, and the heightened
emphasis on competitive integrated
employment throughout the Act, as
amended by WIOA.
The Secretary believes that final
361. 5( c)( 9)( ii) and the explanation in
the following paragraphs provide
sufficient guidance to enable DSUs to
determine whether a particular work
location satisfies the definition of
competitive integrated employment."
The Secretary does not believe it
necessary to revise the definition by
adding language emphasizing that
individuals with disabilities, including
those with the most significant
disabilities, are capable of achieving
high quality competitive integrated
employment when provided the
necessary services and supports. This
principle is clearly expressed in final
361. 1 describing the purpose of the VR
program, thereby forming the
foundation for all provisions of final
part 361, including the definition of
competitive integrated employment."
Therefore, there is no need to restate the
principle in the definition.
We do not believe that it is possible
to identify all types of non-integrated
employment settings in the definition,
as the specific exclusion of one type of
non-integrated employment setting from
the definition could result in a
misperception that settings not
mentioned are within the scope of the
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definition. Instead, we explain in the
following paragraphs the application of
the integrated location criteria to these
types of work settings. When the criteria
are properly applied by DSUs, group
and enclave employment settings
operated by businesses formed for the
purpose of employing individuals with
disabilities will not satisfy the
definition of " competitive integrated
employment." Therefore, the Secretary
disagrees with the recommendation to
add language to the definition expressly
excluding from the scope of the
definition employment in businesses
owned by community rehabilitation
providers, group and enclave settings,
affirmative industries, social
enterprises, and other forms of non-
traditional work settings.
In addition, we disagree with the
recommendation to change the term
competitive integrated employment" to
competitive integrated individualized
employment." Section 7( 5) of the Act, as
amended by WIOA, defines
competitive integrated employment,"
and that definition forms the basis for
the definition in final § 361. 5( c)( 9).
Moreover, the many provisions of the
Act and the final regulations in final
part 361, including those governing the
selection of an employment outcome,
the vocational rehabilitation services
provided, the exercise of informed
choice, and the closure of an
individual' s service record, underscore
the individualized nature of the VR
program, thereby making it unnecessary
to add the word " individualized" to the
term " competitive integrated
employment" in these final regulations.
Furthermore, the Secretary disagrees
with the commenters' recommendation
that we replace the regulatory criteria in
proposed § 361. 5( c)( 9)( ii) with the
statutory criteria, verbatim, in section
7( 5)( B) of the Act, as amended by
WIOA. As stated in the NPRM, the
integrated setting criteria in proposed
361. 5( c)( 9)( ii),although not verbatim,
are nevertheless consistent with the
statutory definition in section 7( 5)( B) of
the Act, as amended by WIOA, with
respect to the integrated nature of the
employment setting, and, in turn, are
consistent with the definition of
integrated setting" in prior
361. 5( b)( 33)( ii).Also in light of the
consistency of section 7( 5)( B) of the Act
with the prior regulatory definition of
integrated setting," as well as the
Department' s long-standing
interpretation of that definition, the
Secretary does not believe that the
criteria in the statutory definition of
competitive integrated employment"
would permit within its scope work
options that would not have satisfied
the criteria in prior § 361. 5( b)( 32)( ii).
There is no indication in the Act, as
amended by WIOA, or the limited
legislative history, that Congress
intended to narrow the scope of the
integrated setting criterion of the
definition of " competitive integrated
employment." Therefore, the Secretary
believes the definition of " competitive
integrated employment" in final
361. 5( c)( 9)(ii),while not verbatim, is
nonetheless consistent with the Act,
prior regulations, and long-standing
Department policy. This means
employment that would have satisfied
the definition of " integrated settings" in
prior regulations and Department
guidance would satisfy the definition of
competitive integrated employment"
in these final regulations.
We emphasize that it is the DSU' s
responsibility to apply final
361. 5( c)( 9)( ii) in a manner consistent
with long-standing Departmental policy.
The DSU must apply the criteria equally
to any position, whether it involves the
management or administration of, or the
production and delivery of goods and
services by, the organization, and
without regard to the type of business
operation, such as, but not limited to, a
call center within a community
rehabilitation program, the manufacture
of office supplies by a State industries
program for individuals who are blind,
or a contract for landscaping services.
The criteria contained in final
361. 5( c)( 9)( ii) and 361. 5( c)( 32)( ii)
provide important clarifications that are
necessary to better enable a DSU to
determine, on a case-by-case basis,
whether a particular position in an
organization' s specific work unit is in
an integrated location.
The Randolph -Sheppard Act provides
opportunities for self-employment and
entrepreneurship in the community to
individuals who are blind. As a form of
self-employment and business
ownership, the outcomes of individuals
in the vending facilities established
under the Randolph -Sheppard Act are
deemed to be in integrated settings and
specifically within the definition of
employment outcome" in final
361. 5( c)( 15).
Changes: None.
Typically Found in the Community
Comments: One commenter stated
that work opportunities established by
community rehabilitation programs
specifically for the purpose of
employing individuals with disabilities
in the community constitute an
integrated setting, and that these jobs
enable people to become more self-
sufficient and live a more rewarding
life.
A few commenters asked whether the
criteria would prohibit the employment
of individuals with disabilities in work
settings operated by community
rehabilitation providers that exclusively
serve other persons with disabilities
e.g., group homes, inclusive child care
centers, adult day programs, or peer
support programs), because these
locations are not typically found in the
community or do not afford the level of
interaction among individuals with and
without disabilities required by the
definition.
One commenter specifically
addressed the criterion requiring the
work location to be a setting typically
found in the community, stating that the
criterion does not exist in the statutory
definition and it would limit
opportunities for individuals with
disabilities to participate in new and
innovative employment models and
businesses that are not yet typical. The
commenter recommended that we
remove this requirement.
Discussion: The Secretary has
incorporated language contained in the
prior regulatory definition of " integrated
setting" requiring that the work location
be in " a setting typically found in the
community," meaning that an integrated
setting must be one that is typically
found in the competitive labor market.
This long-standing Departmental
interpretation is consistent with the Act,
as amended by WIOA, as well as with
express congressional intent as set forth
in prior legislative history. Specifically,
integrated setting " is intended to mean
a work setting in a typical labor market
site where people with disabilities
engage in typical daily work patterns
with co-workers who do not have
disabilities; and where workers with
disabilities are not congregated . . .
Senate Report 105-166, page 10, March
2, 1998). Nothing in the Act suggests
that Congress intended a different
interpretation of the integrated setting
criterion in the amendments made by
WIOA. Rather, Congress demonstrated a
continuation of this interpretation by
incorporating into the statute, almost
verbatim, a criterion from prior
361. 5( b)( 33)( ii) into the definition of
competitive integrated employment"
in section 7( 5)( B) of the Act. Therefore,
the Secretary maintains the long-
standing Departmental policy that
settings established by community
rehabilitation programs specifically for
the purpose of employing individuals
with disabilities (e.g., sheltered
workshops) do not constitute integrated
settings because these settings are not
typically found in the competitive labor
market—the first of two criteria that
must be satisfied if a DSU is to
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determine that a work setting is an
integrated location under final
361. 5( c)( 9).
As we made clear in the discussion of
Integrated Location— General
previously and have stated in long-
standing Departmental policy, DSUs
must apply the integrated location
criteria in a consistent manner and on
a case-by-case basis to any work setting,
including settings operated by
community rehabilitation providers that
exclusively serve other persons with
disabilities ( e.g., group homes, inclusive
child care centers, adult day programs,
or peer support programs). Nonetheless,
we note that the settings described in
the comments, though formed for the
unique purpose of serving individuals
with disabilities, have not been
established for the purpose of
employing them. Thus, the settings in
question in the comments would appear
to satisfy the first criterion that the
setting is typically found in the
community. If this is the case, it would
remain for the DSU to determine if the
setting is one in which the employee
with the disability interacts with
employees without disabilities in the
work unit and across the work site to
the degree that employees without
disabilities in similar positions interact
with these same persons.
With respect to the comment
specifically about proposed
361. 5( c)( 9)( ii)(A), which requires that
the location be a setting typically found
in the community, the Secretary
disagrees with the commenter' s request
to remove the criterion from the
definition. The criterion does not
exclude from competitive integrated
employment any innovative or unique
business models that otherwise satisfy
the definition' s criteria. Instead, the
Secretary interprets the criterion to be
more narrowly focused on the purpose
for which the business is formed. As
explained earlier, businesses established
by community rehabilitation programs
or any other entity for the primary
purpose of employing individuals with
disabilities do not satisfy this criterion,
and, therefore, are not considered
integrated settings, because these
settings are not within the competitive
labor market. The Department has long
considered several factors to typically
distinguish positions in these types of
businesses from those that satisfy the
criterion. The factors that generally
would result in a business being
considered " not typically found in the
community," include: (1) The funding
of positions through Davits -Wagner -
O' Day Act (JWOD) contracts; ( 2)
allowances under the FLSA for
compensatory subminimum wages; and
3) compliance with a mandated direct
labor -hour ratio of persons with
disabilities. It is the responsibility of the
DSU to take these factors into account
when determining if a position in a
particular work location is an integrated
setting.
Changes: None.
Level ofInteraction Among Individuals
With and Without Disabilities
Comments: Of those commenters who
commented specifically on the level of
interaction among individuals with and
without disabilities, one commenter
asked that we include language to
require individuals with disabilities to
interact with other employees and
individuals without disabilities to the
same extent that employees without
disabilities paid directly by the
employer interact with these persons.
The commenter stated that the
additional language would help to
emphasize that individuals can exercise
informed choice in the selection of
service providers under the VR program.
One commenter suggested that we
define " integrated location" as a ratio of
individuals with disabilities and
individuals without disabilities, stating
that true integrated employment
consists of a mix of workers with and
without disabilities.
Another commenter recommended
that we adopt the prior Departmental
guidance in technical assistance circular
06-01 mentioned in the Integrated
Location— General discussion. The
commenter believed that the guidance
required DSUs to give equal weight to
the interaction of individuals with
disabilities with other individuals
without disabilities, including
employees in the work unit and across
the work site, and customers as well as
vendors.
Discussion: In response to those
comments addressing proposed
361. 5( c)( 9)( ii)(B), the second criterion
of integrated location, section 102( d) of
the Act and final § 361. 52 require that
individuals be able to exercise informed
choice in the selection of service
providers. Therefore, it is not necessary
to amend the definition to require that
individuals with disabilities interact
with employees and other persons
without disabilities to the same extent
that employees without disabilities paid
directly by the employer interact with
these persons. We do not believe that
including the additional language in
final § 361. 5( c)( 9)( ii)(B) would further
protect the ability of individuals to
choose among service providers.
The Secretary appreciates the
commenter' s recommendation that we
revise this criterion and define an
integrated setting as being comprised of
a ratio (not specified by the commenter)
of employees with disabilities in
comparison to individuals without
disabilities. Since " integrated setting"
was first defined in VR program
regulations, we have considered how
best to capture the intent of Congress
and long-standing Department policy in
its criteria. In doing so, we considered
whether to establish a numerical ratio
and have rejected this as impractical
and unworkable. Given the many and
varied types of employment settings in
today' s economy, we cannot determine
a single ratio that could be used to
satisfactorily determine the level of
interaction required to meet the intent
underlying the definition. Rather than
using a numerical standard, we believe
that an " integrated setting" is best
viewed in light of the quality of the
interaction among employees with
disabilities and persons without
disabilities when compared to that of
employees without disabilities in
similar positions, and have not added a
numerical ratio to final § 361. 5( c)( 9).
The Secretary disagrees with the
commenter' s interpretation of the prior
guidance provided in technical
assistance circular 06-01 and the
assertion that factors such as the level
of interaction of employees with
disabilities with other employees in the
work unit and across the work site, as
well as with customers and vendors,
should be weighted equally. As stated in
the NPRM, the Secretary believes the
focus of whether the setting is integrated
should be on the interaction between
employees with and without
disabilities, and not solely on the
interaction of employees with
disabilities with people outside of the
work unit. For example, the interaction
of individuals with disabilities
employed in a customer service center
with other persons over the telephone,
regardless of whether these persons
have disabilities, would be insufficient
by itself to satisfy the definition.
Instead, the interaction of primary
consideration should he that between
the employee with the disability and his
or her colleagues without disabilities in
similar positions.
Changes: None.
Work Unit
Comments: Commenters supporting
and opposing the integrated location
criteria commented specifically on the
use of " work unit" in final
361. 5( c)( 9)( ii)(B). Some in support
requested that we clarify the meaning of
the term with respect to the numbers of
individuals with disabilities as
compared to those without disabilities
55644 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
to ensure that the standard is
consistently applied to work units of
different sizes, and the effect of the term
on the ability of individuals to choose
to work alone. One commenter
suggested that we clarify that the
employment of individuals with
disabilities in non-traditional work
units who perform their duties of the
position in isolation or separate from
other employees in the work unit
satisfies the definition of " competitive
integrated employment" as long as all
other criteria are met.
A few commenters asked whether
work unit" refers to all employees in
a certain job category or program, or to
groups of employees working together to
accomplish tasks. These commenters
stated that certain categories of
employees ( such as temporary office
workers and certain kinds of contract
workers) regularly interact with others
within the work site ( including other
employees, customers, or vendors), but
do not work side by side or in
collaboration with others within the
same job category. Similarly, a few
commenters requested that we clarify
the effect of the criteria on employment
in scattered work sites.
Of those in opposition, some
requested that we remove " work unit"
from the definition because they were
concerned that its use prohibits mobile
work crews and enclaves unless very
restrictive criteria are met, and that if
Congress had intended to eliminate
group work opportunities, it would have
done so in the law. Other commenters
requested clarification of the effect of
the term on group employment under
the JWOD Act commonly used in
Ability One and long-term commercial
contracts, stating that these settings
provide well -paying jobs for persons
with the most significant disabilities.
Discussion: In response to those
comments that address the use of the
term " work unit," the Secretary
disagrees with the recommendation to
remove the term from the definition
because it properly focuses the
consideration of the interaction of the
individual with the disability with
employees without disabilities within
the environment in which the work is
performed. As used in the definition,
work unit" may refer to all employees
in a particular job category or to a group
of employees working together to
accomplish tasks, depending on the
employer' s organizational structure. In
addition, its use is consistent with prior
guidance issued by the Department. The
Secretary emphasizes that the
Department has long maintained that
the interaction required between
employees with disabilities and
employees without disabilities is not
dependent on the number of individuals
in the work unit and that the criterion
must be applied consistently to work
units of any size. The Department also
has long -held that the interaction
between employees with and without
disabilities need not be face to face. Nor
do we interpret the criterion as
necessarily excluding employment
settings in which individuals work
alone, such as telecommuting,
temporary employment, and work in
mobile or scattered locations, from the
scope of the definition of " competitive
integrated employment," so long as the
employee with the disability interacts
with employees of the employer in
similar positions and interacts with
other persons without disabilities to the
same extent that employees without
disabilities interact with others.
As stated earlier in this section, the
Department has long considered the
funding of positions through JWOD
contracts to be a distinguishing
characteristic when determining if a
business is typically found in the
community. Likewise, the use of the
term " work unit" in the definition does
not change its application with respect
to the required interaction among
employees with and without disabilities
in the work setting. Entities that are set
up specifically for the purpose of
providing employment to individuals
with disabilities will likely not satisfy
the definition' s criteria. The high
percentage of individuals with
disabilities employed with these entities
most likely would result in little to no
opportunities for interaction between
individuals with disabilities and non -
disabled individuals. These entities,
therefore, likely would be considered
sheltered or non-integrated employment
sites. Nonetheless, DSUs must apply
these criteria on a case-by-case basis
when determining if an individual' s
employment is in an integrated location
and satisfies the definition of
competitive integrated employment."
Changes: None.
Interaction During Performance ofJob
Duties
Comments: One commenter stated
that to define " integrated location" as
only " the interaction between
employees with disabilities and those
without disabilities that is specific to
the performance of the employee' s job
duties, and not the casual,
conversational, and social interaction
that takes place in the workplace" is too
narrow and may not reflect many
workers' interaction patterns in typical
work settings.
Discussion: Under the definition of
competitive integrated employment"
and consistent with the general
principles contained in the prior
definition of " integrated setting," the
DSU is to consider the interaction
between employees with disabilities
and those without disabilities that is
specific to the performance of the
employee' s job duties, and not the
casual, conversational, and social
interaction that takes place in the
workplace. As a result, it would not be
pertinent to its determination of an
integrated setting for a DSU to consider
interactions in the lunchrooms and
other common areas of the work site in
which employees with disabilities and
those without disabilities are not
engaged in performing work
responsibilities.
The Secretary recognizes that the
application of the integrated location
criteria in the manner explained in the
preceding paragraphs will restrict the
types of employment options available
to individuals with disabilities through
the VR program. However, these
restrictions have been in effect since the
definition of " employment outcome"
was last revised in 2001 and, therefore,
do not reflect new Departmental policy.
Specifically, through application of the
criteria, individuals with disabilities
hired by community rehabilitation
programs to perform work under service
contracts, either alone, in mobile work
crews, or in other group settings ( e.g.,
landscaping or janitorial crews), whose
interaction with persons without
disabilities ( other than their supervisors
and service providers), while
performing job responsibilities, is with
persons working in or visiting the work
locations (and not with employees of
the community rehabilitation programs
without disabilities in similar positions)
would not be performing work in an
integrated setting. The Secretary
believes that, even if such group
employment in a community
rehabilitation program provides for
competitively paid wages, this fact does
not change the non-integrated nature of
the employment and may result in a less
desirable level of integration (e.g.,
interaction with non -disabled co-
workers) than individual employment,
which supports the autonomy and self-
sufficiency of individuals with
disabilities.
In summary, the DSU must determine,
on a case-by-case basis, that a work
location is in an integrated setting,
meaning it is typically found in the
community, and it is one in which the
employee with the disability interacts
with employees and other persons, as
appropriate to the position, who do not
55645Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
have disabilities to the same extent that
employees without disabilities interact
with these persons. Finally, the DSU is
to consider the interaction between the
employee with the disabilities and these
other persons that takes place for the
purpose of performing his or her job
duties, not mere casual and social
interaction. We firmly believe that the
integrated location criteria within final
361. 5( c)( 9)(ii),when properly applied,
ensure that participants in the VR
program, including individuals with the
most significant disabilities, are
afforded a full opportunity to integrate
in their communities and to achieve
employment available to the general
public.
Changes: None.
Opportunities for Advancement
Comments: One commenter asked
whether employment in which
individuals with disabilities truly do
not have the opportunity to advance in
their jobs satisfies the definition of
competitive integrated employment,"
if the criteria regarding competitive
earnings and integrated locations are
met. This commenter gave the example
of a small business.
Discussion: To ensure that the
employment of persons with disabilities
is equivalent in all respects to that of
persons without disabilities, section
7( 5)( C) of the Act, as amended by
WIOA, and final § 361. 5( c)( 9)( iii) require
that the employee with the disability
have the same opportunities for
advancement as employees without
disabilities in similar positions,
regardless of the size of the business.
This new criterion is consistent with the
prior definitions of " competitive
employment" and " integrated settings."
If employees in positions similar to that
of the employee with the disability have
the opportunity to advance in their
employment, the individual with the
disability must be afforded the same
opportunity for this criterion of the
definition to be satisfied.
Changes: None.
Construction of a Facility for a Public
or Nonprofit Community Rehabilitation
Program (§ 361. 5( c)( 10))
Comment: One commenter requested
that " construction" and " ongoing
maintenance" be clearly defined in the
regulations.
Discussion: The term " construction of
a facility for a public or nonprofit
community rehabilitation program"
remains unchanged in section 7( 6) of
the Act, as amended by WIOA, and final
361. 5( c)( 10).
We disagree with the
recommendation that we define
ongoing maintenance" in part 361.
Final § 361. 5( c)( 2)( viii) specifies such
costs, when incurred for operating and
maintaining DSU facilities, may be
allowable administrative costs under the
VR program. However, ongoing costs of
any kind, including ongoing
maintenance costs, are not allowable
expenditures when establishing,
developing, or improving a community
rehabilitation program (see final
361. 5( c)( 16)( iii)).
Changes: None.
Customized Employment
361. 5( c)( 11))
Comments: Most commenters
supported the new definition of
customized employment" in proposed
361. 5( c)( 11). A few commenters
requested that the definition include the
discovery phase" of the customized
employment model. A few commenters
suggested that the definition address
when it is appropriate for the DSU to
consider customized employment for
individuals with disabilities. Further,
these commenters stated that DSUs
should use customized employment as
the last option in assisting an individual
with a disability to achieve competitive
integrated employment. Another
commenter questioned whether
customized employment means " job
carving." Furthermore, one commenter
requested that we clarify how
individuals with disabilities, who are
working in customized employment,
could advance in their careers. One
commenter questioned whether an
employer would want to support an
individual with a significant disability
in customized employment. Another
commenter stated that customized
employment should not be an unfunded
mandate. Finally, one commenter asked
that we clarify the impact customized
employment might have on the
performance accountability measure for
the core programs, including the VR
program, in the workforce development
system under section 116 of WIOA that
measures the median wage of
participants during the second quarter
after they exit from these programs. This
commenter suggested that earnings from
customized employment would deflate
this measure.
Discussion: We appreciate the
comments supporting the new
definition of " customized employment"
in final § 361. 5( c)( 11). However, we
disagree with commenters who
recommended that the definition be
modified to include additional
requirements, such as the inclusion of
the discovery phase of the model or
when a DSU must consider customized
employment for an individual. Section
7( 7) of the Act, as amended by WIOA,
which defines the term " customized
employment," does not include this
information. Therefore, we believe final
361. 5( c)( 11) is consistent with the
statute and further regulatory change is
not necessary.
We disagree with the commenter that
DSUs should use customized
employment as a last resort when
assisting an individual with a disability
to achieve an employment outcome. We
believe that customized employment
may be an option for some individuals
with significant disabilities, while, for
other individuals, it may not be a viable
path to competitive integrated
employment. We strongly encourage
DSUs to tailor customized employment
services, like all of the services in final
361. 48( b) provided to eligible
individuals under an individualized
plan for employment, to meet the
unique strengths, needs, interests, and
informed choice of the individual, so
that he or she can achieve an
employment outcome in competitive
integrated employment. We understand
that some may have referred to
customized employment in the past as
job carving;" however, the Act, as
amended by WIOA, does not use that
term. Therefore, we have not
incorporated the term " job carving" into
these final regulations.
We believe it is possible for
individuals with disabilities in
customized employment to advance in
their careers. Individuals who achieve
competitive integrated employment
through customized employment could
advance in their career with their
original employers or by seeking
advancement with other employers. The
definition of " customized employment"
in section 7( 7) of the Act, as amended
by WIOA, and final § 361. 5( c)( 11) do not
include any criteria requiring an
individual with a significant disability
to remain in customized employment;
rather, these individuals may seek
additional vocational rehabilitation
services for the purpose of advancing in
their careers through other forms of
competitive integrated employment.
Customized employment is an
alternative that enables individuals with
disabilities and employers the
opportunity to negotiate job tasks and/
or reassign basic job duties to improve
overall production in the workplace. For
employers, customized employment
allows an employer to examine its
specific workforce needs and fulfill
those needs with a well -matched
employee. We encourage DSUs to work
with employers, particularly those
employers that have not been open to
employing individuals with significant
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disabilities, to enable them to hire these
individuals through customized
employment when appropriate.
We disagree with the commenter that
customized employment is an unfunded
mandate. Customized employment
services are included in the list of
allowable vocational rehabilitation
services in final § 361.48(b). DSUs may
expend their resources, including
program funds, on supporting
individuals in customized employment
when appropriate.
Customized employment, as we have
discussed, must lead to competitive
integrated employment. Section
116(b)( 2)( A)(i)(III) of title I of WIOA
establishes a primary performance
accountability indicator for all core
programs of the workforce development
system, including the VR program, that
measures the median earnings of all
participants who have exited the
program in the second quarter after exit.
As such, earnings from customized
employment will affect the VR
program' s performance, in the same
manner that other earnings will do so.
We cannot assume, as the commenter
suggests, that individuals in customized
employment will earn low wages.
Changes: None.
Employment Outcome (§ 361. 5( c)( 15))
Some commenters supported the
definition of " employment outcome" in
proposed § 361. 5( c)( 15) because it is
consistent with the overall purpose of
the Act, as amended by WIOA, to
promote the achievement of competitive
integrated employment and self-
sufficiency by individuals with
disabilities. As proposed, an
employment outcome" would mean
full-or part-time employment in
competitive integrated employment, or
supported employment. As such,
uncompensated employment outcomes
e.g., homemakers and unpaid family
workers) would be removed from the
scope of the definition for purposes of
the VR program. However, most
commenters strongly opposed removing
uncompensated employment
outcomes," and recommended revisions
or clarifications to the proposed
definition.
Statutory Basis
Comments: Most of the commenters
on the proposed definition of
employment outcome" in
361. 5( c)( 15) stated that the proposed
change is contrary to congressional
intent and not mandated by the Act, as
amended by WIOA. Many of these
commenters requested that the Secretary
use the discretion permitted under
section 7( 11)( C) of the Act to not limit
the definition to compensated
employment, thereby permitting
uncompensated outcomes of
homemaker and unpaid family worker
to continue to count as an employment
outcome under the VR program.
In addition, recognizing that WIOA
amends section 102( b)( 4) of the Act to
require that the individualized plan for
employment contain a specific
employment goal consistent with
competitive integrated employment, a
few commenters presented two
arguments to support the retention of
uncompensated outcomes as an
employment outcome. First, the
commenters argued that the phrase
consistent with the Act," as used in the
statutory definition, does not require
that all components of the term
competitive integrated employment"
be satisfied. In the alternative, these
commenters suggested that homemaker
and unpaid family worker outcomes
satisfy the criteria for competitive
integrated employment because they are
typically found in the community and
the earnings of individuals with
disabilities who obtain these outcomes
are commensurate with those of non -
disabled persons in similar positions.
Discussion: We appreciate the
commenters' concerns and recognize
that the definition of " employment
outcome" in proposed and final
361. 5( c)( 15) will end a long-standing
Department policy. We gave
considerable thought to all aspects of
the issue and seriously considered the
definition in light of the comments
received.
We agree with commenters that the
change eliminating uncompensated
outcomes was not explicitly required on
the basis of an amendment to the
statutory definition in section 7( 11) of
the Act, which remained unchanged, in
pertinent part, by WIOA. Nonetheless,
we believe that the Act as amended by
WIOA, when read in its entirety,
provides a strong justification for the
change.
We agree with the commenters that
section 7( 11)( C) of the Act permits the
Secretary to use his discretion to
include other vocational outcomes
within the scope of the definition of
employment outcome." This provision
is purely discretionary, and there is no
requirement that the Secretary exercise
this discretion, either to incorporate
new outcomes or to retain previously
permitted outcomes. However, if the
Secretary chooses to exercise this
discretion, the Secretary must do so in
a manner that is consistent with the Act.
As noted throughout the preambles to
the NPRM and these final regulations,
WIOA amended the Act by emphasizing
the achievement of competitive
integrated employment by individuals
with disabilities, including individuals
with the most significant disabilities.
The Act, as amended by WIOA, refers
extensively to competitive integrated
employment, including in the statement
of the purpose for the VR program,
requirements for developing
individualized plans for employment
and providing services to students and
youth with disabilities, and the
limitations on the payment of
subminimum wages in new section 511.
In particular, section 102( b)( 4) of the
Act, as amended by WIOA, and final
361. 46( a) require that the specific
employment goal identified in the
individualized plan for employment be
consistent with the general goal of
competitive integrated employment.
The changes made by WIOA provide
a marked contrast to the Act, as
amended by the Workforce Investment
Act of 1998 ( WIA). Under WIA, the
emphasis in the Act was on achieving
integrated employment. Consequently,
in 2001, the Secretary amended the
definition of " employment outcome"
and required that all employment
outcomes in the VR program be in
integrated settings, under prior
361. 5( b)( 16). In so doing, the Secretary
eliminated sheltered employment as an
employment outcome. At that time,
because we considered homemaker and
unpaid family worker outcomes to occur
in integrated settings, these outcomes
continued to constitute an " employment
outcome," for purposes of the VR
program.
By contrast, given the pervasive
emphasis on achieving competitive
integrated employment—not just
integrated employment—throughout the
Act, as amended by WIOA, the
Secretary has determined that
uncompensated employment outcomes,
including homemaker and unpaid
family worker outcomes, are no longer
consistent with the Act. For this reason,
the Secretary believes it is no longer an
appropriate exercise of the Secretary' s
discretion under section 7( 11)( C) of the
Act to include uncompensated
outcomes within employment outcomes
in final § 361. 5( c)( 15).
We disagree with the commenters'
argument that an " employment
outcome" need not satisfy all criteria of
the definition of " competitive integrated
employment," with one narrow
exception. Section 7( 11)( B) of the Act
and final § 361. 5( c)( 15) include
supported employment within the
employment outcomes available to
individuals with disabilities through the
VR program. Under section 7( 38) of the
Act, as amended by WIOA, and final
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361. 5( c)( 53), supported employment
requires that the individual be
employed in competitive integrated
employment or in an integrated setting
in which the individual is working on
a short-term basis toward competitive
integrated employment. Thus, in limited
circumstances, individuals in supported
employment may not have achieved
employment that satisfies all the criteria
of " competitive integrated employment"
initially since they will be earning non-
competitive wages on a short-term basis.
This very narrow exception is the only
instance in which the statute permits
that all criteria of " competitive
integrated employment" need not be
satisfied for an individual to achieve an
employment outcome. However, even
under this narrow exception, the
expectation is that, after a short period
of time, the individual will achieve
competitive integrated employment in
supported employment. It is
understood, and the commenters do not
argue otherwise, that uncompensated
employment, such as homemaker and
unpaid family worker outcomes, does
not satisfy the definition of " supported
employment." There is no expectation
that the individuals will ever be
compensated in such employment.
We disagree with the first of the
commenters' arguments that all criteria
of " competitive integrated employment"
need not be satisfied for employment to
be considered competitive integrated
employment. To interpret the Act's
definition of " employment outcome"
this way would ignore one of the three
major components of the definition of
competitive integrated employment"—
competitive wages.
While we agree with the assertion that
individuals with disabilities who
achieve homemaker or unpaid family
worker outcomes perform their work in
settings typically found in the
community and receive no wages, as
would a non -disabled homemaker or
unpaid family worker, these similarities
are not sufficient to satisfy the
definition of " competitive integrated
employment." " Competitive integrated
employment" requires the payment of
wages at or above the applicable
Federal, State, or local minimum wage.
Neither homemakers nor unpaid family
workers earn a wage. Therefore,
individuals achieving uncompensated
outcomes, such as homemakers and
unpaid family workers cannot have
achieved an employment outcome in
competitive integrated employment.
Changes: None.
Informed Choice
Comments: Many commenters
asserted that the definition of
employment outcome" in proposed
361. 5( c)( 15) is contrary to the
principle of informed choice and that
individuals with disabilities should
have the right to choose homemaker and
other uncompensated outcomes just as
do persons without disabilities.
Discussion: While we agree that
section 102( d) and many other
provisions of the Act place a premium
on the ability of individuals with
disabilities to exercise informed choice
throughout the vocational rehabilitation
process, including the choice of an
employment outcome, we do not agree
that the definition of " employment
outcome" in final § 361. 5( c)( 15) is
inconsistent with the individual' s
ability to exercise informed choice. We
have historically interpreted the statute
as allowing individuals who are
participating in the VR program to
exercise informed choice among those
outcomes that satisfy the definition of
employment outcome." Under these
final regulations, such outcomes must
be in competitive integrated
employment or supported employment.
If an individual makes an informed
choice to pursue uncompensated
employment (e.g., homemaker or unpaid
family worker outcomes) or any other
outcome that does not meet the
definition of " employment outcome"
under final § 361. 5( c)( 15), he or she may
still do so, but not with the assistance
of the VR program. In final § 361. 37, the
DSU is required to refer that individual
to other Federal, State, or local programs
and providers that can meet the
individual' s needs for related services
e.g., the State Independent Living
Services (SILS) program, Independent
Living Services for Older Individuals
Who Are Blind program (OIB), Centers
for Independent Living program (CIL),
and programs for the aging). In addition,
final § 361. 37 requires that individuals
receive sufficient information
concerning the scope of the VR program
and competitive integrated employment
opportunities. This information enables
individuals to make a fully informed
choice regarding whether to pursue an
employment outcome through the VR
program or homemaker and other
uncompensated outcomes through other
sources.
We believe the definition of
employment outcome" in final
361. 5( c)( 15) ensures that the VR
program promotes maximum
opportunities for individuals with
disabilities, particularly those with
significant disabilities, to pursue
competitive integrated employment or
supported employment options.
Individuals with disabilities can achieve
competitive integrated employment or
supported employment if given
appropriate services and supports and,
therefore, should be informed that they
are not limited to pursuing
uncompensated outcomes no matter
how significant their disabilities.
Nevertheless, we recognize that some
individuals will choose to pursue such
outcomes. These final regulations
require each DSU to preserve individual
choice by referring any individual who
decides to pursue uncompensated
outcomes, or any other outcome that
does not meet the definition of an
employment outcome" in final
361. 5( c)( 15), to other appropriate
resources for assistance.
Changes: None.
Legitimacy of Homemaker Outcomes
Comments: Some commenters stated
that the definition of " employment
outcome" in proposed § 361. 5( c)( 15)
does not recognize the legitimacy of
homemaker occupations and devalues
the work performed by homemakers.
Some commenters stated that
homemaker outcomes provide economic
value for the individual or family,
though the individual does not receive
direct wages. Others suggested that
homemaker outcomes allow the
individual to care for other family
members who are disabled and who
would otherwise be institutionalized.
Discussion: We agree with the
commenters that homemakers perform
work that has an economic value for
themselves and others in the home. For
example, by caring for themselves and
the home, homemakers can enable other
members of the household to work
outside the home and earn an income.
In addition, homemakers may care for
persons with disabilities in the
household, thus helping them to remain
in their homes, rather than to reside in
institutional settings. Therefore, we
emphasize that nothing in these final
regulations is intended to alter the fact
that homemaker outcomes serve as a
legitimate and valued option for people
with disabilities. The Secretary does not
devalue the dignity or the worth of the
individuals who perform this work
through this regulatory action. Rather,
the definition of " employment
outcome" in final § 361. 5( c)( 15), focuses
the VR program on its statutory purpose,
as set forth in section 100( a)( 2)( B)—
giving persons with disabilities,
including those with significant or the
most significant disabilities, the
opportunity to work in competitive
integrated employment and to achieve
economic self-sufficiency.
Changes: None.
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Availability of Services
Comments: Several commenters who
opposed the definition of "employment
outcome" in proposed § 361. 5( c)( 15)
stated that the services provided to
individuals pursuing homemaker
outcomes through the VR program
provide a bridge, gateway, or stepping
stone to competitive integrated
employment. Many of those
commenters stated that services such as
Braille training, assistive technology,
mobility training, and other home
management services are essential to the
ability of individuals who are blind and
visually impaired to prepare for
employment. Many commenters
expressed the concern that without
homemaker services, many individuals,
especially those who are blind and
visually impaired, will be unable to
function, and either be shut in their
homes or forced to live in a care facility.
Finally, some commenters stated that
the loss of homemaker services could
result in low self-esteem, the loss of
independence, physical disease, and
depression among individuals who are
blind and visually impaired.
Discussion: We strongly agree that
Braille training, assistive technology,
and mobility training are critical to the
independence of individuals who are
blind and visually impaired, and help to
build the foundation on which they can
successfully pursue gainful
employment. In addition, we recognize
that these services can enable
individuals who are blind and visually
impaired to increase their confidence, as
well as their physical and psychological
well-being. Most importantly, these
services always have been, and continue
to be, available to individuals with
disabilities under an individualized
plan for employment pursuant to
section 103( a) of the Act and final
361. 48( b), so long as the individuals
are pursuing an employment outcome
under final § 361. 5( c)( 15), specifically
competitive integrated employment or
supported employment. To the extent
such individuals do not wish to do so,
these same services are, and always
have been, available under the
independent living programs authorized
by title VII of the Act.
We understand, from anecdotal
evidence, that it has been the practice of
some DSUs to provide individuals who
are newly blind or experiencing
significant vision loss with services
designed to help them attain
homemaker outcomes, with the
expectation that the individuals will
return to the VR program when they are
ready to pursue additional training and
the achievement of an employment
outcome. However, DSUs must provide
the vocational counseling and guidance
to help individuals pursue an
employment outcome consistent with
competitive integrated employment, as
required by section 102( b)( 4) of the Act,
as amended by WIOA, and final
361. 46( a)( 1) at the outset or refer
individuals to the independent living
programs under final § 361. 37
depending on their individual goals.
DSUs are encouraged to deliver services
such as Braille and mobility training
throughout the vocational rehabilitation
process, in combination with the other
education, training, and equipment
needed to achieve the identified
employment goal. In this way, DSUs can
more effectively engage individuals in
the VR program and better assist them
to achieve the ultimate goal of
competitive integrated employment or
supported employment.
Changes: None.
Disproportionate Impact
Comments: Many commenters stated
that the change in the definition of
employment outcome" in proposed
361. 5( c)( 15) will have a
disproportionate impact on individuals
served through the VR program who are
blind and visually impaired. A few
commenters requested that we create an
exception for agencies that serve
individuals who are blind if we
maintain the definition as proposed.
Discussion: As stated in the preamble
to the NPRM, we believe the definition
of " employment outcome" in final
361. 5( c)( 15) will have minimal impact
on most DSUs in their administration of
the VR program because, nationally, a
steadily decreasing and relatively small
number of individuals exit the program
as homemakers or unpaid family
workers. The data reported by DSUs
demonstrate that the majority of DSUs
have been placing increased importance
and emphasis in their policies and
procedures on competitive integrated
employment and supported
employment outcomes, thereby
deemphasizing uncompensated
outcomes. This shift in practice has
been the product of the DSUs'
responding to the changes to the Act
since the enactment of WIA in 1998 and
reflecting that changing emphasis in
their administration of the VR program.
Nonetheless, we recognize that some
DSUs, particularly those serving
individuals who are blind and visually
impaired, report a greater percentage of
homemaker outcomes than others. For
example, VR agencies serving
individuals who are blind and visually
impaired reported that 618 individuals
obtained homemaker outcomes in FY
2014, representing 9. 8 percent of all
employment outcomes for these
agencies. In comparison, all other VR
agencies reported that 2, 436 individuals
obtained homemaker outcomes in FY
2014, representing 1. 4 percent of all
employment outcomes for these
agencies. Consequently, we proposed in
the NPRM a transition period of six
months following the effective date of
these final regulations to allow DSUs to
complete the VR process for individuals
already pursuing homemaker outcomes
under individualized plans for
employment. See the discussion on
Transition Period" later in this section
regarding the comments received on the
proposed transition period.
Neither section 7( 11) nor any other
provision of the Act, as amended by
WIOA, permits the Secretary to make an
exception when implementing the
definition of " employment outcome" to
allow DSUs serving individuals who are
blind and visually impaired to continue
assisting individuals to achieve
uncompensated outcomes, such as
homemaker outcomes, when that
employment is not consistent with the
Act. Therefore, there is no statutory
authority to make the exception
recommended by commenters.
Changes: None.
Resources for Service Provision
Comments: Several commenters
stated that services such as training in
Braille, orientation and mobility
training, and the provision of assistive
technology and training in its use are
not available to individuals who are
blind and visually impaired through any
other resources, such as medical
insurance and one-stop delivery centers.
In particular, many commenters stated
that the OIB program lacks sufficient
resources to serve the individuals who
would no longer be eligible to receive
vocational rehabilitation services as a
result of the change in the definition of
employment outcome" in proposed
361. 5( c)( 15), because, to be eligible for
the VR program, an individual must
intend to achieve an employment
outcome. A few commenters asked that
we request additional funds for this
program. One commenter suggested that
we lower the age of eligibility for
services from the OIB program to allow
younger individuals to receive these
services. Additionally, many
commenters stated that other
independent living programs and
providers lack the funds and qualified
staff needed to provide individuals who
are blind and visually impaired with the
complex skills of Braille literacy and
orientation and mobility. Several
commenters stated that the change in
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the definition of " employment
outcome" will result in loss of funding
needed by community rehabilitation
programs to provide these vital services.
One commenter asked if the
Department would create a separate
homemaker program not directly
connected to the VR program. One
commenter stated that many DSUs have
entered into long-term contractual
arrangements for providing services to
individuals pursuing homemaker
outcomes and requested that we exempt
these arrangements from the application
of the new rule. Another commenter
requested that the Client Assistance
Program (CAP) and other advocacy
groups conduct outreach to the
community of individuals who are blind
and visually impaired who otherwise
would have chosen homemaker
outcomes.
Discussion: We recognize that medical
insurance and other one-stop delivery
system programs under WIOA typically
do not support training in Braille and
mobility or the provision of assistive
technology for individuals who are
blind and visually impaired.
Under final § 361. 37( b), the
circumstances when the DSU must
provide referrals to other programs and
service providers for individuals who
choose not to pursue an employment
outcome under the VR program has
been expanded. Similarly, final
361. 43( d) expands the requirement for
the referral of individuals found
ineligible for vocational rehabilitation
services, or determined ineligible
subsequent to the receipt of such
services, to include appropriate State,
Federal, and local programs, and
community service providers (e.g., the
SILS program, OIB program, CILs, and
programs for the aging) better suited to
meet their needs.
Those programs designed to meet the
needs of individuals who choose to
pursue homemaker outcomes include
the OIB program, the only program
authorized under title VII of the Act, as
amended by WIOA, which remains
under the administration of the
Department. There is no authority, in
either title I or VII, to permit DSUs to
use VR program funds to provide OIB
program services in order to alleviate
any deficiencies in OIB funding, which
may result from an increase in the
number of individuals seeking services
from the OIB program following the
change in the employment outcome
definition for purposes of the VR
program. However, the Administration
has requested a $ 2. 0 million increase
over the 2016 level for the OIB program
in the fiscal year 2017 President' s
Budget to assist States in meeting an
anticipated increase in the demand for
OIB services. The Department will
consider increases in the demand for
OIB program services resulting from this
rule change in future budget requests.
We recognize that some CIL staff may
not possess the skills necessary to
provide individuals who are blind and
visually impaired the specialized
training and services that will enable
them to remain in their homes and care
for themselves, such as training in
Braille and orientation and mobility.
Therefore, we strongly encourage DSUs
to strengthen their relationships with
the CILs in their States by providing
training and technical assistance
necessary to build the capacity of the
staff that will afford them the option to
deliver these services in accordance
with the State Plan for Independent
Living developed in the State. The
Department will support these efforts
through technical assistance in
collaboration with the Department of
Health and Human Services, which is
now responsible for the administration
of the Centers for Independent Living
program under title VII of the Act, as
amended by WIOA.
We disagree that the change in the
definition necessarily will result in a
loss of funding for community
rehabilitation programs to provide
homemaker services. Although DSUs
may no longer use VR program funds to
purchase these services from
community providers, they may use
other program funds to do so, such as
those for the OIB programs.
In response to the comment
requesting an exemption for existing
contractual relationships between the
DSUs and other entities to assist
individuals with disabilities to achieve
outcomes in uncompensated
employment, once final § 361. 5( c)( 15)
takes effect a DSU cannot contract with
another entity to assist an individual
with a disability to achieve an
uncompensated outcome, such as
homemaker or unpaid family worker.
There is no statutory authority that
would permit an exemption to the
prohibition. However, as discussed in
more detail in the Transition Period
section, DSUs are able to use VR
program funds to continue to engage in
contractual arrangements for providing
services to individuals with disabilities
who are already in the process of
pursuing homemaker and other
uncompensated employment outcomes
under individualized plans for
employment approved prior to the
effective date of these final regulations.
While we understand the concern
raised by the commenter who requested
a lower eligibility age for the OIB
program, title VII of the Act, as amended
by WIOA, retains the eligible age of 55
for OIB program services in the statute;
therefore, the Department is not
authorized to change the age of
eligibility. Nor does the Act, as
amended by WIOA, authorize the
creation of a homemaker program
separate from the VR program.
While we appreciate the commenter' s
recommendation that the CAP should
provide outreach services to individuals
affected by the implementation of the
revised definition of "employment
outcome," section 112 of the Act
requires, as it always has, the CAP to
provide information and advocacy
services to individuals who are
applicants or consumers of the VR
program or any other program under the
Act. The CAP may provide information
and advocacy services for those
individuals pursuing uncompensated
outcomes who are served by the VR
program during the transition period or
served by the OIB or independent living
programs after the transition period.
However, no authority exists in section
112 of the Act to permit the CAP to
conduct outreach to, or to serve,
individuals pursuing uncompensated
outcomes under programs not
authorized by the Act. Although the
Department is no longer responsible for
the administration of the CIL and SILS
programs, these programs continue to be
authorized under title VII of the Act,
and therefore the CAP can provide
assistance to individuals receiving
independent living services.
Changes: None.
Feasibility Studies
Comments: Some commenters
recommended that we conduct a study
of homemaker closures to address
problems of overuse and that the
definition of " employment outcome"
include strict criteria to prevent
overuse.
One commenter asked whether the
Department had conducted a feasibility
study to determine if the referral of
individuals from VR to other service
providers would reasonably result in the
provision of services.
Discussion: We have not conducted,
nor do we intend to conduct, a study of
homemaker closures to address
problems of overuse. A study to ensure
DSUs do not overuse uncompensated
outcomes is not necessary because such
outcomes will no longer be permitted
under the VR program once these final
regulations take effect and the transition
period ends. For the same reason, we do
not believe it necessary to change
361. 5( c)( 15) to prevent the overuse of
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homemaker and unpaid family worker
outcomes.
However, we intend to monitor State
implementation of the final regulations
during our annual review and periodic
on-site monitoring of State VR agencies
to ensure that persons with significant
disabilities, including those who are
blind and visually impaired, receive
vocational rehabilitation services in
pursuit of competitive integrated
employment or supported employment.
Additionally, we will review the steps
DSUs are taking to ensure that
individuals are appropriately referred
under final §§ 361. 37(b) and 361. 43( d),
to other Federal, State, and local
programs and providers (e.g., the SILS
program, OIB program, CILs, and
programs for the aging) that are better
able to meet the needs of individuals
with disabilities who desire to receive
homemaker services. If needed, the
Department will consider providing
technical assistance to DSUs to enable
them to build better relationships with
these other entities to increase the
potential for successful referrals.
Changes: None.
Transition Period
Comments: A few commenters
supported the Department' s proposed
transition period of six months
following the effective date of the final
regulations, during which DSUs would
finish providing vocational
rehabilitation services to, and close the
service records of, individuals pursuing
uncompensated outcomes, such as
homemakers and unpaid family
workers, through individualized plans
for employment that were approved
prior to the effective date.
Some commenters stated that six
months would not be long enough to
finish providing services and close these
service records or to develop
relationships with providers of
independent living services to which
the DSUs could refer these individuals.
Of these commenters, some
recommended that the Department
extend the proposed transition period to
12 months following the effective date
of the final regulations, while some
others recommended 18 or 24 months.
However, most commenters who
commented on the proposed transition
period recommended that we adopt a
flexible period that DSUs would
determine case by case, taking into
account the needs of the individual.
Finally, one commenter recommended
that we permit DSUs to provide
vocational rehabilitation services to
individuals with the goal of homemaker
on their individualized plans for
employment without regard to the
duration of the services, but that we not
allow DSUs to implement new
individualized plans for employment
with the goal of homemaker following
the effective date of the final
regulations.
Discussion: To permit DSUs to
develop individualized plans for
employment that include
uncompensated employment goals, such
as those of homemakers and unpaid
family workers, after the effective date
of these final regulations would be
inconsistent with the Act, as amended
by WIOA. Section 102( b)( 4) of the Act,
as amended by WIOA, and final
361. 46( a), require all individualized
plans for employment developed under
the Act to include employment goals
consistent with the general goal of
competitive integrated employment.
However, we do agree with
commenters that DSUs may need longer
than six months following the effective
date to finish providing services to some
individuals who are already pursuing
homemaker or other uncompensated
outcomes on individualized plans for
employment that were developed and
executed prior to the effective date. Data
obtained through the RSA -911 case
service report show that, on average,
individuals with disabilities take
approximately 24 months to complete
the vocational rehabilitation process
from the time they apply for services
until their service records are closed.
These data also demonstrate that
individuals who are 55 years and older
and blind take approximately 21. 5
months to complete the vocational
rehabilitation process from the time that
they apply for services.
Therefore, the Secretary has
concluded that DSUs may continue to
provide services to individuals with
uncompensated employment goals on
their individualized plans for
employment that were approved prior to
the effective date of the final regulations
through June 30, 2017, unless a longer
period of time is required based on the
needs of the individual, as documented
in the individual' s service record.
The Secretary believes that DSUs can
finish providing services to, and close
the service records of, most individuals
pursuing homemaker and other
uncompensated outcomes during this
transition period. However, a DSU can
determine on a case-by-case basis,
taking into consideration the unique
needs of each individual, that the DSU
cannot complete the provision of
services within that time frame and,
therefore, may continue the services
until the individual no longer needs
them. For example, services may be
interrupted and, consequently, the DSU
cannot complete the services prior to
June 30, 2017. For this and other
reasons, the DSU may extend the
provision of services beyond June 30,
2017, until they are completed and the
individual' s service record is closed.
By extending the transition period,
DSUs will have sufficient time to
develop and strengthen their
relationships with other governmental
and nonprofit providers of independent
living services so that DSUs may make
appropriate referrals to these providers
and individuals with disabilities can
receive the services they need to
maintain their homes and
independence. The Department plans to
provide guidance and technical
assistance to: ( 1) Facilitate the transition
to the new definition of employment
outcome; and ( 2) minimize the potential
disruption of services to VR program
consumers currently receiving services
and who do not have a competitive
integrated employment or supported
employment goal reflected in their
individualized plan for employment.
Finally, all participants who exit the
VR program after July 1, 2016, including
those exiting in uncompensated
employment, such as homemakers and
unpaid family workers, must be
included in the calculations of the
performance accountability measures
established in section 116(b)( 2)( A)(i) of
title I of WIOA and explained more fully
in the joint performance information
collection request. The performance
accountability requirements of section
116 of WIOA take effect July 1, 2016.
Changes: We have included a note in
final § 361. 5( c)( 15) allowing for a
transition period to permit a DSU to
continue services to individuals with
uncompensated employment goals on
their approved individualized plans for
employment prior to the effective date
of the final regulations until June 30,
2017, unless a longer period of time is
required based on the needs of the
individual with the disability.
Extended Services (§ 361. 5( c)( 19))
Comments: A few commenters were
concerned that the provision of
extended services to youth with the
most significant disabilities will cause
an undue hardship for some DSUs. A
few other commenters understood the
proposed changes to mean that the
DSUs were responsible for funding all
individuals in extended services even
after the individual transitions from the
DSU for support.
Discussion: Final § 361. 5( c)( 19)( iv)
specifies that " extended services" are
those services provided to individuals
with the most significant disabilities,
which may include youth with the most
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significant disabilities, by a State
agency, a private nonprofit organization,
employer, or any other appropriate
resource once an individual has
concluded support services from the
DSU. The definition of " extended
services" in final § 361. 5( c)( 19)( v)
specifies that the DSU provides
extended services only to " youth with
the most significant disabilities" for a
period not to exceed four years or until
such time as a youth reaches the age of
25 and no longer meets the definition of
a " youth with a disability" under final
361. 5( c)( 58). For further information
on the provision of extended services in
accordance with final §§ 363. 4 and
363. 22, see the Analysis of Comments
and Changes section for the Supported
Employment Program in 34 CFR part
363.
Changes: None.
Indian; American Indian; Indian
American; Indian Tribe (§ 361. 5( c)( 25))
Comments: Many commenters
disagreed with expanding the definition
of " Indian tribe" to make tribal
organizations eligible for AIVRS grants.
Most of these commenters requested
that we establish policies that give tribal
governments the authority to designate
those tribal organizations or entities
acting on their behalf as applicants or
recipients of AIVRS funding.
Discussion: We provide a detailed
analysis of these comments in a separate
regulatory action implementing the
amendments made by WIOA to
miscellaneous programs under the Act,
including the AIVRS program,
published elsewhere in this issue of the
Federal Register.
Changes: None.
Informed Choice
Comments: Some commenters
requested that we define " informed
choice."
Discussion: We disagree with the
recommendation to define " informed
choice" in final § 361. 5( c). Section
102( d) of the Act and final § 361. 52 fully
describe the critical aspects of informed
choice in the context of the VR program
and reflect the statutory emphasis that
individuals participating in the VR
program must be able to exercise
informed choice throughout the entire
rehabilitation process.
Changes: None.
Supported Employment Definitions
Comments: We received comments on
the definitions of " supported
employment" and " supported
employment services" in proposed
361. 5( c)( 53) and 361. 5( c)( 54),
respectively, concerning the short-term
basis period, transitional employment,
and the duration of supported
employment services.
Discussion: We discuss these
comments later in the Analysis of
Comments and Changes section for the
Supported Employment Program in
final 34 CFR part 363.
Transition -Related Definitions
Comments: We received comments on
definitions pertaining to the transition
of students and youth with disabilities
from school to postsecondary education
and employment, including " pre-
employment transition services,"
student with a disability," " transition
services," and " youth with a disability."
Discussion: We discuss these
comments in section B later in this
Analysis of Comments and Changes
section of the preamble.
Submission, Approval, and
Disapproval of the State Plan (§ 361. 10)
Content and Submission of the VR
Services Portion of the Unified and
Combined State Plan
Comments: Apart from public
comments received on the joint
regulations proposed by the U.S.
Departments of Labor and Education
implementing jointly administered
requirements for the Unified or
Combined State Plan, we received
comments on proposed § 361. 10
pertaining to the VR services portion of
the Unified or Combined State Plan.
Many commenters expressed support
for the revised State Plan requirements
and process as described in the
proposed joint regulations, noting the
regulations promote an opportunity for
collaboration across the workforce
development system. Additionally,
these commenters requested technical
assistance and guidance to clarify the
State Plan process.
One commenter requested that we
clarify the meaning of " The VR services
portion of the State Plan" and asked
whether this is in fact a separate
program -specific component of the
Unified or Combined State Plan. This
commenter previously submitted a
Unified State Plan in which the
vocational rehabilitation components of
the plan were interspersed throughout
the overall plan. One commenter asked
whether the proposed joint regulation in
34 CFR 676.130(f), which requires the
RSA Commissioner to approve the VR
services portion of the Unified or
Combined State Plan before the
Secretaries of Labor and Education
approve the Unified or Combined State
Plans, means that DSUs will have
separate timelines for the submission of
the VR program -specific components of
the plan.
Discussion: We appreciate the
commenters' support, as well as the
requests for clarifications. Final § 361. 10
implements section 101( a)( 1) of the Act,
as amended by WIOA, which requires a
State to submit a Unified or Combined
State Plan under section 102 or section
103, respectively, of title I of WIOA, in
order to receive funding under the VR
program. The Unified or Combined
State Plan must contain a VR services
portion. Section 101( a)( 1) of the Act, as
amended by WIOA, and final § 361. 10( a)
require the VR services portion of the
Unified or Combined State Plan to
contain all State Plan requirements
under section 101( a) of the Act. Prior to
the enactment of WIOA, DSUs
submitted a stand-alone State Plan
directly to the Department. Under
WIOA, the VR services portion will be
submitted as part of the Unified or
Combined State Plans by the State to the
Secretary of the U.S. Department of
Labor, who will distribute the plans to
the other Federal agencies responsible
for their review and approval, including
the Department of Education with
respect to the review and approval of
the VR services portion of the plans.
The " Required Elements for
Submission of the Unified or Combined
State Plan and Plan Modifications
Under the Workforce Innovation and
Opportunity Act," recently approved by
the Office of Management and Budget
under control number 1205-0522,
presents the VR services portion of the
Unified or Combined State Plan as a
distinct component of the plan. The
timelines for submission of the Unified
or Combined State Plan, and, hence, the
VR services portion of that plan, are
governed by sections 102 and 103 of
title I of WIOA, and the joint final
regulations published elsewhere in this
issue of the Federal Register. Thus,
there is no statutory authority to
establish a separate timeline or date for
the submission of the VR services
portion of the plan, despite the fact that
the Commissioner must approve the VR
services portion before the Secretaries of
Labor and Education approve the
remainder of the plans.
Changes: None.
Alignment of Program and Fiscal Years
Comments: Many commenters were
interested in how the new timelines for
the submission and modification of the
Unified and Combined State Plans will
be aligned with the specific
requirements of the VR services portion
of the Unified or Combined State Plan,
including reporting requirements,
performance levels, and the difference
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between the start of the program year on
July 1 for the purposes of requirements
under title I of WIOA versus the start of
the Federal fiscal year on October 1
when the VR program formula grants are
issued in accordance with the Act. A
few commenters supported the
alignment of the program years under
the Unified and Combined State Plans
among all core programs in the
workforce development system,
including the VR program.
Discussion: While we understand the
concern expressed by commenters
regarding the potential confusion
caused by differences between the VR
program' s fiscal year and the other core
programs' program year, section
110( a)( 2)( A) of the Act, which specifies
the manner in which VR program
allotments are to be made, was not
amended by WIOA. Moreover, section
111( a)( 1) of the Act, which also
remained unchanged by WIOA, requires
that payments are made to States on a
Federal fiscal year basis. This provision
is consistent with section 101( a)( 1),
which requires States to submit a VR
services portion of a Unified or
Combined State Plan to receive funding
for a fiscal year." Finally, section
101( a)( 10) of the Act, as amended by
WIOA, requires the DSU to submit
certain data to demonstrate the annual
performance of the VR program, within
the same fiscal year in which the VR
program operates. For these reasons,
there is no statutory authority to change
the period for making allotments to the
States from the fiscal year beginning on
October 1 to the program year used
under title I of WIOA, which is July 1
of each year for most core programs.
In order to align the VR program with
the other core programs to the extent
practicable, DSUs must submit the VR
services portion of the Unified or
Combined State Plan and report the data
required under final § 361. 40 in a
manner consistent with the jointly
administered requirements set forth in
the joint regulations governing Unified
or Combined State Plan requirements
published elsewhere in this issue of the
Federal Register. However, States will
continue to receive VR program
allotments and report fiscal data
through the Financial Status Report
SF -425) in accordance with the Federal
fiscal year.
Changes: None.
Other Comments
Comments: Several commenters were
uncertain about the application of
common performance measures and
asked whether combined partners under
a Combined State Plan would be held to
the new performance standards as well.
One commenter asked whether, when
there is more than one DSU in the State,
DSUs serving individuals who are blind
will have separate performance levels
from DSUs serving individuals with all
other disabilities. Another commenter
suggested that Unified or Combined
State Plans be posted electronically to a
Web site that the public could easily
access.
We also received comments regarding
the determination of eligibility for
individuals with autism and on the
significance of disability.
Discussion: The Departments of
Education and Labor address these
comments in the Analysis of Comments
and Changes section of the joint final
regulations implementing the jointly
administered requirements for the
submission of a Unified or Combined
State Plan under sections 102, and 103
of title I of WIOA and the performance
accountability system under section 116
of title I of WIOA, published elsewhere
in this issue of the Federal Register,
because they apply to all core programs
in the workforce development system,
not just the VR program.
We address the comments regarding
the determination of eligibility for
individuals with autism and the
significance of disability in the
Assessment for Determining Eligibility
and Priority for Services (§ 361. 42)
section of this preamble.
Changes: None.
Requirements for a State Rehabilitation
Council (§ 361. 17)
Establishment of a State Rehabilitation
Council
Comments: One commenter suggested
the word " if" be removed from the
introductory paragraph in § 361. 17. This
commenter suggested that all States are
required to have a State Rehabilitation
Council (SRC or Council).
Discussion: Section 101( a)( 21) of the
Act, which remained unchanged by
WIOA, and final § 361. 16 permit States
to establish either an independent State
commission or an SRC. Therefore, there
is no statutory authority to mandate that
States establish a Council, rather than
an independent commission. For this
reason, we have not revised the
introductory paragraph in final § 361. 17
as the commenter recommended,
because it is consistent with the statute.
However, the Act does not prohibit a
State from establishing both an
independent commission and a SRC if
it chooses to do so.
Changes: None.
Additional Members
Comments: Some commenters
requested that we require in § 361. 17( b)
that the SRC include additional
members, such as a representative of the
State' s Council on Developmental
Disabilities, entities carrying out
programs under the Assistive
Technology Act of 1998 in the State,
and groups of, or representing,
individuals with intellectual and
developmental disabilities.
Discussion: Section 105( b)( 1) of the
Act, as amended by WIOA, made only
one amendment to the composition
requirements of the SRC related to the
representation of the AIVRS projects in
the State on the SRC. The Act, as
amended by WIOA, did not alter the
composition requirements in any other
way. As a result, there is no statutory
basis to require additional
representatives from other State entities.
However, the Act, as amended by
WIOA, does not prohibit a State from
electing to add more members to its SRC
if it determines this is appropriate.
Changes: None.
Terms ofAppointment
Comments: One commenter suggested
that we amend the requirements related
to terms of appointment in § 361. 17( e) to
allow SRC members who were
appointed to fill a vacancy and serve the
remainder of their predecessor' s term to
be appointed to two additional
consecutive full terms.
Discussion: WIOA did not amend
section 105( b)( 6) of the Act or change
the requirements governing terms of
appointment; therefore, there is no
statutory authority to amend these
requirements in final § 361. 17( e). The
Department has interpreted these
requirements to permit an SRC member
who completed the term of a vacating
member to be appointed for only one
additional consecutive full term of three
years.
This long-standing Department
interpretation is consistent with section
105(b)(6) of the Act, which limits a term
to no more than three years; however,
there is no requirement that each
member be appointed for a three-year
term. Under section 105(b)(6)(A)(i) of
the Act, an individual who is appointed
to complete a predecessor' s unfinished
term is appointed for the remainder of
that term. This appointment constitutes
one full term for that individual. Section
105(b)(6)(B) of the Act prohibits an
individual from serving more than two
consecutive full terms. Therefore, if an
individual is appointed to complete one
year remaining of a predecessor' s term
and is then reappointed for a second full
three-year term, this individual has
served two full terms even though the
total number of years served is four.
Changes: None.
55653Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
Coordination With One -Stop Centers
Comments: None.
Discussion: Section 105( c)( 8) of the
Act and final § 361. 17(h))(8) permit the
SRC to perform functions in addition to
those specifically authorized in the Act
and final regulations so long as they are
comparable to the specified functions.
To support the alignment of the VR
program with the workforce
development system as emphasized
throughout the Act and these final
regulations, we clarify that SRCs may
coordinate and establish working
relationships with one-stop centers.
This coordination is comparable to the
coordination with SILCs and CILs
required under section 105( c)( 7) of the
Act and final § 361. 17(h)(7).
Changes: None.
Comprehensive System of Personnel
Development (§ 361. 18)
Data Report for Comprehensive System
of Personnel Development (§ 361. 18( a))
Comments: One commenter
recommended revisions to proposed
361. 18( a) regarding the submission of
data on the comprehensive system of
personnel development (CSPD) in the
vocational rehabilitation services
portion of the Unified or Combined
State Plan to reduce burden on DSUs.
Specifically, the commenter
recommended that DSUs be required to
submit information about the vocational
rehabilitation personnel via pre-print
assurances, rather than descriptions,
and be required to submit aggregated
data, rather than disaggregated data.
Discussion: WIOA made only
technical changes to section 101( a)( 7)( A)
of the Act, none of which increased the
reporting that had been required of
DSUs for nearly 20 years. While we are
sensitive to the burden imposed by
reporting requirements, there is no
statutory basis for the Department to
make the changes suggested by the
commenter. Section 101( a)( 7)( A) of the
Act, as amended by WIOA, explicitly
mandates that DSUs provide the
requisite information in a descriptive
format and the data in a disaggregated
format.
Changes: None.
Applicability of Education, and
Experiential Requirements to
Rehabilitation Counselors
361.18(c)( 1))
Comments: We received many
comments regarding proposed
361. 18(c)( 1)( ii),which requires DSUs
to establish, as part of a CSPD,
personnel standards for rehabilitation
professionals and paraprofessionals that
include educational and experiential
requirements. Most of these commenters
opposed applying this provision to
vocational rehabilitation counselors,
and many of these commenters stressed
the importance of maintaining the
education and experience requirement
under prior § 361. 18( c)( 1)( i) for
vocational rehabilitation counselors.
Specifically, these commenters stated
that vocational rehabilitation counselors
should be required to meet a national or
State -approved or recognized
certification, licensing, registration, or
other comparable requirements for the
area in which such personnel are
providing vocational rehabilitation
services. These commenters strongly
urged the Department to require that
vocational rehabilitation counselors
meet that higher standard.
Similarly, many commenters urged
that the training and education received
in a master' s degree program in
rehabilitation counseling relate in a
necessary, direct, and practical way to
the work vocational rehabilitation
counselors do each day. These
commenters asserted that rehabilitation
counseling is a professional career that
requires extensive knowledge in a very
broad arena. In addition, several
commenters stressed that the
educational requirements applied to
vocational rehabilitation counselors
must be sufficient to ensure that they
have the following knowledge: medical
and psychological aspects of disability,
counseling and guidance strategies,
vocational assessment, person -centered
planning, cultural competency, career
services, and building relationships
with businesses who would like to hire
or retain individuals with disabilities.
These commenters maintained that all
of these skills are available to
individuals pursuing a master' s degree
in a program accredited by the Council
on Rehabilitation Education.
Several commenters maintained that
section 101( a)( 7)( B)( ii) of the Act, as
amended by WIOA, and proposed
361. 18( c)( 1)( ii), which set education
and experience requirements of a
baccalaureate degree in an additional
field of study such as business
administration, human resources, and
economics, do not apply to vocational
rehabilitation counselors. These
commenters strongly believe that since
a national certification exists for
certified rehabilitation counselors this
provision is inapplicable for vocational
rehabilitation counselors. Some
commenters stated that because there
was no legislative report accompanying
WIOA, the Department cannot be
certain that Congress intended that the
lower education and experience
requirements in section 101( a)( 7)( B)( ii)
of the Act, as amended by WIOA, apply
to vocational rehabilitation counselors.
One commenter stated that including a
business degree in the credentials
required for vocational rehabilitation
personnel, with respect to qualified
vocational rehabilitation counselors,
was intended to be supplemental to a
Master' s degree in rehabilitation
counseling and does not supplant the
highest standard in the State, which in
many States is the master' s degree in
rehabilitation counseling. Another
commenter stated that since individuals
with less experience could be paid less,
they potentially could make up a larger
portion of the DSU staff. If done
correctly, the commenter stated that this
could be a great opportunity to add
individuals with business and
marketing backgrounds to the DSU staff.
This could also potentially help reduce
caseloads, since recipients who need
assistance only with placement could go
straight to the marketing/business staff.
Some commenters observed that the
new requirements appear to be based on
an assumption that a counselor should
be able to work with both consumers
and employers, as opposed to a team
approach where experts in counseling
work with consumers and business
experts work with employers.
One commenter supported the
education and experience requirements
in proposed § 361. 18( c)( 1)( ii) because of
the heightened emphasis on employer
engagement and competitive integrated
employment outcomes. This commenter
stated that the proposed changes will
provide an opportunity for DSUs to
adjust the level of expertise and
commitment of its personnel. The
commenter also stated that establishing
these educational requirements and
work experiences will ensure that
program participants are receiving
quality services.
Discussion: We appreciate the many
comments we received regarding CSPD
and the changes proposed in
361. 18( c)( 1)( ii).We appreciate the fact
that CSPD is an important issue for
DSUs and their personnel and that it
represents a cornerstone of the VR
program, ensuring that individuals with
disabilities receive services from staff
who are qualified to meet their
individual needs.
As stated in the NPRM, proposed
361. 18( c)( 1)( ii) mirrors section
101( a)( 7)( B)( ii) of the Act, as amended
by WIOA, with regard to minimum
education and experience requirements
for vocational rehabilitation personnel.
In so doing, § 361. 18( c)( 1)( i),both
proposed and final: (1) Retains language
in prior § 361. 18( c)( 1)( i) regarding
national and State -approved
55654 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
certification and licensure requirements
since this requirement remained
unchanged by WIOA; (2) incorporates
new educational and experiential
requirements in proposed
361. 18( c)( 1)( ii) that range from a
baccalaureate degree with at least one
year of relevant experience to a master' s
or doctoral degree; and ( 3) deletes the
requirement in prior § 361. 18( c)( 1)( ii)
that DSUs must re-train staff who do not
meet their established personnel
standards.
We agree with commenters that the
higher standard in section 101( a)( 7)( B)( i)
of the Act and final § 361. 18( c)( 1)( i),
which had been the only personnel
standard for vocational rehabilitation
personnel prior to the enactment of
WIOA, has served a critical role in
ensuring that well-qualified staff are
available to provide vocational
rehabilitation services to individuals
with disabilities. We understand other
lower education or experience
requirements may not prepare DSU staff
in the same manner as a national or
State -approved certification or licensure
for vocational rehabilitation counseling
could. As commenters indicated,
programs leading to such national or
State -approved certification or licensure
in vocational rehabilitation provide
vocational rehabilitation counselors
with critical knowledge and
understanding of medical and
psychological aspects of disability,
counseling and guidance strategies,
vocational assessment, person -centered
planning, cultural competency, career
services, and building relationships
with businesses who would like to hire
or retain individuals with disabilities.
However, section 101( a)( 7)( B) of the Act,
as amended by WIOA, requires that
States establish and maintain personnel
standards, which apply to all vocational
rehabilitation professionals and
paraprofessionals employed by the DSU,
including both national or State -
approved certification and licensure
requirements in section 101( a)( 7)( B)( i)
and the education and experience
requirements in section 101( a)( 7)( B)( ii).
This means that the personnel standards
apply to vocational rehabilitation
counselors and all other vocational
rehabilitation professionals and
paraprofessionals. There is nothing in
the statute that limits the higher
standard to vocational rehabilitation
counselors. Nor is there any statutory
basis to preclude a DSU from hiring a
vocational rehabilitation counselor who
meets the education and experience
requirements of section 101( a)( 7)( B)( ii)
but not a national or State -approved
certification or licensure requirement.
Final § 361. 18( c)( 1) is consistent with
the Act as amended by WIOA.
We also agree with the commenters
who supported the proposal, and
believe that the new education and
experience requirements set forth in
section 101( a)( 7)( B)( ii) of the Act, as
amended by WIOA, and final
361. 18( c)( 1)( ii) are beneficial to the VR
program and the individuals they serve.
Changes: None.
Applicability of Standards to Other
Personnel
Comments: Some commenters stated
that the lower educational standards
might better be applied to other
vocational rehabilitation personnel (e.g.,
business relations specialists, placement
specialists, etc.). One commenter said
other positions (such as financial
officers, legal counsel, DSU program/
division directors, and policy/regulatory
compliance officers) should be subject
to requirements regarding the
development of skills and knowledge
and should be required to complete and
maintain a certain amount of training
regarding the provision of rehabilitation
services.
Discussion: Consistent with our
interpretation of the CSPD requirements
in a NPRM published pursuant to the
1998 Amendments to the Act, we
interpret the Act to require the DSU
establish and implement appropriate,
certification -based standards for all
categories of professionals and
paraprofessionals needed to conduct the
VR program. However, 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 (65 FR
10619, 10622- 10623 ( Feb. 28, 2000)).
This requirement under the Act, as
amended by WIOA, applies to all
personnel positions listed under the
State' s vocational rehabilitation
classification as it had under WIA. The
specific positions covered under such a
classification will vary from State to
State. With respect to financial officers
and legal counsel, States have the
discretion to determine whether they
are classified as vocational
rehabilitation professionals or
paraprofessionals since their
classification varies between States. In
many States, these positions are not
dedicated solely to the DSU and its VR
program, but rather are more general
State personnel positions. We would
agree that program and division
administrators and policy and
regulatory compliance officers for the
DSU' s VR program must be covered by
the requirement in final § 361. 18( c)( 1).
Similarly, we would agree that the VR
program director or administrator would
be covered by the CSPD requirements of
section 101( a)( 7)( B) because that
position would be considered a
vocational rehabilitation professional or
paraprofessional. The Secretary believes
that the individual who oversees
vocational rehabilitation professionals
and paraprofessionals should satisfy at
least the minimum education and
experience requirements applicable to
all vocational rehabilitation
professionals and paraprofessionals.
We appreciate the comment regarding
the personnel standards and their
applicability to vocational rehabilitation
paraprofessionals. Neither the Act nor
these final regulations distinguish
between vocational rehabilitation
professionals and paraprofessionals. By
the same token, neither the Act nor
these final regulations define what
constitutes a vocational rehabilitation
professional or paraprofessional as
opposed to an administrative staff
position providing clerical or other
support to rehabilitation personnel.
The distinction among vocational
rehabilitation professionals,
paraprofessionals, and administrative
e.g., clerical and other support) staff are
made at the State level in accordance
with State hiring policies and
procedures. Neither section 101( a)( 7)( B)
of the Act, as amended by WIOA, nor
final § 361. 18( c)( 1) require the DSU to
develop personnel standards for the
hiring of staff who are not classified as
vocational rehabilitation professionals
or paraprofessionals. However, both the
Act and these final regulations require
a DSU to develop personnel standards
for the hiring of vocational
rehabilitation professionals and
paraprofessionals that are consistent
with the standards set forth in section
101( a)( 7)( B) of the Act, as amended by
WIOA, and final § 361. 18( c)( 1).
As such, if a national or State -
approved standard— or, in the absence
of such standards, other comparable
requirements (e.g., State personnel
standards)— exists for such
paraprofessional this should be the
standard for such personnel. However,
if no such standard exists or the DSU is
unable to hire staff that meet such
standard, then the DSU must, under
final § 361. 18( c)( 1)( ii), hire vocational
rehabilitation paraprofessionals who
meet standards consistent with the
education and experience levels
established in the Act and these final
regulations.
Changes: None.
55655Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
De-Professionalization and Diminution
of Vocational Rehabilitation Personnel
Comments: Several commenters
stated that the proposed education and
experience requirements seemingly
discount the role and impact of the
professional rehabilitation counselor
working with eligible consumers to
obtain competitive integrated
employment. Many stated that proposed
361. 18(c)( 1)( ii)(A)(1), which permits a
baccalaureate degree plus one year of
relevant experience, serves as a
guideline to promote the de-
professionalization of the expertise level
associated with rehabilitation
counseling and the professional
provision of qualified services for
individuals with disabilities. The
commenters asserted that an individual
with a baccalaureate degree, some
related work experience, or volunteer
work, is not equivalent to a master' s
degree level graduate who is a qualified
counselor licensed to practice
counseling.
Further, at least one commenter
expressed concern that the flexibility
offered by the new education and
experience requirements could lead to
the unintended diminution of a
vocational rehabilitation workforce able
to meet the needs of a consumer
population with significant disabilities,
which is its major focus, especially as
public resources diminish. The
commenter encouraged the Department
to work with DSUs and academic
institutions to ensure this diminution
does not occur. The commenter stated
that some of the degrees listed under
these personnel standards would be
appropriate for specialized titles such as
business relations specialists" but may
not be appropriate for vocational
rehabilitation counselors.
Discussion: Prior § 361. 18( c)( 1)( ii)
permitted DSUs to hire individuals who
did not meet the national or State -
approved standard so long as the agency
provided training to enable the
individual to reach that higher standard.
While WIOA deleted the provision that
allowed DSUs to hire individuals at a
lower standard so long as additional
training was provided so that the staff
person could eventually satisfy the
national or State -approved standard,
DSUs under final § 361. 18( c)( 1)( ii) must
ensure that individuals who do not meet
the higher standard satisfy certain
statutorily -required minimum
standards. Looking at the new
requirements in this way, the new
educational and experiential
requirements merely set minimum
hiring standards, which previously had
been left at the DSU' s discretion. In this
manner, we disagree with commenters
that the new provisions of section
101( a)( 7)( B)( ii) of the Act, as amended
by WIOA, and final § 361. 18( c)( 1)( ii)
promote the de-professionalization of
the vocational rehabilitation counselor
or the diminution of the knowledge and
skills needed to meet the vocational
rehabilitation needs of individuals with
disabilities.
We believe the education and
experience requirements set forth in
section 101( a)( 7)( B)( ii) of the Act, as
amended by WIOA, and final
361. 18( c)( 1)( ii) enable DSUs to hire
personnel in such a manner that results
in an expansion of qualifications of staff
available to provide vocational
rehabilitation services. For example, the
new education and experience
requirements could enable DSUs to
expand the number of staff trained to
provide certain services critical to
meeting the employment needs of
individuals with disabilities and
employers, such as employment
specialists or job placement specialists,
thereby increasing opportunities for
employer engagement and the
achievement of competitive integrated
employment outcomes by individuals
with disabilities. This broader range of
acceptable education and experience
could lead to a more diverse workforce
in VR agencies.
Looking at the new personnel
standard requirements in this way, they
could be viewed as a means of enabling
DSUs to expand the range of qualified
personnel available to provide certain
services in-house rather than having to
contract for those services. DSUs could
employ sufficient qualified personnel to
work in teams to meet the holistic needs
of the individuals served by the VR
program, ranging from specific
disability -related services to
employment-related services. We
believe this interpretation is consistent
with the plain meaning of the statutory
requirements in section 101( a)( 7)( B) of
the Act, and the heightened emphasis
throughout WIOA on employer
engagement and the achievement of
competitive integrated employment
outcomes.
Changes: None.
State Job Classification Minimum
Qualifications
Comments: One commenter noted the
various degrees listed (e.g., psychology
and business) in section 101( a)( 7)( B)( ii)
of the Act, as amended by WIOA, and
proposed § 361. 18( c)( 1)( ii) are not
typically seen for the same position
when State governments are developing
classification minimum qualifications
because each of the degrees provide
individuals with different skill sets. The
commenter added that, while a DSU
would need personnel with skill sets
from many of the degrees listed, it
would be unreasonable to expect that a
single individual would have expertise
in two or more specialized skill sets.
Some commenters stated that the
standards in proposed § 361. 18( c)( 1)
should be sufficient for recruitment of
vocational rehabilitation counselors, but
that the use of " and" between proposed
361. 18( c)( 1)( i) and 361. 18( c)( 1)( ii)
seems to imply that additional
standards must be used. They expressed
concern that requiring at least one year' s
paid or unpaid work in the field would
make it challenging for DSUs to recruit
qualified counselors directly from long-
term training programs.
Discussion: We disagree with
commenters that the degrees listed in
section 101( a)( 7)( B)( ii) of the Act, as
amended by WIOA, and proposed
361. 18( c)( 1)( ii) necessarily will pose
problems for the development of
minimum qualifications within State job
classification. While we agree that it
would be unreasonable for a single job
position to list each of those degrees as
a minimum qualification, it is
reasonable to post various job positions
within the classification for vocational
rehabilitation counselors. As stated
previously, we believe the amendments
to WIOA provide DSUs with an
opportunity to employ other personnel,
such as business specialists or job
placement specialists, who could
complement the critical work performed
by vocational rehabilitation counselors.
In so doing, DSUs could minimize the
need to contract for these services.
While final § 361. 18( c)( 1)( ii) permits
DSUs to hire individuals with a variety
of degrees, there is no requirement or
expectation that a vocational
rehabilitation counselor or any other
vocational rehabilitation professional or
paraprofessional employed by the DSU
be an expert in more than one area.
The education and experience
requirements of section 101( a)( 7)( B)( ii)
of the Act apply only in those
circumstances when the DSU is not able
to hire vocational rehabilitation
professionals and paraprofessionals who
satisfy a national-or State -approved
certification or licensure standard.
Vocational rehabilitation counselors
graduating from long-term training
programs would meet a national or
State -approved standard and could be
hired in accordance with personnel
standards established under section
101( a)( 7)( B)( i) of the Act, which does
not require that the individual satisfy
minimum experience requirements.
Changes: None.
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Additional or Substitute Qualifications
Comments: Two commenters
recommended revising proposed
361. 18( c)( 1)( ii)(B) by inserting a work
experience requirement similar to that
required for individuals with a
baccalaureate degree as set forth in
proposed § 361. 18( c)( 1)( ii)(A)(1).
Many commenters requested the
proposed regulations be revised to
include a new provision in
361. 18( c)( 1)( ii) to allow a complement
of work experience, in addition to
specialized training or certification
through either advanced higher
education or through a legitimately
recognized association that provides
specialized training when working
specifically with individuals who
possess unique barriers to independence
and require unique training, such as
individuals who are blind.
Another commenter recommended
that proposed § 361. 18( c)( 1)( ii) be
revised to allow years of experience to
substitute for the identified degree( s) for
paraprofessionals, which could create
reasonable flexibility. A requirement of
years of experience, coupled with staff
development required by the
regulations, would assure that
paraprofessionals are highly qualified to
provide appropriate services to
individuals with disabilities.
Discussion: We appreciate the
suggestion made by two commenters
adding minimum paid or unpaid work
experience requirements for DSU
personnel hired at the master' s or
doctoral level. We also appreciate the
many comments recommending that, in
addition to satisfying a national or State -
approved standard, work experience be
required for those personnel who work
with individuals with significant
barriers to employment, such as
individuals who are blind or visually -
impaired.
While we agree work experience can
be valuable, section 101( a)( 7)( B) sets
forth explicit requirements for a DSU' s
personnel standards, including
requirements related to minimum
educational and experiential
requirements. Given the explicit nature
of these requirements, there is no
statutory basis to require different or
additional personnel standards in final
361. 18( c)( 1).
Changes: None.
Interplay Between National or State -
approved Certification or Licensure
Standards and Minimal Educational
and Experiential Requirements
Comments: Many commenters
requested clarification regarding the
interplay between the requirement that
a State' s CSPD be consistent with a
national or State -approved certification
or licensure standard in proposed
361. 18( c)( 1)( i) and the minimal
educational and experiential
requirements in proposed
361. 18( c)( 1)( ii). Most of these
commenters did not support the
proposed regulatory language, stating
that it is confusing to have two sets of
standards for vocational rehabilitation
personnel. A few commenters
questioned whether a DSU may choose
between the two standards, i.e. choose
to maintain the higher standard of
361. 18( c)( 1)( i) or the lower standard of
361. 18( c)( 1)( ii). Similarly, some
commenters requested clarification
about whether the DSUs can maintain
their current personnel standards
consistent with applicable national or
State -approved or recognized
certification, licensing, or registration
requirements. These commenters were
concerned that including lower
standards in the regulations would force
DSUs to lower their standards. Further,
some commenters stated that most
States have a minimum personnel
standard that is greater than what is
being proposed and asked whether the
DSUs will have to hire vocational
rehabilitation personnel at the lower
educational standard.
Discussion: Contrary to the
suggestions made by several
commenters, the personnel standards in
section 101( a)( 7)( B)( i) and (ii) are
separate and distinct requirements.
Therefore, DSUs may not choose to
implement one and not the other but,
rather, must develop both standards.
Under section 101( a)( 7)( B)( i), States
must continue to develop personnel
standards that are consistent with
applicable national or State -approved
certification or licensure requirements,
as well as develop personnel standards
that satisfy minimum education and
experience requirements. As has always
been the case, CSPD standards do not
dictate whom a State may or may not
hire. Hiring is solely a State matter.
Instead, the CSPD standards simply set
parameters for the standards a State
must use in establishing its hiring
procedures. There is nothing in the Act
or these final regulations to preclude a
DSU from continuing to hire vocational
rehabilitation professionals and
paraprofessionals that satisfy the higher
standard. However, in hiring
individuals who do not meet a national
or State -approved certification or
licensure standard, DSUs must hire
individuals who meet the educational
and experiential requirements set forth
in section 101( a)( 7)( B)( ii).These
individuals must have at least a
baccalaureate degree in a specified field
of study plus one year of relevant
experience, or a master' s or doctoral
degree in one of the fields specified.
Further, if a vocational rehabilitation
counselor is hired under the standard
set forth in final § 361. 18( c)( 1)( i) ( e.g., a
standard consistent with a national or
State -approved standard), that
vocational rehabilitation counselor is
not required to meet the education or
experience requirements set forth in
final § 361. 18( c)( 1)( ii) as well. There is
no requirement that an individual meet
both personnel standards set forth in
final § 361. 18( c)( 1).
Changes: None.
Succession Planning
Comments: One commenter suggested
that the CSPD requirements should
address succession planning at the
administrative level. The commenter
recommended that the final regulations
be revised to incorporate CSPD
requirements to address the void in
administrative skill and knowledge
created in DSUs by retirements.
Discussion: We agree with the
commenter' s concern that DSUs face a
significant loss of knowledge and skills
as key personnel retire. We note that
DSUs are required, under final
361. 18( d)( 2)( iii), to include succession
planning in their staff development
plans when developing personnel
standards and providing on-going
training.
Changes: None.
Re -Training of Staff Not Meeting
Personnel Standards
Comments: Several commenters
expressed serious concerns about the
elimination of the requirement to re-
train staff who are not meeting the
DSU' s personnel standards for qualified
staff, in prior § 361. 18( c)( 1)( ii).
Discussion: While we appreciate the
concern expressed by commenters
regarding the deletion of the regulatory
requirement for the DSU to provide re-
training to personnel who do not meet
the DSU' s personnel standards, the
statutory requirement for re-training,
which had been contained in section
101( a)( 7)( B)( ii) of the Act, as amended
by WIA, has been deleted by the
amendments made by WIOA. Despite
the deletion of the regulatory
requirement, there is nothing in the Act
or these final regulations that prohibits
a DSU from making the decision to re-
train staff as the agency deems
appropriate. However, there is no
statutory basis for the Department to
require such re-training in these final
55657Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
regulations given the specific deletion of
that statutory requirement.
Changes: None.
Standards of Personnel Development—
Other Comparable Requirements
361.18(c)( 1))
Comments: Several commenters
recommended that the Department
define " other comparable
requirements," which is included in the
personnel standard in section
101( a)( 7)( B)( i) of the Act and proposed
361. 18( c)( 1)( i) and applies if there are
no applicable national, State -approved,
or recognized certification, licensing, or
registration requirements. The
commenters recommended that " other
comparable requirements" should
include competence in counseling and
guidance, knowledge and application of
the medical and psychological aspects
of disability, knowledge and
implementation of vocational testing,
working knowledge and integration of
labor market data and disability
employment policy, and providing the
services required to develop and
implement individualized career plans
that assist persons with disabilities in
successful employment in a competitive
integrated work environment.
Discussion: Section 101( a)( 7)( B)( i) of
the Act and final § 361. 18( c)( 1)( i)
require a DSU to develop personnel
standards that are consistent with any
national or State -approved or
recognized certification, licensing, or
registration requirements, or, in the
absence of these requirements, other
comparable requirements (including
State personnel requirements) that
apply to the profession or discipline in
which that category of personnel is
providing vocational rehabilitation
services. While we agree with
commenters that " other comparable
requirements" could include any of the
areas suggested, we disagree that the
final regulations should define the
phrase. This phrase provides DSUs with
maximum flexibility when developing
personnel standards by enabling DSUs
to modify personnel standards as
relevant credentials evolve.
Changes: None.
Meaning of "A 21st Century
Understanding of the Evolving Labor
Force and the Needs ofIndividuals With
Disabilities"
Comments: Many commenters asked
for clarification of what is meant by a
21st century understanding of the
evolving labor force and the needs of
individuals with disabilities, as used in
section 101( a)( 7)( B)( ii) of the Act, as
amended by WIOA, and in proposed
361. 18( c)( 2)( ii).Many commenters
stated that the list of examples of
relevant personnel skills in proposed
361. 18( c)( 2)( ii) either did not help
clarify the meaning or was incomplete.
Some commenters stated that the list
represented skills more oriented to the
medical models of the past rather than
the employer focus required today. One
commenter asserted that the
congressional intent behind the
requirements for a 21st century
understanding included a focus on
employment; an understanding of
economic and job market trends,
business management, and operations;
and meeting the needs of local and
regional employers.
Many commenters who thought the
list of examples was incomplete
suggested additions. Some were
suggested because the commenters
stated that customary, but critical, skills
for vocational rehabilitation counselors
had been left out of the list. Some
brought a more modern focus to the
traditional topic, refining knowledge of
medical and psychological aspects of
disability to include more employment -
focused use of such knowledge to
determine functional limitations and the
vocational implications of these
functional limitations on employment
planning and workplace
accommodations.
Other commenters provided lists of
skills that represented areas in which
the focus is on greater knowledge of the
world of work, including labor market
trends and various sources of labor
market information and its use in
selecting vocational goals and
developing individualized plans for
employment. Some commenters
suggested that using information about
job requirements, labor market trends,
and other labor market information
would help build relationships with
employers through greater knowledge of
their businesses and their employment
requirements and would also help in job
development and job placement efforts.
One group of commenters suggested
that a recent U.S. Government
Accountability Office (GAO) study,
which identified gaps in the knowledge
of vocational counselors employed by
the U.S. Department of Veterans Affairs,
could serve as a starting point for
developing a list of skills needed for the
21st century vocational rehabilitation
counselor employed by the DSU. Some
skills included familiarity with Bureau
of Labor Statistics data, the Dictionary
of Occupational Titles, and the
Department of Labor' s O* NET
occupational system; vocational testing
and assessment; job accommodations;
training in the Americans with
Disabilities Act (ADA) and other
employment discrimination laws;
vocational implications of various
disabilities, including traumatic brain
injury, post-traumatic stress syndrome,
mental illnesses, and autism;
employment plan development; Social
Security work incentives, and the Ticket
to Work and Self -Sufficiency program;
and knowledge of disability programs in
the State and local area, including
independent living programs.
One commenter suggested that the six
areas of knowledge and skills in
proposed § 361. 18( c)( 2)( ii) could be
used to ensure vocational rehabilitation
personnel have a 21st century
understanding. The commenter stated
the examples focused on critical
knowledge domains and closely mirror
the knowledge domains required for
accreditation by a vocational
rehabilitation counseling program.
However, the commenter expressed
concern that the process of evaluating
whether candidates have the necessary
knowledge and skills would be
insufficient without the assurance that
the candidate graduates from an
accredited vocational rehabilitation
counseling program. The commenter
recommended that the Department
recognize graduates from accredited
programs as having the knowledge,
skill, and experience requirements that
are necessary to provide high quality
services to individuals with disabilities.
Discussion: We appreciate the many
comments and suggestions we received
about the skills and knowledge essential
to ensuring a 21st century
understanding of the evolving labor
force and the needs of individuals with
disabilities under section 101( a)( 7)( B)( ii)
of the Act, as amended by WIOA, and
in proposed § 361. 18( c)( 2)( ii). Lacking a
widely -accepted definition of the term,
we proposed several examples in the
regulations to help clarify its meaning.
Most commenters, however, stated that
the examples in proposed
361. 18( c)( 2)( ii) were not sufficient
because they did not include a clear
focus on employment or emphasize the
use of the most up-to-date techniques.
In considering what changes to make
in the examples, we first recognized that
the requirements for a 21st century
understanding apply to knowledge and
skills relevant to working with both
employers and individuals with
disabilities. We also believe that " 21st
century" refers to maintaining a cutting
edge, state-of-the-art approach to
whatever topic is included in the list,
not merely maintaining activities at
traditional, established levels. These
underlying principles governed the
review, selection, and wording of the
examples.
55658 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
We looked at traditional topic areas
that are still necessary for working with
individuals with disabilities and
employers, with the intent to add
language that suggests use of
contemporary practices or that adds
emphasis on an employment focus. For
example, we replaced the previous
language about knowledge of medical
and psychological aspects of disability
with language about knowledge of the
functional limitations of various
disabilities and the vocational
implications of these functional
limitations for employment.
We considered new approaches to
learn about the world of work, large-
scale employer needs ( e.g., labor market
trends and occupational shortages),
small-scale employer needs ( e.g.,
specific job requirements, soft skill
requirements), and ways to use
information differently to inform
traditional vocational rehabilitation
practices (such as using labor market
information to assist in developing
vocational goals and employment plans,
while providing informed choice). We
also took into consideration the GAO
report titled " VA Vocational
Rehabilitation and Employment: Further
Performance and Workload
Management Improvements Are
Needed" ( GAO -14-61) published
January 14, 2014, as well as various lists
of suggested examples provided by
national organizations and endorsed by
other commenters. After considering all
of the comments and suggestions
received, we have amended the
examples in final § 361. 18( c)( 2)( ii). We
clarify that the term " apprenticeships"
as used in 361. 18( c)( 2)( ii)(D) does not
include Registered Apprenticeships.
In response to commenters asking
whether the " 21st century
understanding" requirement applies
only to vocational rehabilitation
counselors, section 101( a)( 7)( B) of the
Act, as amended by WIOA, and final
361. 18( c) require the DSU to develop
personnel standards that apply to all
vocational rehabilitation professionals
and paraprofessionals, not just
vocational rehabilitation counselors.
The revised list of examples set forth in
final § 361. 18( c)( 2)( ii) provides a
comprehensive, but not exhaustive, list
of skills necessary for achieving
employment outcomes in the 21st
century. Because we realize that States
may choose to employ staff in a variety
of positions, the skills listed may be
applicable to various positions in
differing ways.
Finally, as we described earlier in the
Applicability of Education, and
Experiential Requirements to
Rehabilitation Counselors
361. 18( c)( 1)) section, we agree with
the comment that accredited programs
provide vocational rehabilitation
counselors with knowledge and skills
critical to providing vocational
rehabilitation services to individuals
with disabilities. However, section
101( a)( 7) of the Act does not specify that
individuals pursuing employment as
vocational rehabilitation counselors
must obtain an undergraduate or a
graduate -level degree in rehabilitation
counseling from accredited programs
and final § 361. 18( c) mirrors the Act in
this respect. In addition, we recognize
that other DSU personnel, such as
employment specialists and job
placement specialists, serve a critical
role in working with employers and
individuals with disabilities. The
Secretary believes all vocational
rehabilitation professionals and
paraprofessionals must have the
knowledge and skills necessary to
satisfy the " 21st century understanding"
requirement.
Changes: We have substantially
revised the examples in final
361. 18( c)( 2)( ii) to provide a more
robust list of the skills and knowledge
needed to meet the needs of employers
and individuals with disabilities in the
evolving 21st century labor market.
Staff Development (§ 361.18( d))
Comments: Several commenters
requested clarification regarding
proposed § 361. 18( d)( 1)( i), which
requires, as part of the DSU' s system of
personnel development, training
implemented in coordination with
entities carrying out State programs
under section 4 of the Assistive
Technology Act of 1998 ( 29 U. S. C.
3003). Some of these commenters asked
whether the purpose of this provision is
to require those entities to provide the
training to the DSUs. If so, the
commenters requested that the
Department revise proposed
361. 18( d)( 1)( i) to make that intent
clear. These commenters also sought
clarification on how the training is to be
coordinated with the State' s assistive
technology program. Other commenters
thought a Federal " training fund"
source should be made available for the
training, regardless of who provides it.
Still other commenters stated that
proposed § 361. 18( d)( 1)( i) should be
revised to require that the DSUs fund
the entities carrying out the State' s
assistive technology program to provide
this training.
Many commenters expressed
concerns about insufficient training
funds to meet the training needs of
vocational rehabilitation personnel and
requested that the Department require
DSUs to allocate training funds for any
required CSPD training. The
commenters were further concerned that
the potential hiring of staff at the
baccalaureate or higher degree in a
discipline other than vocational
rehabilitation counseling would
increase the need for training in order
to ensure these personnel have solid
knowledge of the VR program. Despite
this expected increased need for
training, DSUs will face reduced
financial resources because of the
elimination of the In -Service Training
Grant program by WIOA. Therefore,
these commenters were concerned that
DSUs would allocate less funding for
staff development training, certification
fees, and other related expenses. One
commenter requested that the
Department provide training funds to
each DSU to assist in providing staff
development and personnel training in
the areas mandated by WIOA. Still
another commenter recommended that
the Department offer regional training
rather than onsite training through its
monitoring or technical assistance
process. The commenter said the
regional trainings could benefit a larger
group of personnel.
A few commenters recommended that
proposed § 361. 18( d) be revised to
require specific training areas for staff
development. For example, one
commenter stated that many vocational
rehabilitation counselors struggle to
identify appropriate service providers
for individuals with autism. The
commenter requested further guidance
from the Department on providing
vocational rehabilitation services to this
population in order to increase
opportunities for competitive integrated
employment.
Another commenter asked the
Department to require DSUs to include
in their agency planning and oversight
the substantial involvement of mental
health advocates, including individuals
who have personally experienced
mental illness, treatment, and recovery.
Similarly, another commenter
recommended that DSUs be required to
hire and train peer service providers
experienced in working with
individuals with mental illness who are
seeking vocational rehabilitation
services, thereby increasing the DSU' s
effectiveness in serving this population.
Still another commenter recommended
that staff development include caseload
management training, including
implementation standards, measures,
techniques, and strategies.
Another commenter stressed the
importance of coordinating personnel
development activities under the Act
and the IDEA. The commenter
55659Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
recommended that State and local
education agencies and DSUs establish
memoranda of understanding on
coordinating personnel development
activities. Yet another commenter
recommended that proposed § 361. 18( d)
require staff development to emphasize
the need for evolving skills, including
understanding the evolving labor
market, nondiscrimination laws, the
medical and psychosocial aspects of
various disabilities, and how this
understanding evolves over time.
Discussion: We appreciate the
comments seeking clarification of the
requirement that the DSU' s CSPD must
include assistive technology training for
vocational rehabilitation professionals
and paraprofessionals. Section
101( a)( 7)( A)(v)(I) of the Act was
amended slightly by WIOA, but not in
a manner that imposed additional
requirements for this particular training.
Therefore, final § 361. 18( d)(1)( i)
contains only technical changes from
the prior regulation, and there is no
statutory basis for the Department to
add new requirements regarding how
the training should be financed. Section
101( a)( 7)( A)(v)(I) of the Act, as amended
by WIOA, and final § 361. 18(d)(1)( i)
simply require DSUs to ensure their
vocational rehabilitation professionals
and paraprofessionals are adequately
trained. This must include a system for
the continuing education of personnel
in rehabilitation technology, and it must
include training implemented in
coordination with the entity carrying
out the State' s assistive technology
program. It is within the DSU' s
discretion to determine how and by
whom such training will be provided, so
long as the training is adequate.
Further, it is beyond the scope of the
Act and these regulations to mandate
that an entity, authorized under a
separate Federal law, such as the
Assistive Technology Act of 1998,
perform any action, including providing
the training described here. There is
also no separate Federal program from
which money may be given to DSUs to
pay for this training, as in-service
training funds were eliminated from the
Act by WIOA. However, the Act does
not prohibit DSUs from using title I VR
program funds to provide the training
directly or through a contract with the
entity providing assistive technology
services in the State.
There are many possible sources of
training on assistive technology and
several ways in which the DSUs may
coordinate with the State assistive
technology program entity. For example,
the DSU may select a trainer with input
from the State' s assistive technology
program entity, or the DSU and the State
assistive technology program entity may
jointly train DSU staff. Final
361. 18( d)( 1)( i) provides the DSU with
maximum flexibility to coordinate with
the assistive technology program entity
in the manner it deems appropriate.
While we understand the limited
financial resources available to DSUs,
there is no authority under the Act to
provide funding to DSUs for any of the
trainings required by section 101( a)( 7) of
the Act and final § 361. 18( d)( 1)( i). As
the commenters noted, WIOA
eliminated the In -Service Training Grant
program, which had been used by many
DSUs to provide staff development
training. Nonetheless, the Act has, and
continues to, permit DSUs to use title I
VR program funds to provide staff
development and training. Given the
availability of VR program funds for this
purpose, we disagree that DSUs
necessarily will allocate fewer resources
for this effort.
Finally, the Department will explore
options for providing staff development
trainings on a broader scale, including
regional training.
As section 101( a)( 7) of the Act is
specific about the training areas that
may be included for staff development,
there is no statutory basis for imposing
additional training requirements.
However, final § 361. 18( d)( 2) is
consistent with the Act in that it gives
DSUs maximum flexibility to use staff
development trainings that are specific
to each DSU' s needs. Nevertheless, we
understand the concerns raised by
commenters requesting training on
specific topics. We agree that serving
individuals with autism may raise many
complex issues, some of which are
addressed in an Institute on
Rehabilitation Issues Monograph on
rehabilitation of individuals with
autism spectrum disorders, which may
be found at: http:// vwwv.iriforum. org//
books.aspx.
While there is statutory authority
under section 101( a)( 21)( A)(i)(III) to
require DSUs to involve mental health
advocates in the agency' s planning and
oversight activities when the DSU has
an independent commission or council,
there is no specific statutory
requirement under section 101( a)( 7) that
DSUs hire mental health peer service
providers. Moreover, there is no
statutory basis under section
101( a)( 7)( A)(v) of the Act to require
caseload management be included in
staff development training. However,
there is nothing to preclude a DSU from
doing these things under § 361. 18( d)( 2)
if a need is identified by the DSU.
Finally, we agree with the commenter
regarding the need for coordinating staff
development between DSUs and State
and local education agencies. The Act,
as amended by WIOA, places
heightened emphasis on providing
vocational rehabilitation services to
students and youth with disabilities.
Although section 101( a)( 7) of the Act
does not require DSUs to enter into
memoranda of understanding with
educational agencies, final § 361. 18( f)
continues to mandate this coordination
as it has for many years in prior
regulations. We also agree that staff
development should emphasize the
evolving skills needed to provide
vocational rehabilitation services so that
individuals with disabilities may
achieve competitive integrated
employment in the evolving 21st
century labor market. Only with these
evolving skills will vocational
rehabilitation personnel be able to
engage effectively with employers in the
evolving labor market of the 21st
century. We believe the staff
development requirement set forth in
final § 361. 18( d)( 1) and ( 2) covers these
skills needed in the 21st century
evolving labor market.
Changes: None.
Training Based on the Needs of the DSU
Comment: None.
Discussion: After further
Departmental review, we have
determined proposed § 361. 18( d)( 2)
contained a drafting error by
inadvertently using the word " should"
rather than " must." The regulation has
used the term " must" since final
regulations were published in 1997,
with regard to the specific training areas
for staff development. The specific
training areas " must" be based on the
needs of the DSU. Final § 361. 18( d)( 2)
reflects the correct wording, and this
change in these final regulations
represents no change in the requirement
for DSUs because the provision now
reads as it has since 1997.
Changes: Final § 361. 18( d)( 2) has been
changed to require training areas for
staff development be based on the needs
of the DSU, as is true in prior
regulations.
Public Participation Requirements
361. 20)
Public Hearings for Changes in an Order
of Selection
Comments: Several commenters
supported the changes to the prior
regulations in proposed § 361. 20 that
outline the requirements for public
notice and participation prior to the
adoption of any substantive policies or
procedures governing the provision of
vocational rehabilitation services under
the State plan, including substantive
55660 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
amendments. Proposed § 361. 20
clarifies through descriptive examples
the distinction between substantive and
administrative changes to VR program
rules, policies, and procedures. While
substantive changes" trigger the
requirement that the designated State
agency provide notice and conduct a
public meeting, " administrative
changes" typically do not. These
commenters stated that the proposed
regulation clarifies and supports a more
rigorous and open channel of
communication between the designated
State agency, the SRC, and community
stakeholders.
Nonetheless, several commenters
requested further clarification. One
commenter asked if a DSU must
conduct a public meeting every time it
opens or closes a priority category under
an order of selection.
Discussion: We appreciate the support
for, as well as the requests for further
clarification of, proposed § 361. 20,
which distinguishes between those
substantive changes requiring public
meetings and those administrative
changes that do not.
Final § 361. 20( a)( 2)( v) states that
adopting or amending policies
implementing an order of selection
constitutes a substantive change that
requires public input. However, it is the
Department' s long-standing policy that a
DSU need not conduct a public meeting
each time it opens or closes a priority
category if doing so is consistent with
the information describing the
implementation of the order of selection
in that agency' s currently approved
State Plan (now the VR services portion
of the Unified or Combined State Plan).
By contrast, we believe that closing
one or more priority categories would be
a substantive change in the
administration of the VR program, and
would consequently trigger the
requirement to conduct a public
meeting if such change represents a
departure from the manner in which the
DSU has implemented the order of
selection under the approved State Plan.
For example, if a DSU implements an
order of selection and closes one or
more priority categories after one or
more years without closing priority
categories, we believe this action would
constitute a substantive change in the
administration of the VR program and
would require a public meeting.
Changes: None.
Public Meetings of the State
Rehabilitation Council
Comments: One commenter asserted
that meetings of the SRC should fulfill
the requirements of proposed § 361. 20,
since these are public meetings, and the
Council is charged with the
responsibility to review vocational
rehabilitation policies and other
substantive changes to the VR program.
The commenter stated that holding
public meetings in addition to the
Council' s meetings takes time away
from the central work of the DSU.
Discussion: Under section
101( a)( 16)( A) of the Act and final
361. 20, it is the responsibility of the
designated State agency, not the SRC, to
conduct public meetings. Therefore, the
Council' s meetings cannot satisfy, on
their own, the requirement of final
361. 20. Likewise, it is the
responsibility of the Council, and not
the designated State agency, to conduct
its meetings as required by section 105
of the Act and final § 361. 17. We
recognize that the designated State
agency works closely with the Council,
as it is required to do, with regard to
substantive changes made to policies
and procedures affecting the VR
program. Therefore, if the designated
State agency and the Council determine
it would be expedient and effective to
do so, they may use the regular or
special meetings of the Council as a
forum for obtaining input from the
Council and the public on substantive
changes in VR program rules, policies,
and procedures. If the designated State
agency chooses to conduct joint
meetings in this manner, they must
ensure that all requirements concerning
the conduct of public meetings in final
361. 20 are satisfied. We emphasize
that neither the designated State agency
nor the Council are required to conduct
joint meetings for the purpose of
gathering public input on substantive
changes to the administration of the VR
program under either final §§ 361. 17 or
361. 20, though both entities may find it
efficient to do so.
Changes: None.
Substantive and Administrative
Changes
Comments: A few commenters stated
that the distinction between those
changes in DSU rules, policies, and
procedures that require public comment
and those that do not was not clear in
the proposed regulation, and requested
further clarification.
Discussion: With respect to the
comments seeking further clarification
and examples of what constitutes a
substantive versus administrative
change, the commenters did not specify
what additional clarification was
needed, and so we can provide no
further examples. However, the lists of
examples in final § 361. 20( a)( 2) and
a)( 3) are not exhaustive; rather, they
illustrate some of the most common
substantive and administrative changes
contemplated by DSUs. We recognize
that States may contemplate many more
changes to their rules, policies, and
procedures implementing the VR
program than those identified in these
final regulations.
In addition, the Act, as amended by
WIOA, and these final regulations
provide significant flexibility to the
States in the manner in which they
administer the VR program and deliver
vocational rehabilitation services, and
States may adopt rules, policies, and
procedures governing the
administration of the program that best
suit their particular circumstances. As a
result, States may adopt rules, policies,
and procedures that vary widely from
one another, and we do not believe that
it is practicable to further clarify, or add
to, the examples listed in final
361. 20(a)( 2) and (a)( 3). While we
believe that final § 361. 20 provides
States with the guidance necessary to
determine if a potential change in rules,
policies, and procedures constitutes a
substantive change requiring a public
meeting, we encourage States to seek
guidance from the Department about
State specific changes.
Changes: None.
Public Comment Through Electronic
Means
Comments: One commenter asked if
publishing policy changes on a State
agency' s Web site and receiving public
comment and input at the Web site
constitutes a public meeting.
Discussion: The publication by the
DSU of a proposed change in rules,
policies, or procedures governing its
administration of the VR program on a
Web site does not constitute a public
meeting under section 101( a)( 16)( A) of
the Act or final § 361. 20. As used in
final § 361. 20( a), which requires public
meetings to be held throughout the
State, " public meeting" means a
gathering of people in a physical or
virtual (as in the case of
videoconferences or teleconferences)
location. Nonetheless, designated State
agencies can use postings on a Web site
and other innovative strategies to gather
valuable input from individuals with
disabilities, community rehabilitation
programs, and other stakeholders
affected by proposed changes in rules,
policies, or procedures.
Changes: None.
Requirements Related to the Statewide
Workforce Development System
361. 23)
Comments: Apart from comments on
the joint regulations proposed by the
Departments of Education and Labor
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implementing jointly administered
requirements for the one-stop delivery
system, one commenter requested that
we retitle § 361. 23 to improve the
reference to the joint regulations
governing the one-stop delivery system.
A second commenter expressed concern
that one-stop centers cannot meet the
needs of individuals who are blind or
visually impaired. The commenter did
not provide an explanation or
recommendation on how the regulations
could be revised to address this
concern.
Discussion: Final § 361. 23 provides a
cross-reference to the joint regulations
governing the one-stop delivery system
in subpart F of part 361. Therefore, we
believe there is no need to retitle or
amend the section further as suggested
by the commenter.
We appreciate the concern regarding
the availability of services at the one-
stop centers for individuals who are
blind or visually -impaired. While we
understand that there have been some
issues with respect to accessibility and
availability of services for individuals
with significant disabilities in the past,
section 121( b)( 1)( B)( iv) of WIOA
identifies the VR program as a core
partner of the workforce development
system. As such, DSUs and other core
partners of the workforce development
system are required to ensure the
programmatic and physical accessibility
of the services provided through the
one-stop centers. For further
information, see the joint regulations
governing the one-stop delivery system
published elsewhere in this issue of the
Federal Register. Furthermore, we
strongly encourage DSUs that serve
individuals who are blind or visually
impaired to ensure the needs of these
individuals are met through the one-
stop delivery system, as appropriate, by
strengthening their relationships with
other core programs through the
memoranda of understanding required
under section 121 of WIOA and the joint
regulations in subpart F. The Secretary
believes the strengthened relationships
between the VR program and other core
programs, as well as the delivery of
vocational rehabilitation services
directly at the one-stop centers, will
ensure the needs of individuals who are
blind or visually impaired are met.
Changes: None.
Cooperation and Coordination With
Other Entities (§ 361. 24)
General
Comments: Some commenters
expressed concerns about the difficulty
in establishing new collaborative
relationships, the lack of or limited
fiscal resources necessary to develop
and support collaboration, and
mechanisms for accountability and
transparency. One commenter indicated
that collaborative relationships do not
currently exist in their State and that
establishing them will require
additional money and will alter the
methodology for developing the State
Plan and the statewide needs
assessment.
A few commenters expressed concern
that proposed § 361. 24 contained
limited language regarding the contents
of agreements and the delineation of
issues that should be addressed. For
example, a few commenters remarked
that there was no requirement for an
agreement between the DSU and
Medicaid, and mental health agencies,
for people with psychiatric disabilities
needing long-term employment
supports funded by Medicaid. The
commenters suggested that cooperative
agreements include identification of
individuals needing extended supports,
referral mechanisms, the use of
Medicaid funds in providing extended
supports, how funds will be braided
between the DSU and agencies with
primary responsibilities to serve
individuals with specific disabilities,
and sources and criteria for providers of
extended supports. A similar comment
about waivers for home and community
based settings stressed that all parties
must work cooperatively at both the
policy and individual levels; however,
the commenter noted that the proposed
regulations merely require there to be an
agreement, without specifying
minimum contents of those agreements.
Discussion: We appreciate and
understand the concerns about the
difficulty in establishing new
collaborative relationships required
under the Act, the lack of or limited
fiscal resources necessary to do so, and
mechanisms for accountability and
transparency. However, DSUs have
extensive experience in meeting the
requirements under prior § 361. 24 for
cooperating and coordinating with other
entities, and we believe that this will
enable DSUs to implement the
collaboration requirements in the Act as
amended by WIOA.
We also appreciate the concerns that
proposed § 361. 24 contained limited
language regarding the contents of
agreements and the delineation of issues
that should be addressed. While section
101( a)( 11) specifies the content
requirements for only some of the
cooperative agreements, nothing in the
Act or final § 361. 24 precludes DSUs
from including specific content to
clarify the responsibility of
collaborating entities through these
agreements, and we strongly encourage
DSUs to do so. For example, DSUs may
enter into cooperative agreements with
Medicaid and mental health agencies for
people with psychiatric disabilities
needing long-term employment support
funded by Medicaid. Cooperative
agreements may include identification
of individuals needing extended
supports, referral mechanisms, the use
of Medicaid funds in providing
extended support, how funds will be
braided between DSUs and agencies
with primary responsibilities to serve
individuals with specific disabilities,
and sources and criteria for providers of
extended services.
Changes: None.
Cooperation and Collaboration With
Other Agencies and Entities
Comments: Many commenters
supported proposed § 361. 24, which
expanded the entities with whom the
DSU must collaborate and coordinate its
activities under the VR program and
several offered additional
recommendations.
One commenter especially supported
the coordination with employers. Other
commenters supported the requirement
for cooperative agreements with the
State Medicaid agency and the State
agency primarily serving people with
intellectual and developmental
disabilities; however, several
commenters noted that the State agency
responsible for providing mental health
services was not included in this
requirement and recommended its
inclusion.
Many commenters strongly
recommended that DSUs be required to
enter into formal interagency
agreements with AIVRS grant recipients
and with Tribal Education Agencies
TEAs) located in the State.
One commenter recommended that
the assurance in the VR portion of the
Unified or Combined State Plan specify
that the DSU coordinate activities with
other State agencies functioning as an
employer network under the Ticket to
Work and Self -Sufficiency Program
established under section 1148 of the
Social Security Act (42 U.S. C. 1320b-
19), and that the network be expanded
to include other agencies acting as
employer networks. A related comment
inquired whether there should be a
Federal Partnership Plus agreement
instead of individual State agreements.
A few commenters suggested that in
the development of the vocational
rehabilitation services portion of the
Unified or Combined State Plan, the
Department require the DSU to
collaborate with the lead entity
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implementing programs under the
Assistive Technology Act of 1998.
Discussion: We appreciate the
commenters' review, support, and
recommendations. Although some
commenters recommended adding the
State agencies responsible for providing
mental health services to the required
cooperative agreement with the State
Medicaid agency and the State agency
serving individuals with intellectual
and developmental disabilities, section
101( a)( 11)( G) of the Act does not require
such an agreement and, in fact, is very
specific about the entities with which
the DSU must develop interagency
agreements. For this reason, there is no
statutory basis for us to require the
DSUs to enter into formal cooperative
agreements with the State agencies
responsible for providing mental health
services.
However, we agree with commenters
that it could be beneficial to individuals
with disabilities to formalize
coordination of services between the
DSUs and the State agencies providing
mental health services. While final
361. 24(f) does not require a formal
cooperative agreement, as the
commenters suggest, there is nothing in
the Act or in this section that prohibits
a DSU from entering into a formal
cooperative agreement with the State
agencies providing mental health
services. Furthermore, section
101( a)( 11)( K) of the Act, as amended by
WIOA, and final § 361. 24( g) stress the
importance of the relationship between
the DSU and the State agencies
providing mental health services and
requires collaboration between them.
Similarly, while we agree with
commenters that coordination and
collaboration between DSUs and entities
holding section 14( c) certificates under
the FLSA and Tribal Education
Agencies could be beneficial for
different reasons and we encourage such
coordination and collaboration, there is
no basis under section 101( a)( 11) of the
Act to require this. However, Section
101( a)( 11)( H) of the Act and final
361. 24( d) do require the VR services
portion of the Unified or Combined
State Plan to include an assurance that
the State has entered into a formal
cooperative agreement with each AIVRS
grant recipient in the State.
Additionally, the Department does
not have the authority under section
101( a)( 11)( J) of the Act to expand the
requirement in final § 361. 24( i) to
include non -State agencies acting as
employer networks. The Act only
requires the DSU to coordinate with
State agencies serving as employment
networks under the Ticket to Work
program. While final § 361. 24( i) does
not impose the requirement on the
DSUs for non -State agencies serving this
function, there is nothing in the Act or
these final regulations that would
prohibit a DSU from doing so. Similarly,
the statute does not provide the
authority to develop a Federal
Partnership Plus agreement in lieu of
individual State agreements.
Section 101( a)( 11)( I) of the Act and
final § 361. 24( h) require an assurance in
the VR portion of the Unified or
Combined State Plan that the DSU and
the lead agency and the entity, if any,
implementing programs under section 4
of the Assistive Technology Act of 1998
have developed working relationships
and will enter into agreements for the
coordination of their activities,
including the referral of individuals
with disabilities to programs and
activities described in that section.
However, the Act does not require that
the DSU collaborate with the Assistive
Technology Act program in developing
the VR portion of the Unified or
Combined State Plan. Therefore, to add
this requirement in final § 361. 24( h), as
recommended, is not supported by the
Act. Also, nothing in the Act precludes
a DSU from seeking input from the
Assistive Technology Act program in
the development of the VR portion of
the Unified or Combined State Plan.
Changes: None.
Non -Educational Agencies
Comments: One commenter asked for
clarification of non -educational agencies
and requested examples.
Discussion: Section 101( a)( 11)( C) of
the Act, as amended by WIOA, and final
361. 24( a) require the DSU to describe
in the VR services portion of the Unified
or Combined State Plan its cooperation
with, and use of, a variety of entities,
including non -educational agencies
serving out-of-school youth. In response
to the commenter, the Act does not
define non -educational agencies.
Therefore, the Act and these final
regulations maximize flexibility because
the DSU is not limited to a list that may
or may not be applicable in any given
State. However, we believe that non-
educational agencies could include
public systems such as welfare services,
foster care, and the juvenile or criminal
justice systems serving out-of-school
youth. Non -educational agencies also
could include those State or local
agencies that administer the youth
formula grant program authorized under
title I of WIOA.
Changes: None.
Federal Agreements
Comments: A few commenters asked
whether we intend to establish working
arrangements or agreements with
agencies at the Federal level to assist
States in their efforts to implement
proposed § 361. 24, and one suggestion
was made to establish an interagency
coordinating workgroup to review any
working arrangements or agreements
with these agencies.
Discussion: The Department already
cooperates and works collaboratively
with its Federal partners. The Act does
not provide for formal arrangements at
the Federal level for the coordination,
collaboration, and cooperation required
by section 101( a)( 11) of the Act;
however, we believe that guidance and
technical assistance in the development
of agreements and cooperative
arrangements may be beneficial. Where
appropriate, the Department will work
collaboratively with Federal partners to
assist States.
Changes: None.
Guidance on the Braiding of Funds
Comments: Two commenters
suggested that Federal agencies
coordinate guidance regarding the ways
in which various funding streams may
be braided to help States implement
agreements to fully support individuals
with disabilities. One commenter
requested that the Department
emphasize transparency of coordination
efforts to track resources to ensure
accountability and sustainability.
Discussion: Each Federal program has
its own requirements for the
expenditure of funds, and States must
adhere to those requirements when
collaborating. Moreover, while the
Uniform Guidance, as set forth in 2 CFR
part 200, provides for the braiding and
blending of funds, it also requires that
funds must be spent solely on allowable
costs, namely those costs permitted
under and allocable to that program. A
cost is allocable to the extent that the
program receives a benefit relative to the
expenditure of those funds (in other
words, a proportionate share of those
expenditures). While the Department
exercises oversight of the expenditure of
funds by DSUs under the Act, we do not
have the authority to provide guidance
related to the expenditure of funds
provided by other Federal agencies or
programs. However, we support
transparency of coordination efforts to
track resources to ensure accountability
and sustainability.
Changes: None.
Requirements for Training
Comments: One commenter suggested
including joint training among the
activities in which the DSU must
coordinate with other entities.
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Discussion: There is no authority
under section 101( a)( 11) of the Act to
require the DSUs to add joint training to
the activities that the DSU must
coordinate with other entities, with one
exception. Joint training is required in
section 101( a)( 11)( H) with grant
recipients under the AIVRS program,
but not with the other entities in section
101( a)( 11) of the Act.
Changes: None.
Notification of the Client Assistance
Program
Comments: One commenter suggested
that proposed § 361. 24 require that all
cooperating agencies notify program
participants about the CAP in each
State.
Discussion: The suggestion is
inconsistent with the Act. Section 20 of
the Act requires only programs and
projects providing services under the
Act, not cooperating agencies, be
mandated to notify program participants
of the CAP. Moreover, section 112 of the
Act authorizes the CAP to serve only
individuals who are applicants or
consumers of programs funded under
the Act. To the extent that a cooperative
entity is serving an individual who is
also an applicant or consumer of a
program funded under the Act, that
individual would already receive
information about the CAP under
section 20 of the Act.
Changes: None.
Requirements for Third -Party
Cooperative Arrangements (§ 361. 28)
In -Kind Contributions
Comments: Two commenters agreed
with the changes to the prior regulation
in proposed § 361. 28. Many
commenters, primarily from one State,
noted that excluding costs for
administrative time and other indirect
costs paid by third parties as an
allowable source of match would
negatively impact cooperative
arrangements between VR agencies and
their partners.
One commenter requested that the
regulations maintain flexibility for
States to use in-kind funding
contributions from partners to augment
a State' s match and leverage State
funding. Another commenter expressed
concern that as a result of the proposed
changes, services for students and
clients in one program would cease, and
that school district employees would
lose their jobs.
Discussion: We appreciate the
commenters' concerns, and agree that
eliminating the ability of third -party
cooperative agencies from using
certified personnel time would indeed
pose a hardship, but such prohibition is
not contained in § 361. 28, either
proposed or final. Section 361. 28( c),
both proposed and final, explicitly
permits public third -party cooperative
agencies to provide match via certified
personnel time for staff directly
providing the vocational rehabilitation
services under the third -party
cooperative arrangement, as they have
been permitted to do for many years.
For example, for a school that is the
cooperating agency, the cooperating
agency may use the certified time for the
teacher responsible for teaching the
students under the third -party
cooperative arrangement program as a
permissible source of match since the
teacher is directly providing the service
under the third -party cooperative
arrangement. Final § 361. 28( c) does not
change the long-standing arrangements
that many DSUs have with third -party
cooperative agencies, such as the
schools, with regard to certified
personnel time. However, not all
certified personnel time is permissible
as a source of match under a third -party
cooperative arrangement. As stated
above, the teacher' s time is permissible
for match purposes under the VR
program because he or she is directly
providing the service, but certified time
for other school staff such as principals,
vice principals, secretaries, and
supervisors, is not permissible for match
purposes under the VR program because
these individuals do not directly
provide vocational rehabilitation
services. The certified time for these
individuals is a third -party in-kind
contribution as defined in 2 CFR 200. 96
and, as such, is not permissible source
of match for the VR program. While
final § 361. 28( c) is a new provision, the
content merely clarifies the matching
requirements that existed in accordance
with § 361. 60( b), which remains
virtually unchanged by these final
regulations. The changes made to this
section further clarify the allowable
sources of match under third -party
cooperative arrangements.
Consequently, we believe that final
361. 28( c) should have little or no
effect on the services for students and
other individuals with disabilities
served through third -party cooperative
arrangements or the cooperative
agencies and their employees.
Contrary to what some commenters
appear to believe, third -party in-kind
contributions have never been an
allowable source of match under the VR
program, including for purposes of
third -party cooperative arrangements.
Final § 361. 60(b)( 2), which remains
unchanged, prohibits the use of third -
party in-kind contributions as a source
of match for the VR program and this
prohibition would apply to third -party
cooperative arrangements under the VR
program as well. However, during
monitoring of the VR program, the
Department has found that many DSUs
seem to be unaware of this prohibition,
especially in the context of third -party
cooperative arrangements. For this
reason, the Department proposed
revisions to § 361. 28( c), which are
maintained in these final regulations, to
remind DSUs of the allowable sources of
match for third -party cooperative
arrangements. Specifically, these
sources include cash transfers from the
cooperating agency to the DSU and
certified personnel expenditures of
cooperating agency staff who directly
provide vocational rehabilitation
services under the third -party
cooperative arrangement, both of which
were proposed in the NPRM. In final
361. 28, we have added a new
paragraph (c)( 3) to specify that other
direct expenditures incurred under the
contract with the cooperating agency
only for the direct provision of services
under the third -party cooperative
arrangement may be an allowable source
of match. These expenditures are
distinguished from in-kind
contributions because the expenditures
were incurred specifically for the
purpose of the third -party cooperative
arrangement and in accordance with the
terms and conditions of the contract and
within the contract period, all of which
can be verified by supporting
documentation from the cooperating
agency. For example, if it was necessary
for a cooperating agency to purchase
instructional materials to provide new
or expanded services authorized under
the third -party cooperative arrangement
contract, and if those materials were not
already available to the cooperating
agency, the expenditures for those
materials may be an allowable source of
match. On the other hand, expenditures
for costs incurred by the third -party
cooperating agency not directly for the
provision of vocational rehabilitation
services, such as, indirect costs,
depreciation, existing utilities, space
and supplies are not an allowable
source of match because they are third -
party in-kind contributions as defined
in 2 CFR 200. 96.
Changes: We have revised final
361. 28 by adding new paragraph (c)( 3)
to permit other direct expenditures
incurred by the cooperating agency to be
used as a source of match so long as
those expenditures were incurred
specifically for the purpose of the third -
party cooperative arrangement.
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Students Who Are Eligible or Potentially
Eligible for Services
Comments: One commenter requested
that proposed § 361. 28( a)( 2) include
services provided by the cooperating
agency for students with disabilities
who are eligible or potentially eligible
for services from the DSU.
Discussion: Under final § 361. 28( a)( 2),
which remains unchanged from prior
regulations, vocational rehabilitation
services provided under a third -party
cooperative arrangement are only
available to applicants for, or recipients
of, services from the VR program. Given
amendments to the Act made by WIOA,
particularly new provisions in section
103(b)( 7) regarding transition services to
groups of students and youth with
disabilities and section 113 regarding
the provision of pre-employment
transition services to students with
disabilities, it is possible that some of
these services will be provided to youth
or students with disabilities who have
not yet applied or been determined
eligible for vocational rehabilitation
services. This means that these students
and youth with disabilities would be
considered a " recipient" of vocational
rehabilitation services for purposes of
final § 361. 28. As such, DSUs could
enter into third -party cooperative
arrangements for the provision of these
group transition services or pre-
employment transition services so long
as all requirements of final § 361. 28 are
satisfied.
Changes: None.
Statewide Assessment; Annual
Estimates; Annual State Goals and
Priorities; Strategies; and Reports of
Progress (§ 361. 29)
Comprehensive Statewide Needs
Assessment
Comments: We received many
comments on proposed § 361. 29
pertaining to statewide assessment,
annual estimates, goals and priorities,
strategies, and reports of progress. One
commenter requested clarification of the
role of SRCs in the conduct of a
comprehensive statewide needs
assessment under WIOA.
Several commenters suggested that we
revise § 361. 29( a) to require that the
comprehensive statewide needs
assessment be conducted
independently, thereby helping to
ensure that the needs assessment is
more objective and comprehensive.
Another commenter requested that we
add a requirement to proposed
361. 29( a)( 1)( i) and 361. 29(b) that the
statewide assessment include
individuals who are working in
subminimum wage and sheltered
employment for employers using
section 14( c) certificates issued by the
Department of Labor under the FLSA.
The commenter recommended that
because States are required to conduct
annual reviews of individuals in
subminimum wage and sheltered
employment, the needs of these
individuals should be added to the
assessment requirements under
361. 29( a).
Additionally, the commenter stated
that States should be required to review
the quality of supported employment
services provided to individuals with
the most significant disabilities and
ensure that any employer holding
subminimum wage certificates under
section 14( c) of the FLSA should be able
to provide supported employment
services. Lastly, the same commenter
asserted that States should include data
on individuals working in segregated
employment in any reports to RSA.
Discussion: In response to the
comment requesting clarification of the
role of the SRC, there is no authority
under section 101( a)( 15) or 105 of the
Act or under title I of WIOA for the SRC
to participate in the conduct of any
needs assessments required by title I of
WIOA. The activities of the Council are
limited to those listed in section 105( c)
of the Act and final § 361. 17(h), both of
which remain unchanged by WIOA or
these final regulations. In general, the
SRC' s responsibilities encompass only
functions associated with the conduct of
the VR program under title I of the Act,
not those functions of the VR program
as a core partner in the workforce
development system under title I of
WIOA.
Specifically, section 105( c)( 3) and
final § 361. 17( h)(3) authorize the
Council to advise the DSU on activities
carried out under title I of the Act and
part 361 and to assist with the
preparation of the VR services portion of
the Unified or Combined State Plan,
applications, reports, needs
assessments, and evaluations required
to be carried out under title I and part
361.
We disagree with the
recommendation to require that the
comprehensive statewide needs
assessment be conducted
independently. Final § 361. 29( a) mirrors
section 101( a)( 15)( A) of the Act, which
does not require that the assessment be
carried out independently. On the
contrary, that provision requires that the
DSU and Council jointly conduct the
assessment every three years. Therefore,
there is no authority to revise
361. 29( a) as the commenters
recommend.
The contents of the comprehensive
statewide needs assessment are outlined
in section 101( a)( 15)( A) of the Act and
final § 361. 29( a) is consistent with the
statute. However, nothing in the Act and
these final regulations prohibits a DSU
and Council from conducting a needs
assessment that includes additional
elements, such as the needs of
individuals in subminimum wage and
sheltered employment.
Changes: None.
Annual Estimates and Reports of
Progress
Comments: One commenter
supported the change in proposed
361. 29 that requires DSUs that have
implemented orders of selection to
estimate and report how many
individuals with disabilities are not
receiving services, asserting this will
provide indirect data regarding the
appropriateness of not implementing an
order of selection. One commenter
requested clarification as to what the
Department means by the submission of
annual estimates " at such time and in
such manner to be determined by the
Commissioner" and expressed concern
that this was not consistent with the
continued requirements to submit
various annual reports and updates. The
same commenter suggested that the
phrase " standards and indicators
authorized by Section 106 of the Act" be
removed as no longer relevant and that
only performance measures authorized
under WIOA be included.
Another commenter stated that the
requirement under WIOA for the
increased collection of data would offer
evidence of successes and challenges
across the Nation but would also impose
some additional costs on the DSUs,
which are already struggling under
budget constraints.
Additionally, one commenter
expressed concerns about the apparent
lack of annual reporting of progress
toward achieving goals and priorities,
and that once the WIOA system is fully
implemented, annual reporting should
not be such a burden. The commenter
requested guidance on how best to use
data collected under the newly aligned
systems to maximize fiscal and staff
resources.
One commenter expressed concern
that the lack of annual reporting to the
Department regarding flaws in the
delivery system for persons with
significant disabilities, including those
receiving supported employment
services, could preclude making timely
adjustments to maximize the
opportunity for successful, integrated
employment in accordance with Section
109 of the Act, as amended by WIOA,
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which allows for " expanded types of
trainings, technical assistance and other
services DSUs may provide under the
VR program, to employers who have
hired or are interested in hiring
individuals with disabilities."
Discussion: We appreciate the support
for the requirement to report the
numbers of individuals with disabilities
who may not be served in the event that
an order of selection is implemented, as
well as the other comments expressing
concerns and suggestions. In response to
the comment requesting clarification
pertaining to submission of annual
estimates, " at such time and in such
manner to be determined by the
Commissioner" allows the Department
to solve a practical problem caused by
a statutory inconsistency. Section
101( a)( 10) requires that DSUs collect
key data to more effectively manage the
VR program and ensure that the needs
of the program' s consumers, including
those with the most significant
disabilities, are met. Many of these data
must be collected annually, and
historically have been submitted as part
of annual State plan updates. However,
under sections 102 and 103 of title I of
WIOA, the Unified or Combined State
Plan is submitted every four years, with
modifications made at least every two
years, as appropriate. Therefore, the
Secretary may determine it appropriate
to require the data, which are collected
annually by DSUs, to be reported only
when the State submits a Unified or
Combined State Plan or a modification
to that Plan.
Although collected data are to be
submitted at a time and in a manner to
be determined by the Secretary, DSUs
still must gather and analyze required
data annually as required by the Act and
these final regulations. This will allow
the agency to respond in a timely
manner to the needs of all consumers,
including those with the most
significant disabilities who may need
supported employment services in order
to achieve their vocational goals.
Section 106 of the Act requires that
the standards and indicators for the VR
program must be consistent with the
performance accountability measures
required by section 116 of title I of
WIOA for all core programs, including
the VR program. Therefore, all
references to standards and indicators
throughout the Act and these final
regulations refer to the performance
accountability measures under WIOA
and the phrase cannot be removed from
final § 361. 29.
We address comments associated with
any burden resulting from the data
reporting requirements under section
101( a)( 10) of the Act, as amended by
WIOA, in the Regulatory Impact
Analysis section of these final
regulations. The Departments of
Education and Labor will jointly issue
guidance regarding the alignment of
data reporting requirements pursuant to
the joint regulations governing the
performance accountability system
established under WIOA and published
in subpart E of part 361.
Changes: None.
Provision of Training and Services for
Employers (§ 361. 32)
Comments: While commenters
generally appreciated the increased
emphasis on engagement with
employers, some suggested that the
regulations clarify the types of services
and activities in which the DSU may
engage, and differentiate the roles and
responsibilities of the DSU and the
employer, especially with regard to
providing accommodations.
Some commenters acknowledged the
importance and need for training
employers about their obligations under
the ADA and about vocational
rehabilitation services provided through
the VR program, such as work -based
learning experiences, pre-employment
transition services, disability awareness
and the needs of individuals with
disabilities in the workplace.
A few commenters suggested that the
Department recommend some actions to
engage employers, such as encouraging
States to establish employer advisory
councils at the State, regional, or local
level.
One commenter suggested that
proposed § 361. 32 was not strong
enough to prioritize the activities under
this section because it authorizes, but
does not require, an allocation of
funding for services. The commenter
recommended that the Department more
heavily emphasize the importance of
activities under this section.
Finally, one commenter
recommended aligning allowable
activities under this section with WIOA
performance measures regarding
effectiveness in serving employers and
requested guidance on tracking data
related to services provided to
employers and the effectiveness of such
services.
Discussion: We appreciate the
supportive comments and the additional
recommendations for implementing the
requirements for activities DSUs may
engage in with employers. Section 109
of the Act, as amended by WIOA,
describes the activities for which States
may pay to educate and provide services
to employers who have hired, or are
interested in hiring, individuals with
disabilities under programs carried out
under title I of the Act. However,
section 109 of the Act does not address
prohibited activities or the
differentiation of the roles and
responsibilities of the DSU and the
employer, particularly in providing
accommodations. Section 109( 1) only
allows the DSU to provide training and
technical assistance to employers
regarding the employment of
individuals with disabilities, including
disability awareness, and the
requirements of the ADA and other
employment-related laws. The
recommended inclusion of language to
describe accommodations that are
incumbent upon employers to provide
does not fall under the purview of the
Department or within the scope and
authority of these regulations. Instead,
the responsibility of employers for work
place accommodations is within the
jurisdiction of the Equal Employment
Opportunity Commission, which is
charged with the enforcement of title I
of the ADA.
Section 109 of the Act, as amended by
WIOA, and final § 361. 32 clearly
recognize the important role that DSUs
can play in increasing opportunities for
competitive integrated employment for
individuals with disabilities through the
provision of technical assistance and
training to employers and specify a
wide variety of these activities. For
example, the statute and regulation
describe the areas in which DSUs may
work with employers to provide
opportunities for work -based learning
experiences and pre-employment
transition services to recruit qualified
applicants who are individuals with
disabilities, to train employees who are
individuals with disabilities, and to
promote awareness of disability -related
obstacles to continued employment.
Furthermore, the Act and final
regulation provide that the DSU may
assist employers through consultation,
technical assistance, and support related
to workplace accommodations, assistive
technology, facilities and workplace
access, and using available financial
support for hiring or accommodating
individuals with disabilities. Given
these and other examples, we do not
believe that it is necessary to include
additional language in final § 361. 32 to
further emphasize the importance of
this technical assistance and training.
However, we clarify here that the use of
the term " apprenticeships" in final
361. 32 does not include Registered
Apprenticeships.
Although we recognize the value of
the DSUs engaging employers through
activities such as establishing Statewide
or regional/ local level employer
advisory councils, section 109 of the Act
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does not require this activity and
therefore, we have no statutory
authority to require this activity in these
regulations. However, final § 361. 24( c)
requires States to describe in the VR
services portion of the Unified or
Combined State Plan how the DSU will
work with employers to identify
opportunities for competitive integrated
employment and career exploration, and
to facilitate the provision of vocational
rehabilitation services.
We agree that the provision of training
and services for employers by DSUs is
important in accomplishing the
purposes of the Act, as amended by
WIOA; however, final § 361. 32 mirrors
section 109 of the Act, as amended by
WIOA, which authorizes, but does not
require, the expenditure of funds for
activities under this section. Therefore,
we have no authority to require DSUs to
incur expenditures under this section.
The Departments of Education and
Labor appreciate the comment regarding
the potential interplay between the
activities authorized under section 109
of the Act and final § 361. 32, and the
performance indicator for the
effectiveness of serving employers
required by 116( b)( 2)( A)(i)(VI) of title I
of WIOA. Because the measures apply to
all core programs in the workforce
development system, not just the VR
program, we have addressed this
comment in the joint final regulations
implementing the performance
accountability measures under section
116 of WIOA, and published elsewhere
in this issue of the Federal Register.
Changes: None.
Innovation and Expansion Activities
361. 35)
Resource Plans for Statewide
Independent Living Councils
Comments: Many of the commenters
opposed the changes in proposed
361. 35( a)( 3) which requires the State
to assure that it will reserve and use a
portion of its VR program funds to
support the funding of the Statewide
Independent Living Council (SILC),
consistent with the plan prepared
jointly by the Council and the State
under section 705( e)( 1). The
commenters contend that WIOA did not
amend section 101( a)( 18)( A)(ii)(I) of the
Act and therefore, the Department
should not change its regulation and
allow the State and the SILC to
determine not to use I&E funds. The
commenters further stated that any
change to § 361. 35 would harm CILs by
diverting funds from the SILS program
under Part B of title VII if I&E funds are
not used. Some other commenters
opposed proposed § 361. 35 allowing
innovation and expansion funds to be
used at all to support SILC resource
plans to the extent needed, arguing that
other funding sources are available.
A few commenters requested
clarification as to when the DSU uses
I&E funds to support the SILC. Of these,
one commenter indicated that the DSU,
in the commenter' s State, has supported
the SILC with innovation and expansion
funds and would likely continue to do
so unless there is a change in the
designated State entity (DSE), the State
agency responsible for the
administration of the independent
living programs authorized under title
VII of the Act, as amended by WIOA.
Discussion: We appreciate the
concerns expressed by commenters. In
proposed § 361. 35, we attempted to set
forth our long-standing interpretation of
the statutory language in section
101( a)( 18)(A)(ii)(II) that a State' s
contribution of innovation and
expansion funds to the SILC resource
plan is governed by the resource plan' s
description of support for the SILC. We
consistently have interpreted the
statutory requirement in section
101( a)( 18)(A)(ii)(II) that the funding of
the SILC be consistent with the SILC
resource plan to mean that the State and
the SILC may decide to use innovation
and expansion funds to support the
SILC resource plan, or not to do so as
they determine how they will use the
sources of funding available under
section 705( e) to support the SILC.
Our data shows that States and SILCs
have been using innovation and
expansion funds to support SILC
resource plans in this way for many
years. Based upon an analysis of the
data from all of the State Plans for
Independent Living for the period FY
2014 through FY 2016, we found that
innovation and expansion funds
account for 38 percent of the roughly
8. 7 million contributed by States to
SILC resource plans. We found that only
32 States contributed innovation and
expansion funds to the SILC resource
plan. Of these 32 States, 13 States used
only innovation and expansion funds to
support the SILC.
However, because the innovation and
expansion section of the Act remained
unchanged by WIOA and our proposed
regulation sparked confusion among
many commenters, we have decided to
return to the current regulation which
mirrors the statutory language requiring
that the reservation and use of the
innovation and expansion funds to
support the funding of the SILC be
consistent with the SILC resource plan.
We continue to interpret the current
regulation, as we always have, that the
State and the SILC determine in the
SILC resource plan which sources and
amounts of available funding, including
innovation and expansion funding, will
be used in the SILC resource plan, and
then the State reserves and uses the
innovation and expansion funding to
support funding of the SILC, consistent
with the SILC resource plan.
Changes: We have revised final
361. 35( a)( 3) to substitute the language
of the current regulation, with
conforming edits, for the language in the
proposed regulation.
Innovative Approaches With
Components of the Workforce
Development System
Comments: None.
Discussion: Section 101( a)( 18)( A)(i) of
the Act and final 361. 35( a)( 1) require
the designated State unit to develop and
implement innovative approaches to
improve vocational rehabilitation
services to individuals with disabilities
that are consistent with the
comprehensive statewide needs
assessment and the State' s goals and
priorities. To support the alignment of
the VR program with the workforce
development system as emphasized
throughout the Act and these final
regulations, we clarify that these
innovative approaches may include
activities and partnerships with
components of the workforce
development system.
Changes: None.
Ability To Serve All Eligible
Individuals; Order of Selection for
Services (§ 361. 36)
Individuals Who Require Specific
Services and Equipment To Maintain
Employment
Comments: Most commenters
supported proposed § 361. 36( a)( 3)( v),
which permits the DSU to elect to serve
eligible individuals who require specific
services or equipment to maintain that
employment, whether or not those
individuals are receiving vocational
rehabilitation services under the order
of selection. The commenters stated that
this proposed change from the prior
regulations will better serve the needs of
individuals with disabilities who are at
risk of losing their jobs by allowing the
DSU an opportunity to serve them
outside an order of selection, as
appropriate.
A few commenters expressed concern
that proposed § 361. 36( a)( 3)( v) would
allow individuals with less significant
disabilities to be served before
individuals with significant or the most
significant disabilities. A few
commenters also questioned whether
this new provision applies only to
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individuals with the most significant
disabilities. In addition, a few
commenters stated that providing
specific services or equipment to
eligible individuals who do not meet the
order of selection should be mandatory
to ensure that they are able to maintain
their employment.
Conversely, a few commenters
suggested that the DSU should not be
required to use this authority at all. One
commenter suggested that a DSU should
not be required to state its intent to use
the authority in the vocational
rehabilitation services portion of the
Unified or Combined State Plan. One
commenter requested clarification of the
term " immediate need," which the
Department used in explaining the
proposed provision in the preamble of
the NPRM.
Discussion: We appreciate the
comments supporting the flexibility
afforded to DSUs in § 361. 36( a)( 3)( v).
We also recognize the need, as
expressed by some commenters, for
clarification of this exemption from the
order of selection.
Final § 361. 36( a)( 3)( v), which
implements section 101( a)( 5)( D) of the
Act, applies to those specific services or
equipment that an individual needs to
maintain current employment. The
regulation does not apply to other
services an individual may need for
other purposes. In other words, if an
individual is receiving services and
equipment from a DSU under this
exemption, the individual is within the
order of selection for the purpose of
receiving any other vocational
rehabilitation services not covered by
the exemption. This means that if the
individual needs services that are not
directly tied to maintaining current
employment, the individual' s ability to
receive those services from the VR
program depends on the individual' s
placement in the State' s order of
selection.
As to whether and how the DSU may
exercise its authority under final
361. 36( a)( 3)( v), that section applies to
all eligible individuals, not just those
with the most significant disabilities. It
is possible that individuals with less
significant disabilities would receive
vocational rehabilitation services before
individuals with significant or the most
significant disabilities. The Act, as
amended by WIOA, gives the DSU the
option to provide services and
equipment to individuals at immediate
risk of losing employment outside the
established order, and the DSU should
consider doing so if financial and staff
resources are sufficient. If the DSU
elects to do so— again, the exercise of
the authority is not mandatory—section
101( a)( 5)( D) of the Act requires that it
indicate this in the VR services portion
of the Unified or Combined State Plan.
The term " immediate need" in the
Summary ofProposed Changes section
of the NPRM has its common meaning,
and it remains the same. The phrase
means that the eligible individual
would almost certainly lose his or her
current job if not provided specific
services or equipment in the very near
future that would enable him or her to
retain that employment.
Changes: None.
Information and Referral
Comments: One commenter sought
clarification about referring individuals
to other programs under proposed
361. 37 for specific services or
equipment necessary to help them
retain employment, as well as other
services that cannot be provided under
proposed § 361. 36( a)( 3)( v). This
commenter further suggested that if an
individual is referred elsewhere for
specific services or equipment necessary
to maintain employment, the DSU
should follow up to ensure the
necessary services were delivered.
Discussion: If the individual is placed
into a closed category of that order,
under sections 101( a)( 5)( E) and
101( a)( 20) of the Act, and final
361. 36( a)( 3)( iv)(B) and 361. 37( a)( 2),
the DSU must refer the individual to
other programs and providers for those
services not covered by the exemption.
These provisions require a DSU to
assure in the VR services portion of the
Unified or Combined State Plan that
individuals who do not meet the order
of selection criteria will have access to
an information and referral system
through which the DSU will refer them
to other appropriate Federal and State
programs, including other components
of the statewide workforce development
system.
However, neither section 101( a)( 5)( E)
nor 101( a)( 20) requires the DSU to
follow up with the programs to which
the individuals are referred, and we
have no authority to do so either. While
we agree this is a best practice, we also
recognize the administrative burden the
requirement would impose on the DSU.
Changes: None.
Monitoring by the State Rehabilitation
Council
Comments: A few commenters
proposed that § 361. 36(f)(4) allow the
SRC to monitor the use of this authority
by the DSU and ensure that individuals
with the most significant disabilities are
still prioritized for vocational
rehabilitation services. A few other
commenters also suggested that the SRC
be involved in monitoring the use of the
new provision but did not propose any
additional regulatory language.
Discussion: Section 105( c) of the Act,
which sets forth the functions of the
SRC, does not authorize it to monitor
the DSU' s exercise of the order of
selection exemption. Rather, section
107( a)( 1) of the Act requires the
Department to monitor the DSUs.
However, under section 105( c)( 1)( A)
of the Act and final § 361. 17( h)(1)( i), the
SRC is tasked with reviewing,
analyzing, and advising the DSU about
the order of selection and the discretion
to exercise the authority set forth in
section 101( a)( 5)( D) of the Act and final
361. 36( a)( 3)( v). In addition, the SRC
has the opportunity to review and
comment on the DSU' s intent to use the
authority under § 361. 36( a)( 3)( v) when
the SRC reviews the DSU' s order of
selection policies under final § 361. 36( f)
and when the SRC advises and assists
the DSU in the preparation of the VR
services portion of the Unified or
Combined State Plan under final
361. 17(h)(3).
Changes: None.
Order of Selection Criteria
Comments: A few commenters
suggested that the DSU develop a
meaningful" order of selection to
ensure that individuals with the most
significant disabilities receive
vocational rehabilitation services. One
commenter suggested that the order of
selection be based on something other
than the refinement of the three criteria
in the definition of " individual with a
significant disability" in § 361. 5( c)( 30).
Discussion: Section 101( a)( 5) of the
Act remained unchanged by WIOA,
except for the addition of section
101( a)( 5)( D) permitting the DSU to
exercise its discretion to provide
specific services and equipment to
individuals, who are at risk of
immediate job loss, outside the order of
selection. Therefore, there is no
authority to further amend final § 361. 36
to require the DSU to establish a
meaningful" order of selection or to
permit the order of selection to be based
on criteria other than those included in
the definition of an " individual with a
significant disability" in final
361. 5( c)( 30).
Changes: None.
Prohibited Factors
Comments: Some commenters
questioned whether the proposed
361. 36 is consistent with the
requirement in § 361. 42( c)( 2)( ii)(D),
which prohibits the DSU from
considering an applicant' s particular
service needs, the anticipated cost of
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services required by an applicant, or the
income level of an applicant and
applicant' s family. Other commenters
indicated that the proposed § 361. 36
aligns with § 361. 42( a)( 1)( iii), which
permits the DSU to provide vocational
rehabilitation services to eligible
individuals who require services in
order to retain their employment.
Discussion: For States operating under
an order of selection, the DSU must
determine eligibility under final
361. 42 prior to assigning eligible
individuals to any priority category.
WIOA did not change this requirement.
Therefore, under final
361. 42( c)( 2)( ii)(D) an applicant' s
particular service needs ( including
those services necessary to maintain
current employment) are not considered
in determining eligibility. The order of
selection exemption in final
361. 36( a)( 3)( v) applies only after an
individual has been determined eligible.
Consequently, the eligible individual
would be exempt from the order of
selection for the purpose of receiving
services necessary to maintain
employment.
Changes: We have made a technical
amendment to § 361. 36( d)( 2)( vi) to
reflect the exemption set forth in
361. 36( a)( 3)( v).
Pre -Employment Transition Services
Comments: Some commenters raised
various concerns, posed questions, or
sought clarification about pre-
employment transition services,
including serving students with
disabilities who may not have applied
or been determined eligible for
vocational rehabilitation services.
Discussion: We address these
comments in the Pre -Employment
Transition Services (§ 361. 48( a)) section
elsewhere in this Analysis of Comments
and Changes.
Changes: None.
Information and Referral Programs
361. 37)
Benefits Planning
Comments: Most of the comments
received on this regulation were in
support of the changes to the prior
regulation in proposed § 361. 37, while
some suggested further revisions. A few
of these commenters suggested that
361. 37 specify to whom referrals are
made for benefits planning for
individuals with disabilities receiving
Social Security benefits under title II or
title XVI of the Social Security Act.
Discussion: We appreciate the
comments supporting the changes to
361. 37 and the comments suggesting
further revisions. Section 361. 37(b)( 5),
both proposed and final, which requires
the DSU to refer individuals who do not
choose to seek an employment outcome
under the VR program to the SSA for
information about receiving benefits
while employed, has remained
unchanged from the VR program
regulations that were published in 2001.
While section 102(b)( 2) of the Act, as
amended by WIOA, requires the DSU to
provide information about benefits
planning to individuals with disabilities
receiving Social Security benefits, it
does not mandate the DSUs to make
related referrals to any one agency or
organization for this service. Some
DSUs have the capacity to provide this
information in-house, whereas others
may need to refer individuals to other
programs or entities. As such, and
because the needs of the individuals
requiring these services also vary, we
believe it best serves DSUs and
individuals with disabilities not to
require a specific referral program in
final § 361. 37. For the same reason, we
have not specified other entities to
which DSUs may refer individuals with
disabilities for any other type of service.
Changes: None.
Referral Options
Comments: One commenter suggested
that a list of all options for referrals be
included in proposed § 361. 37. Another
commenter suggested that referral
options may not be available in certain
geographical areas of the State. The
commenter also noted the dilemma
facing DSU personnel if it is known,
before a referral is made, that
individuals with disabilities are
unlikely to receive services from other
programs in the State.
Discussion: We do not believe it is
possible or practicable to include a list
of all referral options in final § 361. 37
because the Federal, State, and local
agencies, as well as non-profit
organizations that serve individuals
with disabilities vary widely from State
to State. In addition, DSUs are most
familiar with the referral option in their
State and we would not want them to
believe these options were limited by
the inclusion of a list in final § 361. 37.
However, we clarify that these referral
options include one-stop centers as
components of the workforce
development system.
If referral options are not available in
a geographic location or if a referral will
not result in the individual with a
disability receiving services, we
encourage DSUs to continue to build
partnerships with a broader set of
appropriate Federal and State programs,
including other components of the
statewide workforce development
system, to ensure effective referral
options are available in the State. DSUs
should not make referrals to other
programs unless there is an expectation
that the individual with a disability will
benefit from the referral.
Changes: None.
Follow -Up
Comments: One commenter suggested
that DSUs be required to follow-up on
referrals made to other programs to
verify that individuals with disabilities
are receiving the services for which they
were referred.
Discussion: The Act, as amended by
WIOA, does not require a DSU to
follow-up on the referrals it makes to
other programs. Therefore, we have not
made the suggested revision. While we
agree with commenters that this is a best
practice, we also recognize the
administrative burden the requirement
would impose. However, the criteria for
appropriate referrals in final § 361. 37( c)
is designed to ensure effective referrals
for individuals with disabilities.
Changes: None.
Independent Living Services
Comments: A few commenters
suggested that there may be difficulty in
referring individuals with disabilities
for independent living services if the
DSU is not the same entity
administering the independent living
programs authorized under title VII of
the Act, as amended by WIOA. One
commenter stated that the Department
would need to partner with the
Department of Health and Human
Services when referrals are made for
independent living services.
Discussion: We acknowledge that
some States may establish a designated
State entity (DSE) responsible for
administering the independent living
programs, which is separate from the
DSU for the VR program. However, this
should not inhibit referrals between the
VR and independent living programs as
required in final § 361. 37(b). In these
circumstances, we encourage the DSU to
partner with the DSE to develop
effective referral policies and
procedures to enable individuals with
disabilities to access both programs. The
Department intends to support these
partnerships in the State through
technical assistance developed and
delivered jointly with the Department of
Health and Human Services, which now
administers the SILS program and the
CIL program.
Changes: None.
Protection, Use, and Release of Personal
Information (§ 361. 38)
Comments: None.
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Discussion: We anticipate that other
Federal and State agencies, and
researchers will have an increased
interest in using the data required to be
collected by core programs in the
workforce development system,
including the VR program, under
section 116( b) of title I of WIOA. Section
116(b) of WIOA requires DSUs to collect
significantly more personal information
than was required previously under
section 101( a)( 10) of the Act and prior
361. 40. Therefore, after further
Departmental review, we have
strengthened the protection of the
confidentiality of this information by
requiring in final § 361. 38 that DSUs
enter into written agreements with any
entity seeking access to personal
information collected under the VR
program for the purpose of audits,
evaluations, research, or for other
program purposes. We understand that
DSUs already enter into such written
agreements and the revisions to final
361. 38 will not represent a change in
practices under the VR program.
Changes: We have revised final
361. 38(a), (d), and (e) by requiring that
DSUs enter into written agreements
with other organizations and entities
receiving personal VR program
information during the conduct of
audits, evaluations, research, and for
other program purposes.
Reports; Evaluation Standards and
Performance Indicators (§ 361. 40)
We received numerous comments on
proposed reporting requirements under
361. 40, including the collection and
reporting of data on students with
disabilities receiving pre-employment
transition services, evaluation standards
and performance indicators under
section 106 of the Act, common
performance accountability measures
under section 116 of WIOA, and the
timeframe for implementation of
reporting requirements. We also
received comments on burden estimates
that were included in the Regulatory
Impact Analysis of the NPRM. While
one commenter supported the collection
of new data elements required under
section 101( a)( 10) of the Act and
implemented in § 361. 40( a) of these
final regulations, in general,
commenters expressed concerns or
requested additional clarification
concerning the collection and reporting
of data. We address these comments
under the subheadings below.
Pre -Employment Transition Services
Comments: We received several
comments on the reporting of data on
students with disabilities receiving pre-
employment transition services under
proposed § 361. 40( a)( 1)( ii). One
commenter noted that States may opt to
track funding and services for students
receiving pre-employment transition
services in different ways, depending on
factors such as staffing patterns, order of
selection wait list considerations, and
counselor caseload sizes. One
commenter expressed the opinion that
there are more effective ways to track
the expenditures from the 15 percent of
the VR program allotment reserved for
the provision of pre-employment
transition services than collecting
individual case information for each
student receiving these services.
A few commenters requested
guidance about the specific data
elements that will be required for
students who are receiving pre-
employment transition services and are
applicants, or potentially eligible, for
vocational rehabilitation services.
Another commenter asked what
additional data will be needed for
purposes of performance accountability
reporting pursuant to section 116 of
WIOA once the student becomes a
participant under the VR program.
Finally, one commenter requested
clarification and guidance about the
interplay between the data required to
be reported under § 361. 40( a), collected
through the Case Service Report (RSA -
911), and the content of the VR services
portion of the Unified or Combined
State Plan regarding the number of
students who are receiving pre-
employment transition services.
Discussion: We appreciate the
concerns expressed regarding the new
data reporting requirements in final
361. 40( a) related to the provision of
pre-employment transition services to
students with disabilities. We agree
with commenters that it is reasonable to
anticipate an increase in the number of
individuals that will need to be reported
through the RSA -911. Prior to the
enactment of WIOA, DSUs could only
serve, and thus report, individuals who
were applicants or eligible individuals
under the VR program. However,
section 113 of the Act, as added by
WIOA, requires DSUs to provide pre-
employment transition services to all
students potentially eligible for
vocational rehabilitation services who
need such services, regardless of
whether they have applied and been
determined eligible for vocational
rehabilitation services. This change is
likely to result in a significant increase
in the number of individuals reported
under the RSA -911.
Students with disabilities who are not
yet served under an individualized plan
for employment and who receive pre-
employment transition services are not
considered " participants" as that term is
defined under the joint final regulations
for performance accountability purposes
published elsewhere in this issue of the
Federal Register. However, students
with disabilities receiving pre-
employment transition services are
considered " reportable individuals" for
RSA -911 reporting and WIOA
performance purposes, regardless of
whether they have applied for
vocational rehabilitation services or are
receiving these services under an
individualized plan for employment.
This does not, however, preclude a DSU
from serving an eligible student with a
disability under an individualized plan
for employment. Once the student has
begun receiving services under a signed
individualized plan for employment, he
or she will be counted as a participant
and included in the applicable
performance indicator calculations. At
the point the student with a disability
becomes a participant, all the applicable
RSA -911 data elements will be
collected and reported in the
individual' s RSA -911 case record.
We have identified and defined the
specific data elements needed for all
students with disabilities receiving pre-
employment transition services in the
RSA -911 instructions. We believe this
will reduce collection and reporting
burden to the maximum extent possible,
and prevent a requirement for collecting
specific information that would
otherwise result in an application for
services for students with disabilities
who have not intended to apply for
these services.
In addition to the tracking necessary
to demonstrate compliance with the
requirement to reserve at least 15
percent of the State' s VR allotment for
providing pre-employment transition
services, under section 110( d) of the
Act, as amended by WIOA, and final
361. 65( a)( 3), section 101( a)( 10) of the
Act requires DSUs to have a mechanism
to report the number of students with
disabilities receiving these services. We
recognize the burden this will place on
DSUs and we have included a specific,
but limited, set of data elements in the
RSA -911 to enable DSUs to report the
number of students with disabilities
receiving these services, including both
those who have been determined
eligible for vocational rehabilitation
services and those who have not applied
for vocational rehabilitation services.
For further information regarding the
specific data elements DSUs are
required to report regarding students
receiving pre-employment transition
services, see the RSA -911 data
collection instrument published
elsewhere in this issue of the Federal
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Register. We believe DSUs should use
these data, along with other information
such as that obtained through the
comprehensive statewide needs
assessment required under section
101( a)( 15)( A) of the Act, as amended by
WIOA, and final § 361. 29( a)), when
developing the VR services portion of
the Unified or Combined State Plan,
including the goals and strategies
related to the provision of pre-
employment transition services under
sections 101( a)( 15)( C) and (D) of the Act,
as amended by WIOA, and final
361. 29(c) and (d).
Changes: None.
Standards and Indicators
Comments: With respect to proposed
361. 40( b), a few commenters requested
that we add indicators to the evaluation
standards and performance indicators.
Of these, a few requested that separate
indicators be added for transition
services to students and youth with
disabilities and for services to youth
with disabilities. One commenter
expressed the concern that students
with disabilities will not be counted as
participants or included in the
performance indicators, thereby
eliminating a large number of vocational
rehabilitation consumers from the
performance measures. This commenter
recommended that we establish new
performance indicators for students
with disabilities receiving pre-
employment transition services.
Another commenter requested we add
performance indicators aligned with
evidence -based practices that promote
individuals with disabilities entering
the labor force. One commenter
requested that we include additional
performance indicators in these final
regulations rather than add them later
through an information collection
request. Another commenter asked if the
Department would continue using the
evaluation standards and performance
indicators in prior §§361. 80 through
361. 89 as Federal reporting
requirements under the VR program.
Finally, one commenter requested that
we limit the data selected to only that
required to determine the performance
accountability measures under section
116 of WIOA.
Discussion: Section 106 of the Act, as
amended by WIOA, makes the VR
program subject to the common
performance accountability measures,
established in section 116 of title I of
WIOA, which are applicable to all core
programs of the workforce development
system. Therefore, we have removed
prior § 361. 80 through § 361. 89, which
established the evaluation standards
and indicators in use by the VR program
prior to the enactment of WIOA. Final
361.40(b) includes a cross reference to
the joint performance accountability
regulations developed by the
Departments of Labor and Education in
subpart E of final part 361.
Section 106 of the Act, as amended by
WIOA, does not provide additional VR
program -specific performance
accountability measures. However,
consistent with section 116(b)( 1)( A)(ii)
of title I of WIOA, section 106( a)( 2)
permits States, but not the Department,
to establish and provide information on
additional performance accountability
indicators. States must identify any
additional performance indicators in the
Unified or Combined State Plan. Under
this section, States could opt to include
additional performance indicators,
including any or all of the additional
performance measures recommended by
commenters or the evaluation standards
and performance indicators set forth in
prior §§ 361. 80 through 361. 89.
In addition, section 101( a)( 10)( A) of
the Act requires that, in the VR services
portion of the Unified or Combined
State Plan, the State assures that it will
submit certain reports in the form and
level of detail and at the time required
by the Secretary. Regarding applicants
for, and eligible individuals receiving,
services, these reports must provide the
wide variety of data specified in section
101( a)( 10)( C), as well as data related to
the evaluation standards and indicators
in section 106 of the Act, which are the
performance accountability indicators
in section 116(b) of title I of WIOA.
Therefore, there is no statutory authority
to limit the data reported by DSUs
through the RSA -911 to those data
needed for the performance
accountability indicators applicable to
the core programs under WIOA, as
recommended.
Changes: None.
Program Year
Comments: One commenter requested
that the Department use the program
year under title I of WIOA, instead of
the fiscal year, for the operation of the
VR program in order to better align the
program with the performance data
required under section 116 of WIOA.
Discussion: We understand the
concern expressed by commenters and
the potential confusion that may result
because the annual award and financial
reporting cycle for the VR program is no
longer aligned with the State planning
and performance reporting cycle
required under title I of WIOA. The VR
program is a current -funded program for
which Congress appropriates annual
funds to be obligated consistent with the
Federal fiscal year and section
110( a)( 2)( A) of the Act, which specifies
the manner in which allotments are to
be made. As noted in the Submission,
Approval, and Disapproval of the State
Plan (§ 361. 10) section earlier in this
preamble, section 110( a)( 2)( A) of the
Act, which was not amended by WIOA,
requires that allotments be made for
each fiscal year beginning on or after
October 1, 1978. We interpret section
110( a)( 2)( A) of the Act to require that
VR program allotments coincide with
the Federal fiscal year. Thus, we cannot
change the year under which the VR
program operates in order to align it
with the July 1 through June 30 program
year for submission of the VR services
portion of the Unified or Combined
State Plan and the reporting of
performance data required under final
361. 40. States will continue to receive
VR program allotments and report fiscal
data through the Financial Status Report
SF -425) and the VR program Cost
Report (RSA -2) in accordance with the
Federal fiscal year.
Changes: None.
Performance Accountability Regulations
Comments: One commenter
recommended that we include the joint
performance regulations in proposed
361. 40.
Discussion: We disagree with the
recommendation. The extent and detail
of the joint regulations governing the
performance accountability system
under section 116 of title I of WIOA
makes it necessary to include them in a
separate subpart of these final
regulations. For the convenience of the
reader, we grouped this subpart E with
subparts D and F, which set forth the
joint final regulations implementing
requirements for unified and combined
planning and the one-stop delivery
system, respectively, of WIOA. We
believe it is sufficient to include a cross
reference to subpart E in final
361. 40( b).
Changes: None.
Cumulative Caseload Report (RSA -113)
Comments: We received two
comments regarding the VR program' s
Cumulative Caseload Report (RSA -113).
One commenter asked whether we
intend to make changes to this data
collection instrument and requested that
we provide guidance on these changes.
Another commenter suggested that the
Department discontinue use of the
RSA -113 because it is redundant with
data reported through the revised RSA -
911.
Discussion: We do not intend to make
changes to the currently approved RSA -
113 or the instructions for its
submission. At this time, we use the
55671Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
data reported through the RSA -113, the
only source of quarterly VR program
data, for program management purposes
and to support budget requests for the
VR program. However, we intend to
reduce the reporting burden on the
States by discontinuing use of the RSA -
113 when DSUs are able to report
similar data through the RSA -911 on a
quarterly basis. When appropriate, the
Department will provide guidance to
DSUs regarding reporting changes.
Changes: None.
States With Two VR Agencies
Comments: One commenter asked
whether, in States with two VR
agencies, those agencies that serve
individuals who are blind and visually
impaired would establish levels of
performance for purposes of the
performance accountability indicators
under section 116 of title I of WIOA
separate from those established by
agencies serving individuals with all
other disabilities. Another commenter
expressed concern that VR agencies
serving individuals who are blind and
visually impaired would be required to
establish separate levels of performance
due to the relatively low number of
individuals served by these agencies
and the high variance in outcomes.
Discussion: Section 116(b)( 3)( A)(iii) of
title I of WIOA requires States to
identify, in their Unified or Combined
State Plans, expected levels of
performance for the performance
indicators for the first two years covered
by their plans. Because this section, as
well as all other provisions of section
116 of WIOA pertinent to the
establishment of levels of performance
for the performance accountability
indicators, refers to the " State," States
must establish the expected levels of
performance using State -level, not VR
agency -level, data. Therefore, in States
with more than one VR agency, the
agencies must work together to identify
expected levels of performance that take
into account their individual
performance. We will monitor each
agency' s performance on the
performance accountability indicators
and their contributions toward
achieving the adjusted levels of
performance through a review of the
data reported on the RSA -911 and
during periodic reviews in accordance
with section 107 of the Act. See the
Analysis of Comments and Changes
section of the joint performance
regulations published elsewhere in this
issue of the Federal Register for a more
detailed discussion about setting
expected levels of performance and
adjusted levels of performance.
Changes: None.
Reporting Burden
Comments: We received numerous
comments on the Department' s burden
estimates, all of which stated that we
underestimated the costs associated
with the reporting of data under
proposed § 361. 40 described in the
Regulatory Impact Analysis section of
the NPRM. In particular, commenters
raised concerns about estimates of the
amount of time needed for the
collection of new data and the quarterly
reporting of individual data on all open
service records, as well as the cost of
changes to State management
information systems. Some of these
commenters stated that the proposed
new reporting requirements will create
a burden on the financial and personnel
resources of the agency. One commenter
noted that documenting and tracking
the number of potentially eligible
students with disabilities would be
burdensome and costly considering the
number of potentially eligible students
is staggering when compared to the
number of transition -age consumers
previously served by the DSUs.
Discussion: We recognize that
proposed new data collection and
reporting requirements, including data
on students with disabilities receiving
pre-employment transition services, will
have an impact on the financial and
personnel resources of the agency.
However, the collection and reporting of
such data are required by the
amendments made by WIOA to section
101( a)( 10) of the Act. In addition, the
collection and reporting of data
regarding the number of students with
disabilities receiving pre-employment
transition services and the costs of these
services will enable the Department and
the States to better track the use of VR
program funds that must be reserved for
the provision of these services.
In response to the comments
regarding the burden associated with
the reporting of data under final
361. 40 and as a result of further
Departmental review, we have adjusted
the burden estimates as described in the
Regulatory Impact Analysis section of
the preamble of these final regulations.
Comments pertaining to specific
estimates of reporting burden included
in the Regulatory Impact Analysis of the
NPRM are addressed in the Regulatory
Impact Analysis of these final
regulations. No changes are needed to
the regulatory text of final § 361. 40.
Changes: None.
RSA -911 Case Service Report
Comments: We received comments
related to the definitions of data
elements, the reporting of Social
Security numbers, the reliability of data,
the data elements used to report services
to employers, the reporting of barriers to
employment as required by section 116
of title I of WIOA, and the timelines by
which States must report data required
for the performance accountability
indicators.
Discussion: We discuss comments
related to the manner in which the data
are required to be reported under final
361.40(a) and (b) through the RSA -911
in the supporting statement for this data
collection instrument published
elsewhere in this issue of the Federal
Register, and under the joint
performance accountability system final
regulations, also published elsewhere in
this issue of the Federal Register, as
appropriate.
Assessment for Determining Eligibility
and Priority for Services (§ 361. 42)
Advancing in Employment and Other
Eligibility Criteria
Comments: Many commenters
expressed strong support for proposed
361. 42( a)( 1)( iii) permitting an
applicant to be eligible if he or she
requires vocational rehabilitation
services to advance in employment and
meets all other eligibility criteria.
However, some of these commenters
requested clarification regarding the
effect of the regulation when an
individual is unable to advance in
employment due to his or her disability.
These commenters also asked whether
advancing in employment refers only to
the individual' s current employment, or
if it extends to preparations, including
graduate education services, for
advancing in future employment. A few
commenters requested clarification
about whether a DSU would be required
to support the pursuit of a graduate
degree by an individual already
employed successfully in a competitive
integrated environment and about how
financial need shall be assessed.
Some commenters expressed concern
that the term " advance in employment"
was too vague and that it would be
difficult to know when an individual
has achieved his or her goal since one
can always advance in employment to
some degree. These commenters also
expressed concerns that serving more
individuals who want to advance in
employment could force a DSU to
implement an order of selection. Some
commenters suggested that the
regulations should clarify that
advancement in employment should be
explicitly linked to the individual' s
impairment, rather than broader
developmental needs.
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A few commenters inquired whether
the proposed changes in § 361. 1, which
establishes the purpose of the VR
program, affect the determination of
eligibility under § 361. 42. These
commenters expressed concern that the
deletion of the term " gainful
employment" in proposed § 361. 1 could
be misconstrued as disallowing entry
level employment as a vocational goal.
A few commenters asked whether the
new emphasis on self-sufficiency and
competitive integrated employment
means that those who apply for
vocational rehabilitation services
intending only to work part-time will be
a lower priority for the purpose of
determining eligibility.
Discussion: We appreciate the strong
support for the changes in final
361. 42. We also understand the need
for clarification.
Section 102( a)( 1)( B) of the Act, as
amended by WIOA, allows for an
individual with a disability, whose
physical or mental impairment
constitutes a substantial impediment to
employment, to be determined eligible
for vocational rehabilitation services if
he or she requires services to prepare
for, secure, retain, advance in, or regain
employment. By adding the phrase
advance in," section 102( a)( 1)( B) of the
Act, as amended by WIOA, reinforces
the Department' s long-standing
commitment that the VR program must
provide comprehensive services to
assist individuals with disabilities to
achieve their maximum vocational
potential. The VR program is not
intended solely to place individuals
with disabilities in entry-level jobs but
rather to assist them to obtain
appropriate employment, given their
unique strengths, resources, priorities,
concerns, abilities, capabilities, and
informed choice. The VR program' s
purpose is the same regardless of
whether an individual wants to advance
in employment or obtain employment.
We disagree with the commenter that
the provision of vocational
rehabilitation services to assist an
individual to advance in employment
should be limited to disability needs
rather than other needs or desires. The
extent to which DSUs should assist
eligible individuals to advance in their
careers by providing vocational
rehabilitation services depends upon
whether the individual has achieved
employment that is consistent with this
standard. The DSU' s assistance could
include, as appropriate for the
individual, graduate -level
postsecondary education, if necessary to
achieve the advancement in
employment specified in the vocational
goal on the individual' s approved
individualized plan for employment.
All other eligibility criteria still apply to
applicants seeking to advance in
employment.
Consistent with long-standing
Department policy, we interpret the
phrase " advance in employment," as
used in section 102( a)( 1)( B) of the Act
and final § 361. 42( a)( 1)( iii),broadly to
include advancement within an
individual' s current employment or
advancement into new employment. In
this way, the VR program ensures that
individuals with disabilities obtain the
services necessary so they can pursue
and engage in high -demand jobs
available in today' s economy.
The addition of the phrase " advance
in" in § 361.42(a)(1)(iii),both proposed
and final, underscores long-standing
policy. Because DSUs have been
assisting individuals to advance in
employment prior to this statutory and
regulatory revision, we do not anticipate
that the change will result in a DSU
implementing an order of selection due
to an increased number of individuals
seeking to advance in employment. As
stated, although the phrase " advance
in" employment is new in both the
statute and these final regulations, its
inclusion merely mirrors long-standing
Departmental policy as set forth in
RSA—PD-97-04, dated August 19, 1997.
As discussed in more detail in the
Purpose (§ 361. 1) section earlier in this
preamble, inclusion of the term
economic self-sufficiency," rather than
gainful employment" as contained in
prior § 361. 1, does not alter the
eligibility criteria set forth in final
361. 42( a)( 1) or establish a priority of
services for individuals seeking any
particular form of employment.
Therefore, the changes contained in
final §§361. 1 and 361. 42( a)( 1)( iii) do
not require DSUs to treat individuals
seeking part-time or self-employment
differently (e.g., given lower priority)
than individuals seeking full-time
employment. Neither the Act, as
amended by WIOA, nor these final
regulations, supports such an
interpretation. Section 361. 42( c)( 2), for
example, prohibits the DSU from
considering the nature of an applicant' s
vocational goal when determining
eligibility and priority for services.
Therefore, a DSU may not prioritize the
determination of eligibility for
individuals who choose to pursue full-
time employment over those who elect
to seek part-time employment or self-
employment. In addition, economic self-
sufficiency is intended to serve as a goal
to maximize employment, which may
be achieved through a variety of
employment options, including entry-
level employment for individuals for
whom it is consistent with their skills,
interests, and informed choice.
However, the achievement of economic
self-sufficiency is not among the criteria
used to determine eligibility for the VR
program under section 102( a) of the Act.
Changes: None.
Substantial Impediment to Employment
Comments: One State VR agency
asked whether a substantial impediment
to employment for the purpose of
determining eligibility meant an
impediment to any employment, or just
to the employment the individual
wished to pursue.
Discussion: Although this particular
eligibility criterion was not changed in
the Act, as amended by WIOA, or
361. 42, either proposed or final, we
clarify in this Discussion that the term
substantial impediment to
employment" should be interpreted in
its broadest context, not just considered
with respect to the applicant' s specific
vocational goal when determining
eligibility. Final § 361. 42( c)( 2)( ii)(B), as
it did in prior regulations, prohibits the
DSU from considering the individual' s
desired employment objective, even if
known, during this stage of the
vocational rehabilitation process.
Changes: None.
Prohibited Factors
Comments: A number of commenters
expressed concerns about the inability
to consider an applicant' s employment
history when determining eligibility,
particularly for those who are currently
employed and apply for vocational
rehabilitation services to advance in
employment. One commenter stated
that not being able to evaluate disability
barriers from previous or current
employment experiences, or not being
able to assess abilities and capabilities
by examining past and current
educational credentials, could prevent
the qualified rehabilitation counselor
from determining whether an individual
has a substantial impediment to
employment and whether the individual
requires services to achieve an
employment outcome.
Other commenters expressed concern
that proposed § 361. 42( c)( 2), which
precludes the consideration of an
applicant' s employment history, current
employment status, level of education,
or educational credentials when
determining eligibility for services,
contradicts the definition of
assessment" in § 361. 5( c)( 5)( ii)(E),
which states that the vocational
rehabilitation counselor must rely on
information obtained from the eligible
individual' s experience in integrated
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employment settings in the community
and other integrated settings.
Some of these commenters requested
that we remove the requirement that a
DSU must not consider an applicant' s
employment history, current
employment status, level of education,
or educational credentials when
determining eligibility for services. A
commenter requested that criminal
records be added to the list of
prohibited factors when determining
eligibility for vocational rehabilitation
services, except when the criminal
background is related to the
employment outcome.
Discussion: The additional factors, set
forth in both proposed and final
361. 42( c)( 2)( ii)(E) and (F), that a DSU
must not consider when determining an
applicant' s eligibility for vocational
rehabilitation services are consistent
with long-standing policy. A DSU must
examine a variety of factors when
developing an individualized plan for
employment, including the individual' s
past and current employment and
education credentials, to ensure that the
appropriate vocational rehabilitation
services are identified to assist the
individual to achieve his or her chosen
vocational goal specified in the
approved individualized plan for
employment. However, a DSU may not
use an applicant' s employment or
education to determine his or her
eligibility for vocational rehabilitation
services. The change from the prior
regulation in proposed and final
361. 42( c)( 2)( ii)(E) and (F) clarifies
existing eligibility criteria and the list of
prohibited factors in order to ensure
consistency with the phrase " advance in
employment" in the Act, as amended by
WIOA, and these final regulations.
Because an individual may be eligible
for the VR program if he or she requires
vocational rehabilitation services to
advance in employment, the Act seems
to take into account that the individual
could have more than minimal
educational or employment history.
Regardless of his or her education or
employment history, the applicant still
must demonstrate that he or she has a
disability and that the disability
constitutes a substantial impediment to
employment as required in
361. 42( a)( 1)( ii) and requires vocational
rehabilitation services to prepare for,
secure, retain, advance in, or regain
employment in accordance with final
361. 42( a)( 1)( iii).In making these
determinations, the qualified vocational
rehabilitation counselor would review
all known information about the
applicant in order to assess the
individual' s impediments and service
needs, but the eligibility determination
itself must not be based on the fact that
the individual has an extensive
employment or educational history.
Although final § 361. 42( c)( 2) does not
specifically prohibit a DSU from
considering an applicant' s criminal
background when determining an
individual' s eligibility for vocational
rehabilitation services, the Act and
these final regulations require that a
DSU base the determination of
eligibility only on those factors
identified in section 102( a)( 1) of the Act
and final § 361. 42( a)( 1). However, the
DSU may develop policy and issue
guidance to its vocational rehabilitation
counselors about managing an
individual' s criminal background when
developing the individualized plan for
employment to ensure that the
vocational goal is appropriate and that
any necessary vocational rehabilitation
services to address this background are
provided in a manner that is consistent
with limitations that might be imposed
by Federal, State, and local law and
regulations due to that criminal history.
For further information regarding
Federal law and guidance in this area,
see: http://wdr.doleta.gov/directives/
and http:// www.eeoc.gov/laws/
guidance/.
Changes: None.
Residency
Comments: A number of commenters
requested clarification about the
definition of "residency" for the
purpose of determining eligibility and
providing vocational rehabilitation
services. Several commenters noted that
individuals may apply for services
when living just across the border in a
neighboring State, while other
individuals receive services from one
State but intend to work in another State
and continue working with the VR
agency with which they began their
rehabilitation program.
Discussion: We proposed only one
change from the prior regulation in
361. 42( c)( 1) to clarify that a DSU is
prohibited from establishing de facto
duration of residency requirements by
requiring the applicant to produce
documentation that would, under State
or local law, result in a duration of
residence requirement. Although the
clarification regarding documentation
did not exist in prior § 361. 42( c)( 1), the
provision as contained in final
361. 42( c)( 1) is consistent with long-
standing Department policy. The
explicit prohibition against a duration of
residency requirement existed in prior
361. 42( c)( 1) and remains unchanged in
all other respects in these final
regulations and is consistent with
section 101( a)( 12) of the Act.
Nonetheless in response to the
requests for clarification, as stated in
Technical Assistance Circular 12- 04,
titled " Provision of Vocational
Rehabilitation Services to An Individual
by More Than One Agency" and dated
June 11, 2012, we clarify here in this
Discussion that an individual may
receive vocational rehabilitation
services from more than one DSU
simultaneously, including those in
different States, when appropriate, and
in accordance with the implementation
of an order of selection, as applicable,
in each State. In this way, the individual
can receive the services that best
support his or her vocational needs and
the achievement of an employment
outcome.
Changes: None.
Compliance Threshold
Comments: A few commenters
recommended that we establish a
compliance threshold of 90 percent with
the requirement to determine eligibility
within 60 days of the receipt of the
application. These commenters stated
this would provide a national
benchmark by which DSUs would be
held accountable by community
stakeholders as well as State and
Federal auditors.
Discussion: Section 102( a)( 6) of the
Act and final § 361. 41( b)( 1) require
DSUs to determine the eligibility of an
applicant within 60 days from the
receipt of an application for vocational
rehabilitation services, unless
exceptional circumstances preclude the
determination and the individual agrees
to a specific extension of time. This
requirement remains unchanged in the
Act, as amended by WIOA and these
final regulations; therefore, it is not a
new requirement imposed on DSUs.
We appreciate the recommendations
made by commenters for a mechanism
to ensure compliance. Section 106( a)( 1)
of the Act requires States to comply
with the common performance
accountability system requirements
imposed on all core programs of the
workforce development system,
including the VR program, established
by section 116 of title I of WIOA.
Section 116( b)( 1)( A) requires a State to
comply with the six primary
performance indicators set forth in
section 116( b)( 2)( A)(i),as well as any
other additional performance indicators
developed by the State. While there is
no statutory authority for the
Department to impose a performance
accountability measure, such as that
recommended by commenters, there is
nothing to preclude a State from
developing such a measure for itself. We
will continue to assess the compliance
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of DSUs with the 60 -day eligibility
determination requirement in
accordance with section 107 of the Act
using all available data and information.
Changes: None.
Entities Holding Special Wage
Certificates
Comments: Many commenters
requested clarification about whether a
DSU may contract with a community
rehabilitation program to provide
assessments used in the determination
of eligibility, if the community
rehabilitation program holds a
subminimum wage certificate under
section 14( c) of the FLSA.
Discussion: Neither the Act, as
amended by WIOA, nor these final
regulations prohibit a DSU from
contracting with a community
rehabilitation program for assessment
services regardless of whether that
provider also holds a subminimum
wage certificate under section 14( c) of
the FLSA. Nevertheless, we strongly
encourage DSUs to contract with
providers that can conduct assessments
in competitive integrated settings. It is
through these assessments that DSUs
may best determine the individual' s
eligibility for the VR program and the
vocational rehabilitation services
needed to achieve competitive
integrated employment.
Changes: None.
Extended Evaluation and Trial Work
Experiences
Comments: Many commenters
supported eliminating extended
evaluation as a tool for determining
eligibility for some individuals with the
most significant disabilities. However,
many other commenters also requested
clarification of the circumstances under
which it might be appropriate to use
extended evaluation for the
determination of eligibility for
vocational rehabilitation services. Some
commenters expressed concern that
individuals for whom a trial work
opportunity may not be available may
inappropriately be determined ineligible
for services and requested an
evidentiary standard in the absence of
the term " clear and convincing
evidence" in § 361. 42. Some
commenters explicitly requested that
extended evaluation be reinserted into
the regulations.
Some commenters asked whether the
term " clear and convincing evidence"
was removed from proposed
361. 42( e)( 2)( iii) by mistake and
recommended retaining this standard.
The proposed language required that
sufficient evidence" be obtained
through trial work experiences to
determine if an individual cannot
benefit from vocational rehabilitation
services to achieve a vocational goal.
These commenters believed sufficient
evidence is not a strong enough
standard and that individuals with
significant disabilities may be
inappropriately determined ineligible as
a result.
One commenter recommended that
we revise § 361. 42( e)( 2)( i) to require that
all trial work experiences take place in
integrated settings by deleting the
phrase " to the maximum extent
possible." One commenter requested
that we add examples of supports for
individuals with serious mental illness
to § 361. 42( e)( 2)( iv), such as individual
placement and supported employment
services.
Discussion: We appreciate the support
by many commenters for the
elimination of the use of extended
evaluations for the purpose of
determining that an individual is unable
to benefit from vocational rehabilitation
services due to the severity of the
individual' s disability and, thus, is
ineligible for vocational rehabilitation
services under section 102( a)( 2)( B) of
the Act, as amended by WIOA, and
361. 42. The Act' s amendment and
these final regulations help to ensure
that before a DSU makes an ineligibility
determination, it must conduct a full
assessment of the capacity of the
applicant to perform in realistic work
settings, without the use of lengthy
extended evaluations.
We appreciate the comment
recommending that all trial work
experiences be conducted in
competitive integrated employment
settings. While we agree that these
experiences should be provided in
competitive integrated employment
settings, to the maximum extent
possible, as stated in both proposed and
final § 361. 42( e)( 2)( i),there is no
statutory authority to do as the
commenter recommends. Section
102( a)( 2)( B) of the Act, as amended by
WIOA, requires a DSU to explore an
individual with a disability' s ability to
work through trial work experiences
prior to determining that the individual
is not eligible for the VR program due
to the severity of his or her disability.
The trial work experiences must be of
sufficient variety" and must provide
the individual with the opportunity to
try different employment experiences"
and " become employed in competitive
integrated employment." There is no
mandate in section 102( a)( 2) that all
trial work experiences be in competitive
integrated employment. In fact, the use
of the phrases " sufficient variety" and
different employment opportunities"
suggest the congressional understanding
that some trial work experiences may
need to be provided in a setting other
than competitive integrated
employment. However, given the Act' s
heightened emphasis on the
achievement of employment outcomes
in competitive integrated employment,
as well as the fact that section
102( a)( 2)( B) of the Act, as amended by
WIOA, specifically mandates that trial
work experiences provide individuals
with the opportunity to become
employed in competitive integrated
employment, we believe that final
361. 42( e)( 2)( i) is consistent with the
statute. Proposed and final
361. 42( e)( 2)( i), are both consistent
with prior § 361. 42( e)( 2)( i), with only
minor wording changes to conform to
terms used in the Act, as amended by
WIOA. The Department also believes
that trial work experiences in integrated
settings, rather than simulated or mock
experiences in sheltered environments,
provide the DSU with the best and most
comprehensive evidence of an
individual' s capacity to achieve
competitive integrated employment.
Therefore, consistent with the intent of
the Act to provide individuals with
disabilities the opportunity to achieve
competitive integrated employment, we
strongly recommend that DSUs exhaust
all opportunities to provide trial work
experiences through actual work
experiences in integrated community
environments to obtain the evidence
necessary for making the determination
of an individual' s eligibility for
vocational rehabilitation services.
We do not expect that individuals
with significant disabilities will be
determined ineligible in greater
numbers as a result of this change.
Rather, we expect that more individuals,
including those with the most
significant disabilities, and those who
may require supported employment
services, will achieve competitive
integrated employment outcomes.
We appreciate the comments
regarding the inadvertent deletion of
prior regulatory provisions regarding
clear and convincing evidence from
proposed § 361. 42( e)( 2)( iii) and
appreciate the strong support that this
provision be retained in these final
regulations. We agree with commenters
that " sufficient evidence" is insufficient
for a determination of ineligibility and
that some individuals with significant
disabilities may be inappropriately
determined ineligible as a result. The
deletion of the provision related to clear
and convincing evidence was indeed an
error and we have revised final
361. 42( e)( 2)( iii) to read exactly as it
had in prior regulations, thus resulting
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in no regulatory change from prior
regulations to these final regulations.
We believe retaining prior regulatory
text in these final regulations is
consistent with the statutory
requirements of section 102 of the Act,
as amended by WIOA. Specifically,
section 102( a) of the Act, read in its
entirety, establishes the information that
is sufficient to make a determination of
eligibility for an individual with a
disability for purposes of the VR
program. There is no, and never has
been, a statutory requirement that clear
and convincing evidence be used to
make an eligibility determination. This
long-standing statutory interpretation is
consistent with use of the phrase
sufficient evidence" in
361. 42( e)( 2)( iii)(A), both prior and
final, with respect to eligibility
determinations. However, when making
a determination of ineligibility due to
the severity of an individual' s disability,
section 102( a)( 5)( C)( i) of the Act, which
remained unchanged by WIOA, requires
the DSU to inform the individual in
writing of the reason for the ineligibility
determination, including the clear and
convincing evidence that formed the
basis for that determination. This long-
standing statutory requirement is
consistent with use of the phrase " clear
and convincing evidence" in
361. 42( e)( 2)( iii)(B), both prior and
final, with respect to determinations of
ineligibility. Therefore, given the error
noted by commenters, the Department
has retained prior § 361. 42( e)( 2)( iii) in
these final regulations.
In addition, prior to WIOA, section
102( a)( 2)( B) of the Act required that trial
work experiences be of sufficient variety
and provided over a sufficient period of
time to enable the DSU to determine the
eligibility of the individual, or to obtain
clear and convincing evidence of the
individual' s inability to achieve an
employment outcome due to the
severity of his or her disability.
Section 102( a)( 2)( A) and section
102( a)( 2)( B) now state only that the trial
work experiences must be of sufficient
variety and over a sufficient period of
time to determine the eligibility of the
individual. Section 102 of the Act, as
amended by WIOA, no longer makes
reference to the need for clear and
convincing evidence for the purpose of
determining an individual' s ineligibility
for vocational rehabilitation services.
Consistent with these amendments, we
proposed to revise §§ 361. 42( e)( 1) and
361. 42( e)( 2)( iii) to require that trial work
experiences be of sufficient variety and
over a sufficient period of time for the
DSU to obtain sufficient evidence that
the individual cannot benefit from
participation in the VR program.
In proposing this change, we believe
that the Act, as amended by WIOA, did
not intend, to weaken the evidentiary
standard required for this
determination. It remains our long-
standing policy that individuals with
disabilities, including those with the
most significant disabilities, must be
afforded every opportunity to obtain the
vocational rehabilitation services
needed to achieve high quality
employment and that a DSU should
only deny an individual this
opportunity in limited circumstances,
and based on the highest level of proof.
Therefore, we have revised final
361. 42( e)( 2)( iii) to clarify that the trial
work experiences must yield clear and
convincing evidence before a DSU may
determine an individual is incapable of
benefiting from the provision of
vocational rehabilitation services, and,
thus, is ineligible for the program.
We agree with the commenter that
individuals with serious mental illness
should be afforded the necessary
supports, such as— but not limited to—
individual placement or supported
employment services, to ensure trial
work experiences are beneficial. The
same is true for any individual with
significant disabilities participating in
trial work experiences. Proposed
361. 42( e)( 2)( iv) remained unchanged
from prior regulations. While we
disagree with the commenter that
specific examples pertinent to mental
illness should be included in final
361. 42( e)( 2)( iv) because to do so could
cause more confusion as to why other
examples were not added. However,
assistive technology services and
personal assistance services are not the
only support that should be provided
during a trial work experience.
Although we believe the provision was
clear that the two examples given were
just two examples of many given the use
of the word " including," we have
nonetheless made a small change to
361. 42( e)( 2)( iv) to add further clarity.
Changes: We have revised final
361. 42( e)( 2)( iii) to retain prior
361. 42( e)( 2)( iii),thereby specifying
that a DSU must base eligibility
determinations on sufficient evidence,
but that determinations of ineligibility
due to the severity of an individual' s
disability must be based on clear and
convincing evidence. We have also
revised final § 361. 42( e)( 2)( iv) to add the
phrase " including, but not limited to"
when providing examples of the types
of support services that may be
provided to an individual participating
in a trial work experience. This change
clarifies that DSUs should ensure an
individual with a disability receives the
supports he or she needs so that the trial
work experience is beneficial.
Development of the Individualized Plan
for Employment (§ 361. 45)
Time Frame for Developing the
Individualized Plan for Employment
Comments: Many commenters
supported the change from the prior
regulations in proposed § 361. 45( e)
which required that the DSU develop
the individualized plan for employment
for each eligible individual as soon as
possible, but no later than 90 days
following determination of eligibility,
unless the DSU and the individual agree
to a specific extension of that time
frame. Some commenters supported the
90 -day standard but were concerned
that the quality of plans be maintained
and that plans continue to be
individualized based on interests,
abilities and informed choice and not be
made uniform out of expediency. These
commenters stated that DSUs may not
take the time needed to develop a
comprehensive individualized plan for
employment within the 90 -day time
limit, and may settle for a more
generalized plan rather than seeking an
extension of time. Some commenters,
though they supported a specific time
limit, stated that the limit should be
shorter than 90 days and recommended
that we strengthen the regulation to
promote the more timely development
of the individualized plan for
employment. One commenter
recommended the adoption of a 90
percent compliance standard for this
regulation to strengthen the adherence
to the time limit. Another commenter
asked how long the extended period
should be to ensure that there are no
additional delays in the development of
the individualized plan for
employment. Finally, one commenter
requested guidance concerning how to
proceed in situations where the
individual does not agree to an
extension.
Discussion: We appreciate the
comments supporting the proposed
regulatory changes, as well as the
concerns expressed by commenters
about those same changes. As explained
in the NPRM, the change to § 361. 45( e),
which mirrors section 102( b)( 3)( F) of the
Act, as amended by WIOA, is intended
to efficiently and effectively serve
eligible individuals, move them through
the VR process with minimal delay, and
achieve employment outcomes in
competitive integrated employment. We
believe that DSUs can implement the
regulation in a manner that does not
negatively affect the quality and
individualized nature of the plan for
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employment for each eligible individual
and that this requirement will have a
minimal impact on the majority of DSUs
that have already adopted the 90 -day
time frame. Despite the 90 -day time
frame, these plans must be of sufficient
quality to incorporate mandatory
components in section 102( b)( 4) of the
Act, and meet requirements under
361. 46( a)( 1), which requires the
individualized plan for employment to
be consistent with the individual' s
unique strengths, resources, priorities,
concerns, abilities, capabilities, career
interest, and informed choice consistent
with the general goal of competitive
integrated employment (except that in
the case of an eligible individual who is
a student or a youth with a disability,
the description may be a description of
the individual' s projected post -school
employment outcome).
In addition, the change to § 361. 45( e)
is necessary to implement the statutory
requirement in section 102( b)( 3)( F) of
the Act, as amended by WIOA, that
specifically mandates DSUs to develop
the individualized plan for employment
for each individual within 90 days
following the determination of
eligibility, unless the DSU and the
individual agree to an extension of that
time frame. Therefore, we do not have
the statutory authority to shorten the
time frame because to do so would be
inconsistent with the statute.
DSUs must comply with the
requirements of section 102( b)( 3)( F) of
the Act and final § 361. 45( e) when
developing the individualized plans for
employment for each eligible
individual. We will assess the DSUs'
compliance with the requirement during
the monitoring and review we conduct
under section 107 of the Act. We do not
believe that it is necessary, therefore, to
include a 90 percent compliance
standard in this regulation to strengthen
the adherence to the time frame.
Section 102( b)( 3)( F) of the Act and
final § 361. 45( e) permit the DSU and
individual to agree to a specific
extension of the 90 -day time limit
without imposing a limitation on the
length of that extension. DSUs should
ensure that the extension is warranted
based on the particular circumstances
and needs of the individual and that the
extensions are not so long as to cause
unnecessary delays in providing
services.
The individualized plan for
employment is an evolving document
and may be amended to effect changes
of goal, services, providers, and time
frames. If the individual disagrees with
the vocational rehabilitation counselor' s
request to extend the time for
developing the plan, the counselor
should determine whether the plan, as
written at that time, addresses the
mandatory components of section
102(b) of the Act and final § 361. 46, and
whether the information in the plan is
sufficient to allow the DSU and
individual to proceed with the delivery
of services, with the understanding that
the plan may be amended. If the
counselor determines that the plan does
not contain sufficient information on
which to base the provision of services
and the individual still disagrees with
the request to extend the development
of the plan beyond 90 days after further
vocational guidance and counseling, the
counselor should refer the individual to
the CAP for help in resolving the
disagreement, and must, in accordance
with section 102( c)( 2)( B)( ii), inform the
individual of the due process rights set
forth in section 102( c) of the Act and
final § 361. 57.
Changes: None.
Options for Developing the
Individualized Plan for Employment
Comments: All comments received on
proposed § 361. 45( c)( 1) supported the
requirement that a DSU provide eligible
individuals information about the
option of requesting assistance from a
disability advocacy organization when
developing the individualized plan for
employment. Many of the commenters
recommended that we include in the
regulation examples of disability
advocacy organizations, such as
agencies funded under the Act, entities
providing services under the Ticket to
Work and Work Incentive Act of 1998,
and agencies assisting individuals with
disabilities under the Developmental
Disabilities Assistance and Bill of Rights
Act of 2000 and the IDEA.
All commenters supported our
inclusion of benefits planning in
proposed § 361. 45( c)( 3). A few
commenters requested that we define
that term. One commenter asked
whether we would support the
development of additional benefit
planning resources and what
documentation would be required to
verify the individual' s completion of
benefits planning.
Discussion: We appreciate the
comments supporting the proposed
regulations. Section 102( b)( 1)( A) of the
Act, as amended by WIOA, and final
361. 45( c)( 1)( ii)(C) are intended to
empower eligible individuals by
clarifying that they can choose to seek
assistance from disability advocacy
organizations when developing their
individualized plans for employment.
Section 102( b)( 1)( A) of the Act does not
specify examples of these disability
advocacy organizations, and we do not
believe it necessary to include examples
in final § 361. 45( c)( 1)( ii)(C) because to
do so could have an unintended
limiting effect. However, we encourage
DSUs to provide eligible individuals
with a list of the advocacy organizations
in the State so that they may identify
those organizations with expertise in
disability -related needs, responsibilities,
and services that are required to achieve
the individuals' employment goals.
Consistent with section 102( b)( 2) of
the Act, as amended by WIOA, final
361. 45( c) requires DSUs to provide
certain information in writing to eligible
individuals when developing the
individualized plan for employment.
Specifically, final § 361. 45( c)( 2) and (3)
require DSUs to provide general
information on additional supports and
assistance for individuals with
disabilities desiring to enter the
workforce, including assistance with
benefits planning, to individuals
receiving Supplemental Security
Income or Social Security Disability
Insurance benefits. We recommend that
DSUs retain a copy of this written
information and guidance in the
individual' s service record, as they
would be documents pertinent to the
development of the individualized plan
for employment.
In addition, we understand that
benefits planning may take many
different forms over a course of time.
Furthermore, benefits planning and the
individuals certified to provide these
types of support services are determined
by the SSA' s work incentive program.
We believe it is important that States
retain sufficient flexibility to work with
providers appropriately certified or
defined by SSA. Therefore, we disagree
with the recommendation to define
benefits planning" in these final VR
program regulations.
Furthermore, although DSUs must
provide information about benefits
planning and available resources, they
are not required to document the
completion of these services. However,
if benefits planning is included and the
services in the individualized plan for
employment, it should be documented
upon completion.
Changes: None.
Data for Preparing the Individualized
Plan for Employment
Comments: One commenter stated
that the determination of eligibility only
requires that an individual have
impediments to employment but not
necessarily impediments to the specific
employment outcome the individual
desires, and questioned why only this
data would be used.
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Discussion: While we appreciate the
concerns expressed by the commenter,
this section of the Act was not changed
by WIOA and, therefore, no changes
were proposed in the NPRM. We
address other comments we received on
this section regarding the use of
sheltered employment settings for the
conduct of assessments in the
Assessment for Determining Eligibility
and Vocational Rehabilitation Needs
section under the Applicable Definitions
section previously in this preamble.
Changes: None.
Content of the Individualized Plan for
Employment (§ 361. 46)
Comments: The majority of
commenters supported proposed
361. 46( a)( 1), requiring that the
individualized plan for employment
specify an employment goal consistent
with the general goal of competitive
integrated employment under section
102(b)(4) of the Act, as amended by
WIOA. However, a few commenters
expressed concern that the proposed
regulation does not satisfactorily
address the needs of all individuals
with disabilities because it limits
options for employment goals to
competitive integrated employment, and
stated that the regulation is in conflict
with congressional intent regarding the
full range of employment options.
A few commenters recommended
adding to or clarifying the requirement
in proposed § 361. 46( a)( 7)( iii) that the
individualized plan for employment
contain a description of how the
responsibilities for service delivery will
be divided between the employment
network and the DSU under section
102(b)(4)(H) of the Act.
Discussion: We appreciate the support
for the proposed regulation. WIOA did
not amend section 102( b)( 4)( H) of the
Act, which requires that the
individualized plan for employment for
an individual receiving assistance from
an employment network through the
Ticket to Work and Self -Sufficiency
program established under the Social
Security Act include a description of
how the responsibility for providing
services will be divided between the
employment network and the DSU.
Therefore, we do not believe that further
clarification of this long-standing
requirement is necessary.
We received comments about
eliminating uncompensated
employment outcomes through the
individualized plan for employment,
and we address them in the discussion
on the definition of " employment
outcome" in final § 361. 5( c)( 15) under
the Applicable Definitions section
elsewhere in this Analysis of Comments
and Changes section.
Changes: None.
Scope of Vocational Rehabilitation
Services for Individuals With
Disabilities
Services for Individuals Who Have
Applied or Been Determined Eligible
for Vocational Rehabilitation Services
361. 48(b))
Advanced Training
Comments: A few commenters
supported including advanced training
in STEM fields (science, technology,
engineering, or mathematics, including
computer science), medicine, law, or
business as a vocational or other
training service in proposed
361.48(b)( 6) so that individuals with
disabilities can be prepared for the high -
demand careers available in today' s
economy. One commenter
recommended that advanced training be
provided, as appropriate, not only for
those specific careers mentioned in
proposed § 361.48(b)( 6), but for all
careers. Another commenter suggested
that § 361.48(b)(6) explicitly state that
advanced training must be provided
under an individualized plan for
employment. Still another commenter
requested that proposed § 361. 5( c)
include a definition of " advanced
training."
By contrast, a few commenters
expressed concern about the potential
cost burden upon VR agencies that
would result from individuals pursuing
advanced training under proposed
361.48(b)( 6). These commenters
suggested that comparable benefits are
typically limited for graduate students;
as a result, DSUs would need to cover
all or a substantial portion of the cost of
advanced degrees.
Additionally, one commenter
requested that we clarify in § 361.48(b)
that vocational rehabilitation services
are not intended to assist individuals to
obtain employment in only entry-level
careers.
Discussion: We appreciate the support
for including advanced training among
the individualized services available.
The Department has a long history of
encouraging DSUs to provide advanced
training, when appropriate, to assist
eligible individuals in achieving their
employment goals. Section 103( a)( 18) of
the Act, as amended by WIOA,
specifically permits DSUs to provide
vocational rehabilitation services that
encourage qualified eligible individuals
to pursue advanced training in the
STEM fields, medicine, law, or
business. Section 103( a)( 5) of the Act
and our prior regulation in § 361.48(f)
now final § 361. 48(b)( 6)) have
historically permitted DSUs to provide
training at institutions of higher
education, including in advanced
degree programs, to qualified eligible
individuals.
While section 103( a)( 18) of the Act
specifically mentions advanced
education in certain fields, that does not
exclude advanced training in other
fields under section 103( a)( 5) of the Act.
In reviewing proposed § 361.48(b)( 6),
the Department recognizes that it could
be interpreted as allowing advanced
training in only certain fields. This was
not our intent, and that restriction
would not be consistent with section
103( a) of the Act or long-standing
Department policy. Therefore, we have
revised final § 361.48(b)(6) to clarify that
DSUs may provide advanced training in
any field, not just the specific fields
listed in section 103( a)( 18) of the Act.
We do not believe that a definition of
advanced training" is necessary.
Neither section 7, nor section 103( a), of
the Act, as amended by WIOA, defines
advanced training." We understand
that " advanced training" may have
multiple meanings, such as degrees
conferred by institutions of higher
education and advanced certifications
in certain fields, all of which may be
permissible under the VR program.
Therefore, we will not define this term
in final § 361. 48( b)( 6) or elsewhere in
final part 361 to avoid limiting the
meaning of " advanced training."
As stated earlier, final § 361.48(b)( 6)
continues the long-standing availability
of financial support for advanced
training through the VR program.
Therefore, though comparable benefits
for graduate -level education may be
limited, we anticipate that DSUs will
experience little, if any, increase in the
costs of providing this existing service.
The Secretary agrees that providing
vocational rehabilitation services is not
limited only to helping an individual
with a disability obtain entry-level
employment. Under section 102( a)( 1) of
the Act, as amended by WIOA, and final
361. 48( b), DSUs are to provide
vocational rehabilitation services to
help eligible individuals advance in
employment, consistent with each
individual' s approved individualized
plan for employment and his or her
unique strengths, resources, priorities,
concerns, abilities, capabilities,
interests, and informed choice.
Changes: We have revised
361. 48( b)( 6) to clarify that DSUs may
provide advanced training in any field.
Other Services
Comments: Some commenters
recommended that proposed § 361.48(b)
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include other services not already
specifically mentioned. Of these
commenters, a few suggested that
361. 48( b)( 6) allow DSUs to provide
tuition and other services for students
with intellectual or developmental
disabilities in a Comprehensive
Transition and Postsecondary Program
for Students with Intellectual
Disabilities, as defined by the Higher
Education Act of 2008. One commenter
asked that assistive technology be
included among the individualized
services listed in this section. Another
commenter suggested that § 361.48(b)
require that DSUs recruit, train, and hire
peer service providers and mental
health advocates to offer individualized
support services to individuals
experiencing mental illness.
Finally, one commenter requested
that we clarify the difference between
job retention services and follow -along
services in § 361.48(b)( 12).
Discussion: We disagree with the
commenters' recommendations to
identify in final § 361. 48( b) other
services not specifically listed. The list
of services in section 103( a) of the Act
and final § 361.48(b) is not exhaustive.
Therefore, DSUs may provide other
services, not specifically listed, if
necessary for the individual to achieve
an employment outcome. Similarly, we
clarify here that the vocational and
other training services specified in final
361. 48( b)( 6) encompass tuition and
other services for students with
intellectual or developmental
disabilities in a Comprehensive
Transition and Postsecondary Program
for Students with Intellectual
Disabilities, as defined by the Higher
Education Act of 2008. In addition,
assistive technology is encompassed in
the definition of "rehabilitation
technology" in final § 361. 5( c)( 45),
which is included among the
individualized services in final
361. 48( b)( 17). Also, section 103( a) of
the Act, as amended by WIOA, does not
specifically require a DSU to provide
mental health advocacy services or peer -
counseling services for individuals with
mental health diagnoses. However, a
DSU may provide peer -counseling
services, on an individualized basis,
under final § 361.48(b)( 3), ( 12), and (21).
Finally, job -retention services and
follow -along services are both types of
job-related services. Job -retention
services may include any vocational
rehabilitation service (i.e., vocational
rehabilitation counseling and guidance,
maintenance, or tools) necessary to help
an individual maintain employment.
Follow -along services typically mean
direct contact with an employed
individual to provide support with
issues arising from employment, such as
on-the-job performance, or with
addressing employment barriers, such
as absenteeism or tardiness, that could
jeopardize employment.
Changes: None.
Scope of Vocational Rehabilitation
Services for Groups of Individuals With
Disabilities (§ 361. 49( a))
Establishment, Development, or
Improvement of Community
Rehabilitation Programs
Comments: One commenter suggested
that vocational rehabilitation services
provided under § 361. 49( a)( 1) for
establishing, developing, or improving a
public or other nonprofit community
rehabilitation program should be
allowable only if these services result in
competitive integrated employment for
the individuals receiving services from
the program.
Discussion: We agree with the
comment that services for groups
provided under § 361. 49( a)( 1) must be
provided for the purpose of achieving
competitive integrated employment.
Section 103( b)( 2) of the Act remained
unchanged by the amendments in
WIOA, except for a technical
amendment. As such, services provided
under this authority have always been
for the purpose of promoting integration
in the community through employment,
and final § 361. 49( a)( 1), like the Act, as
amended by WIOA, emphasizes
employment outcomes in competitive
integrated employment, including
supported employment and customized
employment.
Changes: None.
Technical Assistance to Businesses
Comments: Another commenter
sought clarification about the difference
between technical assistance to
businesses seeking to employ
individuals with disabilities in
proposed § 361. 49( a)( 4) and training and
services for employers in proposed
361. 32. This commenter inquired
whether both authorities may be used to
fund these similar services.
Discussion: In answer to the request
for clarification, DSUs are permitted to
partner with employers and businesses
under both final §§ 361. 49( a)( 4) and
361. 32, as authorized by sections 103(b)
and 109, respectively, of the Act, as
amended by WIOA. Under final
361. 49( a)( 4), DSUs may use VR
program funds to provide technical
assistance to businesses seeking to hire
individuals with disabilities, and this
authority must be exercised in a manner
consistent with the ultimate purpose of
the program—achieving competitive
integrated employment. Final § 361. 32
is similar, and it identifies specific
activities DSUs may engage in when
providing training and technical
assistance to businesses. These activities
may include, but are not limited to,
general training and technical assistance
for employers about employing
individuals with disabilities, disability
awareness, and employment law;
recruitment, training, retention of, and
workplace accommodations for,
employees with disabilities; and
improving opportunities for work -based
learning experiences for individuals
with disabilities. The specific activities
in final § 361. 32 are encompassed
within the more general authority of
final § 361. 49( a)( 4). Thus, there is little
distinction between the two authorities,
and DSUs may rely on both when
providing training and technical
assistance to businesses seeking to
employ individuals with disabilities in
competitive integrated employment.
Changes: None.
Establishment, Development, or
Improvement ofAssistive Technology
Programs
Comments: A few commenters
opposed proposed § 361. 49( a)( 8),
because it requires that individuals with
disabilities be applicants of or be
determined eligible for vocational
rehabilitation services to access assistive
technology services through the
establishment, development, or
improvement of assistive technology
demonstration, loan, reutilization, or
financing programs established under
the Assistive Technology Act of 1998.
Discussion: We agree with
commenters that section 103(b)( 8) of the
Act, as amended by WIOA, is not
explicitly limited to individuals with
disabilities who have applied or been
determined eligible for the VR program.
We also agree that individuals with
disabilities who are not applicants or
eligible individuals of the VR program
may benefit from the coordination of
programming with activities authorized
under the Assistive Technology Act of
1998.
After further review, we recognize
that limiting these generalized assistive
technology services to applicants and
eligible individuals of the VR program,
as we did in proposed § 361. 49( a)( 8),
may have created an unintended barrier
for these individuals in accessing
generalized assistive technology
services. Our intention of limiting this
service to applicants and eligible
individuals of the VR program in
proposed § 361. 49( a)( 8) was to be
consistent with the establishment
authority in section 103( b)( 2) of the Act
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and proposed § 361. 49( a)( 1), which
remained substantially unchanged by
WIOA.
However, we acknowledge that the
nature of the services provided under
the new establishment authority of
section 103( b)( 8) of the Act and
proposed § 361. 49( a)( 8) is quite
different. We also acknowledge that
neither section 103( b) of the Act, as
amended by WIOA, nor proposed
361. 49 mandates the DSU to provide
any one of these services, including the
assistive technology related services in
section 103( b)( 8) of the Act and
proposed § 361. 49( a)( 8). Furthermore,
consistent with section 103(b) of the
Act, under final § 361. 49( a), some of the
services to groups are available to
individuals who may not have applied
or been determined eligible for
vocational rehabilitation services.
We acknowledge that some
individuals with disabilities may
require generalized assistive technology
services before they are able to apply for
vocational rehabilitation services, or
that, through the receipt of generalized
assistive technology services,
individuals with disabilities may realize
their potential to achieve competitive
integrated employment and
subsequently apply for vocational
rehabilitation services. Therefore, the
final regulations do not limit assistive
technology services to applicants and
eligible individuals of the VR program.
Finally, the assistive technology
services provided under this authority
are more generalized in nature and for
the benefit of a group of individuals;
they are not tied to the individualized
plan for employment of any one
individual. Individualized assistive
technology services and devices may
only be provided, under section
103( a)( 14) of the Act and final
361. 48( b)( 17) and in accordance with
an agreed upon individualized plan for
employment.
Changes: We have revised final
361. 49( a)( 8) so that DSUs are
permitted to provide any individual
with a disability generalized assistive
technology services provided under
programs established, developed, or
improved by the DSU in coordination
with activities authorized under the
Assistive Technology Act of 1998.
Advanced Training
Comments: One commenter sought
clarification of the authority of the DSU
to provide support to eligible
individuals (including, as appropriate,
tuition) for advanced training in specific
fields under proposed § 361. 49( a)( 9).
Discussion: As stated in the NPRM,
because § 361. 49( a)( 9) addresses
services to groups, we believe there are
only limited circumstances in which it
would be appropriate for the DSU to
provide support for advanced training
under that section. Examples include
supporting an advanced degree program
for multiple eligible individuals at the
same institution of higher education or
developing and implementing specific
programming to benefit a group of
eligible individuals working toward
advanced degrees at institutions of
higher education.
Final § 361. 49( a)( 9), which mirrors
section 103(b)( 9) of the Act, as amended
by WIOA, is not intended, and must not
be used, to replace the authority of the
DSU to provide advanced training to
eligible individuals on their
individualized plans for employment
under section 103( a)( 5) and (18) of the
Act and final § 361.48(b).
Changes: None.
Comparable Services and Benefits
361. 53)
Accommodations and Auxiliary Aids
and Services
Comments: Although a few
commenters supported the proposed
regulation, many commenters
recommended that accommodations and
auxiliary aids and services be exempt
from a search for comparable services
and benefits when they are needed to
help an individual participate in
services that are exempt from such a
search. Two commenters recommended
removing the requirement to search for
comparable benefits for auxiliary aids
and devices altogether. Some
commenters indicated that, prior to
WIOA, providing accommodations or
auxiliary aids and services was typically
done in support of another service and
rarely a stand-alone service.
A few commenters noted a technical
error in proposed § 361. 53( b), which
cross-referenced the vocational
rehabilitation services exempt from a
determination of the availability of
comparable services and benefits in
proposed § 361. 48( a) instead of
proposed § 361.48(b), the correct
citation. These commenters also
recommended revising the regulation to
specify that a comparable service review
is not required prior to providing an
accommodation or auxiliary aid or
service if it is necessary for an
individual to receive one of the exempt
services listed in proposed § 361.48(b).
Discussion: We appreciate the
comments and recommendations about
comparable services and benefits.
Although many commenters suggested
that we exempt accommodations and
auxiliary aids and services from a search
for comparable services and benefits,
especially when they are needed to
enable an individual to participate in
services that are exempt from such a
search, doing so would be contrary to
the statute. Whereas some commenters
noted that prior to WIOA, providing
accommodations for auxiliary aids and
services was typically done in support
of another service and rarely as a stand-
alone service, section 101( a)( 8)( A)(i) of
the Act, as amended by WIOA,
specifically added accommodations or
auxiliary aids and services to those
services that require a determination of
available comparable services and
benefits before the DSU may provide
them. Moreover, section 101( a)( 8)( A)(i)
specifically exempts certain services
from this search, but accommodations
or auxiliary aids and services are not
among those that are exempt.
We agree that there was an error in
the cross-reference to proposed
361. 48( a), as noted by several
commenters. We have made the
correction.
Changes: We have revised final
361. 53( b), which cross-references
361. 48, to correct a typographical error
that appeared in the NPRM. The correct
cross-reference is § 361. 48( b).
Pre -Employment Transition Services
and Personally Prescribed Devices
Comments: A few commenters
suggested that pre-employment
transition services be added to the list
of services exempt from a search for
comparable services and benefits
because the vocational rehabilitation
agency must ensure that these services
are provided or provide them directly.
One commenter suggested that
personally -prescribed devices, such as
eyeglasses, hearing aids, and
wheelchairs, be added as an exempt
service under proposed § 361. 53( b). The
commenter based this recommendation
on a statement in the preamble of the
NPRM about identifying agency
financial responsibilities in interagency
agreements under proposed § 361. 53( d)
that personally prescribed devices are
not included in accommodations or
auxiliary aids and services for the
purposes of these regulations.
Discussion: While we agree with
commenters that DSUs must provide, or
arrange for the provision of, pre-
employment transition services, section
101( a)( 8)( A)(i) of the Act, as amended by
WIOA, does not exempt these services
from the search for comparable services
and benefits as it does for other specific
services. A DSU may satisfy its mandate
under section 113 of the Act by
arranging for pre-employment transition
services provided by another public
55680 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
entity after conducting a search for
comparable services and benefits.
Similarly, section 101( a)( 8)( A)(i) of the
Act does not exempt personally -
prescribed devices, such as eyeglasses,
hearing aids, and wheelchairs. Given
that the Act specifically exempts some
services, there is no statutory basis to
exempt other services or devices from
the search for comparable services and
benefits; therefore, personally
prescribed devices may not be added as
an exempt service under final
361. 53( b) as referenced in final
361. 53( d).
Changes: None.
Interagency Agreements
Comments: Several commenters
addressed interagency agreements
between DSUs and public institutions of
higher education for providing
accommodations and auxiliary aids and
services. A few commenters shared their
concern that students may not receive
services they need because the DSU and
an institution of higher education
cannot agree on financial
responsibilities. One commenter
suggested that DSUs be required to
provide the services and then pursue
reimbursement from the universities if
no interagency agreement exists. Other
commenters supported interagency
agreements so long as they did not
result in denial or delays in providing
needed aids or accommodations. Some
commenters stated that interagency
agreements should not require
negotiation of the financial
responsibilities for providing
accommodations or auxiliary aids and
services, which should be the
responsibility of the agency that is
providing the service, aid, or
accommodation. Other commenters
stated that these financial
responsibilities should be defined at a
national level. One commenter
suggested that interagency agreements
should be explicit in specifying who is
responsible for accommodations,
services, and auxiliary aids, and that the
regulations should include a required
time frame of six months from the
publication of the final regulations for
completing interagency agreements.
A few commenters objected to one
example in the NPRM describing agency
financial responsibilities in interagency
agreements with public institutions of
higher education. Specifically, the
commenters thought the example of a
DSU providing interpreters or readers
both in and out of a classroom in a State
where tuition is free for deaf or blind
students could be misinterpreted as
guidance or direction from the
Department about how to assign
financial responsibilities rather than as
an example of negotiating financial
responsibilities.
Discussion: We appreciate the
concerns expressed by commenters
regarding negotiation of financial
responsibilities in interagency
agreements and the potential delay in
students receiving services. Pursuant to
section 101( a)( 8)( A)(i) of the Act and
final § 361. 53( c)( 2), DSUs must provide
a service if that service is not available
as a comparable service at the time it is
needed. This provision should not be
interpreted as precluding the required
negotiation of financial responsibilities
under an interagency agreement
required by section 101( a)( 8)( B) of the
Act and final § 361. 53( d).
Although some commenters suggested
that accommodations and auxiliary aids
and services should be the
responsibility of the agency providing
the service requiring the
accommodations, section 101( a)( 8)( B) of
the Act, as amended by WIOA,
mandates that State -level interagency
agreements identify who is financially
responsible for providing vocational
rehabilitation services, including
accommodations or auxiliary aids and
services.
There is no statutory authority for the
Department to define these financial
responsibilities at the national level.
While the statute and these final
regulations establish some parameters,
both permit States to develop
interagency agreements appropriate to
their unique needs, thereby ensuring
maximum flexibility. For example,
States may choose to explicitly identify
the financial responsibilities of each
party to the interagency agreement as
suggested by the commenter.
Additionally, there is no statutory
authority for the Department to impose
a deadline of six months from the
publication of the final regulations to
complete interagency agreements.
Moreover, we do not believe such a
deadline is necessary because the
requirement to enter into interagency
agreements, set forth in section
101( a)( 8)( B) of the Act and final
361. 53, existed prior to the enactment
of WIOA. The requirement to enter into
an interagency agreement is long-
standing, with the only change being the
explicit inclusion of accommodations or
auxiliary aids and services. However, as
noted in the preamble to the NPRM, we
believe that these services were always
included in the search for comparable
services and benefits, as is any
vocational rehabilitation service that is
not explicitly exempt. For this reason,
the changes made to the interagency
agreements pursuant to the amendments
made by WIOA are technical—not
substantive—in nature, and additional
time to implement the requirement is
not necessary.
Finally, in response to comments
expressing concern about one of the
examples provided in the preamble to
the NPRM, that example is one of
several in a non -exhaustive list.
Determination of agency financial
responsibilities in interagency
agreements is a State matter and should
be developed appropriately to meet each
State' s unique circumstances. We
provided the examples only to
demonstrate how some States have
resolved financial responsibilities in
interagency agreements. However, these
examples do not necessarily represent
best practices or the complete universe
of how such issues may be resolved.
Changes: None.
Semi -Annual and Annual Review of
Individuals in Extended Employment
and Other Employment Under Special
Certificate Provisions of the Fair Labor
Standards Act (§ 361. 55)
Effective Date
Comments: Many commenters
strongly supported or endorsed
proposed § 361. 55, which was viewed as
helpful in increasing the potential of as
many people with disabilities as
possible moving into competitive
integrated employment. A few
commenters requested clarification
about the effective date.
Discussion: We appreciate the many
comments supporting this regulation,
which is consistent with section
101( a)( 14) of the Act, as amended by
WIOA. The additional review
requirement in § 361. 55 is one of many
new requirements by which WIOA
places heightened emphasis on ensuring
that individuals with disabilities,
including those with the most
significant disabilities, can achieve
competitive integrated employment if
given the necessary services and
supports.
In response to the comments seeking
clarification of the effective date of the
requirements in final § 361. 55, most
provisions of the Act, as amended by
WIOA (with only a few exceptions not
applicable here), took effect on July 22,
2014, the date WIOA was signed into
law. This includes section 101( a)( 14),
which requires the semi-annual review
and reevaluation for the first two years
following the beginning of employment,
and annually thereafter, for individuals
with a disability who have received
services under the VR program and who
are employed in an extended
employment setting in a community
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rehabilitation program or any other
employment under section 14( c) of the
FLSA. The purpose of these reviews is
to determine each individual' s interest,
priorities, and needs with respect to
competitive integrated employment or
training for such employment.
Changes: None.
Who is subject to the requirements?
Comments: A few commenters
requested that we clarify who is subject
to these requirements (e.g., all
individuals, only youth, or individuals
in day habilitation programs).
Discussion: Final § 361. 55 applies to
all individuals with disabilities,
regardless of age, who have been served
by the VR program and are employed in
extended employment or in any
employment setting at subminimum
wage. This includes any individual who
has received services under an
individualized plan for employment but
has been determined by the DSU to be
no longer eligible for services under
final § 361. 43.
Changes: None.
Documentation
Comments: A few commenters asked
that we clarify the documentation
required for the semi-annual and annual
reviews.
Discussion: The documentation
required in final § 361. 55(b)( 2) for the
semi-annual or annual reviews must be
consistent with final § 361. 47( a)( 10). We
believe that the DSU could satisfy the
requirement by: (1) Documenting the
results of the semi-annual or annual
review; (2) obtaining a signed
acknowledgment that the individual
with a disability, or if appropriate, the
individual' s representative, has
provided input to the review; and ( 3)
obtaining a signed acknowledgment by
the individual, or the individual' s
representative as appropriate, that the
review was done.
Final § 361.47(b) requires the DSU, in
consultation with the SRC, if the State
has a Council, to determine the type of
documentation that the DSU will
maintain in order to meet service record
requirements, including those in final
361. 55( b)( 2). We encourage the DSU to
document the interests, priorities, and
needs discussed in final § 361. 55( b)( 1)
and the maximum efforts made under
final § 361. 55( b)( 3) to assist the
individual in achieving competitive,
integrated employment.
Changes: None.
Costs of Conducting the Reviews
Comments: One commenter noted the
unknown costs to the DSU associated
with conducting semi-annual and
annual reviews.
Discussion: We agree with the
commenter that the costs associated
with conducting semi-annual and
annual reviews may not be readily
known; however, prior to the
amendments made by WIOA, DSUs
were required to conduct annual
reviews for up to two years and
annually thereafter at the request of the
individual with a disability or his or her
representative. Therefore, the DSU
should have a historical cost basis for
estimating the current costs of
conducting these reviews.
Changes: None.
Informed Choice
Comments: Other commenters
suggested allowing an individual,
directly or indirectly through his or her
representative, to exercise informed
choice to opt out of future reviews after
any review has taken place.
Discussion: While we appreciate the
commenter' s suggestion to allow an
individual to opt out of future reviews
after any given review has taken place,
section 101( a)( 14) of the Act, as
amended by WIOA, does not permit
this. WIOA removed the previous
statutory provision that required the
reviews to be conducted annually only
for the first two years of employment.
Under the prior requirement, the
reviews would continue past the
mandatory two years only if requested
by the individual or, if appropriate, the
individual' s representative. By
removing this language, WIOA requires
the reviews and provides no ability for
an individual to opt out.
Changes: None.
Retroactive Reviews
Comments: One commenter was
concerned that the semi-annual and
annual reviews would not be conducted
by the DSU in that State. The
commenter observed that the DSU had
not been tracking individuals or
conducting reviews, despite beginning
tracking efforts in 2014. The commenter
suggested that we require DSUs to
conduct, within a specified time,
retroactive semi-annual and annual
reviews for all individuals with
disabilities in subminimum wage or
extended employment that have been
found ineligible to benefit from
vocational rehabilitation services.
Discussion: We appreciate both the
concern about the DSU not tracking and
conducting reviews, as well as the
recommendation to require DSUs to
conduct retroactive semi-annual and
annual reviews within a specified time.
Since the enactment of WIOA, DSUs
have been required to conduct semi-
annual reviews on individuals with
disabilities in extended employment, or
any other employment under section
14( c) of the FLSA, for two years
following the beginning of such
employment and annually thereafter. To
require a set period of time for
retroactive reviews is inconsistent with
the Act; however, the conduct of
reviews, albeit with differing time
frames, has been a requirement prior to
the passage of WIOA and a
responsibility of the DSU. Therefore, a
DSU that historically has not, and is not
conducting reviews currently, would be
out of compliance with the requirement
under the Act.
Changes: None.
Cross -Reference With 34 CFR 397. 40
Comments: A few commenters
suggested that the language in proposed
361. 55 and proposed 34 CFR 397.40,
regarding semi-annual and annual
reviews, be cross-referenced and
reconciled to ensure consistency and
avoid confusion about which
requirements apply and the respective
responsibilities of the DSU under each
provision. One commenter suggested we
add a new § 361. 55( c) to indicate that:
1) The requirements in part 361
supersede any requirements that may
apply in 34 CFR 397.40 regarding the
responsibilities of a DSU for individuals
with disabilities, regardless of age, who
are employed at a subminimum wage;
and ( 2) reviews conducted under
361. 55 are subject to the requirements
under 34 CFR 397.40, regarding
informing the individual of self -
advocacy, self-determination, and peer
mentoring training opportunities
available in the community.
Discussion: Although a few
commenters suggested that the language
in proposed § 361. 55 and proposed
397.40 regarding semi-annual and
annual reviews be cross-referenced and
reconciled to ensure consistency and
avoid confusion about applicable
requirements and responsibilities of the
DSU, the sections are under separate
titles in the Act and have differing
effective implementation dates. Section
101( a)( 14) took effect upon enactment
July 22, 2014); section 511 of the Act,
as amended by WIOA, will take effect
on July 22, 2016. Moreover, final part
361 and 34 CFR part 397 apply to
different, although sometimes
intersecting, groups of individuals with
disabilities. Final § 361. 55 applies only
to individuals who have received or are
receiving vocational rehabilitation
services, whereas final 34 CFR 397. 40
covers a much broader population of
individuals with disabilities because
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many of those individuals may not have
ever received vocational rehabilitation
services. Neither section supersedes the
other; therefore, the specific
responsibilities of the DSU and the
requirements for reviews must be met
under both. While it is conceivable that
the required reviews under final
361. 55 and final 34 CFR 397.40 may be
fulfilled concurrently for some
individuals with disabilities to whom
both apply, it cannot be assumed that a
review required under final § 361. 55
sufficiently replaces the review required
under final 34 CFR 397.40 or vice versa.
Changes: None.
Individuals With a Record of Service
Comments: None.
Discussion: Upon further
Departmental review of proposed
361. 55 in light of the practical
implementation of these requirements
with regard to students with disabilities
receiving pre-employment transition
services under section 113 of the Act, as
amended by WIOA and final § 361. 48( a),
we have determined that clarifying
technical amendments are necessary.
Thus, we clarify in final § 361. 55( a)( 1)
and ( a)( 2) that the requirements of final
361. 55 apply to those individuals who
have a record of service—in other
words, individuals who have applied
for or been determined eligible for,
vocational rehabilitation services— and
achieved employment either at
subminimum wage or in extended
employment. This clarifying change
retains the long-standing applicability of
these requirements to such individuals.
Without this clarifying change, it may
be construed that the requirements may
also apply to students with disabilities
receiving pre-employment transition
services. As noted in a separate
discussion related to " Transition
Services," there is no requirement that
these students apply for or be
determined eligible for vocational
rehabilitation services in order to
receive pre-employment transition
services. As such, it is possible that a
DSU will have no information about the
student to form the basis for these semi-
annual or annual reviews.
Changes: Final §§ 361. 55( a)( 2)( i) and
ii) now explicitly applies these
requirements to individuals who have a
record of service.
B. Transition of Students and Youth
With Disabilities From School to
Postsecondary Education and
Employment
This section presents the analysis of
comments we received on proposed
regulations regarding the provision of
transition and other vocational
rehabilitation services to students and
youth with disabilities to ensure that
they have meaningful opportunities to
move from school to post -school
activities, including competitive
integrated employment. The analysis is
presented by topical headings relevant
to sections of the regulations in the
order they appear in part 361 as listed.
We discussed some of these regulatory
sections, such as §§ 361. 24, 361. 46,
361. 48( b), and 361. 49, under section A
as they also pertain to the general
administration of the VR program and
the provision of vocational
rehabilitation services to individuals
with disabilities of any age.
Topical Headings
Transition -Related Definitions (§ 361. 5( c))
Pre -Employment Transition Services
361. 5( c)( 42))
The Term " Pre -Employment Transition
Services"
Scope of Definition
Definitions for Required Activities
Acronym for Pre -Employment Transition
Services
Student With a Disability (§ 361. 5( c)( 51))
Scope of Definition
Educational Programming
Students Who Have Applied or Been
Determined Eligible for Vocational
Rehabilitation Services
Transition Services (§ 361. 5( c)( 55))
Scope of "Pre -Employment Transition
Services" and " Transition Services"
Outreach and Engagement of Parents or
Representatives
Youth With a Disability (§ 361. 5( c)( 58))
Distinction Between " Student With a
Disability" and " Youth With a
Disability"
Scope of Definition
Coordination With Education Officials
361. 22)
Coordination of Pre -Employment
Transition Services
Financial and Programmatic
Responsibilities
Contracting With Subminimum Wage
Programs
Coordination and Outreach to Parents and
Representatives
Dispute Resolution
Cooperation and Coordination With Other
Entities (§ 361. 24)
Content of the Individualized Plan for
Employment (§ 361. 46)
Scope of Vocational Rehabilitation Services
for Individuals With Disabilities
361. 48)
Pre -Employment Transition Services
361. 48( a))
Scope of Pre -Employment Transition
Services and Use of Reserve
Potentially Eligible
Discretion to Provide Pre -Employment
Transition Services to All Students With
Disabilities
Provision of Required Activities Based on
Need
Continuation of Pre -Employment
Transition Services
Required Activities
Continuum of Services
Other Vocational Rehabilitation Services as
Pre -Employment Transition Services
Pre -Employment Transition Coordination
Activities
Documentation and Reporting
Performance Measures
Services for Individuals Who Have Applied
for or Been Determined Eligible for
Vocational Rehabilitation Services
361. 48( b))
Scope of Vocational Rehabilitation Services
for Groups of Individuals With
Disabilities (§ 361. 49)
Transition -Related Definitions
361. 5( c))
Pre -Employment Transition Services
361. 5( c)( 42))
The Term ` Pre -Employment Transition
Services"
Comments: Some commenters
suggested revising the term " pre-
employment transition services" to
student career services."
Discussion: We appreciate the
suggestions raised by the commenters.
However, we will not change the term
pre-employment transition services" in
final § 361. 5( c)( 42) to " student career
services" because this term is not used
in the Act. Rather, section 7( 30) of the
Act, as amended by WIOA, defines
pre-employment transition services,"
and it is the term used throughout title
I of the Act, including in sections
101( a)( 25), 103( a)( 15), 110( d), 112( a),
and 113.
Changes: None.
Scope of Definition
Comments: A few commenters
recommended alternate definitions for
the term " pre-employment transition
services" that would include: (1) The
pre-employment transition coordination
responsibilities in proposed
361. 48( a)( 4); ( 2) each of the five
required activities in proposed
361. 48( a)( 2); and ( 3) use of the term
potentially eligible" and its definition.
Discussion: While we appreciate the
suggestions, we disagree that the
definition of " pre-employment
transition services" should be expanded
to include more specific information
regarding the types of services that
constitute " pre-employment transition
services" and the population to be
served. The definition of "pre-
employment transition services" in final
361. 5( c)( 42) is consistent with the
statutory definition in section 7( 30) of
the Act because it refers to the required
and authorized activities specified in
detail in final § 361. 48( a), which are the
only services permitted.
We also disagree with the
recommendation to include pre-
55683Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
employment coordination services in
the definition of "pre-employment
transition services." We agree that
coordination activities are necessary for
arranging and providing pre-
employment transition services.
However, coordination activities are
more akin to the related activities
performed by vocational rehabilitation
counselors and other vocational
rehabilitation personnel during the
course of providing pre-employment
transition services rather than the
services themselves. As such, we
included pre-employment transition
coordination activities under the
implementation of pre-employment
transition services in final § 361. 48( a),
but have not included them as part of
the definition of "pre-employment
transition services."
We also do not believe it is necessary
to define the term " potentially eligible,"
either within the definition of "pre-
employment transition services" or
separately in final § 361. 5( c). Because
this term is unique to implementing pre-
employment transition services and is
not applicable to any other vocational
rehabilitation service, we interpret the
phrase " potentially eligible" in
361. 48( a)( 1) as meaning all students
with disabilities, regardless of whether
they have applied or been determined
eligible for vocational rehabilitation
services. In so doing, the term is
applicable only when implementing the
requirements governing pre-
employment transition services in final
361. 48( a).
Changes: None.
Definitions for Required Activities
Comments: A few commenters
recommended that we define the
required activities listed in proposed
361. 48( a)( 2), including work -based
learning experiences, and career (or job
exploration) counseling. In this same
vein, many suggested that we define
work -based learning experiences in a
manner consistent with section 103( a) of
the School to Work Opportunities Act of
1994, and include job training, work
experiences, workplace mentoring, and
instruction in general workplace
competencies. One commenter
requested that we define career
counseling, expressing concern that
many States may provide this service in
ways that are less effective than one-on-
one counseling, such as presentations to
groups of students. One commenter
requested that we broadly define the
five required pre-employment transition
services to facilitate maximum use of
the VR funds reserved for those services.
However, a few commenters requested
that the required activities not be
defined so as to maintain the flexibility
permitted in the Act, as amended by
WIOA, to allow States to be innovative
in the types of activities provided to
students with disabilities and to
maximize use of the VR funds reserved
for providing pre-employment transition
services.
Discussion: We considered the
requests to define the required activities
listed in § 361. 48( a)( 2). We reviewed
section 103 of the School -to -Work
Opportunities Act of 1994, which
expired on October 1, 2001, and found
that it included mandatory activities
under the work -based learning
component that are similar to the five
required activities identified in section
113(b) of the Act, as amended by WIOA.
Given the similarities, we do not believe
further clarifications are needed.
We agree with the comment that, by
not defining the required activities, we
maintain flexibility for States and
enable the use of creative and
innovative strategies that are State
specific and tailored to meet the needs
of students with disabilities. We also
considered the comment about defining
career counseling. DSUs must provide
career counseling, or job exploration
counseling as the term is used in section
113 of the Act, in a manner that most
effectively meets the needs of the
student with a disability in an
individual or group setting, as they
would any other vocational
rehabilitation service. By providing job
exploration counseling in group
settings, DSUs can prepare students
with disabilities for one-on-one
counseling.
Changes: None.
Acronym for Pre -Employment
Transition Services
Comments: A few commenters
expressed concerns about the use of an
acronym for " pre-employment
transition services."
Discussion: We agree with the
commenters that an acronym should not
be used as shorthand for " pre-
employment transition services." We
did not use the most obvious acronym
for " pre-employment transition
services" in the NPRM or in these final
regulations, and we do not intend to use
it in administering the VR program
because of its negative connotations.
Changes: None.
Student With a Disability
361. 5( c)( 51))
Scope ofDefinition
Comments: A few commenters
supported the proposed definition.
However, most commenters did not
agree, for differing reasons, with the
Department' s proposed definition or its
interpretation set forth in the preamble
of the NPRM. Most of those disagreeing
stated the Department narrowed the
scope of the definition of a " student
with a disability."
Some commenters disagreed with the
regulatory definition because it did not
mirror the statutory definition.
Specifically, they believed the addition
of the phrase " a student who is" to the
phrase " an individual with a disability
for the purposes of section 504" in
proposed § 361. 5( c)( 51)( i)(C)( 2) narrows
the scope of the statutory definition. In
fact, one commenter believed that the
interpretation effectively eliminated
individuals qualifying on the basis of
section 504 of the Act.
A few commenters recommended that
the Department adjust the age range of
a " student with a disability," while
other commenters recommended that
the definition require a consistent age
range across the Nation.
Discussion: We appreciate the
comments supporting the definition, as
well as those expressing concern or
disagreement. We anticipated many of
the same concerns when developing the
proposed regulations. However, we
firmly believe that § 361. 5( c)( 51), both
as proposed and final, is consistent with
both the plain meaning and intent of the
definition in section 7( 37) of the Act, as
amended by WIOA. We agree with
commenters that § 361. 5( c)( 51)( i)(C)( 2),
both as proposed and final, limits the
definition to students. We adopted
almost verbatim section 7( 37) of the Act,
as amended by WIOA, and, in so doing,
we attempted to eliminate confusion
that the term " student with a disability"
could be construed to apply to someone
not in an educational program. We
recognize that the applicability of
section 504 of the Act, in any other
context, is much broader. Therefore, in
an effort to reduce confusion and
potential non-compliance, we clarified
in § 361. 5( c)( 51)( i)(C)( 2), both proposed
and final, that this particular criterion,
as all others, applies only to students
with disabilities. We believe this
clarification is consistent with the
statute because the term itself—"student
with a disability"— describes a
population that encompasses only
individuals with disabilities who are
participating in educational programs.
For this reason, we also disagree with
the recommendations to remove any
explicit requirement in the definition of
a " student with a disability" that the
individual be a participant in an
educational program because to do so
would contradict the plain meaning of
55684 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
the term itself and section 7( 37) of the
Act.
The definitions of " student with a
disability" in section 7( 37) of the Act
and final § 361. 5( c)( 51) allow for a
certain degree of flexibility in the age
range of students with disabilities.
States may elect to use a lower
minimum age for receipt of pre-
employment transition services than the
earliest age for the provision of
transition services under section
614( d)( 1)( A)(i)(VIII) of the IDEA. The
section applies beginning with the first
individualized education program (IEP)
to be in effect when a child with a
disability turns 16, or younger if
determined appropriate by the IEP
Team, and updated annually thereafter.
Pursuant to 34 CFR 300. 320( b) of the the
IDEA regulations, transition services
may be provided for students with
disabilities younger than age 16, if
determined appropriate by the IEP
Team. Furthermore, a " student with a
disability" may not be older than 21,
unless a State law provides for a higher
maximum age for the receipt of special
education and related services under the
IDEA. Therefore, there is no statutory
authority to revise the definition of a
student with a disability," for purposes
of the VR program, by adjusting the
specified age range or creating a
standard age range to be applied across
the Nation because to do so would be
inconsistent with the age criteria
contained in the statutory definition.
Changes: None.
Educational Programming
Comments: Some commenters stated
that the Department' s interpretation that
the definition applies only to students
in secondary school directly contradicts
congressional intent, as expressed in
section 2( b)( 5) of the Act, as amended
by WIOA, because the narrower
interpretation does not ensure, to the
greatest extent possible, that students
and youth with disabilities have
opportunities for postsecondary success.
Most of these commenters stated that
students in postsecondary education
should be included within the
definition, as should students in GED,
ESL, home school, vocational/ technical
programs, and juvenile justice or mental
health treatment facilities, so long as
they meet the age requirements in the
definition. These commenters stated
that students in these educational
programs and settings also need pre-
employment transition services, which
are available only to individuals who
meet the definition of a " student with
a disability." One commenter requested
that the Department share
documentation of congressional intent
in support of the interpretation that the
definition does not include individuals
in postsecondary education. A few
commenters were concerned that the
emphasis on serving only secondary
students might decrease emphasis by
DSUs on services for individuals
enrolled in postsecondary education.
Some commenters expressed concern
about the impact of the Department' s
interpretation of the definition of
student with a disability" on the use of
funds reserved for the provision of pre-
employment transition services. These
commenters believed the definition of a
student with a disability" should be
broader in order for States to maximize
use of the funds reserved for pre-
employment transition services.
Discussion: We appreciate the
concerns expressed by the commenters
and have reconsidered our
interpretation, as described in the
preamble to the NPRM, that the
definition of a " student with a
disability" should be limited to students
in a secondary education program. Our
intention in the NPRM was to be
consistent with congressional intent for
the definition, given the requirements
governing the availability of a free
appropriate public education under the
IDEA, which is limited to services
included in the individualized
education programs of children with
disabilities who are enrolled in
secondary education under State law
20 U.S. C. 1412( a)( 1) and 1401( 9)).
Services provided under the IDEA are
not affected by our interpretation here,
which applies only to the VR program.
Nonetheless, we agree that section
7( 37) of the Act, as amended by WIOA,
is silent on the educational setting for a
student with a disability. After much
consideration of the potential effects for
such change in interpretation, the
Secretary agrees that the definition of a
student with a disability" in final
361. 5( c)( 51), for purposes of the VR
program, should be interpreted as
applying to students also enrolled in
educational programs outside secondary
school, including postsecondary
education programs, so long as the
students satisfy the age requirements set
forth in final § 361. 5( c)( 51). We believe
this change will eliminate the concern
expressed by commenters regarding the
potential negative effect a different
interpretation would have on a DSU
providing and maximizing
postsecondary education opportunities
to eligible individuals with disabilities
needing such services under an
approved individualized plan for
employment. Furthermore, as was set
forth in the NPRM, the Secretary
believes that the definition applies to
secondary students who are
homeschooled, as well as students in
other non-traditional secondary
educational programs. This
interpretation is not affected by this
discussion, and these individuals
remain covered by the definition of a
student with a disability" in final
361. 5( c)( 51).
We also agree with commenters that
postsecondary education students may
benefit from certain pre-employment
transition services set forth in section
113 of the Act, as amended, and final
361. 48( a), all of which are limited to
students with disabilities." We believe
this broader interpretation of the
definition will increase the potential for
DSUs to maximize the use of funds
reserved for the provision of pre-
employment transition services by
increasing the number of students who
can receive these services. Therefore, we
have revised the definition of " student
with a disability" in final § 361. 5( c)( 51)
to include students in secondary,
postsecondary, and other recognized
education programs.
However, this broader interpretation
does not expand the list of required or
authorized activities in section 113 of
the Act, as amended by WIOA, and final
361. 48( a). A DSU can use the reserved
funds to provide pre-employment
transition services, as set forth in final
361. 48( a), to students with disabilities
in postsecondary education or other
educational programs who meet the age
requirements of the definition. For
example, a DSU may provide work -
based learning activities such as
internships to an individual with a
disability in a postsecondary education
program who otherwise satisfies the
definition of a " student with a
disability," but may not use the reserved
funds (dedicated to the provision of pre-
employment transition services under
final § 361. 48( a)) to provide services and
activities not specifically included in
section 113 of the Act and final
361. 48( a). In other words, a DSU may
not use the funds reserved for pre-
employment transition services to pay
for tuition and other costs of attending
postsecondary education, since this is
not among those activities that are
required or authorized under section
113 of the Act and final § 361. 48( a).
These and other necessary services,
however, may be provided with VR
funds not reserved for the provision of
pre-employment transition services so
long as they are provided pursuant to an
approved individualized plan for
employment under section 103( a) of the
Act and final § 361. 48( b) of these final
regulations.
55685Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
Section 113 of the Act, as amended by
WIOA, requires DSUs to coordinate pre-
employment transition services with
local educational agencies. This applies
to students with disabilities in
educational programs administered by
local educational agencies. DSUs should
coordinate the pre-employment
transition services provided to students
who are not participating in programs
administered by local educational
agencies with the public entities
administering those educational
programs, as described in section
101( a)( 11)( C) of the Act, as amended by
WIOA, and final § 361. 24.
Changes: We have revised the
definition of " student with a disability"
in final § 361. 5( c)( 51) to includes
students in secondary, postsecondary,
and other recognized education
programs.
Students Who Have Applied or Been
Determined Eligible for Vocational
Rehabilitation Services
Comments: A few commenters
recommended that the definition apply
only to individuals with disabilities
who have applied for and been
determined eligible for vocational
rehabilitation services.
Discussion: We disagree with the
comments recommending that a
student with a disability" should be
limited to individuals who have applied
or been determined eligible for
vocational rehabilitation services. The
definition in final § 361. 5( c)( 51) is
consistent with section 7( 37) of the Act,
which does not limit the definition to
applicants and eligible individuals of
the VR program. Furthermore, to impose
such a limitation would be contrary to
the Department' s interpretation of
students withpotentially eligible,"
disabilities, as used in section 113 of the
Act, as amended by WIOA, and final
361. 48( a). We have repeatedly stated
in both the NPRM and these final
regulations that all " students with
disabilities," regardless of whether they
have submitted an application or been
determined eligible for vocational
rehabilitation services, may receive pre-
employment transition services under
final § 361. 48( a). See a more detailed
discussion of "Potentially Eligible" later
in this section in connection with
comments received under final
361. 48( a).
Upon further Departmental review of
this issue, the Secretary has determined
that other conforming changes are
needed throughout final part 361 to
ensure these students, who may not
have applied or been determined
eligible for the VR program, would still
be protected by fundamental rights
under the VR program, namely the
protection of their personal information
under final § 361. 38 and the right to
exercise informed choice under final
361. 52. We have revised these
provisions to refer to " recipients of
services" rather than " eligible
individuals."
Changes: We have revised final
361. 38 and final § 361. 52 to refer to
recipients of services" rather than
eligible individuals," thereby ensuring
that students and youth with disabilities
who may receive pre-employment
transition services or transition services
to groups, as applicable, are still
protected by requirements governing
confidentiality and informed choice
even if they have not applied or been
determined eligible for the VR program.
Transition Services (§ 361. 5( c)( 55))
Scope of "Pre -Employment Transition
Services" and " Transition Services"
Comments: A few commenters
supported the definition of "transition
services" in proposed § 361. 5( c)( 55),
while a few commenters requested
clarification regarding the difference
between " transition services" and " pre-
employment transition services," and
the responsibility of DSUs to provide
job placement assistance within the
context of these services.
Discussion: We appreciate the support
from commenters to maintain the
proposed definition of " transition
services" in final § 361. 5( c)( 55). As to
the difference between " pre-
employment transition services" and
transition services," we believe the
distinction between the two is critical.
As stated in the preamble to the NPRM,
vocational rehabilitation services are
provided on a continuum, with pre-
employment transition services being
the earliest set of services available to
students with disabilities.
Pre-employment transition services,
authorized by section 113 of the Act, as
amended by WIOA, and implemented
by final § 361. 48( a), are designed to help
students with disabilities to begin to
identify career interests that will be
further explored through additional
vocational rehabilitation services, such
as transition services. Furthermore, pre-
employment transition services are only
those services and activities listed in
section 113 of the Act, as amended by
WIOA, and final § 361. 48( a). Job
placement assistance is not included
among the listed pre-employment
transition services, but it could
constitute a transition service under
section 103( a)( 15) of the Act and final
361.48(b). Finally, pre-employment
transition services are available only to
students with disabilities, whereas
transition services may be provided to a
broader population—both students and
youth with disabilities.
Following the continuum, transition
services represent the next set of
vocational rehabilitation services
available to students and youth with
disabilities. They are outcome -oriented
and promote movement from school to
post -school activities, including
postsecondary education, vocational
training, and competitive integrated
employment. As such, transition
services may include job-related
services, such as job search and
placement assistance, job retention
services, follow-up services, and follow -
along services, based on the needs of the
individual.
Individualized transition services
under section 103( a)( 15) of the Act and
final § 361.48(b) must be provided to
students who have been determined
eligible for the VR program and in
accordance with an approved
individualized plan for employment.
Transition services also may be
provided in group settings to students
and youth with disabilities under
section 103( b)( 7) of the Act, as amended
by WIOA, and final § 361. 49( a)( 7).
Although these group services are not
individualized, they can still be
beneficial for job exploration, including
presentations from employers in the
community and group mentoring
activities.
Changes: None.
Outreach and Engagement ofParents or
Representatives
Comments: A few commenters
requested that we revise the definition
to incorporate parental outreach and
engagement.
Discussion: We agree that engaging
and coordinating with parents or
representatives of students and youth
with disabilities is consistent with the
network of services and activities
included in the definition, and we have
revised the definition accordingly.
Changes: We have revised final
361. 5( c)( 55) by adding paragraph (v) to
include outreach to and engagement of
parents or, as appropriate, the
representatives of students or youth
with disabilities in the definition of
transition services."
Youth With a Disability (§361. 5( c)( 58))
Distinction Between " Student With a
Disability" and " Youth With a
Disability"
Comments: While a few commenters
praised the clarity of the proposed
definition, most stated that making a
55686 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
distinction between a student with a
disability and a youth with a disability
creates unnecessary complexity and
burden. These commenters
recommended that services available to
students with disabilities, such as pre-
employment transition services, also be
available to youth with disabilities. One
commenter recommended that " youth
with a disability" be defined more
broadly than " student with a disability"
so that individuals who are
homeschooled and others could be
covered by the definition.
Discussion: We appreciate all of the
comments and concerns about the
definition of "youth with a disability"
in § 361. 5( c)( 58). While we understand
the commenters' concerns, the Act, as
amended by WIOA, defines the terms
student with a disability" and " youth
with a disability" differently. Moreover,
the Act and these final regulations use
the terms differently, depending on the
context. For example, only students
with disabilities can receive pre-
employment transition services under
section 113 of the Act and final
361. 48( a), but both students with
disabilities and youth with disabilities
can receive transition services under
section 103 of the Act and final
361. 48( b) and 361. 49( a). The
definitions set forth in these final
regulations are consistent with the
statute, and we have no statutory
authority to consolidate the two
definitions or to delete one of them
because to do so would be inconsistent
with the statute.
The age range in the definition of
youth with a disability" in final
361. 5( c)( 58) is broader than that for
student with a disability" in final
361. 5( c)( 51). Therefore, a student with
a disability always meets the definition
of a " youth with a disability" because
a student with a disability has an age
range that fits within the age range
prescribed by the definition of a " youth
with a disability."
However, a youth with a disability
may not necessarily meet the definition
of a " student with a disability." A youth
with a disability could also be a student
with a disability if the individual meets
the age range in the definition of
student with a disability" and
participates in an educational program
see the earlier discussion of
educational programming under
Student with a Disability section
361. 5( c)( 51)). On the other hand, a
youth with a disability who is outside
the age range for a student with a
disability or is not participating in an
educational program does not meet the
definition of a " student with a
disability."
Changes: None.
Scope ofDefinition
Comments: One commenter
questioned whether the definition of
youth with a disability" includes
criteria related to the IDEA or section
504, as is the case with the definition of
a " student with a disability."
Discussion: As previously discussed,
the definition of "youth with a
disability" in final § 361. 5( c)( 58) not
only is broader in age range but also is
not tied to participation in an
educational program under the IDEA or
section 504 of the Act, as is the
definition of " student with a disability."
Changes: None.
Coordination With Education Officials
361. 22)
Coordination ofPre -Employment
Transition Services
Comments: A few commenters
expressed support for proposed
361. 22, suggesting minimal to no
changes. A few, however, stated that
DSUs are required to provide pre-
employment transition services in
collaboration with educational agencies,
and recommended that we include in
proposed § 361. 22( b) reference to these
services wherever the interagency
coordination of transition services is
mentioned. One commenter stated that
a major challenge in transition is
determining which entity is responsible
for job placement assistance and
support, and recommended proposed
361. 22( b) be revised to incorporate
specific mention of these services in the
coordination of pre-employment
transition services.
A few commenters recommended that
we consider including in proposed
361. 22 a reference to technical
assistance circular 14-03 ( RSA—TAC-
14-03), which discusses transition -
related principles.
Discussion: We appreciate the
comments supporting proposed
361. 22, as well as those seeking further
clarification or expressing concerns. We
agree that pre-employment transition
services should be added to final
361. 22( b) as it is referenced in final
361. 22( a)( 1). However, there is no
statutory basis to require job placement
services in connection with pre-
employment transition services, as job
placement services are not among the
required or authorized activities under
section 113 of the Act, as amended by
WIOA. Yet, while we cannot require it,
nothing in the Act prohibits States from
including job placement activities as a
transition service in the formal
interagency agreement.
We disagree with the request to add
a reference in final § 361. 22( b) to
technical assistance circular 14- 03
because the content of technical
assistance circular 14-03 has been
significantly affected by the
amendments to the Act made by WIOA.
As a result, we will be revising this
particular technical assistance circular
accordingly.
Changes: We have revised
361. 22( b)( 1) to state that the formal
interagency agreement must include
collaboration between the DSU and the
State educational agency for providing
pre-employment transition services to
students with disabilities. We have also
revised §§ 361. 22(b)( 3) and (b)( 4) to
similarly cover pre-employment
transition services when identifying
personnel responsible for providing
services and when developing
procedures for outreach to and
identification of students with
disabilities.
Financial and Programmatic
Responsibilities
Comments: One commenter suggested
that we revise proposed § 361. 22 by
requiring that the formal interagency
agreement between the DSU and the
State educational agency contain more
robust minimum content provisions,
since the agreement is critical to
providing services to students with
disabilities and a successful transition
from school to post -school activities.
Many commenters stated that
additional guidance is needed to
determine which entity, the school or
the DSU, is financially responsible for
providing transition services to students
with disabilities. Many requested that
we revise proposed § 361. 22 to
explicitly identify the financial roles
and responsibilities of each entity,
stating that the interagency agreement
cannot be effective if it is broad, general
or abstract. Other commenters
recommended that the formal
interagency agreement provide clear
direction about agencies'
responsibilities for services under
particular circumstances, stating that
specificity is essential to coordinating
shared responsibilities and funding.
A few commenters expressed concern
that major problems and delays in
implementing transition planning
services occur because neither WIOA
nor the IDEA state explicitly which
entity is responsible for providing
transition services. These commenters
stated that the financial responsibilities
must be made clear so that neither the
local educational agency nor the DSU
may shift the burden for providing a
55687Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
service, for which it otherwise would be
responsible, to the other entity.
A few commenters also noted that
while many of these decisions can be
resolved at the State and local level,
there are still instances where it is
difficult to determine the responsible
entity, such as in the determination of
which entity is responsible for job
placement assistance and related work
supports. Conversely, one commenter,
representing school officials, stated that
decisions about providing and assuming
financial responsibility for transition
services must be made at the State and
local level through interagency
collaboration and coordination, cannot
be wholly dictated by regulation, and
must be made based on the
circumstances of the situation and the
eligibility of the student.
One commenter expressed the
concern that the budget for the VR
program is not as significant as the
budget for special education, and
vocational rehabilitation funds may be
quickly exhausted if the VR program
were to provide pre-employment
transition services to every student with
a disability. Another commenter noted
that the schools and DSUs need to
collaborate with other entities that have
shared responsibilities and funding.
Similarly, one commenter stated that
the IDEA, WIOA, and the Americans
with Disabilities Act seem to be in a
competitive relationship, since the
entities covered by these statutes are
responsible for providing and funding
some of the same services.
Discussion: As discussed in the
preamble of the NPRM, over the years
many individuals have sought
clarification and posed questions about
the financial responsibilities of schools
and DSUs when services fall under the
purview of both entities. For example,
pre-employment transition services and
transition services can be both
vocational rehabilitation services under
the VR program and special education
or related services under the IDEA.
While neither the Act, as amended by
WIOA, nor the IDEA is explicit as to
which entity—the DSU or the State
educational agency and, as appropriate,
the local educational agency— is
financially responsible for providing
pre-employment transition services and
transition services, both final § 361. 22( c)
and 34 CFR 300. 324( c)( 2) provide that
neither the DSU nor the local
educational agency may shift the burden
for providing services, for which it
otherwise should be responsible, to the
other entity. It is essential that section
101( c) of the Act, as amended by WIOA,
and section 612( a)( 12) of the IDEA,
along with their implementing
regulations in § 361. 22( c) and 34 CFR
300. 154, are read in concert to avoid any
inconsistency or conflict between the
two requirements.
Section 113( a) of the Act, as amended
by WIOA, requires the DSU to provide,
or arrange for the provision of, pre-
employment transition services in
collaboration with local educational
agencies. Therefore, decisions as to
which entity will be responsible for
providing services that are both special
education services and vocational
rehabilitation services must be made at
the State and, as appropriate, local level
as part of the collaboration between the
DSU, State educational agencies, and, as
appropriate, the local educational
agencies.
We agree that the formal interagency
agreement should facilitate the
transition of students with disabilities
receiving special education services to
receiving vocational rehabilitation
services without delay or disruption.
Since the decisions about financial
responsibility for providing pre-
employment transition services and
transition services must be made at the
State and local level during
collaboration and coordination of
services, a formal interagency agreement
or other mechanism for interagency
coordination can explicitly address all
aspects of these issues. As suggested in
the NPRM, the agreement criteria could
address criteria such as:
1. The purpose of the service. Is it
related more to an employment outcome
or education? That is, is the service
usually considered a special education
or related service, such as transition
planning necessary for the provision of
a free appropriate public education?
2. Customary Services. Is the service
one that the school customarily
provides under part B of the IDEA? For
example, if the school ordinarily
provides job exploration counseling or
work experiences to its eligible students
with disabilities, the mere fact that
those services are now authorized under
the Act as pre-employment transition
services does not mean the school
should cease providing them and refer
those students to the VR program.
However, if summer work experiences
are not customarily provided by a local
educational agency, the DSU and local
educational agency may collaborate to
coordinate and provide summer work -
based learning experiences.
3. Eligibility. Is the student with a
disability eligible for transition services
under the IDEA? The definition of a
student with a disability" under the
Act and these final regulations is
broader than under the IDEA because
the definition in the Act includes those
students who are individuals with
disabilities under section 504 of the Act.
It is possible that students receiving
services under section 504 do not have
individualized education programs
under the IDEA because they are not
eligible to receive special education and
related services under the IDEA. As a
result, DSUs are authorized to provide
transition services under the VR
program to a broader population under
WIOA than local educational agencies
are authorized to provide under the
IDEA.
The Secretary believes that these
criteria may assist DSUs, State
educational agencies, and local
educational agencies as they collaborate
and coordinate the provision of
transition services, including pre-
employment transition services, to
students with disabilities. We strongly
encourage that formal interagency
agreements have clearly defined
parameters for collaborating and
coordinating the delivery of pre-
employment transition services and
transition services and clearly defined
responsibilities for each entity.
However, there is no statutory basis for
the Department to establish service
delivery or financial responsibilities.
Those decisions must be made at the
State level while developing an
interagency agreement and considering
the population, available resources, and
needs of the students and youth.
Consequently, States have maximum
flexibility to develop these interagency
agreements in a manner that best meets
the unique needs and capacities of both
the DSUs and educational agencies.
Changes: None.
Contracting With Subminimum Wage
Programs
Comments: Some commenters
recommended that proposed
361. 22( b)( 6) be revised to prohibit
contracts or arrangements with, or
referrals to, programs in which youth
with disabilities are employed at
subminimum wage. They stated that the
agreements should go beyond
documentation requirements and make
proactive efforts to identify individuals
being considered for employment at
subminimum wage. One commenter
expressed support for using the existing
formal interagency agreement as the
mechanism to develop and document
the process required in section 511 of
the Act as proposed in § 361. 22.
Discussion: We agree with
commenters that the Act emphasizes the
need to ensure that individuals with
disabilities, especially students and
youth with disabilities, are given the
opportunity to receive training for and
55688 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
obtain work in competitive integrated
employment. The commenters
misunderstood our proposal because
361. 22( b)( 6), both proposed and final,
requires the interagency agreement
between the DSU and the State
educational agency to include an
assurance that, in accordance with 34
CFR 397. 31, neither the State
educational agency nor the local
educational agency will enter into a
contract or other arrangement with an
entity, as defined in 34 CFR 397. 5( d), for
the purpose of operating a program for
a youth with a disability under which
work is compensated at a subminimum
wage. Moreover, new requirements in
section 511 of the Act, as amended by
WIOA, and in final 34 CFR part 397
place additional limitations on the use
of subminimum wages for individuals
with disabilities, especially youth with
disabilities. For example, final 34 CFR
397. 10 requires the DSU, in
coordination with the State educational
agency, to develop a process that
ensures youth with disabilities receive
documentation demonstrating their
completion of the various required
activities.
Changes: None.
Coordination and Outreach to Parents
and Representatives
Comments: A few commenters urged
the Department to ensure that
coordination efforts include outreach to
parents of students who are in need of
transition services. One such
commenter recommended proposed
361. 22( b)( 4) be revised to include
systematic outreach to, and engagement
of, parents, including through the IEP
process for the IDEA eligible students.
The commenter stated that without this
outreach and engagement, parents will
not have a meaningful understanding of
the benefits of vocational rehabilitation
services for their children.
Discussion: While there is no
statutory basis in section 101( a)( 11)( D)
of the Act to require outreach to parents,
we agree that family members,
caregivers, and representatives play a
critical role in the transition process.
We believe that for pre-employment
transition services and transition
services to be meaningful and to lead to
successful outcomes for students and
youth with disabilities, their family
members, caregivers, and
representatives must be aware of the
services and benefits offered by DSUs
and be involved in the transition
process. Although DSUs may conduct
outreach to parents and representatives,
this activity may be affected by State
laws governing the age of majority.
Under section 615( m) of the IDEA and
34 CFR 300. 520, a State may transfer all
rights accorded to parents under Part B
of the IDEA to the student when he or
she reaches the age of majority under
State law that applies to all children. If
rights under the IDEA transfer to the
student, a student may have the right to
make his or her own education,
employment, and independent living
decisions under the IDEA. DSUs may
conduct outreach directly to these
students. Parental consent to participate
in pre-employment transition services
and transition services should be
obtained pursuant to State law, as well
as policies of the educational programs
and the DSU. We further emphasize
here that the Department funds
programs and projects that advise and
assist parents and representatives of
students and youth with disabilities as
their children prepare for adult life. The
Department awarded grants to more
than 65 Parent Training and Information
Centers funded by the Office of Special
Education Programs and seven Parent
Information and Training Programs
funded by RSA during FY 2015.
Individuals will find additional
resources regarding age of majority at
www.parentcenterhub. org/repository/
age-of-majority-parentguide/.
Changes: None.
Dispute Resolution
Comments: Some commenters
expressed the concern that proposed
361. 22( c) is limited and provides no
safeguards for students if an agreement
is not reached about financial
responsibility for a particular service,
which can lead to delays in services or
no services at all. Some commenters
stated that the formal interagency
agreement should include a mechanism
to resolve disputes between the State
educational agency and the DSU about
providing pre-employment transition
services and transition services. One
commenter also suggested that we
require language in the formal
interagency agreement to inform
individuals of the availability of the
CAP.
Discussion: We disagree with the
recommendations to require that the
formal interagency agreement include:
1) A mechanism for resolving disputes
between the DSU and the State
educational agency or local educational
agency; ( 2) a method for resolving
disputes between an individual with a
disability and these entities; and (3)
information about the CAP. Section
101( a)( 11)( D) of the Act, as amended by
WIOA, which provides the statutory
authority for final § 361. 22( b), does not
require that States create a grievance
procedure for disputes under the
agreements, in general, or, more
specifically, about the provision of pre-
employment transition services or
transition services. Likewise, section
101( a)( 11)( D) of the Act does not require
the interagency agreement to identify a
process for resolving disputes between
an individual with a disability and the
DSU, State educational agency, or local
educational agency about pre-
employment transition services and
transition services, or to include
information about the CAP. We believe
final § 361. 22 is consistent with the Act,
and it provides States maximum
flexibility to develop the interagency
agreements in a manner that best meets
their unique needs and circumstances.
However, there is nothing in the Act or
these final regulations that prohibits
States from including in the formal
interagency agreement a grievance
procedure (e.g., similar to the one in
section 101( a)( 8) of the Act) to resolve
disputes between the DSU and the State
educational agency, or the local
educational agency, as appropriate, as
well as procedures to resolve disputes
between an individual with a disability
and the DSU, State educational agency
or local educational agency, and
information about the CAP. We
encourage States to include these
procedures and information in their
interagency agreements.
Section 20 of the Act requires all
programs providing services under the
Act, including the VR program, to
inform applicants and recipients of
services of the availability and purpose
of the CAP. Therefore, regardless of
whether the formal interagency
agreement between the DSU and the
State educational agency addresses the
CAP, all students and youth with
disabilities receiving vocational
rehabilitation services, including pre-
employment transition services and
transition services, will be informed
about it. In addition, an applicant for, or
eligible individual under, the VR
program who is dissatisfied with a
decision made by vocational
rehabilitation personnel, including
those about pre-employment transition
services and transition services, may
request a review of that decision under
section 102( c) of the Act. Upon further
Departmental review, the Secretary has
realized that the statute has created an
unintended inconsistency among
sections 20, 102( c), 103( b)( 7), 12( a), and
113. Specifically, section 20 requires
programs funded under the Act to
inform applicants for and recipients of
those services about the CAP. There is
no requirement that the recipients be
55689Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
determined eligible for those services in
order to receive information about the
CAP. Section 103( b)( 7) of the Act
permits the DSU to provide transition
services to youth and students with
disabilities in a group setting, regardless
of whether those students or youth have
applied for or been determined eligible
for vocational rehabilitation services.
Section 112( a) specifically authorizes
the CAP to assist students with
disabilities receiving pre-employment
transition services. Section 113 makes
clear that students with disabilities are
eligible to receive pre-employment
transition services regardless of whether
they have applied or been determined
eligible for the VR program. All of these
provisions, read in concert, make clear
that due process rights under the Act
would be available to students and
youth with disabilities receiving pre-
employment transition services and
transition services even if they have not
yet applied for or been determined
eligible for the VR program. However,
section 102( c) refers only to " applicants
and eligible individuals," thus creating
an internal inconsistency within the
Act. Because it is clear that students and
youth with disabilities are able to
receive certain services without having
applied or been determined eligible for
vocational rehabilitation services and
they are eligible for advocacy assistance
from the CAP, the Secretary has
determined it is necessary to amend
final § 361. 57 throughout to make clear
that " recipients" of vocational
rehabilitation services may exercise due
process rights when disagreements arise
during the receipt of pre-employment
transition services and transition
services. We have also made conforming
changes throughout final part 361, such
as with the definition of " impartial
hearing officer" in § 361. 5( c)( 24) and
qualified and impartial mediator" in
361. 5( c)( 43).
The student or youth with a
disability, or the individual' s parent, as
appropriate, will be informed of the
CAP. Disputes or disagreements
between parents and educational
personnel are beyond the scope of the
Act and these final regulations.
Changes: We have revised final
361. 57 throughout to replace " eligible
individuals" with " recipients." We also
made conforming changes to the
definitions of " impartial hearing
officer" and " qualified and impartial
mediator" in final § 361. 5( c).
Cooperation and Coordination With
Other Entities (§ 361. 24)
Comments: A few commenters
disagreed with proposed § 361. 24( d),
stating that the regulations do not
ensure that American Indian students
and youth with disabilities enrolled in,
but disconnected from, the education
system are adequately served. These
same commenters specifically requested
that reference to the American Indian
Vocational Rehabilitation Services
AIVRS) program funded under § 121 of
the Act be made throughout the final
regulations whenever " new transition
services" are mentioned. A few other
commenters addressed transition
services for American Indian students
with disabilities without referring to
proposed § 361. 24.
Some commenters recommended that
we require DSUs to include in their
formal interagency agreements with
AIVRS projects and to address in their
agreements with Tribal Education
Agencies in the State how the State VR
agency plans to provide equitable pre-
employment transition services to
American Indian students with
disabilities, particularly those that
attend schools on Indian reservations.
The commenters also recommended that
we require State VR agencies to address
how services to American Indian
students with disabilities will be
incorporated into the budgeting and
spending plans for the funds reserved
for providing pre-employment transition
services for students with disabilities.
One commenter encouraged the
Department to consider using Impact
Aid funds for youth in transition.
Discussion: While the Department
understands the commenters' concerns
regarding the need to ensure that
coordination among the DSU, AIVRS
program, and educational agencies is
taking place and that transition services,
including pre-employment transition
services, are provided to American
Indian students with disabilities, the
Department does not believe a revision
to the final regulations is necessary to
do this.
Final § 361. 24, as it did when
proposed, addresses the need for
coordination among these entities and
for providing transition services to
American Indians living on or near a
reservation. Section 361. 24( d)( 1)
requires the VR services portion of the
Unified or Combined State Plan to
assure that DSUs have entered into
formal cooperative agreements with
AIVRS programs in their States. Section
361. 24( d)( 2) sets out requirements for
cooperative agreements with AIVRS
programs, and those include strategies
for providing transition planning under
361. 24( d)( 2)( iii). Furthermore, the
Federal funds reserved in accordance
with § 361. 65, and any funds made
available from State, local, or private
funding sources, are to be used to
provide pre-employment transition
services to all students with disabilities,
including American Indian students
with disabilities, in need of such
services, regardless of whether an
application for services has been
submitted. Finally, § 361. 30 requires
that the DSU assure in the VR services
portion of the Unified or Combined
State Plan that it will provide services
to American Indians with disabilities to
the same extent that it provides services
to other populations with disabilities in
the State.
Final § 361. 22 provides for a formal
interagency agreement with the State
Educational Agency that would include
educational services, including
transition services and pre-employment
transition services, provided by local
educational agencies for Indian students
with disabilities living on reservations.
DSUs coordinate with schools on
reservations that provide services
through the Bureau of Indian Education
or TEAs under the requirement in
361. 24( a) that the DSU cooperate with
Federal and local agencies and
programs. Because the final regulations
provide appropriate mechanisms for
coordination with the Federal, State and
Tribal agencies that provide educational
services to Indian students with
disabilities on reservations, we do not
believe a change in the regulations is
necessary.
As for using funds for transition
services provided under the Impact Aid
law (formerly Title VIII of the
Elementary and Secondary Education
Act of 1965 ( ESEA) and now in Title VII
as a result of the Every Student
Succeeds Act reauthorization), the
comment is beyond the scope of these
regulations. That said, however, the
Impact Aid provides assistance to local
school districts with concentrations of
children residing on Indian lands,
military bases, low -rent housing
properties, or other Federal properties
and, to a lesser extent, concentrations of
children who have parents in the
uniformed services or employed on
eligible Federal properties who do not
live on Federal property. The majority
of Impact Aid funds is general aid to the
school district recipients and may be
used in whatever manner the districts
choose, as long as it is consistent with
State and local requirements. The
Department does not have the statutory
authority to direct Impact Aid general
aid money, including for the use
suggested by the commenter.
Changes: None.
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Content of the Individualized Plan for
Employment (§ 361. 46)
Comments: A few commenters
requested additional guidance regarding
the use of a " projected post -school
employment outcome" in an
individualized plan for employment for
a student or youth with a disability and
asked whether the use of the broad
category " Standard Occupational
Codes" would meet this description.
Discussion: In response to the request
for additional guidance, the
individualized plan for employment
with a projected post -school
employment outcome should outline
the services and activities that will
guide the individual' s career
exploration. The projected post -school
employment outcome facilitates the
individual' s exploration and
identification of a vocational goal based
upon his or her informed choice. It may
be a specific goal, such as a Web
designer, or a broader goal, such as
medical practitioner. The projected goal
may be amended during the career
development process, and eventually it
must be revised to a specific vocational
goal once this process is completed.
Changes: None.
Scope of Vocational Rehabilitation
Services for Individuals With
Disabilities (§ 361. 48)
Pre -Employment Transition Services
361. 48( a))
Scope of Pre -Employment Transition
Services and Use of Reserve
Comments: Some commenters
expressed support for the proposed
regulation. However, most commenters
recommended revisions or sought
clarification about the scope and
provision of pre-employment transition
services. One commenter suggested that
we revise proposed § 361. 48( a) to
include only direct services to
individuals, while another commenter
requested clarification as to whether
pre-employment transition coordination
activities in proposed § 361. 48( a)( 4)
could be paid for with funds reserved
for providing pre-employment transition
services.
Discussion: Section 113( a) of the Act,
as amended by WIOA, states that the
funds reserved under section 110( d) and
any funds made available from State,
local, or private (other) sources shall be
used to provide, or arrange for the
provision of, pre-employment transition
services. The coordination activities
required by section 113( d) of the Act, as
amended by WIOA, and final
361. 48( a)( 4) are essential for arranging
and providing the " required" and
authorized" activities set forth in
section 113(b) and (c) of the Act and
final § 361. 48( a)( 2) and (3). Therefore,
there is no statutory authority to limit
the scope of final 361. 48( a) to only the
direct services required by section
113(b) of the Act. See a more detailed
discussion of the definition of " Pre -
Employment Transition Services," and
the services included in that definition,
earlier in this section.
We agree with the commenter that
proposed § 361. 48( a) should be revised
to clarify that pre-employment
transition coordination services
provided under § 361. 48( a)( 4) may be
paid with funds reserved for providing
pre-employment transition services,
because coordination activities are
essential for arranging and providing
those services, as required by section
113( a) of the Act and § 361. 48( a).
Changes: We have revised final
361. 48( a) to clarify that the funds
reserved for the provision of pre-
employment transition services may be
used to pay for pre-employment
transition coordination activities.
Potentially Eligible
Comments: Through the NPRM, we
sought public comments and alternate
suggestions related to our interpretation
of "potentially eligible" to mean all
students with disabilities, regardless of
whether they have applied for and been
determined eligible for the VR program.
Of the comments received, most agreed
with this interpretation. However, some
commenters provided alternate
interpretations.
Of those commenters, a few suggested
that the term should be interpreted as
meaning students with disabilities who
have at least applied for vocational
rehabilitation services, with one
commenter suggesting this would both
allow for providing individualized
services and ensure parental consent for
students with disabilities to work with
a vocational rehabilitation counselor.
Other commenters stated that serving
applicants for vocational rehabilitation
services would allow the counselor not
only to gather sufficient information to
meet the specific needs of the student
with a disability but also to track and
report the provision of services and
expenditure of funds. One commenter
recommended revising proposed
361. 48( a)( 1) to limit the " potentially
eligible" population to those
individuals who have both applied for
and been determined eligible for
vocational rehabilitation services.
Furthermore, some commenters
provided alternate interpretations for
limiting or expanding the population to
students or youth based upon age -range,
or enrollment in secondary,
postsecondary, or dual enrollment
educational programs. One commenter
recommended that " potentially eligible"
be defined to ensure consistent
implementation across States. A few
commenters expressed concerns that the
regulations significantly limit the
resources for students who have applied
for and been determined eligible for the
full scope of vocational rehabilitation
services, as well as individuals with
most significant disabilities. A few
commenters expressed concerns that
spending funds required to be reserved
for providing pre-employment transition
services on students who are potentially
eligible for vocational rehabilitation
services may force DSUs to implement
an order of selection or close priority
categories under an existing order of
selection. One commenter raised
concerns that DSUs may have limited
fiscal and human resources required to
address the needs of potentially eligible
students. One commenter requested
clarification as to how students would
he identified.
Another commenter suggested that
proposed § 361. 48( a) does not conform
to section 112 of the Act, as amended
by WIOA, because the CAP is unable to
provide assistance or advocacy services
to individuals who are not vocational
rehabilitation clients or client -
applicants. A few commenters also
expressed concerns about students
being able to make informed choices, as
well as obtaining parental consent for
potentially eligible students who are
minors and participating in pre-
employment transition services, prior to
submitting an application for vocational
rehabilitation services.
Discussion: We appreciate the
comments supporting the proposed
regulation, as well as comments
expressing concerns and suggestions for
changes. After much consideration of all
available options, we have decided to
maintain our interpretation of
potentially eligible" for purposes of
pre-employment transition services. In
so doing, all students with disabilities,
regardless of whether they have applied
for or been determined eligible for the
VR program, may receive pre-
employment transition services. The
Secretary believes this is the broadest
legally supportable interpretation and
the one that is most consistent with the
apparent congressional intent.
Most notably, section 113 of the Act
is the only statutory section that
references " potentially eligible"
students with disabilities. All other
sections of title I of the Act refer to
applicants" or individuals determined
eligible for services. Given the stark
55691Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
contrast in the use of "potentially
eligible" in section 113 of the Act, the
Secretary believes it imperative that
meaning is given to that phrase by not
limiting it to individuals who have
applied for or been determined eligible
for the VR program.
The broader interpretation means all
students with disabilities will be able to
obtain much-needed pre-employment
transition services and begin the early
phase of job exploration without the
potential delays, and the administrative
burden on DSU personnel and
resources, caused by application
processing, eligibility determinations,
assignment to an order of selection
category, and development of an
individualized plan for employment.
However, there is nothing that
precludes a DSU from taking an
application as soon as a student
expresses an interest in pre-employment
transition services or other vocational
rehabilitation services and making a
timely determination of eligibility.
We want to emphasize that the phrase
potentially eligible" applies only in the
context of pre-employment transition
services. This means that students with
disabilities who need individualized
services beyond the scope of pre-
employment transition services ( e.g.,
transition and other vocational
rehabilitation services) must first apply
for, and be determined eligible for, the
VR program, be assigned to the
appropriate category if the State is on an
order of selection, and develop an
approved individualized plan for
employment. We recommend that DSUs
request students with disabilities who
are " potentially eligible" for vocational
rehabilitation services and receiving
pre-employment transition services
submit an application for services as
soon as possible in the event further
vocational rehabilitation services are
needed.
This recommendation is especially
pertinent for those States that have
implemented an order of selection. A
student' s position on the wait list for
services other than pre-employment
transition services, in the event the
student is placed in a closed category,
is based on the date of application, not
the date of referral or the receipt of pre-
employment transition services. To
provide students with disabilities an
opportunity to apply for services as
early as possible in the transition
process and ensure a smooth transition
into the VR program, it is imperative
that DSUs collaborate with educational
programs to identify students who may
be eligible or potentially eligible for
vocational rehabilitation services and
engage parents and representatives. The
earlier a student is placed on a wait list,
the sooner his or her turn will open in
the State' s order in the event a State is
on an order of selection.
We want to make clear that neither
the Act nor these final regulations
exempt these students with disabilities
from the State' s order of selection, if one
has been implemented, or VR program
requirements once they apply and are
determined eligible for services. While
under the order of selection regulations
at § 361. 36, the student could continue
to receive pre-employment transition
services if such services have begun, a
student could not begin to receive pre-
employment transition services if such
services had not begun prior to applying
and being determined eligible. To
permit such would create an exemption
from the order of selection requirements
and the statute does not provide such
authority. However, we recognize the
benefit early services can have for
students. Therefore, we want to make
clear that these students could receive
transition services offered to groups of
students and youth with disabilities
under § 361. 49. While not identical to
pre-employment transition services,
many similar services could be provided
under the services to groups authority.
A detailed discussion regarding
comments related to the continuation of
pre-employment transition services
under an order of selection is provided
in the Continuation of Pre -Employment
Transition Services section later in this
Analysis of Comments and Changes.
In response to the concern related to
the availability of services from the
CAP, section 112( a) of the Act, as
amended by WIOA, specifically
authorizes CAP grantees to assist
individuals receiving services under
sections 113 and 511 of the Act.
Therefore, these individuals are clients
and client -applicants for purposes of the
CAP.
Finally, as discussed previously
under " Coordination with Education
Officials," parental consent to
participate in pre-employment
transition services is governed by State
law, as well as policies of the
educational programs and the DSU.
Furthermore, informed choice, as
outlined in final § 361. 52, applies
throughout the vocational rehabilitation
process; therefore, students with
disabilities receiving pre-employment
transition services under final
361. 48( a) must be given the
opportunity to exercise their informed
choice.
Changes: None.
Discretion To Provide Pre -Employment
Transition Services to All Students With
Disabilities
Comments: One commenter requested
that we clarify whether States have the
option, under proposed § 361. 48( a), to
provide pre-employment transition
services to all students with disabilities,
including those who have not applied
for vocational rehabilitation services.
Another commenter requested that we
revise the " may" in proposed
361. 48( a)( 1) to " shall" in order to
ensure that pre-employment transition
services are provided to all students
with disabilities, regardless of whether
they have applied for services.
Discussion: We agree that clarification
is necessary. Section 110( d)( 1) of the
Act, as amended by WIOA, requires
States to reserve at least 15 percent of
their Federal vocational rehabilitation
allotment for providing pre-employment
transition services. Moreover, section
113 of the Act, as amended by WIOA,
requires States to use the reserved funds
to provide, or arrange for the provision
of, pre-employment transition services
to all students with disabilities in need
of such services who are eligible or
potentially eligible for services.
Therefore, the requirement to reserve
and use funds for providing pre-
employment transition services is
mandatory, not discretionary. A State
must provide pre-employment
transition services to all students with
disabilities needing those services and
may not limit or expand those services.
We used the term " may" in proposed
361. 48( a)( 1) to recognize that, for the
first time, the Act permitted the delivery
of pre-employment transition services to
students with disabilities who have not
applied for or been determined eligible
for the VR program. However, we
acknowledge the confusion caused by
the use of the term. We therefore clarify
that States must provide pre-
employment transition services not only
to students with disabilities who have
applied for vocational rehabilitation
services but also to those students with
disabilities who have not applied for
services.
Changes: We have revised final
361. 48( a)( 1) to clarify that DSUs must
make pre-employment transition
services available statewide to all
students with disabilities, not just those
who have applied for or been
determined eligible for vocational
rehabilitation services.
Provision of Required Activities Based
on Need
Comments: Some commenters
requested that we clarify whether a
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student must be provided all five
required services or only those required
services based upon a student' s need. Of
these comments, many recommended
the latter, as students with disabilities
may not need all five activities set forth
in section 113( b) of the Act, as amended
by WIOA.
A few commenters requested
clarification about, or criteria for,
making a determination of need. One
commenter also recommended that the
regulations promote client choice about
participating in pre-employment
transition services to ensure that
students are not coerced into
participating in these services. Finally,
one commenter expressed concern that
DSUs may require students with
disabilities to participate in pre-
employment transition services as
readiness or preparatory activities
before applying for vocational
rehabilitation services, thereby delaying
the transition from school to post -school
activities.
Discussion: Section 113( a) and (b) of
the Act, as amended by WIOA, when
read in concert with each other, as well
as final § 361. 48( a)( 2), require the DSU
to make certain " required" pre-
employment transition services
available to all students with disabilities
who need them. However, none of these
provisions mandate that all five
required" activities be provided to
each student with a disability if all the
activities are not necessary. Pre-
employment transition services, as is
true for any vocational rehabilitation
service, must be provided solely on the
basis of the individual' s need for that
service.
Under final § 361. 50, DSUs are
responsible for developing policies, in
consultation with the SRC, for
determining the need for pre-
employment transition services. These
policies must include clear and
consistent criteria based on the needs of
students identified in the
comprehensive statewide needs
assessment. The policies will guide the
DSU, in consultation with school
personnel, family members, and
students with a disability, in
determining which pre-employment
transition services each student needs,
consistent with his or her interests and
informed choice.
Finally, pre-employment transition
services are designed to be an early start
at job exploration for students with
disabilities and should enrich, not
delay, transition planning, application
to the VR program, and the continuum
of vocational rehabilitation services
necessary for movement from school to
post -school activities. Neither section
113 of the Act, as amended by WIOA,
nor final § 361. 48( a) requires students
with disabilities receiving pre-
employment transition services to apply
for, or be determined eligible for, the VR
program or to receive other vocational
rehabilitation services. The Act and
these final regulations maximize
opportunities for achieving competitive
integrated employment by imposing no
requirement that would delay or hinder
the student' s ability to access these
crucial early services or that would
permit a DSU to coerce an individual to
participate in any of them. However,
should the student with a disability
need additional vocational
rehabilitation services, he or she must
apply for and be determined eligible for
those services. See the more detailed
discussion of comments related to
Potentially Eligible" earlier in this
section.
Changes: None.
Continuation ofPre -Employment
Transition Services
Comments: Some commenters
expressed concerns about the
continuation of pre-employment
transition services and availability of
reserved funds for those services once a
student with a disability applies for and
is determined eligible for the VR
program. Of those commenters, many
expressed the need for a continuation of
services for those students who received
pre-employment transition services
prior to applying for the VR program
and aging out of or exiting an
educational program. Some commenters
requested that States be permitted to use
funds reserved under section 110( d) of
the Act to continue to provide services
for any student with a disability who
has received pre-employment transition
services and who cannot receive
vocational rehabilitation services due to
a State' s implementation of an order of
selection. One commenter suggested
that those students found eligible for the
VR program while, or after, receiving
pre-employment transition services
should be given an automatic service
priority under a State' s order of
selection, while another commenter
requested clarification as to why
students with disabilities have not
received a service priority under
proposed § 361. 36. Some commenters
expressed concerns that serving
students who have not applied for
services, regardless of the severity of
their disability, will result in a delay of
services to other students who have
applied and been determined eligible
for vocational rehabilitation services,
including individuals with the most
significant disabilities. A few
commenters expressed the concern that
the emphasis on serving students would
limit the funds available to serve adult
consumers.
Discussion: We understand the
commenters' concerns about the
continuation of services for students
with disabilities after receiving pre-
employment transition services, as some
students may apply but not be
determined eligible for the VR program.
Others may no longer satisfy the
definition of a " student with a
disability" because they are no longer
within the required age range or are no
longer participating in an education
program. These issues arise only when
a student with a disability who is
receiving, or has received, pre-
employment transition services also
needs other vocational rehabilitation
services. All students with disabilities
who apply for vocational rehabilitation
services, even if they are still receiving
pre-employment transition services, will
be subject to all relevant requirements
for eligibility, order of selection, and
development of the individualized plan
for employment (including its
development prior to leaving school
under final § 361. 22( a)( 2)). Neither the
Act nor these final regulations exempt
students with disabilities from any of
these requirements, which apply to all
VR program applicants.
Section 101( a)( 5) of the Act, as
amended by WIOA, does not exempt
students with disabilities receiving pre-
employment transition services prior to
the determination of eligibility from a
State' s order of selection; therefore, we
do not have the statutory authority to
include such an exemption in final
361. 36. Nonetheless, consistent with
the policy underlying prior
361. 36( e)( 3), which requires a DSU to
continue providing vocational
rehabilitation services to individuals
who had begun receiving these services
under an individualized plan for
employment prior to the
implementation of an order of selection,
it is imperative that students with
disabilities not experience a disruption
in the pre-employment transition
services that they are receiving and that
are so critical to their transition to
postsecondary education and
employment. Thus, we have revised
final § 361. 36( e)( 3) by requiring DSUs
implementing an order of selection to
continue the provision of pre-
employment transition services to
students with disabilities who were
receiving these services prior to the
determination of eligibility and
assignment to a priority category. DSUs
may use the funds reserved under
section 110( d) and final § 361. 65( a)( 3)
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for the continuation of these services.
This change does not permit the DSU to
provide any other transition or
vocational rehabilitation services for
students with disabilities assigned to
closed priority categories.
As for ceasing to satisfy the definition
of " student with a disability," pre-
employment transition services under
section 113 of the Act and final
361. 48( a) are available only to students
with disabilities. Therefore, if an
individual no longer meets the
definition of a " student with a
disability," despite the fact that he or
she has received or is receiving pre-
employment transition services, he or
she is no longer able to receive these
services under section 113 of the Act
and final § 361. 48( a). However, if the
individual has been determined eligible
for vocational rehabilitation services
and has been assigned to an open
category in the State' s order of selection,
if the State has implemented one, he or
she may continue to receive the same
types of pre-employment transition
services under section 103( a) of the Act
and final § 361.48(b), in accordance
with an approved individualized plan
for employment. The DSU would pay
for these services with VR funds, other
than those reserved for the provision of
pre-employment transition services
under section 113 of the Act because the
reserved funds must be used solely for
the provision of pre-employment
transition services to individuals who
satisfy the definition of a " student with
a disability."
Changes: We have revised final
361. 36( e)( 3) by requiring a designated
State unit implementing an order of
selection to continue to provide pre-
employment transition services to
students with disabilities who have
begun receiving these services prior to
the determination of eligibility and
assignment to a closed priority category.
Required Activities
Comments: Several commenters
provided alternate suggestions for the
required activities specified in proposed
361. 48( a)( 2). One commenter
recommended that States be permitted
to develop their own menu of pre-
employment transition services, while
many other commenters recommended
a variety of revisions to proposed
361. 48( a)( 2). Specifically, one
commenter requested that job
exploration counseling include actual
work experience in competitive
integrated employment settings. A few
commenters requested that work -based
learning experiences include paid or
unpaid work experiences in school or
community settings, as well as
experiential learning opportunities.
Some commenters who recommended
paid work experiences suggested that
placement be aligned with the
definition of competitive integrated
employment. Many commenters on
work -based learning experiences
requested that the Department delete " to
the maximum extent possible" from the
regulation, prohibit sheltered work in
segregated settings, and require that the
experiences only be provided in
integrated settings. However, a few
commenters requested clarification as to
whether entities with certificates issued
by the Department of Labor under
section 14( c) of the FLSA could provide
pre-employment transition services.
A few commenters suggested that we
revise proposed 361. 48( a)( 2) to conform
to similar language in the Higher
Education Opportunity Act of 2008 by
replacing " or" with " and" in the
language that governs counseling on
opportunities for enrollment in
comprehensive transition or
postsecondary educational programs at
institutions of higher education. In
addition, these commenters
recommended language specific to
counseling on opportunities for
enrollment of students with intellectual
disabilities in postsecondary
educational programs at institutions of
higher education. A few other
commenters proposed revising the focus
of workplace readiness training to
replace the development of social skills
and independent living with a focus on
soft skills, financial literacy, mobility
skills, and other skills necessary for
employment. Another few commenters
recommended that the regulations
require instruction in self -advocacy to
be provided by a recognized self -
advocacy group of the individual' s
choosing and that peer mentoring occur
during work experiences. A few
commenters recommended that the
required activities include outreach to
and engagement of parents of students
with disabilities in conjunction with
parent centers and parent training
information centers.
Discussion: We appreciate the
commenters' suggestions, concerns, and
requests for clarification. However,
section 113(b) of the Act, as amended by
WIOA, specifically itemizes the pre-
employment transition services that
must be provided—the " required"
activities. Furthermore, section 113( c) of
the Act itemizes the pre-employment
transition services that may be
provided—the " authorized" activities—
in the event funds remain after
providing the required activities. Given
the Act' s specificity about the pre-
employment transition services that
must be provided, as well as those that
may be provided, there is no statutory
basis to require additional activities or
impose additional requirements, such as
requiring that instruction in self -
advocacy be provided by a recognized
self -advocacy group of the individual' s
choosing or that peer mentoring occur
during work experiences.
We disagree with the commenters'
request to revise § 361. 48( a)( 2)( iii) to
conform to similar language in the
Higher Education Opportunity Act of
2008 and specifically includes programs
and services for students with
intellectual disabilities. Final
361. 48( a)( 2)( iii) mirrors section
113(b)( 3) of the Act, as amended by
WIOA, and we do not believe the
replacement of " or" with " and" helps to
better describe the manner in which
DSUs are to provide this service. In
addition, Section 113(b)( 3) of the Act
and final § 361. 48( a)( 2)( iii) encompass
counseling on the broad range of
comprehensive transition or
postsecondary education programs
available to all students with
disabilities, including students with
intellectual disabilities. Therefore, we
do not believe it is necessary to revise
final § 361. 48( a)( 2)( iii).
Moreover, there is no statutory basis
for States to develop their own menu of
pre-employment transition services.
Rather, under section 113( b) of the Act
and final § 361. 48( a)( 2), each State must
make all "required" pre-employment
transition services available to students
with disabilities who need such
services.
Similarly, contrary to
recommendations made by commenters,
we do not have the authority to remove,
by regulation, statutory requirements.
Accordingly, § 361. 48( a)( 2)( ii) must be
consistent with section 113(b)( 2) of the
Act, as amended by WIOA, which
requires that work -based learning
experiences occur in integrated settings
to the maximum extent possible. While
we agree with commenters that work -
based learning experiences in integrated
settings are optimal, the Act' s use of the
phrase " to the maximum extent
possible" leaves open the possibility for
work -based learning experiences in non-
integrated settings. Consequently, we
cannot require that all work -based
learning experiences occur in integrated
settings. However, DSUs should exhaust
all opportunities for work -based
learning experiences in competitive
integrated employment settings before
considering provision of these services
in non-integrated work settings, as
appropriate for the needs, and
consistent with the informed choice, of
the individual student with a disability,
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and his or her family or guardian, as
applicable.
Having said this, the Department
agrees that actual work experiences in
integrated settings, rather than
simulated or mock experiences in
sheltered environments, provide
students with disabilities with the most
beneficial opportunities for job
exploration, work -based learning, work
readiness, and peer mentoring. The
Secretary believes that DSUs, to the
maximum extent possible, should
provide work -based learning
experiences, which may be paid or
unpaid, through actual work
experiences in integrated community
environments to prepare students with
disabilities for community-based
competitive integrated employment,
instead of using classrooms and
educational facilities as settings for
work -based learning experiences that
segregate, replicate the tasks performed
in adult sheltered employment, and
often result in referrals to segregated
employment settings following exit from
school.
If these are paid work -based learning
experiences, students with disabilities
must be paid competitive wages to the
extent competitive wages are paid to
students without disabilities. Training
stipends are also permissible for
students with disabilities to the same
extent that they are provided to students
without disabilities participating in
these experiences. Similarly, nothing in
the Act prohibits States from
coordinating the provision of pre-
employment transition services with
entities that hold certificates issued by
the Department of Labor under section
14( c) of the FLSA. However, the
Department strongly encourages training
in competitive integrated settings to
prepare students for competitive
integrated employment. In addition,
there is no statutory basis here to
require that self -advocacy instruction be
provided by a specific entity.
We agree that engaging students'
parents or representatives is essential to
their participation in pre-employment
transition services and vital to their
success. Since DSUs will be delivering
pre-employment transition services to
students with disabilities at a much
younger age, parents must be involved,
as required by State law and the policies
of educational agencies and the DSU.
We encourage DSUs to provide
information regarding the application
process and availability of services to all
students with disabilities, and their
parents or representatives, early in the
transition process. As such, parent
centers funded through the
Rehabilitation Act and the IDEA may
serve as mechanisms for outreach to,
and engagement of, parents.
Changes: None.
Continuum of Services
Comments: A few commenters
requested clarification about " required
activities" under pre-employment
transition services in § 361. 48( a)( 2). One
commenter stated that pre-employment
transition services appear to be a
continuum of services and requested
clarification as to whether a student
might initially receive a general level of
pre-employment transition services and
then later receive a customized level of
pre-employment transition services.
Another commenter requested
clarification as to how individualized
pre-employment transition services
would be funded for a student or youth
with a disability who is not a vocational
rehabilitation client. One commenter
suggested that general pre-employment
transition services be reserved for
students who are potentially eligible for
the VR program, while reserving
individualized level pre-employment
transition services for those students
with disabilities determined eligible for
vocational rehabilitation services. The
same commenter suggested that pre-
employment transition services be
directed toward determining whether
further vocational rehabilitation services
are required for the individual to be
successful in securing and maintaining
employment. A few commenters
requested clarification of the difference
between employment assistance under
pre-employment transition services and
transition services, including the role of
the vocational rehabilitation counselor.
Discussion: In response to requests for
clarification, DSUs may provide, or
arrange for the provision of, "required"
pre-employment transition services to
students with disabilities in classroom,
employment, or community (group)
settings. These services may be general
in nature for students with disabilities
who have not applied and been
determined eligible for vocational
rehabilitation services. As a student
progresses through the vocational
rehabilitation process by applying and
being determined eligible for services,
the DSU will have the information
necessary to conduct assessments and
provide more individualized and
customized services to address the
student' s particular needs. But in some
instances DSUs may nonetheless have
sufficient information to provide
individualized pre-employment
transition services to students with
disabilities who have not applied and
been determined eligible for vocational
rehabilitation services. Thus, we decline
to require in final § 361. 48( a)( 2) that
providing more individualized pre-
employment transition services be
limited to students with disabilities who
have applied and been determined
eligible for vocational rehabilitation
services.
Finally, section 113 requires that
DSUs use the funds reserved under
section 110( d) of the Act, as amended by
WIOA, to provide pre-employment
transition services not only to students
with disabilities who are eligible for
vocational rehabilitation services but
also to students with disabilities who
are potentially eligible for vocational
rehabilitation services, which includes
all students with disabilities regardless
of whether they have submitted an
application for these services.
Examples of the five " required"
activities and how they may be
provided in either a group or
individualized setting include, but are
not limited to, the following:
One, general job exploration
counseling may be provided in a
classroom or community setting and
include information regarding in -
demand industry sectors and
occupations, as well as non-traditional
employment, labor market composition,
administration of vocational interest
inventories, and identification of career
pathways of interest to the students. Job
exploration counseling provided on an
individual basis might be provided in
school or the community and include
discussion of the student' s vocational
interest inventory results, in -demand
occupations, career pathways, and local
labor market information that applies to
those particular interests.
Two, work -based learning experiences
in a group setting may include
coordinating a school-based program of
job training and informational
interviews to research employers, work-
site tours to learn about necessary job
skills, job shadowing, or mentoring
opportunities in the community. Work -
based learning experiences on an
individual basis could include work
experiences to explore the student' s area
of interest through paid and unpaid
internships, apprenticeships (not
including pre -apprenticeships and
Registered Apprenticeships), short-term
employment, fellowships, or on-the-job
trainings located in the community.
These services are those that would he
most beneficial to an individual in the
early stages of employment exploration
during the transition process from
school to post -school activities,
including employment. Should a
student need more individualized
services ( e.g., job coaching, orientation
and mobility training, travel expenses,
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uniforms or assistive technology), he or
she would need to apply and be
determined eligible for vocational
rehabilitation services and develop and
have an approved individualized plan
for employment.
Three, counseling on opportunities
for enrollment in comprehensive
transition or postsecondary educational
programs at institutions of higher
education in a group setting may
include information on course offerings,
career options, the types of academic
and occupational training needed to
succeed in the workplace, and
postsecondary opportunities associated
with career fields or pathways. This
information may also be provided on an
individual basis and may include
advising students and parents or
representatives on academic curricula,
college application and admissions
processes, completing the Free
Application for Federal Student Aid
FAFSA), and resources that may be
used to support individual student
success in education and training,
which could include disability support
services.
Four, workplace readiness training
may include programming to develop
social skills and independent living,
such as communication and
interpersonal skills, financial literacy,
orientation and mobility skills, job-
seeking skills, understanding employer
expectations for punctuality and
performance, as well as other " soft"
skills necessary for employment. These
services may include instruction, as
well as opportunities to acquire and
apply knowledge. These services may be
provided in a generalized manner in a
classroom setting or be tailored to an
individual' s needs in a training program
provided in an educational or
community setting.
Five, instruction in self -advocacy in a
group setting may include generalized
classroom lessons in which students
learn about their rights, responsibilities,
and how to request accommodations or
services and supports needed during the
transition from secondary to
postsecondary education and
employment. During these lessons,
students may share their thoughts,
concerns, and needs, in order to prepare
them for peer mentoring opportunities
with individuals working in their area( s)
of interest. Further individual
opportunities may be arranged for
students to conduct informational
interviews or mentor with educational
staff such as principals, nurses,
teachers, or office staff; or they may
mentor with individuals employed by or
volunteering for employers, boards,
associations, or organizations in
integrated community settings. Students
may also participate in youth leadership
activities offered in educational or
community settings.
The wide variety of pre-employment
transition services described in these
examples is designed to be an early start
at job exploration for students with
disabilities. DSUs are not to use these
activities as assessment services for the
purpose of determining whether
additional vocational rehabilitation
services are needed, or if the individual
will be successful in employment. In
response to commenters' requests for
clarification of the difference between
employment assistance under pre-
employment transition services and
transition services, see more detailed
descriptions of the distinctions between
the two types of services in the
Transition Services (section
361. 5( c)( 55)) and Scope of Pre -
Employment Transition Services and
Use of the Reserve sections earlier in
this section B.
Changes: None.
Other Vocational Rehabilitation
Services as Pre -Employment Transition
Services
Comments: A few commenters
recommended that we interpret the
scope of required activities under
section 113 of the Act, as amended by
WIOA, to include both support services
and individualized vocational
rehabilitation services necessary to
participate in pre-employment
transition services. The commenters
requested that the funds reserved for
providing pre-employment transition
services also be permitted to pay for
services provided under section 103( a)
of the Act, as amended by WIOA, and
proposed § 361.48(b), including, but not
limited to job coaching services,
maintenance, transportation to and from
work -based learning experiences, travel,
uniforms, tools, sign language
interpreters, reasonable
accommodations, assistive technology,
independent living, and orientation and
mobility services for students who are
blind. One commenter requested that
pre-employment transition services be
expanded to include all transition
services for students determined eligible
for vocational rehabilitation services.
Another commenter requested that we
include all services listed on an
individualized plan for employment
within the scope of pre-employment
transition services, including
postsecondary education and training
costs.
Discussion: Section 113 of the Act, as
amended by WIOA, and final § 361. 48( a)
set out a list of pre-employment
transition services that must be made
available to all students with disabilities
who are eligible or potentially eligible
for vocational rehabilitation services
required" activities), as well as those
that may be provided (" authorized"
activities). Under section 113( a) of the
Act, the funds required to be reserved
for pre-employment transition services
must be used solely for providing pre-
employment transition services.
Therefore, the Department has no
statutory authority to expand or limit
the pre-employment transition services
listed in section 113 of the Act, as
amended by WIOA. Furthermore, if a
student with a disability needs any
additional individualized vocational
rehabilitation services, including those
necessary for participating in pre-
employment transition services, such as
those provided under final § 361. 48( b),
the student must apply and be
determined eligible for vocational
rehabilitation services and develop an
individualized plan for employment
that includes the additional necessary
services. These additional services must
be charged as a vocational rehabilitation
expenditure separate from the funds
reserved for providing pre-employment
transition services.
Changes: None.
Pre -Employment Transition
Coordination Activities
Comments: A few commenters
expressed concerns that proposed
361. 48( a)( 4) did not permit alternate
means of participation in the meetings
required by section 113 of the Act, as
amended by WIOA, and permitted in
section 103( b)( 6) of the Act. Many
commenters recommended we include
language to allow for alternate means of
participation in meetings as vocational
rehabilitation counselors may not be
available to participate in all
individualized education program or
person -centered planning meetings
across a State.
A few commenters stated that pre-
employment transition coordination
activities must occur between DSUs and
parent training and information centers
funded by the Office of Special
Education Programs and RSA to ensure
that parental outreach concerning the
benefits of pre-employment transition
services is coordinated among these
federally funded centers.
Discussion: We agree that alternate
means for participating in pre-
employment transition coordination
activities (e.g., video conferences and
teleconferences) could minimize travel
time and costs and maximize both the
number of individualized education
program and person -centered planning
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meetings in which a vocational
rehabilitation counselor could
participate, as well as the number of
direct services a vocational
rehabilitation counselor could provide
to students with disabilities. Although
361. 48( a)( 4), both as proposed and
final, does not explicitly permit DSUs to
use alternate means to participate in
individualized education program or
person -centered planning meetings, it
does not prohibit them. DSUs may
therefore use these alternate means.
Decisions on how to conduct
meetings is a matter of agency
administration. Conducting these
meetings via alternate means would be
consistent with the explicit authority to
conduct alternate format meetings under
section 101( a)( 11)( D)( i) of the Act and
final § 361. 22( b)( 1). Additionally,
section 614(f) of the IDEA and its
implementing regulations in 34 CFR
300. 328 allow the parent of a child with
a disability and a public agency to agree
to use alternative means of meeting
participation requirements, such as
video conferences and conference calls,
when conducting individualized
education program team meetings and
placement meetings under the IDEA, as
well as carrying out administrative
matters under section 615 of the IDEA
such as scheduling, exchange of
witness lists, and status conferences).
Since the Act and the IDEA provide for
alternate means for conducting meetings
very similar to those required by section
113 of the Act and final § 361. 48( a),
DSUs may use alternate means to
conduct these meetings as well. We do
not believe a regulatory change is
necessary to accomplish this.
We agree that coordinating with
federally funded parent centers is a
mechanism that would help parents of
students with disabilities understand
the benefits of pre-employment
transition services. Section 113( d) of the
Act, as amended by WIOA, however,
does not require this. The statute is clear
that the funds reserved for providing
pre-employment transition services
must only be spent on the activities
specified in section 113 of the Act, as
amended by WIOA, and final
361. 48( a). Given the Act' s specificity
of the activities that constitute pre-
employment transition services, there is
no statutory authority for final
361. 48( a)( 4) to include any additional
required coordination responsibilities.
Changes: None.
Documentation and Reporting
Comments: Some commenters
requested clarification as to how States
should document the provision and
costs of pre-employment transition
services for students with disabilities
who have not yet applied and been
determined eligible for vocational
rehabilitation services and for whom
limited personal information is
available. Additionally, one commenter
requested additional guidance about the
tracking of funds expended on groups of
students who have not applied or been
determined eligible for the VR program.
A few commenters requested
flexibility in the reporting of pre-
employment transition services because
it is burdensome for DSUs to develop
and implement tracking systems for a
large potentially eligible population.
These commenters also stated this
tracking could be difficult because DSUs
may not have access to the personal
identifying information, including
Social Security numbers, typically used
to document and report vocational
rehabilitation services provided. A few
commenters suggested that the
Department establish reporting
requirements for pre-employment
transition services that are similar to the
child count reporting requirements
under the IDEA. One commenter
requested clarification regarding
reporting requirements for the funds
reserved for providing pre-employment
transition services and whether
expenditures are only to be reported
during the time period for which an
individual meets the definition of a
student with a disability or during the
entire fiscal year in which the
individual was served.
Discussion: Because sections 110( d)
and 113 of the Act require a State to
reserve and use at least 15 percent of its
total vocational rehabilitation allotment
for providing, or arranging for the
provision of, pre-employment transition
services to students with disabilities, it
will be critical that the DSU implement
administrative methods and procedures
that ensure proper data collection and
financial accountability of these
reserved funds, as required by final
361. 12 and 2 CFR 200. 302 of the
Uniform Guidance. In addition, section
101( a)( 10)( C) of the Act, as amended by
WIOA, expands the VR program -specific
data that DSUs must report, including
data elements related to students with
disabilities who are receiving pre-
employment transition services. These
reporting requirements are included in
final § 361. 40( a) to ensure that the
Secretary has the information needed to
assess the performance of the VR
program, especially with regard to
providing pre-employment transition
services to students with disabilities.
Although the Department recognizes
the burden placed on DSUs to develop
procedures for tracking pre-employment
transition services and related
expenditures for students who have not
yet applied or been determined eligible
for vocational rehabilitation services,
DSUs are required by section
101( a)( 10)( C) of the Act to do so in order
to properly account for, and report, the
provision of pre-employment transition
services and the reserved funds spent on
those services. Moreover, the State' s
accounting procedures must be such
that the DSU will be able to complete
accurately all required forms, including
financial reports, that show the
reservation and use of these funds for
this purpose, as required by final
361. 12 and 2 CFR 200. 302.
The Department does not have the
authority to grant exceptions from, or
waivers of, these reporting
requirements. Regardless of whether
students with disabilities are receiving
pre-employment transition services
without having applied or been
determined eligible for vocational
rehabilitation services, i.e. by virtue of
the fact they are " potentially eligible"
for the program, if Federal funds are
being spent, expenditures must be
tracked and monitored in accordance
with final § 361. 12 and the Uniform
Guidance in 2 CFR 200. 302 ( Financial
Management) and 200.328 (Monitoring),
as well as the Federal cost principles in
2 CFR 200.403 (Allowability), 200.404
Reasonable) and 200.405 ( Allocable).
Furthermore, the Department issued
Policy Directive (PD) 15- 05 on February
5, 2015, which provided technical
assistance on reporting the total Federal
expenditures for providing pre-
employment transition services. We
appreciate the commenters' proposed
alternate suggestions for reporting.
However, the Department uses the SF -
425 to collect financial data from DSUs
so that it can monitor the financial
status of the VR program and assess
grantee compliance with Federal fiscal
requirements under the VR program,
including requirements for the
reservation and use of funds for
providing pre-employment transition
services.
As they have been required to do for
many years, DSUs must submit
completed SF -425 reports semi-
annually. The end dates for each
reporting period in a fiscal year are
March 31 and September 30. Semi-
annual reports must be submitted no
later than 45 days after the end of the
reporting period. Final reports must be
submitted no later than 90 days after the
period of performance. " Period of
performance" means the time during
which the non -Federal entity may incur
new obligations to carry out the work
authorized under the Federal award.
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These final regulations do not affect any
of these reporting requirements. To
ensure the proper accounting and
reporting of services provided and funds
expended, especially with regard to pre-
employment transition services, DSUs
must track and report data on students
with disabilities until they no longer
meet the definition of a student with a
disability. At that point, DSUs must
track and report services provided to,
and funds expended on, these
individuals as they would any other
individual receiving vocational
rehabilitation services.
Changes: None.
Performance Measures
Comments: A few commenters
expressed concern that pre-employment
transition services and expenditure of
funds are not included in the proposed
common performance accountability
measures. These commenters
recommended that we revise the
common performance accountability
measures to include and evaluate these
services. One commenter requested
clarification regarding how group
service expenditures would inform
statistical adjustment model
calculations, as it was unclear how the
ratio of reportable individuals to
participants may reflect on the
performance of a DSU.
Discussion: The VR program is no
longer subject to its own set of
performance standards and indicators
established by the Department, as it had
been prior to the enactment of WIOA.
Because the common performance
accountability indicators are mandated
by section 116(b) of title I of WIOA and
apply to all six core programs of the
workforce development system,
including the VR program, the
Departments of Education and Labor do
not have the authority to establish
additional performance accountability
indicators beyond those identified in
the statute. However, section 106( a)( 2)
of the Act and section 116(b)( 1)( A)(ii) of
title I of WIOA permit States to develop
additional accountability measures to
evaluate the performance of the core
partners in the workforce development
system. We intend to monitor State
implementation of pre-employment
transition services and expenditure of
funds during our annual review and
periodic on-site monitoring of State VR
agencies to identify areas of concern and
the need for technical assistance. The
Departments of Education and Labor
address the remaining comments in the
joint final regulations implementing the
performance accountability system
under title I of WIOA, and published
elsewhere in this issue of the Federal
Register.
Changes: None.
Services for Individuals Who Have
Applied for or Been Determined Eligible
for Vocational Rehabilitation Services
361. 48( b))
Comments: A few commenters
supported proposed § 361.48(b)( 18) and
agreed that youth may be provided
transition services that are similar to
pre-employment transition services
under an individualized plan for
employment. Another commenter
requested that proposed § 361. 48( b)( 18)
require DSUs to provide students and
youth with disabilities an application
for vocational rehabilitation services at
the beginning of the transition process.
A few commenters expressed concerns
regarding the expansion of services for
students and youth with disabilities at
the expense of other individuals with
disabilities served by DSUs. One
commenter expressed such concerns in
terms of potential harm to the
Randolph -Sheppard program.
Some commenters requested that we
identify the services, including
transition services, that would be
allowable if provided by community
rehabilitation programs that hold
section 14( c) certificates under the
FLSA. A few commenters recommended
that the regulations prohibit DSUs from
contracting with section 14( c) certificate
holders to provide transition services.
One commenter requested that we
clarify if entities holding section 14( c)
certificates may provide transition
services and proposed alternatives for
providing these services if they may not.
One commenter requested that
incentives be added for providing
transition services or supported
employment services.
Discussion: We appreciate the support
for, and consideration given by
commenters to, proposed
361.48(b)( 18). We agree that students
and youth with disabilities should
receive adequate information and
applications for vocational
rehabilitation services at the beginning
of the transition from secondary
programs to post -secondary activities. A
DSU may provide the information and
application under final §§ 361. 41 and
361. 52, which require the DSU to
establish and implement standards for
promptly processing referrals, informing
individuals of application requirements,
and facilitating individuals' informed
choice as they transition. Therefore, we
do not believe it is necessary to add
further requirements to final
361.48(b)( 18).
We acknowledge that the heightened
emphasis on providing services to
students and youth with disabilities
may cause some DSUs concern about
their ability to serve all individuals. We
believe that the process for
implementing an order of selection
established within section 101( a)( 5) of
the Act, as amended by WIOA, is
adequate to address these concerns in
the event that vocational rehabilitation
services cannot be provided to all
eligible individuals.
We acknowledge the commenters'
support and concerns about section
14( c) certificate holders providing
transition and other vocational
rehabilitation services. While the Act
does not prohibit community
rehabilitation programs that are section
14( c) certificate holders from providing
transition or other vocational
rehabilitation services or training in
sheltered settings, section 511 of the Act
prohibits local and State educational
agencies from entering into a contract or
other arrangement with section 14( c)
entities for the purpose of operating a
program for youth with disabilities
under which work is compensated at a
subminimum wage. The Department
strongly encourages training in
competitive integrated settings to
prepare students for competitive
integrated employment, as stated in the
discussion of "required" activities in
final § 361. 48( a) and discussed in more
detail in Required Activities earlier in
this section B. There is no statutory
basis for requiring or permitting
incentive payments for providing
vocational rehabilitation services,
including transition and supported
employment services.
Changes: None.
Scope of Vocational Rehabilitation
Services for Groups ofIndividuals With
Disabilities (§ 361. 49)
Comments: A few commenters sought
clarification of, or suggested revisions
to, proposed § 361. 49( a)( 7) governing
the provision of transition services for
groups of youth and students with
disabilities. Of these, one commenter
questioned whether transition services
may be provided under this authority to
students and youth with disabilities
who have not applied or been
determined eligible for vocational
rehabilitation services. Similarly,
another commenter suggested that DSUs
be required to provide an application to
all students and youth with disabilities
receiving transition services under
proposed § 361. 49( a)( 7). One commenter
communicated concerns that allowing
transition services under this authority
will lead to students and youth with
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disabilities receiving services in
segregated environments. Another
commenter suggested that pre-
employment transition services under
proposed § 361. 49 be limited to group
orientations. Yet another commenter
supported providing transition services
for groups of students and youth with
disabilities and then providing
transition services to this population
under final § 361.48(b) if more
individualized services are necessary.
One other commenter suggested that
we add the term " competitive integrated
employment" to proposed § 361. 49( a)( 7)
to emphasize that transition services for
groups of students and youth with
disabilities are to support the
achievement of competitive integrated
employment. The same commenter
recommended that we add outreach to
and engagement of parents to
361. 49( a)( 7) as an allowable service to
groups. Finally, one commenter
requested clarification of how informed
choice of both the individual and the
individual' s representative would be
provided and documented if transition
services are provided to groups of youth
and students with disabilities.
Discussion: We appreciate all of these
comments. A student with a disability
or a youth with a disability is not
required to have applied or been
determined eligible for vocational
rehabilitation services to receive general
transition services provided to groups
under section 103(b)( 7) of the Act, as
amended by WIOA, and final
361. 49( a)( 7). Therefore, a DSU may,
but is not required to, provide or collect
applications from students and youth
with disabilities receiving transition
services under final § 361. 49( a)( 7).
Students with disabilities may receive
these services in a variety of settings,
including classroom, employment, and
community-based settings. However, the
Department strongly encourages DSUs
to provide these services in integrated
settings to the maximum extent possible
to best prepare students and youth with
disabilities for competitive integrated
employment. Furthermore, students and
youth with disabilities may continue to
receive generalized transition services
under this authority while also
receiving individualized vocational
rehabilitation services under an
individualized plan for employment
pursuant to section 103( a) of the Act
and final § 361.48(b).
Pre-employment transition services
may be provided in a group setting to
students with disabilities who have not
applied or been determined eligible for
vocational rehabilitation services, as
discussed in the examples in final
361. 48( a). Contrary to the assumption
in some comments, pre-employment
transition services cannot be provided
to students with disabilities as a service
for groups under section 103( b)( 7) of the
Act, as amended by WIOA, or final
361.49(a)( 7). Pre-employment
transition services must only be
provided under section 113 of the Act
and final § 361. 48( a).
The intent of these generalized
transition services when provided under
final § 361. 49( a)( 7) is to benefit groups
of students and youth with disabilities.
We understand the concern that these
services are limited to only students and
youth with disabilities. Transition
services provided under final
361.48(b) under an individualized
plan for employment are more
individualized in nature, and the
settings in which they are delivered are
typically more diverse.
We agree that the purpose of
transition services to groups should
ultimately be achieving competitive
integrated employment for students and
youth with disabilities consistent with
the purpose of the VR program set forth
in final § 361. 1. Nonetheless, the
transition services provided under final
361. 49( a)( 7) are not limited to those
individuals who have been determined
eligible for the VR program and who are
pursuing an employment outcome in
competitive integrated employment or
supported employment. Therefore, we
cannot require that the transition
services authorized in final section
361. 49( a)( 7) be provided only for the
purpose of assisting students and youth
with disabilities to obtain competitive
integrated employment.
We also agree that the families of
students and youth with disabilities
should be involved in all transition
services, even though section 103( b) of
the Act, as amended by WIOA, does not
specifically include outreach to and
engagement of parents within its
requirements. Neither the Act nor these
final regulations prohibit a DSU from
providing outreach to, and engaging
parents in, the provision of transition
services under final § 361. 49( a)( 7).
Finally, informed choice, as outlined
in final § 361. 52, applies throughout the
vocational rehabilitation process;
therefore, students and youth with
disabilities receiving transition services
under final § 361. 49( a)( 7) must be given
the opportunity to exercise their
informed choice.
Changes: None.
C. Fiscal Administration of the VR
Program
Section C includes the Analysis of
Comment and Changes to the
regulations in subpart C of part 361 that
pertain to the fiscal administration of
the VR program and covers
requirements for matching funds,
maintenance of effort, program income,
and the allotment and payment of
funds. The analysis is presented by
topical headings relevant to sections of
the regulations in the order they appear
in part 361 as listed.
Topical Headings
Matching Requirements (§ 361. 60)
Third -Party In -Kind Contributions
Additional Sources of Match
Differences Between Prior and Proposed
Regulations
Maintenance of Effort Requirements
361. 62)
Program Income (§ 361. 63)
Waiver
Legal Basis
Pre -Employment Transition Services
Amount of Program Income Earned
Addition Alternative
Allotment and Payment of Federal Funds for
Vocational Rehabilitation Services
361. 65)
Exemption from the Reservation of Funds
Requirement for Pre -Employment
Transition Services
Use of Reserved Funds for Other
Vocational Rehabilitation Services
Amount of Funds to Be Reserved
Application of the Reservation of Funds to
the State and to the State Allotment
Effect of Reallotment and Carryover on the
Reservation of Funds
Administrative Costs
Tracking of the Reserved Funds
Use of Reserved Funds for Authorized
Activities
Matching Requirements (§ 361. 60)
Third -Party In -Kind Contributions
Comments: Several commenters
requested that the Department either
include third -party in-kind
contributions as an allowable source of
match under the VR program or clarify
whether these contributions are an
allowable source of match. One
commenter questioned whether the
Department has the authority to exclude
third -party in-kind contributions as a
source of match under the VR program,
given that these contributions are a
permissible source of match in the
Uniform Guidance contained in 2 CFR
part 200.
Discussion: We have addressed the
comments regarding the allowability
and use of third -party in-kind
contributions as match under the VR
program in the discussion of third -party
cooperative arrangements in final
361. 28 earlier in section A of this
Analysis of Comments and Changes
section. We received similar comments
about that regulation, and issues of
third -party in-kind contributions most
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often arise in the third -party cooperative
arrangement context.
For more than two decades, the
Department has excluded third -party in-
kind contributions from the allowable
sources of match for the VR program.
Neither the NPRM nor these final
regulations reflect any substantive
changes to this prohibition.
In addition, we do not agree that
361. 60 is inconsistent with 2 CFR part
200 with regard to third -party in-kind
contributions. Specifically, 2 CFR
200. 306 states that for all Federal
awards, any shared costs or matching
funds and all contributions, including
cash and third -party in-kind
contributions, must be accepted as part
of the non -Federal entity' s cost sharing
or matching when specific criteria are
met. However, 2 CFR 200. 102( c) states
that " the Federal awarding agency may
apply more restrictive requirements to a
class of Federal awards or non -Federal
entities when approved by OMB, or
when required by Federal statutes or
regulations.. .
Section 361. 60( b)( 2) has prohibited,
and continues to prohibit, DSUs from
considering third -party in-kind
contributions as a permissible source of
match under the VR program. The
Department is within its authority to
continue to exclude third -party in-kind
contributions as an allowable source of
match under the VR program, as it has
done for more than two decades, and
thus the VR program regulations are
consistent with 2 CFR part 200.
Nevertheless, given the comments
questioning the relationship between
the prohibition against using third -party
in-kind contributions for match
purposes under the VR program in
361. 60( b)( 2) and the permissibility of
these contributions under 2 CFR
200. 306( b), we have revised final
361. 4( d) to reduce confusion. These
revisions are purely technical and do
not affect the long-standing prohibition
against using third -party in-kind
contributions as a source of match
under the VR program.
Changes: We have revised final
361. 4( d) to exempt 2 CFR 200.306(b),
as it relates to third -party in-kind
contributions, from the VR program,
thereby ensuring consistency with final
361. 60(b)( 2) and the long-standing
prohibition against third -party in-kind
contributions as a source of match
under the VR program.
Additional Sources ofMatch
Comments: Another commenter
requested that the Department include
additional sources of non -Federal share
as examples of potential matching
sources.
Discussion: We appreciate the
commenter' s request for additional
examples of permissible sources of
match under the VR program. The 1988
regulations (53 FR 16978 (May 12,
1988)), which remained in effect until
1997, contained a short list of examples
of permissible match sources, none of
which included third -party in-kind
contributions.
Similarly, the 1997 final regulations
62 FR 6307 ( Feb. 11, 1997)) simplified
the requirements by removing the list of
permissible sources of expenditures to
meet the non -Federal share. Instead, it
referred to former 34 CFR 80. 24 for a list
of allowable match sources, to the
extent that provision was not
inconsistent with § 361.60(b), which
prohibited third -party in-kind
contributions from being used for match
purposes under the VR program. We
emphasized in the preamble to the 1995
NPRM (60 FR 64475 ( Dec. 15, 1995))
that the proposed regulation would not
prohibit the use of any funding sources
that had been allowable for match
purposes under the VR program, but
third -party in-kind contributions were
not among them. Although we do not
believe the list of permissible match
sources should be re-inserted into final
361. 60, we provide here the still -
effective permissible match sources that
had been contained in prior § 361. 76,
which existed until the 1997 regulations
took effect and subsequently was
replaced by prior § 361. 60.
The old regulations in 34 CFR 361. 76,
which formed the basis for both prior
and final § 361. 60, indicated that the
allowable sources of match were:
1. Direct State appropriation to the VR
agency,
2. Transfers or allotments from other
public agencies,
3. Expenditures incurred by other
public agencies pursuant to a
cooperative agreement in accordance
with 34 CFR 361. 13 ( which formed the
basis for both prior and final § 361. 28),
4. Funds set aside from Business
Enterprise Programs, established under
the Randolph -Sheppard Act, for which
the DSU provides supervision and
management services, and
5. Private contributions deposited into
the VR agency' s account.
Section 361. 60 has remained
substantively unchanged from 1997
through these final regulations.
Changes: None.
Differences Between Prior and Proposed
Regulation
Comments: One commenter requested
we clarify the differences between the
prior and proposed § 361.60(b)( 3).
Discussion: We made only technical
changes to proposed § 361. 60( b)( 3)( iii)
in the NPRM. Specifically, we replaced
the phrase " grant, subgrant, or contract"
with the word " subaward" in order to
be consistent with the use of this term
in the Uniform Guidance, as set forth in
2 CFR part 200. We made no further
changes to final § 361. 60( b)( 3)( iii).
Changes: None.
Maintenance of Effort Requirements
361. 62)
Comments: A few commenters
supported proposed § 361. 62. One
commenter stated that section 241( b) of
WIOA did not support the proposed VR
regulations and recommended allowing
flexibility for States to choose the fiscal
year in which maintenance of effort
penalties would be paid.
Discussion: We appreciate the
comments supporting proposed
361. 62. Section 241( b) of WIOA,
referenced by the commenter, does not
apply to the VR program but rather to
programs authorized under the Adult
Education and Family Literacy Act in
title II of WIOA. Instead, section 420 of
WIOA amended section 111( a)( 2)( B) of
the Act, which governs the maintenance
of effort requirements for the VR
program. Final § 361. 62( a) is consistent
with section 111( a)( 2)( B) of the Act, as
amended by WIOA.
Changes: None.
Program Income (§ 361. 63)
Waiver
Comments: Several commenters
requested that we waive the
requirement for States to expend
program income prior to drawing down
Federal grant funds. One commenter
stated that the role of the Department in
placing restrictions on the use of
program income should be limited since
VR program grantees are not required to
generate program income.
Discussion: We appreciate the
comments submitted regarding
proposed § 361. 63. The Act gives the
Secretary the authority to grant waivers
of only two VR program requirements,
specifically those related to
statewideness ( section 101( a)( 4)) and
maintenance of effort (section
111( a)( 2)( C)). The Act, as amended by
WIOA, does not provide a general
waiver authority or a specific authority
to waive program income requirements.
Therefore, we may not include in final
361. 63 a waiver of the requirement to
expend program funds prior to drawing
down Federal VR program funds.
Changes: None.
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Legal Basis
Comments: Another commenter noted
that following the 1992 amendments to
the Rehabilitation Act, the Department
interpreted the Act as allowing program
income, including transferred program
income, to be obligated and/ or
expended on or before September 30th
of the carryover year of the grant period.
According to the commenter, WIOA did
not amend the Act to require the
expenditure of program income under
the VR program as soon as it was
received. The commenter also
recommended that we review both the
1992 amendments to the Rehabilitation
Act and WIOA to determine whether
there is a sufficient legal basis to exempt
DSUs from the requirement to expend
program income before requesting
additional Federal grant funds and that
we include this exemption in the VR
program final regulations. One
commenter noted that the NPRM
incorrectly cited 2 CFR 200.305(b)( 5) as
the legal authority requiring that
program income be disbursed prior to
drawing down Federal funds.
Discussion: While we agree that DSUs
are not required to earn program income
under the VR program, we disagree that
the Secretary' s authority over program
income is, therefore, limited. As a
recipient of Federal VR program funds,
DSUs must comply with all applicable
Federal requirements, including those
in the Act, the VR program regulations
in final part 361, Education Department
General Administrative Regulations
EDGAR), and government -wide
regulations in 2 CFR part 200 ( see final
361. 4). Requirements governing
program income affecting the VR
program are found in final § 361. 63 and
2 CFR 200. 305, both of which are under
the Secretary' s purview. Moreover, final
361. 4(b) and (d) make final part 361
and 2 CFR part 200, respectively,
applicable to the VR program. For this
reason, DSUs must comply with all
Federal requirements governing
program income to the extent that they
earn such income under the VR
program.
We agree that section 19( a)( 2) of the
Act allows program income to remain
available for obligation and expenditure
in the year following the year in which
the program income was earned.
However, we also believe that final
361. 63( c)( 3) is consistent with both
section 19( a)( 2) of the Act and 2 CFR
200. 305. In the event that a DSU
receives program income at the end of
a fiscal year and is unable to disburse
it prior to the end of that year, the DSU
may carry over that program income for
use in the following Federal fiscal year;
however, that DSU must spend that
program income prior to drawing down
Federal funds.
The Department reminded DSUs of
this requirement—program income must
be disbursed prior to drawing down
Federal funds—in PD -11-03 (dated
October 26, 2010), as well as in PD -12-
06 and PD -15-05 ( dated February 13,
2012 and February 5, 2015,
respectively). The Department also
reminded DSUs of this requirement in a
PowerPoint presentation at the FY 2011
Fiscal Conference, held in Washington,
DC, in August 2011.
Prior to developing proposed
361. 63, the Department reviewed the
legislative and regulatory history about
program income. Our review found that,
while the Act has not addressed this
issue specifically, EDGAR has long done
so. The Federal government has had a
long-standing requirement under the
common rule implementing former
OMB Circular A-102, codified by the
Department of Education in former 34
CFR 80. 21( f)(2), that States must expend
program income prior to drawing down
Federal grant funds. The Uniform
Guidance, codified in 2 CFR part 200,
was adopted by the Department in 2
CFR 3474 on December 19, 2014, in 79
FR 76091. The Uniform Guidance in 2
CFR 200. 305( a) specifies the payment
procedures that States must use to draw
down Federal funds; however, these
procedures appear, on the surface, to
apply only to funds included in a
Treasury -State Agreement (TSA), and
not all Federal program funds made
available to States are subject to TSAs.
For this reason, the Uniform Guidance
in 2 CFR 200. 305( a) has created an
ambiguity about how States should
draw Federal funds under non -TSA
programs. Moreover, TSAs do not cover
program income earned by State
grantees. Thus, in addition to the
ambiguity regarding non -TSA programs,
2 CFR 200. 305( a) does not address
whether States must expend available
program income funds before requesting
additional Federal cash, as had been the
long-standing government -wide
requirement in OMB Circular A-102
and codified for Department grantees in
former 34 CFR 80. 21( f)(2). This silence
creates concern because, for all other
non -Federal entities, § 200. 305( b)( 5)
clearly requires those entities to expend
available program income funds before
requesting payments of Federal funds.
While the § 200. 305( a) silence creates
an ambiguity, we do not believe that
this ambiguity should be construed to
no longer require States to expend
program income funds before requesting
additional Federal cash because no such
policy change was discussed in the
preambles to either the final guidance in
2 CFR part 200, which was published on
December 26, 2013 ( 78 FR 78589), or in
the Interim Final Guidance published
on December 19, 2014 ( 79 FR 75867).
This issue is critical to the Department
because DSUs earn more than $100
million in program income annually
under the VR program—an amount that
far exceeds amounts earned under any
other program administered by the
Department. For this reason, the
Secretary believes it is essential that we
resolve this ambiguity in these
regulations. Therefore, we proposed in
the NPRM to incorporate the
requirement to expend program income
before requesting payment of funds by
referencing 2 CFR 200. 305( a).
Upon further review of that proposed
change, and in consideration of one
comment, we have determined that the
proposed amendment, as presented in
the NPRM, would not achieve the
needed objective because it referenced
the wrong citation from 2 CFR part 200.
We resolved the ambiguity by revising
final § 361. 63( c)( 3) to explicitly require
States to expend available program
income funds before requesting
additional cash payments, maintaining
the long-standing requirement that
applied to VR program grantees under
34 CFR 80. 21( f)(2). The Secretary
believes this change is essential to
protect the Federal interest by using
program income to increase the funds
devoted to the VR program and keep to
a minimum the interest costs to the
Federal government of making grant
funds available to the States. There is no
legal basis to exempt DSUs from this
long-standing government -wide
requirement.
Changes: We have revised final
361. 63( c)( 3) to explicitly require States
to disburse available program income
funds before requesting additional cash
payments.
Pre -Employment Transition Services
Comments: Some commenters
expressed concerns that the requirement
to spend program income first creates an
undue barrier to the ability of DSUs to
reserve 15 percent of their VR program
allotments for providing pre-
employment transition services.
According to these commenters,
grantees cannot predict the arrival of
program income to the same extent that
they can anticipate the arrival of allotted
funds. As a result, DSUs may have to
expend program income for pre-
employment transition services instead
of their State allotments, thereby failing
to expend the 15 percent reserve
required for the provision of pre-
employment transition services.
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Discussion: We recognize the
challenge for States to meet both the
requirements to disburse program
income prior to drawing down Federal
funds as well as to reserve VR program
funds for providing pre-employment
transition services. While final
361. 63( c)( 1)( ii) requires States to
expend available program income funds
before requesting additional cash
payments, it does not preclude States
from executing allowable accounting
adjustments between program income
disbursed on pre-employment transition
services and other Federal funds
expended on non -pre-employment
transition services for the same time
period. These accounting adjustments
must be in accordance with Generally
Accepted Accounting Principles
GAAP) and the State' s accounting
procedures and must be reflected in the
State accounting system that is required
by final § 361. 12 and 2 CFR 200. 302.
Changes: None.
Amount ofProgram Income Earned
Comments: One commenter noted
that it is unable to determine the actual
amount of program income earned until
after the end of the Federal award
because the program income must be
netted out."
Discussion: Program income, as
defined in 2 CFR 200.80 and used in
final § 361. 63, means the " gross"
program income earned by the grantee.
Furthermore, as stated earlier, program
income is considered earned when
received. In other words, if a DSU
receives $ 100, 000 in program income in
November, it should report this amount
as received—or earned—on the SF -425
covering the first quarter of the Federal
fiscal year. Therefore, DSUs should not
wait until the end of a fiscal year to
determine the amount of program
income received, and all reports should
reflect gross—not net—amounts.
Changes: None.
Addition Alternative
Comments: None.
Discussion: Upon further Department
review, we determined it necessary to
clarify in § 361. 63( c)( 3) that the
deduction method is no longer available
to DSUs for expending program income.
In examining the grant formula set forth
in the statute more closely, we have
concluded that the use of the deduction
method would, in effect, result in a
reduction of a VR grant allotment.
Absent specific statutory authority,
these reductions would be inconsistent
with the statute and general
appropriations law principles. In
reviewing the grantees' financial
reports, we have found that very few, if
any, DSUs elect to use the deduction
method. Instead, most, if not all,
grantees elect to use the addition
method, which is still permissible and,
in fact, will be the only permissible use
of program income under the VR
program final regulations. We do not
believe this change will negatively
impact many, if any, grantees.
Therefore, we have revised final
361. 63( c)( 3) to require VR program
grantees to use program income only to
supplement the VR grant through the
addition alternative.
Changes: We have revised final
361. 63( c)( 3) to require DSUs to use the
addition alternative when expending
program income.
Allotment and Payment of Federal
Funds for Vocational Rehabilitation
Services (§ 361. 65)
Exemption From the Reservation of
Funds Requirement for Pre -Employment
Transition Services
Comments: Some commenters agreed
with the changes to proposed § 361. 65.
Many commenters recommended that
we exempt DSUs from the requirement
to reserve at least 15 percent of their
State allotments for providing pre-
employment transition services in cases
where the DSUs lack resources to do so.
Discussion: We appreciate the
commenters who supported proposed
361. 65 and those who expressed
concern or sought clarification. Section
110( d)( 1) of the Act, as amended by
WIOA, requires States— not the
Department—to reserve at least 15
percent of their VR program allotment
for providing pre-employment transition
services. Given this explicit
requirement, the Secretary lacks
statutory authority to exempt States
from the reservation requirement or to
modify this requirement because to do
so would be inconsistent with the
statute. While we understand the
concerns expressed by commenters
regarding an inability to expend the full
amount of reserved funds on pre-
employment transition services, we
encourage DSUs to work closely with
the school systems and other entities to
identify students with disabilities who
might benefit from pre-employment
transition services. Through these
outreach activities, DSUs may be able to
identify students with disabilities who
could benefit from pre-employment
transition services and who were not
previously known to the agencies.
Changes: None.
Use of Reserved Funds for Other
Vocational Rehabilitation Services
Comments: A few commenters
requested that agencies who may not
meet the reservation requirement, due to
a lack of individuals who qualify to
receive pre-employment transition
services, be allowed to use the
remaining reserved funds to provide
vocational rehabilitation services listed
under proposed § 361. 48( b) to other
eligible individuals.
Discussion: Funds reserved, pursuant
to section 110( d)( 1) of the Act, for
providing pre-employment transition
services must be used solely for the
activities set forth in section 113 of the
Act, as amended by WIOA, and final
361. 48( a). If a student with a disability
requires other vocational rehabilitation
services, the DSU must pay for those
services with the remainder of the VR
program allotment.
Changes: None.
Amount ofFunds To Be Reserved
Comments: A few commenters
recommended creating a benchmark for
pre-employment transition services
provided, rather than tying those
services to actual Federal funds spent.
Two commenters recommended basing
the reservation of funds on the number
of individuals in the State who would
be eligible to receive pre-employment
transition services. These commenters
added that the remaining funds would
be used for the provision of all other
allowable vocational rehabilitation
services.
Two commenters stated that the
requirement to reserve at least 15
percent is too high. One commenter
recommended that we consider DSUs to
have satisfied the requirement if they
demonstrate progress toward the
minimum 15 percent requirement in the
first 2 years of implementation, based
upon the amount of funds spent in the
previous fiscal year for pre-employment
transition services. One commenter
recommended that we allow States to
negotiate the reservation requirement
based upon populations of students
with disabilities in the States. One
commenter expressed concern that
requiring at least 15 percent of the VR
award to be used for pre-employment
transition services will reduce the
Federal VR funds available to support
the Randolph -Sheppard program.
Discussion: Section 110(d)( 1) of the
Act, as amended by WIOA, requires
States to reserve " at least" 15 percent of
their VR program allotment for
providing pre-employment transition
services. Final § 361. 65( c)( 3) mirrors the
statutory requirement. Although several
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commenters referred to the 15 percent
reservation requirement as a " limit," the
Act as amended by WIOA, and final
361. 65( c)( 3) do not restrict States from
spending more than 15 percent of their
allotments for the provision of these
services.
We appreciate the many
recommendations for alternative ways
for DSUs to meet the pre-employment
transition services reservation
requirement under proposed
361. 65( a)( 3)( i). We also appreciate the
concerns that the reservation of funds
for the sole purpose of providing pre-
employment transition services will
reduce the amount of funds available for
other VR program purposes, including
services for individuals who are blind or
visually impaired who wish to start a
vending facility under the Randolph -
Sheppard program. Nevertheless, the
Act requires States to reserve at least 15
percent of their VR program allotment
for providing pre-employment transition
services. The Act provides no
exceptions to this requirement and,
therefore, we do not have the authority
to make the changes suggested by the
commenters because to do so would be
inconsistent with the statute.
Changes: None.
Application ofthe Reservation of Funds
to the State and to the State Allotment
Comments: Many commenters
requested that RSA apply the pre-
employment transition reservation
requirement to the State as a whole and
not to the DSU in States with separate
agencies serving individuals who are
blind and individuals with all other
disabilities. One commenter requested
clarification regarding how pre-
employment transition services are to be
funded. A few commenters requested
that we clarify whether the reservation
requirement applies to the State funds,
or just the Federal funds.
Discussion: Section 113( a) of the Act
requires pre-employment transition
services to be paid for with funds
reserved from the VR program allotment
pursuant to section 110( d)( 1) of the Act,
as amended by WIOA. We agree with
commenters that the reservation of
funds for providing pre-employment
transition services is a State
requirement, not a DSU -specific
requirement. Section 110(d) of the Act,
as amended by WIOA, and final
361. 65( a)( 3)( i) require the State— not
the DSU—to reserve the funds, thereby
making this a matter that must be
resolved at the State level when there
are two agencies in the State. For this
reason, the Department encourages
DSUs to coordinate to ensure State
compliance. While the Department
recommends that each DSU, when a
State has two DSUs, reserve at least 15
percent of its allotment to facilitate the
tracking of State compliance with the
reservation requirement, the Act does
not require that this be done. If one DSU
when a State has two DSUs) uses more
of its funds than the other, the State
would be in compliance so long as the
State' s total of funds reserved for
providing pre-employment transition
services is at least 15 percent of the
State' s total allotment, including any
additional funds received during
reallotment by one or both DSUs.
The State allotment, from which
funds must be reserved, refers to the
Federal funds awarded pursuant to
section 110( a) of the Act, not State funds
appropriated to the DSUs by State
legislatures.
Changes: None.
Effect ofReallotment and Carryover on
the Reservation ofFunds
Comments: One commenter requested
clarification regarding whether funds
received during reallotment would
count toward the State' s allotment for
purposes of the pre-employment
transition services reservation
requirement. One commenter requested
clarification regarding whether the
reservation requirement applies to the
carryover period.
Discussion: Under section 110(b)( 3) of
the Act, funds received during
reallotment are an increase to the State' s
allotment. Similarly, funds relinquished
during reallotment are a reduction to the
State' s allotment. Therefore, funds
received or relinquished by a State
during reallotment affect the amount of
funds that must he reserved for
providing pre-employment transition
services.
Section 19 of the Act, which governs
the carryover of grant funds, applies to
all VR program funds, including funds
reserved for providing pre-employment
transition services. Section 19( b) of the
Act permits grantees to carry over
Federal funds for obligation and
expenditure in the subsequent Federal
fiscal year only to the extent that the
DSU has provided sufficient non -
Federal expenditures to match those
funds. This means that grantees may
carry over Federal funds reserved for
providing pre-employment transition
services into the subsequent Federal
fiscal year only to the extent that they
have provided the requisite 21. 3 percent
non -Federal share by the end of the
Federal fiscal year in which the funds
were awarded. In addition, because they
have been matched in the fiscal year for
which they were appropriated, the
funds reserved for providing pre-
employment transition services that are
eligible for carryover into the
succeeding Federal fiscal year may only
be obligated in that succeeding Federal
fiscal year and expended for providing
pre-employment transition services.
Changes: None.
Administrative Costs
Comments: Some commenters
requested clarification regarding fiscal
reporting requirements, including staff
time, counted toward the reservation
requirement given that DSUs may not
expend funds reserved for providing
pre-employment transition services on
administrative costs. One commenter
requested clarification regarding the
apparent contradiction of some of the
authorized activities listed in proposed
361. 48( a)( 3), which might appear to be
administrative in nature, and the
prohibition in proposed
361. 65( a)( 3)( ii) against using reserved
funds for administrative costs.
Discussion: We appreciate the
comments requesting clarification
regarding whether DSUs may pay for
staff -related costs from funds reserved
for the provision of pre-employment
transition services. Section 110( d)( 2) of
the Act, as amended by WIOA, prohibits
DSUs from using the reserved funds for
administrative costs. Section 7( 1) of the
Act and final § 361. 5( c)( 2) define
administrative costs" as including,
among other things, " administrative
salaries, including clerical and other
support staff salaries, in support of these
administrative functions." It has been
the long-standing Department policy
that staff -related costs, including
salaries, fringe benefits, and travel,
incurred while providing vocational
rehabilitation services, constitute
service costs, not administrative costs.
As such, costs associated with staff time
spent providing pre-employment
transition services may be paid with the
funds reserved for providing those
services.
By contrast, supervisory costs, rent,
utilities, indirect costs, and other
similar associated costs are
administrative costs— not service
costs— and, as such, cannot be paid with
the reserved funds. In considering the
various pre-employment transition
services specified in section 113 of the
Act and final § 361. 48( a) in this way, we
do not believe there are actual conflicts
between final § 361. 48( a) and § 361. 65.
However, we have revised final
361. 65( a)( 3)( ii)(B) to add a cross-
reference to the definition of
administrative costs" in final
361. 5( c)( 2), to clarify that these costs
are still allowable under the VR program
and may be paid for with VR program
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funds not reserved for the provision of
pre-employment transition services
under final § 361. 65( a)( 3).
Changes: We have revised final
361. 65( a)( 3)( ii)(B) to clarify that the
administrative costs referred to in this
provision are those that meet the
definition of " administrative costs" in
final § 361. 5( c)( 2). This change is
technical, not substantive.
Tracking of the Reserved Funds
Comments: Some commenters
requested that we provide flexibility
regarding the tracking of pre-
employment transition service
expenditures to minimize time-
consuming administrative requirements.
One commenter requested that the
Department issue guidance to States
regarding tracking expenditures, for
example, creating a separate accounting
code to track the reservation
requirement. One commenter requested
that the Department allow agencies with
counselors who work with schools or
support the provision of pre-
employment transition services to count
all of the counselor' s time toward the
reservation requirement, thereby easing
the burden on DSUs associated with
tracking these costs.
Discussion: When tracking
expenditures incurred for the provision
of pre-employment transition services,
DSUs may need to develop a cost
objective (i.e., a separate accounting
code) that is different from the one used
for other VR program cost allocation
purposes, thereby enabling DSUs to
track pre-employment transition
services expenditures properly with the
reserved funds. Similarly, DSUs should
account for personnel time to ensure the
proper allocation of staff time between
the provision of pre-employment
transition services and other vocational
rehabilitation services, just as the DSU
does when its personnel work on
multiple programs. DSUs must track
pre-employment transition services in a
manner that ensures the reserved funds
are used only for the provision of
services set forth in section 113 of the
Act and final § 361. 48( a). Although this
could increase administrative burden
slightly, it is only in this manner that a
DSU can be certain it is expending
reserved funds appropriately. The
Department will issue guidance
separately about tracking expenditures
from the reserved funds and other fiscal
matters relevant to the reservation of
funds for providing pre-employment
transition services.
Changes: None.
Use of Reserved Funds for Authorized
Activities
Comments: Some commenters
requested that we clarify when the
authorized activities (as opposed to the
required activities) in proposed
361. 48( a)( 3) are allowable pre-
employment transition expenditures in
meeting the reservation requirement.
Specifically, the commenters wanted to
know the threshold for determining
when funds are remaining after
providing the required activities under
361. 48( a)( 3).
Discussion: As stated in final
361. 48( a)( 3), a DSU may provide
authorized" pre-employment transition
services only to the extent that reserved
funds remain after providing the
required" activities. As part of the
Comprehensive Statewide Needs
Assessment, States should determine
the number of potential individuals
eligible for pre-employment transition
services. This data will enable the States
to target the amount of the reserved
funds necessary for ensuring the
required" pre-employment transition
services are provided to students with
disabilities. To the extent the States
demonstrate that they have made the
required pre-employment transition
services available to the population
identified in the Comprehensive
Statewide Needs Assessment, the States
have met the requirement to provide the
required" pre-employment transition
services prior to the " authorized"
activities. Any reserved funds remaining
beyond the targeted amount necessary
for the " required" activities may then be
used for " authorized" activities in final
361. 48( a)( 3).
Changes: We have revised proposed
361. 65( a)( 3)( ii)(A) to clarify that funds
reserved for providing pre-employment
transition services may be used to pay
for the costs of providing all of the
services " specified" in final § 361. 48( a).
Proposed § 361. 65( a)( 3)( ii)(A) referred to
services " authorized" in final
361. 48( a). We believe this technical
change is necessary to avoid any
confusion about the general use of the
term " authorized" and the distinction
between " required" and " authorized"
services in the context of pre-
employment transition services.
Part 363— The State Supported
Employment Services Program
The discussion of comments on part
363 is presented by topic in the order
that the relevant sections appear in this
part.
Competitive Integrated Employment and
Short -Term Basis (§ 363. 1)
Comments: Overall, commenters
strongly supported the focus and
emphasis in part 363 on individuals
with the most significant disabilities,
including youth with the most
significant disabilities, achieving
competitive integrated employment.
One commenter suggested, however,
that supported employment should not
be assumed automatically as the first
option for people with significant, or the
most significant, disabilities. Another
commenter urged that " States"
presumably designated State agencies)
track all individuals working in
segregated settings and at subminimum
wage to help identify the need for
supported employment.
Other commenters pointed out
discrepancies in the definition of
supported employment" between
proposed 34 CFR 361. 5( c)( 53) and
proposed §§ 363. 1( b) and (c) and urged
that these he made consistent.
One commenter suggested adding
other approaches or evidence -based
models such as Individual Placement
and Support (IPS) to supported
employment and customized
employment. This commenter also
asked whether funds could he used to
train new or existing providers in
various models of supported
employment.
Many commenters responded to the
short-term basis provisions in proposed
363. 1( c) and proposed 34 CFR
361. 5( c)( 53) under which individuals
with the most significant disabilities
working in an integrated setting are
working toward competitive integrated
employment and can reasonably
anticipate achieving competitive
integrated employment within six
months of entering supported
employment. A few commenters
endorsed the six-month period,
indicating that the six-month period
would not allow individuals to linger
for long periods in subminimum wage
employment.
A few commenters considered six
months to be too long and even
recommended eliminating the short-
term basis period altogether, indicating
that under no circumstance should any
individual with a disability be
employed at a subminimum wage.
However, most commenters considered
six months to be arbitrary, too
restrictive, or not sufficient, especially
for individuals with the most significant
disabilities, such as individuals who are
blind who, as indicated by multiple
commenters, might require additional
training or specialized services in order
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to achieve competitive integrated
employment. Others recommended
extensions of up to 12, 18, or 24 months,
or even an unspecified time based upon
an individual' s needs, in order to
achieve competitive integrated
employment consistent with the
individual' s unique strengths, priorities,
concerns, abilities, capabilities,
interests, and informed choice.
Some commenters suggested adding
unpaid internships, apprenticeships,
and transitional employment as
examples of " working on a short term
basis." These commenters also
recommended emphasizing that
employment in sheltered workshops
and enclaves and group employment
settings does not constitute supported
employment. A few commenters stated
that individuals working on a short-term
basis should be only in integrated
settings as they work toward
competitive integrated employment.
Other commenters, however, referenced
competitive, but non-integrated, settings
when commenting on the short-term
basis provision. One commenter asked
for clarification to ensure that
AbilityOne contracts with non-profit
agencies that employ individuals with
disabilities remain a viable option for
individuals with the most significant
disabilities to achieve employment
outcomes in supported employment.
Discussion: We appreciate the many
supportive comments regarding the goal
of competitive integrated employment
for all individuals with significant
disabilities, including youth with
significant disabilities, and particularly
for those with the most significant
disabilities.
We also agree with the commenter
who suggested that supported
employment should not be considered
automatically as the first choice for
individuals with significant disabilities
or the most significant disabilities. The
State Supported Employment Services
program (Supported Employment
program) and supported employment
services exist to support individuals
with the most significant disabilities
who need intensive services and
supports to achieve an employment
outcome. Supported employment
should be considered when determining
an individual' s employment goal,
consistent with his or her unique
strengths, priorities, concerns, abilities,
capabilities, interests, and informed
choice.
The Act, as amended by WIOA,
specifically mentions customized
employment and supported
employment. We do not believe that
including examples of additional
approaches or models of supported
employment, such as Individual
Placement and Supports, is necessary.
However, we support developing and
implementing evidence -based models of
supported employment, so long as they
are consistent with the Act, as amended
by WIOA, and the implementing
regulations. Furthermore, administrative
funds under this part, subject to the 2. 5
percent administrative cost limitation,
and funds under 34 CFR part 361, as
appropriate, may be used to support
training of providers and others on
various models of supported
employment.
Although the tracking of all
individuals working in segregated
settings and at subminimum wage
would be useful to designated State
units (DSUs) in identifying and
assessing the need for supported
employment, we do not have the
authority under the Act to require this
unless the individuals have been served
through the VR program (see 34 CFR
361. 55, which requires the DSU to
conduct semi-annual or annual reviews,
as applicable, of individuals in
extended employment and other
employment under special wage
certificate provisions of the Fair Labor
Standards Act), or the individuals have
become known to the DSU through the
activities required in section 511 of the
Act.
We agree with commenters who noted
discrepancies in the definition of
supported employment" in proposed
34 CFR 361. 5( c)( 53) and proposed
363. 1( b) and (c), and we have made
the definitions consistent in these final
regulations.
We also appreciate the many
comments about " short-term basis." As
proposed, § 363. 1( c) is consistent with
the requirement in the Act, as amended
by WIOA, that supported employment
be in competitive integrated
employment or in an integrated work
setting in which the individual is
working on a short-term basis toward
competitive integrated employment.
Therefore, despite the payment of
competitive wages, employment in a
non-integrated work setting does not
meet the requirement under the Act, as
amended by WIOA, for an employment
outcome in supported employment.
The Secretary acknowledges the
diverse views, concerns, and
recommendations of the commenters
about the variables that should be
considered in determining the short-
term basis period but believes six
months is consistent with the intent of
the Act. The Secretary agrees with the
commenters, however, that, in limited
circumstances, an extended period of
time may be appropriate based upon the
needs of the individual and upon
demonstrated progress toward
competitive earnings documented in his
or her service record. Therefore, an
individual with a most significant
disability, including a youth with a
most significant disability, may, in
limited circumstances, have up to 12
months from achieving a supported
employment outcome, as appropriate, to
address fully his or her individualized
needs to secure competitive earnings in
supported employment.
In response to the concerns about the
availability of sufficient time to help
individuals achieve an employment
outcome, particularly in relation to the
short-term basis, we want to clarify
when the six-month short-term basis
period, and the additional six months
that may be available in limited
circumstances, begins. This period
begins only after an individual with a
most significant disability, including a
youth with a most significant disability,
has completed up to 24 months of
supported employment services (unless
a longer period of time is necessary
based upon the individual' s needs) and
the individual is stable in the supported
employment placement for a minimum
period of 90 days following the
transition to extended services. At this
point, the individual has achieved a
supported employment outcome in
accordance with the criteria set forth in
final § 363. 54. We believe that this
provides sufficient time, considering
both the time allowed for providing
supported employment services and the
short-term basis period, if needed, to
address fully the needs of an individual
in supported employment and to enable
that individual to achieve competitive
integrated employment. Our data
support this belief and show that most
supported employment outcomes are
achieved in less than 24 months.
In response to multiple commenters'
concerns about individuals with the
most significant disabilities, such as
individuals who are blind who may
require additional training or
specialized services to achieve
competitive integrated employment, we
want to clarify that vocational
rehabilitation services, as well as
supported employment services, are
available to them. The vocational
rehabilitation services generally occur
prior to placement in supported
employment as part of the individual' s
approved individualized plan for
employment.
Again, because the definition of
employment outcome," which
includes supported employment,
requires achieving competitive
integrated employment as defined in
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final § 361. 5( c)( 9), all supported
employment outcomes must be in
integrated settings with the expectation
that individuals with the most
significant disabilities can and will
achieve competitive wages.
We appreciate the recommendations
regarding activities that commenters
stated should constitute employment
during the short-term basis period,
including unpaid internships,
apprenticeships, and transitional
employment; however, we want to
emphasize that the short-term basis
period begins following the
achievement of the supported
employment outcome. Unpaid
internships, pre -apprenticeships,
apprenticeships (including Registered
Apprenticeships), and transitional
employment are vocational
rehabilitation services that lead to
employment outcomes, but they do not
constitute supported employment
outcomes within the meaning of the
definition of " supported employment"
in final 34 CFR 361. 5( c)( 53) and
363. 1( b) and ( c). Therefore, they would
not be appropriate placements for
employment on a short-term basis.
Finally, we agree with commenters
that employment in sheltered
workshops and enclaves and group
employment settings does not constitute
supported employment under this part
because an individual achieves a
supported employment outcome only if,
at a minimum, the supported
employment is in an integrated setting.
There is a full discussion about why
non-integrated employment does not
meet the definition of " competitive
integrated employment" in the
responses to comments on the definition
of competitive integrated employment
in 34 CFR 361. 5( c)( 9). That discussion
also addresses whether entities that are
set up specifically for providing
employment to individuals with
disabilities, such as AbilityOne non-
profit agencies, will be able to place
individuals with the most significant
disabilities in competitive integrated
employment and achieve employment
outcomes in supported employment.
Changes: We have revised the
definition of " supported employment"
to be consistent in both final § 363. 1( b)
and ( c) and final 34 CFR 361. 5( c)( 53). In
the NPRM, the definition in proposed
34 CFR 361. 5( c)( 53) did not include the
phrase " and customized" when
referring to competitive integrated
employment, and proposed § 363. 1( b)
did not include the phrase " including a
youth with a most significant disability"
when referring to individuals with the
most significant disabilities.
Additionally, proposed 34 CFR
361. 5( c)( 53) included " transitional
employment," which has been removed
in final 34 CFR 361. 5( c)( 53). We have
corrected other, minor inconsistencies
in singular and plural references to
individuals with the most significant
disabilities.
We have also revised final § 363. 1( c)
by adding a limited circumstance in
which an individual can extend the
short term basis up to a 12 -month
period from the achievement of the
supported employment outcome to
demonstrate progress toward
competitive earnings based on
information contained in the service
record.
Definitions (§ 363. 6( a))
Comments: We received several
comments regarding changes in
proposed 34 CFR 361. 5( c) to definitions
relevant to the Supported Employment
program. A few commenters requested
the removal of the definition of
transitional employment" in proposed
34 CFR 361. 5( c)( 56). These commenters
also suggested removing the reference to
transitional employment from the
definitions of " supported employment"
in proposed 34 CFR 361. 5( c)( 53) and
ongoing support services" in proposed
34 CFR 361. 5( c)( 37). They noted that
WIOA eliminated " transitional
employment" and that the definition of
supported employment" in WIOA
supersedes the definition in the
Workforce Investment Act of 1998,
which included " transitional
employment" for individuals with
mental illness. The commenters
suggested that Congress deliberately
removed " transitional employment" to
ensure people with the most significant
disabilities have access to competitive
integrated employment.
Some commenters sought clarification
about the definition of " extended
services" in proposed 34 CFR
361. 5( c)( 19)( v) related to youth with the
most significant disabilities.
Discussion: We agree with the
commenters' assessment of the
congressional intent behind removing
the definition of " transitional
employment" and the reference to
transitional employment in both the
definition of supported employment
and the definition of ongoing support
services. The term is no longer
supported by the Act.
We discuss the commenters' request
for clarification about the definition of
extended services" in proposed 34 CFR
361. 5( c)( 19)( v) for youth with the most
significant disabilities in this Analysis
of Comments and Changes under
Services to Youth with the Most
Significant Disabilities" in § 363. 4( a)( 2).
Changes: We have removed the
definition of " transitional employment"
in final 34 CFR 361. 5( c), as well as the
references to it in the definition of
supported employment" in 34 CFR
361. 5( c)( 53) and " ongoing support
services" in 34 CFR 361. 5( c)( 37).
The definition of " extended services"
in 34 CFR 361. 5( c)( 19)( v) has been
revised as discussed in § 363. 4( a)( 2) of
this Analysis of Comments and Changes
section under " Services to Youth with
the Most Significant Disabilities."
Extension of Time for the Provision of
Supported Employment Services (34
CFR 361.5(c)(54)(iii))
Comment: A few commenters
recommended either basing the time
frame for providing supported
employment services on an individual' s
need rather than a prescribed period of
time or revising the regulatory language
to make it easier to extend the 24 -month
time frame, as needed. A few other
commenters disagreed with extending
the time frame beyond 18 months.
Discussion: We appreciate the
concerns regarding the time frame for
providing supported employment
services. WIOA extended the
availability of supported employment
services from 18 months to 24 months,
and this mandate cannot be changed by
the Department. The extension provides
additional time for individuals with the
most significant disabilities to receive
the services and supports necessary to
achieve an employment outcome in
supported employment, either in
competitive integrated employment or
working on a short-term basis to achieve
competitive integrated employment. In
accordance with section 7( 39)( C) of the
Act, under special circumstances, the
eligible individual and the
rehabilitation counselor or coordinator
can jointly agree to extend the time to
achieve the employment outcome
identified in the individualized plan for
employment.
Changes: None.
Services to Youth With the Most
Significant Disabilities (§§ 363. 4( a)( 2)
and 363. 22)
Extended Services (§ 363. 4( a)( 2))
Comments: Many commenters
suggested changing the statutorily
defined time frame of up to four years
during which the DSU may expend
supported employment program funds
for extended services for youth with the
most significant disabilities, either by
establishing a longer or shorter period
for providing extended services or by
basing this period upon individual
circumstances.
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Additionally, commenters requested
clarification regarding the point at
which the DSU would be required to
terminate its provision of extended
services for a youth who turns 25 years
of age and no longer meets the
definition of a " youth with a disability"
in 34 CFR 361. 5( c)( 58).
With respect to the use of funds
allotted under the Supported
Employment program for extended
services, a few commenters
recommended changing the word
may" in proposed § 363. 4( a) to " shall"
or " will" to establish that it is
mandatory for DSUs to provide
extended services to youth with the
most significant disabilities.
A few commenters asked for
clarification whether providing
extended services is mandatory or
optional, citing discrepancy between the
language in proposed § 363. 22, which
appears to indicate that the reserve must
be used for extended services, and
proposed § 363. 4( a)( 2), which uses the
word " may" when referring to the use
of funds allotted under this part.
Other commenters also proposed
making the DSU either the initial payer
or the payer of last resort for extended
services for youth with the most
significant disabilities. Still other
commenters raised questions about
providing extended services to youth
with the most significant disabilities
who have not been served by the DSU
as an applicant or eligible individual.
Discussion: We appreciate the
suggested revisions to proposed
363. 4( a)( 2). While many commenters
sought to limit the DSU' s responsibility
for extended services, given limited
available resources, we cannot do so.
Section 604( b)( 2) of the Act mandates
that the DSU make available extended
services for youth with the most
significant disabilities for up to four
years. Nothing in the Act authorizes the
Department to grant a waiver of this
requirement or to change the time
period from four years to any other time
period for youth with the most
significant disabilities.
While the DSU cannot " opt out" of
any of the activities authorized under
363. 4 by refusing to fund them, DSUs
determine the need for and fund
services on a case-by-case basis
dependent upon each individual' s need
for services. Therefore, it is not
appropriate to change the " may" in 34
CFR 363. 4( a) to " shall" or " will," and
doing so would not be consistent with
the authorizing language in section 604
of the Act. In light of the responsibility
to make available funds for extended
services for youth with the most
significant disabilities, DSUs should
continue to explore the availability of
funding from other sources, as is done
for other individuals with the most
significant disabilities transitioning
from supported employment services to
extended services.
Regarding the point at which the DSU
may no longer provide extended
services to a youth with the most
significant disabilities, in no case may a
DSU provide more than four years of
extended services. Also, once a youth
with the most significant disabilities
reaches 25 years of age, he or she no
longer meets the definition of "youth
with a disability" in 34 CFR
361. 5( c)( 58), and the DSU must
discontinue funding extended services.
We appreciate the commenters bringing
this last scenario to our attention. Final
363. 4( a)( 2) now states that at the age
of 25, a youth with a most significant
disability is no longer eligible to receive
extended services, even if he or she has
not yet received services for four years.
Nevertheless, under final
363. 53( b)( 2)( ii), the DSU must identify
another source of extended services to
ensure that there will be no interruption
of services.
As indicated by a few commenters,
section 606(b)( 7)( D) of the Act provides
that the State shall use supported
employment funds only to supplement,
and not to supplant, title I VR program
funds in providing supported
employment services. A few
commenters suggested that this
provision means that the Supported
Employment program or VR program
funds should be the payer of last resort
others suggested the payer of first
resort) for extended services to youth
with the most significant disabilities.
The " supplement, not supplant clause,"
as it is known, addresses only the
relationship between the Supported
Employment program and the VR
program when providing supported
employment services, which now
includes extended services. It does not
affect at all the relationship of the
Supported Employment program or VR
program to sources of funds that have
historically been the providers of
extended services to individuals after
they have transitioned from supported
employment services provided by the
DSU. We expect those State and other
sources of funding to coordinate with
the Supported Employment and VR
programs to provide the extended
services needed by youth with the most
significant disabilities. One of the
purposes of the Supported Employment
program is to assist States in developing
collaborative programs with appropriate
public and private nonprofit
organizations to provide supported
employment services for individuals
with the most significant disabilities.
As to whether the DSU can provide
extended services to youth with the
most significant disabilities who have
not been served by the DSU as an
applicant or eligible individual, we
emphasize that in order to be eligible for
supported employment services,
including extended services, provided
by the DSU, youth with the most
significant disabilities must meet the
requirements of § 363. 3, which include
being determined eligible for vocational
rehabilitation services. The DSU
therefore may not provide extended
services to a youth with the most
significant disabilities who has not
received services from the DSU through
an individualized plan for employment
simply because he or she meets the
definition of a youth with a disability
and is in need of extended services.
Changes: We have revised
363. 4( a)( 2) to clarify that extended
services to youth with the most
significant disabilities provided by the
DSU may be for a period not to exceed
four years, or until such time as the
youth reaches age 25 and no longer
meets the definition of "youth with a
disability" under final 34 CFR
361. 5( c)( 58), whichever occurs first.
Reserve of Supported Employment
Funds for Services for Youth With the
Most Significant Disabilities (§ 363.22)
Comments: One commenter agreed
with the reserve requirement, indicating
that the reserve funds should also be
targeted to " school -to -work" transition
services to place youth in competitive
integrated employment.
Of the commenters that expressed
concern regarding the requirement for
reserving 50 percent of supported
employment funds for supported
employment services to youth with the
most significant disabilities, most
requested an exemption to ensure that
adults with the most significant
disabilities, particularly those with
adult onset visual impairment or
blindness, are able to be served.
Discussion: We appreciate these
concerns. However, WIOA mandates the
50 percent reservation of funds for
supported employment services,
including extended services, for youth
with the most significant disabilities.
The reserved funds may not be used for
school -to -work" transition services
because the funds must be used for
supported employment services for
youth with the most significant
disabilities, including extended
services, which occur after placing such
youth in competitive integrated
employment. WIOA does not provide
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any exceptions or authorize the
Department to grant an exemption or
waiver.
Changes: None.
Match Requirements for Funds Reserved
for Serving Youth With the Most
Significant Disabilities (§ 363.23)
Comments: Some commenters
preferred that the 50 percent reserve not
have a match requirement, and others
indicated the match tracking and
monitoring requirements are
burdensome. A few commenters sought
clarification regarding whether the
match required new funding by the
State or whether the State could realign
current funding. The commenters
indicated that it was difficult to
comprehend the intent of the match
without a defined plan for allocating the
funds.
Other commenters requested that in-
kind match, such as those used and
tracked in the Independent Living
Services for Older Individuals Who Are
Blind program, be allowed to meet the
match requirements under this section.
A few commenters requested examples
of match and asked whether certified
personnel expenditures are permitted as
a third -party contribution.
Discussion: We appreciate the
concerns expressed by the commenters
regarding the required match for funds
reserved for providing supported
employment services, including
extended services, to youth with the
most significant disabilities. This is a
new requirement that will require all
States to provide a non -Federal share;
however, States that have historically
expended non -Federal funds to
supplement the Federal supported
employment award now may count
those expenditures for the provision of
services to youth with the most
significant disabilities as match for the
reserve requirement.
WIOA mandates the match
requirement for supported employment
and does not provide any exceptions to
it or authorize the Secretary to grant a
waiver. The activities and internal
processes necessary for States to track
and expend the non -Federal share for
the reserve should not be burdensome
because they may be modeled after
those used for the part 361 match
requirements.
In addressing what may be used as
match, allowable sources of match for
the supported employment program
follow the same guidelines for those
sources allowable under the VR
program. Under final 34 CFR
361. 28(b)( 2), which addresses third -
party cooperative arrangements for
providing vocational rehabilitation
services, which in turn include
supported employment services under
final 34 CFR 361. 48( b)( 13), certified
personnel expenditures for time
cooperating agency staff spent providing
direct vocational rehabilitation services
pursuant to a third -party cooperative
arrangement are allowable. Certified
personnel expenditures include staff
salary and fringe benefits allocable to
the third -party cooperative arrangement.
To ensure consistency with part 361,
third -party in-kind contributions are not
permitted as match.
In reviewing proposed § 363. 23
further, we determined that it did not
effectively describe the calculation of
the 10 percent match, which must be
based upon the total expenditures, made
up of the Federal funds reserved and the
non -Federal share, incurred for
providing supported employment
services to youth with the most
significant disabilities.
Changes: We have revised final
363. 23( a)( 2)( i) to demonstrate that the
match calculation is based upon the
total expenditures, including the
Federal funds reserved and the non -
Federal share, associated with the 50
percent reserve of Federal funds for
providing supported employment
services to youth with the most
significant disabilities.
Program Income (§ 363. 24)
Comments: A commenter disagreed
with limiting the use of program income
and supported eliminating the
requirement to disburse program
income prior to requesting additional
cash draws from its Federal award.
Discussion: There has been a long-
standing government -wide requirement
under the common rule implementing
former OMB Circular A-102, as codified
by the Department in former 34 CFR
80. 21( f)(2), that States must expend
program income prior to drawing down
Federal grant funds. The Uniform
Administrative Requirements, Cost
Principles, and Audit Requirements for
Federal Awards (Uniform Guidance),
codified in 2 CFR part 200, were
adopted by the Department in 2 CFR
3474 on December 19, 2014 ( 79 FR
76091). The new 2 CFR 200. 305( a)
specifies the payment procedures that
States must use to draw down Federal
funds; however, these procedures
appear, on the surface, to apply only to
funds included in a Treasury -State
Agreement (TSA), but not all Federal
program funds made available to States
are subject to TSAs. For this reason,
there is an ambiguity in 2 CFR
200. 305( a) about how States should
draw Federal funds under non -TSA
programs. Moreover, TSAs do not cover
program income earned by State
grantees, and 2 CFR 200. 305( a) does not
address whether States should expend
available program income funds before
requesting additional Federal cash, as
had been the long-standing government -
wide requirement in OMB Circular A-
102 and codified for Department
grantees in 34 CFR 80. 21( f)(2).
This silence creates concern because,
for all other non -Federal entities, 2 CFR
200. 305( b)( 5) requires those entities to
expend available program income funds
before requesting payments of Federal
funds. We do not believe, however, that
this ambiguity should be construed to
lift the requirement that States expend
program income funds before requesting
additional Federal cash because no such
policy change was discussed in the
preambles to either the final guidance in
2 CFR part 200, which was published on
December 26, 2013 ( 78 FR 78589), or in
the Interim Final Guidance published
on December 19, 2014 ( 79 FR 75867).
Here, 34 CFR 361. 63( c)( 2) permits the
transfer of VR Social Security
reimbursement program income to
carryout programs under title VI of the
Rehabilitation Act (Supported
Employment). Historically, some State
VR agencies have transferred a portion
of VR Social Security reimbursement
program income to the Supported
Employment programs for use by those
programs. For this reason, we believe it
is essential that we resolve this
ambiguity via these regulations.
Thus, we proposed in the NPRM to
incorporate the requirement to expend
program income before requesting
payment of funds by referencing 2 CFR
200. 305( a), but that provision is
ambiguous. These final regulations now
resolve the ambiguity by revising
363. 24( b)( 1) to require States to
expend available program income funds
before requesting additional cash
payments from their Federal Supported
Employment grant. We believe this
change is essential to protect the Federal
interest by using program income to
increase the funds devoted to this
program to which VR Social Security
reimbursement program income may be
transferred, keeping to a minimum
potential interest costs to the Federal
government of making grant funds
available to the States. These final
regulations should not negatively
impact States because this change
merely maintains the status quo that
existed under former 34 CFR 80. 21( f)(2).
In addition, upon further review of
the proposed program income
regulation, we determined that it was
necessary to address the relationship
between program income and match.
Just as with program income in the VR
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program, program income earned in the
Supported Employment program may
not be used to meet the required non -
Federal share under § 363. 23.
Changes: We have revised § 363. 24 by
removing the inapplicable reference to
the Uniform Guidance in § 363. 24(b)( 1),
leaving only the requirement that
program income earned in the
Supported Employment program must
be disbursed prior to requesting
additional cash draws from its Federal
award. We have also added a new
363. 24( b)( 3), which provides that
program income cannot be used to meet
the non -Federal share requirement
under § 363. 23.
Period of Availability of Funds
363. 25)
Comment: None.
Discussion: In reviewing proposed
363. 25( b), we determined that it would
be beneficial to clarify the use of Federal
funds reserved for the provision of
supported employment services to
youth with the most significant
disabilities that have been matched in
the fiscal year for which the funds were
appropriated and thus are available for
obligation in the succeeding fiscal year.
The Federal supported employment
reserve funds eligible for carryover into
the succeeding Federal fiscal year,
because they have been matched in the
fiscal year for which the funds were
appropriated, may only be obligated and
expended in that succeeding Federal
fiscal year for supported employment
services to youth with the most
significant disabilities.
Changes: Final § 363. 25( b) states that
any reserved funds carried over may
only be obligated and expended in that
succeeding Federal fiscal year for
providing supported employment
services to youth with the most
significant disabilities.
Limitations on Administrative Costs
363. 51)
Comment: One commenter stated that
the reduction of the administrative cost
limit from 5 percent to 2. 5 percent
would severely limit the agency' s ability
to hire and retain staff.
Discussion: Despite this mandated
reduction in section 603( c) of the Act,
funds from the VR program remain
available for costs related to the
Supported Employment program,
including administrative costs under
363. 4( c)( 1) and section 608( a) of the
Act. The limitation of administrative
costs under the Supported Employment
program expands the availability of
funds for supported employment
services to individuals with the most
significant disabilities, and the
availability of VR program funds for
administrative costs related to the
Supported Employment program helps
to mitigate the impact of the reduction
in administrative costs upon the DSU' s
ability to hire and retain staff.
Changes: None.
Requirements for Transition To
Extended Services, the Achievement of
an Employment Outcome, and Closure
of a Service Record (§ 363. 53, § 363. 54,
and § 363. 55)
Comments: Many commenters
requested clarification of requirements
related to the transition to extended
services, especially for youth with the
most significant disabilities; the
interplay of the short-term basis with
the achievement of an employment
outcome; and the requirements related
to case closure, particularly when youth
with the most significant disabilities are
receiving extended services from the
DSU.
Discussion: We acknowledge the
questions and confusion that many
commenters expressed about the
transition to extended services,
employment outcome, and closure of
the service record as they pertain to
individuals receiving supported
employment services. The transition to
extended services continues to take
place after an individual has completed
supported employment services. WIOA
makes two changes to the transition to
extended services.
First, an individual receiving
supported employment services can
now receive those services for up to 24
months, instead of the previous 18, and,
under special circumstances, may
receive an extension based upon the
individual' s need as described in 34
CFR 361. 5( c)( 54)( iii). The transition to
extended services begins after all
supported employment services are
complete. Second, the DSU may now
provide extended services to youth with
the most significant disabilities in
accordance with § 363. 4( a) and 34 CFR
361. 5( c)( 19)( v). The DSU' s
responsibilities necessitated by both of
those changes have been outlined more
comprehensively in a revised section
363. 53.
By including the requirement to
achieve competitive integrated
employment into the definition of
supported employment" in Section
7( 38) of WIOA, Congress stated its
expectation that all individuals with
disabilities, even those with the most
significant disabilities, could achieve
competitive integrated employment.
Recognizing, however, that those
individuals with the most significant
disabilities may need more time and
supports to reach that goal, Congress
permitted those individuals to be
employed in an integrated setting with
non-competitive wages on a short-term
basis, as long as they were working
toward competitive integrated
employment. The definition of
employment outcome" in 34 CFR
361. 5( c)( 15) addresses the achievement
of competitive integrated employment
in supported employment. Therefore,
final § 363. 54 explains when an
individual with a most significant
disability is considered to have
achieved an employment outcome in
supported employment, either in
competitive integrated employment or
when he or she is working on a short-
term basis toward competitive
employment in an integrated work
setting.
When the DSU closes the service
record of an individual with a most
significant disability now depends on
whether the DSU is providing services
during the short-term basis period or
providing extended services for youth.
A new final § 361. 55 describes how the
new statutory requirements for
employment on a short-term basis
working toward competitive integrated
employment, extended services for
youth, and achieving an employment
outcome relate to closing the service
record.
Changes: We have reformatted and
revised § 363. 53 to better identify the
steps that the DSU must take prior to
transitioning an individual with a most
significant disability, including a youth
with a most significant disability, to
extended services. Those steps include
both a joint decision made by the
counselor and the individual that the
individual needs no further supported
employment services, as defined in
361. 5( c)( 54), and identifying providers
of extended services, including the DSU
in the case of a youth with a most
significant disability, under 34 CFR part
361. 5( c)( 19).
We have reformatted and revised final
363. 54 to better identify the
considerations that the DSU must take
into account when determining when an
individual with a most significant
disability, including a youth with a
most significant disability, who is
employed in competitive integrated
employment or in an integrated setting
and is working on a short-term basis
toward competitive integrated
employment, will be considered to have
achieved an employment outcome in
supported employment.
We have removed the cross-reference
from proposed § 363.54(b) to the closure
of the service record requirement in 34
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CFR 361. 56 as a criterion for achieving
an employment outcome.
Final § 363. 54 sets forth four
requirements that must be satisfied for
an employment outcome. First, the
individual must have completed
supported employment services under
this part and 34 CFR part 361, meaning
the individual has received services for
up to 24 months, or longer if the
counselor and the individual have
determined that such services are
needed to support and maintain the
individual in supported employment.
Any other vocational rehabilitation
services listed on the individualized
plan for employment provided to
individuals who are working on a short-
term basis toward the achievement of
competitive integrated employment in
supported employment need not be
completed prior to satisfying the
achievement of an employment
outcome.
Second, the individual has
transitioned to extended services
provided either by the DSU for youth
with the most significant disabilities, or
another provider, consistent with the
provisions of §§363. 4( a)( 2) and 363. 22.
Third, the individual has maintained
employment and achieved stability in
the work setting for a minimum of 90
days after transitioning to extended
services, and, finally, the employment
must be individualized and customized
consistent with the strengths, abilities,
interests, and informed choice of the
individual.
New final § 363. 55 addresses when
the service record of an individual who
has achieved an employment outcome
in supported employment may be
closed. Separate requirements are
specified for different scenarios,
depending on whether individuals with
a most significant disability, including
youth with a most significant disability,
achieve competitive integrated
employment or work toward
competitive integrated employment on a
short-term basis and whether they are
receiving extended services and any
other vocational rehabilitation services
from the DSU or from other service
providers.
Limitation on Use of Subminimum
Wage (34 CFR Part 397)
The Analysis of Comments and
Changes of part 397 is presented in the
order in which relevant subjects and
sections appear in this part.
General Comments (Part 397)
Comments: More than 550
commenters responded to proposed part
397. Some commenters expressed strong
support for all or various sections. A
few commenters suggested that section
511 of the Act, as added by WIOA, does
not go far enough, and stated that the
payment of subminimum wages to
individuals with disabilities perpetuates
the perception that these individuals are
less valued. The commenters
recommended that the payment of
subminimum wages to individuals with
disabilities should be entirely
eliminated. Others supported Congress'
steps to reinforce the belief that, with
the proper supports and services,
individuals with all types of disabilities
can attain competitive integrated
employment. A few commended the
Department for its efforts in issuing
important regulations designed to curb
subminimum wage employment,
especially for youth with disabilities,
who too often transition from school
directly into sheltered employment at
subminimum wages without ever
having the opportunity to try
competitive integrated work or explore
their interests and abilities.
Some commenters remarked that
section 511 of the Act and the
implementing regulations in part 397
will help to eliminate practices that
have not worked to benefit individuals
with disabilities, such as the overuse of
employment at subminimum wages,
years of extended evaluation, and cycles
of performance evaluations that result in
low wages based upon an individual' s
productivity without necessary supports
and services. In addition, a few
commenters suggested that supporting
subminimum wage employment
appeared to be inconsistent with the
purpose of the VR program and that
resources should not be used to provide
services or activities that result in
individuals being employed in
segregated settings at subminimum
wages.
Generally, however, supporters of
proposed part 397 regarded the
regulations as helping individuals who
are considering subminimum wage
employment, or those already employed
at subminimum wage, access
opportunities for competitive integrated
employment.
Multiple commenters voiced
opposition to, or concerns about,
proposed part 397. These commenters
expressed concern that proposed part
397 would eliminate or phase out
section 14( c) certificates and
subminimum wages, close sheltered
workshops, and cause individuals
employed at subminimum wages to lose
their jobs. Some of these commenters
stated that individuals employed in
sheltered employment were mostly
incapable of working in competitive
integrated employment, enjoyed a
supportive and safe environment and
social network in sheltered
employment, and would lose income -
based financial and medical benefits if
they were paid minimum wages.
Additionally, many of these
commenters expressed concern that
employers in the community would not
hire individuals with low productivity
who are unable to perform at expected
levels and that it was unrealistic to
believe that there are enough jobs for
them in competitive employment. As a
result, these individuals with
disabilities would remain at home or
need increased support from day
programs.
Many commenters suggested that
there should be a continuum of
employment opportunities for
individuals with disabilities, including
sheltered workshops, and that the
proposed regulations do not consider
the choices that individuals and
families make among these options.
Discussion: We appreciate the many
thoughtful recommendations to change,
clarify, and improve the regulations.
Section 511 of the Act, as added by
WIOA, and final part 397 set forth the
requirements that must be satisfied: (1)
Before an entity holding a special wage
certificate issued by the Department of
Labor under section 14( c) of the Fair
Labor Standards Act (FLSA) may hire a
youth with a disability or continue to
employ an individual with a disability
of any age at subminimum wages; and
2) by DSUs and local educational
agencies with regard to services and
documentation that must be provided to
these individuals. Neither section 511 of
the Act nor final part 397 eliminates the
payment of subminimum wages or
section 14( c) certificates. Both of these
actions are outside the scope of the
Department' s authority and these final
regulations. We also understand the
concerns about the potential loss of
needed disability -related and income -
based benefits and the availability of
sufficient jobs in the community;
however, WIOA embodies the belief that
with appropriate skills and supports, all
individuals with disabilities can
participate in the competitive workforce
and achieve self-sufficiency. The Act, as
amended by WIOA, and WIOA itself,
could result in more job opportunities
becoming available to individuals with
disabilities, including those with the
most significant disabilities. Two of the
core purposes of WIOA are to ensure
that: (1) Individuals who face barriers to
employment, such as individuals with
disabilities, receive the services and
supports they need to acquire the skills
necessary to obtain competitive
integrated employment; and (2)
55710 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
employers receive the training,
technical assistance, and other services
they need to understand and tap into
the full potential of individuals with
disabilities in the workforce, for
example through supported
employment or customized
employment. In addition, the Act, as
amended by WIOA, and final part 361
require DSUs to work with other public
agencies to ensure that individuals with
disabilities receive the benefits planning
they need to better understand the
interplay of income -based benefits and
work and to make informed decisions
about the type of employment to pursue.
Through all of these efforts, the
Secretary hopes that individuals with
disabilities, including those with the
most significant disabilities, have more
employment opportunities.
In addition, neither section 511 of the
Act nor final part 397 restricts or
eliminates sheltered employment.
Individuals with disabilities continue to
have a continuum of choices and
options for employment ranging from
competitive integrated employment to
employment in sheltered workshops.
Therefore, individuals with disabilities
choosing to pursue or continue in
sheltered employment may do so;
however, certain requirements must be
satisfied before the employer hires or
continues to employ them at
subminimum wages. While we
recognize that many subminimum wage
jobs for individuals with disabilities are
in sheltered settings, section 511 of the
Act and final part 397 focus exclusively
on the requirements that must be
satisfied before an entity holding a
section 14( c) certificate may hire or
continue to employ an individual with
a disability at subminimum wages, not
on the setting in which those wages are
paid.
Changes: None.
Purpose (§ 397. 1)
Comments: One commenter
recommended that § 397. 1( b)( 1) require
the DSU to ensure that youth with
disabilities actually have completed
certain services, not just provide
documentation about the completion of
those services to the youth. The
commenter further suggested we revise
this section to maximally limit the use
of subminimum wage employment by
requiring the DSU to: ( 1) Track youth
with disabilities receiving pre-
employment transition services and
transition services from the DSU who
are considering subminimum wage
employment; (2) identify all individuals
currently receiving services from the
DSU considering subminimum wage
employment; (3) identify all individuals
over the past three years who applied
for and were found ineligible for the VR
program and may be currently working
in, or considering, subminimum wage
employment; (4) track referral
agreements with, and conduct outreach
to, State and local educational agencies
to identify youth with disabilities
considering subminimum wage
employment; and ( 5) track referral
agreements with, and conduct outreach
to, the State agency with primary
responsibility for providing services and
supports for individuals with
intellectual and developmental
disabilities, and any other State agency
providing services to a significant
number of individuals in subminimum
wage employment. The commenter also
recommended that we revise § 397. 1 by
clarifying that nothing in this part
supersedes the requirements of 34 CFR
361. 55 regarding semi-annual and
annual review of individuals in
extended employment or other
employment under special certificates
issued under section 14( c) of the FLSA.
Discussion: We appreciate the
commenter' s time and consideration in
reviewing this section and making
substantive suggestions that would
assist DSUs in carrying out the intent of
section 511. In particular, the Secretary
believes the proactive steps
recommended by the commenter offer
potential ways in which DSUs could
increase the number of youth and other
individuals with disabilities considering
subminimum wage employment who
become known to the DSUs, thereby
significantly impacting the DSU' s ability
to assist in limiting the use of
subminimum wages. That said, the Act
does not require DSUs to seek out or
solicit youth and others with disabilities
considering, or already employed at,
subminimum wages. Similarly, the Act
does not require DSUs to track youth
with disabilities or others with
disabilities, except for those individuals
who have become known to the DSU
through the vocational rehabilitation
process or through activities required in
397. 20, 397. 30, 397. 40 and 397. 50.
However, there is nothing in the Act or
these final regulations that would
prohibit a DSU from working with local
educational agencies or other public
agencies that may be able to identify
individuals seeking or working in
subminimum wage employment, for
example, when implementing the
requirements in section 101( a)( 11) of the
Act, as amended by WIOA, and the final
regulations in 34 CFR 361. 22 related to
coordination with education officials,
34 CFR 361. 24 regarding cooperation
and coordination with other entities,
and the documentation process
requirements in final part 397. This
could increase the number of
individuals known to the DSU and
allow the DSU to provide services,
especially employment-related
counselling and guidance, earlier than it
otherwise would.
While we encourage the DSUs and
State and local educational agencies to
work together to identify these students
and youth with disabilities as early as
possible, any referrals by educational
agencies that are subject to the
confidentiality requirements of the
Family Education Rights and Privacy
Act (FERPA) ( 20 U.S. C. 1232g(b) and 34
CFR 99. 30 and 99. 31) and/ or the IDEA
20 U.S. C. 1417( c) and 34 CFR 300. 622)
would need to comply with the
applicable confidentiality standards.
Although we are not revising the final
regulations as recommended, the
Department will consider ways to
incorporate some of the suggestions into
technical assistance to the DSUs.
The Secretary understands the
recommendation to require the DSU to
ensure that youth with disabilities
actually complete certain services, in
addition to providing documentation.
However, the Secretary disagrees that
this is necessary. Under section
511( c)( 1)( A) of the Act and final
397. 40( a), DSUs must provide certain
information and career counselling
services to all individuals with
disabilities, known by the DSUs, who
want to continue employment at
subminimum wage. Upon the
completion of those services, the DSU
must provide the individual with
documentation that the services were
provided. As such, the documentation
ensures," as the commenter desired,
that the services were actually
completed. Similarly, a youth with a
disability must complete certain
services, such as transition and, as
appropriate, pre-employment transition
services, prior to beginning work in
subminimum wage employment. Again,
the DSUs and local educational agencies
must provide documentation that the
youth has completed these services,
thus ensuring that the services were
completed.
Finally, the Secretary agrees that
nothing in this part supersedes the
requirements of final 34 CFR 361. 55
regarding semi-annual and annual
review of individuals in extended
employment or other employment
under special wage certificate
provisions in section 14( c) of the FLSA.
We received similar suggestions to
cross-reference and reconcile the
requirements under final 34 CFR 361. 55
and final § 397.40 to ensure consistency
55711Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
and avoid confusion about which
requirements apply and the respective
responsibilities of the DSU under each
provision. While the Secretary
understands the concerns, such
revisions are not necessary or
appropriate. The DSUs must satisfy
their responsibilities under both final 34
CFR 361. 55 and final § 397. 40. These
sections implement requirements under
separate titles in the Act and apply to
different—although sometimes
intersecting—populations. We discuss
these requirements of final 34 CFR
361. 55 more fully in the Analysis of
Comments and Changes section earlier
in this preamble and those in final
397. 40 in a following section.
Changes: None.
Jurisdiction (§ 397. 2)
Jurisdiction of the Departments of
Education and Labor
Comments: One commenter agreed
that proposed § 397. 2 is consistent with
the statutory authority granted to the
Department. The commenter noted that
the Department has the authority to
regulate the actions of State educational
agencies and collect data, citing
Executive Order 11761 ( To Facilitate
Coordination of Federal Education
Programs), and, therefore, has the
authority to impose documentation
requirements; to impose requirements
for educational agencies, as detailed in
proposed §§ 397. 2( a)( 1) and ( 2); and to
regulate the actions of State and local
educational agencies with regard to
subminimum wage placements as
detailed in proposed § 397. 2( a)( 3).
The same commenter agreed with
proposed § 397. 2( b), which states that
nothing in this part will be construed to
grant the Department or its grantees
jurisdiction over requirements set forth
in the FLSA. The commenter added
that, although the Department of Labor
has the authority to grant entities
section 14( c) certificates allowing
subminimum wage employment to
individuals with disabilities, the
Department has the authority to
regulate, and thus restrict, the
placement of individuals with
disabilities in subminimum wage
employment as it relates to public
schools.
Another commenter stated that the
Department has express legal authority
to administer funding for the VR
program under the Act and to oversee
services by local school districts under
the Individuals with Disabilities
Education Act (IDEA). The commenter
urged the Department to assume a
central enforcement role over programs
that facilitate employment outcomes for
youth with disabilities, something
which, according to the commenter, was
lacking in the proposed regulations.
Other commenters stated that the
Department should take a more
proactive and vigorous role in
enforcement, working collaboratively
with the Department of Labor' s Wage
and Hour Division to enforce fully and
meaningfully the requirements of
section 511 of the Act, including
provisions under which both
Departments have overlapping
jurisdiction. Similarly, several
commenters viewed the enforcement of
section 511 of the Act as a shared
responsibility between the Departments
of Education and Labor.
Several commenters expressed
concerns about the enforcement of
section 511, including the concern that
entities holding section 14( c) certificates
would continue their current practices
and not comply with requirements
under the Act. Some commenters
suggested the Department require
entities holding special wage certificates
to refer youth and other individuals
with disabilities to the DSU or
educational agency. Many commenters
recognized that these entities are subject
to enforcement action from the
Department of Labor and may have their
certificates revoked under 29 CFR
525. 17.
Similarly, since section 511 of the Act
is entitled " limitations on the use of
subminimum wage," one commenter
suggested that there is a legal basis
under WIOA for the Department of
Labor to revoke section 14( c) certificates
for violations of section 511 of the Act,
which these final regulations should
require. The same commenter stated
that after the effective date of section
511 on July 22, 2016, when an entity
holding a section 14( c) certificate hires
a person with a disability who is age 24
or younger without completing the
required steps in section 511( a)( 2)( B) of
the Act, the entity should face
enforcement action from the
Departments of Labor and Education
under both the FLSA and the Act, as
amended by WIOA. Without vigorous
enforcement by both Departments,
particularly the Department of
Education, the commenter suggested
that entities holding section 14( c)
certificates would view the
responsibility for meeting the
requirements under section 511 of the
Act as resting with the DSUs.
Discussion: The Secretary appreciates
the many comments and
recommendations about jurisdiction and
enforcement. In response to the many
comments received, the Department
consulted further on the matter with the
Department of Labor' s Wage and Hour
Division. Although the Secretary
understands the various concerns
expressed, both the Departments of
Education and Labor agree that under
FLSA and WIOA, the authority to
administer and enforce Federal
requirements governing the payment of
subminimum wages by entities holding
special wage certificates under section
14( c) of the FLSA resides with the
Secretary of Labor. The Secretary of
Labor administers and enforces the
minimum wage and overtime
requirements of the FLSA, issues and
revokes subminimum wage certificates,
and remedies unauthorized payment of
subminimum wages. See 29 U.S. C. 206,
207, and 214( c); 29 CFR part 525.
Section 511 states that its provisions
shall be construed in a manner
consistent with the provisions of the
Fair Labor Standards Act of 1938 ( 29
as amended before
or after the effective date of this Act."
Accordingly, if an employer fails to
comply with the section 511 criteria for
U.S. C. 201 et seq.),
payment of a subminimum wage, the
Secretary of Labor would take
enforcement action pursuant to the
FLSA in the same manner as he would
against any other employer who failed
to satisfy the requirements of the FLSA.
The Secretary of Labor has delegated his
authority to administer the FLSA to the
Department of Labor' s Wage and Hour
Division.
The Secretary agrees with
commenters who called for greater
collaboration between the Department
and the Department of Labor' s Wage and
Hour Division to ensure that the
requirements of section 511 of the Act
are enforced fully and meaningfully.
Additionally, the Secretary agrees that
the provisions of section 511 are
dependent on the DSUs and educational
agencies knowing the identities of
individuals seeking employment or who
are already employed at subminimum
wage. However, despite the
recommendations made by commenters,
there is no statutory authority for the
Department to require entities holding
special wage certificates to refer youth
and other individuals with disabilities
to the DSU or educational agency.
Section 511 of the Act does not grant the
Department the authority to impose this
or any other requirement on entities
holding special wage certificates under
the FLSA. Recognizing the importance
of these requirements, the Secretary
proposed part 397, taking the initiative
to regulate on those provisions for
which the Department is solely
responsible. Under section 511 of the
Act, the Department has the authority to
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regulate the activities and services that
must be provided to an individual
before the individual is eligible for, or
may continue work compensated at a
subminimum wage. Additionally, the
Department has the authority to regulate
how documentation of these actions is
provided by the DSU to the individual
with a disability, including the
documentation process developed by
the DSU in consultation with the State
educational agency. We have revised
final § 397. 2( a)( 1) to specify the
Department' s jurisdiction over the
documentation process. Lastly, while
States, not the Department, have
oversight of services by local school
districts under the IDEA, the
Department has the authority under
section 511 of the Act to prohibit State
and local educational agencies from
entering into a contract or other
arrangement with certain entities for the
purpose of operating a program under
which a youth with a disability is
engaged in work compensated at a
subminimum wage. The Department has
enforcement authority over State and
local educational agencies that violate
this prohibition.
Contrary to the opinion of some
commenters, the Department of Labor
rather than the Department has
enforcement authority and jurisdiction
over entities holding special wage
certificates, including the suspension or
revocation of these certificates. Despite
recommendations that we require the
Department of Labor to revoke violators'
section 14( c) certificates if entities are
found to be in violation of section 511,
the statute does not authorize the
Department of Education to do so; any
suspension or revocation and any
related regulations must be undertaken
and promulgated by the Department of
Labor.
Changes: We have revised final
397. 2( a)( 1) to state that the Department
has jurisdiction over the documentation
process developed by the DSU in
consultation with the State educational
agency.
Interplay of the Other WIOA
Rulemakings
Comments: One commenter noted
that the Department of Labor' s NPRM
covering programs authorized under
titles I and III of WIOA, as well as the
joint NPRM issued by the Departments
of Education and Labor for the
workforce development system, did not
address section 511 or the Department
of Labor' s enforcement of the
documentation requirements for hiring
or retaining individuals with disabilities
in subminimum wage employment.
Discussion: In response to the
comment regarding the lack of mention
of section 511' s requirements or the
Department of Labor' s enforcement
responsibilities either in its program -
specific NPRM (80 FR 20690 (April 16,
2015)) or in the joint NPRM issued by
the Departments of Education and Labor
80 FR 20574 (April 16, 2015)), the
Secretary believes it would not have
been appropriate to do so for two
reasons. First, the joint NPRM focuses
solely on jointly administered
requirements imposed by title I of
WIOA on the Department of Education
and the Department of Labor' s
Employment and Training
Administration. The explicit
requirements set forth in title I make
both the Department and the
Department of Labor' s Employment and
Training Administration equally
responsible for administering and
monitoring all jointly administered
requirements governing the workforce
development system.
Section 511, on the other hand,
imposes requirements on State and local
educational agencies and DSUs
administered by the Department, that
are separate and distinct from the
restrictions imposed on entities holding
section 14( c) certificates that fall under
the exclusive purview of the
Department of Labor' s Wage and Hour
Division. There is nothing in section
511 of the Act that shifts the
responsibility for enforcement under the
FLSA either to the Department
exclusively or to the Department jointly
with the Department of Labor. In fact,
section 511(b)( 3) of the Act requires that
section 511 be construed in a manner
that is consistent with the FLSA.
Therefore, the Department of Labor
retains the authority to enforce all
minimum wage and subminimum wage
requirements for entities holding special
wage certificates.
Second, the Department of Labor' s
program -specific NPRM focuses solely
on program -specific requirements
imposed by titles I and III of WIOA.
Section 511, on the other hand, is
contained in title V of the Act, which is
contained in title IV of WIOA. As such,
the provisions of section 511 would not
have been appropriate for the
Department of Labor' s program -specific
NPRM. Moreover, the enforcement
authority in section 511 that belongs to
the Department of Labor resides with a
different division, specifically the Wage
and Hour Division, than that covered by
the Department of Labor' s program -
specific NPRM. Rules required under
the FLSA related to the provisions of
section 511 are the responsibility of the
Department of Labor.
Changes: None.
Reviewing Documentation
Comments: Many commenters
suggested that the final regulations
specify timelines for reviewing
documentation. One commenter stated
that proposed § 397. 2 does not address
enforcement, either by DSUs or the
Department of Labor, for the failure of
section 14( c) certificate holders to
maintain required documentation. The
commenter also stated that it is unclear
whether the Department of Labor has
the ability to revoke a license for a
workshop that fails to keep the required
documentation under final §§ 397. 20,
397. 30, and 397. 40.
Several commenters emphasized the
importance of enforcing the document
review process. They suggested that the
DSU or its contractor authorized to
review individual documentation
maintained by entities holding section
14( c) certificates have an enforcement
mechanism to address deficiencies and
violations. These commenters urged the
Department to take a stronger stand to
ensure that corrective actions can be
taken by the DSU or its contractor.
Another commenter requested that the
final regulations define the
consequences for non-compliance. One
commenter suggested that the DSU
should be required to report deficiencies
to the Department of Labor or the Client
Assistance Program (CAP).
Some commenters stated that DSUs
are not enforcement or compliance
agencies and requested clarification
regarding enforcement authority in the
documentation review process. One
commenter agreed that while it was
clear in the proposed regulations that
the Department of Labor oversees
entities holding section 14( c) certificates
and the payment of subminimum wages
to individuals with disabilities, further
clarification of the DSU' s role and scope
was required. Without it, the DSU might
become the " de facto" organization
responsible for policing subminimum
wage certificates rather than providing
guidance and technical assistance.
One commenter urged that the final
regulations task the Department of Labor
with enforcing provisions related to the
review of documentation since it
already monitors entities holding
special wage certificates and reviews
employee documentation, unlike DSUs.
If the final regulations also include the
remedy of revoking an entity' s 14( c)
certificate for failure to maintain the
required documentation for individuals
employed at subminimum wage, the
Department of Labor has the capacity to
implement that remedy. In the view of
the commenter, imposing an
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enforcement obligation on the DSUs
would be burdensome and likely result
in no enforcement at all.
Discussion: Many commenters
suggested final part 397 include
timelines for the review of
documentation. Section 511( e)( 2)( B) of
the Act imposes no specific
requirements on when, how often, or
how reviews must be done. Rather, the
statute states that the reviews will be
conducted at a time and in a manner as
necessary, consistent with regulations
established by the DSU or the Secretary
of Labor. Therefore, under section
511( e)( 2)( B) of the Act, requirements
governing the reviews, including
whether or when they must be done, are
beyond the scope of these final
regulations.
Although some commenters requested
that we provide the DSU or its
contractor an enforcement mechanism
for addressing documentation
deficiencies and violations by entities
holding section 14( c) certificates, the
Secretary lacks the statutory authority to
do as the commenters suggest. Likewise,
the Secretary lacks the statutory
authority to define the consequences for
non-compliance by entities holding
special wage certificates under the
FLSA, which rests with the Department
of Labor, or to require the DSU to report
non-compliance by these entities to the
Department of Labor or to the CAP.
Having said this, nothing in section 511
prohibits a DSU from informing the
Department of Labor' s Wage and Hour
Division of non-compliance it finds
during any documentation review and
doing so may assist in supporting the
Department of Labor' s efforts in
monitoring compliance. A more detailed
discussion of this issue is presented in
the Review of Documentation (§ 397.50)
section later in this preamble. As
discussed under the CAP and PAIR
Protection and Advocacy of Individual
Rights) section, the reporting of non-
compliance to the CAP is not
authorized.
We acknowledge that reviewing
individual documentation held by the
entities holding special wage
certificates, as authorized by section
511( e)( 2)( B) of the Act, may be regarded
as burdensome to DSUs. Section 511
does not require that DSUs conduct
these reviews. Rather section
511( e)( 2)( B) merely subjects entities
holding section 14( c) certificates to
these reviews in an effort to ensure that
the intent of section 511 is being
fulfilled. These reviews may be
conducted in a manner and at such time
as is deemed necessary, consistent with
a DSU' s or the Department of Labor' s
regulations. While the Secretary agrees
with the comment that the Department
of Labor is experienced with conducting
these reviews, the Secretary does not
have the statutory authority to require
that the Department of Labor be solely
responsible for the documentation
reviews. Section 511( e)( 2)( B) of the Act
clearly grants authority to the DSUs to
conduct these reviews as well.
Changes: None.
CAP and PAIR
Comments: Many commenters
suggested that CAPs and PAIR programs
have jurisdiction for reviewing
compliance with section 511. To ensure
that required activities are completed
and are meaningful (i.e., not just
checklist actions), some commenters
recommended that the CAP or the PAIR
agency be empowered to represent
students and others with disabilities
employed at subminimum wages under
section 511. Commenters emphasized
that, given the role of CAPs in the new
requirements in sections 113 and 511 of
the Act, the regulations should define
this role and provide the CAPs the
authority and ability to monitor and
effectively advocate for individuals with
disabilities. The commenters noted that
the CAPs have access to workers in
sheltered workshops and their records,
regardless of whether they are VR
program consumers. The commenters
endorsed the need for independent
advocates to ensure that DSUs and
entities adhere to the requirements of
section 511 to make the most of the
opportunity presented in the Act to
improve the employment of individuals
with disabilities.
One commenter requested that we
require that the protection and advocacy
systems have access to any entity
covered under sections 113 and 511 of
the Act to monitor for rights and safety
compliance, which includes the ability
to speak with individuals with
disabilities privately and to access
records with the consent of an
individual service recipient, parent, or
guardian. Additionally, the commenter
suggested that we require CAP staff with
similar access to advise individuals
employed by an entity holding a section
14( c) certificate of their rights and, with
consent, to access their records.
Discussion: With respect to the
comments regarding the CAPs, section
112( a) of the Act, as amended by WIOA,
specifically requires CAPs to inform and
advise clients and client -applicants of
all available benefits under the Act,
including under section 511. Clients or
client -applicants, as defined in final 34
CFR 370. 6( b) for purposes of the CAP,
are individuals seeking or receiving
services under the Act, including
individuals seeking or receiving services
under section 511. Upon the request of
clients or client -applicants, CAPs may
assist and advocate for them, including
by pursuing legal, administrative, or
other appropriate remedies to protect
their rights and ensure access to the
services under the Act.
Although several commenters
expressed concerns that the proposed
regulations did not provide CAP and
PAIR programs with the authority to
access records and conduct monitoring,
the Secretary does not agree that CAP or
PAIR programs have the authority to
access records in the manner the
commenter suggests. The advocacy
provided by CAPs, whether individual
or systemic, must be at the request of
clients or client -applicants and must be
solely for the purpose of protecting their
rights or to facilitate their access to
services under the Act. In representing
the client or client -applicant upon that
individual' s request, CAPs could access
relevant records of individuals with
disabilities under section 511 of the Act,
so long as they follow the requirements
of the holder of those records, which
typically require the informed written
consent of the client or client -applicant.
PAIR programs have limited
monitoring authority. PAIR programs
provide advocacy and legal services to
protect the rights of individuals with
disabilities who are not eligible for
services from other components of the
protection and advocacy system and
whose concerns are beyond the scope of
the CAP. Since section 112 of the Act
specifically authorizes the CAP to assist
individuals with disabilities receiving
services under section 511, such
activities would fall outside the scope of
the PAIR programs.
Despite the suggestion that
independent advocates ensure that
DSUs and entities adhere to the
requirements of section 511 to make the
most of the opportunity presented in the
Act to improve the employment of
individuals with disabilities, there is no
statutory basis to require independent
advocates to take on this role. There is
no mention of independent advocates in
section 511 of the Act, and these entities
are not within the purview of the
Department. Having said this, there is
nothing in section 511 to preclude a
DSU or the Department of Labor from
contracting with an independent
advocate to conduct reviews of
documentation.
On the other hand, section 112 of the
Act, as amended by WIOA, does not
authorize CAPs to engage in advocacy
for the sole purpose of gaining general
access to records or conducting
monitoring. Since section 112 of the
55714 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
Act, as amended by WIOA, references
the applicability of the requirements of
the CAP to section 511 already, we do
not believe that additional language is
needed in final part 397. The
Department has, however, made minor
revisions to final 34 CFR part 370 to
clarify that CAPs may advocate on
behalf of clients or client -applicants
requesting assistance with issues arising
under section 511. Final 34 CFR part
370 is published elsewhere in this issue
of the Federal Register.
Changes: None.
Rules of Construction (§ 397.3)
Comments: A few commenters
requested that we revise § 397. 3 to
emphasize that nothing in section 511
or final part 397 changes or affects a
State' s obligations under the U.S.
Supreme Court' s 1999 Olmstead
decision, subsequent U.S. Department of
Justice enforcement actions, or the rules
established for home-and community-
based services by the U. S. Department
of Health and Human Services' Center
for Medicare and Medicaid Services
CMS).
Discussion: Section 511 and final part
397 are consistent with the Olmstead
decision and other requirements for
community-and home-based services.
Under each of the requirements
mentioned by the commenters, services
must be provided in the community to
the extent possible.
Section 511 gives individuals every
opportunity possible to obtain
competitive integrated employment by
requiring that youth with disabilities
receive certain services before beginning
employment at subminimum wages and
that individuals with disabilities of any
age receive certain services every six
months for the first year of subminimum
wage employment and annually
thereafter as long as subminimum wage
employment continues.
Moreover, under section 511( b)( 1) of
the Act, nothing in section 511 is to be
construed as changing the purpose of
the Act, which is to empower
individuals with disabilities to
maximize their opportunities to achieve
competitive integrated employment, nor
is section 511 to he construed as
promoting subminimum wage. Final
397. 3 sets forth the " rules of
construction" consistent with those set
forth in section 511( b) of the Act.
Paragraphs ( a) and (b) of final § 397. 3
promote opportunities for competitive
integrated employment for individuals
with disabilities. Therefore, the
Secretary declines to make the
suggested revision.
Changes: None.
What regulations apply? (§397. 4)
Comments: None.
Discussion: Although we received no
comments specific to proposed § 397. 4,
we received several comments about
various provisions in part 397 regarding
informed choice and confidentiality.
Specifically, we received comments
asking whether an individual with a
disability has the right to refuse to
participate in activities required by
section 511 of the Act and part 397. As
the Secretary has stated throughout this
preamble, an individual has the right to
exercise informed choice regarding
participation in the activities required
by this part. The Secretary has revised
final § 397.4(b) to highlight 34 CFR
361. 52 as being applicable to final part
397.
In addition, we received comments
asking whether the DSU could provide
documentation to a family member of an
individual with a disability. A DSU
must protect all personal information
regarding an individual in its
possession, pursuant to final 34 CFR
361. 38. To highlight this requirement,
we have revised final § 397.4(b) to
specifically mention the confidentiality
requirements of final 34 CFR 361. 38.
In addition to these specific changes
in final part 397, we also made
conforming changes in final 34 CFR part
361 to make clear that final 34 CFR
361. 38 and 361. 52 apply to applicants
and recipients of services. In so doing,
we ensure that individuals receiving
services required by part 397, regardless
of whether they have applied for or been
determined eligible for vocational
rehabilitation services, are still
protected by the confidentiality and
informed choice requirements. These
changes were discussed in the preamble
to final part 361 in Part B of the
Analysis of Comments.
Changes: We have revised final
397.4(b) to highlight final 34 CFR
361. 38 and 34 CFR 361. 52 as being
applicable to final part 397.
What definitions apply? (§397. 5)
Comments: A few commenters
suggested that the Department provide
specific definitions for the terms " self -
advocacy," " self-determination," and
peer mentoring training opportunities"
to ensure integrity and reflect the intent
of section 511. One commenter
requested a definition for " certain
information." Another commenter asked
whether the term " special wage
certificate" in proposed § 397. 5( c)( 2)
included all types of section 14( c)
certificates issued by the Department of
Labor (e.g., business certificate holders
and patient workers) among those
certificate -holding entities that must
comply with section 511 of the Act. The
commenter also asked that we clarify in
397. 5( d) whether " entity" includes
associated businesses affiliated with a
section 14( c) certificate holder, such as
a non-profit community rehabilitation
program that has a for-profit business in
the same location.
Discussion: We appreciate the
commenters' recommendations for
additional definitions; however, we use
these terms in part 397 as they are
commonly understood, just as they are
used in section 511 of the Act.
Attempting to define these terms could
cause us to inadvertently define the
terms too broadly or too narrowly. This
is of particular concern both because we
would be defining these terms after the
comment period has ended, without the
benefit of public input, and because this
is a new statutory provision, and we do
not yet have institutional experience
with how DSUs may implement them in
this context.
As commonly understood, " peer
mentoring" generally involves
individuals with disabilities providing
guidance, counseling, and advice to
other individuals with disabilities based
upon their own experiences and
training and the experiences of others
they know. " Self -advocacy" generally
involves developing the skills,
knowledge, and confidence to stand up
for oneself and using appropriate means
to obtain one' s goals. Finally, " self-
determination" generally means having
the abilities, attitudes, skills, and
opportunities to play an active and
prominent role in living and planning
one' s life and future. Neither final part
397 nor section 511 of the Act includes
the phrase " certain information."
Next, " special wage certificate"
applies to all entities holding section
14( c) certificates, including work
centers ( also known as community
rehabilitation programs), hospital/
residential care centers ( facilities that
employ patient workers), business
establishments that are not a work
center or an employer of patient
workers, and School Work Experience
Programs ( SWEP). All must comply
with section 511 of the Act, which
provides for no exceptions and refers
simply to entities holding special wage
certificates issued under section 14( c) of
the FLSA.
as defined in finalWhether " entity,"
397. 5( d), includes associated
businesses affiliated with a section 14( c)
certificate holder depends upon
individual circumstances. As defined,
entity" refers to any employer who
holds a special wage certificate issued
under section 14( c) of the FLSA.
55715Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
Therefore, the factors to consider
include, but are not limited to, whether
the associated business is separately
incorporated, operates under the same
or a separate special wage certificate
described in section 14( c) of the FLSA,
employs or jointly employs as defined
in the FLSA, individuals with
disabilities at subminimum wages,
shares subminimum wage employees
with the section 14( c) certificate holder,
or operates as a contractor or
subcontractor for the section 14( c)
certificate holder. The for-profit nature
of an associated business of a non-profit
is not a determining factor since both
may hold a special wage certificate
under the FLSA.
Changes: None.
Coordinated Documentation Process
397. 10)
Comments: Most commenters on
proposed § 397. 10 supported the
requirement that the DSU, in
consultation with the State educational
agency, develop a process, or utilize an
existing process to document the
completion of required activities under
section 511 of the Act by youth with
disabilities prior to seeking or entering
subminimum wage employment. A few
commenters strongly supported using
the DSU' s formal interagency agreement
with the State educational agency
required by 34 CFR 361. 22(b) as the
mechanism to develop a robust
documentation process, and a few
commenters requested that final
397. 10 reflect the role of the State
Rehabilitation Council in this process.
One commenter suggested that we
require the interagency agreement to
include a requirement that students and
parents or guardians be provided
training on subminimum wage
employment. One commenter
recommended that we require the
interagency agreements to be developed
with local educational agencies, in
addition to State educational agencies.
In addition, the commenter
recommended that interagency
agreements that specify data sharing
requirements be developed with State
agencies serving individuals with
intellectual and developmental
disabilities as well. The commenter
suggested that the interagency
agreements indicate how each agency
will ensure compliance with the
requirements in this section.
Several commenters recommended
that the Department provide guidance
detailing the documentation and
collaboration requirements of DSUs,
educational agencies, and other entities
under section 511. Similarly, one
commenter requested that we include
more specific language in the
regulations regarding the types of
documentation that would he
acceptable, emphasizing that guidance
should be sufficient to ensure that
documentation is complete and meets
the intent of section 511 of the Act.
Some stated that proposed § 397. 10
focused heavily on compliance with the
documentation requirements, and not
the congressional intent of limiting the
use of subminimum wages.
Many commenters expressed
concerns about the 90 -day time frame
for providing documentation to youth
with disabilities in proposed
397. 10( c)( 2) and recommended shorter
time frames, such as 30 or 45 days. They
noted that allowing the DSU up to 90
days to provide documentation to youth
with disabilities after completing each
of the required activities, which may or
may not take place concurrently, could
result in prolonged delays for such
youth seeking to enter subminimum
wage employment since there are
several steps and multiple activities in
the process that the youth must
complete.
One commenter asked the Department
to define " completed" in proposed
397. 10(b)( 2)( i), stating that transition
services are typically ongoing and may
continue until a student graduates from
high school. The same commenter
posed a series of additional questions
about proposed § 397.10(b)(2)(ii). The
commenter asked about what
constitutes documentation; the level of
detail required; requirements for the
rigor and quality of the activities; the
need for signatures, dates, descriptions
and settings of activities; information
about the location or setting of
activities; and the DSU' s obligations if
the educational agency fails to provide
documentation of transition activities or
such activities are deemed substandard.
One commenter urged the Department
to include a new paragraph in § 397. 10
or, alternatively, in § 397. 50, to require
the DSU to retain copies of
documentation required by this part and
to provide this documentation for
review by the CAP or a protection and
advocacy agency.
One commenter remarked that
documentation of required activities
denotes completion of these activities
without regard to consumer choice to
participate, whereas other commenters
requested clarification of what
documentation would be required if an
individual, exercising informed choice,
refuses vocational rehabilitation
services.
Finally, one commenter asked for
clarification regarding whether a
documentation process between the
DSU and the State educational agency
must be developed and what
documentation is required in those
States that prohibit subminimum wages
for individuals with disabilities.
Alternatively, the commenter suggested
that emphasis should be placed upon
tracking services in the regulations
regardless of whether a subminimum
wage prohibition exists.
Discussion: We appreciate the many
comments we received regarding the
documentation process. Compliance
with the documentation process
requirements is intended to result in
limiting the use of subminimum wages.
The Secretary agrees that the formal
interagency agreement between the DSU
and the State educational agency
provides an optimal mechanism to
develop and describe the
documentation process required in final
397. 10, and the Department
appreciates the strong support we
received from commenters on this point.
As noted by the commenters, final 34
CFR 361. 22(b)( 5) requires the DSU and
State educational agency to develop a
formal interagency agreement that, at a
minimum, provides for coordination
necessary to satisfy documentation
requirements set forth in final § 397. 10.
Under final 34 CFR 361. 20( c) and (d),
the State Rehabilitation Council (SRC)
must provide input into the VR services
portion of the Unified or Combined
State Plan, and the DSU must actively
consult with the SRC, if it has a Council,
on its policies and procedures governing
the provision of vocational
rehabilitation services. The functions of
the SRC in final 34 CFR 361. 17(h)
support Council involvement in
developing the coordinated
documentation process. Therefore, the
Secretary does not believe it necessary
to specifically state the role of the SRC
in the documentation process in final
397. 10.
While the Secretary agrees that
students and parents or guardians can
benefit from training about
subminimum wage employment, the
Act does not require the formal
interagency agreement to include such a
requirement. To add it would be
inconsistent with the statutorily
required actions that must be taken by
either the DSU or the State educational
agency with regard to the
documentation process. Nonetheless,
nothing in the Act precludes the DSU
and State educational agency from
including a training requirement in the
formal interagency agreement.
Similarly, we do not believe it
necessary to require, in final part 397,
the DSU to enter into interagency
agreements with local educational
55716 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
agencies and State agencies serving
individuals with intellectual and
developmental disabilities, because
final 34 CFR 361.24(f) and (g) provide
for the DSU to enter into cooperative
agreements and engage in interagency
collaboration with these State agencies.
These cooperative agreements could
provide a mechanism for addressing, as
appropriate, the requirements in final
397. 10 and promote data sharing. The
Secretary encourages the DSUs, local
educational agencies, and State agencies
serving individuals with developmental
and intellectual disabilities to work
collaboratively to identify individuals
with disabilities, particularly youth
with disabilities, who are considering or
who are already engaged in
subminimum wage employment.
The Secretary agrees that further
operational guidance regarding the
requirements for collaboration,
development, and implementation of
the documentation process is warranted.
Therefore, the Department' s Office of
Special Education and Rehabilitative
Services intends to collaborate with the
Department of Labor' s Wage and Hour
Division in issuing guidance about
implementing the requirements in final
part 397, particularly the documentation
process. This guidance will help to
ensure that the documentation process
works smoothly within already -
established procedures for the DSUs and
State and local educational agencies,
especially with regard to the protection
of personally identifiable information,
while also enabling efficient and
effective reviews of any such
documentation by the Department of
Labor.
Final §§ 397. 10 and 397. 30 specify the
documentation requirements. Final
397. 20 describes the activities for
which documentation must be
provided, all of which are familiar to
DSUs and local educational agencies
and should pose no additional
administrative burden. Each DSU has
case management practices for
documenting various steps in the
vocational rehabilitation process, such
as eligibility and ineligibility
determinations, the individualized plan
for employment, the provision of
vocational rehabilitation services
including pre-employment transition
services), and case closure. State
educational agencies also have methods
for documenting transition services
provided to students under the IDEA. In
developing the documentation process,
each DSU, in coordination with the
State educational agency, has flexibility
to determine the most appropriate
procedures for documenting required
activities and for timely provision of the
documentation to youth with
disabilities upon their completion of the
required activities.
As proposed, § 397. 10( c)( 2) required
the DSU to provide the documentation
of the completion of each of the
required actions in §§ 397. 20 and 397. 30
to a youth as soon as possible, but no
later than 90 days, following the
completion of each of the actions. We
understand the concerns raised by
commenters, and we want to emphasize
that we anticipate DSUs and State
educational agencies will develop a
process whereby the documentation in
most instances will be provided either
concurrently with the completion of the
activity or very shortly thereafter, and
we encourage them to do so.
For example, DSUs typically provide
documentation of eligibility or
ineligibility determinations to the
individual within a very short time after
the decision is made. Similarly, DSUs
typically provide a copy of the
individualized plan for employment to
the individual at the time both parties
sign the document. With regard to
providing services, such as pre-
employment transition services or
transition services, we anticipate that
the DSUs and schools will develop a
streamlined approach for transmittal of
the documentation by the DSU to the
youth.
We proposed a period of up to 90
days to be consistent with other time
frames in the vocational rehabilitation
process and to enable DSUs to obtain
documentation from local educational
agency personnel who may not be
available due to extenuating
circumstances. It was never the
Department' s intent to delay the
provision of the required documentation
to any individual seeking subminimum
wage employment. After considerable
deliberation and balancing competing
interests while not imposing undue
burden on the DSUs or schools, the
Secretary has modified the time frame
in these final regulations. Final
397. 10( c)( 2) requires the DSU to
provide the requisite documentation,
including documentation received from
the local educational agency, to the
youth within 45 calendar days of
completion of the activity.
For example, if a student completes a
required activity provided by the local
educational agency, the documentation
must be transmitted to the DSU and
provided to the youth all within 45
calendar days. However, if, due to
extenuating circumstances additional
time is needed, documentation must be
provided to the youth within 90
calendar days after completion of the
activity. As provided in final
397. 10( c)( 2)( i)(B), this exception for
extenuating circumstances is a limited
exception that would cover
circumstances such as, the unexpected
absence of the individual necessary to
provide the documentation, or a natural
disaster. That said, DSUs and State
educational agencies could establish a
shorter time frame in their
documentation processes.
We recognize that providing
transition services, as well as pre-
employment transition services, may be
ongoing for students with disabilities.
For example, under the IDEA, a student
with a disability may receive transition
services until the student graduates
from high school with a regular diploma
or exceeds the age of eligibility for a free
appropriate public education. Similarly,
students with disabilities may receive
pre-employment transition services
under the Act for as long as the student
remains in an educational program and
meets the definition of a " student with
a disability" under final 34 CFR
361. 5( c)( 51). For purposes of final
397.10(b)( 2)(i),the local educational
agency must, consistent with
confidentiality requirements of FERPA
and/ or the IDEA, provide the DSU
documentation of transition services
when a student has completed all
transition services in the individualized
education program. The final
regulations do not contain a definition
of " completion," as suggested by
commenters, because the definition
would vary widely depending on the
activity. The Secretary will provide
more guidance in the general
operational guidance for the
documentation process required by
section 511 and final part 397.
Section 511 of the Act does not
address what constitutes
documentation, the level of detail
required, requirements related to the
rigor and quality of the activities, the
need for signatures, dates, descriptions
and settings of activities, information
about the location or setting of
activities, and the DSU' s obligations if
the education agency fails to provide
documentation of transition activities or
such activities are deemed substandard.
Some of these issues are best left to the
DSU and State educational agency to
negotiate when developing the
interagency agreement or the
documentation process to maximize
State flexibility and accommodate the
unique needs within a State. However,
the Secretary agrees that some guidance
would be helpful. Therefore, the
Secretary has revised final § 397. 10( a) to
state that the documentation process
must address both the actual production
and transmittal of documentation.
55717Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
Again, the transmittal of all
documentation by the educational
agency to the DSU must comply with
the confidentiality requirements of
FERPA and the IDEA.
In addition, the Secretary has revised
final § 397. 10( a) by adding three new
paragraphs. Final § 397. 10( a)( 1)
establishes minimum requirements for
information to be contained in the
documentation of determinations made
or the completion of an activity. Final
397. 10( a)( 2) establishes minimum
requirements for information that must
be contained in documentation in the
event that a youth, or his or her parent
or guardian, exercises informed choice
and refuses to participate in an activity
required by section 511 of the Act or
final part 397. Final § 397. 10( a)( 3)
requires the DSU to retain a copy of all
required documentation provided to the
youth. The DSU must retain this
documentation just as it would any
other documentation in its case
management system, and the
documentation must be retained in
accordance with the requirements of 2
CFR 200. 333, which governs record
retention for all Federal grantees.
In using an existing process or
developing a new documentation
process, the DSU and the State
educational agency may wish to
consider questions such as those posed
by the commenter but not addressed in
these final regulations. In addition, the
Secretary has revised final
397. 10( b)( 2)( i) to require the
educational agency to provide the
documentation to the DSU. The
Secretary has also added a new
requirement in final § 397. 10( c)( 3) that
the DSU provide, when transmitting
documentation of the last determination
made or activity completed, a cover
sheet that itemizes all documentation
provided to the youth. The Secretary
hopes that these additions will assist
DSUs and State educational agencies in
developing a streamlined
documentation process that will enable
the expedient completion and
transmittal of the documentation to the
youth, and allow for the expedient
review of the documentation, if a review
is conducted by the DSU or the Wage
and Hour Division of the Department of
Labor.
Additionally, for the reasons
discussed in the section titled
Jurisdiction (§ 397.2), any access to
these records by CAPs or protection and
advocacy systems is subject to the
requirements of sections 112 and 509 of
the Act, respectively, and implementing
final regulations in 34 CFR part 370 and
34 CFR part 381.
Although section 511 of the Act and
final part 397 establish prerequisites for
a youth with a disability to work in
subminimum wage employment, as
with any vocational rehabilitation
service, the youth with a disability, or
his or her parent or guardian, as
applicable, may exercise informed
choice and refuse to participate. If a
youth chooses not to participate in the
activities required by section 511 of the
Act and final part 397, or chooses to opt
out of the vocational rehabilitation
process entirely, such a choice will
impact the permissibility of the youth to
work at subminimum wage and
preclude him or her from obtaining
subminimum wage employment given
the limitations imposed by section 511
of the Act and final part 397.
Accordingly, DSUs should inform youth
with disabilities and/ or their guardians
of the youth' s ineligibility for
subminimum wage employment if he or
she refuses to participate in the required
activities. As discussed previously, final
397. 10( a)( 2) establishes documentation
requirements for when a youth refuses
to participate in the required activities.
Meeting these requirements
demonstrates the DSU' s compliance
under section 511 and final part 397.
The Secretary believes it is appropriate
to establish an even shorter time frame
for the transmittal of documentation
demonstrating the youth' s refusal to
participate in required activities under
final part 397 because there should be
few administrative reasons for delay.
Thus, in this circumstance, final
397.10(b)( 2)( ii) requires that the
documentation be provided to the
youth, within 10 calendar days of the
youth' s refusal.
In a State that prohibits the payment
of subminimum wages to individuals
with disabilities, the DSU and the State
educational agency still must develop a
documentation process in accordance
with final § 397. 10, although it may be
used infrequently. This documentation
would be necessary if a youth with a
disability seeks subminimum wage
employment in another State that does
not prohibit subminimum wages.
Finally, the Department, upon further
review, notes that the documentation of
pre-employment transition services in
final § 397. 10( b)( 1) refers to a " student
with a disability" rather than a " youth
with a disability" because only a
student with a disability may receive
pre-employment transition services.
Further, the section states more directly
that the appropriate school official
responsible for providing transition
services will provide the DSU
documentation of completion of
appropriate transition services under
the IDEA.
Changes: We made several changes to
final § 397. 10. First, we revised final
397. 10( a) to state that the
documentation process must cover both
the production and transmittal of the
documentation. The process must
ensure all confidentiality requirements
of FERPA and the IDEA are satisfied.
Second, we revised final § 397. 10( a)
by adding three paragraphs. Final
397. 10( a)( 1) establishes minimum
information that must be contained in
documentation of a youth' s completion
of required activities. Final
397. 10( a)( 2) establishes the minimum
information that must he contained in
documentation when a youth refuses to
participate in the required activities.
Final § 397. 10( a)( 3) requires the DSU to
retain copies of all documentation
required by final part 397.
We revised final § 397.10(b)( 1) to
clarify that we are referring to a
student with a disability" with regard
to the documentation of the completion
of appropriate pre-employment
transition services. We also revised
397. 10( b)( 2)( i) to clarify that the
appropriate school official responsible
for the provision of transition services
must provide the DSU documentation of
completion of appropriate transition
services under the IDEA. We revised
final § 397. 10( c)( 2) by adding two new
paragraphs. Final § 397. 10( c)( 2)( i)
requires the DSU to provide all requisite
documentation to the youth within 45
calendar days of the determination or
the completion of the required
activities, unless extenuating
circumstances make additional time
necessary. In that case, the
documentation must be provided to the
youth within 90 calendar days of the
determination or completion of the
activity or service. The final regulations
also provide examples of what could
constitute extenuating circumstances
necessitating the additional time. Final
397. 10( c)( 2)( ii) requires the DSU to
provide documentation of the youth' s
refusal to participate in required
activities within 10 calendar days of the
refusal. Lastly, final § 397. 10( c)( 3) was
added to require the DSU to provide a
coversheet that itemizes all
documentation provided to the youth
when transmitting documentation of the
last determination made or activity
completed.
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Responsibilities of a DSU to Youth With
Disabilities Who Are Known To Be
Seeking Subminimum Wage
Employment (§397.20)
Reasonable Period of Time
Comments: Most commenters on this
section recommended changes in
proposed § 397. 20( a)( 2)( ii)(B) and
proposed § 397. 20( b)( 3)( i) related to the
determination that a youth with a
disability is not able to achieve the
employment goal specified in his or her
individualized plan for employment,
other than supported employment, after
working toward the goal for a reasonable
period of time with appropriate
supports and vocational rehabilitation
services. The commenters
recommended that, for these youth, the
reasonable period of time be consistent
with, or no less than, the time period
provided in proposed § 397. 20( b)( 3)( ii)
for individuals with disabilities whose
specified employment goal is in
supported employment. A few
commenters recommended defining the
time frame for " reasonable period of
time" for all youth, regardless of
whether they were seeking supported
employment outcomes or other
outcomes, as 36 months or up to four
years since the DSU is being allowed to
provide up to four years of extended
services for youth in supported
employment. The commenters stated
that limiting the length of time the DSU
can devote to helping youth with
disabilities achieve competitive
integrated employment creates barriers
to the policy of maximizing steps to
facilitate attaining competitive
integrated employment and requested
that the Department amend the
proposed rule to designate a minimum,
not maximum, period of time during
which DSUs must assist youth with
disabilities to attain integrated
employment outcomes, including
supported employment. Citing the low
participation rate of individuals with
disabilities in the labor force, coupled
with the significant barriers to
employment faced by these individuals,
one commenter recommended a
minimum of three years as the
appropriate amount of time for youth
with disabilities to work toward
competitive integrated employment
before considering segregated work and
subminimum wage employment. This
commenter stated that, without a
minimum time frame, the proposed
regulations offer little to prevent youth
from continuing to settle for
subminimum wage employment. Some
premised their suggestion of extending
the time frame to four years based upon
the DSU being allowed to provide up to
four years of extended services for youth
in supported employment. On the other
hand, one commenter suggested that,
consistent with the provision of
supported employment services, in no
case should the reasonable period of
time exceed two years.
Suggesting that the distinctions in
reasonable period of time" between
those youth with supported
employment goals and those with other
employment goals prove more confusing
than helpful, a few commenters
supported language that reflects an
individualized approach for defining
reasonable period of time" for all
youth, including those individuals in
supported employment. One commenter
stated that, without uniform time frames
for both youth with disabilities seeking
supported employment outcomes and
youth seeking other competitive
integrated employment outcomes, DSUs
may circumvent the necessary level of
effort needed in working with
individuals by simply writing an
individualized plan for employment
that does not include the goal of
supported employment.
Discussion: We appreciate the many
comments we received about defining
reasonable period of time" before
closing a service record as unsuccessful
when a youth has been pursuing,
through an individualized plan for
employment, an employment outcome
as defined under final 34 CFR
361. 5( c)( 15)), other than in supported
employment.
Although many commenters
requested a specified time frame— of
anywhere from 24 months, to coincide
with that for the provision of supported
employment services, to up to four years
to coincide with the amount of time
allowed for the provision of extended
services for a youth with a disability—
we believe that a " reasonable period of
time" must take into account the
disability -related and vocational needs
of the individual, as well as the
anticipated length of time required to
complete the services identified in the
individualized plan for employment to
achieve an employment outcome. The
time frame for providing supported
employment services is prescribed in
section 7( 39) of the Act, as amended by
WIOA, and final 34 CFR 361. 5( c)( 54),
but the Act does not limit the amount
of time for providing any other
vocational rehabilitation service.
Therefore, we believe that it is not in the
best interest of individuals with
disabilities to limit the time for
providing vocational rehabilitation
services other than supported
employment services. To do so might
unnecessarily restrict the amount of
time an individual may need to
complete the services necessary to
achieve an employment outcome in
competitive integrated employment.
We understand the concerns
expressed by many of the commenters
about limitations on the amount of time
the DSU may devote to assisting youth
with disabilities to achieve competitive
integrated employment, especially if
someone is not seeking supported
employment. We also understand the
desire to provide a minimum time,
rather than a maximum time, during
which the DSU may help youth with
disabilities attain employment
outcomes, including supported
employment. However, we believe that
with allowable extensions, and based
upon the needs of the individual and
the individual' s disability, DSUs have
the flexibility to provide all services and
supports necessary for an individual to
achieve competitive integrated
employment in a reasonable time prior
to closing the individual' s service
record as unsuccessful.
Changes: None.
Requirements for Closure
Comments: A few commenters
recommended that we revise proposed
397. 20( a)( 2)( ii)(C) to reference 34 CFR
361. 47( 10) rather than the more general
34 CFR 361. 47 when addressing the
requirements for closure of the service
record of a youth with a disability. The
commenters stated that under 34 CFR
361. 47( 10), the vocational rehabilitation
counselor will not accidentally classify
the youth with a disability as having
achieved competitive integrated
employment, when, in fact, the youth
has obtained subminimum wage
employment. One commenter also
suggested that this change would serve
as a reminder to vocational
rehabilitation counselors that a
placement of a youth with a disability
in a subminimum wage environment is
less desirable than a placement into
competitive integrated employment.
Discussion: We do not agree with the
recommendation that we revise
proposed § 397. 20( a)( 2)( ii)(C) to
reference final 34 CFR 361. 47( 10), rather
than the more general final 34 CFR
361. 47, when addressing the
requirements for closure of a service
record for a youth with a disability.
Final 34 CFR 361. 47 contains other
requirements, and limiting the reference
to final 34 CFR 361. 47( 10) could
provide the impression that other
requirements do not apply. We
anticipate that the discussion in part
361 of these regulations found
elsewhere in this issue of the Federal
Register regarding " competitive
55719Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
integrated employment" and
employment outcome" will serve to
clarify that employment at subminimum
wages is not a successful outcome for
purposes of the VR program.
Changes: None.
Pre-employment Transition Services
Comments: Several commenters
provided comments about the DSU' s
responsibility to document completed
pre-employment transition services.
One commenter asked that the final
regulations specifically prohibit the use
of segregated settings such as sheltered
workshops for providing pre-
employment transition services,
regardless of whether these settings pay
subminimum wages. Given that this
section applies to youth with
disabilities, a commenter requested
clarification regarding how youth with
disabilities who are age 24 or younger,
who are not students with disabilities,
may be provided pre-employment
transition services that are, by
definition, provided to students with
disabilities. The commenter stated that
although a youth with a disability who
is no longer a student may have
received pre-employment transition
services, or transition services under the
IDEA, a DSU would find it challenging
to document the services after the youth
has left the education system. As an
alternative, the commenter suggested
that we make an exception to the
definition of " pre-employment
transition services" for the purpose of
proposed § 397. 20 to include all youth
in the provision and documentation of
pre-employment transition services.
Another commenter stated that it would
be overly burdensome to track all
individuals receiving pre-employment
transition services and their activities in
order to provide documentation to those
few considering subminimum wage
employment. The commenter
recommended removing the
requirement for documentation of pre-
employment transition services from
proposed § 397. 20( a)( 1).
One commenter was concerned that
proposed § 397. 20 served as a loophole
for the education system to continue to
view subminimum wage employment as
a viable alternative and suggested that
the final regulations be strengthened by
specifying that youth must be provided
exposure to, and opportunities for,
experiences such as integrated work -
based learning programs, summer jobs,
summer volunteering, and summer
internships to enable them to make an
informed choice to pursue subminimum
wage employment.
Discussion: As discussed in the
Analysis of Comments and Changes
section for part 361 earlier in this
preamble, we do not have the authority
to prohibit the use of segregated
settings, such as sheltered workshops,
for providing pre-employment transition
services. That being said, assessment
services and pre-employment transition
services are to be carried out in an
integrated setting to the maximum
extent possible in accordance with final
34 CFR 361. 5( c)( 5) and final 34 CFR
361. 48( a)( 2), respectively.
We understand the confusion created
by proposed § 397. 20( a)( 1), which
covered the documentation of
completed pre-employment transition
services that must be provided to youth
by the DSU, when, in fact, pre-
employment transition services are
provided to students with disabilities,
not to all youth with disabilities. We
have revised this paragraph to clarify
that documentation for the completion
of pre-employment transition services
applies to students with disabilities. We
have made further revisions for the
documentation of the completion of
transition services under the IDEA,
which the DSU is also responsible for
providing to youth once the local
educational agency has provided such
documentation to the DSU.
We disagree with the commenter' s
alternative suggestion of making an
exception to the definition of " pre-
employment transition services" in final
34 CFR 361. 5( c)( 42) to include all youth
for purposes of this part, as that would
be inconsistent with section 113 of the
Act.
We understand that a DSU would find
it challenging to obtain documentation
of services after a youth has left the
education system; however, educational
systems must maintain records of the
provision of transition services to
students provided through an
individualized education program.
We appreciate the commenter' s
concern about the burden of tracking
individuals receiving pre-employment
transition services and their activities in
order to provide documentation to a few
individuals that might seek
subminimum wage employment. The
commenter recommended removing the
requirement from final § 397. 20( a)( 1).
However, this would be inconsistent
with section 511( d)( 2)( a) of the Act.
We agree that youth with disabilities
may find integrated work based learning
programs, summer jobs, summer
volunteering, and summer internships
valuable and these experiences could
better enable them to make an informed
choice of whether to pursue
subminimum wage employment.
However, we do not believe that
embedding this language in the
regulations in part 397 would
strengthen the final regulations, as they
already incorporate the requirements to
document the completion of pre-
employment transition services and/ or
transition services for youth with
disabilities, which include these
activities.
Finally, we made a technical change
in the title of this section, replacing
considering" with " seeking" to be
consistent with § 397. 30. " Seeking"
more appropriately describes those
youth who have determined that they
would like to pursue subminimum wage
employment.
Changes: We added § 397. 20( a)( 1)( i)
and (ii) to require DSUs to document
completion of transition services under
the IDEA in addition to completion of
pre-employment transition services
under the VR program. Additionally, we
inserted " a student with a disability" in
final § 397. 20( a)( 1)( i) because pre-
employment transition services are
available only to students with
disabilities. Finally, we replaced the
word " considering" with " seeking" in
the title of this section to be consistent
with the title in § 397. 30.
Other Comments
Comments: A commenter posed a
series of questions and concerns about
how to serve eligible VR consumers who
might be contemplating subminimum
wage employment if there is a lag time
or lack of supported employment
providers or customized employment
and the consequences to consumers and
families, as well as DSUs, if an
individual chooses to opt out of the
vocational rehabilitation process.
Other commenters asked whether the
employment goal specified in the
individualized plan for employment
needs to be consistent with competitive
integrated employment when
considering the individual' s strengths,
resources, priorities, concerns, abilities,
capabilities, interests and informed
choice. Also, they asked what the
expectations are around the
determination of ineligibility, including
how many work experiences must be
provided and how long to pursue
supported employment after the 24 -
month period or customized
employment when resources for long-
term supports are not available. Finally,
commenters asked how to consider an
individual' s geographic area when
providing referrals to Federal and State
programs and other resources that offer
employment-related services and
supports designed to enable the
individual to explore, discover,
experience, and attain competitive
integrated employment.
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Discussion: We understand that
commenters have concerns and
questions about the responsibilities of
DSUs in this section. Limited resources
and available providers of services,
including providers of long-term
supports, provide a challenge for DSUs
as they work to locate services that will
assist individuals with disabilities in
achieving competitive integrated
employment or supported employment.
Without sufficient service providers or
resources, a youth may choose to opt
out of the VR process entirely,
precluding him or her from achieving
even subminimum wage employment
given the limitations imposed by section
511 of the Act and final part 397. In the
event a youth opts out of the vocational
rehabilitation process because of a lack
of resources in the community, there
would be no consequences for the DSU
under this part.
The specified employment goal must
be consistent with the general goal of
competitive integrated employment
when considering the individual' s
strengths, resources, priorities,
concerns, abilities, capabilities,
interests, and informed choice in
accordance with section 102( b)( 4) of the
Act, as amended by WIOA, and final 34
CFR 361. 46( a). The answers to the other
questions posed by the commenter are
dependent upon circumstances and
require the judgment of the DSU and the
vocational rehabilitation counselor in
consideration of the consumer' s choice
and needs.
Changes: None.
Responsibilities of a Local Educational
Agency to Youth With Disabilities Who
Are Known To Be Seeking
Subminimum Wage Employment
397. 30)
Comments: Commenters
recommended several changes to
proposed § 397. 30 regarding the
responsibilities of a local educational
agency to youth with disabilities
seeking subminimum wage
employment. Several commenters
recommended that we require the local
educational agency to retain copies of
documentation that a youth has
completed transition services and to
make this documentation available for
review by the CAP or a protection and
advocacy system. A few commenters
also recommended that the phrase " who
are known to be seeking subminimum
wage employment" or, alternatively,
who are known to be" be deleted from
the title of proposed § 397. 30,
presumably to include all youth with
disabilities under the responsibilities of
the local educational agency in this part,
not just those seeking subminimum
wage employment. Commenters also
recommended that the language
indicating that a local educational
agency may provide a youth with a
disability documentation of transitions
services received under the IDEA be
changed to indicate that this is not
optional, but a requirement. Finally, one
commenter offered additional language
that a local educational agency is
responsible for referring youth with
disabilities considering subminimum
wage employment as a transition
outcome to the designated State unit in
order to complete the requirements
under proposed § 397. 20.
Discussion: We appreciate all of the
comments and suggestions on this
section. While the suggestion to require
local educational agencies to retain
copies of documentation that a youth
has completed transition services is
unnecessary given the requirements of 2
CFR 200. 333, we understand the
concerns expressed. After much
consideration, the Secretary has revised
final § 397. 30 to require the educational
agency to retain a copy of all
documentation provided to the DSU in
accordance with 2 CFR 200. 333. This
requirement in final § 397. 30( d) should
pose no additional burden to the local
educational agencies because the
agencies are already subject to Federal
record retention requirements. Final
397. 30( d) is consistent with a similar
provision in final § 397. 10( c), thereby
ensuring consistency between the DSU
and local educational agencies for
purposes of the documentation process.
Similarly, the Secretary has revised final
397. 30( a) to state that the
documentation transmitted to the DSU
must comply with the confidentiality
requirements of FERPA and the IDEA.
Additionally, final § 397. 30 is revised to
establish minimum information content
requirements for the documentation to
be provided to the DSU upon
completion of the transition services
under the IDEA or the youth' s refusal to
participate in those activities. In
addition, the Secretary has also added a
new paragraph in final § 397. 30 to
require a time frame for the transmittal
of the documentation to the DSU—of no
more than 30 calendar days after
completion of the transition service, or
no more than 60 calendar days after
completion of the transition service if
additional time is needed due to
extenuating circumstances, or within 5
calendar days of the youth refusal to
participate. This gives the DSU the time
necessary to transmit the documentation
to the youth within the time required by
final § 397. 10( c).
In addition, final § 397. 30( c)( 2)
requires educational personnel, when
transmitting documentation of the last
service or activity completed by the
youth to the DSU, to provide a
coversheet that itemizes all
documentation transmitted to the DSU
regarding that youth. In so doing, the
DSU will have a checklist to ensure
receipt of each documentation, thereby
ensuring the youth obtains all necessary
documentation. These additional
provisions are necessary to ensure
consistency between the DSU and the
local educational agencies in the
documentation process. All of these
changes are consistent with those made
in final § 397. 10.
As previously discussed in other
sections of this part, the CAP and
protection and advocacy systems
already have access to records in
accordance with their governing statutes
and regulations and section 511 of the
Act does not expand this access.
We disagree with the
recommendation to remove the phrase
who are known to be seeking
subminimum wage employment" or,
alternatively, " who are known to be"
from the title in final § 397. 30. The
provisions relate directly to youth who
are contemplating or seeking
subminimum wage employment, and
local educational agencies have
knowledge of these individuals in
meeting the IDEA requirements for
transition services in the individualized
education program in 20 U. S. C.
1414 (d) (1) ( A) (i) (VIII) (aa)–( bb).
In considering the commenter who
recommended making it mandatory for
the local educational agency to provide
documentation of the completion of
required activities to the student, upon
further review, the Department has
determined that providing
documentation of completed activities
by the local educational agency directly
to a youth with a disability seeking
subminimum wage employment is not
mandatory, and we are removing this
language in the final regulation to be
more consistent with the statute and
final § 397. 10. The documentation must
be provided by the local education
agency to the DSU in accordance with
section 511( d)( 2)( ii) and (iii).
The local educational agency, in
accordance with the requirements in
section 511( d)( 2) and the documentation
process developed by the DSU in
consultation with the State educational
agency, must provide documentation to
the DSU. The DSU is then responsible
under section 511( d)( 2)( A)(iii) to
provide this documentation to the
student with a disability. Final
397. 10 and 397. 30 make this
requirement clear and ensure
55721Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
consistency with specific statutory
requirements.
While we agree that it is in the best
interest of a student with a disability
considering subminimum wage
employment to be referred by a local
educational agency to the DSU in order
to complete the requirements under
final § 397. 20, we believe that this is
best left to the DSU and the State
educational agency to negotiate when
developing the interagency agreement
required by 34 CFR 361. 22.
Nevertheless, we believe that this
practice represents the type of
coordination and cooperation that
should exist between DSUs and local
educational agencies and enables
collaboration with the student with a
disability to provide a complete
program of services that may result in
an employment outcome in competitive
integrated employment. See a more
detailed discussion of this issue earlier
in this preamble. Regardless, once the
DSU receives documentation of
completed transition activities from the
local educational agency, then the
individual will become known to the
DSU, and thus " referred."
Changes: We have revised final
397. 30 in several ways. We have
revised final § 397. 30( a) by deleting the
language stating that a local educational
agency may provide documentation to a
youth of the completion of actions
described in § 397. 20( a) and inserting in
its place language that the local
educational agency must provide the
DSU with such documentation in
accordance with section 511( d)( 2). We
also stated that the documentation must
be transmitted in a manner that
complies with the confidentiality
requirements of FERPA and the IDEA.
We added final § 397. 30(b), which
establishes minimum content
requirements for the documentation that
must be transmitted by the local
educational agency to the DSU. We
added final § 397. 30( c), which
establishes the time frame under which
a local educational agency must provide
the DSU with required documentation
and requires the local educational
agency to retain a copy of all
documentation provided to the DSU
under this part. Final § 397. 30( c)( 2)
requires educational personnel to
transmit a coversheet to the DSU that
itemizes all documentation provided to
the DSU regarding the youth. This
coversheet is to be provided when the
educational personnel transmits
documentation of the last activity
completed by the youth. Lastly, we
added final § 397. 30( d), which
establishes the timeline in which
documentation must be transmitted by
the educational agency to the DSU.
Contracting Prohibition on Educational
Agencies (§ 397. 31)
Comments: A few commenters
supported proposed § 397. 31. A few
commenters also suggested that the
Department of Labor has the
responsibility to oversee the DSUs and
State educational agencies to ensure that
subminimum wage employment is not
being used inappropriately.
Most commenters expressed concern
that the proposed regulation was being
interpreted by educational agencies and
DSUs to mean that an entity that holds
a section 14( c) certificate is
automatically prohibited from providing
any service paid for by local and State
educational agencies and that this was
not the intent of section 511( b)( 2) of the
Act. The commenters requested that we
clarify that State and local educational
agencies may contract with entities
holding section 14( c) certificates such as
community rehabilitation programs for
other purposes, including transition and
pre-employment transition services that
are beneficial to students with
disabilities and supported by parents of
these individuals. One commenter
asked whether proposed § 397. 31
eliminates the ability of local
educational agencies to contract with
holders of section 14( c) certificates for
the provision of internships and work -
based tryouts, among other services.
One commenter mentioned that in
rural States or areas, the availability of
services may be limited to providers
who hold special wage certificates, thus
provisions in part 397 should not
preclude students from accessing the
expertise section 14( c) certificate
holders have in assisting people into
competitive integrated employment.
Additionally, a commenter strongly
emphasized the desire to sustain a wide
range of quality rehabilitation services
for youth with disabilities and believed
that restricting the legitimate
engagement of State educational
agencies with section 14( c) certificate
holders would result in a reduction of
service availability, and curtail learning
opportunities and services available to
youth with disabilities.
A commenter asked whether schools
may contract with providers that offer
subminimum wage and minimum wage
services when the only service being
contracted for would be opportunities
paid at minimum wage.
A few commenters suggested that the
regulatory language as proposed should
not be modified to suggest that some
types of contracts between an
educational agency and an entity using
section 14( c) certificates are permissible.
A few others expressed support for the
regulation but suggested that the
language should clearly indicate that
States cannot engage at all in any
contracts for any vocational
rehabilitation services with agencies
that pay subminimum wages.
One commenter emphasized that the
types of jobs students with disabilities
are introduced to during high school
correlate to the types of jobs they will
obtain following graduation. They
therefore supported proposed § 397. 31,
which reduces students' exposure to
subminimum wage employment and
increases students' opportunities for
obtaining competitive integrated
employment. Similarly, another
commenter stated that limiting the
opportunity for inadvertent slotting into
subminimum wage employment is a
step in the right direction for students
with disabilities toward achieving
competitive integrated employment.
One commenter, citing research
predicting post -school employment,
suggested that all work-related activities
to prepare individuals with disabilities
for jobs and careers should happen in
realistic integrated environments, not in
segregated workplaces or where an
individual is paid a subminimum wage.
A few commenters suggested that the
formal interagency agreement between
the DSU and the State educational
agency in proposed 34 CFR 361. 22
prohibit contracts or arrangements with,
or referrals to, programs in which youth
with disabilities are employed at
subminimum wages. Commenters also
recommended inserting the requirement
for referrals in proposed § 397. 31.
Other commenters suggested inserting
the word " sub -contract" between
contract" and " other arrangements" to
align proposed § 397. 31 with the
language in section 511( a) of the Act
regarding entities, including contractors
and subcontractors of entities.
Additionally, many of these
commenters also requested that the
prohibition be extended to local and
State educational agencies that operate
a program where a youth with a
disability is engaged in subminimum
wage employment. A few commenters
were unclear about the term " other
arrangement" and interpreted this as not
specifically prohibiting referrals to
programs employing youth with
disabilities at subminimum wages.
A number of commenters requested
either that the Department issue
guidance to local and State educational
agencies clarifying that the contracting
prohibitions only apply to contracts for
the purposes of operating a program
under which a youth with disabilities is
55722 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
employed at subminimum wage. In the
alternative, the commenters suggested
that the Department require State
educational agencies to issue clear
policy directives to local educational
agencies regarding the prohibition on
State and local educational agencies
contracting with section 14( c) certificate
holders in order to pay individuals
subminimum wages. In addition,
commenters asked that the Department
add additional language regarding the
responsibilities of State educational
agencies to enforce this provision.
Discussion: We appreciate the support
for proposed § 397. 31. We disagree with
the recommendation that the
Department of Labor should have
oversight responsibility for the DSUs
and the State educational agencies to
ensure that subminimum wage
employment is not being used
inappropriately. Rather, both the
Departments of Education and Labor
have responsibilities for oversight under
section 511. Specifically, the
Department has sole responsibility for
overseeing all requirements under
section 511 and final part 397 that relate
to requirements that fall under its
purview, such as the documentation
process and the prohibition against a
State or local educational agency
entering into a contract with an entity
holding a special wage certificate for the
purpose of operating a program in
which a youth is compensated for work
at subminimum wage. The Department
of Labor, on the other hand, has sole
responsibility for overseeing
requirements that fall under its purview,
such as those related to entities holding
special wage certificates paying
individuals with disabilities
subminimum wages without the
requirements of section 511 of the Act
and final part 397 being met. There is
no statutory authority for the
Department to compel the Department
of Labor to oversee entities, such as the
DSUs and educational agencies, that are
under the Department' s purview.
We appreciate the significance of the
contracting prohibition in section
511( b)( 2) of the Act and the comments
received in response to proposed
397. 31 seeking clarification and
making recommendations. We agree
with the substantial number of
commenters that this section does not
preclude State and local educational
agencies from contracting with entities
holding section 14( c) certificates, such
as community rehabilitation programs,
for purposes other than operating a
program for youth under which work is
compensated at a subminimum wage. In
other words, nothing in section
511( b)( 2) of the Act or final § 397. 31
precludes a State or local educational
agency from contracting with an entity,
even if that entity holds a special wage
certificate under section 14( c) of the
FLSA, for another purpose, including
the provision of transition and pre-
employment transition services that are
beneficial to students with disabilities,
so long as they are not paid
subminimum wage if compensation is
provided. Pre-employment transition
services under final 34 CFR 361. 48( a)
and assessment services provided to
vocational rehabilitation consumers
must be provided in integrated settings
to the maximum extent possible.
Further, nothing in section 511( b)( 2) of
the Act or final § 397. 31 prohibits a
State or local educational agency from
contracting with an entity holding a
special wage certificate for the purpose
of operating a program in which the
youth is paid at or above minimum
wage. A State or local educational
agency, prior to entering into such a
contract, must ensure that the youth
will be paid at least minimum wage.
Only in doing this can the local or State
educational agency ensure its
compliance with section 511( b)( 2) and
final § 397. 31. It is not necessary to
revise final § 397. 31 because the
regulation mirrors the statute and states
that the prohibition is against
contracting for " the purpose" of
operating a program for youth under
which work is compensated at a
subminimum wage.
The Department also agrees with
commenters who regard the contracting
prohibition as a step toward limiting the
progression of students and transition -
age youth into subminimum wage
employment, since it seeks to limit the
exposure of these individuals to settings
that pay subminimum wages. Final
397. 31 raises expectations for both
youth with disabilities and their
families, and redirects them toward
experiences leading to competitive
integrated employment in the
community.
While we understand the
commenters' desire to align the
language in final § 397. 31 with section
511( a) of the Act, which references
entities holding special wage certificates
as well as their contractors and
subcontractors, we disagree that it is
necessary to specifically mention
subcontractors" in these final
regulations. Final § 397. 31 prohibits the
State or local educational agency from
entering into a contract or other
arrangement with an " entity, as defined
in § 397. 5( d)" for the purpose of
operating a program in which the youth
is engaged in work compensated at a
subminimum wage. Final § 397. 5( d)
defines " entity" as an employer, or a
contractor or subcontractor of that
employer, that holds a special wage
certificate described in section 14( c) of
the FLSA. Therefore, contractors and
subcontractors of the employer holding
the special wage certificate are already
included in that definition, making
specific reference to contractors and
subcontractors unnecessary. The
reference to " other arrangements" in
both section 511(b)(2) and final § 397.31
refers to any other type of agreement
other than a contract), such as a
memorandum of understanding or
subcontract, through which the State or
local educational agency makes
arrangements with entities operating
programs in which youth with
disabilities are paid subminimum wages
under section 14( c) of the FLSA. The
term allows for a broad interpretation of
the relationships that might exist
between a local or State educational
agency and an entity, as well as the
types of agreements they may enter into
to establish those relationships,
including sub -contracts. For purposes of
the requirements and limitations in final
part 397 ( including the contracting
prohibition in final § 397. 31), a local or
State educational agency that holds a
section 14( c) certificate to operate a
program in which a youth with a
disability is engaged in work
compensated at a subminimum wage is
treated in the same manner as any other
entity holding a special wage certificate
under section 14( c) of the FLSA.
We agree that the interagency
agreement between the DSU and State
educational agency, as described in 34
CFR 361. 22, should include reference to
the prohibition in final § 397. 31.
Therefore, 34 CFR 361. 22( b)( 6), both
proposed and final, requires the
interagency agreement to include an
assurance that neither the State or local
educational agency will enter into a
contract or other arrangement for the
purpose of operating a program in
which youth with disabilities are
engaged in work compensated at a
subminimum wage. Thus, final 34 CFR
361. 22( b)( 6) ensures consistency
between the interagency agreement
required under that part and the
requirements of final § 397. 31.
The Secretary disagrees with the
recommendation to revise final § 397. 31
to prohibit local or State educational
agencies from making referrals to
entities holding special wage
certificates. As discussed previously, as
well as in detail in the preamble to final
34 CFR part 361, the Act does not
prohibit services such as assessments,
pre-employment transition services, and
other services from being provided by
55723Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
entities holding special wage certificates
under section 14( c) of the FLSA.
However, the Act requires that each of
these services be provided, to the
maximum extent possible, in integrated
settings. We wish to point out that
entities holding special wage certificates
under section 14( c) of the FLSA, also
include businesses, in addition to
community rehabilitation programs, that
operate in integrated settings in the
community. The focus of the
prohibition in final § 397. 31 is the
payment of subminimum wages to
youth with disabilities—not the setting
in which the work is performed.
Therefore, there is nothing in the Act to
prohibit a State or local educational
agency from making a referral to such
entity, so long as the purpose of the
referral is not for the payment of
subminimum wages to the youth with a
disability.
With regard to the request that final
397. 31 be revised to specify that the
State educational agency is responsible
for enforcing final § 397. 31, the
Secretary disagrees that such change is
necessary. First, the Department will be
enforcing this provision through its
regular monitoring activities. Second,
the prohibition applies to both the State
and local educational agencies;
therefore, it would not be appropriate
for the State educational agency to
enforce a requirement against itself. As
stated above, the Department intends to
issue operating guidance to the States
regarding the implementation of the
requirements of final part 397, including
the prohibition contained in final
397. 31.
Changes: None.
Responsibilities of a DSU for
Individuals Regardless of Age in
Subminimum Wage Employment
397. 40)
Counseling, Information and Referral
Services
Comments: Many commenters
expressed support for the provision of
services by DSUs described in proposed
397. 40 for individuals employed at a
subminimum wage, regardless of age.
Many were encouraged by the
requirement for ongoing information
and referral, as well as, career
counseling and the potential benefit that
it could bring to consumers in the
future. Others suggested that proposed
397.40 require information be
provided to family members and/ or
caregivers as appropriate, in addition to
the individual. Still others asked that
this section require the provision of
benefits counseling so that individuals
would understand the impact and
benefits, rather than the perceived
barriers, of moving out of subminimum
wage employment into competitive
integrated employment. A few indicated
that it is imperative that any career
counseling provide participants with
information on Federal and State
programs that continue healthcare and
income supports to individuals with
disabilities who engage in the
workforce.
A few commenters expressed
concerns related to the requirement to
provide information and career
counseling -related services to adults
working in subminimum wage jobs,
suggesting that the requirement places
pressure on DSU staff and fiscal
resources due to the sheer numbers of
these individuals, and could impact the
ability to serve all eligible individuals in
the State through the VR program
without implementing an order of
selection.
Another commenter asked whether
the services described in proposed
397. 40 were for all individuals or just
those individuals that have been served
by the DSU.
Regarding required intervals for
providing information and referral and
career counseling, many commenters
provided requests for clarification and
recommendations related to the semi-
annual and annual intervals for
providing these services to individuals
in subminimum wage employment.
Several recommended referencing and
reconciling the requirements under
proposed § 397. 40 with those under
proposed 34 CFR 361. 55 related to semi-
annual and annual reviews for
individuals in extended employment or
subminimum wage employment.
A few commenters sought
clarification regarding the individuals to
he served and whether there were
differences in the requirements for
youth and other individuals with
disabilities. One commenter asked
whether entities were to refer every
subminimum wage employee for career
counseling by January of 2017 or
whether this section only applies to
individuals who become employed in
subminimum wage after the effective
date of section 511, July 22, 2016, citing
that, either way, the workload would be
significant.
Another commenter questioned why
these services were available every six
months for the first year of employment
only, suggesting that the more often
individuals received career counseling
and information and referral services,
the more likely that the individual
would become comfortable with the
idea of future competitive integrated
employment.
Discussion: We appreciate the support
for, and extensive comments and
recommendations received in response
to, proposed § 397.40. Section 511 of the
Act does not require that the DSU
provide the information to the family or
caregivers, as well as to the individual
with a disability. As a recipient of
services from a DSU, the individual
with a disability would be protected by
the provisions in final 34 CFR 361. 38,
governing the protection, use, and
release of personal information, and
other Federal and State privacy laws
and regulations. For this reason, we lack
the statutory authority to make the
recommended change in final § 397. 40.
However, if an individual chooses to
include family members and caregivers
in such activities, nothing would
prohibit DSUs or their contractors from
doing so with the informed consent of
the individual. On the other hand, if a
parent, other family member, or another
individual has power of attorney for or
guardianship over, or has any other
legal authority to act as the individual' s
representative, the DSU could provide
the information to that representative in
accordance with the laws governing that
representation.
We agree with commenters that
income -based benefits counseling
would be beneficial to individuals with
disabilities who are employed at
subminimum wage. There is no
prohibition in section 511 against
providing benefits counseling as a part
of information and referral or career
counseling. The Secretary believes that
information provided as part of benefits
counseling could enable individuals
with disabilities to have the information
they need to understand the full
opportunities provided by competitive
integrated employment. For this reason,
the Secretary has revised final
397.40( a) by adding paragraph (4) to
specify that career counseling and
information and referral services may
include benefits counseling, particularly
with regard to the interplay between
earned income and income -based
financial, medical, and other benefits.
We understand the concerns and
challenges with meeting the
requirements under this section due to
the potentially large numbers of
individuals to be served on an annual or
semi-annual basis. DSUs may contract
these services to help mitigate the
demands upon the DSU staff and
resources. We also recognize these
additional activities could impact a
State' s needs and decisions regarding
order of selection. However, section 511
is explicit about the activities that must
be performed by the DSU with regard to
individuals with disabilities employed
55724 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
at subminimum wage. Therefore, there
is no statutory basis to limit the DSU' s
responsibilities under final § 397.40,
which is consistent with section 511( c)
of the Act.
To clarify, the services under this
section are for any individual in
subminimum wage employment, not
just individuals who have been
applicants or recipients of services
under the VR program or who have been
served by the DSU under another
program administered by that agency.
With respect to career counseling, and
whether requirements for information
and referral and career counseling differ
between youth and other individuals
with disabilities, all are required. The
timing for the semi-annual provision of
career counseling and information and
referral services applies only for an
individual with a disability who begins
employment at subminimum wage on or
after the effective date of section 511
July 22, 2016). This means, for
example, that an individual who begins
employment at subminimum wage on
July 30, 2016, must receive the first
provision of the semi-annual career
counselling and information and referral
services no later than January 30, 2017,
and the second provision of the semi-
annual services no later than July 30,
2017, and the annual set of services no
later than July 30, of each year thereafter
for as long as the individual maintains
subminimum wage employment. For
individuals who were already employed
at subminimum wage when section 511
takes effect (July 22, 2016), the
individual must receive career
counseling and information and referral
services at least once a year. Neither the
statute nor these final regulations
dictate when those annual reviews must
be done. This is a matter for the entity
holding the special wage certificate and/
or the DSU to determine in terms of
what works best within their operations.
However, the Secretary clarifies here
that all individuals employed at
subminimum wage must have received
the requisite first annual career
counseling and information and referral
services no later than July 22, 2017, and
annually thereafter by that date.
Consistent with the Act, all individuals
employed at subminimum wage,
regardless of date of employment, must
receive career counseling by at least one
year after the effective date of section
511.
We agree that frequent career
counseling and guidance activities may
assist individuals in subminimum wage
employment to consider competitive
integrated employment. Although the
Act requires DSUs to provide these
career counseling and information and
referral services on a semi-annual basis
for the first year of employment and
annually thereafter, nothing in the Act
prohibits a DSU from providing these
services on a more frequent basis. The
specific requirements for youth, and the
semi-annual and annual counseling and
information and referral requirements,
along with the documentation
requirements, as required by the statute
become effective on July 22, 2016. The
Secretary has revised final § 397.40( c) to
make these requirements related to the
required intervals more clear.
Changes: In final § 397.40(a), we
added paragraph (4) to specify that the
career counseling and information and
referral services a DSU must provide
may include benefits counseling,
particularly with regard to the interplay
between earned income and income -
based financial, medical, and other
benefits. We made revisions to final
397. 40( c) to provide that the required
intervals for providing services under
final §§397. 40( a) and (b) will be
calculated based upon the date the
individual becomes known to the DSU.
We revised final § 397. 40( c) to clarify
when the required services are due for
both individuals hired at subminimum
wage on or after the effective date of the
statute and also for individuals hired at
subminimum wage prior to that date. As
part of the revisions to final § 397. 40( c),
we specified in paragraphs ( c)( 3)( i) and
ii) that DSUs are responsible for
providing the required services only
when that individual becomes " known"
to the DSU, and we specified what it
means to become " known."
Identification and Referral of
Individuals
Comments: Several commenters
requested that the phrase " who are
known" be clarified, defined, or
replaced with more specific language. A
few thought that the language in
proposed § 397.40( a)( 2) was vague,
limiting, or misleading and could be
interpreted to mean it applies only to
individuals who have been through the
vocational rehabilitation process or who
have been referred by the CAP.
A few commenters suggested that
language be added mandating
interagency agreements with the State
educational agency, the State
intellectual and developmental
disabilities agency, and any other
appropriate agency serving individuals
who may be in subminimum wage
employment to identify and refer
individuals considering, or currently in,
subminimum wage employment to the
DSU. This suggestion aligned with other
commenters who advocated a more
expansive and proactive strategy by the
DSU to identify all individuals who are
contemplating or are currently in
subminimum wage, which one
commenter described as similar to
child find" under the IDEA. One
commenter urged that a subsection be
added to final 34 CFR 361. 29( a)( 1)( i)
and (b) requiring the comprehensive
statewide assessment under the VR
program include information about
individuals who are working in
segregated and subminimum wage jobs
for employers using section 14( c)
certificates.
One commenter asked whether the
DSU was required to track an individual
working in a sheltered workshop setting
who contacted the agency for
independent living services.
Another commenter asked whether
proposed § 397.40 establishes an
affirmative requirement or expectation
that DSUs or their contractors seek out
individuals in subminimum wage
employment, noting the potential issue
of confidentiality between the
individual and the employer.
A commenter suggested adding
language that would require that any
entity holding a section 14( c) certificate
failing to refer an individual to the DSU
have its section 14( c) certificate
suspended until it has been documented
that all employees working at
subminimum wage have been referred
to the DSU.
Some commenters suggested that
coordination and guidance from the
Federal Departments on the
identification issues would be helpful.
Discussion: The use of the phrase
who are known" in several sections of
these regulations highlights that the
DSU must be aware that an individual
with a disability is employed at the
subminimum wage level in order to
provide the services required by section
511 of the Act and final part 397,
including the services and activities
required by final § 397. 40. Such
awareness may be made through the
self -identification by the individual
with a disability, the vocational
rehabilitation process, cooperative or
coordinated activities with other
agencies, or referral to the DSU,
including referral by employing entities.
Otherwise, there is no mandate in
section 511 of the Act for the DSUs to
seek out or solicit these individuals. To
impose such a requirement in these
final regulations would be extremely
burdensome on the DSUs because of the
thousands of entities holding special
wage certificates under section 14( c) of
the FLSA. It would not be practical or
reasonable to expect or require the DSU
to take on the role of seeking out
individuals with disabilities who are
55725Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
employed at subminimum wage.
Moreover, confidentiality laws and
regulations would prohibit the
automatic release of personal
information about the individual with a
disability to the DSU without the
written consent of the individual.
Furthermore, there is no statutory
mandate for entities holding section
14( c) certificates to refer to the DSU
employees or individuals with
disabilities seeking to enter
subminimum wage employment.
We considered using the words " who
are referred" instead of " who are
known," but that phrase implied an
active referral process required by other
entities, all of whom are outside of the
Department' s purview. The phrase
who are known" allows for any
method of identifying individuals to the
DSU and clarifies there is no mandate
that the DSU seek out or solicit
individuals with disabilities employed
at subminimum wage. In final
397. 40( a)( 2), we are including " self-
referred" in the list detailing examples
of how the DSU knows of an individual.
The Secretary has also added a
paragraph in final § 397.40( c)( 3)(ii) to
clarify when an individual with a
disability becomes " known" to the DSU.
While we agree that there is benefit in
identifying individuals with disabilities
in subminimum wage employment or
those potentially seeking such
employment, through interagency
agreements with other State agencies
such as the State educational agency,
the State intellectual and developmental
disabilities agency, and any other
appropriate agency, we cannot require
other agencies to make these referrals
because section 511 does not impose
any requirements on most of the
agencies suggested by the commenters.
State and local educational agencies
will be providing, in effect, a referral
when they transmit documentation to
the DSU demonstrating the completion
of transition and other services by
students with disabilities. As stated in
an earlier section of this preamble, we
have encouraged DSUs and various
other State and local agencies with
whom they have relationships for
cooperation and coordination of
services, to include provisions in their
interagency agreements related to the
referral of individuals employed at
subminimum wage. We do not believe
it is appropriate to amend these final
regulations to require such provisions
because these matters are best left to the
States to determine what meets their
unique needs and circumstances. We
expect that DSUs will use the
opportunity as they develop
relationships and agreements through
the coordination and cooperative
agreements set out in final 34 CFR
361. 24 to seek cross -agency referrals.
With regard to entities holding 14( c)
certificates under the FLSA, all
authority to impose requirements (e.g.,
consequences for failure to comply
including suspension or revocation of
the special wage certificate) rests with
the Department of Labor and are beyond
the scope of these final regulations.
We appreciate the question from the
commenter who asked whether the DSU
is required to track an individual who
is employed in a sheltered workshop
setting at subminimum wage, and who
contacted the agency for independent
living services. While such is not
specifically required by statute, section
511 of the Act requires the DSU to
provide certain services and/ or
documentation to individuals with
disabilities, including youth with
disabilities, who are seeking ( for
purposes of youth with disabilities only)
or maintaining subminimum wage
employment (for individuals with
disabilities of any age). The Secretary
has interpreted, for purposes of final
part 397, and stated throughout this
preamble, that the DSU must provide
these required services or
documentation to any individual with a
disability whom it knows is seeking or
maintaining employment at
subminimum wage, not only
individuals who have participated in
the VR program or been referred by the
CAP. As stated above, the DSU can
know of these individuals in a variety
of ways, including through the programs
it administers, such as the VR program
or the independent living programs.
Therefore, if the DSU knows of an
individual through the independent
living program and knows that
individual is seeking or maintaining
subminimum wage employment, the
DSU must provide the services and
documentation required by section 511
of the Act and final part 397, including
the requirements of final § 397. 40.
We address the comment that we add
requirements to the comprehensive
statewide assessment to include
information about individuals who are
working in segregated and subminimum
wage jobs for employers using section
14( c) certificates in the Analysis of
Comments and Changes section for 34
CFR part 361, under the discussion of
34 CFR 361. 29, earlier in this preamble.
It is anticipated that joint guidance
from the Departments of Education and
Labor is forthcoming and will address,
among other aspects of WIOA, the
limitations on use of subminimum wage
if the required services and
documentation have not been provided.
In the meantime, the expectation is that,
at every opportunity, DSUs will identify
individuals with disabilities seeking
employment or who are currently
employed at a subminimum wage.
Changes: We revised final
397. 40( a)( 2) to include " self -referral"
and added a paragraph in final
397. 40( c)( 3)( ii) to clarify when an
individual with a disability becomes
known" to the DSU.
Financial Interest
Comments: With regard to self -
advocacy, self-determination, and peer
mentoring training opportunities,
several commenters requested
clarification related to " financial
interest" and what entities may not
provide these services. One commenter
proposed language that specifically
includes the entity that employs the
individual at subminimum wages
among those entities deemed to have a
financial interest for the purpose of this
section. Some commenters asked that
we clarify that an entity providing
subminimum wage employment to an
individual may not provide self -
advocacy, self-determination, and peer
mentoring training opportunities to the
individual.
A few commenters recommended that
the Department further clarify that an
entity that holds a section 14( c)
certificate, but does not have a financial
interest in the outcome of the
individual, may provide the services
required under section 511( c)( 1). Some
of those commenters expressed concern
that an overly restrictive interpretation
would have a detrimental impact on
rural areas with few providers.
Several commenters regarded section
14( c) certificate holders as clearly
having a " financial interest" and
therefore, should be precluded from
providing services required under this
section. Although these entities may not
have an immediate financial interest in
the employment outcome of the
individual, some commenters viewed
them as having a definite interest in
encouraging the individual to apply for
vocational rehabilitation services in
anticipation of being selected at a later
time to provide employment or
supported employment services.
Several commenters suggested that if
the DSU contracts with public and
private service providers to provide the
services required for individuals who
are currently in subminimum wage
employment, rather than provide the
services directly, language be added to
proposed § 397.40 in the final
regulations that explicitly and
specifically prohibits section 14( c)
certificate holders from providing these
55726 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
services, to avoid what the commenters
perceived as a clear conflict of interest
for these entities. In this scenario,
commenters emphasized that employers
would have a financial interest in the
outcome of these services and would
not be positioned to provide adequate or
objective career counseling.
Discussion: With regard to self -
advocacy, self-determination, and peer
mentoring training opportunities,
several commenters requested
clarification of " financial interest" and
what entities may not provide these
services. Based upon the comments and
our assessment, we have determined
that all entities holding special wage
certificates under section 14( c),
irrespective of whether any employ the
individual receiving the services, have a
financial interest or a potential future
financial interest in providing these
services. Therefore, these entities may
not be used to provide these services.
The Secretary believes that many
organizations and providers are
available and are already providing self -
advocacy, self-determination, and peer
mentoring training services, such as the
centers for independent living (CILs) in
each State. Although some commenters
have expressed concern about the
potentially detrimental impact on rural
areas with few providers, the Secretary
believes that virtual and electronic
technology allows access to these
services even if the provider is not
physically located in a particular rural
area.
We agree with the several commenters
who suggested that if the DSU contracts
with public and private service
providers to provide the services
required for individuals who are
currently in subminimum wage
employment, rather than provide the
services directly itself, then the services
may be provided, so long as the service
providers are not section 14( c)
certificate holders. We have added
language in final § 397. 40, therefore,
that prohibits section 14( c) certificate
holders from providing these services.
Changes: We inserted language in
final § 397.40(e) stating that a contractor
providing the services on behalf of the
DSU may not be an entity holding a
special wage certificate under section
14( c) of the FLSA as defined in final
397. 5( d).
Time Frames and Documentation
Requirements
Comments: One commenter
recommended that the Department set a
time frame for providing documentation
of the completion of activities under
proposed § 397.40 to individuals with
disabilities in subminimum wage
employment, suggesting that this would
circumvent resource -intensive disputes
and inconsistencies in the interpretation
of timeliness.
Discussion: Upon the suggestion of
commenters, we include a specific time
period for providing documentation of
the completion of activities under final
397. 40 to individuals with disabilities
in subminimum wage employment. This
time frame is consistent with that in
397. 10 for the provision of
documentation to youth with
disabilities, thereby ensuring
consistency between all provisions in
final part 397 related to documentation.
Similarly, the Secretary has revised final
397. 40 to set minimal content
requirements for the documentation that
must be provided to the individual
demonstrating completion of the career
counseling and information and referral
services. Again, this new regulatory text
is consistent with that contained in final
397. 10 and § 397. 30.
Changes: We have included a time
frame in final § 397.40( d) of no later
than 45 calendar days after completion
of the required activities or services for
the DSU to provide documentation of
activities in this section to individuals
with disabilities; however, where
extenuating circumstances exist, the
DSU can have up to 90 calendar days
after completion of the required
activities or services. We also added
final § 397.40( d)( 1)( ii) to provide a time
frame of 10 calendar days for DSUs to
provide this documentation to an
individual who has refused to
participate in a required activity. We
also added final § 397. 40( d)( 2) and ( 3) to
specify minimum content requirements
for the documentation DSUs must
provide to individuals, including
individuals who refuse to participate in
a required activity. We added final
397. 40( d)( 4) requiring DSUs to retain a
copy of all documentation required by
part 397, in a manner consistent with 2
CFR 200. 333.
Clarifications
Comments: One commenter asked for
an explanation as to why the DSU is
only required to provide individuals in
subminimum wage employment with
self -advocacy, self-determination, and
peer mentoring training opportunities,
all of which are fundamental to
achieving independence and self-
sufficiency, if the employer holding a
section 14( c) certificate has fifteen or
fewer employees.
Clarification was sought by a few
commenters regarding how proposed
part 397 would impact clients of the
DSU who are being paid subminimum
wages in a community rehabilitation
program as part of their training under
an individualized plan for employment.
Additionally, a commenter asked if the
DSU may contract with businesses to
perform a service in a workshop, for a
limited time, as part of the individual' s
individualized plan for employment.
Discussion: The requirement that the
DSU must provide individuals in
subminimum wage employment with
self -advocacy, self-determination, and
peer mentoring training opportunities
only when the employer holding a
section 14( c) certificate has fifteen or
fewer employees is consistent with the
requirement of section 511( c)( 3) of the
Act. Employers holding a section 14( c)
certificate that have more than fifteen
employees are responsible for ensuring
that individuals in subminimum wage
employment are provided self -advocacy,
self-determination, and peer mentoring
training opportunities in accordance
with section 511( c)( 1)( B) of the Act.
This provision removes the burden that
would otherwise be experienced by
small businesses as a result of these
requirements by having the DSU
provide the services instead.
The Secretary does not believe that
final part 397 would impact clients of
the DSU who receive a training stipend
that is below minimum wage for work
performed in a community
rehabilitation program as part of their
training under an individualized plan
for employment. That being said, we
encourage that all training and
assessment take place in an integrated
setting to the maximum extent possible
to reinforce the expectation under the
Act that all individuals with disabilities,
given the proper training and supports,
can achieve competitive integrated
employment. However, neither section
511 of the Act nor final part 397
prohibits a DSU from entering into a
contract with a business in which
clients in training receive a training
stipend that is below minimum wage.
Unlike the prohibition against these
contracts for State and local educational
agencies, such a prohibition for DSUs
would go beyond the scope of section
511 of the Act and these final
regulations. We wish to emphasize,
however, that section 511( b)( 2) of the
Act and final § 397. 31 address
contracting prohibitions for State and
local educational agencies entering into
contracts with entities holding section
14( c) certificates for the purpose of
operating a program for youth in which
work is compensated at a subminimum
wage. In this case, work associated with
a work experience, work adjustment
training and extended employment, or
other activities for which work is
55727Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
compensated must be at or above the
minimum wage.
Changes: None.
Review of Documentation (§ 397. 50)
Comments: One commenter on
proposed § 397. 50 recommended that
we clarify the review process and the
necessary documentation required.
Most commenters responding to
proposed § 397. 50 regarding the role of
the DSU in the review of individual
documentation maintained by entities,
as defined in proposed § 397. 5( d) under
this part, stated that the proposed
regulation did not include sufficient
language to provide for any enforcement
mechanism, should the DSU discover
that documentation does not exist or is
not sufficient. Some commenters asked
that an enforcement mechanism he
included, reflecting, at a minimum, the
requirement that the DSU report
documentation deficiencies to the
Department of Labor for action, or to the
CAP. Some commenters suggested that,
although the proposed regulation
establishes a much needed opportunity
to review individual documentation, it
does not indicate what actions,
including authorized corrective actions
or revocation of section 14( c)
certificates, may be taken if deficiencies
are identified by the DSU or its
contractor.
Several commenters recommended
that we remove the proposed language
that allows a contractor working for the
DSU to conduct documentation reviews
of section 14( c) certificate holders,
viewing this as conflicting with section
511. They suggested that if the final
regulations continue to allow
contractors to conduct documentation
reviews, that additional language be
added that specifies parameters for such
contractors, including a prohibition of
the use of organizations that are section
14( c) certificate holders to conduct such
reviews.
Several commenters requested that
specified timelines for the review of
documentation be added to enhance
enforcement, and that language be
added to specify that the CAP and
protection and advocacy system have
jurisdiction in reviewing compliance
with Section 511 requirements.
A few commenters requested that we
clarify whether the review of
documentation by the DSU is a
requirement, and if so, noted that the
DSUs do not have the resources or
expertise to conduct such reviews,
suggesting that the reviews are best
conducted by the agency responsible for
the administration of the special wage
certificate.
Another commenter shared concerns
about the record-keeping
responsibilities and the supporting
documentation for monitoring purposes.
Other commenters had questions and
concerns pertaining to whether the DSU
can make a blanket documentation of an
entity, or if requests to review
documentation must be made on an
individual basis. Commenters
recommended that the final regulations
task the Department of Labor with the
responsibility for documentation
reviews based upon its experience with
reviewing and monitoring entities for
compliance with section 14( c) of the
FLSA.
Discussion: We appreciate the
comments regarding the need to review
documentation of individuals who are
employed at subminimum wage,
consistent with the requirements in
section 511. The commenters raise
many important issues that necessitate
clarification. As we discussed in an
earlier section of the preamble for final
part 397, neither section 511( e)( 2)( B) of
the Act nor final § 397. 50 requires either
the DSU or the Department of Labor to
review documentation maintained by
entities holding special wage
certificates. Rather, both section
511( e)( 2)( B) of the Act and final § 397. 50
subject those entities to a review of
documentation should the DSU or the
Department of Labor conduct such
reviews. We appreciate the concerns
expressed by commenters about the
strategies, responsibilities, resources,
and expertise required to conduct
documentation reviews. However, there
is no statutory basis to task the
Department of Labor, Wage and Hour
Division, with this exclusive
responsibility even though it has more
experience in conducting reviews of
entities involving documentation of
compliance with section 14( c) under the
FLSA. As noted previously, section
511( e)( 2)( B) of the Act and final
397. 50 specify that both the DSU and
the Department of Labor have authority
to conduct these reviews. Therefore, to
task only the Department of Labor with
this responsibility in these final
regulations would be inconsistent with
the statute. While we understand the
concerns about lack of resources, we
disagree that the DSUs do not have
sufficient expertise to conduct the
reviews. In fact, much of the
documentation to be reviewed would be
that generated by the DSU itself and,
therefore, would be familiar to the DSU.
Moreover, we do not believe it is
necessary to revise final § 397. 50 to
identify the documentation to be
reviewed during a review under this
section because the documentation that
must be reviewed is set out in these
regulations in final §§397. 10, 397. 20,
397. 30, and 397. 40. Given the intent of
section 511 to limit the use of
subminimum wage, the Secretary
believes that DSUs, in conjunction with
the Department of Labor may have an
impact on the degree to which youth
and other individuals with disabilities
seek or maintain employment at
subminimum wage through the
documentation review process and the
requirements set out elsewhere in this
section.
Because there is no requirement that
these reviews be done, neither the
statute nor these final regulations
establish a time frame for the reviews.
Section 511( e)( B) of the Act provides
that the reviews are to be done " at such
a time" as may be necessary to fulfill the
intent of section 511. Therefore, the
timing of any such reviews must be
determined by the DSU or the
Department of Labor as either deems
necessary.
We disagree with commenters that the
DSU should report violations
discovered during a review of
documentation to the CAP. As
previously discussed, the applicability
of final part 397 to CAPs and protection
and advocacy systems must be
consistent with their responsibilities
under their respective authorizing
statutes and regulations. Monitoring and
oversight activities are beyond the scope
of the CAP' s authority under section 112
of the Act. Therefore, we do not believe
it is appropriate to include any specific
language regarding their authority or
jurisdiction in these final regulations.
We also appreciate the many
comments and suggested regulatory
language submitted by a variety of
commenters related to the DSU' s role in
the review of documentation. We agree
that enforcement measures and
consequences for non-compliance are
important; however, section 511 of the
Act does not include specific
enforcement authority for DSUs and to
include such measures in the final
regulations would be inconsistent with
the Act. Enforcement of section 14( c) of
the Fair Labor Standards Act rests with
the Department of Labor, Wage and
Hour Division. Additionally,
consequences for non-compliance with
the requirements for documentation
prior to hiring youth with disabilities or
continuing to employ individuals with
disabilities of any age and the retention
of documentation records by entities
under section 511 also rests with the
Department of Labor, Wage and Hour
Division. Although section 511 does not
require DSUs to report documentation
55728 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
deficiencies to the Department of Labor,
Wage and Hour Division for action, the
Secretary agrees with commenters that
such reporting would be consistent with
the purpose of final part 397.
Similarly, if a parent or an individual
with a disability brings an instance of
non-compliance with the
documentation or other requirements of
section 511 to the attention of the DSU,
we would encourage the DSU to report
this to the Department of Labor, Wage
and Hour Division as well. Therefore,
the Secretary has revised final § 397. 50
by adding a new paragraph (b) to specify
that DSUs should report deficiencies to
the Department of Labor' s Wage and
Hour Division. The Secretary has
intentionally used " should" rather than
must" because there is no requirement
that the DSUs conduct reviews and,
there is no mechanism for enforcement
for failing to report deficiencies. We also
want to emphasize that the Secretary
purposely used " should" rather than
may" to signal that the Department
strongly encourages DSUs to report such
deficiencies whenever they are found.
We disagree with commenters that the
use of a contractor working for the DSU
to conduct documentation reviews of
section 14( c) certificate holders is
inconsistent with section 511. In fact,
section 511( e)( 2)( B) refers to
representatives working directly for"
the DSU or Department of Labor. If the
authority to conduct reviews were
limited to DSU or Department of labor
personnel, the statute would have used
such wording. Use of the words
representative working directly for"
the DSU or Department of labor implies
that it could be agency staff or
contractors for those agencies. We agree,
however, that if a contractor is working
on behalf of the DSU to review
documentation, the contractor may not
be an entity holding a special wage
certificate under section 14( c) of the
FLSA. We believe that this is consistent
with the intent of section 511 of the Act
and, therefore, we include this language
in final § 397. 50( a).
Changes: We have revised final
397. 50 by adding a new paragraph (b)
and redesignating the proposed
language as paragraph (a). We have
inserted additional language in final
397. 50( a) stating that the contractor
may not be an entity holding a special
wage certificate under section 14( c) of
the FLSA. Final § 397. 50( b) states that
DSUs should report deficiencies noted
during documentation reviews to the
Department of Labor' s Wage and Hour
Division.
Executive Orders 12866 and 13563
Regulatory Impact Analysis
Under Executive Order 12866, the
Secretary must determine whether this
regulatory action is " significant" and,
therefore, subject to the requirements of
the Executive order and subject to
review by OMB. Section 3( f) of
Executive Order 12866 defines a
significant regulatory action" as an
action likely to result in a rule that
may—
1) Have an annual effect on the
economy of $100 million or more, or
adversely affect a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
State, local, or tribal governments or
communities in a material way (also
referred to as an " economically
significant" rule);
2) Create serious inconsistency or
otherwise interfere with an action taken
or planned by another agency;
3) Materially alter the budgetary
impacts of entitlement grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or
4) Raise novel legal or policy issues
arising out of legal mandates, the
President' s priorities, or the principles
stated in the Executive order.
This regulatory action is a significant
regulatory action subject to review by
OMB under section 3( f) of Executive
Order 12866.
We have also reviewed these
regulations under Executive Order
13563, which supplements and
explicitly reaffirms the principles,
structures, and definitions governing
regulatory review established in
Executive Order 12866. To the extent
permitted by law, Executive Order
13563 requires that an agency—
1) Propose or adopt regulations only
upon a reasoned determination that
their benefits justify their costs
recognizing that some benefits and
costs are difficult to quantify);
2) Tailor its regulations to impose the
least burden on society, consistent with
obtaining regulatory objectives and
taking into account—among other things
and to the extent practicable—the costs
of cumulative regulations;
3) In choosing among alternative
regulatory approaches, select those
approaches that maximize net benefits
including potential economic,
environmental, public health and safety,
and other advantages; distributive
impacts; and equity);
4) To the extent feasible, specify
performance objectives, rather than the
behavior or manner of compliance a
regulated entity must adopt; and
5) Identify and assess available
alternatives to direct regulation,
including economic incentives—such as
user fees or marketable permits—to
encourage the desired behavior, or
provide information that enables the
public to make choices.
Executive Order 13563 also requires
an agency " to use the best available
techniques to quantify anticipated
present and future benefits and costs as
The Office of
Information and Regulatory Affairs of
OMB has emphasized that these
techniques may include " identifying
changing future compliance costs that
might result from technological
innovation or anticipated behavioral
accurately as possible."
changes."
We also have determined that this
regulatory action would not unduly
interfere with State, local, and tribal
governments in the exercise of their
governmental functions.
We have assessed the potential costs
and benefits of this regulatory action.
The potential costs associated with the
regulations are those resulting from
statutory requirements and those we
have determined as necessary for
administering these programs effectively
and efficiently. Elsewhere in this
section under the Paperwork Reduction
Act of 1995, we identify and explain
burdens specifically associated with
information collection requirements.
In assessing the potential costs and
benefits—both quantitative and
qualitative—of these final regulations,
we have determined that the benefits
would justify the costs.
Need for Regulatory Action
Executive Order 12866 emphasizes
that " Federal agencies should
promulgate only such regulations as are
required by law, are necessary to
interpret the law, or are made necessary
by compelling public need, such as
material failures of private markets to
protect or improve the health and safety
of the public, the environment, or the
well-being of the American people."
The Department' s goal in regulating is to
incorporate the provisions of the Act, as
amended by WIOA, into the
Department' s regulations governing the
VR program and Supported
Employment program in parts 361 and
363, respectively, as well as to clarify,
update, and improve these final
regulations. This final regulatory action
is also necessary to establish a new part
397 to implement specific provisions of
section 511 of the Act, as added by
WIOA, which fall under the purview of
the Secretary. Section 511 of the Act, in
general, places limitations on the use of
55729Federal Register / Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
subminimum wages for individuals
with disabilities.
Response to Comments on Reporting
Burden Estimates VR Services Portion
of the Unified or Combined State Plan
Time Estimated for Submission
Comments: One commenter stated
that the time estimated for compiling
the VR services portion of the Unified
or Combined State plan is not accurate,
given all the new requirements under
the Act, as amended by WIOA, for
collaboration with other entities,
providing training and technical
assistance to employers, providing pre-
employment transition services to
students with disabilities, changes to
CSPD requirements, and the new
requirements in section 511 of the Act.
Discussion: We appreciate the
concerns expressed by the commenter
regarding the estimated burden
associated with developing and
submitting the VR services portion of
the Unified or Combined State plan. The
estimated additional burden represents
the hours needed by a DSU to compile
and submit information as part of the
VR services portion of the Unified or
Combined State plan describing how the
DSU is implementing new VR program
requirements under WIOA, not the time
the DSU engages in the actual
implementation of the various activities
described in the plan. Consequently, we
believe the estimated burden is
accurate.
Changes: None.
Reports; Standards and Indicators
The Department received numerous
comments on the burden associated
with new data collection and reporting
requirements under this rule and the
joint rule implementing the
performance accountability system for
the core programs under section 116 of
WIOA. Most of these commenters stated
that we underestimated the costs of new
data collection and reporting
requirements in the Summary of
Potential Costs and Benefits section of
the Regulatory Impact Analysis for these
rules. In particular, commenters raised
concerns about estimates of the amount
of time needed for the collection of new
data and the quarterly reporting of
individual data on open and closed
service records, as well as the cost of
changes to State management
information systems.
Data Collection
Comments: In the NPRM, the
Department estimated that it would take
15 minutes per vocational rehabilitation
counselor to collect the new data
required under WIOA. Several
commenters stated that we
underestimated the burden for
collecting new data. One commenter
asserted that this estimate did not allow
adequate time for counselors to collect
the new data. Another commenter
suggested that a more accurate estimate
of the time required is 15 minutes per
open service record and not per
counselor. Several commenters
indicated the burden for data collection
should be based upon varying estimates
for the total amount of minutes to
collect this data, based on an individual
service record basis, including 15, 30,
60, and 120 minutes per service record.
Discussion: Upon further review, we
have determined that time per data
element provides a better estimate of the
additional burden associated with the
collection of new data required under
WIOA, including the requirements in
361. 40 of these final regulations. As a
result of this change in methodology the
estimated annual burden for the
collection of new data elements has
increased significantly from the estimate
in the NPRM. Specifically, we now
estimate the burden for the collection of
new data elements to be reported in the
Individual Service Report (RSA -911) at
one minute per data element.
Additional information on the
calculation of this burden estimate is
provided in the Summary of Potential
Costs and Benefits section of this
Regulatory Impact Analysis under the
subheading Reports; Standards and
Indicators.
Changes: The estimated burden
associated with the collection of new
data in the RSA -911 Service Report
discussed under the Summary of
Potential Costs and Benefits of this final
regulation (see Reports; Standards and
Indicators) is calculated based on an
average of one minute per data element.
Data Reporting
Comments: In the NPRM, the
Department estimated that it would take
an additional 50 hours per year per DSU
to submit the RSA -911 data file due to
the need to report all open service
record data quarterly rather than closed
service records annually. Several
commenters stated that we
underestimated the burden related to
the change in reporting for the RSA -
911, including our estimate of the
number of hours it currently takes to
prepare the current annual submission
of the RSA -911 report. One commenter
suggested that if it currently takes an
average of 50 hours to submit the RSA -
911 data file annually, it should take
200 hours to produce the four required
quarterly reports because the staff time
required to generate and verify the data
is the same as it is for an annual report.
However, another commenter stated that
it will take 150 hours per quarter for an
annual total of 600 hours to report RSA -
911 data. Still another commenter said
that due to the increase in complexity
of the RSA -911 reporting, it would be
appropriate to recalculate the quarterly
burden for submitting the RSA -911
report as 400 hours, instead of 50 hours.
One commenter claimed that its staff
spent approximately 1, 000 staff hours
preparing the current annual RSA -911
report.
Discussion: We disagree that the
hours needed to submit the RSA -911
file of data open records on a quarterly
basis will require at least four times as
many hours as the previous annual
submission of data on closed records.
DSUs spend an extensive amount of
time each year analyzing and revising
their closed record data prior to
reporting. However, under these
regulations, DSUs are expected to report
a quarterly " snapshot" of their open
case data, a process that will be much
less labor intensive for each submission.
States are expected to maintain accurate
and timely data in their case
management systems. These data should
be quickly and efficiently exported via
reporting software to generate the RSA -
911 report each quarter. However, we
recognize that States may incur some
additional burden in ensuring the
quality of the new data to be reported
and thus have increased the estimated
quarterly RSA -911 data submission
burden.
Changes: The estimated annual
burden for the submission of the RSA -
911 data file on a quarterly basis has
been increased from an average of 100
hours ( 25 hours per quarter), as
estimated in the NPRM, to 120 hours ( 30
hours per quarter) per DSU.
Changes to State DSU Information
Systems
Comments: Several commenters
stated that the Department
underestimated the burden associated
with updating and modifying agency
case management systems. One
commenter stated that its cost estimate
for making the required changes to the
agency' s case management system to
collect new data and report open service
record data on a quarterly basis vastly
exceeds the Department' s estimate of
31, 000. Another commenter noted that
the burden estimates omit any mention
of the costs to train staff and monitor
data quality during implementation, and
to build or change data collection
instruments and processes that may be
needed to collect information directly
from participants post -exit. Three
55730 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
commenters specifically provided cost
estimates for modifying their
information systems to collect and
report the additional data required by
WIOA of $200, 000 to $ 500, 000,
1, 000, 000 to $ 2, 000, 000, and
6, 311, 040. One commenter indicated
there will be additional costs to update
the agency' s data collection software,
which includes interfacing with a
centralized data collection database at
the State level, as well as several State
and Federal databases. Three
commenters indicated that DSUs will
incur additional costs to modify,
develop and maintain information
technology systems to capture the
required data. Another commenter cited
costs for modifying systems to capture
new or modified data elements and
building automation to link vocational
rehabilitation service records to
Unemployment Insurance wage data for
the reporting of employment or
earnings.
Discussion: In response to the
comments regarding the burden
associated with the reporting of data in
accordance with final § 361. 40 and as a
result of further Departmental review,
we have increased the burden estimate
for modifying and maintaining agency
information systems to collect and
report the required new data. We
recognize that modifications to agency
case management systems necessitated
by the redesigned RSA -911 will vary
widely because agencies themselves
range in size, the sophistication of their
information technology systems, and
how the system is supported. We are
also aware that in addition to modifying
their systems, agencies will incur
increased labor and contractual costs to
maintain their systems. The Department
has taken these factors into
consideration in calculating burden
estimates for this final regulation and
the joint final regulations. Additional
information on the calculation of these
burden estimates is provided in the
Summary of Potential Costs and
Benefits section of this Regulatory
Impact Analysis under the subheading
Reports; Standards and Indicators.
Changes: The Department has
expanded its analysis and revised its
burden estimates associated with
modifying and maintaining agency
information systems under the
Summary of Potential Costs and
Benefits of these final regulations (see
subheading Reports; Standards and
Indicators) to reflect State variation.
Proration of Burden
Comments: None.
Discussion: DSUs will report data
required by section 101( a)( 10)( C) of the
Act, as amended by WIOA, under these
final regulations and by section 116 of
WIOA under the joint final regulations
through the RSA -911. To more
appropriately reflect the costs
attributable to these two rules, we have
prorated the burden based on an
analysis of all new WIOA data elements
to be reported through the RSA -911.
Using this methodology, the Department
estimates that approximately 64 percent
of the increase in burden is related to
these final regulations, while 36 percent
is related to the joint final regulations.
Changes: Estimates of the total
increase in burden for the collection and
reporting of new data are prorated to
reflect the 64 percent of burden
attributed to requirements under these
final regulations.
Summary of Potential Costs and
Benefits
The Secretary believes the changes
made by WIOA implemented through
these final regulations will improve the
programs covered in this final
regulatory action and will yield
substantial benefits in terms of program
management, efficiency, and
effectiveness. The Secretary believes
that the final regulations represent the
least burdensome way to implement the
amendments to the Act made by WIOA.
Due to the number of regulatory
changes, our analysis focuses solely on
new requirements imposed by WIOA,
organized in the following manner.
First, we discuss the potential costs and
benefits related to implementing
changes to the VR program under
section A that specifically relate to:
competitive integrated employment and
employment outcomes, pre-employment
transition services and transition
services, and additional VR program
provisions. Second, we discuss the
potential costs and benefits related to
implementing changes to the Supported
Employment program under section B.
Finally, we discuss the costs and
benefits pertaining to implementing
requirements of section 511 of the Act
that fall under the purview of the
Department under section C.
Where possible, the Department
derived estimates by comparing the
costs and benefits incurred under
existing program regulations against the
benefits and costs associated with
implementing requirements contained
in these final regulations. The
Department also made an effort, when
feasible, to quantify and monetize the
benefits and costs of the final
regulations. When unable to quantify
benefits and costs— for example, due to
data limitations—we describe them
qualitatively. In accordance with the
regulatory analysis guidance contained
in OMB Circular A-4 and consistent
with the Department' s practices in
previous rulemakings, this regulatory
analysis focuses on the likely
consequences (benefits and costs that
accrue to individuals with disabilities)
of these final regulations. In this
analysis, the Department also considers
the transfer of benefits from one group
to another that do not affect total
resources available to the VR program
and Supported Employment program.
However, in a number of instances, the
Department is unable to quantify these
transfers due to limitations of the data
it currently collects.
This Regulatory Impact Analysis
presents the Department' s estimate of
the additional labor and other costs and
benefits associated with the
implementation of the provisions in
these final regulations. In estimating
DSU labor costs for this analysis, we use
Bureau of Labor Statistics (BLS) data on
mean hourly wage rate for State
employees, as well as data on employer
compensation costs to calculate loaded
wage factors. 12 Loaded wage factors
account for non -wage factors such as
health and retirement benefits. We then
multiplied the loaded wage factor by
each occupational category' s wage rate
to calculate an hourly compensation
rate used throughout this analysis to
estimate the labor costs for each
provision. For DSU personnel, we used
a loaded wage factor of 1. 57, which
represents the ratio of average total
compensation to average wages. 3
For Federal employees we use wage
rates from the Office of Personnel
Bureau of Labor Statistics. ( 2014- 2015). May
2014-2015 national industry -specific occupational
employment and wage estimates: NAICS 999200—
State government, excluding schools and hospitals
OES designation). Retrieved from: http://
www.bls.gov/oes/current/naics4 999200.htm.
2Bureau of Labor Statistics. ( 2016). 2015). 2014
Employer Costs for Employee Compensation.
Retrieved from: http:// www.bls.gov/schedule/
archives/ ececnr.htm.
The Department calculated this value using data
from Table 3. " Employer Costs per Hour Worked for
Employee Compensation and Costs as a Percent of
Total Compensation: State and Local Government
Workers, by Major Occupational and Industry
Group." Wages and salaries for all workers. Average
Series ID CMU3020000000000D,
CMU3020000000000P. To calculate the average
wage and salary in 2014- 2015 of $21, 2228. 41, we
averaged the wage and salaries for all workers
provided in March, June, September, and December
releases.
3 The State and local loaded wage factor was
applied to all non -Federal employees. Discerning
the number of State and local -sector employees and
private -sector employees at the local level is
difficult; therefore, the Departments used the State
and local -sector loaded wage factor ( 1. 5657) instead
of the private -sector wage factor (1. 43) for all non -
Federal employees to avoid underestimating the
costs.
55731Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
Management' s ( OPM) Salary Table for
the 2015 General Schedule for Federal
employees. 4 For Federal employees, we
used a loaded wage factor of 1. 63 based
on internal data from DOL.
A. Vocational Rehabilitation Program
Competitive Integrated Employment and
Employment Outcomes
The Act, as amended by WIOA,
emphasizes the achievement of
competitive integrated employment by
individuals with disabilities, including
those with the most significant
disabilities. Congress added a new term
and accompanying definition to the
Act—" competitive integrated
employment," which represents, in
general, a consolidation of two existing
regulatory terms and their definitions—
competitive employment" and
integrated setting." In implementing
the new term and its definition in these
final regulations, we replaced the
existing regulatory term and definition
of " competitive employment" with the
new term " competitive integrated
employment," by mirroring the statute
and incorporating relevant critical
criteria from the existing regulatory
definition of " integrated setting."
Because this change is more technical
than substantive, and given that the
substance of the definition already
existed in two separate definitions, we
believe this particular change will have
no significant impact on the VR
program, thereby resulting in no added
cost burden to DSUs.
In addition to implementing the new
term and definition of " competitive
integrated employment" in these final
regulations, we also have revised the
regulatory definition of " employment
outcome." While the Act, as amended
by WIOA, made only technical changes
to the statutory definition of
employment outcome," the Secretary
believes a regulatory change is
necessary in light of other amendments
made by WIOA throughout the Act that
emphasize the achievement of
competitive integrated employment
under the VR program and Supported
Employment program. Consequently,
the Secretary defines " employment
outcome" in these final regulations as
an outcome in competitive integrated
employment or supported employment,
thereby eliminating uncompensated
employment (e.g., homemakers and
unpaid family workers), which had been
4 The wage rate for Federal employees is based on
Step 5 of the General Schedule ( Source: OPM,
2014- 2015, " Salary Table for the 2014- 2015
General Schedule"). Retrieved from: https://
www.opm.gov/policy-data-oversight/ pay-leave/
salaries-wages/ salary-tables/pdf/2014/ GS h.pdf.
permitted to date as a matter of the
Secretary' s discretion, from the scope of
employment outcomes for purposes of
the VR program. The Secretary believes
the regulatory definition of
employment outcome" in final
361. 5( c)( 15) is consistent with all
amendments to the Act made by WIOA,
from the purpose of the Act to the
addition of section 511. With the change
to the definition of "employment
outcome," individuals with disabilities
requiring homemaker or other unpaid
family worker services will need to
obtain those services, more
appropriately, from independent living
and other programs serving individuals
with disabilities, not the VR program.
It is difficult to quantify the extent to
which the change to the definition of
employment outcome" in these final
regulations, which has the effect of
eliminating homemakers and unpaid
family workers from its scope, will
affect VR program costs nationally due
to a number of highly variable factors.
For example, it is not known whether
individuals who previously had
achieved homemaker outcomes or
would seek such outcomes will choose
to pursue competitive integrated
employment through the VR program in
the future, or seek services from other
resources, such as those available from
independent living, aging, or other
programs serving individuals with
disabilities. Based on data reported by
DSUs through the RSA -911 for the
period beginning in fiscal year (FY)
1980 and ending in FY 2015, the
percentage of individuals exiting the VR
program as homemakers nationally
declined significantly from 15 percent
of all individuals achieving an
employment outcome in FY 1980 to 1. 7
percent in FY 2015 ( representing 3, 257
of the 186, 209 total employment
outcomes that year). While the national
percentage of homemaker outcomes
compared to all employment outcomes
is small, some DSUs have a greater
percentage of homemaker outcomes
than others, particularly those serving
only individuals who are blind and
visually impaired. In FY 2015, the 24
DSUs that only provided services to
individuals who are blind and visually
impaired reported that 885 of the 6, 442
employment outcomes in that year, or
about 13. 7 percent, were homemaker
outcomes. DSUs that serve individuals
with disabilities other than those with
blindness and visual impairments
reported 480 homemaker outcomes in
that year, or 0. 5 percent of the 96,404
employment outcomes. In addition, the
32 DSUs that serve individuals with all
disabilities reported 1, 892 homemaker
outcomes in FY 2015, representing 2. 3
percent of their total 83, 362
employment outcomes.
The average cost per employment
outcome, including the average cost per
homemaker outcome, can be calculated
based on data reported by DSUs in the
RSA -911 on the cost of purchased
services for individuals exiting the VR
program with an employment outcome.
In FY 2015, the average cost per
homemaker outcome for the VR program
was $ 6, 574, while the comparable
average cost per employment outcome
for all individuals exiting the VR
program with an employment outcome
that year was $ 5, 627. It is possible that
this higher average cost is because
individuals obtaining a homemaker
outcome generally require more
intensive services or costly equipment
because the nature or severity of their
disabilities have prevented them from
pursuing competitive integrated
employment. However, there may be
other factors that increase the average
cost of these outcomes. For example, it
may be that some of these individuals
originally had a goal of competitive
employment, but after receiving services
for an intensive or long period of time
without obtaining such an outcome,
they may have chosen to change their
goal. Further analysis is needed to
identify the factors that contribute to the
average higher cost of homemaker
closures.
Given current information reported to
the Department by DSUs, we are not
able to predict how many individuals
who would have possibly had a
homemaker outcome might now choose
to seek competitive integrated
employment. However, for the purpose
of providing a gross estimate of these
costs, we assume that approximately
one-fourth (814) of the number of
individuals who exited the VR program
with a homemaker outcome will choose
a goal of competitive integrated
employment and continue to seek
services through the VR program. We
also assume that obtaining competitive
integrated employment for these
individuals may be more expensive than
the current cost for obtaining a
homemaker outcome, but also assume it
is unlikely that the average costs for
providing services to these individuals
would exceed more than 150 percent of
their current costs ( or approximately
175 percent of the average cost per
employment outcome for all agencies in
FY 2015). As such, we estimate that the
additional cost to DSUs to provide VR
services to those individuals who
previously would have exited the
program with homemaker outcomes will
not exceed $ 3, 287 per outcome, or about
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2, 675, 618 per year for all DSUs.
Alternatively, assuming that about 75
percent of the number of individuals
who would have otherwise attained a
homemaker outcome will no longer seek
services from DSUs ( 2, 443), at an
average cost of $6, 574, there will be a
savings of $16, 060, 282 to the VR
program. Based on these assumptions,
we estimate an overall net savings to the
VR program of approximately
13, 384,664.
We recognize that the change in the
definition of " employment outcome"
could potentially increase the demand
for services from independent living
and other programs, such as the
Independent Living Services for Older
Individuals Who Are Blind (OIB)
program and other programs for aging
individuals or persons with disabilities,
that can provide services similar to
those that such individuals would have
previously sought from the VR program.
We also recognize that meeting this
potential increase in demand may result
in a cost transfer to other Federal, State,
and local programs. However, without
additional information, such as the
likelihood of how many consumers
would access which programs, we
cannot provide sound quantifiable
estimates of potential cost transfers at
this time.
For illustrative purposes we provide a
quantitative description of the potential
cost transfer to the OIB program
resulting from the change in the
definition of " employment outcome" in
these final regulations. RSA -911 data
show that 75. 6 percent of individuals
with a homemaker outcome in FY 2015
were individuals with blindness and
visual impairments. In addition, 49
percent (1, 208) of such individuals with
a homemaker outcome were age 55 or
older at application. We expect many of
the individuals in the upper age range
of this subgroup will be referred to and
receive services through the OIB
program. However, considering the
differences in the focus of the VR and
OIB programs and that a number of
individuals with homemaker outcomes
may have received employment-related
services for a long period of time
without obtaining a competitive
integrated employment outcome, we
expect the average cost per individual
served for this population under the OIB
program will be significantly lower than
the average cost under the VR program.
Assuming 75 percent of such
individuals were to receive services
from the OIB program at an average
annual cost of $1, 500 per individual, the
annual cost transfer would be
approximately $1. 4 million. To assist
States in meeting the increased demand
for OIB services, including assistance in
reducing the impact of the change in the
definition of " employment outcome" in
these final regulations for those States
that have typically reported higher
numbers of homemaker outcomes, the
Administration' s FY 2017 Budget
Request includes a $ 2 million increase
for the OIB program.
Pre -Employment Transition Services
and Transition Services
The Act, as amended by WIOA, places
heightened emphasis on the provision
of pre-employment transition services
and other transition services to students
and youth with disabilities, as
applicable. As a result, the Secretary
makes numerous amendments in these
final VR program regulations to
implement new statutory requirements.
A few of those changes are relevant to
this discussion.
Final § 361. 65( a)( 3) requires DSUs to
reserve at least 15 percent of the State' s
VR allotment for the provision of pre-
employment transition services to
students with disabilities who are
eligible or potentially eligible for
vocational rehabilitation services. Based
on a total of $3. 024 billion in VR grant
funds awarded to States from FY 2015
appropriations, the total amount of
funds required to be reserved for pre-
employment transition services is
453. 6 million. Overall, this reservation
of funds will decrease the amounts
available to support other authorized
activities that State agencies provide
through the VR program and result in a
transfer of benefits from the VR eligible
individuals a State agency may have
historically served to students with
disabilities in need of pre-employment
transition services. Additionally, under
final § 361. 65( a)( 3)( ii)(B), States may not
include administrative costs associated
with the provision of pre-employment
transition services in the calculation or
use of that reserved amount. We are
unable to estimate the potential increase
in DSU administrative costs that may
arise from implementation of new
section 113 of the Act or the required
reservation of funds at this time.
However, to implement these
requirements, DSUs will need to
dedicate resources to: ( 1) Ensure that the
15 percent minimum is reserved from
the State' s VR program allotment; (2)
track the provision of pre-employment
transition services to ensure the
reserved funds were spent solely on
allowable services specified in section
113 of the Act, as added by WIOA, and
its implementing regulation in final
361. 48( a) and not on administrative
costs; and ( 3) provide for administrative
costs related to pre-employment
transition services with non -reserved
VR program funds.
Second, section 113 of the Act, as
added by WIOA, requires DSUs to
provide pre-employment transition
services to students with disabilities
who are eligible or potentially eligible
for vocational rehabilitation services. In
final § 361. 48( a), " potentially eligible"
means all students with disabilities who
satisfy the definition in final
361. 5( c)( 51), regardless of whether
they have applied, and been determined
eligible, for the VR program. The
Secretary believes this interpretation is
consistent with congressional intent and
the stated desires of some DSUs and
other stakeholders expressed through
comments.
Although pre-employment transition
services are a new category of services
identified in the Act, many of these
services historically were provided
under the broader category of transition
services. Therefore, the provision of
these services is not new to DSUs.
However, until the enactment of WIOA,
all such services were provided only to
those students with disabilities who had
been determined eligible for the VR
program. Consequently, providing pre-
employment transition services to all
students with disabilities under final
361. 48( a) will likely increase staff time
and resources spent on the provision of
these services.
We are unable to provide a
quantitative estimate of the impact of
this requirement on DSUs at this time
because we do not currently have data
on the number of students with
disabilities that will he referred for such
services or adequate data on the cost of
providing pre-employment transition
services. In the future, information
provided by the State in the VR services
portion of the Unified or Combined
State plan and RSA data collections,
such as the revised RSA -911, should
assist the Department in assessing the
impact of the pre-employment transition
service requirements.
In general, the extent of the impact of
the reservation on a particular State will
likely depend on the extent to which it
has been providing transition services
that are now specified under section 113
as pre-employment transition services to
students with disabilities. DSUs that
have provided extensive transition
services to students with disabilities,
including services that would meet the
definition of pre-employment transition
services, are likely to see less transfer of
benefits among individuals served. For
State agencies that have not provided
these services or have only provided
these services to a small extent, there
may be more extensive transfers of
55733Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
services and benefits of the VR program
among individuals (i.e., to students with
disabilities and away from other
individuals who otherwise would have
been served). We are extremely limited
in our ability to estimate the annual
amount that State agencies have spent
in providing similar services to eligible
individuals prior to the implementation
of section 113 of the Act that would
have met the definition of a student
with a disability because we do not
collect the necessary annual data under
the currently approved RSA -911 report.
Under the current RSA -911, DSUs
report individual level data in the year
in which the service record is closed
and the information reported on
services and service costs are
cumulative over the duration of the
service record. In addition, while DSUs
may directly provide many of the pre-
employment transition services with VR
staff, only the cost of services purchased
by the agency on behalf of an individual
are reported under the current RSA -
911. Further, the pre-employment
transition services that States are
required to provide to students with
disabilities are not specifically reported
in the service categories of the currently
approved RSA -911.
However, for illustrative purposes, FY
2015 data on closed service records
reported in the RSA -911 ( the most
recent year for which full data are
available) for youth who were between
the ages of 16 and 21 at the time of
application do provide some limited
insight into the amount spent on
purchased services for the service
categories that DSUs would have most
likely reported the receipt of services
similar to pre-employment transition
services. Although, the reservation
requirement went into effect in FY 2015,
we believe that it is still an appropriate
base year since youth whose service
records were closed in that year were
not likely to have been affected by the
new requirement.
DSUs reported service record closures
in the FY 2015 RSA -911 for 98,454
youth who were between the ages of 16
and 21 at application and total purchase
service costs of about $ 526. 5 million
including about $ 11. 6 million in title
VI Supported Employment funds) for
such youth. Because reporting is limited
to closed cases, we are unable to
determine the amount of the purchased
services actually expended in FY 2015.
However, at least 85 percent of these
purchases were for categories of service
that would not include pre-employment
transition services as defined in final
361. 5( c)( 42) ( e.g., postsecondary
education, assessment, diagnosis and
treatment, and on-the-job supports).
Similarly, for the subset of youth whose
service records were closed in FY 2015
that were in secondary education and
had an IEP or were receiving services
under section 504 at the time of
application to the VR program ( 53, 734
students), about 82 percent of the $ 245
million in reported purchased services
for this group were for categories of
service that would not meet the
statutory definition of pre-employment
transition services.
While it is important to note that RSA
data show significant variation in the
number and amount of funds spent for
this age group among State agencies,
available information indicates that
many State agencies will experience
challenges in meeting the new
reservation requirement and will need
to develop and implement aggressive
strategies in order to expend these funds
in the initial years of implementation.
Further, we recognize that the FY
2015 data include only those students
with disabilities who had applied and
been determined eligible for VR services
and that under these final regulations
DSUs will provide pre-employment
transition services to students with
disabilities who may not have applied
or been determined eligible for the VR
program. These final regulations also
clarify that, in addition to secondary
education, the term " students with
disabilities" includes students in
postsecondary or other recognized
education programs that meet the age
and other requirements contained in
final § 361. 5( c)( 51).
Therefore, we anticipate that many
DSUs will need to serve a larger number
of students with disabilities in order to
expend the reserved funds than they
had prior to the passage of WIOA,
thereby increasing the potential total
value of the benefits transferred as a
result of final § 361. 48( a).
Fiscal reports submitted by DSUs
appear to confirm the early challenges
DSUs are having in spending these
funds. FY 2015 fourth quarter Federal
Financial (SF -425) reports document
that in total, DSUs expended 33. 6
percent of the $453. 6 million that were
required to be reserved for pre-
employment transition services based
on final FY 2015 State VR grant awards.
Provided that States matched their
Federal VR grant funds, the remaining
amount of the required reservation
would have been carried over for
obligation and liquidation in FY 2016.
Despite these challenges, we are
optimistic that as States implement the
strategies described in the VR services
portion of their Unified or Combined
State plans to address the needs of
students with disabilities for pre-
employment transition services
consistent with § 361. 29 ( a)(4) ( e.g.,
working with employers to provide
opportunities for work -based learning
experiences ( including internships,
short-term employment,
apprenticeships, and fellowships), as
required under final § 361. 32( b), and
coordinating with schools to ensure the
provision of pre-employment transition
services for students with disabilities as
required under final § 361. 48( a)( 4)), they
will adopt policies and practices that
enable them to effectively spend the
funds reserved for this purpose to
improve employment outcomes for
students with disabilities.
Third, section 103( b)( 7) of the Act, as
added by WIOA, and in its
implementing regulation in final
361. 49( a)( 7) permit DSUs to provide
transition services to groups of youth
and students with disabilities regardless
of whether they have applied, and been
determined eligible, for the VR program.
Such services to groups were not
permitted prior to the passage of WIOA.
The regulation benefits DSUs in two
significant ways by: (1) Giving them the
ability to serve groups of youth and
students with disabilities
simultaneously, who may need only
basic generalized services (i.e., group
tours of universities and vocational
training programs, employer or business
site visits to learn about career
opportunities, career fairs coordinated
with workforce development and
employers to facilitate mock interviews
and resume writing, and other general
services), thereby reducing the amount
of funds expended per individual; and
2) reducing administrative burden on
the DSUs, as well as the burden on
students or youth with disabilities and
their families, by not having to engage
in processes for determining eligibility,
conducting assessments, and developing
individualized plans for employment.
However, we are unable to quantify the
impact of this regulatory provision due
to the variability in the number of
individuals who may seek out these
services nationally, the degree to which
individuals will require these services
within each State, and the services that
will be provided in each State.
Additional Vocational Rehabilitation
Program Provisions VR Services Portion
of the Unified or Combined State Plan
Section 101( a)( 1) of the Act, as
amended by WIOA, requires the VR
State plan, which has been a stand-
alone State plan, to be submitted as a
VR services portion of a Unified or
Combined State plan for all six core
programs of the workforce development
system, including the VR program.
55734 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
Requirements related to the submission
of Unified or Combined State plans take
effect in July 2016. Discussion of the
burden associated with new Unified or
Combined State plan requirements
affecting all core programs, including
the VR program, will be addressed in
the Regulatory Impact Analysis for the
joint final regulations published
elsewhere in this issue of the Federal
Register. This Regulatory Impact
Analysis focuses solely on the impact of
new requirements affecting the VR
services portion of the Unified or
Combined State plan and not any plan
requirement that affects all core
programs.
In preparing for the transition to the
submission of Unified or Combined
State plans every four years, with
modifications submitted every two years
of the four-year plan, the final
regulations no longer require DSUs to
submit particular reports and updates
annually, but, rather, at such time and
in such manner as determined by the
Secretary as required in final § 361. 29.
This flexibility allows for VR program -
specific reporting to be done in a
manner consistent with those for the
Unified or Combined State plan under
section 102 or 103 of WIOA, thus
avoiding additional burden or costs to
DSUs through the submission of
separate reports annually or whenever
updates are made.
Section 101( a) of the Act, as amended
by WIOA, requires DSUs to include
additional descriptive information in
the VR services portion of the Unified
or Combined State plan. Therefore, final
361. 29 requires DSUs to describe in
the VR services portion of the Unified
or Combined State plan: (1) The results
of the comprehensive statewide needs
assessment with respect to the needs of
students and youth with disabilities for
pre-employment transition services and
other transition services, as appropriate;
2) goals and priorities to address these
needs; and (3) strategies for the
achievement of these goals. Final
361. 24( c) also requires that the VR
services portion of the Unified or
Combined State plan include a
description of how the DSU will work
with employers to identify competitive
integrated employment and career
exploration opportunities, in order to
facilitate the provision of VR services,
including pre-employment transition
services and transition services for
youth and students with disabilities, as
applicable. Final § 361. 24( g) further
requires that the VR services portion of
the Unified or Combined State plan
contain a description of collaboration
with the State agency responsible for
administering the State Medicaid plan
under title XIX of the Social Security
Act, the State agency responsible for
providing services for individuals with
developmental disabilities, and the
State agency responsible for providing
mental health services, to develop
opportunities for community-based
employment in integrated settings, to
the greatest extent practicable. As a
result, DSUs will be required to expend
additional effort in the development of
these descriptions in the VR services
portion of the Unified or Combined
State plan beyond the 25 hours
previously estimated for the
development and submission of the
entire stand-alone VR State plan, now
the VR services portion of the Unified
or Combined State plan. We estimate
that DSUs will require an additional five
hours for the development of these
descriptions, for a total of 30 hours ( 25
hours previous burden plus 5 hours new
additional burden) per DSU, or 2, 400
hours for all 80 DSUs. The average
hourly compensation rate of $54. 21—
based on data obtained from the Bureau
of Labor Statistics for State social and
community service managers ( e.g., field
services manager or other program
manager responsible for development of
the VR services portion of the Unified
or Combined State plan) and the loaded
wage factor—is more consistent with
State rates of pay than the $ 22. 00 per
hour wage rate used to calculate costs
from the most recent State plan
information collection extension. At an
hourly compensation rate of $54. 21,
each DSU would expend $ 271 in
additional costs for the five hours
needed to develop the new descriptions
required for the VR services portion of
the Unified or Combined State plan,
resulting in a total of $21, 684 and 400
additional hours for all 80 DSUs.
Despite the additional costs incurred by
all 80 DSUs in the development and
submission of the State plan, we believe
that the additional burden is more
accurate and outweighed by the benefit
to the public through a more
comprehensive understanding of the
activities DSUs engage in to assist
individuals with disabilities to obtain
the skills necessary to achieve
competitive integrated employment in
job -driven careers.
Order of Selection
Final § 361. 36( a)( 3)( v) implements
section 101( a)( 5) of the Act, as amended
by WIOA, by permitting DSUs, at their
discretion, to serve eligible individuals
who require specific services or
equipment to maintain employment,
regardless of whether they are receiving
VR services under an order of selection.
DSUs implementing an order of
selection are not required to use this
authority; rather, they may choose to do
so based on agency policy, or the
availability of financial and staff
resources. Under final § 361. 36( a)( 3)( v),
DSUs implementing an order of
selection must state in the VR services
portion of the Unified or Combined
State plan that they have elected to
exercise this discretion, thereby
signaling a decision to serve eligible
individuals who otherwise might have
been placed on a waiting list under the
State' s order of selection, and who are
at risk of losing their employment. This
change will increase flexibility for a
State managing its resources. While a
State that elects to implement this
authority could prevent an individual
from losing employment by avoiding a
delay in services, DSUs doing so would
potentially need to reallocate resources
to cover expenditures for services or
equipment for individuals who meet the
qualifications of this provision and fall
outside an open priority category of the
DSU' s order of selection.
For FY 2015, the VR State plans of 35
of the 80 DSUs (44 percent) documented
that the agency had established an order
of selection, one agency more than in
FY 2014. This total includes two of the
24 DSUs serving only individuals who
are blind and visually impaired and 33
of the 56 other DSUs. Based on data
reported through the RSA -911 in FY
2015, nationwide, 20. 4 percent of the
individuals whose service records were
closed and who received services were
employed at application, with an
average cost of purchased services of
4, 617. In addition, according to data
reported through the VR program
Cumulative Caseload (RSA -113) report,
30, 311 individuals nationwide were on
a waiting list for VR services at the
beginning of FY 2015 due to the
implementation of an order of selection.
Assuming that 20. 4 percent of the
30, 311 individuals on the waiting list
could potentially benefit from the
provision of services and equipment to
maintain employment (which assumes
individuals on a waiting list are just as
likely to be employed at the time of
application as individuals whose
records were closed and received
services), a possible 6, 183 individuals
could benefit from this regulatory
change, for a total cost of $28, 546, 911
across all 80 DSUs. This figure
represents the potential reallocation of
resources to cover the cost of services
for individuals who, prior to enactment
of WIOA, may not have received them,
and away from eligible individuals who
would have received services based on
a DSU' s order of selection policy.
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However, the implementation of an
order of selection by a DSU may differ
from year to year, as well as within a
given fiscal year. In fact, not all DSUs
that indicate they have established order
of selections as part of their State plans
actually implement those orders or
report that they had individuals on
waiting lists during the year. For
example, 63 percent of such agencies
22 of 35) reported that they had
individuals on a waiting list in FY 2015.
In addition, we are unable to predict
which DSUs that have implemented an
order of selection will choose this
option. The degree to which individuals
will be referred for this service could
vary widely among DSUs, as could the
level of services or equipment that an
individual may need to maintain
employment.
Reports; Standards and Indicators
Final § 361. 40 implements changes to
reporting requirements in section 116( b)
in title I of WIOA and section 101( a)( 10)
of the Act, as amended by WIOA. Final
361. 40 does not list the actual data to
be reported, rather, it requires the
collection and reporting of the
information specified in sections 13, 14,
and 101( a)( 10) of the Act. New
requirements under section 101( a)( 10)
include the reporting of data on the
number of: Individuals with open
service records and the types of services
these individuals are receiving
including supported employment
services); students with disabilities
receiving pre-employment transition
services; and individuals referred to the
State VR program by one-stop operators
and individuals referred to such one-
stop operators by DSUs. The RSA -911
is revised as described in the
information collection published for a
30 -day public comment period at FR
Document 2016-09713 consistent with
the requirements in final § 361. 40.
Final § 361. 40 also requires States to
report the data necessary to assess DSU
performance on the standards and
indicators subject to the performance
accountability provisions described in
section 116 of WIOA. The common
performance accountability measures
apply to all core programs of the
workforce development system,
including the VR program, and are
implemented in part 677 of the joint
regulations and set forth in subpart E of
part 361. The impact and analysis of the
joint regulations governing the common
performance accountability system are
addressed in the regulatory action for
the joint regulations published
elsewhere in this issue of the Federal
Register.
In response to the comments
regarding the burden associated with
the collection of data under final
361. 40, described in the Comments
section of this Regulatory Impact
Analysis, and as a result of further
Departmental review, we have adjusted
the burden estimates as described here.
We have increased the estimated
burden for the collection of the new
data required by section 101( a)( 10),
including data required to assess State
agency performance under section 106
of the Act by recalculating the estimates
using the time DSUs will spend
collecting these additional data
elements. We estimate that on average it
will take DSU staff one minute per data
element to collect the new required
data.
For the first year of data collection,
DSUs will incur greater data collection
burden than in subsequent years. As
required by statute, the WIOA
performance accountability system goes
into effect July 1, 2016. All participants
who are still receiving services (have
not exited) by the start of program year
PY) 2016 become WIOA participants
and will be counted and tracked in
accordance with the WIOA performance
requirements set forth in section 116 of
WIOA. The final RSA -911 Information
Collection Request (ICR) will include
new and/ or revised data elements and
definitions as necessary to provide
alignment with the WIOA Participant
Individual Record Layout (PIRL) and
comply with new requirements under
the Act as amended by WIOA.
In order to meet the requirements in
final § 361. 40, DSUs will need to collect
additional information for new
applicants and VR consumers as well as
current eligible individuals who, as of
the effective date of section 116 of title
I (July 1, 2016), met the definition of
participant," as that term is defined
under the joint final regulations
implementing the jointly administered
performance accountability system
requirements of section 116 of title I of
WIOA published elsewhere in this issue
of the Federal Register.
DSUs are at varying stages of revising
their case management systems
consistent with the new joint data
specifications described in the PIRL and
the new elements required under title I
of the Act as proposed in the ICR,
published in the Federal Register on
April 27, 2016 ( 81 FR 24888).
Based on data reported by DSUs
through the Quarterly Caseload Report
RSA 113) for FYs 2014 and 2015, we
estimate that in the first year of data
collection DSUs will in total incur a
minimum of about 800, 000 hours of
additional burden to collect new data
for VR consumers (an average of 10,000
to 11, 250 per DSU), including
participants and reportable individuals
in the VR system at the beginning of FY
2016, individuals who will be
determined eligible during the first year
of data collection, students with
disabilities who are receiving pre-
employment transition services and data
needed for subminimum wage
determinations under section 511 of the
Act.
Based on data reported through the
RSA -113 for FY 2015 and the
proportion of new VR -specific data
elements to all new data elements
required by WIOA (64 percent), we
estimate that DSUs will spend a total of
approximately 512, 000 hours collecting
the new VR -specific data elements, or
an average of 6, 400 hours per DSU in
the first year of data collection. We
further estimate that vocational
rehabilitation counselors will complete
50 percent of data collection activities
for new VR -specific data elements, and
that vocational rehabilitation
technicians or similar personnel will
complete the remaining 50 percent.
Using an hourly compensation rate of
36. 66 for vocational rehabilitation
counselors ( wage rate based on State -
employed rehabilitation counselors), the
estimated cost for 50 percent of the data
collection burden (256,000 hours) is
9, 384, 960. Using an hourly
compensation rate of $28. 29 for
vocational rehabilitation assistants or
equivalent positions (wage rate based on
State -employed social and human
service assistants 5 plus the loaded wage
factor), the estimated cost for the
remaining 50 percent of the data
collection burden is $ 7, 242, 240.
Consequently, we estimate that the total
additional cost for all 80 DSUs to collect
the new VR program -specific data
elements is $ 16, 627, 200, or an average
of $207, 840 per DSU for the initial year
of data collection.
For the second and subsequent years
of data collection under these final
regulations, we estimate that in total
DSUs will incur about 200, 000 hours of
additional burden per year under
WIOA. For new VR -specific data
elements, we estimate 128, 000 hours, or
an average of 1, 600 hours of additional
annual burden per DSU, in the second
and subsequent years of data collection.
Using the same strategy to calculate the
costs for the first year of data collection,
we estimate that the total additional
5Bureau of Labor Statistics. ( 2015) May2015
national industry -specific occupational
employment and wage estimates: NAICS 999200—
State government, excluding schools and hospitals
OES designation). Retrieved from: http://
www.bls.gov/ oes/ current/ oes211093.htm.
55736 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
annual cost for all 80 DSUs to collect
the new VR program -specific data
elements is $4,156, 800, or an average of
51, 960 per DSU for the second and
subsequent years of data collection. The
remaining portion of the burden for new
data collection attributed to the
performance accountability
requirements in section 116 of title I of
WIOA ($10,558,080 or $131,976 per
DSU) is included in the Regulatory
Impact Analysis for the final joint
regulations, published elsewhere in this
issue of the Federal Register.
As described in the discussion of
comments on this Regulatory Impact
Analysis, we estimate an average of 70
additional burden hours per year, or a
total of 120 hours per year ( 30 hours per
quarter), for each DSU to submit the
RSA -911 data file of open case service
records on a quarterly basis. As a result,
the estimated total number of hours
needed for the submission of the data
file for 80 agencies will increase from
4, 000 to 9, 600 hours, resulting in an
increase of 5, 600 hours. Using an
average hourly compensation rate of
57. 02 ( wages based on State -employed
database administrators), the estimated
additional cost for all 80 DSUs to submit
the RSA -911 data file of open service
records on a quarterly basis is $ 319, 312.
The estimated additional cost per DSU
is $ 3,991.
The total additional VR -specific
burden hours for both collection and
submission of required data will be
6,470 hours per DSU (6,400 data
collection hours and 70 data submission
hours), or a total of 517,600 hours for all
80 DSUs. The estimated total additional
VR program -specific cost for both
collection and submission per DSU is
211, 831, with a total additional burden
cost of $16, 946, 512 for all 80 DSUs.
DSUs will also incur additional costs
related to programming and
modifications of their case management
systems to collect and report new VR
program -specific data required under
section 101( a)( 10) of the Act. Additional
burden related to the programming of
case management systems as a result of
the redesigned RSA -911 will vary
widely because DSUs range in size and
the sophistication of their information
technology systems.
Upon further Departmental review
since the publication of the NPRM,
including the review of comments
summarized in the Comments section of
this Regulatory Impact Analysis, we
have adjusted the estimates associated
with the modification of DSU data
systems. The adjusted estimates are
based on: The apportionment of the data
elements in the RSA -911 necessitated
by the requirements of section 116 of
WIOA and section 101( a)( 10) of the Act,
as amended by WIOA; adjustments to
the wage rates for DSU personnel; and
updated information regarding the
variation in the level of effort required
by DSUs to modify and maintain their
data systems.
Although we estimate that each DSU
will require computer systems analysts
for this one-time task, the related
burden for changing a State' s case
management system has been broken
down to reflect the variation among the
80 DSUs with respect to their size and
updated information regarding the
number of DSUs that modify and
maintain their case management and
reporting systems and those that
contract for these services. Roughly 30
of the 80 DSUs use case management
and reporting systems purchased from
software providers who are responsible
for maintaining and updating the
software. We estimate these 30 DSUs
will require two computer systems
analysts to spend 150 hours integrating
the software changes into their own
State systems, resulting in 300 hours per
DSU, or a total of 9, 000 hours in
additional burden for all 30 DSUs. Of
the remaining 50 DSUs that do not have
agreements with a software provider to
maintain and update software, five of
these agencies are categorized as large
agencies ( more than 5, 000 employment
outcomes) and 45 of these agencies are
categorized as small to medium-sized
agencies ( less than 1, 000 employment
outcomes, and between 1, 000 and 5, 000
employment outcomes, respectively).
We estimate the five large agencies will
require five computer systems analysts
to spend 1, 000 hours each to maintain
and update agency software (for a total
of 5, 000 hours per agency), while the 45
small to medium-sized agencies will
require two staff members to spend
1, 000 hours each to maintain and
update the software (for a total of 2, 000
hours per agency) in order to make the
necessary software changes. As a result,
we estimate that the large agencies will
need a total of 25, 000 total hours and
the small to medium-size agencies will
need 90, 000 hours, for a total of 115, 000
hours for the 50 agencies to maintain
and update computer software.
Combining these estimates with the
9, 000 hours for the 30 agencies that we
believe will only have to integrate the
software changes their providers are
contracted to make, the total burden
estimate for all 80 agencies is 124, 000
hours. The VR program -specific burden
prorated at 64 percent of total burden)
is estimated at 79, 360 hours. We
estimate that the cost burden for all 80
agencies to maintain and update their
computer software based on a total of
79, 360 VR -specific hours and an hourly
compensation rate of $56. 17 for State -
employed computer systems analysts,
will be $4,457,651. The balance of the
burden in modifying agency data
systems associated with the common
data reporting requirements under title
I of WIOA (36 percent) is included in
the Regulatory Impact Analysis of the
joint final regulations published
elsewhere in this issue of the Federal
Register.
In addition to maintaining and
updating software, 48 agencies that
utilize vendor supplied case
management software will incur
additional software licensing or user
fees. Our discussions with case
management software vendors informed
our revised estimate of the average cost
of $700.00 per user annually for
software licensing or user fees, which
will include a 20 percent increase due
to new WIOA requirements, resulting in
140 of additional costs per user.
Information obtained in discussions
with case management software vendors
also resulted in an estimate of
approximately 6, 600 users in States
served by vendor systems. We estimate
an additional total software licensing or
user costs related to new WIOA
requirements of $924,000. After
adjusting this cost to reflect only the VR
program -specific burden (64 percent),
we estimate that the 48 States will incur
an additional $591, 360 in licensing or
user fees, or $ 12, 320 per agency.
Finally, the 80 DSUs will be required
to train vocational rehabilitation
counselors regarding the new data
reporting requirements. To estimate this
labor cost, we assume an average of 62
vocational rehabilitation counselors per
agency and 8 hours of training per
counselor. Using an hourly
compensation rate of $36. 66 per
vocational rehabilitation counselor, the
estimated labor costs for vocational
rehabilitation counselors to receive
training on collecting the new data is
1, 454,669 for all 80 agencies, or
18, 183 per agency. We estimate that
development of the training materials
and methodologies will require 1 staff
trainer 8 hours per agency. Using the
social and community service manager
hourly compensation rate ($ 54. 21) as a
proxy for the staff trainer, the total cost
for development of the training is
34,694, or $434 per agency. The total
cost for development of the training and
vocational rehabilitation counselor
participation in the training is
1, 489, 363. Since we are estimating that
approximately 64 percent of the burden
related to performance accountability is
VR -specific burden, the estimated cost
55737Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
will be $ 953, 192 for all 80 agencies, or
11, 915 per agency.
Including all of the associated costs
with the maintenance and updating of
software ($4,457,651), licensing fees
591, 360), and agency staff training
953, 192), the estimated aggregate VR
program -specific burden for all 80
agencies is $ 6, 002, 203, which does not
include the additional initial year
combined RSA -911 data collection and
submission burden of $16, 946, 512
because that burden estimate was
described separately above.
At the Federal level, RSA will
develop its performance accountability
and data analysis capacity using new
staff positions. We estimate that it will
take two full-time data management
specialist positions, one at a GS -13 Step
5 and one at a GS -14 Step 5, to
complete the necessary database
programming requirements. With an
hourly compensation rate of $64. 71 for
the GS -13 position and $76.48 for the
GS -14 position, the total cost for
software development is $ 293, 675.
Since we are estimating that
approximately 64 percent of the burden
related to performance accountability is
VR -specific burden, the estimated cost
will be $ 187, 952.
We believe that these data collection
and reporting costs are outweighed by
the benefits to the VR program because
the new information to be reported and
having access to more timely
information on individuals currently
participating in the VR program will
better enable the Department and its
Federal partners to assess the
performance of the program and
monitor the implementation of WIOA,
particularly as it relates to key policy
changes, such as the provision of pre-
employment transition services and the
integration of the VR program in the
workforce development system.
Extended Evaluation
Final §§ 361. 41 and 361. 42 remove
requirements related to extended
evaluation because the Act, as amended
by WIOA, no longer includes references
to such evaluations. Instead, a DSU
must use trial work experiences when
conducting an exploration of an
individual with a significant disability' s
abilities, capabilities, and capacity to
perform in work situations. These
revisions streamline the eligibility
determination process for all applicants
whose ability to benefit from VR
services is in question.
VR program data collected by the
Department do not distinguish between
individuals who had a trial work
experience and those that had an
extended evaluation. However, RSA -
911 data show that 4, 924 individuals
exited from the VR program during or
after trial work experiences or extended
evaluations in FY 2015. DSUs expended
a total of $4, 126, 785 on the provision of
services to these individuals for an
average cost of $838 per individual.
Because we are unable to estimate how
many of the 4, 924 individuals were in
extended evaluation, as opposed to trial
work experiences, we cannot quantify
either the current costs or the potential
change in costs for this specific group of
individuals. Based on the monitoring of
DSUs, we note that the use of these
services varies among DSUs, mainly due
to variations in opportunities for
individuals to participate in trial work
experiences, and the extent to which
DSUs historically utilized extended
evaluation. We believe that the benefits
of streamlining the eligibility
determination process for applicants
whose ability to benefit from VR
services is in question and ensuring that
ineligibility determinations are based on
a full assessment of the capacity of an
applicant to perform in realistic work
settings outweighs the costs of removing
the limited exception to trial work
experiences.
Time Frame for Completing the
Individualized Plan for Employment
Final § 361. 45 implements section
102(b) of the Act, as amended by WIOA,
by requiring DSUs to develop
individualized plans for employment as
soon as possible, but not later than 90
days after the date of determination of
eligibility, unless the DSU and the
eligible individual agree to the
extension of that deadline to a specific
date by which the individualized plan
for employment must be completed.
Due to variations in current DSU
timelines for the development of the
individualized plan for employment,
the establishment of a 90 -day timeframe
by WIOA will ensure consistency across
the VR program nationally and the
timely delivery of services, thereby
improving DSU performance and the
achievement of successful employment
outcomes by individuals with
disabilities.
We are unable to quantify potential
additional costs to DSUs to develop
individualized plans for employment
within 90 days of an eligibility
determination due to the variance in
timelines currently in place. It is likely
that DSUs that have had prolonged
timelines beyond 90 days prior to the
enactment of WIOA could experience a
change in annual expenditure patterns.
For example, if larger numbers of
individuals, with approved
individualized plans for employment,
begin to receive VR services at an earlier
time than had historically been the case,
an agency will expend its funds at a
faster rate. However, while the overall
cost per individual served is not likely
to be affected by this provision, the
average time before some DSUs incur
expenses related to the development of,
and provision of VR services under,
individualized plans for employment
could be shortened, resulting in a shift
in the outlay of program funds for
services sooner than in previous years.
Therefore, in any given fiscal year, the
outlay of program funds for these DSUs
could be higher. While costs over the
life of the service record should not be
affected, some DSUs could find it
necessary to implement an order of
selection due to the transfer of costs that
would have been incurred in a
subsequent fiscal year to the current
fiscal year. As always, DSUs are
encouraged to conduct planning that
incorporates programmatic and fiscal
elements to make projections and
assessments of VR program resources
and the number of individuals served,
using management tools including order
of selection, as appropriate.
The Establishment, Development, or
Improvement of Assistive Technology
Demonstration, Loan, Reutilization, or
Financing Programs
Section 103( b)( 8) of the Act, as added
by WIOA, permits a DSU to establish,
develop, or improve assistive
technology demonstration, loan,
reutilization, or financing programs.
Thus, final § 361. 49( a)( 8) permits DSUs
to establish, develop, or improve these
assistive technology programs in
coordination with activities authorized
under the Assistive Technology Act of
1998, to promote access to assistive
technology for individuals with
disabilities and employers. This
regulation reflects the integral role
assistive technology plays in the
vocational rehabilitation and
employment of individuals with
disabilities. We are not able to quantify
additional costs associated with this
provision due to the variable nature of
the specific assistive technology needs
of individuals with disabilities, and the
availability of assistive technology
demonstration, loan, reutilization, or
financing programs within each State.
Maintenance of Effort Requirements
Section 111( a) of the Act, as amended
by WIOA, and final § 361. 62( a) require
the Secretary to reduce a State' s annual
VR program award to satisfy a
maintenance of effort (MOE) deficit in
any prior year. Before the enactment of
WIOA, the Secretary could only reduce
55738 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
the subsequent year' s grant to satisfy an
MOE deficit from the preceding fiscal
year. If an MOE deficit was discovered
after it was too late to reduce the
succeeding year' s grant, the Secretary
was required to seek recovery through
an audit disallowance, whereby the
State repaid the deficit amount with
non -Federal funds.
Because the Secretary is now able to
reduce any subsequent year' s VR
program grant for any prior year' s MOE
deficit, DSUs benefit as they are no
longer required to repay MOE shortfalls
with non -Federal funds, thereby
increasing the availability of non -
Federal funds, in those instances, for
obligation as match under the VR
program. Since FY 2010, two States
were required to pay a total of $791, 342
in non -Federal funds for MOE penalties
because their MOE shortfall was not
known prior to the awarding of Federal
funds in the year after the MOE deficit.
Consequently, these funds were
unavailable to be used as matching
funds for the VR program in the year
they were paid. On the other hand, the
new authority could have resulted in
the deduction of the $ 791, 342 MOE
penalties from a Federal award that was
not limited to the year immediately
following the year with the MOE deficit.
B. The Supported Employment Program
Services to Youth With the Most
Significant Disabilities in Supported
Employment
Section 603( d) of the Act, as amended
by WIOA, and final § 363. 22 require
DSUs to reserve 50 percent of their State
Supported Employment Services
Program grant allotment to provide
supported employment services,
including extended services, to youth
with the most significant disabilities.
This new requirement is consistent with
the heightened emphasis throughout the
Act on the provision of services to youth
with disabilities, especially those with
the most significant disabilities, and is
consistent with the final VR program
regulations in part 361, since the
Supported Employment program is
supplemental to that program.
In addition, section 606(b) of the Act,
as amended by WIOA, and final
363. 23 require States to provide a 10
percent match for the 50 percent of the
Supported Employment allotment
reserved for the provision of supported
employment services, including
extended services, to youth with the
most significant disabilities. Prior to the
enactment of WIOA, there was no match
requirement under the Supported
Employment program.
Finally, section 604 of the Act, as
amended by WIOA, and final § 363. 4( b)
permit DSUs to provide extended
services, for a period not to exceed four
years, to youth with the most significant
disabilities. DSUs may use the reserved
funds to provide these extended
services, as well as supported
employment services, to youth with the
most significant disabilities. Prior to the
enactment of WIOA, DSUs were not
permitted to provide extended services
to any individual, including youth with
the most significant disabilities.
After setting aside funds to assist in
carrying out section 21 of the Act, the
FY 2015 Federal appropriation provided
27, 272, 520 for distribution to DSUs
under the Supported Employment State
Grants program. Assuming States were
able to provide the required 10 percent
non -Federal match for the available
Supported Employment formula grant
funds in FY 2015, the 50 percent
reservation would result in the
dedication of $13, 636, 260 for supported
employment services, including
extended services, to youth with the
most significant disabilities. Conversely,
the reserved funds would not be
available for the provision of supported
employment services to individuals
who are not youth with the most
significant disabilities, and may be
viewed as a transfer of title VI funds
from these individuals to youth with the
most significant disabilities. The 10
percent match requirement would
generate $ 1, 515, 140 in non -Federal
funds for supported employment
services, including extended services,
for youth with the most significant
disabilities. The match requirement
represents additional non -Federal funds
that States must expend in order to
obligate and expend the Federal funds
reserved for youth with the most
significant disabilities. If the
appropriation increases in future years,
the match requirement would result in
additional supported employment
resources for youth with the most
significant disabilities. However, States
will have to identify additional non -
Federal resources in order to match the
Federal funds reserved for this purpose.
Finally, as stated above, DSUs may
provide extended services to youth with
the most significant disabilities,
whereas prior to the enactment of WIOA
such services were not permitted for
individuals of any age. Under the Act,
as amended by WIOA, DSUs still may
not provide extended services to
individuals with the most significant
disabilities who are not also youth with
the most significant disabilities. Since
extended services have not previously
been an authorized activity with the use
of VR program or supported
employment program funds, this change
could have a significant impact on
States by creating a funding source for
these services that previously was not
available. However, because this is not
a service that was previously permitted
under either the VR program or the
Supported Employment program, the
Department has no data on which to
quantify the impact this new
requirement will have on States.
Extension of Time for the Provision of
Supported Employment Services
Section 7( 39) of the Act, as amended
by WIOA, and final § 361. 5( c)( 54)
amend the definition of " supported
employment" to permit the provision of
supported employment services for a
period up to 24 months, rather than the
previous 18 months. Although
contained in part 361, the definition of
supported employment services applies
to both the VR program and Supported
Employment program. DSUs have the
authority to exceed this time period
under special circumstances if jointly
agreed to by the individual and the
vocational rehabilitation counselor.
The change will benefit individuals
with the most significant disabilities
who require ongoing support services
for a longer period of time to achieve
stability in the employment setting,
prior to full transition to extended
services. This provision could result in
DSUs using more resources under both
the VR program and Supported
Employment program to provide
ongoing services.
DSUs typically have not provided
ongoing support services for a full 18
months for a majority of their
consumers. In FY 2015, 13, 652
individuals achieved supported
employment outcomes within 21
months following the development of
the individualized plans for
employment, which period we assume
could include the provision of
supported employment services for a
full 18 months and a minimum period
of 90 days prior to program closure. Of
these individuals, 9, 592, or
approximately 70. 2 percent, achieved
supported employment outcomes
within 12 months. While we anticipate
that most individuals may not need
supported employment services for the
full 24 months, in FY 2015, 1, 783
individuals achieved supported
employment outcomes within a period
ranging from 21 months to 27 months of
the development of the individualized
plan for employment. DSUs in total
expended $13,237,902 on purchased
services for these individuals, or an
average of $7, 425 per individual.
55739Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
Assuming this period includes the
provision of supported employment
services for a full 24 months and a
minimum period of 90 days prior to
program closure, we estimate that an
approximate number of individuals
would benefit from the provision of
supported employment services for an
additional six months and that DSUs
would incur similar costs for the
provision of these services as a result of
the regulatory change.
Limitations on Supported Employment
Administrative Costs
Section 603( c) of the Act, as amended
by WIOA, and final § 363. 51( b) reduce
the maximum amount of a State' s grant
allotment under the Supported
Employment program that can be used
for administrative costs from 5 percent
of the State' s grant allotment to 2. 5
percent. As a result, a larger portion of
Federal Supported Employment funds
must be spent on the provision of
supported employment services,
including extended services to youth
with the most significant disabilities,
rather than administrative costs.
However, any administrative costs
incurred beyond the 2. 5 percent limit on
the use of Supported Employment funds
may be paid for with VR program funds.
Based upon the $27,272, 520 allotted
to States under the Supported
Employment program in FY 2015, the
total allowable amount of these Federal
funds that could be used to support
administrative costs would be reduced
by half, from $1, 363, 626 to $ 681, 813.
Thus, for those DSUs that have typically
used more than 2. 5 percent of their
Supported Employment program
allotment to cover administrative costs,
the change would provide a small
increase in the amount of funds
available for the provision of services to
individuals with the most significant
disabilities pursuing a supported
employment outcome. DSUs may shift
these excess costs to the VR program
since it does not have a cap on the
amount of funds that can be spent on
administrative costs under that program.
We cannot estimate the impact of this
shift on the VR program because DSUs
do not report data showing the amount
of VR program funds spent on
administrative costs for the Supported
Employment program.
C. Limitations on the Use of
Subminimum Wage
Section 511 of the Act, as added by
WIOA, imposes limitations on the
payment of subminimum wages by
employers who hold special wage
certificates under the Fair Labor
Standards Act. These statutory
requirements take effect on July 22,
2016.
Pursuant to section 511 of the Act, as
added by WIOA, final § 397. 10 requires
the DSU, in consultation with the State
educational agency, to develop a
process, or utilize an existing process,
that ensures individuals with
disabilities, including youth with
disabilities, receive documentation
demonstrating completion of the various
activities required by section 511. Final
397. 20 and 397. 30 establish the
documentation that the DSUs and local
educational agencies, as appropriate,
must provide to demonstrate an
individual' s completion of the various
activities required by section 511( a)( 2)
of the Act. These include completing
pre-employment transition services
under final § 361. 48( a) and the
determination under an application for
VR services under final §§ 361. 42 and
361. 43. Final § 397. 40 establishes the
documentation that the DSUs must
provide to individuals with disabilities
upon the completion of certain
information and career counseling -
related services, as required by section
511( c) of the Act. We are not able to
quantify the costs to the DSUs related to
the provision of this required
documentation because the number of
youth and other individuals who
potentially could receive services under
part 397 will vary widely from State to
State. In addition, there exists no
reliable national data on which to base
a calculation of costs. However, DSUs
generate documentation throughout the
vocational rehabilitation process that
may meet the requirements of final
397. 20 and 397. 30, including written
notification of a consumer' s eligibility
or ineligibility, copies of individualized
plans for employment and subsequent
amendments, and written notification
when the consumer' s record is closed.
As a result, the use of this
documentation to meet section 511
requirements should not result in
significant additional burden to DSUs.
Paperwork Reduction Act of 1995
The Paperwork Reduction Act of 1995
does not require the public to respond
to a collection of information unless it
displays a valid OMB control number.
The valid OMB control numbers
assigned to collections of information in
these final regulations are: 1205-0522
Required Elements for Submission of
the Unified or Combined State Plan and
Plan Modifications under the Workforce
Innovation and Opportunity Act), 1820-
0013 ( Cumulative Case Report), 1820-
0017 (Annual Vocational Rehabilitation
Program/ Cost Report), 1820-0508 ( VR
Case Service Report), 1820-0563
Annual Report of Appeals), 1820-0693
Program Improvement Plan), and 1820-
0694 ( VR Program Corrective Action
Plan). WIOA made several significant
changes that affect the VR program
collections of information. These
substantive changes will be submitted to
OMB with the final regulations.
Required Elements for Submission of
the Unified or Combined State Plan and
Plan Modifications Under the Workforce
Innovation and Opportunity Act (1205-
0522)
Section 101( a) of the Act, as amended
by WIOA, adds new content
requirements to the State plan, which is
now submitted as the VR services
portion of the Unified or Combined
State Plan under section 102 or 103 of
title I of WIOA. As a result, these
information collection requirements are
contained in the Required Elements for
Submission of the Unified or Combined
State Plan and Plan Modifications, and
we will discontinue the VR State Plan
OMB 1820-0500). In the NPRM, we
described the substantive changes to the
content of the VR State Plan, now
collected under the VR services portion
and supported employment supplement
of the Unified or Combined State Plan
OMB control number 1205-0522),
caused by final §§ 361. 10, 361. 18,
361. 24, 361. 29, and 361. 36, along with
final §§ 363. 10 and 363. 11. In addition,
the form includes previously approved
information collection requirements
related to a number of regulations that
remained unchanged as a result of the
amendments to the Act, including
361. 12, 361. 13, 361. 15, 361. 16,
361. 17, 361. 19, 361. 20, 361. 21, 361. 22,
361. 23, 361. 25, 361. 26, 361. 27, 361. 30,
361. 31, 361. 34, 361. 35, 361. 37, 361. 40,
361. 46, 361. 51, 361. 52, 361. 53, and
361. 55. We have made no changes in the
content of the VR services portion of the
Unified or Combined State Plan and
supported employment supplement
since publication of the NPRM.
In the NPRM, we increased the
estimated time for each DSU to prepare
and submit the VR services portion of
the Unified or Combined State Plan and
its supported employment supplement
from 25 to 30 hours annually.
In addition, the total cost of this data
collection increased due to the proposed
adjustment to the average hourly wage
rate of State personnel used to estimate
the annual burden for this data
collection from $22.00 to $39. 78, so that
wage rates are consistent with data
reported by the Bureau of Labor
Statistics. As a result of these changes,
we estimated in the NPRM a total
annual burden of 2, 400 hours (30 hours
for each of the 80 respondents), at
55740 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
39. 78 per hour, for a total annual cost
of $95, 472. 00. Since publication of the
NPRM, we have adjusted the total
annual estimated cost burden for
submission of the VR services portion of
the Unified or Combined State Plan due
to further adjustments in the average
hourly wage rate for State personnel
responsible for the submission of the
form of $54. 21 based on data from the
Bureau of Labor Statistics, for a total of
130, 104 for all 80 agencies.
VR Case Service Report (1820-0508)
The VR Case Service Report is used to
collect annual individual level data on
the individuals that have exited the VR
program, including individuals
receiving services with funds provided
under the Supported Employment
program. Sections 101( a)( 10) and 607 of
the Act contain data reporting
requirements under the VR program and
Supported Employment program,
respectively. WIOA amends these
sections to require States to report
additional data describing the
individuals served and the services
provided through these programs. In
addition, WIOA amends section 106 of
the Act by requiring that the standards
and indicators used to assess the
performance of the VR program be
consistent with the performance
accountability measures for the core
programs of the workforce development
system established under section 116 of
WIOA. We described in the NPRM the
substantive changes made to final
361. 40 and 363. 52 that cause
substantive changes to the active and
OMB -approved data collection under
1820-0508— the VR Case Service Report
RSA -911). Since publication of the
NPRM, we have made no substantive
changes to the RSA -911 as a result of
changes in these final regulations or the
joint final regulations governing the
performance accountability system
published elsewhere in this issue of the
Federal Register. However, since the
NPRM, we have modified the RSA -911
to incorporate changes in the data
collected through the joint ICR. In
addition, we have revised the layout of
the form in response to comments to
better align the collection of specific
data elements with the VR process and
to clarify the data needed to track the
provision of pre-employment transition
services and the achievement of
supported employment outcomes.
In the NPRM, we increased the
estimated burden for the submission of
the RSA -911 caused by the reporting of
the data for both open and closed cases
on a quarterly basis. We estimated the
total annual reporting burden to be
8,000 hours at $33. 63 per hour (a rate
more consistent with the rate reported
through the Bureau of Labor Statistics
for State -employed database
administrators), for a total annual cost of
269, 040.
As described in the Regulatory Impact
Analysis section of these final
regulations, we have increased the
estimated burden associated with the
RSA -911 since publication of the NPRM
for several reasons. We now include in
the estimated burden the time needed
for both collection and submission of
the data. Previous burden estimates
were based only on the time needed to
prepare and submit the RSA -911. In
addition, we have changed the method
used to estimate the time needed to
collect the data from a total of 15
minutes per vocational rehabilitation
counselor to one minute for each new
data element in the form. We also have
revised the estimated hours associated
with the submission of the data on a
quarterly basis from a total of 100 per
year to a total of 120 hours (30 hours per
quarter). Finally, we now estimate that
64 percent of the new data elements are
required by substantive changes to the
VR program -specific requirements in
section 101( a)( 10) of the Act and the
remaining 36 percent are required by
section 116 of WIOA. We have prorated
the estimated burden for the collection
of the new data elements based on these
percentages. As a result of these
changes, the total additional VR -specific
burden hours for both collection and
submission of required data is 6, 470
hours per VR agency ( 6, 400 data
collection hours and 70 data submission
hours), or a total of 517, 600 hours for all
80 VR agencies. The estimated total
additional VR program -specific cost for
both collection and submission per VR
agency is $ 211, 831, with a total
additional burden cost of $16, 946, 512
for all 80 VR agencies.
Intergovernmental Review
These programs are subject to
Executive Order 12372 and the
regulations in 34 CFR part 79. One of
the objectives of the Executive order is
to foster an intergovernmental
partnership and a strengthened
federalism. The Executive order relies
on processes developed by State and
local governments for coordination and
review of proposed Federal financial
assistance.
This document provides early
notification of our specific plans and
actions for these programs.
Assessment of Educational Impact
In the NPRM we requested comments
on whether the proposed regulations
would require transmission of
information that any other agency or
authority of the United States gathers or
makes available. We received no
comments.
Federalism
Executive Order 13132 requires us to
ensure meaningful and timely input by
State and local elected officials in the
development of regulatory policies that
have federalism implications.
Federalism implications" means
substantial direct effects on the States,
on the relationship between the
National Government and the States, or
on the distribution of power and
responsibilities among the various
levels of government. In the NPRM we
stated that parts 361, 363, and 397 may
have federalism implications and
encouraged State and local elected
officials to review and provide
comments on the proposed regulations.
In the Public Comment section of this
preamble, we discuss any comments we
received on this subject.
Accessible Format: Individuals with
disabilities can obtain this document in
an accessible format (e.g., braille, large
print, audiotape, or compact disc) on
request to the person listed under FOR
FURTHER INFORMATION CONTACT.
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Catalog of Federal Domestic Assistance
Numbers: 84. 126A State Vocational
Rehabilitation Services program; and 84. 187
State Supported Employment Services
program)
List of Subjects
34 CFR Part 361
Administrative practice and
procedure, Grant programs -education,
Grant programs -social programs,
Reporting and recordkeeping
requirements, Vocational rehabilitation.
55741Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
34 CFR Part 363
Grant programs -education, Grant
programs -social programs, Manpower
training programs, Reporting and
recordkeeping requirements, Vocational
rehabilitation.
34 CFR Part 397
Individuals with disabilities,
Reporting and recordkeeping
requirements, Students, Vocational
rehabilitation, Youth.
Dated: June 30, 2016.
John B. King, Jr.,
Secretary ofEducation.
The Secretary of Education amends 34
CFR chapter III as follows:
1. Part 361 is revised to read as
follows:
PART 361 -STATE VOCATIONAL
REHABILITATION SERVICES
PROGRAM
Subpart A -General
Sec.
361. 1 Purpose.
361. 2 Eligibility for a grant.
361. 3 Authorized activities.
361. 4 Applicable regulations.
361. 5 Applicable definitions.
Subpart B -State Plan and Other
Requirements for Vocational Rehabilitation
Services
361. 10 Submission, approval, and
disapproval of the State plan.
361. 11 Withholding of funds.
Administration
361. 12 Methods of administration.
361. 13 State agency for administration.
361. 14 Substitute State agency.
361. 15 Local administration.
361. 16 Establishment of an independent
commission or a State Rehabilitation
Council.
361. 17 Requirements for a State
Rehabilitation Council.
361. 18 Comprehensive system of personnel
development.
361. 19 Affirmative action for individuals
with disabilities.
361. 20 Public participation requirements.
361. 21 Consultations regarding the
administration of the vocational
rehabilitation services portion of the
Unified or Combined State Plan.
361. 22 Coordination with education
officials.
361. 23 [ Reserved]
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 Provision of training and services
for employers.
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 programs.
361. 38 Protection, use, and release of
personal information.
361. 39 State -imposed requirements.
361. 40 Reports; Evaluation standards and
performance indicators.
Provision and Scope of Services
361. 41 Processing referrals and
applications.
361. 42 Assessment for determining
eligibility and priority for services.
361. 43 Procedures for ineligibility
determination.
361. 44 Closure without eligibility
determination.
361. 45 Development of the individualized
plan for employment.
361. 46 Content of the individualized plan
for employment.
361. 47 Record of services.
361. 48 Scope of vocational rehabilitation
services for individuals with disabilities.
361. 49 Scope of vocational rehabilitation
services for groups of individuals with
disabilities.
361. 50 Written policies governing the
provision of services for individuals with
disabilities.
361. 51 Standards for facilities and
providers of services.
361. 52 Informed choice.
361. 53 Comparable services and benefits.
361. 54 Participation of individuals in cost
of services based on financial need.
361. 55 Semi-annual and annual review of
individuals in extended employment
and other employment under special
certificate provisions of the Fair Labor
Standards Act.
361. 56 Requirements for closing the record
of services of an individual who has
achieved an employment outcome.
361. 57 Review of determinations made by
designated State unit personnel.
Subpart C -Financing of State Vocational
Rehabilitation Programs
361. 60 Matching requirements.
361. 61 Limitation on use of funds for
construction expenditures.
361. 62 Maintenance of effort requirements.
361. 63 Program income.
361. 64 Obligation of Federal funds.
361. 65 Allotment and payment of Federal
funds for vocational rehabilitation
services.
Subparts D -F -[ Reserved]
Authority: Section 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c), unless otherwise noted.
Subpart A -General
361. 1 Purpose.
Under the State Vocational
Rehabilitation Services Program, the
Secretary provides grants to assist States
in operating statewide comprehensive,
coordinated, effective, efficient, and
accountable vocational rehabilitation
programs, each of which is -
a) An integral part of a statewide
workforce development system; and
b) Designed to assess, plan, develop,
and provide vocational rehabilitation
services for individuals with
disabilities, consistent with their unique
strengths, resources, priorities,
concerns, abilities, capabilities,
interests, and informed choice so that
they may prepare for and engage in
competitive integrated employment and
achieve economic self-sufficiency.
Authority: Sections 12( c) and 100(a) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 709( c) and 720( a))
361. 2 Eligibility for a grant.
Any State that submits to the
Secretary a vocational rehabilitation
services portion of the Unified or
Combined 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
Rehabilitation Act of 1973, as amended; 29
U.S. C. 721( a))
361. 3 Authorized activities.
The Secretary makes payments to a
State to assist in -
a) The costs of providing vocational
rehabilitation services under the
vocational rehabilitation services
portion of the Unified or Combined
State Plan; and
b) Administrative costs under the
vocational rehabilitation services
portion of the Unified or Combined
State Plan, including one-stop
infrastructure costs.
Authority: Sections 12( c) and 111( a)( 1) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c) and 731( a)( 1))
361. 4 Applicable regulations.
The following regulations apply to
this program:
a) The Education Department General
Administrative Regulations (EDGAR) as
follows:
1) 34 CFR part 76 ( State -
Administered Programs).
2) 34 CFR part 77 ( Definitions that
Apply to Department Regulations).
3) 34 CFR part 79 ( Intergovernmental
Review of Department of Education
Programs and Activities).
4) 34 CFR part 81 ( General Education
Provisions Act -Enforcement).
55742 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
5) 34 CFR part 82 ( New Restrictions
on Lobbying).
b) The regulations in this part 361.
c) 2 CFR part 190 ( OMB Guidelines
to Agencies on Governmentwide
Debarment and Suspension
Nonprocurement)) as adopted in 2 CFR
part 3485.
d) 2 CFR part 200 ( Uniform
Administrative Requirements, Cost
Principles, and Audit Requirements for
Federal Awards) as adopted in 2 CFR
part 3474, except the requirements to
accept third -party in-kind contributions
to meet cost-sharing or matching
requirements, as otherwise authorized
under 2 CFR 200. 306( b).
Authority: Section 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c))
361. 5 Applicable definitions.
The following definitions apply to
this part:
a) Definitions in EDGAR 77. 1.
b) Definitions in 2 CFR part 200,
subpart A.
c) The following definitions:
1) Act means the Rehabilitation Act
of 1973, as amended ( 29 U.S. C. 701 et
seq.).
2) Administrative costs under the
vocational rehabilitation services
portion of the Unified or Combined
State Plan means expenditures incurred
in the performance of administrative
functions under the vocational
rehabilitation program carried out under
this part, including expenses related to
program planning, development,
monitoring, and evaluation, including,
but not limited to, expenses for—
i) Quality assurance;
ii) Budgeting, accounting, financial
management, information systems, and
related data processing;
iii) Providing information about the
program to the public;
iv) Technical assistance and support
services to other State agencies, private
nonprofit organizations, and businesses
and industries, except for technical
assistance and support services
described in § 361. 49( a)( 4);
v) The State Rehabilitation Council
and other advisory committees;
vi) Professional organization
membership dues for designated State
unit employees;
vii) The removal of architectural
barriers in State vocational
rehabilitation agency offices and State -
operated rehabilitation facilities;
viii) Operating and maintaining
designated State unit facilities,
equipment, and grounds, as well as the
infrastructure of the one-stop system;
ix) Supplies;
x) Administration of the
comprehensive system of personnel
development described in § 361. 18,
including personnel administration,
administration of affirmative action
plans, and training and staff
development;
xi) Administrative salaries, including
clerical and other support staff salaries,
in support of these administrative
functions;
xii) Travel costs related to carrying
out the program, other than travel costs
related to the provision of services;
xiii) Costs incurred in conducting
reviews of determinations made by
personnel of the designated State unit,
including costs associated with
mediation and impartial due process
hearings under § 361. 57; and
xiv) Legal expenses required in the
administration of the program.
Authority: Sections 7( 1) and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 1) and 709( c))
3) Applicant means an individual
who submits an application for
vocational rehabilitation services in
accordance with § 361. 41( b)( 2).
Authority: Section 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c))
4) 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
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c))
5) Assessment for determining
eligibility and vocational rehabilitation
needs means, as appropriate in each
case—
i)(A) A review of existing data—
1) To determine if an individual is
eligible for vocational rehabilitation
services; and
2) To assign priority for an order of
selection described in § 361. 36 in the
States that use an order of selection; and
B) To the extent necessary, the
provision of appropriate assessment
activities to obtain necessary additional
data to make the eligibility
determination and assignment;
ii) To the extent additional data are
necessary to make a determination of
the employment outcomes and the
nature and scope of vocational
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 for employment
of the eligible individual;
B) Uses as a primary source of
information, to the maximum extent
possible and appropriate and in
accordance with confidentiality
requirements—
1) Existing information obtained for
the purposes of determining the
eligibility of the individual and
assigning priority for an order of
selection described in § 361. 36 for the
individual; and
2) Information that can be provided
by the individual and, if appropriate, by
the family of the individual;
C) May include, to the degree needed
to make such a determination, an
assessment of the personality, interests,
interpersonal skills, intelligence and
related functional capacities,
educational achievements, work
experience, vocational aptitudes,
personal and social adjustments, and
employment opportunities of the
individual and the medical, psychiatric,
psychological, and other pertinent
vocational, educational, cultural, social,
recreational, and environmental factors
that affect the employment and
rehabilitation needs of the individual;
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; and
E) To the maximum extent possible,
relies on information obtained from
experiences in integrated employment
settings in the community and in other
integrated community settings;
iii) Referral, for the provision of
rehabilitation technology services to the
individual, to assess and develop the
55743Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
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: Sections 7( 2) and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 2) and 709( c))
6) Assistive technology terms—(i)
Assistive technology has the meaning
given such term in section 3 of the
Assistive Technology Act of 1998 ( 29
U.S. C. 3002).
ii) Assistive technology device has
the meaning given such term in section
3 of the Assistive Technology Act of
1998, except that the reference in such
section to the term individuals with
disabilities will be deemed to mean
more than one individual with a
disability as defined in paragraph
20)( A) of the Act.
iii) Assistive technology service has
the meaning given such term in section
3 of the Assistive Technology Act of
1998, except that the reference in such
section to the term—
A) Individual with a disability will be
deemed to mean an individual with a
disability, as defined in paragraph
20)( A) of the Act; and
B) Individuals with disabilities will
be deemed to mean more than one such
individual.
Authority: Sections 7( 3) and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 3) and 709( c))
7) Community rehabilitation
program—(i) Community rehabilitation
program means a program that provides
directly or facilitates the provision of
one or more of the following vocational
rehabilitation services to individuals
with disabilities to enable those
individuals to maximize their
opportunities for employment,
including career advancement:
A) Medical, psychiatric,
psychological, social, and vocational
services that are provided under one
management.
B) Testing, fitting, or training in the
use of prosthetic and orthotic devices.
C) Recreational therapy.
D) Physical and occupational
therapy.
E) Speech, language, and hearing
therapy.
F) Psychiatric, psychological, and
social services, including positive
behavior management.
G) Assessment for determining
eligibility and vocational rehabilitation
needs.
H) Rehabilitation technology.
I) Job development, placement, and
retention services.
J) Evaluation or control of specific
disabilities.
K) Orientation and mobility services
for individuals who are blind.
L) Extended employment.
M) Psychosocial rehabilitation
services.
N) Supported employment services
and extended services.
0) Customized employment.
P) Services to family members if
necessary to enable the applicant or
eligible individual to achieve an
employment outcome.
0) Personal assistance services.
R) Services similar to the services
described in paragraphs ( c)( 7)( i)(A)
through (Q) of this section.
ii) For the purposes of this definition,
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.
Authority: Section 7( 4) of the Rehabilitation
Act of 1973, as amended; 29 U. S. C. 705( 4))
8) Comparable services and
benefits—(i) Comparable services and
benefits means services and benefits,
including accommodations and
auxiliary aids and services, that are—
A) Provided or paid for, in whole or
in part, by other Federal, State, or local
public agencies, by health insurance, or
by employee benefits;
B) Available to the individual at the
time needed to ensure the progress of
the individual toward achieving the
employment outcome in the
individual' s individualized plan for
employment in accordance with
361. 53; and
C) Commensurate to the services that
the individual would otherwise receive
from the designated State vocational
rehabilitation agency.
ii) For the purposes of this definition,
comparable services and benefits do not
include awards and scholarships based
on merit.
Authority: Sections 12( c) and 101( a)( 8) of
the Rehabilitation Act of 1973, as amended;
29 U.S. C. 709( c) and 721( a)( 8))
9) Competitive integrated
employment means work that—
i) Is performed on a full-time or part-
time basis ( including self-employment)
and for which an individual is
compensated at a rate that–
A) Is not less than the higher of the
rate specified in section 6( a)( 1) of the
Fair Labor Standards Act of 1938 ( 29
U.S.C. 206(a)(1)) or the rate required
under the applicable State or local
minimum wage law for the place of
employment;
B) Is not less than the customary rate
paid by the employer for the same or
similar work performed by other
employees who are not individuals with
disabilities and who are similarly
situated in similar occupations by the
same employer and who have similar
training, experience, and skills; and
C) In the case of an individual who
is self-employed, yields an income that
is comparable to the income received by
other individuals who are not
individuals with disabilities and who
are self-employed in similar
occupations or on similar tasks and who
have similar training, experience, and
skills; and
D) Is eligible for the level of benefits
provided to other employees; and
ii) Is at a location—
A) Typically found in the
community; and
B) Where the employee with a
disability interacts for the purpose of
performing the duties of the position
with other employees within the
particular work unit and the entire work
site, and, as appropriate to the work
performed, other persons (e.g.,
customers and vendors), who are not
individuals with disabilities (not
including supervisory personnel or
individuals who are providing services
to such employee) to the same extent
that employees who are not individuals
with disabilities and who are in
comparable positions interact with these
persons; and
iii) Presents, as appropriate,
opportunities for advancement that are
similar to those for other employees
who are not individuals with
disabilities and who have similar
positions.
Authority: Sections 7( 5) and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 5) and 709( c))
10) 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
55744 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
connection with the acquisition of land
or existing buildings, or the
construction, expansion, remodeling, or
alteration of community rehabilitation
facilities;
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
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 6) and 709( c))
11) Customized employment means
competitive integrated employment, for
an individual with a significant
disability, that is—
i) Based on an individualized
determination of the unique strengths,
needs, and interests of the individual
with a significant disability;
ii) Designed to meet the specific
abilities of the individual with a
significant disability and the business
needs of the employer; and
iii) Carried out through flexible
strategies, such as—
A) Job exploration by the individual;
and
B) Working with an employer to
facilitate placement, including—
1) Customizing a job description
based on current employer needs or on
previously unidentified and unmet
employer needs;
2) Developing a set of job duties, a
work schedule and job arrangement, and
specifics of supervision (including
performance evaluation and review),
and determining a job location;
3) Using a professional representative
chosen by the individual, or if elected
self -representation, to work with an
employer to facilitate placement; and
4) Providing services and supports at
the job location.
Authority: Section 7( 7) and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 7) and 709( c))
12) Designated State agency or State
agency means the sole State agency,
designated, in accordance with
361. 13( a), to administer, or supervise
the local administration of, the
vocational rehabilitation services
portion of the Unified or Combined
State Plan. 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 Unified or
Combined State Plan relating to the
vocational rehabilitation of individuals
who are blind.
Authority: Sections 7( 8)( A) and 101( a)( 2)( A)
of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 705( 8)( A) and
721( a)( 2)( A))
13) Designated State unit or State
unit means either—
i) The State vocational rehabilitation
bureau, division, or other organizational
unit that is primarily concerned with
vocational rehabilitation or vocational
and other rehabilitation of individuals
with disabilities and that is responsible
for the administration of the vocational
rehabilitation program of the State
agency, as required under § 361. 13( b); or
ii) The State agency that is primarily
concerned with vocational
rehabilitation or vocational and other
rehabilitation of individuals with
disabilities.
Authority: Sections 7( 8)( B) and 101( a)( 2)( B)
of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 705( 8)( B) and
721( a)( 2)( B))
14) Eligible individual means an
applicant for vocational rehabilitation
services who meets the eligibility
requirements of § 361. 42( a).
Authority: Sections 7( 20)( A) and 102( a)( 1) of
the Rehabilitation Act of 1973, as amended;
29 U.S. C. 705( 20)( A) and 722( a)( 1))
15) Employment outcome means,
with respect to an individual, entering,
advancing in, or retaining full-time or,
if appropriate, part-time competitive
integrated employment, as defined in
paragraph (c)( 9) of this section
including customized employment,
self-employment, telecommuting, or
business ownership), or supported
employment as defined in paragraph
c)( 53) of this section, that is consistent
with an individual' s unique strengths,
resources, priorities, concerns, abilities,
capabilities, interests, and informed
choice.
Note to paragraph (c)( 15): A designated
State unit may continue services to
individuals with uncompensated
employment goals on their approved
individualized plans for employment prior to
September 19, 2016 until June 30, 2017,
unless a longer period of time is required
based on the needs of the individual with the
disability, as documented in the individual' s
service record.
Authority: Sections 7( 11), 12( c), 100( a)( 2),
and 102( b)( 4)( A) of the Rehabilitation Act of
1973, as amended; 29 U. S. C. 705( 11), 709( c),
720( a)( 2), and 722( b)( 4)( A))
16) 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 (c)( 17) of this section, to
provide vocational rehabilitation
services to applicants or eligible
individuals;
ii) Staffing, if necessary to establish,
develop, or improve a public or
nonprofit community rehabilitation
program for the purpose of providing
vocational rehabilitation services to
applicants or eligible individuals, for a
maximum period of four 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; and
D) 45 percent of staffing costs for the
fourth year; and
iii) Other expenditures and activities
related to the establishment,
development, or improvement of a
public or nonprofit 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
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 12) and 709( c))
17) Establishment of a facility for a
public or nonprofit community
rehabilitation program means—
i) The acquisition of an existing
building and, if necessary, the land in
connection with the acquisition, if the
building has been completed in all
respects for at least one 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
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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
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 12) and 709( c))
18) 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.
Authority: Section 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c))
19) Extended services means ongoing
support services and other appropriate
services that are—
i) Needed to support and maintain an
individual with a most significant
disability including a youth with a most
significant disability, in supported
employment;
ii) Organized or made available,
singly or in combination, in such a way
as to assist an eligible individual in
maintaining supported employment;
iii) Based on the needs of an eligible
individual, as specified in an
individualized plan for employment;
iv) Provided by a State agency, a
private nonprofit organization,
employer, or any other appropriate
resource, after an individual has made
the transition from support from the
designated State unit; and
v) Provided to a youth with a most
significant disability by the designated
State unit in accordance with
requirements set forth in this part and
part 363 for a period not to exceed four
years, or at such time that a youth
reaches age 25 and no longer meets the
definition of a youth with a disability
under paragraph (c)( 58) of this section,
whichever occurs first. The designated
State unit may not provide extended
services to an individual with a most
significant disability who is not a youth
with a most significant disability.
Authority: Sections 7( 13), 12( c), and 604(b)
of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 705( 13), 709( c), and
795i(b))
20) 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 Rehabilitation Act of
1973, as amended; 29 U. S. C. 709( c) and
721( a)( 8)( A)(i)(III))
21) Fair hearing board means a
committee, body, or group of persons
established by a State prior to January
1, 1985, that—
i) Is authorized under State law to
review determinations made by
personnel of the designated State unit
that affect the provision of vocational
rehabilitation services; and
ii) Carries out the responsibilities of
the impartial hearing officer in
accordance with the requirements in
361. 57(j).
Authority: Sections 12( c) and 102( c)( 6) of
the Rehabilitation Act of 1973, as amended;
29 U.S. C. 709( c) and 722( c)( 6))
22) Family member, for purposes of
receiving vocational rehabilitation
services in accordance with
361.48(b)( 9), 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)( 19) of
the Rehabilitation Act of 1973, as amended;
29 U.S. C. 709( c) and 723( a)( 19))
23) Governor means a chief executive
officer of a State.
Authority: Section 7( 15) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 15))
24) 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 recipient of services;
D) Has knowledge of the delivery of
vocational rehabilitation services, the
vocational rehabilitation services
portion of the Unified or Combined
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 could affect 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: Sections 7( 16) and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 16) and 709( c))
25) Indian; American Indian; Indian
American; Indian Tribe—(i) In general.
The terms " Indian", " American
Indian", and " Indian American" mean
an individual who is a member of an
Indian tribe and include a Native and a
descendant of a Native, as such terms
are defined in subsections (b) and (r) of
section 3 of the Alaska Native Claims
Settlement Act (43 U.S. C. 1602).
ii) Indian tribe. The term " Indian
tribe" means any Federal or State Indian
tribe, band, rancheria, pueblo, colony,
or community, including any Alaska
native village or regional village
corporation (as defined in or established
pursuant to the Alaska Native Claims
Settlement Act) and a tribal organization
as defined in section 4( 1) of the Indian
Self -Determination and Education
Assistance Act (25 U.S.C. 450(b)( 1)).
Authority: Section 7( 19) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 19))
26) Individual who is blind means a
person who is blind within the meaning
of applicable State law.
Authority: Section 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 709( c))
27) Individual with a disability,
except as provided in paragraph ( c)( 28)
of this section, 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
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 20)( A))
28) Individual with a disability, for
purposes of §§361. 5( c)( 13), 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)(8), 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
55746 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
iii) Who is regarded as having such
an impairment.
Authority: Section 7( 20)( B) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 20)( B))
29) Individual with a most significant
disability means an individual with a
significant disability who meets the
designated State unit' s criteria for an
individual with a most significant
disability. These criteria must be
consistent with the requirements in
361. 36( d)( 1) and ( 2).
Authority: Sections 7( 21)( E) and 101( a)( 5)( C)
of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 705( 21)( E) and
721( a)( 5)( C))
30) 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 illness, multiple sclerosis,
muscular dystrophy, musculo -skeletal
disorders, neurological disorders
including stroke and epilepsy), spinal
cord conditions (including paraplegia
and quadriplegia), sickle cell anemia,
intellectual disability, 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
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 21)( A))
31) 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
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 22) and 709( c))
32) Integrated setting means—
i) With respect to the provision of
services, 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; and
ii) With respect to an employment
outcome, means a setting—
A) Typically found in the
community; and
B) Where the employee with a
disability interacts, for the purpose of
performing the duties of the position,
with other employees within the
particular work unit and the entire work
site, and, as appropriate to the work
performed, other persons ( e.g.,
customers and vendors) who are not
individuals with disabilities (not
including supervisory personnel or
individuals who are providing services
to such employee) to the same extent
that employees who are not individuals
with disabilities and who are in
comparable positions interact with these
persons.
Authority: Section 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c))
33) Local workforce development
board means a local board, as defined in
section 3 of the Workforce Innovation
and Opportunity Act.
Authority: Section 7( 25) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 25))
34) 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 Rehabilitation Act of 1973, as amended;
29 U.S. C. 709( c) and 723( a)( 7))
i) Examples: The following are
examples of expenses that would meet
the definition of maintenance. The
examples are illustrative, do not address
all possible circumstances, and are not
intended to substitute for individual
counselor judgment.
Example 1: The cost of a uniform or other
suitable clothing that is required for an
individual' s job placement or job -seeking
activities.
Example 2: The cost of short-term shelter
that is required in order for an individual to
participate in assessment activities or
vocational training at a site that is not within
commuting distance of an individual' s home.
Example 3: The initial one-time costs,
such as a security deposit or charges for the
initiation of utilities, that are required in
order for an individual to relocate for a job
placement.
ii) [Reserved]
35) Mediation means the act or
process of using an independent third
party to act as a mediator, intermediary,
or conciliator to assist persons or parties
in settling differences or disputes prior
to pursuing formal administrative or
other legal remedies. Mediation under
the program must be conducted in
accordance with the requirements in
361. 57( d) by a qualified and impartial
mediator as defined in § 361. 5( c)( 43).
Authority: Sections 12( c) and 102( c)( 4) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c) and 722( c)( 4))
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
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 26))
37) Ongoing support services, as used
in the definition of supported
employment, means services that—
i) Are needed to support and
maintain an individual with a most
significant disability, including a youth
with a most significant disability, in
supported employment;
ii) Are identified based on a
determination by the designated State
unit of the individual' s need as
specified in an individualized plan for
employment;
iii) Are 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;
iv) 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—
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A) At a minimum, twice -monthly
monitoring at the worksite of each
individual in supported employment; or
B) If under specific circumstances,
especially at the request of the
individual, the individualized plan for
employment provides for off-site
monitoring, twice monthly meetings
with the individual;
v) Consist of—
A) Any particularized assessment
supplementary to the comprehensive
assessment of rehabilitation needs
described in paragraph (c)( 5)( ii) of this
section;
B) The provision of skilled job
trainers who accompany the individual
for intensive job skill training at the
work site;
C) Job development and training;
D) Social skills training;
E) Regular observation or supervision
of the individual;
F) Follow-up services including
regular contact with the employers, the
individuals, the parents, family
members, guardians, advocates or
authorized representatives of the
individuals, and other suitable
professional and informed advisors, in
order to reinforce and stabilize the job
placement;
G) Facilitation of natural supports at
the worksite;
H) Any other service identified in the
scope of vocational rehabilitation
services for individuals, described in
361. 48( b); or
I) Any service similar to the foregoing
services.
Authority: Sections 7( 27) and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 27) and 709( c))
38) Personal assistance services
means a range of services, including,
among other things, training in
managing, supervising, and directing
personal assistance services, provided
by one or more persons, that are—
i) Designed to assist an individual
with a disability to perform daily living
activities on or off the job that the
individual would typically perform
without assistance if the individual did
not have a disability;
ii) Designed to increase the
individual' s control in life and ability to
perform everyday activities on or off the
job;
iii) Necessary to the achievement of
an employment outcome; and
iv) Provided only while the
individual is receiving other vocational
rehabilitation services. The services may
include training in managing,
supervising, and directing personal
assistance services.
Authority: Sections 7( 28), 12( c),
102(b)(4)( B)(i)(I)(bb), and 103(a)(9) of the
Rehabilitation Act of 1973, as amended; 29
U.S.C. 705(28), 709(c), 722(b)(4)( B)(i)(I)(bb),
and 723( a)( 9))
39) Physical and mental restoration
services means—
i) Corrective surgery or therapeutic
treatment that is likely, within a
reasonable period of time, to correct or
modify substantially a stable or slowly
progressive physical or mental
impairment that constitutes a
substantial impediment to employment;
ii) Diagnosis of and treatment for
mental or emotional disorders by
qualified personnel in accordance with
State licensure laws;
iii)Dentistry;
iv) Nursing services;
v) Necessary hospitalization (either
inpatient or outpatient care) in
connection with surgery or treatment
and clinic services;
vi) Drugs and supplies;
vii) Prosthetic and orthotic devices;
viii) Eyeglasses and visual services,
including visual training, and the
examination and services necessary for
the prescription and provision of
eyeglasses, contact lenses, microscopic
lenses, telescopic lenses, and other
special visual aids prescribed by
personnel who are qualified in
accordance with State licensure laws;
ix) Podiatry;
x) Physical therapy;
xi) Occupational therapy;
xii) Speech or hearing therapy;
xiii) Mental health services;
xiv) Treatment of either acute or
chronic medical complications and
emergencies that are associated with or
arise out of the provision of physical
and mental restoration services, or that
are inherent in the condition under
treatment;
xv) Special services for the treatment
of individuals with end-stage renal
disease, including transplantation,
dialysis, artificial kidneys, and supplies;
and
xvi) Other medical or medically
related rehabilitation services.
Authority: Sections 12( c) and 103( a)( 6) of
the Rehabilitation Act of 1973, as amended;
29 U.S. C. 709( c) and 723( a)( 6))
40) Physical or mental impairment
means—
i) Any physiological disorder or
condition, cosmetic disfigurement, or
anatomical loss affecting one or more of
the following body systems:
neurological, musculo -skeletal, special
sense organs, respiratory (including
speech organs), cardiovascular,
reproductive, digestive, genitourinary,
hemic and lymphatic, skin, and
endocrine; or
ii) Any mental or psychological
disorder such as intellectual disability,
organic brain syndrome, emotional or
mental illness, and specific learning
disabilities.
Authority: Sections 7( 20)( A) and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 20)( A) and 709( c))
41) Post -employment services means
one or more of the services identified in
361. 48( b) that are provided subsequent
to the achievement of an employment
outcome and that are necessary for an
individual to maintain, regain, or
advance in employment, consistent with
the individual' s unique strengths,
resources, priorities, concerns, abilities,
capabilities, interests, and informed
choice.
Authority: Sections 12( c) and 103( a)( 20) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c) and 723( a)( 20))
Note to paragraph (c)( 41): Post -
employment services are intended to ensure
that the employment outcome remains
consistent with the individual' s unique
strengths, resources, priorities, concerns,
abilities, capabilities, interests, and informed
choice. These services are available to meet
rehabilitation needs that do not require a
complex and comprehensive provision of
services and, thus, should be limited in scope
and duration. If more comprehensive services
are required, then a new rehabilitation effort
should be considered. Post -employment
services are to be provided under an
amended individualized plan for
employment; thus, a re -determination of
eligibility is not required. The provision of
post -employment services is subject to the
same requirements in this part as the
provision of any other vocational
rehabilitation service. Post -employment
services are available to assist an individual
to maintain employment, e.g., the
individual' s employment is jeopardized
because of conflicts with supervisors or co-
workers, and the individual needs mental
health services and counseling to maintain
the employment, or the individual requires
assistive technology to maintain the
employment; to regain employment, e.g., the
individual' s job is eliminated through
reorganization and new placement services
are needed; and to advance in employment,
e.g., the employment is no longer consistent
with the individual' s unique strengths,
resources, priorities, concerns, abilities,
capabilities, interests, and informed choice.
42) Pre-employment transition
services means the required activities
and authorized activities specified in
361. 48( a)( 2) and (3).
Authority: Sections 7( 30) and 113(b) and (c)
of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 705( 30) and 733( b) and
c))
43) Qualified and impartial
mediator—(i) Qualified and impartial
mediator means an individual who—
A) Is not an employee of a public
agency (other than an administrative
law judge, hearing examiner, employee
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of a State office of mediators, or
employee of an institution of higher
education);
B) Is not a member of the State
Rehabilitation Council for the
designated State unit;
C) Has not been involved previously
in the vocational rehabilitation of the
applicant or recipient of services;
D) Is knowledgeable of the vocational
rehabilitation program and the
applicable Federal and State laws,
regulations, and policies governing the
provision of vocational rehabilitation
services;
E) Has been trained in effective
mediation techniques consistent with
any State -approved or -recognized
certification, licensing, registration, or
other requirements; and
F) Has no personal, professional, or
financial interest that could affect the
individual' s objectivity during the
mediation proceedings.
ii) An individual is not considered to
be an employee of the designated State
agency or designated State unit for the
purposes of this definition solely
because the individual is paid by the
designated State agency or designated
State unit to serve as a mediator.
Authority: Sections 12( c) and 102( c)( 4) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c) and 722( c)( 4))
44) Rehabilitation engineering means
the systematic application of
engineering sciences to design, develop,
adapt, test, evaluate, apply, and
distribute technological solutions to
problems confronted by individuals
with disabilities in functional areas,
such as mobility, communications,
hearing, vision, and cognition, and in
activities associated with employment,
independent living, education, and
integration into the community.
Authority: Sections 7( 32) and (12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 32) and 709( c))
45) Rehabilitation technology means
the systematic application of
technologies, engineering
methodologies, or scientific principles
to meet the needs of, and address the
barriers confronted by, individuals with
disabilities in areas that include
education, rehabilitation, employment,
transportation, independent living, and
recreation. The term includes
rehabilitation engineering, assistive
technology devices, and assistive
technology services.
Authority: Section 7( 32) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 32))
46) Reservation means a Federal or
State Indian reservation, a public
domain Indian allotment, a former
Indian reservation in Oklahoma, and
land held by incorporated Native
groups, regional corporations, and
village corporations under the
provisions of the Alaska Native Claims
Settlement Act (43 U. S. C. 1601 et seq.);
or a defined area of land recognized by
a State or the Federal Government
where there is a concentration of tribal
members and on which the tribal
government is providing structured
activities and services.
Authority: Section 121( e) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 741( e))
47) Sole local agency means a unit or
combination of units of general local
government or one or more Indian tribes
that has the sole responsibility under an
agreement with, and the supervision of,
the State agency to conduct a local or
tribal vocational rehabilitation program,
in accordance with the vocational
rehabilitation services portion of the
Unified or Combined State Plan.
Authority: Section 7( 24) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 24))
48) State means any of the 50 States,
the District of Columbia, the
Commonwealth of Puerto Rico, the
United States Virgin Islands, Guam,
American Samoa, and the
Commonwealth of the Northern Mariana
Islands.
Authority: Section 7( 34) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 34))
49) State workforce development
board means a State workforce
development board, as defined in
section 3 of the Workforce Innovation
and Opportunity Act (29 U.S.C. 3102).
Authority: Section 7( 35) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 35))
50) Statewide workforce development
system means a workforce development
system, as defined in section 3 of the
Workforce Innovation and Opportunity
Act (29 U.S.C. 3102).
Authority: Section 7( 36) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 36))
51) Student with a disability—(i)
Student with a disability means, in
general, an individual with a disability
in a secondary, postsecondary, or other
recognized education program who—
A)(1) Is not younger than the earliest
age for the provision of transition
services under section
614(d)( 1)( A)(i)(VIII) of the Individuals
with Disabilities Education Act (20
U.S.C. 1414(d)(1)( A)(i)(VIII)); or
2) If the State involved elects to use
a lower minimum age for receipt of pre-
employment transition services under
this Act, is not younger than that
minimum age; and
B)( 1) Is not older than 21 years of age;
or
2) If the State law for the State
provides for a higher maximum age for
receipt of services under the Individuals
with Disabilities Education Act (20
U.S. C. 1400 et seq.), is not older than
that maximum age; and
C)( 1) Is eligible for, and receiving,
special education or related services
under Part B of the Individuals with
Disabilities Education Act (20 U.S. C.
1411 et seq.); or
2) Is a student who is an individual
with a disability, for purposes of section
504.
ii) Students with disabilities means
more than one student with a disability.
Authority: Sections 7( 37) and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 37) and 709( c))
52) Substantial impediment to
employment means that a physical or
mental impairment (in light of attendant
medical, psychological, vocational,
educational, communication, and other
related factors) hinders an individual
from preparing for, entering into,
engaging in, advancing in, or retaining
employment consistent with the
individual' s abilities and capabilities.
Authority: Sections 7( 20)( A) and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 20)( A) and 709( c))
53) Supported employment—(i)
Supported employment means
competitive integrated employment,
including customized employment, or
employment in an integrated work
setting in which an individual with a
most significant disability, including a
youth with a most significant disability,
is working on a short-term basis toward
competitive integrated employment that
is individualized, and customized,
consistent with the unique strengths,
abilities, interests, and informed choice
of the individual, including with
ongoing support services for individuals
with the most significant disabilities—
A) For whom competitive integrated
employment has not historically
occurred, or for whom competitive
integrated employment has been
interrupted or intermittent as a result of
a significant disability; and
B) Who, because of the nature and
severity of their disabilities, need
intensive supported employment
services and extended services after the
transition from support provided by the
designated State unit, in order to
perform this work.
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ii) For purposes of this part, an
individual with a most significant
disability, whose supported
employment in an integrated setting
does not satisfy the criteria of
competitive integrated employment, as
defined in paragraph (c)( 9) of this
section is considered to be working on
a short-term basis toward competitive
integrated employment so long as the
individual can reasonably anticipate
achieving competitive integrated
employment—
A) Within six months of achieving a
supported employment outcome; or
B) In limited circumstances, within a
period not to exceed 12 months from the
achievement of the supported
employment outcome, if a longer period
is necessary based on the needs of the
individual, and the individual has
demonstrated progress toward
competitive earnings based on
information contained in the service
record.
Authority: Sections 7( 38), 12( c), and 602 of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 705( 38), 709( c), and 795g)
54) Supported employment services
means ongoing support services,
including customized employment, and
other appropriate services needed to
support and maintain an individual
with a most significant disability,
including a youth with a most
significant disability, in supported
employment that are—
i) Organized and made available,
singly or in combination, in such a way
as to assist an eligible individual to
achieve competitive integrated
employment;
ii) Based on a determination of the
needs of an eligible individual, as
specified in an individualized plan for
employment;
iii) Provided by the designated State
unit for a period of time not to exceed
24 months, unless under special
circumstances the eligible individual
and the rehabilitation counselor jointly
agree to extend the time to achieve the
employment outcome identified in the
individualized plan for employment;
and
iv) Following transition, as post -
employment services that are
unavailable from an extended services
provider and that are necessary to
maintain or regain the job placement or
advance in employment.
Authority: Sections 7( 39), 12( c), and
103( a)( 16) of the Rehabilitation Act of 1973,
as amended; 29 U. S. C. 705( 39), 709( c), and
723( a)( 16))
55) Transition services means a
coordinated set of activities for a
student or youth with a disability—
i) Designed within an outcome -
oriented process that promotes
movement from school to post -school
activities, including postsecondary
education, vocational training,
competitive integrated employment,
supported employment, continuing and
adult education, adult services,
independent living, or community
participation;
ii) Based upon the individual
student' s or youth' s needs, taking into
account the student' s or youth' s
preferences and interests;
iii) That includes instruction,
community experiences, the
development of employment and other
post -school adult living objectives, and,
if appropriate, acquisition of daily living
skills and functional vocational
evaluation;
iv) That promotes or facilitates the
achievement of the employment
outcome identified in the student' s or
youth' s individualized plan for
employment; and
v) That includes outreach to and
engagement of the parents, or, as
appropriate, the representative of such a
student or youth with a disability.
Authority: Sections 12( c) and 103( a)( 15) and
b)( 7) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 709( c) and 723( a)( 15)
and (b)( 7))
56) Transportation means travel and
related expenses that are necessary to
enable an applicant or eligible
individual to participate in a vocational
rehabilitation service, including
expenses for training in the use of
public transportation vehicles and
systems.
Authority: Sections 12( c) and 103( a)( 8) of
the Rehabilitation Act of 1973, as amended;
29 U.S. C. 709( c) and 723( a)( 8))
i) Examples. The following are
examples of expenses that would meet
the definition of transportation. The
examples are purely illustrative, do not
address all possible circumstances, and
are not intended as substitutes for
individual counselor judgment.
Example 1: Travel and related expenses
for a personal care attendant or aide if the
services of that person are necessary to
enable the applicant or eligible individual to
travel to participate in any vocational
rehabilitation service.
Example 2: The purchase and repair of
vehicles, including vans, but not the
modification of these vehicles, as
modification would be considered a
rehabilitation technology service.
Example 3: Relocation expenses incurred
by an eligible individual in connection with
a job placement that is a significant distance
from the eligible individual' s current
residence.
ii) [Reserved]
57) Vocational rehabilitation
services—( i) If provided to an
individual, means those services listed
in § 361. 48; and
ii) If provided for the benefit of
groups of individuals, means those
services listed in § 361. 49.
Authority: Sections 7( 40) and 103 of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 40) and 723)
58) Youth with a disability—(i) Youth
with a disability means an individual
with a disability who is not—
A) Younger than 14 years of age; and
B) Older than 24 years of age.
ii) Youth with disabilities means
more than one youth with a disability.
Authority: Section 7( 42) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 42))
Subpart B— State Plan and Other
Requirements for Vocational
Rehabilitation Services
361. 10 Submission, approval, and
disapproval of the State plan.
a) Purpose. ( 1) To be eligible to
receive funds under this part for a fiscal
year, a State must submit, and have
approved, a vocational rehabilitation
services portion of a Unified or
Combined State Plan in accordance with
section 102 or 103 of the Workforce
Innovation and Opportunity Act.
2) The vocational rehabilitation
services portion of the Unified or
Combined State Plan must satisfy all
requirements set forth in this part.
b) Separate part relating to the
vocational rehabilitation of individuals
who are blind. If a separate State agency
administers or supervises the
administration of a separate part of the
vocational rehabilitation services
portion of the Unified or Combined
State Plan relating to the vocational
rehabilitation of individuals who are
blind, that part of the vocational
rehabilitation services portion of the
Unified or Combined State Plan must
separately conform to all applicable
requirements under this part.
c) Public participation. Prior to the
adoption of any substantive policies or
procedures specific to the provision of
vocational rehabilitation services under
the vocational rehabilitation services
portion of the Unified or Combined
State Plan, including making any
substantive amendment to those
policies and procedures, the designated
State agency must conduct public
meetings throughout the State, in
accordance with the requirements of
361. 20.
d) [ Reserved]
e) Submission ofpolicies and
procedures. The State is not required to
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submit policies, procedures, or
descriptions required under this part
that have been previously submitted to
the Secretary and that demonstrate that
the State meets the requirements of this
part, including any policies, procedures,
or descriptions submitted under this
part that are in effect on July 22, 2014.
f)Due process. If the Secretary
disapproves the vocational
rehabilitation services portion of the
Unified or Combined State Plan, the
Secretary will follow these procedures:
1) Informal resolution. Prior to
disapproving the vocational
rehabilitation services portion of the
Unified or Combined State Plan, the
Secretary attempts to resolve disputes
informally with State officials.
2) Notice. If, after reasonable effort
has been made to resolve the dispute, no
resolution has been reached, the
Secretary provides notice to the State
agency of the intention to disapprove
the vocational rehabilitation services
portion of the Unified or Combined
State Plan and of the opportunity for a
hearing.
3) State plan hearing. If the State
agency requests a hearing, the Secretary
designates one or more individuals,
either from the Department or
elsewhere, not responsible for or
connected with the administration of
this program, to conduct a hearing in
accordance with the provisions of 34
CFR part 81, subpart A.
4) Initial decision. The hearing officer
issues an initial decision in accordance
with 34 CFR 81. 41.
5) Petition for review of an initial
decision. The State agency may seek the
Secretary' s review of the initial decision
in accordance with 34 CFR part 81.
6) Review by the Secretary. The
Secretary reviews the initial decision in
accordance with 34 CFR 81. 43.
7) Final decision of the Department.
The final decision of the Department is
made in accordance with 34 CFR 81. 44.
8) Judicial review. A State may
appeal the Secretary' s decision to
disapprove the vocational rehabilitation
services portion of the Unified or
Combined State Plan by filing a petition
for review with the United States Court
of Appeals for the circuit in which the
State is located, in accordance with
section 107( d) of the Act.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 101( a) and (b) and
107( d) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 721( a) and (b) and
727( d); and 20 U.S. C. 1231g(a))
361. 11 Withholding of funds.
a) Basis for withholding. The
Secretary may withhold or limit
payments under section 111 or 603( a) of
the Act, as provided by section 107( c) of
the Act, if the Secretary determines
that—
1) The vocational rehabilitation
services portion of the Unified or
Combined State Plan, including the
supported employment supplement, has
been so changed that it no longer
conforms with the requirements of this
part or part 363; or
2) In the administration of the
vocational rehabilitation services
portion of the Unified or Combined
State Plan there is a failure to comply
substantially with any provision of such
plan or with an evaluation standard or
performance indicator established under
section 106 of the Act.
b) Informal resolution. Prior to
withholding or limiting payments in
accordance with this section, the
Secretary attempts to resolve disputed
issues informally with State officials.
c) Notice. If, after reasonable effort
has been made to resolve the dispute, no
resolution has been reached, the
Secretary provides notice to the State
agency of the intention to withhold or
limit payments and of the opportunity
for a hearing.
d) Withholding hearing. If the State
agency requests a hearing, the Secretary
designates one or more individuals,
either from the Department or
elsewhere, not responsible for or
connected with the administration of
this program, to conduct a hearing in
accordance with the provisions of 34
CFR part 81, subpart A.
e) Initial decision. The hearing officer
issues an initial decision in accordance
with 34 CFR 81. 41.
f) Petition for review of an initial
decision. The State agency may seek the
Secretary' s review of the initial decision
in accordance with 34 CFR 81. 42.
g) Review by the Secretary. The
Secretary reviews the initial decision in
accordance with 34 CFR 81. 43.
h) Final decision of the Department.
The final decision of the Department is
made in accordance with 34 CFR 81. 44.
i) Judicial review. A State may appeal
the Secretary' s decision to withhold or
limit payments by filing a petition for
review with the United States Court of
Appeals for the circuit in which the
State is located, in accordance with
section 107(d) of the Act.
Authority: Sections 12( c), 101(b), and 107( c)
and (d) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 709( c), 721( b) and 727( c)
and (d))
Administration
361. 12 Methods of administration.
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that the State
agency, and the designated State unit if
applicable, employs methods of
administration found necessary by the
Secretary for the proper and efficient
administration of the plan and for
carrying out all functions for which the
State is responsible under the plan and
this part. These methods must include
procedures to ensure accurate data
collection and financial accountability.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c) and 101( a)( 6) and
a)( 10)( A) of the Rehabilitation Act of 1973,
as amended; 29 U. S. C. 709( c) and 721( a)( 6)
and (a)( 10)( A))
361. 13 State agency for administration.
a) Designation of State agency. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must designate a State agency
as the sole State agency to administer
the vocational rehabilitation services
portion of the Unified or Combined
State Plan, or to supervise its
administration in a political subdivision
of the State by a sole local agency, in
accordance with the following
requirements:
1) General. Except as provided in
paragraphs ( a)( 2) and ( 3) of this section,
the vocational rehabilitation services
portion of the Unified or Combined
State Plan must provide that the
designated State agency is one of the
following types of agencies:
i) A State agency that is primarily
concerned with vocational
rehabilitation or vocational and other
rehabilitation of individuals with
disabilities; or
ii) A State agency that includes a
vocational rehabilitation unit as
provided in paragraph (b) of this
section.
2) American Samoa. In the case of
American Samoa, the vocational
rehabilitation services portion of the
Unified or Combined State Plan must
designate the Governor.
3) Designated State agency for
individuals who are blind. If a State
commission or other agency that
provides assistance or services to
individuals who are blind is authorized
under State law to provide vocational
rehabilitation services to individuals
who are blind, and this commission or
agency is primarily concerned with
vocational rehabilitation or includes a
vocational rehabilitation unit as
provided in paragraph (b) of this
section, the vocational rehabilitation
services portion of the Unified or
Combined State Plan may designate that
agency as the sole State agency to
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administer the part of the plan under
which vocational rehabilitation services
are provided for individuals who are
blind or to supervise its administration
in a political subdivision of the State by
a sole local agency.
b) Designation of State unit—(1)
General. If the designated State agency
is not of the type specified in paragraph
a)( 1)( i) of this section or if the
designated State agency specified in
paragraph (a)( 3) of this section is not
primarily concerned with vocational
rehabilitation or vocational and other
rehabilitation of individuals with
disabilities, the vocational rehabilitation
services portion of the Unified or
Combined State Plan must assure that
the agency (or each agency if two
agencies are designated) includes a
vocational rehabilitation bureau,
division, or unit that—
i) Is primarily concerned with
vocational rehabilitation or vocational
and other rehabilitation of individuals
with disabilities and is responsible for
the administration of the State agency' s
vocational rehabilitation program under
the vocational rehabilitation services
portion of the Unified or Combined
State Plan;
ii) Has a full-time director who is
responsible for the day-to-day
operations of the vocational
rehabilitation program;
iii) Has a staff, at least 90 percent of
whom are employed full time on the
rehabilitation work of the organizational
unit;
iv) Is located at an organizational
level and has an organizational status
within the State agency comparable to
that of other major organizational units
of the agency; and
v) Has the sole authority and
responsibility described within the
designated State agency in paragraph ( a)
of this section to expend funds made
available under the Act in a manner that
is consistent with the purpose of the
Act.
2) In the case of a State that has not
designated a separate State agency for
individuals who are blind, as provided
for in paragraph (a)( 3) of this section,
the State may assign responsibility for
the part of the vocational rehabilitation
services portion of the Unified or
Combined State Plan under which
vocational rehabilitation services are
provided to individuals who are blind
to one organizational unit of the
designated State agency and may assign
responsibility for the rest of the plan to
another organizational unit of the
designated State agency, with the
provisions of paragraph (b)( 1) of this
section applying separately to each of
these units.
c) Responsibility for administration—
1) Required activities. At a minimum,
the following activities are the
responsibility of the designated State
unit or the sole local agency under the
supervision of the State unit:
i) All decisions affecting eligibility
for vocational rehabilitation services,
the nature and scope of available
services, and the provision of these
services.
ii) The determination to close the
record of services of an individual who
has achieved an employment outcome
in accordance with § 361. 56.
iii) Policy formulation and
implementation.
iv) The allocation and expenditure of
vocational rehabilitation funds.
v) Participation as a partner in the
one-stop service delivery system
established under title I of the
Workforce Innovation and Opportunity
Act, in accordance with 20 CFR part
678.
2) Non -delegable responsibility. The
responsibility for the functions
described in paragraph (c)( 1) of this
section may not be delegated to any
other agency or individual.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 101( a)( 2) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 721( a)( 2))
361. 14 Substitute State agency.
a) General provisions. (1) If the
Secretary has withheld all funding from
a State under § 361. 11, the State may
designate another agency to substitute
for the designated State agency in
carrying out the State' s program of
vocational rehabilitation services.
2) Any public or nonprofit private
organization or agency within the State
or any political subdivision of the State
is eligible to be a substitute agency.
3) The substitute agency must submit
a vocational rehabilitation services
portion of the Unified or Combined
State Plan that meets the requirements
of this part.
4) The Secretary makes no grant to a
substitute agency until the Secretary
approves its plan.
b) Substitute agency matching share.
The Secretary does not make any
payment to a substitute agency unless it
has provided assurances that it will
contribute the same matching share as
the State would have been required to
contribute if the State agency were
carrying out the vocational
rehabilitation program.
Authority: Section 107( c)( 3) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 727( c)( 3))
361. 15 Local administration.
a) If the vocational rehabilitation
services portion of the Unified or
Combined State Plan provides for the
administration of the plan by a local
agency, the designated State agency
must—
1) Ensure that each local agency is
under the supervision of the designated
State unit and is the sole local agency
as defined in § 361. 5( c)( 47) that is
responsible for the administration of the
program within the political subdivision
that it serves; and
2) Develop methods that each local
agency will use to administer the
vocational rehabilitation program, in
accordance with the vocational
rehabilitation services portion of the
Unified or Combined State Plan.
b) A separate local agency serving
individuals who are blind may
administer that part of the plan relating
to vocational rehabilitation of
individuals who are blind, under the
supervision of the designated State unit
for individuals who are blind.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 7( 24) and 101( a)( 2)( A) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 705( 24) and 721( a)( 2)( A))
361. 16 Establishment of an independent
commission or a State Rehabilitation
Council.
a) General requirement. Except as
provided in paragraph (b) of this
section, the vocational rehabilitation
services portion of the Unified or
Combined State Plan must contain one
of the following two assurances:
1) An assurance that the designated
State agency is an independent State
commission that—
i) Is responsible under State law for
operating, or overseeing the operation
of, the vocational rehabilitation program
in the State and is primarily concerned
with vocational rehabilitation or
vocational and other rehabilitation
services, in accordance with
361. 13( a)( 1)( i);
ii) Is consumer -controlled by persons
who—
A) Are individuals with physical or
mental impairments that substantially
limit major life activities; and
B) Represent individuals with a
broad range of disabilities, unless the
designated State unit under the
direction of the commission is the State
agency for individuals who are blind;
iii) Includes family members,
advocates, or other representatives of
individuals with mental impairments;
and
iv) Conducts the functions identified
in § 361. 17(h)(4).
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2) An assurance that—
i) The State has established a State
Rehabilitation Council (Council) that
meets the requirements of § 361. 17;
ii) The designated State unit, in
accordance with § 361. 29, jointly
develops, agrees to, and reviews
annually State goals and priorities and
jointly submits to the Secretary annual
reports of progress with the Council;
iii) The designated State unit
regularly consults with the Council
regarding the development,
implementation, and revision of State
policies and procedures of general
applicability pertaining to the provision
of vocational rehabilitation services;
iv) The designated State unit
transmits to the Council—
A) All plans, reports, and other
information required under this part to
be submitted to the Secretary;
B) All policies and information on all
practices and procedures of general
applicability provided to or used by
rehabilitation personnel providing
vocational rehabilitation services under
this part; and
C) Copies of due process hearing
decisions issued under this part and
transmitted in a manner to ensure that
the identity of the participants in the
hearings is kept confidential; and
v) The vocational rehabilitation
services portion of the Unified or
Combined State Plan, and any revision
to the vocational rehabilitation services
portion of the Unified or Combined
State Plan, includes a summary of input
provided by the Council, including
recommendations from the annual
report of the Council, the review and
analysis of consumer satisfaction
described in § 361. 17(h)(4), and other
reports prepared by the Council, and the
designated State unit' s response to the
input and recommendations, including
its reasons for rejecting any input or
recommendation of the Council.
b) Exception for separate State
agency for individuals who are blind. In
the case of a State that designates a
separate State agency under
361. 13( a)( 3) to administer the part of
the vocational rehabilitation services
portion of the Unified or Combined
State Plan under which vocational
rehabilitation services are provided to
individuals who are blind, the State
must either establish a separate State
Rehabilitation Council for each agency
that does not meet the requirements in
paragraph (a)( 1) of this section or
establish one State Rehabilitation
Council for both agencies if neither
agency meets the requirements of
paragraph (a)( 1) of this section.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 101( a)( 21) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 721( a)( 21))
361. 17 Requirements for a State
Rehabilitation Council.
If the State has established a Council
under § 361. 16( a)( 2) or (b), the Council
must meet the following requirements:
a) Appointment. (1) The members of
the Council must be appointed by the
Governor or, in the case of a State that,
under State law, vests authority for the
administration of the activities carried
out under this part in an entity other
than the Governor (such as one or more
houses of the State legislature or an
independent board), the chief officer of
that entity.
2) The appointing authority must
select members of the Council after
soliciting recommendations from
representatives of organizations
representing a broad range of
individuals with disabilities and
organizations interested in individuals
with disabilities. In selecting members,
the appointing authority must consider,
to the greatest extent practicable, the
extent to which minority populations
are represented on the Council.
b) Composition—( 1) General. Except
as provided in paragraph (b)( 3) of this
section, the Council must be composed
of at least 15 members, including—
i) At least one representative of the
Statewide Independent Living Council,
who must be the chairperson or other
designee of the Statewide Independent
Living Council;
ii) At least one representative of a
parent training and information center
established pursuant to section 682( a) of
the Individuals with Disabilities
Education Act;
iii) At least one representative of the
Client Assistance Program established
under part 370 of this chapter, who
must be the director of or other
individual recommended by the Client
Assistance Program;
iv) At least one qualified vocational
rehabilitation counselor with knowledge
of and experience with vocational
rehabilitation programs who serves as
an ex officio, nonvoting member of the
Council if employed by the designated
State agency;
v) At least one representative of
community rehabilitation program
service providers;
vi) Four representatives of business,
industry, and labor;
vii) Representatives of disability
groups that include a cross section of—
A) Individuals with physical,
cognitive, sensory, and mental
disabilities; and
B) Representatives of individuals
with disabilities who have difficulty
representing themselves or are unable
due to their disabilities to represent
themselves;
viii) Current or former applicants for,
or recipients of, vocational
rehabilitation services;
ix) In a State in which one or more
projects are funded under section 121 of
the Act (American Indian Vocational
Rehabilitation Services), at least one
representative of the directors of the
projects in such State;
x) At least one representative of the
State educational agency responsible for
the public education of students with
disabilities who are eligible to receive
services under this part and part B of
the Individuals with Disabilities
Education Act;
xi) At least one representative of the
State workforce development board; and
xii) The director of the designated
State unit as an ex officio, nonvoting
member of the Council.
2) Employees of the designated State
agency. Employees of the designated
State agency may serve only as
nonvoting members of the Council. This
provision does not apply to the
representative appointed pursuant to
paragraph (b)( 1)( iii) of this section.
3) Composition of a separate Council
for a separate State agency for
individuals who are blind. Except as
provided in paragraph (b)( 4) of this
section, if the State establishes a
separate Council for a separate State
agency for individuals who are blind,
that Council must—
i) Conform with all of the
composition requirements for a Council
under paragraph (b)( 1) of this section,
except the requirements in paragraph
b)( 1)( vii), unless the exception in
paragraph (b)( 4) of this section applies;
and
ii) Include—
A) At least one representative of a
disability advocacy group representing
individuals who are blind; and
B) At least one representative of an
individual who is blind, has multiple
disabilities, and has difficulty
representing himself or herself or is
unable due to disabilities to represent
himself or herself.
4) Exception. If State law in effect on
October 29, 1992 requires a separate
Council under paragraph (b)( 3) of this
section to have fewer than 15 members,
the separate Council is in compliance
with the composition requirements in
paragraphs (b)( 1)( vi) and (viii) of this
section if it includes at least one
representative who meets the
requirements for each of those
paragraphs.
c) Majority. (1) A majority of the
Council members must be individuals
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with disabilities who meet the
requirements of § 361. 5( c)( 28) and are
not employed by the designated State
unit.
2) In the case of a separate Council
established under § 361. 16(b), a majority
of the Council members must be
individuals who are blind and are not
employed by the designated State unit.
d) Chairperson. ( 1) The chairperson
must be selected by the members of the
Council from among the voting
members of the Council, subject to the
veto power of the Governor; or
2) In States in which the Governor
does not have veto power pursuant to
State law, the appointing authority
described in paragraph (a)( 1) of this
section must designate a member of the
Council to serve as the chairperson of
the Council or must require the Council
to designate a member to serve as
chairperson.
e) Terms of appointment. (1) Each
member of the Council must be
appointed for a term of no more than
three years, and each member of the
Council, other than a representative
identified in paragraph (b)( 1)( iii) or (ix)
of this section, may serve for no more
than two consecutive full terms.
2) A member appointed to fill a
vacancy occurring prior to the end of
the term for which the predecessor was
appointed must be appointed for the
remainder of the predecessor' s term.
3) The terms of service of the
members initially appointed must be, as
specified by the appointing authority as
described in paragraph (a)( 1) of this
section, for varied numbers of years to
ensure that terms expire on a staggered
basis.
f) Vacancies. (1) A vacancy in the
membership of the Council must be
filled in the same manner as the original
appointment, except the appointing
authority as described in paragraph
a)( 1) of this section may delegate the
authority to fill that vacancy to the
remaining members of the Council after
making the original appointment.
2) No vacancy affects the power of
the remaining members to execute the
duties of the Council.
g) Conflict of interest. No member of
the Council may cast a vote on any
matter that would provide direct
financial benefit to the member or the
member' s organization or otherwise give
the appearance of a conflict of interest
under State law.
h) Functions. The Council must, after
consulting with the State workforce
development board—
1) Review, analyze, and advise the
designated State unit regarding the
performance of the State unit' s
responsibilities under this part,
particularly responsibilities related to—
i) Eligibility, including order of
selection;
ii) The extent, scope, and
effectiveness of services provided; and
iii) Functions performed by State
agencies that affect or potentially affect
the ability of individuals with
disabilities in achieving employment
outcomes under this part;
2) In partnership with the designated
State unit—
i) Develop, agree to, and review State
goals and priorities in accordance with
361. 29( c); and
ii) Evaluate the effectiveness of the
vocational rehabilitation program and
submit reports of progress to the
Secretary in accordance with
361. 29( e);
3) Advise the designated State agency
and the designated State unit regarding
activities carried out under this part and
assist in the preparation of the
vocational rehabilitation services
portion of the Unified or Combined
State Plan and amendments to the plan,
applications, reports, needs
assessments, and evaluations required
by this part;
4) To the extent feasible, conduct a
review and analysis of the effectiveness
of, and consumer satisfaction with—
i) The functions performed by the
designated State agency;
ii) The vocational rehabilitation
services provided by State agencies and
other public and private entities
responsible for providing vocational
rehabilitation services to individuals
with disabilities under the Act; and
iii) The employment outcomes
achieved by eligible individuals
receiving services under this part,
including the availability of health and
other employment benefits in
connection with those employment
outcomes;
5) Prepare and submit to the
Governor and to the Secretary no later
than 90 days after the end of the Federal
fiscal year an annual report on the status
of vocational rehabilitation programs
operated within the State and make the
report available to the public through
appropriate modes of communication;
6) To avoid duplication of efforts and
enhance the number of individuals
served, coordinate activities with the
activities of other councils within the
State, including the Statewide
Independent Living Council established
under chapter 1, title VII of the Act, the
advisory panel established under
section 612( a)( 21) of the Individuals
with Disabilities Education Act, the
State Developmental Disabilities
Planning Council described in section
124 of the Developmental Disabilities
Assistance and Bill of Rights Act, the
State mental health planning council
established under section 1914( a) of the
Public Health Service Act, and the State
workforce development board, and with
the activities of entities carrying out
programs under the Assistive
Technology Act of 1998;
7) Provide for coordination and the
establishment of working relationships
between the designated State agency
and the Statewide Independent Living
Council and centers for independent
living within the State; and
8) Perform other comparable
functions, consistent with the purpose
of this part, as the Council determines
to be appropriate, that are comparable to
the other functions performed by the
Council.
i) Resources. ( 1) The Council, in
conjunction with the designated State
unit, must prepare a plan for the
provision of resources, including staff
and other personnel, that may be
necessary and sufficient for the Council
to carry out its functions under this part.
2) The resource plan must, to the
maximum extent possible, rely on the
use of resources in existence during the
period of implementation of the plan.
3) Any disagreements between the
designated State unit and the Council
regarding the amount of resources
necessary to carry out the functions of
the Council must be resolved by the
Governor, consistent with paragraphs
i)( 1) and ( 2) of this section.
4) The Council must, consistent with
State law, supervise and evaluate the
staff and personnel that are necessary to
carry out its functions.
5) Those staff and personnel that are
assisting the Council in carrying out its
functions may not be assigned duties by
the designated State unit or any other
agency or office of the State that would
create a conflict of interest.
j) Meetings. The Council must—
1) Convene at least four meetings a
year in locations determined by the
Council to be necessary to conduct
Council business. The meetings must be
publicly announced, open, and
accessible to the general public,
including individuals with disabilities,
unless there is a valid reason for an
executive session; and
2) Conduct forums or hearings, as
appropriate, that are publicly
announced, open, and accessible to the
public, including individuals with
disabilities.
k) Compensation. Funds
appropriated under title I of the Act,
except funds to carry out sections 112
and 121 of the Act, may be used to
compensate and reimburse the expenses
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of Council members in accordance with
section 105( g) of the Act.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 105 of the Rehabilitation
Act of 1973, as amended; 29 U. S. C. 725)
361. 18 Comprehensive system of
personnel development.
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must describe the procedures
and activities the State agency will
undertake to establish and maintain a
comprehensive system of personnel
development designed to ensure an
adequate supply of qualified
rehabilitation personnel, including
professionals and paraprofessionals, for
the designated State unit. If the State
agency has a State Rehabilitation
Council, this description must, at a
minimum, specify that the Council has
an opportunity to review and comment
on the development of plans, policies,
and procedures necessary to meet the
requirements of paragraphs (b) through
d) of this section. This description must
also conform with the following
requirements:
a) Personnel and personnel
development data system. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must describe the
development and maintenance of a
system by the State agency for collecting
and analyzing on an annual basis data
on qualified personnel needs and
personnel development, in accordance
with the following requirements:
1) Data on qualified personnel needs
must include—
i) The number of personnel who are
employed by the State agency in the
provision of vocational rehabilitation
services in relation to the number of
individuals served, broken down by
personnel category;
ii) The number of personnel
currently needed by the State agency to
provide vocational rehabilitation
services, broken down by personnel
category; and
iii) Projections of the number of
personnel, broken down by personnel
category, who will be needed by the
State agency to provide vocational
rehabilitation services in the State in
five years based on projections of the
number of individuals to be served,
including individuals with significant
disabilities, the number of personnel
expected to retire or leave the field, and
other relevant factors.
2) Data on personnel development
must include—
i) A list of the institutions of higher
education in the State that are preparing
vocational rehabilitation professionals,
by type of program;
ii) The number of students enrolled
at each of those institutions, broken
down by type of program; and
iii) The number of students who
graduated during the prior year from
each of those institutions with
certification or licensure, or with the
credentials for certification or licensure,
broken down by the personnel category
for which they have received, or have
the credentials to receive, certification
or licensure.
b) Plan for recruitment, preparation,
and retention ofqualified personnel.
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must describe the
development, updating, and
implementation of a plan to address the
current and projected needs for
personnel who are qualified in
accordance with paragraph (c) of this
section. The plan must identify the
personnel needs based on the data
collection and analysis system
described in paragraph (a) of this
section and must provide for the
coordination and facilitation of efforts
between the designated State unit and
institutions of higher education and
professional associations to recruit,
prepare, and retain personnel who are
qualified in accordance with paragraph
c) of this section, including personnel
from minority backgrounds and
personnel who are individuals with
disabilities.
c) Personnel standards. (1) The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must include the State
agency' s policies and describe—
i) Standards that are consistent with
any national or State -approved or
recognized certification, licensing, or
registration requirements, or, in the
absence of these requirements, other
comparable requirements (including
State personnel requirements) that
apply to the profession or discipline in
which that category of personnel is
providing vocational rehabilitation
services; and
ii) The establishment and
maintenance of education and
experience requirements, to ensure that
the personnel have a 21st -century
understanding of the evolving labor
force and the needs of individuals with
disabilities, including requirements
for—
A)(1) Attainment of a baccalaureate
degree in a field of study reasonably
related to vocational rehabilitation, to
indicate a level of competency and skill
demonstrating basic preparation in a
field of study such as vocational
rehabilitation counseling, social work,
psychology, disability studies, business
administration, human resources,
special education, supported
employment, customized employment,
economics, or another field that
reasonably prepares individuals to work
with consumers and employers; and
2) Demonstrated paid or unpaid
experience, for not less than one year,
consisting of—
i) Direct work with individuals with
disabilities in a setting such as an
independent living center;
ii) Direct service or advocacy
activities that provide such individual
with experience and skills in working
with individuals with disabilities; or
iii) Direct experience in competitive
integrated employment environments as
an employer, as a small business owner
or operator, or in self-employment, or
other experience in human resources or
recruitment, or experience in
supervising employees, training, or
other activities; or
B) Attainment of a master' s or
doctoral degree in a field of study such
as vocational rehabilitation counseling,
law, social work, psychology, disability
studies, business administration, human
resources, special education,
management, public administration, or
another field that reasonably provides
competence in the employment sector,
in a disability field, or in both business-
related and rehabilitation -related fields;
and
2) As used in this section—
i) Profession or discipline means a
specific occupational category,
including any paraprofessional
occupational category, that—
A) Provides rehabilitation services to
individuals with disabilities;
B) Has been established or designated
by the State unit; and
C) Has a specified scope of
responsibility.
ii) Ensuring that personnel have a
21st -century understanding of the
evolving labor force and the needs of
individuals with disabilities means that
personnel have specialized training and
experience that enables them to work
effectively with individuals with
disabilities to assist them to achieve
competitive integrated employment and
with employers who hire such
individuals. Relevant personnel skills
include, but are not limited to—
A) Understanding the functional
limitations of various disabilities and
the vocational implications of
functional limitations on employment,
especially with regard to individuals
whose disabilities may require
specialized services or groups of
individuals with disabilities who
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comprise an increasing proportion of
the State VR caseloads, such as
individuals with traumatic brain injury,
post-traumatic stress syndrome, mental
illnesses, autism, blindness or deaf -
blindness;
B) Vocational assessment tools and
strategies and the interpretation of
vocational assessment results,
including, when appropriate, situational
and work -based assessments and
analysis of transferrable work skills;
C) Counseling and guidance skills,
including individual and group
counseling and career guidance;
D) Effective use of practices leading
to competitive integrated employment,
such as supported employment,
customized employment, internships,
apprenticeships, paid work experiences,
etc.;
E) Case management and
employment services planning,
including familiarity and use of the
broad range of disability, employment,
and social services programs in the state
and local area, such as independent
living programs, Social Security work
incentives, and the Social Security
Administration' s Ticket -to -Work
program;
F) Caseload management, including
familiarity with effective caseload
management practices and the use of
any available automated or information
technology resources;
G) In-depth knowledge of labor
market trends, occupational
requirements, and other labor market
information that provides information
about employers, business practices,
and employer personnel needs, such as
data provided by the Bureau of Labor
Statistics and the Department of Labor' s
O* NET occupational system;
H) The use of labor market
information for vocational rehabilitation
counseling, vocational planning, and
the provision of information to
consumers for the purposes of making
informed choices, business engagement
and business relationships, and job
development and job placement;
I) The use of labor market
information to support building and
maintaining relationships with
employers and to inform delivery of job
development and job placement
activities that respond to today' s labor
market;
J) Understanding the effective
utilization of rehabilitation technology
and job accommodations;
K) Training in understanding the
provisions of the Americans with
Disabilities Act and other employment
discrimination and employment-related
laws;
L) Advocacy skills to modify
attitudinal and environmental barriers
to employment for individuals with
disabilities, including those with the
most significant disabilities;
M) Skills to address cultural diversity
among consumers, particularly affecting
workplace settings, including racial and
ethnic diversity and generational
differences; and
N) Understanding confidentiality and
ethical standards and practices,
especially related to new challenges in
use of social media, new partnerships,
and data sharing.
d) Staff development. (1) The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must include the State
agency' s policies and describe the
procedures and activities the State
agency will undertake to ensure that all
personnel employed by the State unit
receive appropriate and adequate
training, including a description of—
i) A system of staff development for
rehabilitation professionals and
paraprofessionals within the State unit,
particularly with respect to assessment,
vocational counseling, job placement,
and rehabilitation technology, including
training implemented in coordination
with entities carrying out State
programs under section 4 of the
Assistive Technology Act of 1998 ( 29
U. S. C. 3003);
ii) Procedures for acquiring and
disseminating to rehabilitation
professionals and paraprofessionals
within the designated State unit
significant knowledge from research and
other sources; and
iii) Policies and procedures relating
to the establishment and maintenance of
standards to ensure that personnel,
including rehabilitation professionals
and paraprofessionals, needed within
the designated State unit to carry out
this part are appropriately and
adequately prepared and trained.
2) The specific training areas for staff
development must be based on the
needs of each State unit and may
include, but are not limited to—
i) Training regarding the Workforce
Innovation and Opportunity Act and the
amendments it made to the
Rehabilitation Act of 1973;
ii) Training with respect to the
requirements of the Americans with
Disabilities Act, the Individuals with
Disabilities Education Act, and Social
Security work incentive programs,
including programs under the Ticket to
Work and Work Incentives
Improvement Act of 1999, training to
facilitate informed choice under this
program, and training to improve the
provision of services to culturally
diverse populations; and
iii) Activities related to—
A) Recruitment and retention of
qualified rehabilitation personnel;
B) Succession planning; and
C) Leadership development and
capacity building.
e) Personnel to address individual
communication needs. The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
describe how the designated State unit
includes among its personnel, or obtains
the services of—
1) Individuals able to communicate
in the native languages of applicants,
recipients of services, and eligible
individuals who have limited English
proficiency; and
2) Individuals able to communicate
with applicants, recipients of services,
and eligible individuals in appropriate
modes of communication.
f) Coordination with personnel
development under the Individuals with
Disabilities Education Act. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must describe the procedures
and activities the State agency will
undertake to coordinate its
comprehensive system of personnel
development under the Act with
personnel development under the
Individuals with Disabilities Education
Act.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c) and 101( a)( 7) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c) and 721( a)( 7))
361. 19 Affirmative action for individuals
with disabilities.
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that the State
agency takes affirmative action to
employ and advance in employment
qualified individuals with disabilities
covered under and on the same terms
and conditions as stated in section 503
of the Act.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 101( a)( 6)( B) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 721( a)( 6)( B))
361. 20 Public participation requirements.
a) Conduct ofpublic meetings. (1)
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that prior to the
adoption of any substantive policies or
procedures governing the provision of
vocational rehabilitation services under
the Unified or Combined State Plan, the
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designated State agency conducts public
meetings throughout the State to
provide the public, including
individuals with disabilities, an
opportunity to comment on the policies
or procedures.
2) For purposes of this section,
substantive changes to the policies or
procedures governing the provision of
vocational rehabilitation services that
would require the conduct of public
meetings are those that directly impact
the nature and scope of the services
provided to individuals with
disabilities, or the manner in which
individuals interact with the designated
State agency or in matters related to the
delivery of vocational rehabilitation
services. Examples of substantive
changes include, but are not limited
to—
i) Any changes to policies or
procedures that fundamentally alter the
rights and responsibilities of individuals
with disabilities in the vocational
rehabilitation process;
ii) Organizational changes to the
designated State agency or unit that
would likely affect the manner in which
services are delivered;
iii) Any changes that affect the nature
and scope of vocational rehabilitation
services provided by the designated
State agency or unit;
iv) Changes in formal or informal
dispute procedures;
v) The adoption or amendment of
policies instituting an order of selection;
and
vi) Changes to policies and
procedures regarding the financial
participation of eligible individuals.
3) Non -substantive, e.g.,
administrative changes that would not
require the need for public hearings
include:
i) Internal procedures that do not
directly affect individuals receiving
vocational rehabilitation services, such
as payment processing or personnel
procedures;
ii) Changes to the case management
system that only affect vocational
rehabilitation personnel;
iii) Changes in indirect cost
allocations, internal fiscal review
procedures, or routine reporting
requirements;
iv) Minor revisions to vocational
rehabilitation procedures or policies to
correct production errors, such as
typographical and grammatical
mistakes; and
v) Changes to contract procedures
that do not affect the delivery of
vocational rehabilitation services.
b) Notice requirements. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that the
designated State agency, prior to
conducting the public meetings,
provides appropriate and sufficient
notice throughout the State of the
meetings in accordance with—
1) State law governing public
meetings; or
2) In the absence of State law
governing public meetings, procedures
developed by the designated State
agency in consultation with the State
Rehabilitation Council.
c) Summary of input of the State
Rehabilitation Council. The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
provide a summary of the input of the
State Rehabilitation Council, if the State
agency has a Council, into the
vocational rehabilitation services
portion of the Unified or Combined
State Plan and any amendment to that
portion of the plan, in accordance with
361. 16( a)( 2)( v).
d) Special consultation requirements.
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that the State
agency actively consults with the
director of the Client Assistance
Program, the State Rehabilitation
Council, if the State agency has a
Council, and, as appropriate, Indian
tribes, tribal organizations, and native
Hawaiian organizations on its policies
and procedures governing the provision
of vocational rehabilitation services
under the vocational rehabilitation
services portion of the Unified or
Combined State Plan.
e) Appropriate modes of
communication. The State unit must
provide to the public, through
appropriate modes of communication,
notices of the public meetings, any
materials furnished prior to or during
the public meetings, and the policies
and procedures governing the provision
of vocational rehabilitation services
under the vocational rehabilitation
services portion of the Unified or
Combined State Plan.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c), 101( a)( 16)( A), and
105( c)( 3) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 709( c), 721( a)( 16)( A),
and 725( c)( 3))
361. 21 Consultations regarding the
administration of the vocational
rehabilitation services portion of the Unified
or Combined State plan.
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that, in
connection with matters of general
policy arising in the administration of
the vocational rehabilitation services
portion of the Unified or Combined
State Plan, the designated State agency
takes into account the views of—
a) Individuals and groups of
individuals who are recipients of
vocational rehabilitation services or, as
appropriate, the individuals'
representatives;
b) Personnel working in programs
that provide vocational rehabilitation
services to individuals with disabilities;
c) Providers of vocational
rehabilitation services to individuals
with disabilities;
d) The director of the Client
Assistance Program; and
e) The State Rehabilitation Council, if
the State has a Council.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 101( a)( 16)( B) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 721( a)( 16)( B))
361. 22 Coordination with education
officials.
a) Plans, policies, and procedures. (1)
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must contain plans, policies,
and procedures for coordination
between the designated State agency
and education officials responsible for
the public education of students with
disabilities that are designed to facilitate
the transition of students with
disabilities from the receipt of
educational services, including pre-
employment transition services, in
school to the receipt of vocational
rehabilitation services under the
responsibility of the designated State
agency.
2) These plans, policies, and
procedures in paragraph (a)( 1) of this
section must provide for the
development and approval of an
individualized plan for employment in
accordance with § 361. 45 as early as
possible during the transition planning
process and not later than the time a
student with a disability determined to
be eligible for vocational rehabilitation
services leaves the school setting or, if
the designated State unit is operating
under an order of selection, before each
eligible student with a disability able to
be served under the order leaves the
school setting.
b) Formal interagency agreement.
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must include information on
a formal interagency agreement with the
State educational agency that, at a
minimum, provides for—
1) Consultation and technical
assistance, which may be provided
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using alternative means for meeting
participation (such as video conferences
and conference calls), to assist
educational agencies in planning for the
transition of students with disabilities
from school to post -school activities,
including pre-employment transition
services and other vocational
rehabilitation services;
2) Transition planning by personnel
of the designated State agency and
educational agency personnel for
students with disabilities that facilitates
the development and implementation of
their individualized education programs
IEPs) under section 614( d) of the
Individuals with Disabilities Education
Act;
3) The roles and responsibilities,
including financial responsibilities, of
each agency, including provisions for
determining State lead agencies and
qualified personnel responsible for
transition services and pre-employment
transition services;
4) Procedures for outreach to and
identification of students with
disabilities who are in need of transition
services and pre-employment transition
services. Outreach to these students
should occur as early as possible during
the transition planning process and
must include, at a minimum, a
description of the purpose of the
vocational rehabilitation program,
eligibility requirements, application
procedures, and scope of services that
may be provided to eligible individuals;
5) Coordination necessary to satisfy
documentation requirements set forth in
34 CFR part 397 with regard to students
and youth with disabilities who are
seeking subminimum wage
employment; and
6) Assurance that, in accordance with
34 CFR 397. 31, neither the State
educational agency nor the local
educational agency will enter into a
contract or other arrangement with an
entity, as defined in 34 CFR 397. 5( d), for
the purpose of operating a program
under which a youth with a disability
is engaged in work compensated at a
subminimum wage.
c) Construction. Nothing in this part
will he construed to reduce the
obligation under the Individuals with
Disabilities Education Act (20 U.S. C.
1400 et seq.) of a local educational
agency or any other agency to provide
or pay for any transition services that
are also considered special education or
related services and that are necessary
for ensuring a free appropriate public
education to children with disabilities
within the State involved.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c), 101( a)( 11)( D),
101( c), and 511 of the Rehabilitation Act of
1973, as amended; 29 U. S. C. 709( c),
721( a)( 11)( D), 721( c), and 794g)
361. 23 [ Reserved]
361. 24 Cooperation and coordination
with other entities.
a) Interagency cooperation. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must describe the designated
State agency' s cooperation with and use
of the services and facilities of Federal,
State, and local agencies and programs,
including the State programs carried out
under section 4 of the Assistive
Technology Act of 1998 ( 29 U. S. C.
3003), programs carried out by the
Under Secretary for Rural Development
of the Department of Agriculture,
noneducational agencies serving out-of-
school youth, and State use contracting
programs, to the extent that such
Federal, State, and local agencies and
programs are not carrying out activities
through the statewide workforce
development system.
b) Coordination with the Statewide
Independent Living Council and
independent living centers. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that the
designated State unit, the Statewide
Independent Living Council established
under title VII, chapter 1, part B of the
Act, and the independent living centers
established under title VII, Chapter 1,
Part C of the Act have developed
working relationships and coordinate
their activities.
c) Coordination with Employers. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must describe how the
designated State unit will work with
employers to identify competitive
integrated employment opportunities
and career exploration opportunities, in
order to facilitate the provision of—
1) Vocational rehabilitation services;
and
2) Transition services for youth with
disabilities and students with
disabilities, such as pre-employment
transition services.
d) Cooperative agreement with
recipients ofgrants for services to
American Indians—(1) General. In
applicable cases, the vocational
rehabilitation services portion of the
Unified or Combined State Plan must
assure that the designated State agency
has entered into a formal cooperative
agreement with each grant recipient in
the State that receives funds under part
C of the Act (American Indian
Vocational Rehabilitation Services).
2) Contents offormal cooperative
agreement. The agreement required
under paragraph (d)( 1) of this section
must describe strategies for
collaboration and coordination in
providing vocational rehabilitation
services to American Indians who are
individuals with disabilities,
including—
i) Strategies for interagency referral
and information sharing that will assist
in eligibility determinations and the
development of individualized plans for
employment;
ii) Procedures for ensuring that
American Indians who are individuals
with disabilities and are living on or
near a reservation or tribal service area
are provided vocational rehabilitation
services;
iii) Strategies for the provision of
transition planning by personnel of the
designated State unit, the State
educational agency, and the recipient of
funds under part C of the Act, that will
facilitate the development and approval
of the individualized plan for
employment under § 361. 45; and
iv) Provisions for sharing resources
in cooperative studies and assessments,
joint training activities, and other
collaborative activities designed to
improve the provision of services to
American Indians who are individuals
with disabilities.
e) Reciprocal referral services
between two designated State units in
the same State. If there is a separate
designated State unit for individuals
who are blind, the two designated State
units must establish reciprocal referral
services, use each other' s services and
facilities to the extent feasible, jointly
plan activities to improve services in the
State for individuals with multiple
impairments, including visual
impairments, and otherwise cooperate
to provide more effective services,
including, if appropriate, entering into a
written cooperative agreement.
f) Cooperative agreement regarding
individuals eligible for home and
community-based waiver programs. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must include an assurance
that the designated State unit has
entered into a formal cooperative
agreement with the State agency
responsible for administering the State
Medicaid plan under title XIX of the
Social Security Act (42 U.S. C. 1396 et
seq.) and the State agency with primary
responsibility for providing services and
supports for individuals with
intellectual disabilities and individuals
with developmental disabilities, with
respect to the delivery of vocational
rehabilitation services, including
55758 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
extended services, for individuals with
the most significant disabilities who
have been determined to be eligible for
home and community-based services
under a Medicaid waiver, Medicaid
State plan amendment, or other
authority related to a State Medicaid
program.
g) Interagency cooperation. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan shall describe how the
designated State agency will collaborate
with the State agency responsible for
administering the State Medicaid plan
under title XIX of the Social Security
Act (42 U.S. C. 1396 et seq.), the State
agency responsible for providing
services for individuals with
developmental disabilities, and the
State agency responsible for providing
mental health services, to develop
opportunities for community-based
employment in integrated settings, to
the greatest extent practicable.
h) Coordination with assistive
technology programs. The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
include an assurance that the designated
State unit, and the lead agency and
implementing entity (if any) designated
by the Governor of the State under
section 4 of the Assistive Technology
Act of 1998 ( 29 U. S. C. 3003), have
developed working relationships and
will enter into agreements for the
coordination of their activities,
including the referral of individuals
with disabilities to programs and
activities described in that section.
i) Coordination with ticket to work
and self-sufficiency program. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must include an assurance
that the designated State unit will
coordinate activities with any other
State agency that is functioning as an
employment network under the Ticket
to Work and Self -Sufficiency Program
established under section 1148 of the
Social Security Act (42 U.S. C. 1320b-
19).
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c) and 101( a)( 11) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c) and 721( a)( 11))
361. 25 Statewideness.
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that services
provided under the vocational
rehabilitation services portion of the
Unified or Combined State Plan will be
available in all political subdivisions of
the State, unless a waiver of
statewideness is requested and
approved in accordance with § 361. 26.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 101(a)(4) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 721( a)( 4))
361. 26 Waiver of statewideness.
a) Availability. The State unit may
provide services in one or more political
subdivisions of the State that increase
services or expand the scope of services
that are available statewide under the
vocational rehabilitation services
portion of the Unified or Combined
State Plan if—
1) The non -Federal share of the cost
of these services is met from funds
provided by a local public agency,
including funds contributed to a local
public agency by a private agency,
organization, or individual;
2) The services are likely to promote
the vocational rehabilitation of
substantially larger numbers of
individuals with disabilities or of
individuals with disabilities with
particular types of impairments; and
3) For purposes other than those
specified in § 361.60(b)(3)(i) and
consistent with the requirements in
361.60(b)(3)(ii), the State includes in
its vocational rehabilitation services
portion of the Unified or Combined
State Plan, and the Secretary approves,
a waiver of the statewideness
requirement, in accordance with the
requirements of paragraph (b) of this
section.
b) Request for waiver. The request for
a waiver of statewideness must—
1) Identify the types of services to be
provided;
2) Contain a written assurance from
the local public agency that it will make
available to the State unit the non -
Federal share of funds;
3) Contain a written assurance that
State unit approval will be obtained for
each proposed service before it is put
into effect; and
4) Contain a written assurance that
all other requirements of the vocational
rehabilitation services portion of the
Unified or Combined State Plan,
including a State' s order of selection
requirements, will apply to all services
approved under the waiver.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 101(a)(4) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 721( a)( 4))
361. 27 Shared funding and
administration of joint programs.
a) If the vocational rehabilitation
services portion of the Unified or
Combined State Plan provides for the
designated State agency to share
funding and administrative
responsibility with another State agency
or local public agency to carry out a
joint program to provide services to
individuals with disabilities, the State
must submit to the Secretary for
approval a plan that describes its shared
funding and administrative
arrangement.
b) The plan under paragraph (a) of
this section must include—
1) A description of the nature and
scope of the joint program;
2) The services to be provided under
the joint program;
3) The respective roles of each
participating agency in the
administration and provision of
services; and
4) The share of the costs to be
assumed by each agency.
c) If a proposed joint program does
not comply with the statewideness
requirement in § 361. 25, the State unit
must obtain a waiver of statewideness,
in accordance with § 361. 26.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 101( a)( 2)( A) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 721( a)( 2)( A))
361. 28 Third -party cooperative
arrangements involving funds from other
public agencies.
a) The designated State unit may
enter into a third -party cooperative
arrangement for providing or
contracting for the provision of
vocational rehabilitation services with
another State agency or a local public
agency that is providing part or all of
the non -Federal share in accordance
with paragraph (c) of this section, if the
designated State unit ensures that—
1) The services provided by the
cooperating agency are not the
customary or typical services provided
by that agency but are new services that
have a vocational rehabilitation focus or
existing services that have been
modified, adapted, expanded, or
reconfigured to have a vocational
rehabilitation focus;
2) The services provided by the
cooperating agency are only available to
applicants for, or recipients of, services
from the designated State unit;
3) Program expenditures and staff
providing services under the
cooperative arrangement are under the
administrative supervision of the
designated State unit; and
4) All requirements of the vocational
rehabilitation services portion of the
Unified or Combined State Plan,
including a State' s order of selection,
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will apply to all services provided
under the cooperative arrangement.
b) If a third party cooperative
arrangement does not comply with the
statewideness requirement in § 361. 25,
the State unit must obtain a waiver of
statewideness, in accordance with
361. 26.
c) The cooperating agency' s
contribution toward the non -Federal
share required under the arrangement,
as set forth in paragraph (a) of this
section, may be made through:
1) Cash transfers to the designated
State unit;
2) Certified personnel expenditures
for the time cooperating agency staff
spent providing direct vocational
rehabilitation services pursuant to a
third -party cooperative arrangement that
meets the requirements of this section.
Certified personnel expenditures may
include the allocable portion of staff
salary and fringe benefits based upon
the amount of time cooperating agency
staff directly spent providing services
under the arrangement; and
3) other direct expenditures incurred
by the cooperating agency for the sole
purpose of providing services under this
section pursuant to a third -party
cooperative arrangement that—
i) Meets the requirements of this
section;
ii) Are verifiable as being incurred
under the third -party cooperative
arrangement; and
iii) Do not meet the definition of
third -party in-kind contributions under
2 CFR 200. 96.
Authority: Section 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c))
361. 29 Statewide assessment; annual
estimates; annual State goals and priorities;
strategies; and progress reports.
a) Comprehensive statewide
assessment. ( 1) The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
include—
i) The results of a comprehensive,
statewide assessment, jointly conducted
by the designated State unit and the
State Rehabilitation Council (if the State
unit has a Council) every three years.
Results of the assessment are to be
included in the vocational rehabilitation
portion of the Unified or Combined
State Plan, submitted in accordance
with the requirements of § 361. 10( a) and
the joint regulations of this part. The
comprehensive needs assessment must
describe the rehabilitation needs of
individuals with disabilities residing
within the State, particularly the
vocational rehabilitation services needs
of—
A) Individuals with the most
significant disabilities, including their
need for supported employment
services;
B) Individuals with disabilities who
are minorities and individuals with
disabilities who have been unserved or
underserved by the vocational
rehabilitation program carried out under
this part;
C) Individuals with disabilities
served through other components of the
statewide workforce development
system as identified by those
individuals and personnel assisting
those individuals through the
components of the system; and
D) Youth with disabilities, and
students with disabilities, including
1) Their need for pre-employment
transition services or other transition
services; and
2) An assessment of the needs of
individuals with disabilities for
transition services and pre-employment
transition services, and the extent to
which such services provided under
this part are coordinated with transition
services provided under the Individuals
with Disabilities Education Act (20
U. S. C. 1400 et seq.) in order to meet the
needs of individuals with disabilities.
ii) An assessment of the need to
establish, develop, or improve
community rehabilitation programs
within the State.
2) The vocational rehabilitation
services portion of the Unified or
Combined State Plan must assure that
the State will submit to the Secretary a
report containing information regarding
updates to the assessments under
paragraph (a) of this section for any year
in which the State updates the
assessments at such time and in such
manner as the Secretary determines
appropriate.
b) Annual estimates. The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
include, and must assure that the State
will submit a report to the Secretary ( at
such time and in such manner
determined appropriate by the
Secretary) that includes, State estimates
of—
1) The number of individuals in the
State who are eligible for services under
this part;
2) The number of eligible individuals
who will receive services provided with
funds provided under this part and
under part § 363, including, if the
designated State agency uses an order of
selection in accordance with § 361. 36,
estimates of the number of individuals
to be served under each priority
category within the order;
3) The number of individuals who
are eligible for services under paragraph
b)( 1) of this section, but are not
receiving such services due to an order
of selection; and
4) The costs of the services described
in paragraph (b)( 2) of this section,
including, if the designated State agency
uses an order of selection, the service
costs for each priority category within
the order.
c) Goals and priorities—(1) In
general. The vocational rehabilitation
services portion of the Unified or
Combined State Plan must identify the
goals and priorities of the State in
carrying out the program.
2) Council. The goals and priorities
must be jointly developed, agreed to,
reviewed annually, and, as necessary,
revised by the designated State unit and
the State Rehabilitation Council, if the
State unit has a Council.
3) Submission. The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
assure that the State will submit to the
Secretary a report containing
information regarding revisions in the
goals and priorities for any year in
which the State revises the goals and
priorities at such time and in such
manner as determined appropriate by
the Secretary.
4) Basis for goals and priorities. The
State goals and priorities must be based
on an analysis of—
i) The comprehensive statewide
assessment described in paragraph (a) of
this section, including any updates to
the assessment;
ii) The performance of the State on
the standards and indicators established
under section 106 of the Act; and
iii) Other available information on
the operation and the effectiveness of
the vocational rehabilitation program
carried out in the State, including any
reports received from the State
Rehabilitation Council under
361. 17(h) and the findings and
recommendations from monitoring
activities conducted under section 107
of the Act.
5) Service and outcome goals for
categories in order of selection. If the
designated State agency uses an order of
selection in accordance with § 361. 36,
the vocational rehabilitation services
portion of the Unified or Combined
State Plan must identify the State' s
service and outcome goals and the time
within which these goals may be
achieved for individuals in each priority
category within the order.
d) Strategies. The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
describe the strategies the State will use
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to address the needs identified in the
assessment conducted under paragraph
a) of this section and achieve the goals
and priorities identified in paragraph (c)
of this section, including—
1) The methods to be used to expand
and improve services to individuals
with disabilities, including how a broad
range of assistive technology services
and assistive technology devices will be
provided to those individuals at each
stage of the rehabilitation process and
how those services and devices will be
provided to individuals with disabilities
on a statewide basis;
2) The methods to be used to
improve and expand vocational
rehabilitation services for students with
disabilities, including the coordination
of services designed to facilitate the
transition of such students from the
receipt of educational services in school
to postsecondary life, including the
receipt of vocational rehabilitation
services under the Act, postsecondary
education, employment, and pre-
employment transition services;
3) Strategies developed and
implemented by the State to address the
needs of students and youth with
disabilities identified in the assessments
described in paragraph (a) of this
section and strategies to achieve the
goals and priorities identified by the
State to improve and expand vocational
rehabilitation services for students and
youth with disabilities on a statewide
basis;
4) Strategies to provide pre-
employment transition services;
5) Outreach procedures to identify
and serve individuals with disabilities
who are minorities and individuals with
disabilities who have been unserved or
underserved by the vocational
rehabilitation program;
6) As applicable, the plan of the State
for establishing, developing, or
improving community rehabilitation
programs;
7) Strategies to improve the
performance of the State with respect to
the evaluation standards and
performance indicators established
pursuant to section 106 of the Act and
section 116 of Workforce Innovation
and Opportunity Act; and
8) Strategies for assisting other
components of the statewide workforce
development system in assisting
individuals with disabilities.
e) Evaluation and reports ofprogress.
1) The vocational rehabilitation
services portion of the Unified or
Combined State Plan must include—
i) The results of an evaluation of the
effectiveness of the vocational
rehabilitation program; and
ii) A joint report by the designated
State unit and the State Rehabilitation
Council, if the State unit has a Council,
to the Secretary on the progress made in
improving the effectiveness of the
program from the previous year. This
evaluation and joint report must
include—
A) An evaluation of the extent to
which the goals and priorities identified
in paragraph (c) of this section were
achieved;
B) A description of the strategies that
contributed to the achievement of the
goals and priorities;
C) To the extent to which the goals
and priorities were not achieved, a
description of the factors that impeded
that achievement; and
D) An assessment of the performance
of the State on the standards and
indicators established pursuant to
section 106 of the Act.
2) The vocational rehabilitation
services portion of the Unified or
Combined State Plan must assure that
the designated State unit and the State
Rehabilitation Council, if the State unit
has a Council, will jointly submit to the
Secretary a report that contains the
information described in paragraph
e)( 1) of this section at such time and in
such manner the Secretary determines
appropriate.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 101( a)( 15) and ( 25) of the
Rehabilitation Act of 1973, as amended; 29
U.S.C. 721(a)( 15) and (25))
361. 30 Services to American Indians.
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that the
designated State agency provides
vocational rehabilitation services to
American Indians who are individuals
with disabilities residing in the State to
the same extent as the designated State
agency provides vocational
rehabilitation services to other
significant populations of individuals
with disabilities residing in the State.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 101( a)( 13) and 121(b)( 3)
of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 721( a)( 13) and 741( b)( 3))
361. 31 Cooperative agreements with
private nonprofit organizations.
The vocational rehabilitation services
portion of the Unified or Combined
State Plan must describe the manner in
which cooperative agreements with
private nonprofit vocational
rehabilitation service providers will be
established.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 101( a)( 24)( B) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 721( a)( 24)( B))
361. 32 Provision of training and services
for employers.
The designated State unit may expend
payments received under this part to
educate and provide services to
employers who have hired or are
interested in hiring individuals with
disabilities under the vocational
rehabilitation program, including—
a) Providing training and technical
assistance to employers regarding the
employment of individuals with
disabilities, including disability
awareness, and the requirements of the
Americans with Disabilities Act of 1990
42 U.S. C. 12101 et seq.) and other
employment-related laws;
b) Working with employers to—
1) Provide opportunities for work -
based learning experiences ( including
internships, short-term employment,
apprenticeships, and fellowships);
2) Provide opportunities for pre-
employment transition services, in
accordance with the requirements under
361. 48( a);
3) Recruit qualified applicants who
are individuals with disabilities;
4) Train employees who are
individuals with disabilities; and
5) Promote awareness of disability -
related obstacles to continued
employment.
c) Providing consultation, technical
assistance, and support to employers on
workplace accommodations, assistive
technology, and facilities and workplace
access through collaboration with
community partners and employers,
across States and nationally, to enable
the employers to recruit, job match,
hire, and retain qualified individuals
with disabilities who are recipients of
vocational rehabilitation services under
this part, or who are applicants for such
services; and
d) Assisting employers with utilizing
available financial support for hiring or
accommodating individuals with
disabilities.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 109 of the Rehabilitation
Act of 1973, as amended; 29 U. S. C. 728A)
361. 33 [ Reserved]
361. 34 Supported employment State plan
supplement.
a) The vocational rehabilitation
services portion of the Unified or
Combined State Plan must assure that
the State has an acceptable plan under
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part 363 of this chapter that provides for
the use of funds under that part to
supplement funds under this part for
the cost of services leading to supported
employment.
b) The supported employment plan,
including any needed revisions, must be
submitted as a supplement to the
vocational rehabilitation services
portion of the Unified or Combined
State Plan submitted under this part.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 101( a)( 22) and 606 of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 721( a)( 22) and 795k)
361. 35 Innovation and expansion
activities.
a) The vocational rehabilitation
services portion of the Unified or
Combined State Plan must assure that
the State will reserve and use a portion
of the funds allotted to the State under
section 110 of the Act—
1) For the development and
implementation of innovative
approaches to expand and improve the
provision of vocational rehabilitation
services to individuals with disabilities,
particularly individuals with the most
significant disabilities, including
transition services for students and
youth with disabilities and pre-
employment transition services for
students with disabilities, consistent
with the findings of the comprehensive
statewide assessment of the
rehabilitation needs of individuals with
disabilities under § 361. 29( a) and the
State' s goals and priorities under
361. 29( c);
2) To support the funding of the State
Rehabilitation Council, if the State has
a Council, consistent with the resource
plan identified in § 361. 17( i); and
3) To support the funding of the
Statewide Independent Living Council,
consistent with the Statewide
Independent Living Council resource
plan prepared under Section 705( e)( 1) of
the Act.
b) The vocational rehabilitation
services portion of the Unified or
Combined State Plan must—
1) Describe how the reserved funds
will be used; and
2) Include a report describing how
the reserved funds were used.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c) and 101( a)( 18) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c) and 721( a) ( 18))
361. 36 Ability to serve all eligible
individuals; order of selection for services.
a) General provisions—(1) The
designated State unit either must be able
to provide the full range of services
listed in section 103( a) of the Act and
361. 48, as appropriate, to all eligible
individuals or, in the event that
vocational rehabilitation services cannot
be provided to all eligible individuals in
the State who apply for the services,
include in the vocational rehabilitation
services portion of the Unified or
Combined State Plan the order to be
followed in selecting eligible
individuals to be provided vocational
rehabilitation services.
2) The ability of the designated State
unit to provide the full range of
vocational rehabilitation services to all
eligible individuals must be supported
by a determination that satisfies the
requirements of paragraph (b) or (c) of
this section and a determination that, on
the basis of the designated State unit' s
projected fiscal and personnel resources
and its assessment of the rehabilitation
needs of individuals with significant
disabilities within the State, it can—
i) Continue to provide services to all
individuals currently receiving services;
ii) Provide assessment services to all
individuals expected to apply for
services in the next fiscal year;
iii) Provide services to all individuals
who are expected to be determined
eligible in the next fiscal year; and
iv) Meet all program requirements.
3) If the designated State unit is
unable to provide the full range of
vocational rehabilitation services to all
eligible individuals in the State who
apply for the services, the vocational
rehabilitation services portion of the
Unified or Combined State Plan must—
i) Show the order to be followed in
selecting eligible individuals to be
provided vocational rehabilitation
services;
ii) Provide a justification for the
order of selection;
iii) Identify service and outcome
goals and the time within which the
goals may be achieved for individuals in
each priority category within the order,
as required under § 361. 29( c)( 5);
iv) Assure that—
A) In accordance with criteria
established by the State for the order of
selection, individuals with the most
significant disabilities will be selected
first for the provision of vocational
rehabilitation services; and
B) Individuals who do not meet the
order of selection criteria will have
access to services provided through the
information and referral system
established under § 361. 37; and
v) State whether the designated State
unit will elect to serve, in its discretion,
eligible individuals (whether or not the
individuals are receiving vocational
rehabilitation services under the order
of selection) who require specific
services or equipment to maintain
employment, notwithstanding the
assurance provided pursuant to
paragraph ( 3)( iv)(A) of this section.
b) Basis for assurance that services
can be provided to all eligible
individuals. (1) For a designated State
unit that determined, for the current
fiscal year and the preceding fiscal year,
that it is able to provide the full range
of services, as appropriate, to all eligible
individuals, the State unit, during the
current fiscal and preceding fiscal year,
must have in fact—
i) Provided assessment services to all
applicants and the full range of services,
as appropriate, to all eligible
individuals;
ii) Made referral forms widely
available throughout the State;
iii) Conducted outreach efforts to
identify and serve individuals with
disabilities who have been unserved or
underserved by the vocational
rehabilitation system; and
iv) Not delayed, through waiting lists
or other means, determinations of
eligibility, the development of
individualized plans for employment
for individuals determined eligible for
vocational rehabilitation services, or the
provision of services for eligible
individuals for whom individualized
plans for employment have been
developed.
2) For a designated State unit that
was unable to provide the full range of
services to all eligible individuals
during the current or preceding fiscal
year or that has not met the
requirements in paragraph (b)( 1) of this
section, the determination that the
designated State unit is able to provide
the full range of vocational
rehabilitation services to all eligible
individuals in the next fiscal year must
be based on—
i) A demonstration that
circumstances have changed that will
allow the designated State unit to meet
the requirements of paragraph (a)( 2) of
this section in the next fiscal year,
including—
A) An estimate of the number of and
projected costs of serving, in the next
fiscal year, individuals with existing
individualized plans for employment;
B) The projected number of
individuals with disabilities who will
apply for services and will be
determined eligible in the next fiscal
year and the projected costs of serving
those individuals;
C) The projected costs of
administering the program in the next
fiscal year, including, but not limited to,
costs of staff salaries and benefits,
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outreach activities, and required
statewide studies; and
D) The projected revenues and
projected number of qualified personnel
for the program in the next fiscal year.
ii) Comparable data, as relevant, for
the current or preceding fiscal year, or
for both years, of the costs listed in
paragraphs (b)( 2)( i)(A) through (C) of
this section and the resources identified
in paragraph (b)( 2)( i)(D) of this section
and an explanation of any projected
increases or decreases in these costs and
resources; and
iii) A determination that the
projected revenues and the projected
number of qualified personnel for the
program in the next fiscal year are
adequate to cover the costs identified in
paragraphs (b)( 2)( i)(A) through (C) of
this section to ensure the provision of
the full range of services, as appropriate,
to all eligible individuals.
c) Determining need for establishing
and implementing an order of selection.
1) The designated State unit must
determine, prior to the beginning of
each fiscal year, whether to establish
and implement an order of selection.
2) If the designated State unit
determines that it does not need to
establish an order of selection, it must
reevaluate this determination whenever
changed circumstances during the
course of a fiscal year, such as a
decrease in its fiscal or personnel
resources or an increase in its program
costs, indicate that it may no longer be
able to provide the full range of services,
as appropriate, to all eligible
individuals, as described in paragraph
a)( 2) of this section.
3) If a designated State unit
establishes an order of selection, but
determines that it does not need to
implement that order at the beginning of
the fiscal year, it must continue to meet
the requirements of paragraph (a)( 2) of
this section, or it must implement the
order of selection by closing one or
more priority categories.
d) Establishing an order of
selection—( 1) Basis for order of
selection. An order of selection must he
based on a refinement of the three
criteria in the definition of individual
with a significant disability in section
7( 21)( A) of the Act and § 361. 5( c)( 30).
2) Factors that cannot be used in
determining order of selection of eligible
individuals. An order of selection may
not be based on any other factors,
including—
i) Any duration of residency
requirement, provided the individual is
present in the State;
ii) Type of disability;
iii) Age, sex, race, color, or national
origin;
iv) Source of referral;
v) Type of expected employment
outcome;
vi) The need for specific services
except those services provided in
accordance with 361. 36( a)( 3)( v), or
anticipated cost of services required by
an individual; or
vii) The income level of an
individual or an individual' s family.
e) Administrative requirements. In
administering the order of selection, the
designated State unit must—
1) Implement the order of selection
on a statewide basis;
2) Notify all eligible individuals of
the priority categories in a State' s order
of selection, their assignment to a
particular category, and their right to
appeal their category assignment;
3) Continue to provide services to
any recipient who has begun to receive
services irrespective of the severity of
the individual' s disability as follows—
i) The designated State unit must
continue to provide pre-employment
transition services to students with
disabilities who were receiving such
services prior to being determined
eligible for vocational rehabilitation
services; and
ii) The designated State unit must
continue to provide to an eligible
individual all needed services listed on
the individualized plan for employment
if the individual had begun receiving
such services prior to the effective date
of the State' s order of selection; and
4) Ensure that its funding
arrangements for providing services
under the vocational rehabilitation
services portion of the Unified or
Combined State Plan, including third -
party arrangements and awards under
the establishment authority, are
consistent with the order of selection. If
any funding arrangements are
inconsistent with the order of selection,
the designated State unit must
renegotiate these funding arrangements
so that they are consistent with the
order of selection.
f) State Rehabilitation Council. The
designated State unit must consult with
the State Rehabilitation Council, if the
State unit has a Council, regarding the—
1) Need to establish an order of
selection, including any reevaluation of
the need under paragraph (c)( 2) of this
section;
2) Priority categories of the particular
order of selection;
3) Criteria for determining
individuals with the most significant
disabilities; and
4) Administration of the order of
selection.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( d); 101( a)( 5);
101( a)( 12); 101( a)( 15)( A), (B) and (C);
101( a)( 21)( A)(ii);and 504( a) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 709( d), 721( a)( 5), 721( a)( 12),
721(a)(15)(A), (B) and (C); 721(a)(21)( A)(ii),
and 794( a))
361. 37 Information and referral
programs.
a) General provisions. The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
assure that—
1) The designated State agency will
implement an information and referral
system adequate to ensure that
individuals with disabilities, including
eligible individuals who do not meet the
agency' s order of selection criteria for
receiving vocational rehabilitation
services if the agency is operating on an
order of selection, are provided accurate
vocational rehabilitation information
and guidance (which may include
counseling and referral for job
placement) using appropriate modes of
communication to assist them in
preparing for, securing, retaining,
advancing in, or regaining employment;
and
2) The designated State agency will
refer individuals with disabilities to
other appropriate Federal and State
programs, including other components
of the statewide workforce development
system.
b) The designated State unit must
refer to appropriate programs and
service providers best suited to address
the specific rehabilitation, independent
living and employment needs of an
individual with a disability who makes
an informed choice not to pursue an
employment outcome under the
vocational rehabilitation program, as
defined in § 361. 5( c)( 15). Before making
the referral required by this paragraph,
the State unit must—
1) Consistent with § 361. 42( a)( 4)( i),
explain to the individual that the
purpose of the vocational rehabilitation
program is to assist individuals to
achieve an employment outcome as
defined in § 361. 5( c)( 15);
2) Consistent with § 361. 52, provide
the individual with information
concerning the availability of
employment options, and of vocational
rehabilitation services, to assist the
individual to achieve an appropriate
employment outcome;
3) Inform the individual that services
under the vocational rehabilitation
program can be provided to eligible
individuals in an extended employment
setting if necessary for purposes of
training or otherwise preparing for
employment in an integrated setting;
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4) Inform the individual that, if he or
she initially chooses not to pursue an
employment outcome as defined in
361. 5( c)( 15), he or she can seek
services from the designated State unit
at a later date if, at that time, he or she
chooses to pursue an employment
outcome; and
5) Refer the individual, as
appropriate, to the Social Security
Administration in order to obtain
information concerning the ability of
individuals with disabilities to work
while receiving benefits from the Social
Security Administration.
c) Criteria for appropriate referrals.
In making the referrals identified in
paragraph (a)( 2) of this section, the
designated State unit must—
1) Refer the individual to Federal or
State programs, including programs
carried out by other components of the
statewide workforce development
system, best suited to address the
specific employment needs of an
individual with a disability; and
2) Provide the individual who is
being referred—
i) A notice of the referral by the
designated State agency to the agency
carrying out the program;
ii) Information identifying a specific
point of contact within the agency to
which the individual is being referred;
and
iii) Information and advice regarding
the most suitable services to assist the
individual to prepare for, secure, retain,
or regain employment.
d) Order of selection. In providing
the information and referral services
under this section to eligible individuals
who are not in the priority category or
categories to receive vocational
rehabilitation services under the State' s
order of selection, the State unit must
identify, as part of its reporting under
section 101( a)( 10) of the Act and
361. 40, the number of eligible
individuals who did not meet the
agency' s order of selection criteria for
receiving vocational rehabilitation
services and did receive information
and referral services under this section.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 7( 11), 12( c), 101( a)( 5)( E),
101( a)( 10)( C)( ii), and 101( a)( 20) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 11), 709( c), 721( a)( 5)( E),
721( a)( 10)( C)( ii), and 721( a)( 20))
361. 38 Protection, use, and release of
personal information.
a) General provisions. (1) The State
agency and the State unit must adopt
and implement written policies and
procedures to safeguard the
confidentiality of all personal
information, including photographs and
lists of names. These policies and
procedures must ensure that—
i) Specific safeguards are established
to protect current and stored personal
information, including a requirement
that data only be released when
governed by a written agreement
between the designated State unit and
receiving entity under paragraphs (d)
and (e)( 1) of this section, which
addresses the requirements in this
section;
ii) All applicants and recipients of
services and, as appropriate, those
individuals' representatives, service
providers, cooperating agencies, and
interested persons are informed through
appropriate modes of communication of
the confidentiality of personal
information and the conditions for
accessing and releasing this
information;
iii) All applicants and recipients of
services or their representatives are
informed about the State unit's need to
collect personal information and the
policies governing its use, including—
A) Identification of the authority
under which information is collected;
B) Explanation of the principal
purposes for which the State unit
intends to use or release the
information;
C) Explanation of whether providing
requested information to the State unit
is mandatory or voluntary and the
effects of not providing requested
information;
D) Identification of those situations
in which the State unit requires or does
not require informed written consent of
the individual before information may
be released; and
E) Identification of other agencies to
which information is routinely released;
iv) An explanation of State policies
and procedures affecting personal
information will be provided to each
individual in that individual' s native
language or through the appropriate
mode of communication; and
v) These policies and procedures
provide no fewer protections for
individuals than State laws and
regulations.
2) The State unit may establish
reasonable fees to cover extraordinary
costs of duplicating records or making
extensive searches and must establish
policies and procedures governing
access to records.
b) State program use. All personal
information in the possession of the
State agency or the designated State unit
must be used only for the purposes
directly connected with the
administration of the vocational
rehabilitation program. Information
containing identifiable personal
information may not be shared with
advisory or other bodies that do not
have official responsibility for
administration of the program. In the
administration of the program, the State
unit may obtain personal information
from service providers and cooperating
agencies under assurances that the
information may not be further
divulged, except as provided under
paragraphs ( c), ( d), and (e) of this
section.
c) Release to applicants and
recipients of services. ( 1) Except as
provided in paragraphs (c)( 2) and ( 3) of
this section, if requested in writing by
an applicant or recipient of services, the
State unit must make all requested
information in that individual' s record
of services accessible to and must
release the information to the individual
or the individual' s representative in a
timely manner.
2) Medical, psychological, or other
information that the State unit
determines may be harmful to the
individual may not be released directly
to the individual, but must be provided
to the individual through a third party
chosen by the individual, which may
include, among others, an advocate, a
family member, or a qualified medical
or mental health professional, unless a
representative has been appointed by a
court to represent the individual, in
which case the information must be
released to the court-appointed
representative.
3) If personal information has been
obtained from another agency or
organization, it may be released only by,
or under the conditions established by,
the other agency or organization.
4) An applicant or recipient of
services who believes that information
in the individual' s record of services is
inaccurate or misleading may request
that the designated State unit amend the
information. If the information is not
amended, the request for an amendment
must be documented in the record of
services, consistent with § 361. 47( a)( 12).
d) Release for audit, evaluation, and
research. Personal information may be
released to an organization, agency, or
individual engaged in audit, evaluation,
or research only for purposes directly
connected with the administration of
the vocational rehabilitation program or
for purposes that would significantly
improve the quality of life for applicants
and recipients of services and only if, in
accordance with a written agreement,
the organization, agency, or individual
assures that—
1) The information will be used only
for the purposes for which it is being
provided;
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2) The information will be released
only to persons officially connected
with the audit, evaluation, or research;
3) The information will not be
released to the involved individual;
4) The information will be managed
in a manner to safeguard confidentiality;
and
5) The final product will not reveal
any personal identifying information
without the informed written consent of
the involved individual or the
individual' s representative.
e) Release to other programs or
authorities. (1) Upon receiving the
informed written consent of the
individual or, if appropriate, the
individual' s representative, the State
unit may release personal information to
another agency or organization, in
accordance with a written agreement,
for its program purposes only to the
extent that the information may be
released to the involved individual or
the individual' s representative and only
to the extent that the other agency or
organization demonstrates that the
information requested is necessary for
its program.
2) Medical or psychological
information that the State unit
determines may be harmful to the
individual may be released if the other
agency or organization assures the State
unit that the information will he used
only for the purpose for which it is
being provided and will not be further
released to the individual.
3) The State unit must release
personal information if required by
Federal law or regulations.
4) The State unit must release
personal information in response to
investigations in connection with law
enforcement, fraud, or abuse, unless
expressly prohibited by Federal or State
laws or regulations, and in response to
an order issued by a judge, magistrate,
or other authorized judicial officer.
5) The State unit also may release
personal information in order to protect
the individual or others if the individual
poses a threat to his or her safety or to
the safety of others.
Authority: Sections 12( c) and 101( a)( 6)( A) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c) and 721( a)( 6)( A))
361. 39 State -imposed requirements.
The designated State unit must, upon
request, identify those regulations and
policies relating to the administration or
operation of its vocational rehabilitation
program that are State -imposed,
including any regulations or policy
based on State interpretation of any
Federal law, regulation, or guideline.
Authority: Section 17 of the Rehabilitation
Act of 1973, as amended; 29 U. S. C. 714)
361. 40 Reports; Evaluation standards
and performance indicators.
a) Reports. ( 1) The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
assure that the designated State agency
will submit reports, including reports
required under sections 13, 14, and
101( a)( 10) of the Act—
i) In the form and level of detail and
at the time required by the Secretary
regarding applicants for and eligible
individuals receiving services,
including students receiving pre-
employment transition services in
accordance with § 361. 48( a); and
ii) In a manner that provides a
complete count (other than the
information obtained through sampling
consistent with section 101( a)( 10)( E) of
the Act) of the applicants and eligible
individuals to—
A) Permit the greatest possible cross -
classification of data; and
B) Protect the confidentiality of the
identity of each individual.
2) The designated State agency must
comply with any requirements
necessary to ensure the accuracy and
verification of those reports.
b) [ Reserved]
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c), 101( a)( 10)( A) and
F), and 106 of the Rehabilitation Act of 1973,
as amended; 29 U.S. C. 709( c), 721( a)( 10)( A)
and (F), and 726)
Provision and Scope of Services
361. 41 Processing referrals and
applications.
a) Referrals. The designated State
unit must establish and implement
standards for the prompt and equitable
handling of referrals of individuals for
vocational rehabilitation services,
including referrals of individuals made
through the one-stop service delivery
systems under section 121 of the
Workforce Innovation and Opportunity
Act. The standards must include
timelines for making good faith efforts
to inform these individuals of
application requirements and to gather
information necessary to initiate an
assessment for determining eligibility
and priority for services.
b) Applications. (1) Once an
individual has submitted an application
for vocational rehabilitation services,
including applications made through
common intake procedures in one-stop
centers under section 121 of the
Workforce Innovation and Opportunity
Act, an eligibility determination must be
made within 60 days, unless—
i) Exceptional and unforeseen
circumstances beyond the control of the
designated State unit preclude making
an eligibility determination within 60
days and the designated State unit and
the individual agree to a specific
extension of time; or
ii) An exploration of the individual' s
abilities, capabilities, and capacity to
perform in work situations is carried out
in accordance with § 361. 42( e).
2) An individual is considered to
have submitted an application when the
individual or the individual' s
representative, as appropriate—
i)(A) Has completed and signed an
agency application form;
B) Has completed a common intake
application form in a one-stop center
requesting vocational rehabilitation
services; or
C) Has otherwise requested services
from the designated State unit;
ii) Has provided to the designated
State unit information necessary to
initiate an assessment to determine
eligibility and priority for services; and
iii) Is available to complete the
assessment process.
3) The designated State unit must
ensure that its application forms are
widely available throughout the State,
particularly in the one-stop centers
under section 121 of the Workforce
Innovation and Opportunity Act.
Authority: Sections 12( c), 101( a)( 6)( A), and
102( a)( 6) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 709( c), 721( a)( 6)( A), and
722( a)( 6))
361. 42 Assessment for determining
eligibility and priority for services.
In order to determine whether an
individual is eligible for vocational
rehabilitation services and the
individual' s priority under an order of
selection for services (if the State is
operating under an order of selection),
the designated State unit must conduct
an assessment for determining eligibility
and priority for services. The
assessment must be conducted in the
most integrated setting possible,
consistent with the individual' s needs
and informed choice, and in accordance
with the following provisions:
a) Eligibility requirements—(1) Basic
requirements. The designated State
unit' s determination of an applicant' s
eligibility for vocational rehabilitation
services must be based only on the
following requirements:
i) A determination by qualified
personnel that the applicant has a
physical or mental impairment;
ii) A determination by qualified
personnel that the applicant' s physical
or mental impairment constitutes or
results in a substantial impediment to
employment for the applicant; and
iii) A determination by a qualified
vocational rehabilitation counselor
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employed by the designated State unit
that the applicant requires vocational
rehabilitation services to prepare for,
secure, retain, advance in, or regain
employment that is consistent with the
individual' s unique strengths, resources,
priorities, concerns, abilities,
capabilities, interest, and informed
choice. For purposes of an assessment
for determining eligibility and
vocational rehabilitation needs under
this part, an individual is presumed to
have a goal of an employment outcome.
2) Presumption of benefit. The
designated State unit must presume that
an applicant who meets the eligibility
requirements in paragraphs ( a)( 1)( i) and
ii) of this section can benefit in terms
of an employment outcome.
3) Presumption of eligibilityfor
Social Security recipients and
beneficiaries. (i) Any applicant who has
been determined eligible for Social
Security benefits under title II or title
XVI of the Social Security Act is—
A) Presumed eligible for vocational
rehabilitation services under paragraphs
a)( 1) and ( 2) of this section; and
B) Considered an individual with a
significant disability as defined in
361. 5( c)( 29).
ii) If an applicant for vocational
rehabilitation services asserts that he or
she is eligible for Social Security
benefits under title II or title XVI of the
Social Security Act (and, therefore, is
presumed eligible for vocational
rehabilitation services under paragraph
a)( 3)( i)(A) of this section), but is unable
to provide appropriate evidence, such as
an award letter, to support that
assertion, the State unit must verify the
applicant' s eligibility under title II or
title XVI of the Social Security Act by
contacting the Social Security
Administration. This verification must
be made within a reasonable period of
time that enables the State unit to
determine the applicant' s eligibility for
vocational rehabilitation services within
60 days of the individual submitting an
application for services in accordance
with § 361. 41( b)( 2).
4) Achievement ofan employment
outcome. Any eligible individual,
including an individual whose
eligibility for vocational rehabilitation
services is based on the individual being
eligible for Social Security benefits
under title II or title XVI of the Social
Security Act, must intend to achieve an
employment outcome that is consistent
with the applicant' s unique strengths,
resources, priorities, concerns, abilities,
capabilities, interests, and informed
choice.
i) The State unit is responsible for
informing individuals, through its
application process for vocational
rehabilitation services, that individuals
who receive services under the program
must intend to achieve an employment
outcome.
ii) The applicant' s completion of the
application process for vocational
rehabilitation services is sufficient
evidence of the individual' s intent to
achieve an employment outcome, and
no additional demonstration on the part
of the applicant is required for purposes
of satisfying paragraph ( a)( 4) of this
section.
5) Interpretation. Nothing in this
section, including paragraph (a)( 3)( i), is
to be construed to create an entitlement
to any vocational rehabilitation service.
b) Interim determination of eligibility.
1) The designated State unit may
initiate the provision of vocational
rehabilitation services for an applicant
on the basis of an interim determination
of eligibility prior to the 60 -day period
described in § 361. 41( b)( 2).
2) If a State chooses to make interim
determinations of eligibility, the
designated State unit must—
i) Establish criteria and conditions
for making those determinations;
ii) Develop and implement
procedures for making the
determinations; and
iii) Determine the scope of services
that may be provided pending the final
determination of eligibility.
3) If a State elects to use an interim
eligibility determination, the designated
State unit must make a final
determination of eligibility within 60
days of the individual submitting an
application for services in accordance
with § 361. 41( b)( 2).
c) Prohibitedfactors. (1) The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that the State
unit will not impose, as part of
determining eligibility under this
section, a duration of residence
requirement that excludes from services
any applicant who is present in the
State. The designated State unit may not
require the applicant to demonstrate a
presence in the State through the
production of any documentation that
under State or local law, or practical
circumstances, results in a de facto
duration of residence requirement.
2) In making a determination of
eligibility under this section, the
designated State unit also must ensure
that—
i) No applicant or group of applicants
is excluded or found ineligible solely on
the basis of the type of disability; and
ii) The eligibility requirements are
applied without regard to the—
A) Age, sex, race, color, or national
origin of the applicant;
B) Type of expected employment
outcome;
C) Source of referral for vocational
rehabilitation services;
D) Particular service needs or
anticipated cost of services required by
an applicant or the income level of an
applicant or applicant' s family;
E) Applicants' employment history or
current employment status; and
F) Applicants' educational status or
current educational credential.
d) Review and assessment of data for
eligibility determination. Except as
provided in paragraph (e) of this
section, the designated State unit—
1) Must base its determination of
each of the basic eligibility requirements
in paragraph ( a) of this section on—
i) A review and assessment of
existing data, including counselor
observations, education records,
information provided by the individual
or the individual' s family, particularly
information used by education officials,
and determinations made by officials of
other agencies; and
ii) To the extent existing data do not
describe the current functioning of the
individual or are unavailable,
insufficient, or inappropriate to make an
eligibility determination, an assessment
of additional data resulting from the
provision of vocational rehabilitation
services, including trial work
experiences, assistive technology
devices and services, personal
assistance services, and any other
support services that are necessary to
determine whether an individual is
eligible; and
2) Must base its presumption under
paragraph (a)( 3)( i) of this section that an
applicant who has been determined
eligible for Social Security benefits
under title II or title XVI of the Social
Security Act satisfies each of the basic
eligibility requirements in paragraph (a)
of this section on determinations made
by the Social Security Administration.
e) Trial work experiences for
individuals with significant disabilities.
1) Prior to any determination that an
individual with a disability is unable to
benefit from vocational rehabilitation
services in terms of an employment
outcome because of the severity of that
individual' s disability or that the
individual is ineligible for vocational
rehabilitation services, the designated
State unit must conduct an exploration
of the individual' s abilities, capabilities,
and capacity to perform in realistic
work situations.
2)( i) The designated State unit must
develop a written plan to assess
periodically the individual' s abilities,
capabilities, and capacity to perform in
competitive integrated work situations
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through the use of trial work
experiences, which must be provided in
competitive integrated employment
settings to the maximum extent
possible, consistent with the informed
choice and rehabilitation needs of the
individual.
ii) Trial work experiences include
supported employment, on-the-job
training, and other experiences using
realistic integrated work settings.
iii) Trial work experiences must be of
sufficient variety and over a sufficient
period of time for the designated State
unit to determine that—
A) There is sufficient evidence to
conclude that the individual can benefit
from the provision of vocational
rehabilitation services in terms of an
employment outcome; or
B) There is clear and convincing
evidence that due to the severity of the
individual' s disability, the individual is
incapable of benefitting from the
provision of vocational rehabilitation
services in terms of an employment
outcome; and
iv) The designated State unit must
provide appropriate supports,
including, but not limited to, assistive
technology devices and services and
personal assistance services, to
accommodate the rehabilitation needs of
the individual during the trial work
experiences.
f)Data for determination of priority
for services under an order of selection.
If the designated State unit is operating
under an order of selection for services,
as provided in § 361. 36, the State unit
must base its priority assignments on—
1) A review of the data that was
developed under paragraphs (d) and (e)
of this section to make the eligibility
determination; and
2) An assessment of additional data,
to the extent necessary.
Authority: Sections 7( 2), 12( c), 101( a)( 12),
102( a), 103( a)( 1), 103( a)( 9), 103( a)( 10), and
103( a)( 14) of the Rehabilitation Act of 1973,
as amended; 29 U. S. C. 705( 2), 709( c),
721( a)( 12), 722( a), 723( a)( 1), 723( a)( 9),
723( a)( 10), and 723( a)( 14))
Note to § 361. 42: Clear and convincing
evidence means that the designated State unit
has a high degree of certainty before it can
conclude that an individual is incapable of
benefiting from services in terms of an
employment outcome. The clear and
convincing standard constitutes the highest
standard used in our civil system of law and
is to be individually applied on a case-by-
case basis. The term clear means
unequivocal. For example, the use of an
intelligence test result alone would not
constitute clear and convincing evidence.
Clear and convincing evidence might include
a description of assessments, including
situational assessments and supported
employment assessments, from service
providers who have concluded that they
would be unable to meet the individual' s
needs due to the severity of the individual' s
disability. The demonstration of " clear and
convincing evidence" must include, if
appropriate, a functional assessment of skill
development activities, with any necessary
supports (including assistive technology), in
real life settings. ( S. Rep. No. 357, 102d
Cong., 2d. Sess. 37-38 ( 1992))
361. 43 Procedures for ineligibility
determination.
If the State unit determines that an
applicant is ineligible for vocational
rehabilitation services or determines
that an individual receiving services
under an individualized plan for
employment is no longer eligible for
services, the State unit must—
a) Make the determination only after
providing an opportunity for full
consultation with the individual or, as
appropriate, with the individual' s
representative;
b) Inform the individual in writing,
supplemented as necessary by other
appropriate modes of communication
consistent with the informed choice of
the individual, of the ineligibility
determination, including the reasons for
that determination, the requirements
under this section, and the means by
which the individual may express and
seek remedy for any dissatisfaction,
including the procedures for review of
State unit personnel determinations in
accordance with § 361. 57;
c) Provide the individual with a
description of services available from a
client assistance program established
under 34 CFR part 370 and information
on how to contact that program;
d) Refer the individual—
1) To other programs that are part of
the one-stop service delivery system
under the Workforce Innovation and
Opportunity Act that can address the
individual' s training or employment-
related needs; or
2) To Federal, State, or local
programs or service providers,
including, as appropriate, independent
living programs and extended
employment providers, best suited to
meet their rehabilitation needs, if the
ineligibility determination is based on a
finding that the individual has chosen
not to pursue, or is incapable of
achieving, an employment outcome as
defined in § 361. 5( c)( 15).
e) Review within 12 months and
annually thereafter if requested by the
individual or, if appropriate, by the
individual' s representative any
ineligibility determination that is based
on a finding that the individual is
incapable of achieving an employment
outcome. This review need not be
conducted in situations in which the
individual has refused it, the individual
is no longer present in the State, the
individual' s whereabouts are unknown,
or the individual' s medical condition is
rapidly progressive or terminal.
Authority: Sections 12( c) and 102( a)( 5) and
c) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 709( c) and 722( a)( 5) and
c))
361. 44 Closure without eligibility
determination.
The designated State unit may not
close an applicant' s record of services
prior to making an eligibility
determination unless the applicant
declines to participate in, or is
unavailable to complete, an assessment
for determining eligibility and priority
for services, and the State unit has made
a reasonable number of attempts to
contact the applicant or, if appropriate,
the applicant' s representative to
encourage the applicant' s participation.
Authority: Section 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 709( c))
361. 45 Development of the individualized
plan for employment.
a) General requirements. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that—
1) An individualized plan for
employment meeting the requirements
of this section and § 361. 46 is developed
and implemented in a timely manner for
each individual determined to he
eligible for vocational rehabilitation
services or, if the designated State unit
is operating under an order of selection
in accordance with § 361. 36, for each
eligible individual to whom the State
unit is able to provide services; and
2) Services will be provided in
accordance with the provisions of the
individualized plan for employment.
b) Purpose. ( 1) The designated State
unit must conduct an assessment for
determining vocational rehabilitation
needs, if appropriate, for each eligible
individual or, if the State is operating
under an order of selection, for each
eligible individual to whom the State is
able to provide services. The purpose of
this assessment is to determine the
employment outcome, and the nature
and scope of vocational rehabilitation
services to be included in the
individualized plan for employment.
2) The individualized plan for
employment must be designed to
achieve a specific employment outcome,
as defined in § 361. 5( c)( 15), that is
selected by the individual consistent
with the individual' s unique strengths,
resources, priorities, concerns, abilities,
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capabilities, interests, and informed
choice.
c) Required information. The State
unit must provide the following
information to each eligible individual
or, as appropriate, the individual' s
representative, in writing and, if
appropriate, in the native language or
mode of communication of the
individual or the individual' s
representative:
1) Options for developing an
individualized plan for employment.
Information on the available options for
developing the individualized plan for
employment, including the option that
an eligible individual or, as appropriate,
the individual' s representative may
develop all or part of the individualized
plan for employment—
i) Without assistance from the State
unit or other entity; or
ii) With assistance from—
A) A qualified vocational
rehabilitation counselor employed by
the State unit;
B) A qualified vocational
rehabilitation counselor who is not
employed by the State unit;
C) A disability advocacy
organization; or
D) Resources other than those in
paragraph (c)( 1)( ii)(A) through (C) of
this section.
2) Additional information.
Additional information to assist the
eligible individual or, as appropriate,
the individual' s representative in
developing the individualized plan for
employment, including—
i) Information describing the full
range of components that must be
included in an individualized plan for
employment;
ii) As appropriate to each eligible
individual—
A) An explanation of agency
guidelines and criteria for determining
an eligible individual' s financial
commitments under an individualized
plan for employment;
B) Information on the availability of
assistance in completing State unit
forms required as part of the
individualized plan for employment;
and
C) Additional information that the
eligible individual requests or the State
unit determines to be necessary to the
development of the individualized plan
for employment;
iii) A description of the rights and
remedies available to the individual,
including, if appropriate, recourse to the
processes described in § 361. 57; and
iv) A description of the availability of
a client assistance program established
under part 370 of this chapter and
information on how to contact the client
assistance program.
3) Individuals entitled to benefits
under title II or XVI of the Social
Security Act. For individuals entitled to
benefits under title II or XVI of the
Social Security Act on the basis of a
disability or blindness, the State unit
must provide to the individual general
information on additional supports and
assistance for individuals with
disabilities desiring to enter the
workforce, including assistance with
benefits planning.
d) Mandatory procedures. The
designated State unit must ensure that—
1) The individualized plan for
employment is a written document
prepared on forms provided by the State
unit;
2) The individualized plan for
employment is developed and
implemented in a manner that gives
eligible individuals the opportunity to
exercise informed choice, consistent
with § 361. 52, in selecting—
i) The employment outcome,
including the employment setting;
ii) The specific vocational
rehabilitation services needed to
achieve the employment outcome,
including the settings in which services
will be provided;
iii) The entity or entities that will
provide the vocational rehabilitation
services; and
iv) The methods available for
procuring the services;
3) The individualized plan for
employment is—
i) Agreed to and signed by the
eligible individual or, as appropriate,
the individual' s representative; and
ii) Approved and signed by a
qualified vocational rehabilitation
counselor employed by the designated
State unit;
4) A copy of the individualized plan
for employment and a copy of any
amendments to the individualized plan
for employment are provided to the
eligible individual or, as appropriate, to
the individual' s representative, in
writing and, if appropriate, in the native
language or mode of communication of
the individual or, as appropriate, the
individual' s representative;
5) The individualized plan for
employment is reviewed at least
annually by a qualified vocational
rehabilitation counselor and the eligible
individual or, as appropriate, the
individual' s representative to assess the
eligible individual' s progress in
achieving the identified employment
outcome;
6) The individualized plan for
employment is amended, as necessary,
by the individual or, as appropriate, the
individual' s representative, in
collaboration with a representative of
the State unit or a qualified vocational
rehabilitation counselor (to the extent
determined to be appropriate by the
individual), if there are substantive
changes in the employment outcome,
the vocational rehabilitation services to
be provided, or the providers of the
vocational rehabilitation services;
7) Amendments to the individualized
plan for employment do not take effect
until agreed to and signed by the
eligible individual or, as appropriate,
the individual' s representative and by a
qualified vocational rehabilitation
counselor employed by the designated
State unit;
8) The individualized plan for
employment is amended, as necessary,
to include the postemployment services
and service providers that are necessary
for the individual to maintain, advance
in or regain employment, consistent
with the individual' s unique strengths,
resources, priorities, concerns, abilities,
capabilities, interests, and informed
choice; and
9) An individualized plan for
employment for a student with a
disability is developed—
i) In consideration of the student' s
individualized education program or
504 services, as applicable; and
ii) In accordance with the plans,
policies, procedures, and terms of the
interagency agreement required under
361. 22.
e) Standards for developing the
individualized plan for employment.
The individualized plan for
employment must be developed as soon
as possible, but not later than 90 days
after the date of determination of
eligibility, unless the State unit and the
eligible individual agree to the
extension of that deadline to a specific
date by which the individualized plan
for employment must be completed.
f) Data for preparing the
individualized plan for employment. (1)
Preparation without comprehensive
assessment. To the extent possible, the
employment outcome and the nature
and scope of rehabilitation services to
be included in the individual' s
individualized plan for employment
must be determined based on the data
used for the assessment of eligibility
and priority for services under § 361. 42.
2) Preparation based on
comprehensive assessment.
i) If additional data are necessary to
determine the employment outcome and
the nature and scope of services to be
included in the individualized plan for
employment of an eligible individual,
the State unit must conduct a
comprehensive assessment of the
unique strengths, resources, priorities,
concerns, abilities, capabilities,
55768 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
interests, and informed choice,
including the need for supported
employment services, of the eligible
individual, in the most integrated
setting possible, consistent with the
informed choice of the individual in
accordance with the provisions of
361. 5( c)( 5)( ii).
ii) In preparing the comprehensive
assessment, the State unit must use, to
the maximum extent possible and
appropriate and in accordance with
confidentiality requirements, existing
information that is current as of the date
of the development of the
individualized plan for employment,
including information—
A) Available from other programs
and providers, particularly information
used by education officials and the
Social Security Administration;
B) Provided by the individual and
the individual' s family; and
C) Obtained under the assessment for
determining the individual' s eligibility
and vocational rehabilitation needs.
Authority: Sections 7( 2)( B), 101(a)(9), 102(b),
and 103( a)( 1) of the Rehabilitation Act of
1973, as amended; 29 U.S. C. 705( 2)( B),
721( a)( 9), 722( b), and 723( a)( 1))
361. 46 Content of the individualized plan
for employment.
a) Mandatory components.
Regardless of the approach in
361. 45( c)( 1) that an eligible individual
selects for purposes of developing the
individualized plan for employment,
each individualized plan for
employment must—
1) Include a description of the
specific employment outcome, as
defined in § 361. 5( c)( 15), that is chosen
by the eligible individual and is
consistent with the individual' s unique
strengths, resources, priorities,
concerns, abilities, capabilities, career
interests, and informed choice
consistent with the general goal of
competitive integrated employment
except that in the case of an eligible
individual who is a student or a youth
with a disability, the description may be
a description of the individual' s
projected post -school employment
outcome);
2) Include a description under
361. 48 of—
i) These specific rehabilitation
services needed to achieve the
employment outcome, including, as
appropriate, the provision of assistive
technology devices, assistive technology
services, and personal assistance
services, including training in the
management of those services; and
ii) In the case of a plan for an eligible
individual that is a student or youth
with a disability, the specific transition
services and supports needed to achieve
the individual' s employment outcome
or projected post -school employment
outcome.
3) Provide for services in the most
integrated setting that is appropriate for
the services involved and is consistent
with the informed choice of the eligible
individual;
4) Include timelines for the
achievement of the employment
outcome and for the initiation of
services;
5) Include a description of the entity
or entities chosen by the eligible
individual or, as appropriate, the
individual' s representative that will
provide the vocational rehabilitation
services and the methods used to
procure those services;
6) Include a description of the
criteria that will be used to evaluate
progress toward achievement of the
employment outcome; and
7) Include the terms and conditions
of the individualized plan for
employment, including, as appropriate,
information describing—
i) The responsibilities of the
designated State unit;
ii) The responsibilities of the eligible
individual, including—
A) The responsibilities the individual
will assume in relation to achieving the
employment outcome;
B) If applicable, the extent of the
individual' s participation in paying for
the cost of services; and
C) The responsibility of the
individual with regard to applying for
and securing comparable services and
benefits as described in § 361. 53; and
iii) The responsibilities of other
entities as the result of arrangements
made pursuant to the comparable
services or benefits requirements in
361. 53.
b) Supported employment
requirements. An individualized plan
for employment for an individual with
a most significant disability for whom
an employment outcome in a supported
employment setting has been
determined to be appropriate must—
1) Specify the supported employment
services to be provided by the
designated State unit;
2) Specify the expected extended
services needed, which may include
natural supports;
3) Identify the source of extended
services or, to the extent that it is not
possible to identify the source of
extended services at the time the
individualized plan for employment is
developed, include a description of the
basis for concluding that there is a
reasonable expectation that those
sources will become available;
4) Provide for periodic monitoring to
ensure that the individual is making
satisfactory progress toward meeting the
weekly work requirement established in
the individualized plan for employment
by the time of transition to extended
services;
5) Provide for the coordination of
services provided under an
individualized plan for employment
with services provided under other
individualized plans established under
other Federal or State programs;
6) To the extent that job skills
training is provided, identify that the
training will be provided on site; and
7) Include placement in an integrated
setting for the maximum number of
hours possible based on the unique
strengths, resources, priorities,
concerns, abilities, capabilities,
interests, and informed choice of
individuals with the most significant
disabilities.
c) Post -employment services. The
individualized plan for employment for
each individual must contain, as
determined to be necessary, statements
concerning—
1) The expected need for post -
employment services prior to closing
the record of services of an individual
who has achieved an employment
outcome;
2) A description of the terms and
conditions for the provision of any post -
employment services; and
3) If appropriate, a statement of how
post -employment services will be
provided or arranged through other
entities as the result of arrangements
made pursuant to the comparable
services or benefits requirements in
361. 53.
d) Coordination of services for
students with disabilities. The
individualized plan for employment for
a student with a disability must be
coordinated with the individualized
education program or 504 services, as
applicable, for that individual in terms
of the goals, objectives, and services
identified in the education program.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 101( a)( 8), 101( a)( 9), and
102(b)( 4) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 721( a)( 8), 721( a)( 9), and
722(b)( 4))
361. 47 Record of services.
a) The designated State unit must
maintain for each applicant and eligible
individual a record of services that
includes, to the extent pertinent, the
following documentation:
1) If an applicant has been
determined to be an eligible individual,
documentation supporting that
55769Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
determination in accordance with the
requirements under § 361. 42.
2) If an applicant or eligible
individual receiving services under an
individualized plan for employment has
been determined to be ineligible,
documentation supporting that
determination in accordance with the
requirements under § 361. 43.
3) Documentation that describes the
justification for closing an applicant' s or
eligible individual's record of services if
that closure is based on reasons other
than ineligibility, including, as
appropriate, documentation indicating
that the State unit has satisfied the
requirements in § 361. 44.
4) If an individual has been
determined to be an individual with a
significant disability or an individual
with a most significant disability,
documentation supporting that
determination.
5) If an individual with a significant
disability requires an exploration of
abilities, capabilities, and capacity to
perform in realistic work situations
through the use of trial work
experiences to determine whether the
individual is an eligible individual,
documentation supporting the need for,
and the plan relating to, that exploration
and documentation regarding the
periodic assessments carried out during
the trial work experiences in accordance
with the requirements under § 361. 42( e).
6) The individualized plan for
employment, and any amendments to
the individualized plan for
employment, consistent with the
requirements under § 361. 46.
7) Documentation describing the
extent to which the applicant or eligible
individual exercised informed choice
regarding the provision of assessment
services and the extent to which the
eligible individual exercised informed
choice in the development of the
individualized plan for employment
with respect to the selection of the
specific employment outcome, the
specific vocational rehabilitation
services needed to achieve the
employment outcome, the entity to
provide the services, the employment
setting, the settings in which the
services will be provided, and the
methods to procure the services.
8) In the event that an individual' s
individualized plan for employment
provides for vocational rehabilitation
services in a non-integrated setting, a
justification to support the need for the
non-integrated setting.
9) In the event that an individual
obtains competitive employment,
verification that the individual is
compensated at or above the minimum
wage and that the individual' s wage and
level of benefits are not less than that
customarily paid by the employer for
the same or similar work performed by
non -disabled individuals in accordance
with § 361. 5( c)( 9)( i).
10) In the event an individual
achieves an employment outcome in
which the individual is compensated in
accordance with section 14( c) of the Fair
Labor Standards Act or the designated
State unit closes the record of services
of an individual in extended
employment on the basis that the
individual is unable to achieve an
employment outcome consistent with
361. 5( c)( 15) or that an eligible
individual through informed choice
chooses to remain in extended
employment, documentation of the
results of the semi-annual and annual
reviews required under § 361. 55, of the
individual' s input into those reviews,
and of the individual' s or, if
appropriate, the individual' s
representative' s acknowledgment that
those reviews were conducted.
11) Documentation concerning any
action or decision resulting from a
request by an individual under § 361. 57
for a review of determinations made by
designated State unit personnel.
12) In the event that an applicant or
eligible individual requests under
361. 38( c)( 4) that documentation in the
record of services he amended and the
documentation is not amended,
documentation of the request.
13) In the event an individual is
referred to another program through the
State unit' s information and referral
system under § 361. 37, including other
components of the statewide workforce
development system, documentation on
the nature and scope of services
provided by the designated State unit to
the individual and on the referral itself,
consistent with the requirements of
361. 37.
14) In the event an individual' s
record of service is closed under
361. 56, documentation that
demonstrates the services provided
under the individual' s individualized
plan for employment contributed to the
achievement of the employment
outcome.
15) In the event an individual' s
record of service is closed under
361. 56, documentation verifying that
the provisions of §361. 56 have been
satisfied.
b) The State unit, in consultation
with the State Rehabilitation Council if
the State has a Council, must determine
the type of documentation that the State
unit must maintain for each applicant
and eligible individual in order to meet
the requirements in paragraph (a) of this
section.
Authority: Sections 12( c), 101( a)( 6), ( 9), ( 14),
and (20) and 102(a), (b), and (d) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 709( c), 721( a)( 6), ( 9), ( 14), and (20),
and 722( a), ( b), and ( d))
361. 48 Scope of vocational rehabilitation
services for individuals with disabilities.
a) Pre-employment transition
services. Each State must ensure that the
designated State unit, in collaboration
with the local educational agencies
involved, provide, or arrange for the
provision of, pre-employment transition
services for all students with
disabilities, as defined in § 361. 5( c)( 51),
in need of such services, without regard
to the type of disability, from Federal
funds reserved in accordance with
361. 65, and any funds made available
from State, local, or private funding
sources. Funds reserved and made
available may be used for the required,
authorized, and pre-employment
transition coordination activities under
paragraphs ( 2), ( 3) and (4) of this
section.
1) Availability of services. Pre-
employment transition services must be
made available Statewide to all students
with disabilities, regardless of whether
the student has applied or been
determined eligible for vocational
rehabilitation services.
2) Required activities. The designated
State unit must provide the following
pre-employment transition services:
i) Job exploration counseling;
ii) Work -based learning experiences,
which may include in -school or after
school opportunities, or experience
outside the traditional school setting
including internships), that is provided
in an integrated environment in the
community to the maximum extent
possible;
iii) Counseling on opportunities for
enrollment in comprehensive transition
or postsecondary educational programs
at institutions of higher education;
iv) Workplace readiness training to
develop social skills and independent
living; and
v) Instruction in self -advocacy
including instruction in person -
centered planning), which may include
peer mentoring (including peer
mentoring from individuals with
disabilities working in competitive
integrated employment).
3) Authorized activities. Funds
available and remaining after the
provision of the required activities
described in paragraph (a)( 2) of this
section may be used to improve the
transition of students with disabilities
from school to postsecondary education
or an employment outcome by—
i) Implementing effective strategies to
increase the likelihood of independent
55770 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
living and inclusion in communities
and competitive integrated workplaces;
ii) Developing and improving
strategies for individuals with
intellectual disabilities and individuals
with significant disabilities to live
independently; participate in
postsecondary education experiences;
and obtain, advance in and retain
competitive integrated employment;
iii) Providing instruction to
vocational rehabilitation counselors,
school transition personnel, and other
persons supporting students with
disabilities;
iv) Disseminating information about
innovative, effective, and efficient
approaches to achieve the goals of this
section;
v) Coordinating activities with
transition services provided by local
educational agencies under the
Individuals with Disabilities Education
Act (20 U.S. C. 1400 et seq.);
vi) Applying evidence -based findings
to improve policy, procedure, practice,
and the preparation of personnel, in
order to better achieve the goals of this
section;
vii) Developing model transition
demonstration projects;
viii) Establishing or supporting
multistate or regional partnerships
involving States, local educational
agencies, designated State units,
developmental disability agencies,
private businesses, or other participants
to achieve the goals of this section; and
ix) Disseminating information and
strategies to improve the transition to
postsecondary activities of individuals
who are members of traditionally
unserved and underserved populations.
4) Pre-employment transition
coordination. Each local office of a
designated State unit must carry out
responsibilities consisting of—
i) Attending individualized
education program meetings for
students with disabilities, when invited;
ii) Working with the local workforce
development boards, one-stop centers,
and employers to develop work
opportunities for students with
disabilities, including internships,
summer employment and other
employment opportunities available
throughout the school year, and
apprenticeships;
iii) Working with schools, including
those carrying out activities under
section 614( d) of the IDEA, to
coordinate and ensure the provision of
pre-employment transition services
under this section;
iv) When invited, attending person -
centered planning meetings for
individuals receiving services under
title XIX of the Social Security Act (42
andU. S. C. 1396 et seq.);
b) Services for individuals who have
applied for or been determined eligible
for vocational rehabilitation services. As
appropriate to the vocational
rehabilitation needs of each individual
and consistent with each individual' s
individualized plan for employment,
the designated State unit must ensure
that the following vocational
rehabilitation services are available to
assist the individual with a disability in
preparing for, securing, retaining,
advancing in or regaining an
employment outcome that is consistent
with the individual' s unique strengths,
resources, priorities, concerns, abilities,
capabilities, interests, and informed
choice:
1) Assessment for determining
eligibility and priority for services by
qualified personnel, including, if
appropriate, an assessment by personnel
skilled in rehabilitation technology, in
accordance with § 361. 42.
2) Assessment for determining
vocational rehabilitation needs by
qualified personnel, including, if
appropriate, an assessment by personnel
skilled in rehabilitation technology, in
accordance with § 361. 45.
3) Vocational rehabilitation
counseling and guidance, including
information and support services to
assist an individual in exercising
informed choice in accordance with
361. 52.
4) Referral and other services
necessary to assist applicants and
eligible individuals to secure needed
services from other agencies, including
other components of the statewide
workforce development system, in
accordance with §§361. 23, 361. 24, and
361. 37, and to advise those individuals
about client assistance programs
established under 34 CFR part 370.
5) In accordance with the definition
in § 361. 5( c)( 39), physical and mental
restoration services, to the extent that
financial support is not readily available
from a source other than the designated
State unit (such as through health
insurance or a comparable service or
benefit as defined in § 361. 5( c)( 10)).
6) Vocational and other training
services, including personal and
vocational adjustment training,
advanced training in, but not limited to,
a field of science, technology,
engineering, mathematics ( including
computer science), medicine, law, or
business); books, tools, and other
training materials, except that no
training or training services in an
institution of higher education
universities, colleges, community or
junior colleges, vocational schools,
technical institutes, or hospital schools
of nursing or any other postsecondary
education institution) may be paid for
with funds under this part unless
maximum efforts have been made by the
State unit and the individual to secure
grant assistance in whole or in part from
other sources to pay for that training.
7) Maintenance, in accordance with
the definition of that term in
361. 5( c)( 34).
8) Transportation in connection with
the provision of any vocational
rehabilitation service and in accordance
with the definition of that term in
361. 5( c)( 57).
9) Vocational rehabilitation services
to family members, as defined in
361. 5( c)( 23), of an applicant or eligible
individual if necessary to enable the
applicant or eligible individual to
achieve an employment outcome.
10) Interpreter services, including
sign language and oral interpreter
services, for individuals who are deaf or
hard of hearing and tactile interpreting
services for individuals who are deaf -
blind provided by qualified personnel.
11) Reader services, rehabilitation
teaching services, and orientation and
mobility services for individuals who
are blind.
12) Job-related services, including job
search and placement assistance, job
retention services, follow-up services,
and follow -along services.
13) Supported employment services
in accordance with the definition of that
term in § 361. 5( c)( 54).
14) Personal assistance services in
accordance with the definition of that
term in § 361. 5( c)( 39).
15) Post -employment services in
accordance with the definition of that
term in § 361. 5( c)( 42).
16) Occupational licenses, tools,
equipment, initial stocks, and supplies.
17) Rehabilitation technology in
accordance with the definition of that
term in § 361. 5( c)( 45), including
vehicular modification,
telecommunications, sensory, and other
technological aids and devices.
18) Transition services for students
and youth with disabilities, that
facilitate the transition from school to
postsecondary life, such as achievement
of an employment outcome in
competitive integrated employment, or
pre-employment transition services for
students.
19) Technical assistance and other
consultation services to conduct market
analyses, develop business plans, and
otherwise provide resources, to the
extent those resources are authorized to
be provided through the statewide
workforce development system, to
eligible individuals who are pursuing
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self-employment or telecommuting or
establishing a small business operation
as an employment outcome.
20) Customized employment in
accordance with the definition of that
term in § 361. 5( c)( 11).
21) Other goods and services
determined necessary for the individual
with a disability to achieve an
employment outcome.
Authority: Sections 7( 37), 12( c), 103( a), and
113 of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 705( 37), 709( c), 723( a),
and 733)
361. 49 Scope of vocational rehabilitation
services for groups of individuals with
disabilities.
a) The designated State unit may
provide for the following vocational
rehabilitation services for the benefit of
groups of individuals with disabilities:
1) The establishment, development,
or improvement of a public or other
nonprofit community rehabilitation
program that is used to provide
vocational rehabilitation services that
promote integration into the community
and prepare individuals with
disabilities for competitive integrated
employment, including supported
employment and customized
employment, and under special
circumstances, the construction of a
facility for a public or nonprofit
community rehabilitation program as
defined in §§ 361. 5( c)( 10), 361. 5( c)( 16)
and 361. 5( c)( 17). Examples of special
circumstances include the destruction
by natural disaster of the only available
center serving an area or a State
determination that construction is
necessary in a rural area because no
other public agencies or private
nonprofit organizations are currently
able to provide vocational rehabilitation
services to individuals.
2) Telecommunications systems that
have the potential for substantially
improving vocational rehabilitation
service delivery methods and
developing appropriate programming to
meet the particular needs of individuals
with disabilities, including telephone,
television, video description services,
satellite, tactile -vibratory devices, and
similar systems, as appropriate.
3) Special services to provide
nonvisual access to information for
individuals who are blind, including the
use of telecommunications, Braille,
sound recordings, or other appropriate
media; captioned television, films, or
video cassettes for individuals who are
deaf or hard of hearing; tactile materials
for individuals who are deaf -blind; and
other special services that provide
information through tactile, vibratory,
auditory, and visual media.
4) Technical assistance to businesses
that are seeking to employ individuals
with disabilities.
5) In the case of any small business
enterprise operated by individuals with
significant disabilities under the
supervision of the designated State unit,
including enterprises established under
the Randolph -Sheppard program,
management services and supervision
provided by the State unit along with
the acquisition by the State unit of
vending facilities or other equipment,
initial stocks and supplies, and initial
operating expenses, in accordance with
the following requirements:
i) Management services and
supervision includes inspection, quality
control, consultation, accounting,
regulating, in-service training, and
related services provided on a
systematic basis to support and improve
small business enterprises operated by
individuals with significant disabilities.
Management services and supervision
may be provided throughout the
operation of the small business
enterprise.
ii) Initial stocks and supplies
includes those items necessary to the
establishment of a new business
enterprise during the initial
establishment period, which may not
exceed six months.
iii) Costs of establishing a small
business enterprise may include
operational costs during the initial
establishment period, which may not
exceed six months.
iv) If the designated State unit
provides for these services, it must
ensure that only individuals with
significant disabilities will be selected
to participate in this supervised
program.
v) If the designated State unit
provides for these services and chooses
to set aside funds from the proceeds of
the operation of the small business
enterprises, the State unit must
maintain a description of the methods
used in setting aside funds and the
purposes for which funds are set aside.
Funds may be used only for small
business enterprises purposes, and
benefits that are provided to operators
from set-aside funds must be provided
on an equitable basis.
6) Consultation and technical
assistance services to assist State
educational agencies and local
educational agencies in planning for the
transition of students and youth with
disabilities from school to
postsecondary life, including
employment.
7) Transition services to youth with
disabilities and students with
disabilities who may not have yet
applied or been determined eligible for
vocational rehabilitation services, for
which a vocational rehabilitation
counselor works in concert with
educational agencies, providers of job
training programs, providers of services
under the Medicaid program under title
XIX of the Social Security Act (42 U.S. C.
1396 et seq.), entities designated by the
State to provide services for individuals
with developmental disabilities, centers
for independent living (as defined in
section 702 of the Act), housing and
transportation authorities, workforce
development systems, and businesses
and employers. These specific transition
services are to benefit a group of
students with disabilities or youth with
disabilities and are not individualized
services directly related to an
individualized plan for employment
goal. Services may include, but are not
limited to, group tours of universities
and vocational training programs,
employer or business site visits to learn
about career opportunities, career fairs
coordinated with workforce
development and employers to facilitate
mock interviews and resume writing,
and other general services applicable to
groups of students with disabilities and
youth with disabilities.
8) The establishment, development,
or improvement of assistive technology
demonstration, loan, reutilization, or
financing programs in coordination with
activities authorized under the Assistive
Technology Act of 1998 ( 29 U. S. C. 3001
et seq.) to promote access to assistive
technology for individuals with
disabilities and employers.
9) Support (including, as appropriate,
tuition) for advanced training in a field
of science, technology, engineering, or
mathematics (including computer
science), medicine, law, or business,
provided after an individual eligible to
receive services under this title
demonstrates—
i) Such eligibility;
ii) Previous completion of a
bachelor' s degree program at an
institution of higher education or
scheduled completion of such a degree
program prior to matriculating in the
program for which the individual
proposes to use the support; and
iii) Acceptance by a program at an
institution of higher education in the
United States that confers a master' s
degree in a field of science, technology,
engineering, or mathematics (including
computer science), a juris doctor degree,
a master of business administration
degree, or a doctor of medicine degree,
except that—
A) No training provided at an
institution of higher education may be
paid for with funds under this program
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unless maximum efforts have been
made by the designated State unit to
secure grant assistance, in whole or in
part, from other sources to pay for such
training; and
B) Nothing in this paragraph prevents
any designated State unit from
providing similar support to individuals
with disabilities within the State who
are eligible to receive support under this
title and who are not served under this
section.
b) If the designated State unit
provides for vocational rehabilitation
services for groups of individuals, it
must—
1) Develop and maintain written
policies covering the nature and scope
of each of the vocational rehabilitation
services it provides and the criteria
under which each service is provided;
and
2) Maintain information to ensure the
proper and efficient administration of
those services in the form and detail and
at the time required by the Secretary,
including the types of services
provided, the costs of those services,
and, to the extent feasible, estimates of
the numbers of individuals benefiting
from those services.
Authority: Sections 12( c), 101( a)( 6)( A), and
103(b) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 709( c), 721( a)( 6), and
723(b))
361. 50 Written policies governing the
provision of services for individuals with
disabilities.
a) Policies. The State unit must
develop and maintain written policies
covering the nature and scope of each of
the vocational rehabilitation services
specified in § 361. 48 and the criteria
under which each service is provided.
The policies must ensure that the
provision of services is based on the
rehabilitation needs of each individual
as identified in that individual' s
individualized plan for employment
and is consistent with the individual' s
informed choice. The written policies
may not establish any arbitrary limits on
the nature and scope of vocational
rehabilitation services to be provided to
the individual to achieve an
employment outcome. The policies
must be developed in accordance with
the following provisions:
b) Out -of -State services. (1) The State
unit may establish a preference for in -
State services, provided that the
preference does not effectively deny an
individual a necessary service. If the
individual chooses an out -of -State
service at a higher cost than an in -State
service, if either service would meet the
individual' s rehabilitation needs, the
designated State unit is not responsible
for those costs in excess of the cost of
the in -State service.
2) The State unit may not establish
policies that effectively prohibit the
provision of out -of -State services.
c) Payment for services. ( 1) The State
unit must establish and maintain
written policies to govern the rates of
payment for all purchased vocational
rehabilitation services.
2) The State unit may establish a fee
schedule designed to ensure a
reasonable cost to the program for each
service, if the schedule is—
i) Not so low as to effectively deny
an individual a necessary service; and
ii) Not absolute and permits
exceptions so that individual needs can
be addressed.
3) The State unit may not place
absolute dollar limits on specific service
categories or on the total services
provided to an individual.
d) Duration of services. ( 1) The State
unit may establish reasonable time
periods for the provision of services
provided that the time periods are—
i) Not so short as to effectively deny
an individual a necessary service; and
ii) Not absolute and permit
exceptions so that individual needs can
be addressed.
2) The State unit may not establish
absolute time limits on the provision of
specific services or on the provision of
services to an individual. The duration
of each service needed by an individual
must be determined on an individual
basis and reflected in that individual' s
individualized plan for employment.
e) Authorization of services. The
State unit must establish policies related
to the timely authorization of services,
including any conditions under which
verbal authorization can be given.
Authority: Sections 12( c) and 101( a)( 6) of
the Rehabilitation Act of 1973, as amended
and 29 U. S. C. 709( c) and 721( a)( 6))
361. 51 Standards for facilities and
providers of services.
a) Accessibility offacilities. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that any facility
used in connection with the delivery of
vocational rehabilitation services under
this part meets program accessibility
requirements consistent with the
requirements, as applicable, of the
Architectural Barriers Act of 1968, the
Americans with Disabilities Act of 1990,
section 504 of the Act, and the
regulations implementing these laws.
b) Affirmative action. The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
assure that community rehabilitation
programs that receive assistance under
part B of title I of the Act take
affirmative action to employ and
advance in employment qualified
individuals with disabilities covered
under and on the same terms and
conditions as in section 503 of the Act.
c) Special communication needs
personnel. The designated State unit
must ensure that providers of vocational
rehabilitation services are able to
communicate—
1) In the native language of
applicants and eligible individuals who
have limited English proficiency; and
2) By using appropriate modes of
communication used by applicants and
eligible individuals.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c) and 101( a)( 6)( B)
and (C) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 709( c) and 721( a)( 6)( B)
and (C))
361. 52 Informed choice.
a) General provision. The vocational
rehabilitation services portion of the
Unified or Combined State Plan must
assure that applicants and recipients of
services or, as appropriate, their
representatives are provided
information and support services to
assist applicants and recipients of
services in exercising informed choice
throughout the rehabilitation process
consistent with the provisions of section
102( d) of the Act and the requirements
of this section.
b) Written policies and procedures.
The designated State unit, in
consultation with its State
Rehabilitation Council, if it has a
Council, must develop and implement
written policies and procedures that
enable an applicant or recipient of
services to exercise informed choice
throughout the vocational rehabilitation
process. These policies and procedures
must provide for—
1) Informing each applicant and
recipient of services ( including students
with disabilities who are making the
transition from programs under the
responsibility of an educational agency
to programs under the responsibility of
the designated State unit and including
youth with disabilities), through
appropriate modes of communication,
about the availability of and
opportunities to exercise informed
choice, including the availability of
support services for individuals with
cognitive or other disabilities who
require assistance in exercising
informed choice throughout the
vocational rehabilitation process;
2) Assisting applicants and recipients
of services in exercising informed
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choice in decisions related to the
provision of assessment services;
3) Developing and implementing
flexible procurement policies and
methods that facilitate the provision of
vocational rehabilitation services and
that afford recipients of services
meaningful choices among the methods
used to procure vocational
rehabilitation services;
4) Assisting eligible individuals or, as
appropriate, the individuals'
representatives, in acquiring
information that enables them to
exercise informed choice in the
development of their individualized
plans for employment with respect to
the selection of the—
i) Employment outcome;
ii) Specific vocational rehabilitation
services needed to achieve the
employment outcome;
iii) Entity that will provide the
services;
iv) Employment setting and the
settings in which the services will be
provided; and
v) Methods available for procuring
the services; and
5) Ensuring that the availability and
scope of informed choice is consistent
with the obligations of the designated
State agency under this part.
c) Information and assistance in the
selection of vocational rehabilitation
services and service providers. In
assisting an applicant and eligible
individual in exercising informed
choice during the assessment for
determining eligibility and vocational
rehabilitation needs and during
development of the individualized plan
for employment, the designated State
unit must provide the individual or the
individual' s representative, or assist the
individual or the individual' s
representative in acquiring, information
necessary to make an informed choice
about the specific vocational
rehabilitation services, including the
providers of those services, that are
needed to achieve the individual' s
employment outcome. This information
must include, at a minimum,
information relating to the—
1) Cost, accessibility, and duration of
potential services;
2) Consumer satisfaction with those
services to the extent that information
relating to consumer satisfaction is
available;
3) Qualifications of potential service
providers;
4) Types of services offered by the
potential providers;
5) Degree to which services are
provided in integrated settings; and
6) Outcomes achieved by individuals
working with service providers, to the
extent that such information is
available.
d) Methods or sources of information.
In providing or assisting the individual
or the individual' s representative in
acquiring the information required
under paragraph (c) of this section, the
State unit may use, but is not limited to,
the following methods or sources of
information:
1) Lists of services and service
providers.
2) Periodic consumer satisfaction
surveys and reports.
3) Referrals to other consumers,
consumer groups, or disability advisory
councils qualified to discuss the
services or service providers.
4) Relevant accreditation,
certification, or other information
relating to the qualifications of service
providers.
5) Opportunities for individuals to
visit or experience various work and
service provider settings.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c), 101( a)( 19),
102( b)( 2)( B), and 102( d) of the Rehabilitation
Act of 1973, as amended; 29 U. S. C. 709( c),
721( a)( 19), 722( b)( 2)( B), and 722( d))
361. 53 Comparable services and
benefits.
a) Determination of availability. The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that prior to
providing an accommodation or
auxiliary aid or service or any
vocational rehabilitation services,
except those services listed in paragraph
b) of this section, to an eligible
individual or to members of the
individual' s family, the State unit must
determine whether comparable services
and benefits, as defined in § 361. 5( c)( 8),
exist under any other program and
whether those services and benefits are
available to the individual unless such
a determination would interrupt or
delay—
1) The progress of the individual
toward achieving the employment
outcome identified in the
individualized plan for employment;
2) An immediate job placement; or
3) The provision of vocational
rehabilitation services to any individual
who is determined to he at extreme
medical risk, based on medical evidence
provided by an appropriate qualified
medical professional.
b) Exempt services. The following
vocational rehabilitation services
described in § 361. 48( b) are exempt
from a determination of the availability
of comparable services and benefits
under paragraph (a) of this section:
1) Assessment for determining
eligibility and vocational rehabilitation
needs.
2) Counseling and guidance,
including information and support
services to assist an individual in
exercising informed choice.
3) Referral and other services to
secure needed services from other
agencies, including other components of
the statewide workforce development
system, if those services are not
available under this part.
4) Job-related services, including job
search and placement assistance, job
retention services, follow-up services,
and follow -along services.
5) Rehabilitation technology,
including telecommunications, sensory,
and other technological aids and
devices.
6) Post -employment services
consisting of the services listed under
paragraphs (b)( 1) through (5) of this
section.
c) Provision of services. ( 1) If
comparable services or benefits exist
under any other program and are
available to the individual at the time
needed to ensure the progress of the
individual toward achieving the
employment outcome in the
individual' s individualized plan for
employment, the designated State unit
must use those comparable services or
benefits to meet, in whole or part, the
costs of the vocational rehabilitation
services.
2) If comparable services or benefits
exist under any other program, but are
not available to the individual at the
time needed to ensure the progress of
the individual toward achieving the
employment outcome specified in the
individualized plan for employment,
the designated State unit must provide
vocational rehabilitation services until
those comparable services and benefits
become available.
d) Interagency coordination. ( 1) The
vocational rehabilitation services
portion of the Unified or Combined
State Plan must assure that the
Governor, in consultation with the
entity in the State responsible for the
vocational rehabilitation program and
other appropriate agencies, will ensure
that an interagency agreement or other
mechanism for interagency coordination
takes effect between the designated
State vocational rehabilitation unit and
any appropriate public entity, including
the State entity responsible for
administering the State Medicaid
program, a public institution of higher
education, and a component of the
statewide workforce development
system, to ensure the provision of
vocational rehabilitation services, and,
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if appropriate, accommodations or
auxiliary aids and services, ( other than
those services listed in paragraph (b) of
this section) that are included in the
individualized plan for employment of
an eligible individual, including the
provision of those vocational
rehabilitation services (including, if
appropriate, accommodations or
auxiliary aids and services) during the
pendency of any interagency dispute in
accordance with the provisions of
paragraph (d)( 3)( iii) of this section.
2) The Governor may meet the
requirements of paragraph (d)( 1) of this
section through—
i) A State statute or regulation;
ii) A signed agreement between the
respective officials of the public entities
that clearly identifies the
responsibilities of each public entity for
the provision of the services; or
iii) Another appropriate mechanism
as determined by the designated State
vocational rehabilitation unit.
3) The interagency agreement or
other mechanism for interagency
coordination must include the
following:
i) Agency financial responsibility. An
identification of, or description of a
method for defining, the financial
responsibility of the designated State
unit and other public entities for the
provision of vocational rehabilitation
services, and, if appropriate,
accommodations or auxiliary aids and
services other than those listed in
paragraph (b) of this section and a
provision stating the financial
responsibility of the public entity for
providing those services.
ii) Conditions, terms, and procedures
of reimbursement. Information
specifying the conditions, terms, and
procedures under which the designated
State unit must be reimbursed by the
other public entities for providing
vocational rehabilitation services, and
accommodations or auxiliary aids and
services based on the terms of the
interagency agreement or other
mechanism for interagency
coordination.
iii) Interagency disputes. Information
specifying procedures for resolving
interagency disputes under the
interagency agreement or other
mechanism for interagency
coordination, including procedures
under which the designated State unit
may initiate proceedings to secure
reimbursement from other public
entities or otherwise implement the
provisions of the agreement or
mechanism.
iv) Procedures for coordination of
services. Information specifying policies
and procedures for public entities to
determine and identify interagency
coordination responsibilities of each
public entity to promote the
coordination and timely delivery of
vocational rehabilitation services, and
accommodations or auxiliary aids and
services, other than those listed in
paragraph (b) of this section.
e) Responsibilities under other law.
1) If a public entity (other than the
designated State unit) is obligated under
Federal law (such as the Americans
with Disabilities Act, section 504 of the
Act, or section 188 of the Workforce
Innovation and Opportunity Act) or
State law, or assigned responsibility
under State policy or an interagency
agreement established under this
section, to provide or pay for any
services considered to be vocational
rehabilitation services ( e.g., interpreter
services under § 361. 48(j)), and, if
appropriate, accommodations or
auxiliary aids and services other than
those services listed in paragraph (b) of
this section, the public entity must
fulfill that obligation or responsibility
through—
i) The terms of the interagency
agreement or other requirements of this
section;
ii) Providing or paying for the service
directly or by contract; or
iii) Other arrangement.
2) If a public entity other than the
designated State unit fails to provide or
pay for vocational rehabilitation
services, and, if appropriate,
accommodations or auxiliary aids and
services for an eligible individual as
established under this section, the
designated State unit must provide or
pay for those services to the individual
and may claim reimbursement for the
services from the public entity that
failed to provide or pay for those
services. The public entity must
reimburse the designated State unit
pursuant to the terms of the interagency
agreement or other mechanism
described in paragraph (d) of this
section in accordance with the
procedures established in the agreement
or mechanism pursuant to paragraph
d)( 3)( ii) of this section.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c) and 101( a)( 8) of
the Rehabilitation Act of 1973, as amended;
29 U.S. C. 709( c) and 721( a)( 8))
361. 54 Participation of individuals in
cost of services based on financial need.
a) No Federal requirement. There is
no Federal requirement that the
financial need of individuals be
considered in the provision of
vocational rehabilitation services.
b) State unit requirements. (1) The
State unit may choose to consider the
financial need of eligible individuals or
individuals who are receiving services
through trial work experiences under
361. 42( e) for purposes of determining
the extent of their participation in the
costs of vocational rehabilitation
services, other than those services
identified in paragraph (b)( 3) of this
section.
2) If the State unit chooses to
consider financial need—
i) It must maintain written policies—
A) Explaining the method for
determining the financial need of an
eligible individual; and
B) Specifying the types of vocational
rehabilitation services for which the
unit has established a financial needs
test;
ii) The policies must be applied
uniformly to all individuals in similar
circumstances;
iii) The policies may require different
levels of need for different geographic
regions in the State, but must be applied
uniformly to all individuals within each
geographic region; and
iv) The policies must ensure that the
level of an individual' s participation in
the cost of vocational rehabilitation
services is—
A) Reasonable;
B) Based on the individual' s financial
need, including consideration of any
disability -related expenses paid by the
individual; and
C) Not so high as to effectively deny
the individual a necessary service.
3) The designated State unit may not
apply a financial needs test, or require
the financial participation of the
individual—
i) As a condition for furnishing the
following vocational rehabilitation
services:
A) Assessment for determining
eligibility and priority for services
under § 361.48(b)( 1), except those non -
assessment services that are provided to
an individual with a significant
disability during either an exploration
of the individual' s abilities, capabilities,
and capacity to perform in work
situations through the use of trial work
experiences under § 361. 42( e).
B) Assessment for determining
vocational rehabilitation needs under
361. 48( b)( 2).
C) Vocational rehabilitation
counseling and guidance under
361. 48( b)( 3).
D) Referral and other services under
361. 48( b)( 4).
E) Job-related services under
361. 48( b)( 12).
F) Personal assistance services under
361. 48( b)( 14).
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G) Any auxiliary aid or service ( e.g.,
interpreter services under
361. 48( b)( 10), reader services under
361. 48( b)( 11)) that an individual with
a disability requires under section 504
of the Act (29 U.S.C. 794) or the
Americans with Disabilities Act (42
U.S. C. 12101, et seq.), or regulations
implementing those laws, in order for
the individual to participate in the
vocational rehabilitation program as
authorized under this part; or
ii) As a condition for furnishing any
vocational rehabilitation service if the
individual in need of the service has
been determined eligible for Social
Security benefits under titles II or XVI
of the Social Security Act.
Authority: Section 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c))
361. 55 Semi-annual and annual review of
individuals in extended employment and
other employment under special certificate
provisions of the Fair Labor Standards Act.
a) The vocational rehabilitation
services portion of the Unified or
Combined State Plan must assure that
the designated State unit conducts a
semi-annual review and reevaluation for
the first two years of such employment
and annually thereafter, in accordance
with the requirements in paragraph (b)
of this section for an individual with a
disability served under this part—
1) Who has a record of service, as
described in § 361. 47, as either an
applicant or eligible individual under
the vocational rehabilitation program;
and
2)( i) Who has achieved employment
in which the individual is compensated
in accordance with section 14( c) of the
Fair Labor Standards Act; or
ii) Who is in extended employment,
including those individuals whose
record of service is closed while the
individual is in extended employment
on the basis that the individual is
unable to achieve an employment
outcome consistent with § 361. 5( c)( 15)
or that the individual made an informed
choice to remain in extended
employment.
b) For each individual with a
disability who meets the criteria in
paragraph (a) of this section, the
designated State unit must—
1) Semi-annually review and
reevaluate the status of each individual
for two years after the individual' s
record of services is closed (and
annually thereafter) to determine the
interests, priorities, and needs of the
individual with respect to competitive
integrated employment or training for
competitive integrated employment;
2) Enable the individual or, if
appropriate, the individual' s
representative to provide input into the
review and reevaluation and must
document that input in the record of
services, consistent with §361. 47( a)( 10),
with the individual' s or, as appropriate,
the individual' s representative' s signed
acknowledgment that the review and
reevaluation have been conducted; and
3) Make maximum efforts, including
identifying and providing vocational
rehabilitation services, reasonable
accommodations, and other necessary
support services, to assist the individual
in engaging in competitive integrated
employment as defined in § 361. 5( c)( 9).
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Sections 12( c) and 101( a)( 14) of
the Rehabilitation Act of 1973, as amended;
29 U.S. C. 709( c) and 721( a)( 14))
361. 56 Requirements for closing the
record of services of an individual who has
achieved an employment outcome.
The record of services of an
individual who has achieved an
employment outcome may be closed
only if all of the following requirements
are met:
a) Employment outcome achieved.
The individual has achieved the
employment outcome that is described
in the individual' s individualized plan
for employment in accordance with
361. 46( a)( 1) and is consistent with the
individual' s unique strengths, resources,
priorities, concerns, abilities,
capabilities, interests, and informed
choice.
b) Employment outcome maintained.
The individual has maintained the
employment outcome for an appropriate
period of time, but not less than 90
days, necessary to ensure the stability of
the employment outcome, and the
individual no longer needs vocational
rehabilitation services.
c) Satisfactory outcome. At the end of
the appropriate period under paragraph
b) of this section, the individual and
the qualified rehabilitation counselor
employed by the designated State unit
consider the employment outcome to be
satisfactory and agree that the
individual is performing well in the
employment.
d) Post -employment services. The
individual is informed through
appropriate modes of communication of
the availability of post -employment
services.
Authority: Sections 12( c), 101( a)( 6), and
106( a)( 2) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 709( c), 721( a)( 6), and
726( a)( 2))
361. 57 Review of determinations made
by designated State unit personnel.
a) Procedures. The designated State
unit must develop and implement
procedures to ensure that an applicant
or recipient of services who is
dissatisfied with any determination
made by personnel of the designated
State unit that affects the provision of
vocational rehabilitation services may
request, or, if appropriate, may request
through the individual' s representative,
a timely review of that determination.
The procedures must be in accordance
with paragraphs (b) through (k) of this
section:
b) General requirements. (1)
Notification. Procedures established by
the State unit under this section must
provide an applicant or recipient or, as
appropriate, the individual' s
representative notice of—
i) The right to obtain review of State
unit determinations that affect the
provision of vocational rehabilitation
services through an impartial due
process hearing under paragraph (e) of
this section;
ii) The right to pursue mediation
under paragraph (d) of this section with
respect to determinations made by
designated State unit personnel that
affect the provision of vocational
rehabilitation services to an applicant or
recipient;
iii) The names and addresses of
individuals with whom requests for
mediation or due process hearings may
be filed;
iv) The manner in which a mediator
or impartial hearing officer may be
selected consistent with the
requirements of paragraphs (d) and (f) of
this section; and
v) The availability of the client
assistance program, established under
34 CFR part 370, to assist the applicant
or recipient during mediation sessions
or impartial due process hearings.
2) Timing. Notice described in
paragraph (b)( 1) of this section must be
provided in writing—
i) At the time the individual applies
for vocational rehabilitation services
under this part;
ii) At the time the individual is
assigned to a category in the State' s
order of selection, if the State has
established an order of selection under
361. 36;
iii) At the time the individualized
plan for employment is developed; and
iv) Whenever vocational
rehabilitation services for an individual
are reduced, suspended, or terminated.
3) Evidence and representation.
Procedures established under this
section must—
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i) Provide an applicant or recipient
or, as appropriate, the individual' s
representative with an opportunity to
submit during mediation sessions or
due process hearings evidence and other
information that supports the
applicant' s or recipient' s position; and
ii) Allow an applicant or recipient to
be represented during mediation
sessions or due process hearings by
counsel or other advocate selected by
the applicant or recipient.
4) Impact on provision of services.
The State unit may not institute a
suspension, reduction, or termination of
vocational rehabilitation services being
provided to an applicant or recipient,
including evaluation and assessment
services and individualized plan for
employment development, pending a
resolution through mediation, pending a
decision by a hearing officer or
reviewing official, or pending informal
resolution under this section unless—
i) The individual or, in appropriate
cases, the individual' s representative
requests a suspension, reduction, or
termination of services; or
ii) The State agency has evidence that
the services have been obtained through
misrepresentation, fraud, collusion, or
criminal conduct on the part of the
individual or the individual' s
representative.
5) Ineligibility. Applicants who are
found ineligible for vocational
rehabilitation services and previously
eligible individuals who are determined
to be no longer eligible for vocational
rehabilitation services pursuant to
361. 43 are permitted to challenge the
determinations of ineligibility under the
procedures described in this section.
c) Informal dispute resolution. The
State unit may develop an informal
process for resolving a request for
review without conducting mediation or
a formal hearing. A State' s informal
process must not be used to deny the
right of an applicant or recipient to a
hearing under paragraph ( e) of this
section or any other right provided
under this part, including the right to
pursue mediation under paragraph ( d)
of this section. If informal resolution
under this paragraph or mediation
under paragraph (d) of this section is
not successful in resolving the dispute
within the time period established
under paragraph (e)( 1) of this section, a
formal hearing must be conducted
within that same time period, unless the
parties agree to a specific extension of
time.
d) Mediation. (1) The State must
establish and implement procedures, as
required under paragraph (b)( 1)( ii) of
this section, to allow an applicant or
recipient and the State unit to resolve
disputes involving State unit
determinations that affect the provision
of vocational rehabilitation services
through a mediation process that must
be made available, at a minimum,
whenever an applicant or recipient or,
as appropriate, the individual's
representative requests an impartial due
process hearing under this section.
2) Mediation procedures established
by the State unit under paragraph (d) of
this section must ensure that—
i) Participation in the mediation
process is voluntary on the part of the
applicant or recipient, as appropriate,
and on the part of the State unit;
ii) Use of the mediation process is
not used to deny or delay the
applicant' s or recipient' s right to pursue
resolution of the dispute through an
impartial hearing held within the time
period specified in paragraph (e)( 1) of
this section or any other rights provided
under this part. At any point during the
mediation process, either party or the
mediator may elect to terminate the
mediation. In the event mediation is
terminated, either party may pursue
resolution through an impartial hearing;
iii) The mediation process is
conducted by a qualified and impartial
mediator, as defined in § 361. 5( c)( 43),
who must be selected from a list of
qualified and impartial mediators
maintained by the State—
A) On a random basis;
B) By agreement between the director
of the designated State unit and the
applicant or recipient or, as appropriate,
the recipient' s representative; or
C) In accordance with a procedure
established in the State for assigning
mediators, provided this procedure
ensures the neutrality of the mediator
assigned; and
iv) Mediation sessions are scheduled
and conducted in a timely manner and
are held in a location and manner that
is convenient to the parties to the
dispute.
3) Discussions that occur during the
mediation process must be kept
confidential and may not be used as
evidence in any subsequent due process
hearings or civil proceedings, and the
parties to the mediation process may be
required to sign a confidentiality pledge
prior to the commencement of the
process.
4) An agreement reached by the
parties to the dispute in the mediation
process must be described in a written
mediation agreement that is developed
by the parties with the assistance of the
qualified and impartial mediator and
signed by both parties. Copies of the
agreement must be sent to both parties.
5) The costs of the mediation process
must be paid by the State. The State is
not required to pay for any costs related
to the representation of an applicant or
recipient authorized under paragraph
b)( 3)( ii) of this section.
e) Impartial due process hearings.
The State unit must establish and
implement formal review procedures, as
required under paragraph (b)( 1)( i) of this
section, that provide that—
1) Hearing conducted by an impartial
hearing officer, selected in accordance
with paragraph (f) of this section, must
be held within 60 days of an applicant' s
or recipient 's request for review of a
determination made by personnel of the
State unit that affects the provision of
vocational rehabilitation services to the
individual, unless informal resolution
or a mediation agreement is achieved
prior to the 60th day or the parties agree
to a specific extension of time;
2) In addition to the rights described
in paragraph (b)( 3) of this section, the
applicant or recipient or, if appropriate,
the individual' s representative must be
given the opportunity to present
witnesses during the hearing and to
examine all witnesses and other
relevant sources of information and
evidence;
3) The impartial hearing officer
must—
i) Make a decision based on the
provisions of the approved vocational
rehabilitation services portion of the
Unified or Combined State Plan, the
Act, Federal vocational rehabilitation
regulations, and State regulations and
policies that are consistent with Federal
requirements; and
ii) Provide to the individual or, if
appropriate, the individual' s
representative and to the State unit a
full written report of the findings and
grounds for the decision within 30 days
of the completion of the hearing; and
4) The hearing officer' s decision is
final, except that a party may request an
impartial review under paragraph (g)( 1)
of this section if the State has
established procedures for that review,
and a party involved in a hearing may
bring a civil action under paragraph (i)
of this section.
f) Selection of impartial hearing
officers. The impartial hearing officer
for a particular case must be selected—
1) From a list of qualified impartial
hearing officers maintained by the State
unit. Impartial hearing officers included
on the list must be—
i) Identified by the State unit if the
State unit is an independent
commission; or
ii) Jointly identified by the State unit
and the State Rehabilitation Council if
the State has a Council; and
2)( i) On a random basis; or
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ii) By agreement between the director
of the designated State unit and the
applicant or recipient or, as appropriate,
the individual' s representative.
g) Administrative review ofhearing
officer's decision. The State may
establish procedures to enable a party
who is dissatisfied with the decision of
the impartial hearing officer to seek an
impartial administrative review of the
decision under paragraph (e)( 3) of this
section in accordance with the
following requirements:
1) A request for administrative
review under paragraph (g) of this
section must be made within 20 days of
the mailing of the impartial hearing
officer' s decision.
2) Administrative review of the
hearing officer' s decision must be
conducted by—
i) The chief official of the designated
State agency if the State has established
both a designated State agency and a
designated State unit under § 361. 13( b);
or
ii) An official from the office of the
Governor.
3) The reviewing official described in
paragraph (g)( 2)( i) of this section—
i) Provides both parties with an
opportunity to submit additional
evidence and information relevant to a
final decision concerning the matter
under review;
ii) May not overturn or modify the
hearing officer' s decision, or any part of
that decision, that supports the position
of the applicant or recipient unless the
reviewing official concludes, based on
clear and convincing evidence, that the
decision of the impartial hearing officer
is clearly erroneous on the basis of being
contrary to the approved vocational
rehabilitation services portion of the
Unified or Combined State Plan, the
Act, Federal vocational rehabilitation
regulations, or State regulations and
policies that are consistent with Federal
requirements;
iii) Makes an independent, final
decision following a review of the entire
hearing record and provides the
decision in writing, including a full
report of the findings and the statutory,
regulatory, or policy grounds for the
decision, to the applicant or recipient
or, as appropriate, the individual' s
representative and to the State unit
within 30 days of the request for
administrative review under paragraph
g)( 1) of this section; and
iv) May not delegate the
responsibility for making the final
decision under paragraph (g) of this
section to any officer or employee of the
designated State unit.
4) The reviewing official' s decision
under paragraph (g) of this section is
final unless either party brings a civil
action under paragraph ( i) of this
section.
h) Implementation offinal decisions.
If a party brings a civil action under
paragraph (h) of this section to
challenge the final decision of a hearing
officer under paragraph (e) of this
section or to challenge the final decision
of a State reviewing official under
paragraph (g) of this section, the final
decision of the hearing officer or State
reviewing official must be implemented
pending review by the court.
i) Civil action. (1) Any party who
disagrees with the findings and decision
of an impartial hearing officer under
paragraph (e) of this section in a State
that has not established administrative
review procedures under paragraph (g)
of this section and any party who
disagrees with the findings and decision
under paragraph (g)( 3)( iii) of this section
have a right to bring a civil action with
respect to the matter in dispute. The
action may be brought in any State court
of competent jurisdiction or in a district
court of the United States of competent
jurisdiction without regard to the
amount in controversy.
2) In any action brought under
paragraph (i) of this section, the court—
i) Receives the records related to the
impartial due process hearing and the
records related to the administrative
review process, if applicable;
ii) Hears additional evidence at the
request of a party; and
iii) Basing its decision on the
preponderance of the evidence, grants
the relief that the court determines to he
appropriate.
j) State fair hearing board. A fair
hearing board as defined in
361. 5( c)( 21) is authorized to carry out
the responsibilities of the impartial
hearing officer under paragraph (e) of
this section in accordance with the
following criteria:
1) The fair hearing board may
conduct due process hearings either
collectively or by assigning
responsibility for conducting the
hearing to one or more members of the
fair hearing board.
2) The final decision issued by the
fair hearing board following a hearing
under paragraph (j)( 1) of this section
must be made collectively by, or by a
majority vote of, the fair hearing board.
3) The provisions of paragraphs
b)( 1), ( 2), and (3) of this section that
relate to due process hearings and of
paragraphs ( e), ( f), (g), and (h) of this
section do not apply to fair hearing
boards under this paragraph (j).
k) Data collection. (1) The director of
the designated State unit must collect
and submit, at a minimum, the
following data to the Secretary for
inclusion each year in the annual report
to Congress under section 13 of the Act:
i) A copy of the standards used by
State reviewing officials for reviewing
decisions made by impartial hearing
officers under this section.
ii) The number of mediations held,
including the number of mediation
agreements reached.
iii) The number of hearings and
reviews sought from impartial hearing
officers and State reviewing officials,
including the type of complaints and
the issues involved.
iv) The number of hearing officer
decisions that were not reviewed by
administrative reviewing officials.
v) The number of hearing decisions
that were reviewed by State reviewing
officials and, based on these reviews,
the number of hearing decisions that
were—
A) Sustained in favor of an applicant
or recipient;
B) Sustained in favor of the
designated State unit;
C) Reversed in whole or in part in
favor of the applicant or recipient; and
D) Reversed in whole or in part in
favor of the State unit.
2) The State unit director also must
collect and submit to the Secretary
copies of all final decisions issued by
impartial hearing officers under
paragraph (e) of this section and by
State review officials under paragraph
g) of this section.
3) The confidentiality of records of
applicants and recipients maintained by
the State unit may not preclude the
access of the Secretary to those records
for the purposes described in this
section.
Authority: Sections 12( c) and 102( c) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 709( c) and 722( c))
Subpart C— Financing of State
Vocational Rehabilitation Programs
361. 60 Matching requirements.
a) Federal share—( 1) General. Except
as provided in paragraph (a)( 2) of this
section, the Federal share for
expenditures made by the State under
the vocational rehabilitation services
portion of the Unified or Combined
State Plan, including expenditures for
the provision of vocational
rehabilitation services and the
administration of the vocational
rehabilitation services portion of the
Unified or Combined State Plan, is 78. 7
percent.
2) Construction projects. The Federal
share for expenditures made for the
construction of a facility for community
rehabilitation program purposes may
55778 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
not be more than 50 percent of the total
cost of the project.
b) Non -Federal share—(1) General.
Except as provided in paragraph (b)( 2)
and (b)( 3) of this section, expenditures
made under the vocational
rehabilitation services portion of the
Unified or Combined State Plan to meet
the non -Federal share under this section
must be consistent with the provisions
of 2 CFR 200.306(b).
2) Third party in-kind contributions.
Third party in-kind contributions
specified in 2 CFR 200. 306( b) may not
be used to meet the non -Federal share
under this section.
3) Contributions by private entities.
Expenditures made from those cash
contributions provided by private
organizations, agencies, or individuals
and that are deposited in the State
agency' s account or, if applicable, sole
local agency' s account, in accordance
with State law prior to their expenditure
and that are earmarked, under a
condition imposed by the contributor,
may be used as part of the non -Federal
share under this section if the funds are
earmarked for—
i) Meeting in whole or in part the
State' s share for establishing a
community rehabilitation program or
constructing a particular facility for
community rehabilitation program
purposes;
ii) Particular geographic areas within
the State for any purpose under the
vocational rehabilitation services
portion of the Unified or Combined
State Plan, other than those described in
paragraph (b)( 3)( i) of this section, in
accordance with the following criteria:
A) Before funds that are earmarked
for a particular geographic area may be
used as part of the non -Federal share,
the State must notify the Secretary that
the State cannot provide the full non -
Federal share without using these funds.
B) Funds that are earmarked for a
particular geographic area may be used
as part of the non -Federal share without
requesting a waiver of statewideness
under § 361. 26.
C) Except as provided in paragraph
b)( 3)( i) of this section, all Federal funds
must he used on a statewide basis
consistent with § 361. 25, unless a
waiver of statewideness is obtained
under § 361. 26; and
iii) Any other purpose under the
vocational rehabilitation services
portion of the Unified or Combined
State Plan, provided the expenditures
do not benefit in any way the donor,
employee, officer, or agent, any member
of his or her immediate family, his or
her partner, an individual with whom
the donor has a close personal
relationship, or an individual, entity, or
organization with whom the donor
shares a financial or other interest. The
Secretary does not consider a donor' s
receipt from the State unit of a
subaward or contract with funds
allotted under this part to be a benefit
for the purposes of this paragraph if the
subaward or contract is awarded under
the State' s regular competitive
procedures.
Authority: Sections 7( 14), 12( c), 101( a)( 3),
101( a)( 4), and 104 of the Rehabilitation Act
of 1973, as amended; 29 U.S. C. 705( 14),
709(c), 721(a)(3), 721(a)(4), and 724))
Example for paragraph (b)( 3):
Contributions may be earmarked in
accordance with § 361.60(b)( 3)(iii)for
providing particular services ( e.g.,
rehabilitation technology services); serving
individuals with certain types of disabilities
e.g., individuals who are blind), consistent
with the State' s order of selection, if
applicable; providing services to special
groups that State or Federal law permits to
be targeted for services ( e.g., students with
disabilities who are receiving special
education services), consistent with the
State' s order of selection, if applicable; or
carrying out particular types of
administrative activities permissible under
State law. Contributions also may be
restricted to particular geographic areas to
increase services or expand the scope of
services that are available statewide under
the vocational rehabilitation services portion
of the Unified or Combined State Plan in
accordance with the requirements in
361. 60( b)( 3)( ii).
361. 61 Limitation on use of funds for
construction expenditures.
No more than 10 percent of a State' s
allotment for any fiscal year under
section 110 of the Act may be spent on
the construction of facilities for
community rehabilitation program
purposes.
Authority: Section 101( a)( 17)( A) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 721( a)( 17)( A))
361. 62 Maintenance of effort
requirements.
a) General requirements. The
Secretary reduces the amount otherwise
payable to a State for any fiscal year by
the amount by which the total
expenditures from non -Federal sources
under the vocational rehabilitation
services portion of the Unified or
Combined State Plan for any previous
fiscal year were less than the total of
those expenditures for the fiscal year
two years prior to that previous fiscal
year.
b) Specific requirements for
construction offacilities. If the State
provides for the construction of a
facility for community rehabilitation
program purposes, the amount of the
State' s share of expenditures for
vocational rehabilitation services under
the plan, other than for the construction
of a facility for community
rehabilitation program purposes or the
establishment of a facility for
community rehabilitation purposes,
must be at least equal to the
expenditures for those services for the
second prior fiscal year.
c) Separate State agency for
vocational rehabilitation services for
individuals who are blind. If there is a
separate part of the vocational
rehabilitation services portion of the
Unified or Combined State Plan
administered by a separate State agency
to provide vocational rehabilitation
services for individuals who are blind—
1) Satisfaction of the maintenance of
effort requirements under paragraphs (a)
and (b) of this section is determined
based on the total amount of a State' s
non -Federal expenditures under both
parts of the vocational rehabilitation
services portion of the Unified or
Combined State Plan; and
2) If a State fails to meet any
maintenance of effort requirement, the
Secretary reduces the amount otherwise
payable to the State for a fiscal year
under each part of the plan in direct
proportion to the amount by which non -
Federal expenditures under each part of
the plan in any previous fiscal year were
less than they were for that part of the
plan for the fiscal year 2 years prior to
that previous fiscal year.
d) Waiver or modification. (1) The
Secretary may waive or modify the
maintenance of effort requirement in
paragraph (a) of this section if the
Secretary determines that a waiver or
modification is necessary to permit the
State to respond to exceptional or
uncontrollable circumstances, such as a
major natural disaster or a serious
economic downturn, that—
i) Cause significant unanticipated
expenditures or reductions in revenue
that result in a general reduction of
programs within the State; or
ii) Require the State to make
substantial expenditures in the
vocational rehabilitation program for
long-term purposes due to the one-time
costs associated with the construction of
a facility for community rehabilitation
program purposes, the establishment of
a facility for community rehabilitation
program purposes, or the acquisition of
equipment.
2) The Secretary may waive or
modify the maintenance of effort
requirement in paragraph (b) of this
section or the 10 percent allotment
limitation in § 361. 61 if the Secretary
determines that a waiver or
modification is necessary to permit the
State to respond to exceptional or
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uncontrollable circumstances, such as a
major natural disaster, that result in
significant destruction of existing
facilities and require the State to make
substantial expenditures for the
construction of a facility for community
rehabilitation program purposes or the
establishment of a facility for
community rehabilitation program
purposes in order to provide vocational
rehabilitation services.
3) A written request for waiver or
modification, including supporting
justification, must be submitted to the
Secretary for consideration as soon as
the State has determined that it has
failed to satisfy its maintenance of effort
requirement due to an exceptional or
uncontrollable circumstance, as
described in paragraphs (d)( 1) and (2) of
this section.
Authority: Sections 101( a)( 17) and 111( a)( 2)
of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 721( a)( 17) and 731( a)( 2))
361. 63 Program income.
a) Definition. For purposes of this
section, program income means gross
income received by the State that is
directly generated by a supported
activity under this part or earned as a
result of the Federal award during the
period of performance, as defined in 2
CFR 200. 80.
b) Sources. Sources of program
income include, but are not limited to:
Payments from the Social Security
Administration for assisting Social
Security beneficiaries and recipients to
achieve employment outcomes;
payments received from workers'
compensation funds; payments received
by the State agency from insurers,
consumers, or others for services to
defray part or all of the costs of services
provided to particular individuals; and
income generated by a State -operated
community rehabilitation program for
activities authorized under this part.
c) Use ofprogram income. ( 1) Except
as provided in paragraph (c)( 2) of this
section, program income, whenever
earned, must be used for the provision
of vocational rehabilitation services and
the administration of the vocational
rehabilitation services portion of the
Unified or Combined State Plan.
Program income—
i) Is considered earned in the fiscal
year in which it is received; and
ii) Must be disbursed during the
period of performance of the award.
2) Payments provided to a State from
the Social Security Administration for
assisting Social Security beneficiaries
and recipients to achieve employment
outcomes may also be used to carry out
programs under part B of title I of the
Act (client assistance), title VI of the Act
supported employment), and title VII of
the Act (independent living).
3)( i) The State must use program
income to supplement Federal funds
that support program activities that are
subject to this part. See, for example, 2
CFR 200. 307( e)( 2).
ii) Notwithstanding 2 CFR 200. 305( a)
and to the extent that program income
funds are available, a State must
disburse those funds ( including
repayments to a revolving fund),
rebates, refunds, contract settlements,
audit recoveries, and interest earned on
such funds before requesting additional
funds from the Department.
4) Program income cannot be used to
meet the non -Federal share requirement
under § 361. 60.
Authority: Sections 12( c) and 108 of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c) and 728; 2 CFR part 200)
361. 64 Obligation of Federal funds.
a) Except as provided in paragraph
b) of this section, any Federal award
funds, including reallotted funds, that
are appropriated for a fiscal year to carry
out a program under this part that are
not obligated by the State by the
beginning of the succeeding fiscal year
remain available for obligation by the
State during that succeeding fiscal year.
b) Federal funds appropriated for a
fiscal year remain available for
obligation in the succeeding fiscal year
only to the extent that the State met the
matching requirement for those Federal
funds by obligating, in accordance with
34 CFR 76. 707, the non -Federal share in
the fiscal year for which the funds were
appropriated.
Authority: Section 19 of the Rehabilitation
Act of 1973, as amended; 29 U. S. C. 716)
361. 65 Allotment and payment of Federal
funds for vocational rehabilitation services.
a) Allotment. (1) The allotment of
Federal funds for vocational
rehabilitation services for each State is
computed in accordance with the
requirements of section 110 of the Act,
and payments are made to the State on
a quarterly basis, unless some other
period is established by the Secretary.
2) If the vocational rehabilitation
services portion of the Unified or
Combined State Plan designates one
State agency to administer, or supervise
the administration of, the part of the
plan under which vocational
rehabilitation services are provided for
individuals who are blind and another
State agency to administer the rest of the
plan, the division of the State' s
allotment is a matter for State
determination.
3) Reservation for pre-employment
transition services. (i) Pursuant to
section 110( d) of the Act, the State must
reserve at least 15 percent of the State' s
allotment, received in accordance with
section 110( a) of the Act for the
provision of pre-employment transition
services, as described in § 361. 48( a) of
this part.
ii) The funds reserved in accordance
with paragraph (a)( 3)( i) of this section—
A) Must only be used for pre-
employment transition services
specified in § 361. 48( a); and
B) Must not be used to pay for
administrative costs, ( as defined in
361. 5( c)( 2)) associated with the
provision of such services or any other
vocational rehabilitation services.
b) Reallotment. (1) The Secretary
determines not later than 45 days before
the end of a fiscal year which States, if
any, will not use their full allotment.
2) As soon as possible, but not later
than the end of the fiscal year, the
Secretary reallots these funds to other
States that can use those additional
funds during the period of performance
of the award, provided the State can
meet the matching requirement by
obligating the non -Federal share of any
reallotted funds in the fiscal year for
which the funds were appropriated.
3) In the event more funds are
requested by agencies than are available,
the Secretary will determine the process
for allocating funds available for
reallotment.
4) Funds reallotted to another State
are considered to be an increase in the
recipient State' s allotment for the fiscal
year for which the funds were
appropriated.
Authority: Sections 12( c), 110, and 111 of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c), 730, and 731)
Subparts D– F—[ Reserved]
2. Effective October 18, 2016, § 361. 10
is amended by adding paragraph (d) to
read as follows:
361. 10 Submission, approval, and
disapproval of the State plan.
d) Submission, approval,
disapproval, and duration. All
requirements regarding the submission,
approval, disapproval, and duration of
the vocational rehabilitation services
portion of the Unified or Combined
State Plan are governed by regulations
set forth in subpart D of this part.
3. Effective October 18, 2016, § 361. 23
is added to read as follows:
361. 23 Requirements related to the
statewide workforce development system.
As a required partner in the one-stop
service delivery system (which is part of
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the statewide workforce development
system under title I of the Workforce
Innovation and Opportunity Act), the
designated State unit must satisfy all
requirements set forth in regulations in
subpart F of this part.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 101( a)( 11)( A) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 721( a)( 11)( A); Section 121( b)( 1)( B)( iv)
of the Workforce Innovation and Opportunity
Act; 29 U.S. C. 3151)
4. Effective October 18, 2016, § 361. 40
is amended by adding paragraph (b) to
read as follows:
361. 40 Reports; Evaluation standards
and performance indicators.
b) Evaluation standards and
performance indicators—(1) Standards
and indicators. The evaluation
standards and performance indicators
for the vocational rehabilitation program
carried out under this part are subject to
the performance accountability
provisions described in section 116(b) of
the Workforce Innovation and
Opportunity Act and implemented in
regulations set forth in subpart E of this
part.
2) Compliance. A State' s compliance
with common performance measures
and any necessary corrective actions
will be determined in accordance with
regulations set forth in subpart E of this
part.
5. Part 363 is revised to read as
follows:
PART 363— THE STATE SUPPORTED
EMPLOYMENT SERVICES PROGRAM
Subpart A—General
Sec.
363. 1 What is the State Supported
Employment Services program?
363. 2 Who is eligible for an award?
363. 3 Who is eligible for services?
363. 4 What are the authorized activities
under the State Supported Employment
Services program?
363. 5 What regulations apply?
363. 6 What definitions apply?
Subpart B— How Does a State Apply for a
Grant?
363. 10 What documents must a State
submit to receive a grant?
363. 11 What are the vocational
rehabilitation services portion of the
Unified or Combined State Plan
supplement requirements?
Subpart C— How Are State Supported
Employment Services Programs Financed?
363. 20 How does the Secretary allot funds?
363. 21 How does the Secretary reallot
funds?
363. 22 How are funds reserved for youth
with the most significant disabilities?
363. 23 What are the matching
requirements?
363. 24 What is program income and how
may it be used?
363. 25 What is the period of availability of
funds?
Subparts D– E—[ Reserved]
Subpart F— What Post -Award Conditions
Must Be Met by a State?
363. 50 What collaborative agreements must
the State develop?
363. 51 What are the allowable
administrative costs?
363. 52 What are the information collection
and reporting requirements?
363. 53 What requirements must a
designated State unit meet for the
transition of an individual to extended
services?
363. 54 When will an individual be
considered to have achieved an
employment outcome in supported
employment?
363. 55 When will the service record of an
individual who has achieved an
employment outcome in supported
employment be closed?
363. 56 What notice requirements apply to
this program?
Authority: Sections 602- 608 of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 795g -795m, unless otherwise noted.
Subpart A—General
363. 1 What is the State Supported
Employment Services program?
a) Under the State supported
employment services program, the
Secretary provides grants to assist States
in developing and implementing
collaborative programs with appropriate
entities to provide programs of
supported employment services for
individuals with the most significant
disabilities, including youth with the
most significant disabilities, to enable
them to achieve an employment
outcome of supported employment in
competitive integrated employment.
Grants made under the State supported
employment services program
supplement a State' s vocational
rehabilitation program grants under 34
CFR part 361.
b) For purposes of this part and 34
CFR part 361, " supported employment"
means competitive integrated
employment, including customized
employment, or employment in an
integrated work setting in which an
individual with a most significant
disability, including a youth with a
most significant disability, is working
on a short-term basis toward
competitive integrated employment,
that is individualized and customized,
consistent with the unique strengths,
abilities, interests, and informed choice
of the individual, including with
ongoing support services for individuals
with the most significant disabilities—
1)( i) For whom competitive
integrated employment has not
historically occurred; or
ii) For whom competitive integrated
employment has been interrupted or
intermittent as a result of a significant
disability; and
2) Who, because of the nature and
severity of the disability, need intensive
supported employment services, and
extended services after the transition
from support provided by the
designated State unit in order to
perform the work.
c) Short-term basis. For purposes of
this part, an individual with a most
significant disability, whose supported
employment in an integrated setting
does not satisfy the criteria of
competitive integrated employment, as
defined in 34 CFR 361. 5( c)( 9), is
considered to be working on a short-
term basis toward competitive
integrated employment so long as the
individual can reasonably anticipate
achieving competitive integrated
employment—
1) Within six months of achieving a
supported employment outcome; or,
2) In limited circumstances, within a
period not to exceed 12 months from the
achievement of the supported
employment outcome, if a longer period
is necessary based on the needs of the
individual, and the individual has
demonstrated progress toward
competitive earnings based on
information contained in the service
record.
Authority: Sections 7( 38), 7( 39), 12( c), and
602 of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 705( 38) 705( 39), 709( c),
and 795g)
363.2 Who is eligible for an award?
Any State that submits the
documentation required by § 363. 10, as
part of the vocational rehabilitation
services portion of the Unified or
Combined State Plan under 34 CFR part
361, is eligible for an award under this
part.
Authority: Section 606( a) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 795k(a))
363.3 Who is eligible for services?
A State may provide services under
this part to any individual, including a
youth with a disability, if—
a) The individual has been
determined to be—
1) Eligible for vocational
rehabilitation services in accordance
with 34 CFR 361. 42; and
2) An individual with a most
significant disability;
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b) For purposes of activities carried
out under § 363. 4( a)( 2), the individual is
a youth with a disability, as defined in
34 CFR 361. 5( c)( 59), who satisfies the
requirements of this section; and
c) Supported employment has been
identified as the appropriate
employment outcome for the individual
on the basis of a comprehensive
assessment of rehabilitation needs, as
defined in 34 CFR 361. 5( c)( 5), including
an evaluation of rehabilitation, career,
and job needs.
Authority: Section 605 of the Rehabilitation
Act of 1973, as amended; 29 U. S. C. 795j)
363.4 What are the authorized activities
under the State Supported Employment
Services program?
a) The State may use funds allotted
under this part to—
1) Provide supported employment
services, as defined in 34 CFR
361. 5( c)( 54);
2) Provide extended services, as
defined in 34 CFR 361. 5( c)( 19), to youth
with the most significant disabilities, in
accordance with § 363. 11( f), for a period
of time not to exceed four years, or until
such time that a youth reaches the age
of 25 and no longer meets the definition
of a youth with a disability under 34
CFR 361. 5( c)( 58), whichever occurs
first; and
3) With funds reserved, in
accordance with § 363. 22 for the
provision of supported employment
services to youth with the most
significant disabilities, leverage other
public and private funds to increase
resources for extended services and
expand supported employment
opportunities.
b) Except as provided in paragraph
a)( 2) of this section, a State may not use
funds under this part to provide
extended services to individuals with
the most significant disabilities.
c) Nothing in this part will be
construed to prohibit a State from
providing—
1) Supported employment services in
accordance with the vocational
rehabilitation services portion of the
Unified or Combined State Plan
submitted under 34 CFR part 361 by
using funds made available through a
State allotment under that part.
2) Discrete postemployment services
in accordance with 34 CFR 361. 48(b) by
using funds made available under 34
CFR part 361 to an individual who is
eligible under this part.
d) A State must coordinate with the
entities described in § 363. 50( a)
regarding the services provided to
individuals with the most significant
disabilities, including youth with the
most significant disabilities, under this
part and under 34 CFR part 361 to
ensure that the services are
complementary and not duplicative.
Authority: Sections 7( 39), 12( c), 604,
606( b)( 6), and 608 of the Rehabilitation Act
of 1973, as amended; 29 U.S. C. 705( 39),
709( c), 795i, 795k(b)( 6), and 795m)
363. 5 What regulations apply?
The following regulations apply to the
State supported employment services
program:
a) The Education Department General
Administrative Regulations (EDGAR) as
follows:
1) 34 CFR part 76 ( State -
Administered Programs).
2) 34 CFR part 77 ( Definitions that
Apply to Department Regulations).
3) 34 CFR part 79 ( Intergovernmental
Review of Department of Education
Programs and Activities).
4) 34 CFR part 81 ( General Education
Provisions Act—Enforcement).
5) 34 CFR part 82 ( New Restrictions
on Lobbying).
b) The regulations in this part 363.
c) The following regulations in 34
CFR part 361 ( The State Vocational
Rehabilitation Services Program):
361. 5, 361. 31, 361. 32, 361. 34, 361. 35,
361. 39, 361. 40, 361. 41, 361. 42,
361. 47( a), 361. 48, 361. 49, and 361. 53.
d) 2 CFR part 200 ( Uniform
Administrative Requirements, Cost
Principles, and Audit Requirements for
Federal Awards), as adopted in 2 CFR
part 3474.
e) 2 CFR part 180 ( OMB Guidelines
to Agencies on Governmentwide
Debarment and Suspension
Nonprocurement)), as adopted in 2 CFR
part 3485.
Authority: Section 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c))
363. 6 What definitions apply?
The following definitions apply to
this part:
a) Definitions in 34 CFR part 361.
b) Definitions in 34 CFR part 77.
c) Definitions in 2 CFR part 200,
subpart A.
Authority: Sections 7 and 12( c) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705 and 709( c))
Subpart B— How Does a State Apply
for a Grant?
363. 10 What documents must a State
submit to receive a grant?
a) To be eligible to receive a grant
under this part, a State must submit to
the Secretary, as part of the vocational
rehabilitation services portion of the
Unified or Combined State Plan under
34 CFR part 361, a State plan
supplement that meets the requirements
of § 363. 11.
b) A State must submit revisions to
the vocational rehabilitation services
portion of the Unified or Combined
State Plan supplement submitted under
this part as may be necessary.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 606( a) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 795k(a))
363.11 What are the vocational
rehabilitation services portion of the Unified
or Combined State Plan supplement
requirements?
Each State plan supplement,
submitted in accordance with § 363. 10,
must—
a) Designate a designated State unit
or, as applicable, units, as defined in 34
CFR 361. 5( c)( 13), as the State agency or
agencies to administer the Supported
Employment program under this part;
b) Summarize the results of the needs
assessment of individuals with most
significant disabilities, including youth
with the most significant disabilities,
conducted under 34 CFR 361. 29( a), with
respect to the rehabilitation and career
needs of individuals with most
significant disabilities and their need for
supported employment services. The
results of the needs assessment must
also address needs relating to
coordination;
c) Describe the quality, scope, and
extent of supported employment
services to be provided to eligible
individuals with the most significant
disabilities under this part, including
youth with the most significant
disabilities;
d) Describe the State' s goals and
plans with respect to the distribution of
funds received under § 363. 20;
e) Demonstrate evidence of the
designated State unit' s efforts to identify
and make arrangements, including
entering into cooperative agreements,
with—
1) Other State agencies and other
appropriate entities to assist in the
provision of supported employment
services; and
2) Other public or non-profit agencies
or organizations within the State,
employers, natural supports, and other
entities with respect to the provision of
extended services;
f)Describe the activities to be
conducted for youth with the most
significant disabilities with the funds
reserved in accordance with § 363. 22,
including—
1) The provision of extended services
to youth with the most significant
disabilities for a period not to exceed
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four years, in accordance with
363. 4( a)( 2); and
2) How the State will use supported
employment funds reserved under
363. 22 to leverage other public and
private funds to increase resources for
extended services and expand
supported employment opportunities
for youth with the most significant
disabilities;
g) Assure that—
1) Funds made available under this
part will only be used to provide
authorized supported employment
services to individuals who are eligible
under this part to receive such services;
2) The comprehensive assessments of
individuals with significant disabilities,
including youth with the most
significant disabilities, conducted under
34 CFR part 361 will include
consideration of supported employment
as an appropriate employment outcome;
3) An individualized plan for
employment, as described in 34 CFR
361. 45 and 361. 46, will be developed
and updated, using funds received
under 34 CFR part 361, in order to—
i) Specify the supported employment
services to be provided, including, as
appropriate, transition services and pre-
employment transition services to be
provided for youth with the most
significant disabilities;
ii) Specify the expected extended
services needed, including the extended
services that may be provided under
this part to youth with the most
significant disabilities in accordance
with an approved individualized plan
for employment for a period not to
exceed four years; and
iii) Identify, as appropriate, the
source of extended services, which may
include natural supports, programs, or
other entities, or an indication that it is
not possible to identify the source of
extended services at the time the
individualized plan for employment is
developed;
4) The State will use funds provided
under this part only to supplement, and
not supplant, the funds received under
34 CFR part 361, in providing supported
employment services specified in the
individualized plan for employment;
5) Services provided under an
individualized plan for employment
will be coordinated with services
provided under other individualized
plans established under other Federal or
State programs;
6) To the extent job skills training is
provided, the training will be provided
onsite;
7) Supported employment services
will include placement in an integrated
setting based on the unique strengths,
resources, interests, concerns, abilities,
and capabilities of individuals with the
most significant disabilities, including
youth with the most significant
disabilities;
8) The designated State agency or
agencies, as described in paragraph (a)
of this section, will expend no more
than 2. 5 percent of the State' s allotment
under this part for administrative costs
of carrying out this program; and
9) The designated State agency or
agencies will provide, directly or
indirectly through public or private
entities, non -Federal contributions in an
amount that is not less than 10 percent
of the costs of carrying out supported
employment services provided to youth
with the most significant disabilities
with the funds reserved for such
purpose under § 363. 22; and
h) Contain any other information and
be submitted in the form and in
accordance with the procedures that the
Secretary may require.
Approved by the Office of Management and
Budget under control number 1205-0522)
Authority: Section 606 of the Rehabilitation
Act of 1973, as amended; 29 U. S. C. 795k)
Subpart C— How Are State Supported
Employment Services Programs
Financed?
363. 20 How does the Secretary allot
funds?
a) States. The Secretary will allot the
sums appropriated for each fiscal year to
carry out the activities of this part
among the States on the basis of relative
population of each State, except that—
1) No State will receive less than
250, 000, or 1/ fxspo; 3 of 1 percent of
the sums appropriated for the fiscal year
for which the allotment is made,
whichever amount is greater; and
2) If the sums appropriated to carry
out this part for the fiscal year exceed
the sums appropriated to carry out this
part (as in effect on September 30, 1992)
in fiscal year 1992 by $1, 000, 000 or
more, no State will receive less than
300, 000, or 1/ fxspo; 3 of 1 percent of
the sums appropriated for the fiscal year
for which the allotment is made,
whichever amount is greater.
b) Certain Territories. (1) For the
purposes of this section, Guam,
American Samoa, the United States
Virgin Islands, and the Commonwealth
of the Northern Mariana Islands are not
considered to he States.
2) Each jurisdiction described in
paragraph (b)( 1) of this section will be
allotted not less than 1/ 8 of 1 percent of
the amounts appropriated for the fiscal
year for which the allotment is made.
Authority: Section 603( a) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 795h(a))
363.21 How does the Secretary reallot
funds?
a) Whenever the Secretary
determines that any amount of an
allotment to a State under § 363. 20 for
any fiscal year will not be expended by
such State for carrying out the
provisions of this part, the Secretary
will make such amount available for
carrying out the provisions of this part
to one or more of the States that the
Secretary determines will be able to use
additional amounts during such year for
carrying out such provisions.
b) Any amount made available to a
State for any fiscal year in accordance
with paragraph (a) will be regarded as
an increase in the State' s allotment
under this part for such year.
Authority: Section 603( b) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 795h(b))
363.22 How are funds reserved for youth
with the most significant disabilities?
A State that receives an allotment
under this part must reserve and expend
50 percent of such allotment for the
provision of supported employment
services, including extended services, to
youth with the most significant
disabilities in order to assist those youth
in achieving an employment outcome in
supported employment.
Authority: Sections 12( c) and 603( d) of the
Rehabilitation Act of 1973, as amended; 29
U.S.C. 709(c) and 795h(d))
363.23 What are the matching
requirements?
a) Non -Federal share. (1) For funds
allotted under § 363. 20 and not reserved
under § 363. 22 for the provision of
supported employment services to
youth with the most significant
disabilities, there is no non -Federal
share requirement.
2)( i) For funds allotted under
363. 20 and reserved under § 363. 22 for
the provision of supported employment
services to youth with the most
significant disabilities, a designated
State agency must provide non -Federal
expenditures in an amount that is not
less than 10 percent of the total
expenditures, including the Federal
reserved funds and the non -Federal
share, incurred for the provision of
supported employment services to
youth with the most significant
disabilities, including extended
services.
ii) In the event that a designated State
agency uses more than 50 percent of its
allotment under this part to provide
supported employment services to
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youth with the most significant
disabilities as required by § 363. 22,
there is no requirement that a
designated State agency provide non -
Federal expenditures to match the
excess Federal funds spent for this
purpose.
3) Except as provided under
paragraphs (b) and (c) of this section,
non -Federal expenditures made under
the vocational rehabilitation services
portion of the Unified or Combined
State Plan supplement to meet the non -
Federal share requirement under this
section must be consistent with the
provision of 2 CFR 200. 306.
b) Third -party in-kind contributions.
Third -party in-kind contributions, as
described in 2 CFR 200. 306( b), may not
be used to meet the non -Federal share
under this section.
c)( 1) Contributions by private
entities. Expenditures made from
contributions by private organizations,
agencies, or individuals that are
deposited into the sole account of the
State agency, in accordance with State
law may be used as part of the non -
Federal share under this section,
provided the expenditures under the
vocational rehabilitation services
portion of the Unified or Combined
State Plan supplement, as described in
363. 11, do not benefit in any way the
donor, an individual to whom the donor
is related by blood or marriage or with
whom the donor shares a financial
interest.
2) The Secretary does not consider a
donor' s receipt from the State unit of a
contract or subaward with funds
allotted under this part to be a benefit
for the purpose of this paragraph if the
contract or subaward is awarded under
the State' s regular competitive
procedures.
Authority: Sections 12( c) and 606(b)( 7)( I) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c) and 795k(b)( 7)( I))
363.24 What is program income and how
may it be used?
a) Definition. (1) Program income
means gross income earned by the State
that is directly generated by authorized
activities supported under this part or
earned as a result of the Federal award
during the period of performance.
2) Program income received through
the transfer of Social Security
Administration payments from the State
Vocational Rehabilitation Services
program, in accordance with 34 CFR
361. 63( c)( 2), will be treated as program
income received under this part.
b) Use ofprogram income. (1)
Program income must be used for the
provision of services authorized under
363. 4. Program income earned or
received during the fiscal year must be
disbursed during the period of
performance of the award, prior to
requesting additional cash payments.
2) States are authorized to treat
program income as an addition to the
grant funds to be used for additional
allowable program expenditures, in
accordance with 2 CFR 200. 307( e)( 2).
3) Program income cannot be used to
meet the non -Federal share requirement
under § 363. 23.
Authority: Sections 12( c) and 108 of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c) and 728)
363. 25 What is the period of availability
of funds?
a) Except as provided in paragraph
b) of this section, any Federal award
funds, including reallotted funds, that
are appropriated for a fiscal year to carry
out a program under this part that are
not obligated by the State by the
beginning of the succeeding fiscal year,
and any program income received
during a fiscal year that is not obligated
or expended by the State prior to the
beginning of the succeeding fiscal year
in which the program income was
received, remain available for obligation
by the State during that succeeding
fiscal year.
b) Federal funds appropriated for a
fiscal year and reserved for the
provision of supported employment
services to youth with the most
significant disabilities, in accordance
with § 363. 22 of this part, remain
available for obligation in the
succeeding fiscal year only to the extent
that the State met the matching
requirement, as described in § 363. 23,
for those Federal funds by obligating, in
accordance with 34 CFR 76. 707, the
non -Federal share in the fiscal year for
which the funds were appropriated.
Any reserved funds carried over may
only be obligated and expended in that
succeeding Federal fiscal year for the
provision of supported employment
services to youth with the most
significant disabilities.
Authority: Sections 12( c) and 19 of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c) and 716)
Subparts D– E—[ Reserved]
Subpart F— What Post -Award
Conditions Must Be Met by a State?
363. 50 What collaborative agreements
must the State develop?
a) A designated State unit must enter
into one or more written collaborative
agreements, memoranda of
understanding, or other appropriate
mechanisms with other public agencies,
private nonprofit organizations, and
other available funding sources,
including employers and other natural
supports, as appropriate, to assist with
the provision of supported employment
services and extended services to
individuals with the most significant
disabilities in the State, including youth
with the most significant disabilities, to
enable them to achieve an employment
outcome of supported employment in
competitive integrated employment.
b) These agreements provide the
mechanism for collaboration at the State
level that is necessary to ensure the
smooth transition from supported
employment services to extended
services, the transition of which is
inherent to the definition of " supported
employment" in § 363. 1( b). The
agreement may contain information
regarding the—
1) Supported employment services to
be provided, for a period not to exceed
24 months, by the designated State unit
with funds received under this part;
2) Extended services to be provided
to youth with the most significant
disabilities, for a period not to exceed
four years, by the designated State unit
with the funds reserved under § 363. 22
of this part;
3) Extended services to be provided
by other public agencies, private
nonprofit organizations, or other
sources, including employers and other
natural supports, following the
provision of authorized supported
employment services, or extended
services as appropriate for youth with
the most significant disabilities, under
this part; and
4) Collaborative efforts that will be
undertaken by all relevant entities to
increase opportunities for competitive
integrated employment in the State for
individuals with the most significant
disabilities, especially youth with the
most significant disabilities.
Authority: Sections 7( 38), 7( 39), 12( c), 602,
and 606( b) of the Rehabilitation Act of 1973,
as amended; 29 U. S. C. 705( 38), 705( 39),
709( c), 795g, and 795k(b))
363.51 What are the allowable
administrative costs?
a) A State may use funds under this
part to pay for expenditures incurred in
the administration of activities carried
out under this part, consistent with the
definition of administrative costs in 34
CFR 361. 5( c)( 2).
b) A designated State agency may not
expend more than 2. 5 percent of a
State' s allotment under this part for
administrative costs for carrying out the
State supported employment program.
55784 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
Authority: Sections 7( 1), 12( c), and 603( c) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 705( 1), 709( c), and 795h(c))
363.52 What are the information
collection and reporting requirements?
Each State agency designated in
363. 11( a) must collect and report
separately the information required
under 34 CFR 361. 40 for—
a) Eligible individuals receiving
supported employment services under
this part;
b) Eligible individuals receiving
supported employment services under
34 CFR part 361;
c) Eligible youth receiving supported
employment services and extended
services under this part; and
d) Eligible youth receiving supported
employment services under 34 CFR part
361 and extended services.
Authority: Sections 13 and 607 of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 710 and 7951)
363.53 What requirements must a
designated State unit meet for the transition
of an individual to extended services?
a) A designated State unit must
provide for the transition of an
individual with a most significant
disability, including a youth with a
most significant disability, to extended
services, as defined in 34 CFR
361. 5( c)( 19), no later than 24 months
after the individual enters supported
employment, unless a longer period is
established in the individualized plan
for employment.
b) Prior to assisting the individual in
transitioning from supported
employment services to extended
services, the designated State unit must
ensure—
1) The counselor and individual have
considered extending the provision of
supported employment services beyond
24 months, as appropriate, and have
determined that no further supported
employment services are necessary to
support and maintain the individual in
supported employment before the
individual transitions to extended
services; and
2) The source of extended services
for the individual has been identified in
order to ensure there will be no
interruption of services. The providers
of extended services may include—
i) A State agency, a private nonprofit
organization, employer, or any other
appropriate resource, after an individual
has made the transition from support
from the designated State unit; or,
ii) The designated State unit, in the
case of a youth with a most significant
disability, in accordance with
requirements set forth in 34 CFR
361. 5( c)( 19) and this part for a period
not to exceed four years, or at such time
that a youth reaches the age of 25 and
no longer meets the definition of a
youth with a disability under 34 CFR
361. 5( c)( 58), whichever occurs first. For
youth who still require extended
services after they can no longer receive
them from the designated State unit, the
designated State unit must identify
another source of extended services for
those youth in order to ensure there will
be no interruption of services. The
designated State unit may not provide
extended services to individuals with
the most significant disabilities who are
not youth with the most significant
disabilities.
Authority: Sections 7( 13), 12( c), and 604( b)
of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 705( 13), 709( c) and 795i)
363. 54 When will an individual be
considered to have achieved an
employment outcome in supported
employment?
An individual with a most significant
disability, including a youth with a
most significant disability, who is
employed in competitive integrated
employment or who is employed in an
integrated setting working on a short-
term basis to achieve competitive
integrated employment will be
considered to have achieved an
employment outcome, including
customized employment, in supported
employment when—
a) The individual has completed
supported employment services
provided under this part and 34 CFR
part 361, except for any other vocational
rehabilitation services listed on the
individualized plan for employment
provided to individuals who are
working on a short-term basis toward
the achievement of competitive
integrated employment in supported
employment. An individual has
completed supported employment
services when—
1) The individual has received up to
24 months of supported employment
services; or
2) The counselor and individual have
determined that an extension of time to
provide supported employment services
beyond 24 months is necessary to
support and maintain the individual in
supported employment before the
individual transitions to extended
services and that extension of time has
concluded; and
b) The individual has transitioned to
extended services provided by either the
designated State unit for youth with the
most significant disabilities, or another
provider, consistent with the provisions
of §§363. 4( a)( 2) and 363. 22; and
c) The individual has maintained
employment and achieved stability in
the work setting for at least 90 days after
transitioning to extended services; and
d) The employment is individualized
and customized consistent with the
strengths, abilities, interests, and
informed choice of the individual.
Authority: Sections 7( 11), 7( 13), 7( 38), 7( 39),
7( 40), 12( c), 602, and 606(b) of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 705( 11), 705( 13), 705( 38), 705( 39),
705( 40), 709( c), 795g, and 795k(b))
363.55 When will the service record of an
individual who has achieved an
employment outcome in supported
employment be closed?
a) The service record of an individual
with a most significant disability,
including a youth with a most
significant disability, who has achieved
an employment outcome in supported
employment in competitive integrated
employment will be closed concurrently
with the achievement of the
employment outcome in supported
employment when the individual—
1) Satisfies requirements for case
closure, as set forth in 34 CFR 361. 56;
and
2) Is not receiving extended services
or any other vocational rehabilitation
service provided by the designated State
unit with funds under this part or 34
CFR part 361.
b) The service record of an individual
with a most significant disability,
including a youth with a most
significant disability who is working
toward competitive integrated
employment on a short-term basis and
is receiving extended services from
funds other than those allotted under
this part and 34 CFR part 361 will be
closed when the individual—
1) Achieves competitive integrated
employment within the short-term basis
period established pursuant to
363. 1( c); and the individual—
i) Satisfies requirements for case
closure, as set forth in 34 CFR 361. 56;
and
ii) Is no longer receiving vocational
rehabilitation services provided by the
designated State unit with funds under
34 CFR part 361; or
2) Does not achieve competitive
integrated employment within the short-
term basis period established pursuant
to § 363. 1( c).
c) The service record of a youth with
a most significant disability who is
receiving extended services provided by
the designated State unit from funds
under this part or 34 CFR part 361 will
be closed when—
1) The youth with a most significant
disability achieves an employment
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outcome in supported employment in
competitive integrated employment
without entering the short-term basis
period; and
i) Is no longer eligible to receive
extended services provided by the
designated State unit with funds
allotted under this part and 34 CFR part
361 because the individual—
A) No longer meets age requirements
established in the definition of a youth
with a disability pursuant to 34 CFR
361. 5( c)( 58); or
B) Has received extended services for
a period of four years; or
C) Has transitioned to extended
services provided with funds other than
those allotted under this part or part 361
prior to meeting the age or time
restrictions established under
paragraphs (c)( 1)(i)(A) and (B) of this
section, respectively; and
ii) Satisfies requirements for case
closure, as set forth in 34 CFR 361. 56;
and
iii) The individual is no longer
receiving any other vocational
rehabilitation service from the
designated State unit provided with
funds under 34 CFR part 361; or
2) The youth with a most significant
disability who is working toward
competitive integrated employment on a
short-term basis—
i) Achieves competitive integrated
employment within the short-term basis
period established pursuant to
363. 1( c);
ii) Is no longer eligible to receive
extended services provided by the
designated State unit with funds
allotted under this part and 34 CFR part
361 because the individual—
A) No longer meets age requirements
established in the definition of a youth
with a disability pursuant to 34 CFR
361. 5( c)( 58); or
B) Has received extended services for
a period of four years; or
C) Has transitioned to extended
services provided with funds other than
those allotted under this part or 34 CFR
part 361 prior to meeting the age or time
restrictions established under
paragraphs ( c)( 2)( ii)(A) and (B) of this
section, respectively; and
iii) Satisfies requirements for case
closure, as set forth in 34 CFR 361. 56;
or
3) The youth with a most significant
disability working toward competitive
integrated employment on a short-term
basis does not achieve competitive
integrated employment within the short-
term basis period established pursuant
to § 363. 1( c).
Authority: Sections 7( 11), 7( 13), 7( 38), 7( 39),
7( 40), 7( 42), 12( c), 602, and 606( b) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 11), 705( 13), 705( 38), 705( 39),
705( 40), 705( 42), 709( c), 795g, and 795k(b))
363. 56 What notice requirements apply
to this program?
Each grantee must advise applicants
for or recipients of services under this
part, or as appropriate, the parents,
family members, guardians, advocates,
or authorized representatives of those
individuals, including youth with the
most significant disabilities, of the
availability and purposes of the Client
Assistance Program, including
information on seeking assistance from
that program.
Authority: Section 20 of the Rehabilitation
Act of 1973, as amended; 29 U. S. C. 717)
6. Part 397 is added to read as follows:
PART 397—LIMITATIONS ON USE OF
SUBMINIMUM WAGE
Subpart A—General Provisions
Sec.
397. 1 Purpose.
397. 2 What is the Department of
Education' s jurisdiction under this part?
397. 3 What rules of construction apply to
this part?
397. 4 What regulations apply?
397. 5 What definitions apply?
Subpart B— Coordinated Documentation
Procedures Related to Youth with
Disabilities
397. 10 What documentation process must
the designated State unit develop?
Subpart C— Designated State Unit
Responsibilities Prior to Youth with
Disabilities Starting Subminimum Wage
Employment
397. 20 What are the responsibilities of a
designated State unit to youth with
disabilities who are known to be seeking
subminimum wage employment?
Subpart D— Local Educational Agency
Responsibilities Prior to Youth with
Disabilities Starting Subminimum Wage
Employment
397. 30 What are the responsibilities of a
local educational agency to youth with
disabilities who are known to be seeking
subminimum wage employment?
397. 31 What are the contracting limitations
on educational agencies under this part?
Subpart E— Designated State Unit
Responsibilities to Individuals with
Disabilities During Subminimum Wage
Employment
397. 40 What are the responsibilities of a
designated State unit for individuals
with disabilities, regardless of age, who
are employed at subminimum wage?
Subpart F— Review of Documentation
397. 50 What is the role of the designated
State unit in the review of
documentation under this part?
Authority: Section 511 of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 794g, unless otherwise noted.
Subpart A—General Provisions
397.1 Purpose.
a) The purpose of this part is to set
forth requirements the designated State
units and State and local educational
agencies must satisfy to ensure that
individuals with disabilities, especially
youth with disabilities, have a
meaningful opportunity to prepare for,
obtain, maintain, advance in, or regain
competitive integrated employment,
including supported or customized
employment.
b) This part requires—
1) A designated State unit to provide
youth with disabilities documentation
demonstrating that they have completed
certain requirements, as described in
this part, prior to starting subminimum
wage employment with entities (as
defined in § 397. 5( d)) holding special
wage certificates under section 14( c) of
the Fair Labor Standards Act of 1938 ( 29
U.S. C. 214( c));
2) A designated State unit to provide,
at certain prescribed intervals for the
duration of such employment, career
counseling and information and referral
services, designed to promote
opportunities for competitive integrated
employment, to individuals with
disabilities, regardless of age, who are
known to be employed at subminimum
wage; and
3) A designated State unit, in
consultation with the State educational
agency, to develop a process or utilize
an existing process, to document
completion of required activities under
this part by a youth with a disability
known to be seeking employment at
subminimum wage.
c) This part authorizes a designated
State unit, or a representative of a
designated State unit, to review
individual documentation required to
be maintained by these entities under
this part.
d) The provisions in this part work
in concert with requirements in 34 CFR
parts 300, 361, and 363, and do not alter
any requirements under those parts.
Authority: Sections 12( c) and 511 of the
Rehabilitation Act of 1973, as amended; 29
U.S. C. 709( c) and 794g)
397.2 What is the Department of
Education' s jurisdiction under this part?
a) The Department of Education has
jurisdiction under this part to
implement guidelines for—
1) Documentation requirements
imposed on designated State units and
local educational agencies, including
the documentation process that the
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designated State unit must develop in
consultation with the State educational
agency;
2) Requirements related to the
services that designated State units must
provide to individuals regardless of age
who are employed at subminimum
wage; and
3) Requirements under § 397. 31.
b) Nothing in this part will be
construed to grant to the Department of
Education, or its grantees, jurisdiction
over requirements set forth in the Fair
Labor Standards Act, including those
imposed on entities holding special
wage certificates under section 14( c) of
that Act, which is administered by the
Department of Labor.
Authority: Sections 12( c), 511( b)( 3), 511( c),
and 511( d) of the Rehabilitation Act of 1973,
as amended; 709( c), 794g(b)( 3), 794g( c), and
794g(d))
397.3 What rules of construction apply to
this part?
Nothing in this part will be construed
to—
a) Change the purpose of the
Rehabilitation Act, which is to empower
individuals with disabilities to
maximize opportunities for achieving
competitive integrated employment;
b) Promote subminimum wage
employment as a vocational
rehabilitation strategy or employment
outcome, as defined in 34 CFR
361. 5( c)( 15); or
c) Be inconsistent with the
provisions of the Fair Labor Standards
Act, as amended before or after July 22,
2014.
Authority: Sections 12( c) and 511(b) of the
Rehabilitation Act of 1973, as amended; 29
U.S.C. 709(c) and 794g(b))
397.4 What regulations apply?
a) The regulations in 34 CFR part 300
governing the definition of transition
services, and the Individualized
Education Program requirements related
to the development of postsecondary
goals and the transition services needed
to assist the eligible child in reaching
those goals (§§ 300. 320( b), 300. 321( b),
300. 324( c), and 300. 43).
b) The regulations in 34 CFR part 361
governing the vocational rehabilitation
program, especially those regarding
protection and use of personal
information in 34 CFR 361. 38; eligibility
determinations in 34 CFR 361. 42;
individualized plans for employment in
34 CFR 361. 45 and 34 CFR 361. 46;
provision of vocational rehabilitation
services, including pre-employment
transition services, transition services,
and supported employment services in
34 CFR 361. 48; ineligibility
determinations in 34 CFR 361. 43;
informed choice in 34 CFR 361. 52; and
case closures in 34 CFR 361. 56.
c) The regulations in 29 CFR part 525
governing the employment of
individuals with disabilities at
subminimum wage rates pursuant to a
certificate issued by the Secretary of
Labor.
d) The regulations in this part 397.
Authority: Sections 12( c), 102( a) and (b),
103( a), and 113 of the Rehabilitation Act of
1973, as amended; 29 U. S. C. 709( c), 722( a)
and (b), 723( a), and 733; sections 601( 34) and
614( d)( 1)( A)(i)(VIII) of the Individuals with
Disabilities Education Act (20 U.S. C.
1401( 34) and 1414( d)); and section 14( c) of
the Fair Labor Standards Act (29 U.S. C.
214( c))
397.5 What definitions apply?
a) The following terms have the
meanings given to them in 34 CFR
361. 5( c):
1) Act;
2) Competitive integrated
employment;
3) Customized employment;
4) Designated State unit;
5) Extended services;
6) Individual with a disability;
7) Individual with a most significant
disability;
8) Individual' s representative;
9) Individualized plan for
employment;
10) Pre-employment transition
services;
11) Student with a disability;
12) Supported employment;
13) Vocational rehabilitation
services; and
14) Youth with a disability.
b) The following terms have the
meanings given to them in 34 CFR part
300:
1) Local educational agency
300. 28);
2) State educational agency
300. 41); and
3) Transition services (§ 300.43).
c) The following terms have the
meanings given to them in 29 CFR 525. 3
and section 6( a)( 1) of the Fair Labor
Standards Act (29 U.S.C. 206(a)(1)):
1) Federal minimum wage has the
meaning given to that term in section
6( a)( 1) of the Fair Labor Standards Act
29 U.S. C. 206( a)( 1)); and
2) Special wage certificate means a
certificate issued to an employer under
section 14( c) of the Fair Labor Standards
Act (29 U.S.C. 214( c)) and 29 CFR part
525 that authorizes payment of
subminimum wages, wages less than the
statutory minimum wage.
d) Entity means an employer, or a
contractor or subcontractor of that
employer, that holds a special wage
certificate described in section 14( c) of
the Fair Labor Standards Act (29 U.S. C.
214( c)).
Authority: Sections 7, 12( c), and 511( a) and
f) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 705, 709( c), and 794g( a)
and (f); sections 601 and 614( d) of the
Individuals with Disabilities Education Act,
20 U. S. C. 1401 and 1414( d); section 901 of
the Elementary and Secondary Education Act
of 1965, 20 U. S. C. 7801; and sections 6( a)( 1)
and 14( c) of the Fair Labor Standards Act, 29
U.S. C. 206( a)( 1) and 29 U. S. C. 214( c))
Subpart B— Coordinated
Documentation Procedures Related to
Youth with Disabilities
397.10 What documentation process
must the designated State unit develop?
a) The designated State unit, in
consultation with the State educational
agency, must develop a new process, or
utilize an existing process, to document
the completion of the actions described
in § 397. 20 and § 397. 30 by a youth with
a disability, as well as a process for the
transmittal of that documentation from
the educational agency to the designated
State unit, consistent with
confidentiality requirements of the
Family Education Rights and Privacy
Act (20 U.S.C. 1232g(b) and 34 CFR
99. 30 and 99. 31) and the Individuals
with Disabilities Education Act (20
U.S. C. 1417( c) and 34 CFR 300. 622).
1) Such documentation must, at a
minimum, contain the—
i) Youth' s name;
ii) Determination made, including a
summary of the reason for the
determination, or description of the
service or activity completed;
iii) Name of the individual making
the determination or the provider of the
required service or activity;
iv) Date determination made or
required service or activity completed;
v) Signature of the designated State
unit or educational personnel making
the determination or documenting
completion of the required services or
activity;
vi) Date of signature described in
paragraph (a)( 1)( v) of this section;
vii) Signature of designated State unit
personnel transmitting documentation
to the youth with a disability; and
viii) Date and method (e.g., hand -
delivered, faxed, mailed, emailed, etc.)
by which document was transmitted to
the youth.
2) In the event a youth with a
disability or, as applicable, the youth' s
parent or guardian, refuses, through
informed choice, to participate in the
activities required by this part, such
documentation must, at a minimum,
contain the—
i) Youth' s name;
ii) Description of the refusal and the
reason for such refusal;
55787Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
iii) Signature of the youth or, as
applicable, the youth' s parent or
guardian;
iv) Signature of the designated State
unit or educational personnel
documenting the youth' s refusal;
v) Date of signatures; and
vi) Date and method (e.g., hand -
delivered, faxed, mailed, emailed, etc.)
by which documentation was
transmitted to the youth.
3) The documentation process must
include procedures for the designated
State unit to retain a copy of all
documentation required by this part in
a manner consistent with the designated
State unit' s case management system
and the requirements of 2 CFR 200. 333.
b) The documentation process must
ensure that—
1) A designated State unit provides,
in the case of a student with a disability,
documentation of completion of
appropriate pre-employment transition
services, in accordance with §361. 48( a)
of this chapter and as required by
397. 20( a)( 1);
2) In the case of a student with a
disability, for actions described in
397. 30—
i) The appropriate school official,
responsible for the provision of
transition services, must provide the
designated State unit documentation of
completion of appropriate transition
services under the Individuals with
Disabilities Education Act, including
those provided under section
614( d)( 1)(A)(i)(VIII) (20 U.S.C.
1414(d)(1)( A)(i)(VIII));
ii) The designated State unit must
provide documentation of completion of
the transition services, as documented
and provided by the appropriate school
official in accordance with paragraph
b)( 2) of this section, to the youth with
a disability.
c) The designated State unit must
provide—
1) Documentation required by this
part in a form and manner consistent
with this part and in an accessible
format for the youth; and
2)( i) Documentation required by
paragraph (a)( 1) of this section to a
youth as soon as possible upon the
completion of each of the required
actions, but no later than—
A) 45 calendar days after the
determination or completion of the
required activity or service; or
B) 90 calendar days, if additional
time is necessary due to extenuating
circumstances, after the determination
or completion of each of the required
actions in § 397. 20 and § 397. 30( a).
Extenuating circumstances should be
interpreted narrowly to include
circumstances such as the unexpected
lengthy absence of the educational or
designated State unit personnel
necessary for the production of the
documentation or the transmittal of that
documentation due to illness or family
emergency, or a natural disaster.
ii) Documentation required by
paragraph (a)( 2) of this section, when a
youth has refused to participate in an
action required by this part, must be
provided to the youth within 10
calendar days of the youth' s refusal to
participate.
3) When transmitting documentation
of the final determination or activity
completed, as required by § 397. 20 and
397. 30( a), the designated State unit
must provide a coversheet that itemizes
each of the documents that have been
provided to the youth.
Authority: Sections 12( c) and 511( d) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 709( c) and 794g( d))
Subpart C— Designated State Unit
Responsibilities Prior to Youth With
Disabilities Starting Subminimum
Wage Employment
397.20 What are the responsibilities of a
designated State unit to youth with
disabilities who are known to be seeking
subminimum wage employment?
a) A designated State unit must
provide youth with disabilities
documentation upon the completion of
the following actions:
1)( i) Pre-employment transition
services that are available to a student
with a disability under 34 CFR 361. 48;
or
ii) Transition services under the
Individuals with Disabilities Education
such asAct (20 U.S.C. 1400 et seq.),
transition services available to the
individual under section 614( d) of that
Act (20 U. S. C. 1414( d));
2) Application for vocational
rehabilitation services, in accordance
with 34 CFR 361. 41( b), with the result
that the individual was determined—
i) Ineligible for vocational
rehabilitation services, in accordance
with 34 CFR 361. 43; or
ii) Eligible for vocational
rehabilitation services, in accordance
with 34 CFR 361. 42; and
A) The youth with a disability had an
approved individualized plan for
employment, in accordance with 34
CFR 361. 46;
B) The youth with a disability was
unable to achieve the employment
outcome specified in the individualized
plan for employment, as described in 34
CFR 361. 5( c)( 15) and 361. 46, despite
working toward the employment
outcome with reasonable
accommodations and appropriate
supports and services, including
supported employment services and
customized employment services, for a
reasonable period of time; and
C) The youth with a disability' s case
record, which meets all of the
requirements of 34 CFR 361. 47, is
closed.
3)( i) Regardless of the determination
made under paragraph (a)( 2) of this
section, the youth with a disability has
received career counseling, and
information and referrals from the
designated State unit to Federal and
State programs and other resources in
the individual' s geographic area that
offer employment-related services and
supports designed to enable the
individual to explore, discover,
experience, and attain competitive
integrated employment.
ii) The career counseling and
information and referral services
provided in accordance with paragraph
a)( 3)( i) of this section must—
A) Be provided by the designated
State unit in a manner that facilitates
informed choice and decision-making
by the youth, or the youth' s
representative as appropriate;
B) Not be for subminimum wage
employment by an entity defined in
397. 5( d), and such employment-
related services are not compensated at
a subminimum wage and do not directly
result in employment compensated at a
subminimum wage provided by such an
entity; and
C) Be provided within 30 calendar
days of a determination under
paragraph (a)(2)(i) or (a)(2)(ii)(C) of this
section for a youth known by the
designated State unit to be seeking
employment at subminimum wage.
b) The following special
requirements apply—
1) For purposes of this part, all
documentation provided by a
designated State unit must satisfy the
requirements for such documentation,
as applicable, under 34 CFR part 361.
2) The individualized plan for
employment, required in paragraph
a)( 2)( ii)(A) of this section, must include
a specific employment goal consistent
with competitive integrated
employment, including supported or
customized employment.
3)( i) For purposes of paragraph
a)( 2)( ii)(B) of this section, a
determination as to what constitutes a
reasonable period of time" must be
consistent with the disability -related
and vocational needs of the individual,
as well as the anticipated length of time
required to complete the services
identified in the individualized plan for
employment.
55788 Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
ii) For an individual whose specified
employment goal is in supported
employment, such reasonable period of
time is up to 24 months, unless under
special circumstances the individual
and the rehabilitation counselor jointly
agree to extend the time to achieve the
employment outcome identified in the
individualized plan for employment.
Authority: Sections 7( 5), 7( 39), 12( c), 102( a)
and (b), 103( a), 113, and 511( a) and (d) of the
Rehabilitation Act of 1973, as amended; 29
U. S. C. 705( 5), 705( 39), 709( c), 722( a) and (b),
723(a), 733, and 794g(a) and (d))
Subpart D— Local Educational Agency
Responsibilities Prior to Youth With
Disabilities Starting Subminimum
Wage Employment
397.30 What are the responsibilities of a
local educational agency to youth with
disabilities who are known to be seeking
subminimum wage employment?
a) Of the documentation to
demonstrate a youth with a disability' s
completion of the actions described in
397. 20( a), a local educational agency,
as defined in § 397. 5( b)( 1), must provide
the designated State unit with
documentation that the youth has
received transition services under the
Individuals with Disabilities Education
Act (20 U.S. C. 1400 et seq.), such as
transition services available to the
individual under section 614( d) of that
Act (20 U.S. C. 1414(d)). The
documentation must be provided to the
designated State unit in a manner that
complies with confidentiality
requirements of the Family Education
Rights and Privacy Act (20 U.S.C.
1232g(b) and 34 CFR 99.30 and 99.31)
and the Individuals with Disabilities
Education Act (20 U.S. C. 1417( c) and 34
CFR 300. 622).
b)( 1) The documentation of
completed services or activities required
by paragraph ( a) of this section must, at
a minimum, contain the—
i) Youth' s name;
ii) Description of the service or
activity completed;
iii) Name of the provider of the
required service or activity;
iv) Date required service or activity
completed;
v) Signature of educational personnel
documenting completion of the required
service or activity;
vi) Date of signature described in
paragraph (b)( 1)( v) of this section; and
vii) Signature of educational
personnel transmitting documentation
to the designated State unit; and
viii) Date and method (e.g., hand -
delivered, faxed, mailed, emailed, etc.)
by which document was transmitted to
the designated State unit.
2) In the event a youth with a
disability or, as applicable, the youth' s
parent or guardian, refuses, through
informed choice, to participate in the
activities required by this part, such
documentation must, at a minimum,
contain the—
i) Youth' s name;
ii) Description of the refusal and the
reason for such refusal;
iii) Signature of the youth or, as
applicable, the youth' s parent or
guardian;
iv) Signature of the educational
personnel documenting the youth' s
refusal;
v) Date of signatures required by
paragraphs (b)( 2)( iii) and (iv) of this
section;
vi) Signature of educational
personnel transmitting documentation
of the refusal to the designated State
unit; and
vii) Date and method (e.g., hand -
delivered, faxed, mailed, emailed, etc.)
by which documentation was
transmitted to the designated State unit.
c)( 1)( i) The educational personnel
must transmit the documentation
required by paragraph (b)( 1) of this
section to the designated State unit as
soon as possible upon the completion of
each of the required actions, but no later
than—
A) 30 calendar days after the
completion of the required activity or
service; or
B) 60 calendar days, if additional
time is necessary due to extenuating
circumstances, after the completion of
each of the required actions in
paragraph (a) of this section.
Extenuating circumstances should be
interpreted narrowly to include the
unexpected lengthy absence due to
illness or family emergency of the
educational personnel necessary to
produce or transmit the documentation,
or a natural disaster.
ii) Documentation required by
paragraph (b)( 2) of this section, when a
youth has refused to participate in an
action required by this part, must be
provided to the DSU within 5 calendar
days of the youth' s refusal to
participate.
2) When the educational personnel
transmits the last documentation to the
designated State unit regarding the
services provided to the youth under
paragraph (a) of this section, the
educational personnel must provide a
cover sheet that itemizes the
documentation that has been provided
to the designated State unit regarding
that youth.
d) The educational agency must
retain a copy of all documentation
provided to the designated State unit
under this section in a manner
consistent with the requirements of 2
CFR 200. 333.
Authority: Sections 12( c), 511( a)( 2)( A), and
511( d) of the Rehabilitation Act of 1973, as
amended; 29 U. S. C. 709( c), 794g( a)( 2)( A), and
d))
397.31 What are the contracting
limitations on educational agencies under
this part?
Neither a local educational agency, as
defined in § 397. 5( b)( 1), nor a State
educational agency, as defined in
397. 5( b)( 2), may enter into a contract
or other arrangement with an entity, as
defined in § 397. 5( d), for the purpose of
operating a program for a youth under
which work is compensated at a
subminimum wage.
Authority: Section 511( b)( 2) of the
Rehabilitation Act of 1973, as amended; 29
U.S.C. 794g(b)( 2))
Subpart E— Designated State Unit
Responsibilities to Individuals With
Disabilities During Subminimum Wage
Employment
397.40 What are the responsibilities of a
designated State unit for individuals with
disabilities, regardless of age, who are
employed at a subminimum wage?
a) Counseling and information
services. ( 1) A designated State unit
must provide career counseling and
information and referral services, as
described in § 397. 20( a)( 3), to
individuals with disabilities, regardless
of age, or the individual' s representative
as appropriate, who are known by the
designated State unit to be employed by
an entity, as defined in § 397. 5( d), at a
subminimum wage level.
2) A designated State unit may know
of an individual with a disability
described in this paragraph through the
vocational rehabilitation process, self -
referral, or by referral from the client
assistance program, another agency, or
an entity, as defined in § 397. 5( d).
3) The career counseling and
information and referral services must
be provided in a manner that—
i) Is understandable to the individual
with a disability; and
ii) Facilitates independent decision-
making and informed choice as the
individual makes decisions regarding
opportunities for competitive integrated
employment and career advancement,
particularly with respect to supported
employment, including customized
employment.
4) The career counseling and
information and referral services
provided under this section may
include benefits counseling, particularly
with regard to the interplay between
55789Federal Register/ Vol. 81, No. 161 / Friday, August 19, 2016 / Rules and Regulations
earned income and income -based
financial, medical, and other benefits.
b) Other services. ( 1) Upon a referral
by an entity, as defined in § 397. 5( d),
that has fewer than 15 employees, of an
individual with a disability who is
employed at a subminimum wage by
that entity, a designated State unit must
also inform the individual within 30
calendar days of the referral by the
entity, of self -advocacy, self-
determination, and peer mentoring
training opportunities available in the
community.
2) The services described in
paragraph (b)( 1) of this section must not
be provided by an entity as defined in
397. 5( d).
c) Required intervals. (1) For
individuals hired at subminimum wage
on or after July 22, 2016, the services
required by this section must be carried
out once every six months for the first
year of the individual' s subminimum
wage employment and annually
thereafter for the duration of such
employment.
2) For individuals already employed
at subminimum wage prior to July 22,
2016, the services required by this
section must be carried out once by July
22, 2017, and annually thereafter for the
duration of such employment.
3)( i) With regard to the intervals
required by paragraphs ( c)( 1) and ( 2) of
this section for purposes of the
designated State unit' s responsibilities
to provide certain services to
individuals employed at subminimum
wage, the applicable intervals will be
calculated based upon the date the
individual becomes known to the
designated State unit.
ii) An individual with a disability
may become " known" to the designated
State unit through self -identification by
the individual with a disability, referral
by a third -party (including an entity as
defined in § 397. 5( d)), through the
individual' s involvement with the
vocational rehabilitation process, or any
other method.
d) Documentation. (1)( i) The
designated State unit must provide
documentation to the individual as soon
as possible, but no later than—
A) 45 calendar days after completion
of the activities required under this
section; or
B) 90 calendar days, if additional
time is necessary due to extenuating
circumstances, after the completion of
the required actions in this section.
Extenuating circumstances should be
interpreted narrowly to include
circumstances such as the unexpected
lengthy absence of the designated State
unit personnel, due to illness or other
family emergency, who is responsible
for producing or transmitting the
documentation to the individual with a
disability, or a natural disaster.
ii) Documentation required by
paragraph (d)( 3) of this section, when an
individual has refused to participate in
an activity required by this section,
must be provided to the individual
within 10 calendar days of the
individual' s refusal to participate.
2) Such documentation must, at a
minimum, contain the—
i) Name of the individual;
ii) Description of the service or
activity completed;
iii) Name of the provider of the
required service or activity;
iv) Date required service or activity
completed;
v) Signature of individual
documenting completion of the required
service or activity;
vi) Date of signature described in
paragraph (d)( 2)( v) of this section;
vii) Signature of designated State unit
personnel (if different from that in
paragraph (d)( 2)( v) of this section)
transmitting documentation to the
individual with a disability; and
viii) Date and method (e.g., hand -
delivered, faxed, mailed, emailed, etc.)
by which document was transmitted to
the individual.
3) In the event an individual with a
disability or, as applicable, the
individual' s representative, refuses,
through informed choice, to participate
in the activities required by this section,
such documentation must, at a
minimum, contain the—
i) Name of the individual;
ii) Description of the refusal and the
reason for such refusal;
iii) Signature of the individual or, as
applicable, the individual' s
representative;
iv) Signature of the designated State
unit personnel documenting the
individual's refusal;
v) Date of signatures; and
vi) Date and method (e.g., hand -
delivered, faxed, mailed, emailed, etc.)
by which documentation was
transmitted to the individual.
4) The designated State unit must
retain a copy of all documentation
required by this part in a manner
consistent with the designated State
unit' s case management system and the
requirements of 2 CFR 200. 333.
e) Provision of services. Nothing in
this section will be construed as
requiring a designated State unit to
provide the services required by this
section directly. A designated State unit
may contract with other entities, i.e.,
other public and private service
providers, as appropriate, to fulfill the
requirements of this section. The
contractor providing the services on
behalf of the designated State unit may
not be an entity holding a special wage
certificate under section 14( c) of the Fair
Labor Standards Act (29 U.S.C. 214(c))
as defined in 397. 5( d).
Authority: Sections 12( c) and 511( c) and ( d)
of the Rehabilitation Act of 1973, as
amended; 29 U.S. C. 709( c) and 794g( c) and
d))
Subpart F— Review of Documentation
397.50 What is the role of the designated
State unit in the review of documentation
under this part?
a) The designated State unit, or a
contractor working directly for the
designated State unit, is authorized to
engage in the review of individual
documentation required under this part
that is maintained by an entity, as
defined in 397. 5( d), under this part. The
contractor referred in this section may
not be an entity holding a special wage
certificate under section 14( c) of the Fair
Labor Standards Act (29 U.S.C. 214(c)).
b) If deficiencies are noted during a
documentation review conducted under
paragraph (a) of this section, the
designated State unit should report the
deficiency to the U. S. Department of
Labor' s Wage and Hour Division.
Authority: Sections 12( c) and 511( e)( 2)( B) of
the Rehabilitation Act of 1973, as amended;
29 U. S. C. 709( c) and 794g( e)( 2)( B))
FR Doc. 2016-15980 Filed 8- 8-16; 11: 15 am]
BILLING CODE 4000-01-P