Independent Living Services Programs; Proposed Rule DEPARTMENT OF EDUCATION

SUMMARY: The Secretary proposes to issue new regulations and to amend

existing regulations governing the State Independent Living Services

(SILS), Centers for Independent Living (CIL), and Independent Living

Services for Older Individuals Who Are Blind (OIB) programs. These

proposed regulations are needed to implement chapters 1 and 2 of title

VII of the Rehabilitation Act of 1973 (Act), as amended.

DATES: Comments must be received on or before June 13, 1994.

ADDRESSES: All comments concerning these proposed regulations should be

addressed to Commissioner, Rehabilitation Services Administration, U.S.

Department of Education, 400 Maryland Avenue, SW., room 3028, Mary E.

Switzer Building, Washington, DC 20202-2575.

A copy of any comments that concern information collection

requirements also should be sent to the Office of Management and Budget

at the address listed in the Paperwork Reduction Act section of this

preamble.

FOR FURTHER INFORMATION CONTACT: John Nelson, U.S. Department of

Education, 400 Maryland Avenue, SW., room 3326, Mary E. Switzer

Building, Washington, DC 20202-2741. Telephone or TDD: (202) 205-9362.

SUPPLEMENTARY INFORMATION: These proposed regulations would implement

chapters 1 and 2 of title VII of the Act by adding a new part 364 and

revising parts 365, 366, and 367 of the regulations governing the SILS,

CIL, and OIB programs.

The SILS, CIL, and OIB programs are an important part of the

National Education Goals. These programs support National Education

Goal 6 of the Goals 2000: Educate America Act: Every adult American

will be literate and will possess the knowledge and skills necessary to

compete in a global economy and exercise the rights and

responsibilities of citizenship.

Executive Order 12866 encourages Federal agencies to solicit

earlier and greater public participation in the development of

regulations. In response, the Assistant Secretary of the Office of

Special Education and Rehabilitative Services (OSERS) and the Acting

Commissioner of the Rehabilitation Services Administration (RSA) sent,

on December 20, 1993, over 400 letters, along with computer diskettes

that included the most up-to-date draft of the proposed regulations, to

State vocational rehabilitation (VR) agencies, Statewide Independent

Living Councils, centers for independent living (centers), constituent

organizations, and other interested parties and individuals, inviting

their participation in a series of public meetings and teleconferences

on the proposed regulations. On that same date, the Assistant Secretary

of OSERS and the Acting Commissioner of RSA also made available the

draft of the proposed regulations on the ``DIMENET'' and ``RSA BBS''

electronic bulletin boards. Public meetings were held on January 10 and

13 and February 1, 1994. The teleconferences were conducted on January

24, 25, and 26, 1994. A cross section of individuals representing a

wide variety of independent living (IL) organizations and viewpoints on

IL participated. In general, most commenters were pleased with the

draft regulations. The Secretary carefully considered all comments

received during the public meetings and teleconferences.

Because of the time needed to make competitive awards under part C

of chapter 1 and under chapter 2 of title VII of the Act, the Secretary

proposes a 30-day comment period for these proposed regulations. As

described in the ``Summary of Major Provisions,'' the Secretary already

has revised the proposed regulations in response to the extensive

comments received on the draft of these proposed regulations that was

distributed to the public on December 20, 1993. In addition, the

Secretary will make this notice of proposed rulemaking (NPRM) available

through electronic bulletin boards on the date of publication of the

NPRM in the Federal Register. The access numbers for the electronic

bulletin boards are as follows:

DIMENET Access Number: (508) 880-5412

RSA BBS Access Number: (202) 205-5574

Distribution through the electronic bulletin boards will ensure

timely availability of the NPRM. Therefore, the Secretary believes that

the public interest will be served best by allowing the public 30 days

to comment on the proposed regulations.

Summary of Major Provisions

The following is a summary of the major provisions in these

proposed regulations. The summary identifies changes in the regulations

that are mandated by changes in the statute. Other changes described in

the summary are regulations proposed by the Secretary. In addition,

significant changes made to the proposed regulations as a result of

public comments received during the public meetings and teleconferences

are discussed in this preamble.

In addition, the Secretary proposes to change all references to

``individual with a severe disability'' to ``individual with a

significant disability.'' The Secretary proposes to define an

individual with a significant disability to mean an individual with a

severe physical or mental impairment whose ability to function

independently in the family or community or whose ability to obtain,

maintain, or advance in employment is substantially limited and for

whom the delivery of IL services will improve the ability to function,

continue functioning, or move toward functioning independently in the

family or community or to continue in employment, respectively. This

definition is derived from the definition of an ``individual with a

severe disability'' in section 7(15)(B) of the Act. The Secretary is

concerned that the term ``severe'' has largely negative connotations

and associations in common usage and believes that the term

``significant'' may be preferred by persons with disabilities.

Consequently, the Secretary proposes to use the term ``significant

disability'' as a synonym for the term ``severe disability'' in

referring to an individual's disability. No change in meaning is

intended by this change in nomenclature.

On October 27, 1993, the Secretary published a separate NPRM in the

Federal Register (58 FR 57938) soliciting comments on this proposed

change. The comment period on the ``Nomenclature NPRM'' expired on

December 13, 1993. The Secretary received only 37 comments on the

change proposed in the ``Nomenclature NPRM,'' with no clear majority in

favor or against. These commenters expressed a wide range of views on

the proposed change. Commenters favoring the proposed change generally

expressed the view that the term ``significant'' is less pejorative

than the term ``severe'' in referring to an individual's disability

and, thus, would support a more positive philosophy. These comments

were generally received from commenters with an interest in the IL

services and CIL programs authorized by title VII of the Act.

Commenters opposing the change raised several issues. Some suggested

that the proposed change is not technically accurate and that a change

in meaning would result despite departmental assurances to the

contrary. Others suggested that the proposed change would be confusing

and burdensome to implement and that the proposed change should be made

through legislation rather than through rulemaking. These comments were

generally received from commenters with an interest in the VR services

programs authorized by title I of the Act.

Also on October 27, 1993, the Secretary published a separate NPRM

(58 FR 57942) on the indicators of minimum compliance with the

evaluation standards in section 725(b) of the Act. The ``Indicators

NPRM'' notified the public of the ``Nomenclature NPRM'' and advised the

public to limit comments on the proposed nomenclature change to the

``Nomenclature NPRM.'' However, many of the comments received on the

``Indicators NPRM'' also included comments on the proposed change in

terms from ``severe'' to ``significant.'' Of the 102 comments on the

``Indicators NPRM,'' only 4 expressed concern with the proposed change

of the term ``severe'' to ``significant.'' Approximately 28 commenters

specifically approved of the proposed change and 24 commenters used the

new terminology in their own comments, implicitly indicating their

approval of the proposed change. That is, these 24 commenters used the

term ``significant'' instead of the term ``severe'' in their comments,

even though they did not specifically approve of the proposed change.

The remaining 50 commenters expressed no views on the proposed change

and did not use either of the terms ``severe'' or ``significant'' in

their comments. Based on the number of comments received from the IL

community supporting the proposed change from ``severe'' to

``significant'' in the ``Indicators NPRM,'' the Secretary proposes to

substitute the term ``significant'' for the term ``severe'' in this

NPRM.

Further support for changing the term ``severe'' to ``significant''

in this NPRM is based on the fact that Congress totally revised title

VII of the Act when it passed the 1992 and 1993 Amendments. The

argument that it would be burdensome to implement the proposed change

(e.g., because of the need to revise existing forms and reporting

formats) is inapplicable to implementation of the changes made to the

IL programs by the 1992 and 1993 Amendments because the major changes

to title VII of the Act have necessitated major revisions to the

regulations implementing title VII. Thus, States and other recipients

of funds under title VII will have to make extensive revisions (e.g.,

in existing regulations, forms, and reporting formats) to be consistent

with these changes and substituting the term ``significant'' for

``severe'' as part of these revisions would not add any significant

additional burden.

Part 364

Proposed part 364 contains general provisions that would be

applicable to the SILS and CIL programs, authorized by parts B and C,

respectively, of chapter 1 of title VII of the Act. In addition, some

provisions in proposed part 364 also are made specifically applicable

to the OIB program authorized by chapter 2 of title VII of the Act.

Proposed Sec. 364.4 lists the definitions that apply to these

programs, including ``administrative support services,'' ``advocacy,''

``attendant care,'' ``cross-disability,'' ``individual with a

significant disability,'' ``minority group,'' ``nonresidential,''

``peer relationships,'' ``peer role models,'' ``service provider,''

``significant disability,'' ``transportation,'' and ``unserved and

underserved.''

The definition of ``administrative support services'' is based on

the State plan requirement in section 704(c) of the Act regarding the

State's role if the CIL program is administered by the State pursuant

to section 723 of the Act. The definition of ``cross-disability'' is

based on section 725(b)(2) of the Act. The definition of an

``individual with a significant disability'' is the definition of

``individual with a severe disability'' used in section 7(15)(B) of the

Act. The definition of ``service provider'' is derived from the manner

in which this term is used in section 704(e) of the Act. The definition

of ``significant disability'' is derived from section 7(15)(B) of the

Act. The definition of ``unserved and underserved'' is derived from

sections 704(l), 713(7), and 725(c)(10) and (11) of the Act and the

legislative history of these statutory provisions.

The definitions of ``attendant care'' and ``transportation'' are

based on the definitions of these terms found in Sec. 365.1(c)(3) of

the existing regulations for the SILS. The definition of ``advocacy''

is the same definition used in the Client Assistance Program (CAP)

authorized under section 112 of the Act. The definition of ``minority

group'' is based on the general definition of this term used by the

U.S. Department of Education (ED). Finally, the definitions of

``nonresidential,'' ``peer relationships,'' and ``peer role models''

are derived from the generally accepted understanding of these terms in

the IL community.

Proposed Sec. 364.5 would not allow the use of expenditures made

with non-Federal funds in a particular fiscal year as an allowable cost

to offset any costs disallowed in a notice of disallowance decision or

preliminary departmental decision unless the expenditures were reported

as costs charged to the program on the final financial status reports

for that program prior to the commencement of the audit or compliance

review that formed the basis for the disallowance. This provision is

designed to lessen the confusion surrounding the use of unreported

costs as an offset against disallowed costs and to lessen the

litigation costs associated with this practice. This provision also

incorporates the Department's current practice with respect to programs

under the Act.

Proposed Sec. 364.6 would define and address the use of ``program

income'' for grantees under the IL programs authorized under title VII

of the Act. Program income could be used for additional program

expenditures or as a deduction from total allowable costs, but not to

meet the non-Federal share requirement under 34 CFR 365.12(b).

Proposed Sec. 364.7 would incorporate section 19 of the Act that

permits the carryover of unobligated Federal funds from one fiscal year

to the next. However, pursuant to the 1993 Amendments, proposed

Sec. 364.7(b) would not permit recipients of discretionary grants under

sections 722 and 752 of the Act to carry over Federal funds.

Proposed Sec. 364.13 would implement section 706(a) of the Act

concerning when the Secretary may withhold, reduce, limit, or terminate

payments to a State under chapter 1 of title VII of the Act. The

Secretary has revised proposed Sec. 364.13 to make it more consistent

with section 107(c), which is incorporated into title VII of the Act

through section 706(a)(2)(A).

Proposed Sec. 364.20 would implement the State plan requirements in

section 704 of the Act. These requirements relate to the State plan's

form and content, duration (three years), development, and periodic

review and revision (at least once every three years), and to public

hearings on the State plan.

Proposed Sec. 364.20(c) would incorporate the requirement in

section 704(a)(2) of the Act that the designated State unit (DSU) and

the Statewide Independent Living Council (SILC) must jointly develop

the State's IL plan and that the Director of the DSU and the

chairperson of the SILC must jointly sign the State's IL plan.

Proposed Secs. 364.20(d) and 364.22(c) would incorporate the

statutory requirement in section 704(a) as it applies to the

development and submission of a State's IL plan under section 704 of

the Act and part 364. Section 704 of the Act requires a single State IL

plan to be developed and signed by the DSU and the SILC. Nothing in the

language of section 704 permits a DSU for individuals who are blind to

submit a separate State IL plan for serving individuals who are blind.

However, Sec. 364.20(d) of the proposed regulations would require that,

in a State where there is a separate State agency that is the sole

State agency authorized by law to provide IL services to individuals

who are blind, that separate agency for individuals who are blind also

must be included in the development of, and sign, the State IL plan.

Proposed Sec. 364.20(e) would require an assurance in the State

plan that the DSU actively consults with the Director of the CAP

authorized by section 112 of the Act during the development of the

State plan.

Proposed Sec. 364.20(g) would require an assurance in the State

plan that the DSU conducts public meetings to provide all segments of

the public, including interested groups, organizations, and

individuals, an opportunity to comment on the State plan prior to its

submission to the Secretary and on any revisions to the approved State

plan. The Secretary revised proposed Sec. 364.20(g) to explain more

comprehensively what a State is expected to do to comply with section

704 (a) and (m)(6) of the Act.

Finally, proposed Sec. 364.20(h) would require an assurance in the

State plan that, at the public meetings to develop the State plan, the

DSU identifies those provisions in the State plan that are State-

imposed requirements (i.e., requirements imposed by State rule or

policy that are beyond what would be required to comply with the

regulations in proposed 34 CFR parts 364, 365, 366, and 367).

In response to public comment on the draft regulations, the

Secretary has added language to proposed Sec. 364.21 that establishes

the SILC's responsibility for funds it receives under section 705(e) of

the Act and protects the SILC's independence. In addition, the

Secretary has added language to this section that requires the State

plan to include a description of the resource plan for the SILC that is

required by section 705(e) of the Act.

Proposed Secs. 364.23 and 364.24 would revise the staffing and

staff development requirements in existing 34 CFR 365.6 and 365.7 to

reflect the changes made by the 1992 Amendments (Pub. L. 102-569) and

the 1993 Amendments (Pub. L. 103-73). These requirements would apply to

all service providers.

Proposed Sec. 364.23(a) would require the State plan to include an

assurance that service providers have personnel who are specialists in

the development and provision of IL services to individuals with

significant disabilities and in the development of and support to

centers for independent living (centers). Proposed Sec. 364.23(b) would

require the State plan to include an assurance that service providers

have personnel available who are able to communicate with applicants

for and recipients of IL services under title VII of the Act who need

special modes of communication or whose English proficiency is limited.

In response to public comment on the draft regulations, the Secretary

added language to this section to include specific examples of special

modes of communication that should be available for individuals who

need special modes of communication. Finally, proposed Sec. 364.24

would require the State plan to include an assurance that the service

provider has adequate staff development programs to ensure that staff

are able to provide quality services to meet the needs of individuals

with significant disabilities.

These proposed staffing requirements, which are in Secs. 365.6 and

365.7 of the existing regulations for the SILS program, are consistent

with section 504 of the Act, the Americans with Disabilities Act of

1990 (Pub. L. 101-336, 42 U.S.C. 12101-12213), and title VI of the

Civil Rights Act of 1964 (Pub. L. 88-352, 42 U.S.C. 2000d-2000d-6).

These proposed staffing requirements have proven useful in the past,

and centers have identified staff development as a significant area of

need.

Proposed Sec. 364.28 would implement the statutory requirement that

a State must incorporate into the State plan required by section 704 of

the Act any new methods or approaches for the provision of IL services

to older individuals who are blind that are developed under a project

funded under chapter 2 of title VII of the Act. A DSU would be required

to incorporate into and describe in the State plan any new methods or

approaches that are developed under a project funded under chapter 2 of

title VII of the Act that the DSU determines to be effective.

In response to public comment on the draft regulations, the

Secretary has added language to proposed Sec. 364.30 that would require

service providers to provide information about the CAP in formats that

are accessible to individuals who seek or receive IL services.

Proposed Sec. 364.40(a) would incorporate the statutory provision

that makes any individual with a significant disability eligible for IL

services under the SILS and CIL programs. In addition, proposed

Sec. 364.40(b) would make it clear that any individual could seek

information about IL services under these programs and request referral

to other services and programs for individuals with significant

disabilities, as appropriate.

Proposed Sec. 364.41 would require the State to provide an

assurance that eligibility requirements are applied in a

nondiscriminatory manner and that no State or local residence

requirement will be imposed for IL services. The purpose of the

prohibition on a residency requirement is to ensure continuity of

services if an individual moves from one State to another during the

time he or she is receiving IL services. Proposed Sec. 364.41 is

consistent with section 101(a)(14) of the Act regarding the prohibition

on residency requirements for VR services.

In response to public comment on the draft regulations, the

Secretary has specified additional information that would have to be

included in the statement of the objectives that would be required by

proposed Sec. 364.42. The Secretary believes that the statement of

objectives required by section 704(d) of the Act should reflect the

importance of this part of the State plan to the State IL services

programs and address the overall goals and mission of the State's IL

programs and services, the various priorities for services and

populations to be served (including the priorities established by

centers pursuant to section 725(c)(4) of the Act), the types of

services to be provided, the financial plan for the use of Federal and

non-Federal funds to meet the objectives in the State plan, and how

funds received under sections 711, 721, and 752 of the Act will further

the objectives in the State plan.

Proposed Sec. 364.43(b) would incorporate the statutory

requirements in section 704(e) and (f) of the Act. Section 704(e) of

the Act requires that the State must provide IL services to individuals

with a significant disability with Federal, State, or other funds.

Proposed Sec. 364.43(b) would permit a State to meet its statutory

mandate under section 704(e) with Federal, State, or other funds.

Proposed Sec. 364.43(e) would incorporate the statutory requirement

in section 725(b)(2) of the Act that, in the determination of

eligibility, if a State contracts with or awards a grant for the

general operation of a center, it must delegate to the center all

functions related to the determination of eligibility for services. If

a State contracts with or awards a grant for the provision of specific

IL services to individuals, the State may choose either to delegate to

the IL service provider all authority for the determination of

eligibility for these services and for the development of an IL plan

for individuals receiving these services or to retain this authority.

Proposed Secs. 364.50 through 364.56 would impose post-award

conditions on the State and its subgrantees or contractors regarding

the processing of referrals and applications (Sec. 364.50),

determinations of eligibility and ineligibility (Sec. 364.51),

initiation and development of an IL plan (Sec. 364.52), maintenance of

consumer service records (Sec. 364.53), prohibition on durational

limitations for IL services (Sec. 364.54), compliance with standards

for service providers (Sec. 364.55), and procedures for the protection,

use, and release of personal information (Sec. 364.56).

Proposed Secs. 364.51, 364.52, and 364.53 would incorporate

sections 704(e) and 725(b)(2) of the Act. In addition, proposed

Sec. 364.53 would be consistent with the proposed indicators of what

constitutes compliance with the evaluation standards in section 725(b)

of the Act.

Proposed Secs. 364.54, 364.55, and 364.56 would keep important

protections for consumers of IL services that exist in the current SILS

regulations. In particular, the Secretary revised proposed Sec. 364.56

to make it more consistent with the current SILS regulations.

Proposed Sec. 364.57 also would permit the DSU to delegate its

functions and responsibilities under proposed Secs. 364.50, 364.51

(subject to proposed Sec. 364.43(d)), 364.52, 364.53, and 364.56 to the

service provider to which the DSU awards a grant or with which the DSU

contracts to provide IL services in the State. Allowing the DSUs to

delegate these functions and responsibilities permits the States

greater flexibility in the operation of the SILS program.

In response to public comment on the draft regulations, the

Secretary has added a new proposed Sec. 364.58 that would require each

service provider to establish appeals procedures and policies that an

individual could use to obtain review of decisions made by the service

provider concerning the individual's request for IL services or the

provision of IL services to the individual. Proposed Sec. 364.58 also

would require the service provider to inform each individual who seeks

or receives IL services about those appeals procedures and policies in

formats that are accessible to individuals who seek or receive IL

services.

Proposed Sec. 364.59 would require a State to include in its State

plan any financial needs test that would be used by a service provider

to determine whether an individual with a significant disability could

obtain IL services at no cost to the individual. Proposed

Sec. 364.59(d)(1) would require a service provider to maintain written

policies covering the specific types of IL services for which a

financial needs test could be applied and to maintain documentation of

an individual's participation in the costs of any IL services.

Part 365

Proposed part 365 contains regulations for the SILS program

authorized by part B of chapter 1 of title VII of the Act. Pursuant to

proposed Sec. 365.11(c), if a State has designated a DSU to provide IL

services for the general population of individuals with disabilities

and a separate DSU to provide IL services for individuals who are

blind, the State would have total discretion, without any interference

from ED, to determine how it would divide the funds allotted to the

State under part 365 between these two DSUs. The division of funds is a

matter internal to the States, and the regulations would not exclude or

mandate the involvement of the SILC in this decision.

Proposed Sec. 365.13 would impose requirements that a State would

have to meet to satisfy its non-Federal share matching requirement

under section 712(b) of the Act and proposed Sec. 365.12. Proposed

Sec. 365.13(b) would prohibit a State from using cash contributions to

satisfy its non-Federal share matching requirement if the contribution

is for expenditures that benefit or will benefit in any way the donor,

an individual to whom the donor is related by blood or marriage or with

whom the donor has a close personal relationship, or an individual,

entity, or organization with whom the donor shares a financial

interest. Pursuant to proposed Sec. 365.13(c), the receipt of a grant,

subgrant, or contract under section 713 of the Act or a grant,

subgrant, or assistance contract under section 723 of the Act from the

DSU would not be considered a benefit to the donor if the grant,

subgrant, or contract was awarded under the State's regular competitive

procedures.

Conversely, proposed Sec. 365.14(a) would prohibit a State from

conditioning the award of a grant, subgrant, or contract under section

713 of the Act or a grant, subgrant, or assistance contract under

section 723 of the Act on a cash or in-kind contribution from an

applicant. Proposed Sec. 365.14(b) also would prohibit an individual,

entity, or organization that is a grantee or subgrantee of the State,

or has a contract with the State, from conditioning the award of a

subgrant or subcontract on a cash or in-kind contribution to the State

or to the grantee or contractor of the State.

Proposed Sec. 365.15 would impose the restrictions in Sec. 365.14

on a State's use of in-kind contributions to meet the matching

requirement in section 712(b) of the Act. The Secretary has not

proposed to impose on in-kind contributions the restrictions in

Sec. 365.13 because fewer problems have arisen in the past as a result

of the use of this type of contribution for matching purposes.

The proposed limitations on the use of restricted contributions to

meet a State's matching requirement would clarify the limitations in

existing 34 CFR part 365. (See existing 34 CFR 361.76, which is

incorporated by reference into the existing SILS program regulations by

existing 34 CFR 365.15.) The proposed limitations would prevent States

from making awards based on an applicant's ability to contribute the

matching funds rather than on the programmatic merit of the applicant's

proposal. The proposed limitations would not prohibit a State from

accepting restricted contributions for providing services or benefits

to a particular individual or group of individuals. The proposed

limitations would prohibit a State only from using these restricted

contributions to meet its matching share requirement if the donor of

the cash contributions has restricted their use to expenditures that

benefit or will benefit in any way the donor, an individual to whom the

donor is related by blood or marriage or with whom the donor has a

close personal relationship, or an individual, entity, or organization

with whom the donor shares a financial interest.

The proposed limitations on the use of restricted contributions to

meet a State's matching requirement would ensure that the services and

benefits that are provided under a program funded with 90 percent

Federal money would be available to an eligible individual without

regard to the individual's relationship to the donor. The proposed

limitations also would ensure that an eligible applicant that is unable

to contribute the State's share of expenditures for the program would

not be disqualified from receiving a grant, subgrant, or contract under

the program. To allow a State to condition the award of a grant,

subgrant, or contract on the recipient's contribution of the State's

matching requirement would be tantamount to allowing the State to

impose additional eligibility requirements to participate in the

program. This action would contradict 34 CFR 76.770(g), which prohibits

a State from acting in any manner that prevents eligible applicants

from applying under the program.

Finally, the proposed limitations on the use of restricted

contributions to meet a State's matching requirement also are intended

to prevent the sale of grants, subgrants, or contracts by the States to

the highest bidder. ED has always required, unless directed by law to

do otherwise, that the award of grants, subgrants, or contracts by

States be made under a fair competitive process that is free from

favoritism on the assumption that fair competition will result in the

best qualified applicant receiving the grant, subgrant, or contract. To

allow a State to award a grant, subgrant, or contract on the basis of

the amount that the eligible applicant can contribute to the State's

matching requirement would be inconsistent with the advantages that ED

has always presumed result from fair competition.

Proposed Sec. 365.16 would implement the requirements in Office of

Management and Budget (OMB) Circulars A-87 and A-122 that the following

must be treated as a reduction of expenditures charged to the grant,

subgrant, or contract awarded under part 365 and may not be used for

meeting the State's matching requirement: Rebates, deductions, refunds,

discounts, or reductions to the price of goods, products, equipment,

rental property, real property, or services; and premiums, bonuses,

gifts, and any other payments related to the purchase of goods,

products, equipment, rental property, real property, or services.

Proposed Secs. 365.20 and 365.21 would incorporate the requirements

in sections 704(e) and (f) and 713 of the Act. As stated previously,

section 704(e) of the Act requires that the State must provide IL

services to individuals with a significant disability. Section 704(f)

of the Act permits the State to provide these IL services through

grants or contracts with third parties. Section 713 of the Act permits

the State to use funds received under part B of chapter 1 of title VII

of the Act to provide the resources described in section 705(e) of the

Act relating to the SILC and to fund various activities related to IL

services and centers. Proposed Sec. 365.20(a) would permit the State to

use funds received under part B of chapter 1 of title VII of the Act to

provide the IL services required pursuant to section 704(e) of the Act.

Proposed Sec. 365.21(b) would allow a State to provide information

and referral services independent of other IL services. Frequently,

individuals without a disability seek information from centers on

behalf of an individual with a significant disability. Allowing States

to provide information and referral services furthers the dissemination

of information and the provision of IL services to individuals with

significant disabilities. Proposed Sec. 365.21(b) also would allow a

State to provide information and referral services without regard to

subpart G of part 366. (Subpart G includes the indicators of what

constitutes minimum compliance with the evaluation standards in section

725(b) of the Act and was published separately in the October 27, 1993

``Indicators NPRM'' referred to previously. When these regulations are

published in final, subpart G will be included in 34 CFR part 366,

along with any changes made to Subpart G as a result of the public

comment received on the ``Indicators NPRM.'')

Proposed Sec. 365.23 identifies the Education Department General

Administrative Regulations and requirements that would apply if a State

makes a subgrant or enters into a contract.

Proposed Sec. 365.30 would require the DSU to develop, establish,

and maintain written standards and procedures to be applied by the

service provider to ensure expeditious and equitable handling of

referrals and applications for IL services from individuals with

significant disabilities.

Proposed Sec. 365.31 would require the DSU to develop, establish,

and maintain written standards for the provision of IL services to be

met by service providers that do not meet the standards and assurances

in section 725 of the Act and Subparts F and G of 34 CFR part 366 and

that are used by the DSU to provide IL services to individuals with

significant disabilities. Proposed Sec. 365.31 also would require the

DSU to assure that participating service providers meet all applicable

State licensure or certification requirements. Providers used by the

DSU to provide IL services that meet the requirements of section 725 of

the Act and proposed subparts F and G of part 366 would not have to

meet the standards developed by the DSU if the standards developed by

the DSU are different than the Federal requirements. The requirements

for written standards in Secs. 365.30 and 365.31, which existed in the

former regulations for the SILS program, provide important protections

for consumers of IL services.

Part 366

Proposed part 366 contains regulations regarding the CIL program

authorized by part C of chapter 1 of title VII of the Act.

Under proposed Sec. 366.2(b), the expansion of an existing center

through the establishment of a physically separate and complete

facility at a different geographical location would be considered the

same as establishing a new center for purposes of section 722(d) of the

Act and proposed Secs. 366.24 and 366.25, which would establish the

procedures for making an award to a new center. This proposed provision

would facilitate the expansion of the CIL program and the establishment

of statewide networks of centers through the use of the expertise of

currently existing centers. However, pursuant to proposed

Sec. 366.22(a)(1), any funds received by an existing center to

establish a new center at a different geographical location pursuant to

proposed Sec. 366.2(b)(2) would not be included in determining the

level of funding to the existing center in any fiscal year that the new

center applies for and receives funds as a separate center.

Proposed Sec. 366.3 lists the various activities that the Secretary

is authorized by statute to fund under the CIL program. Pursuant to

proposed Sec. 366.3(a), an eligible agency may use funds awarded under

subpart B of this part to carry out training and technical assistance

activities described in proposed Sec. 366.11(b). Pursuant to proposed

Sec. 366.3(b), an eligible agency may use funds under Subparts C and D

of Part 366 to plan, conduct, administer, and evaluate centers, and to

carry out activities that would further a center's compliance with the

evaluation standards in section 725(b) of the Act and with the

assurances in section 725(c) of the Act.

Pursuant to proposed Sec. 366.14, the Secretary would use the

selection criteria in proposed Sec. 366.15 to evaluate applications

from entities with experience in the operation of centers for awards to

provide training and technical assistance to eligible agencies,

centers, and SILCs to plan, develop, conduct, administer, and evaluate

centers. The selection criteria are based on section 721(b) of the Act

and Sec. 75.210 of the Education Department General Administrative

Regulations (EDGAR).

Proposed Secs. 366.20 through 366.28 would incorporate the

statutory requirements that apply if the amount of Federal funds

allotted to the State under section 721(c) and (d) of the Act to

support the general operation of centers is greater than the amount of

State funds earmarked for the same purpose, as determined pursuant to

proposed Secs. 366.30 and 366.31, or that apply even if this condition

is met but the Director of the DSU (Director) does not submit to the

Secretary and obtain approval of an application to award grants under

section 723 of the Act and proposed Sec. 366.32.

Pursuant to proposed Sec. 366.22(b) if, after meeting the

priorities in proposed Sec. 366.22(a)(1) and (2), there are

insufficient funds under the State's allotment to fund a new center

under proposed Sec. 366.22(a)(3), the Secretary may use the excess

funds in the State to assist existing centers or may reallot these

funds in accordance with section 721(d) of the Act. This proposed

provision is designed to give the Secretary added flexibility to

respond to the local needs within a State.

Pursuant to proposed Sec. 366.26, the Secretary would use the

statutory selection criteria from section 722(d)(2)(B) of the Act, as

incorporated in proposed Sec. 366.27, to evaluate applications for

awards to centers under section 722 of the Act. In response to public

comment on the draft regulations, the Secretary has increased the value

of the ``Extent of the need for the project'' from 15 to 20 points and

decreased the value of the ``Plan of operation'' from 25 to 20 points

in proposed Sec. 366.27 (a) and (g), respectively. The Secretary also

has added language to the selection criterion on the ``Extent of the

need for the project'' that would encourage an applicant to provide

information on whether the applicant proposes to serve an area that has

been identified in the State plan as a priority service area.

Proposed Sec. 366.28 would clarify existing authority implicit in

the Act permitting the Secretary to use funds from the allotment of one

State to award a grant to a center located in another State if the

Secretary determines that the proposal of the out-of-State center to

serve individuals with significant disabilities who reside in the other

State is consistent with the State plan of the State in which these

individuals reside. Nothing in the Act limits the award of funds

allotted to a State under section 721 of the Act to eligible agencies

only in that State. This proposed provision would allow the Secretary

to fund the most qualified applicant and would facilitate the provision

of services to unserved and underserved areas in a State in the most

efficient and economical manner.

Proposed Secs. 366.29 through 366.38 would incorporate the

statutory requirements applicable if the Director submits to the

Secretary and obtains approval of an application to award grants under

section 723 of the Act and proposed Sec. 366.32 and the amount of State

funds earmarked to support the general operation of centers is equal to

or greater than the amount of Federal funds allotted to the State for

the same purpose, as determined pursuant to proposed Secs. 366.29 and

366.31.

Proposed Sec. 366.29(a)(2) would incorporate section

723(a)(1)(A)(i) of the Act. Pursuant to proposed Sec. 366.29(a)(2), if

a State submits an application for a fiscal year to award grants under

section 723 of the Act and subpart D of 34 CFR part 366, the Secretary

would determine whether the amount of State funds that were earmarked

by the State to support the general operation of centers meeting the

requirements of part C of chapter 1 of title VII of the Act in the

second fiscal year preceding the fiscal year for which the application

is submitted equaled or exceeded the amount of funds allotted to the

State under section 721 (c) and (d) of the Act (or part B of title VII

of the Act as in effect on October 28, 1992) for that preceding fiscal

year.

Pursuant to proposed Sec. 366.29(c), the second fiscal year

preceding the fiscal year for which the State submits an application to

administer the CIL program under section 723 of the Act and subpart D

of 34 CFR part 366 would be considered the ``preceding fiscal year''

for purposes of section 723(a)(1)(A)(iii) of the Act. For example, if

fiscal year (FY) 1995 is the fiscal year for which the State submits an

application to administer the CIL program under this subpart, FY 1993

would be the ``preceding fiscal year.'' The Secretary chose the second

fiscal year preceding the fiscal year for which the State submits an

application to administer the CIL program as the ``preceding fiscal

year'' because that year would be the most recent year for which

complete financial data would be available to the Secretary to make his

determination. The Secretary would make any adjustments necessary to

accommodate a State's multi-year funding cycle or fiscal year that does

not coincide with the Federal fiscal year.

Pursuant to proposed Sec. 366.30(a), the amount of State funds that

are earmarked by a State to support the general operation of centers

would not include: (1) Federal funds used for the general operation of

centers; (2) State funds used to purchase services from a center,

including State funds used for grants or contracts for personal

assistance or skills training; (3) State attendant care funds; or (4)

Social Security Administration reimbursement funds. Proposed

Sec. 366.30(c) implements congressional intent as expressed in S. Rep.

No. 102-357, 102d Cong., 2d Sess. 92 (1992).

Pursuant to proposed Sec. 366.30(b), ``earmarked funds'' would mean

funds appropriated by the State and expressly or clearly identified as

State expenditures in the relevant fiscal year for the sole purpose of

funding the general operation of centers. ``Earmarked funds'' would be

described in this manner for purposes of this proposed provision to

ensure consistency among the States for what should be included as

``earmarked funds.''

Pursuant to proposed Sec. 366.31, if the State submits an

application to administer the CIL program under section 723 of the Act

and subpart D of 34 CFR part 366 for a fiscal year, but did not earmark

the amount of State funds required by proposed Sec. 366.29(a)(2) in the

preceding fiscal year, the State would be ineligible to make grants

under section 723 of the Act and subpart D of 34 CFR part 366 after the

end of the fiscal year succeeding the preceding fiscal year and for

each succeeding fiscal year.

Example: A State meets the earmarking requirement in FY 1995.

However, in reviewing the State's application to administer the CIL

program in FY 1998, the Secretary determines that the State failed

to meet the earmarking requirement in FY 1996. The State could

continue to award grants in FY 1997 but could not do so in FY 1998

and succeeding fiscal years.

Once the Secretary determines that a State failed to earmark the

required amount of funds in the second fiscal year preceding the fiscal

year for which the State submits an application to administer the CIL

program, the State would be precluded from administering the CIL

program in succeeding fiscal years. The Secretary believes that this

proposed result most clearly reflects the intent of Congress. The

Secretary also believes that allowing States to re-qualify would be

disruptive to the consistent administration of the CIL program within a

State.

In those States in which there is both a DSU responsible for

providing IL services to the general population and a DSU responsible

for providing IL services for individuals who are blind, proposed

Sec. 366.32(d) would provide that the word ``Director,'' as used in

subparts D and E of part 366, would mean ``the Director of the general

DSU.'' This provision is proposed because only the general agency in a

State has authority under State law to provide IL services on a cross-

disability basis. However, both State units would be required to

consult with each other with respect to the provision of services for

individuals who are blind.

Because the Department distinguishes between procurement contracts

and assistance contracts at the State level, proposed Sec. 366.32(e)

would permit the Director to enter into assistance contracts with

centers to carry out section 723 of the Act. The Department considers

assistance contracts awarded by a State as equivalent to subgrants.

Proposed Sec. 366.32(e) would define an assistance contract awarded by

a State as an instrument whose principal purpose is merely to transfer

funds allotted to the State under section 721 (c) and (d) of the Act

and 34 CFR part 366 to an eligible agency to carry out section 723 of

the Act rather than as an instrument to procure services under specific

terms and conditions determined by the Director. If the DSU were to use

an assistance contract to award funds under section 723 of the Act, the

DSU would not be permitted to add any requirements, terms, or

conditions to the assistance contract other than those that would be

permitted if the assistance contract were a subgrant. Under an

assistance contract, the DSU would assume a role consistent with that

of the Secretary under section 722 of the Act; i.e., the role of the

DSU would be to ensure that the terms of the assistance contract (which

are established by chapter 1 of title VII of the Act and the

implementing regulations in 34 CFR parts 364, 365, and 366) are

satisfied.

Conversely, proposed Sec. 366.32(f) would implement congressional

intent to prohibit the Director from entering into procurement

contracts with centers to carry out section 723 of the Act. See H.R.

Rep. No. 102-822, 102d Cong., 2d Sess. 137 (1992) and S. Rep. No. 102-

357, 92. Proposed Sec. 366.32(f) would define a procurement contract as

an instrument whose principal purpose is to acquire (by purchase,

lease, or barter) property or services for the direct benefit or use of

the DSU. Under a procurement contract, the DSU prescribes the specific

services it intends to procure and the terms and conditions of the

procurement.

Pursuant to proposed Sec. 366.32(g), in the enforcement of any

breach of the terms and conditions of an assistance contract, the DSU

would be required to follow the procedures established in proposed

Secs. 366.40 through 366.45.

Pursuant to proposed Sec. 366.34(b), if the order of priorities in

proposed Sec. 366.22 is followed and, after meeting the priorities in

proposed Sec. 366.22(a) (1) and (2), there are insufficient funds under

the State's allotment under section 721 (c) and (d) of the Act to fund

a new center under proposed Sec. 366.22(a)(3), the Director would be

permitted to use any excess funds in the State to assist existing

centers or to return these funds to the Secretary for reallotment in

accordance with section 721(d) of the Act. Proposed Sec. 366.34(b)

would give the Director of a DSU the same discretion that the Secretary

would have under proposed Sec. 366.22(b).

Proposed Secs. 366.39 through 366.45 would establish the

enforcement and appeals procedures if the Secretary or the Director

determines that a center receiving funds under section 722 or 723,

respectively, of the Act is not in compliance with the standards and

assurances in section 725 (b) and (c) of the Act and subparts F and G

of part 366. Pursuant to section 722(g)(1) of the Act, if the Secretary

determines that a center receiving funds under section 722(a) of the

Act is not in compliance with the standards and assurances in section

725(b) of the Act, the Secretary is required to notify the center of

the center's noncompliance. Pursuant to section 722(g)(2) of the Act,

the Secretary is required to terminate funds 90 days after notifying a

center that it is not in compliance with the standards and assurances

in section 725(b) of the Act unless the center submits a corrective

action plan to achieve compliance within 90 days after the Secretary's

notification and the plan is approved by the Secretary. Proposed

Sec. 366.39 (a) and (b) would implement section 722(g) (1) and (2) of

the Act.

Pursuant to proposed Sec. 366.39(a), the Secretary would notify the

center that the Secretary will offer technical assistance to a center

to develop a corrective action plan to comply with the standards and

assurance. Pursuant to proposed Sec. 366.39(b)(2), the Secretary would

notify the center that termination of funds would occur within 90 days

after the center received notice of its noncompliance unless the center

requests a hearing pursuant to proposed Sec. 366.39 (c) or (d).

Proposed Sec. 366.39(c) would give a center 30 days from the date

it receives the Secretary's written notice disapproving its corrective

action plan to file a formal written appeal with the Secretary.

Pursuant to proposed Sec. 366.39(f), the Secretary would issue a

written decision to terminate funds after a hearing if the center is

found out of compliance with the standards and assurances in section

725(b) of the Act and subparts F and G of 34 CFR part 366 or the

center's corrective action plan cannot be approved.

Proposed Secs. 366.40 through 366.43 would incorporate similar

statutory requirements related to enforcement and appeals procedures

that the Director shall use before terminating a center's funds or

taking other significant adverse action against a center. The due

process procedures in proposed Secs. 366.40 through 366.43 are designed

to provide every opportunity for a dispute between a Director and a

center to be resolved at the State level before the dispute is appealed

to the Secretary.

Pursuant to proposed Sec. 366.40(b), unless a center submits and

obtains approval of a corrective action plan, the Director would

terminate all funds to a center under section 723 of the Act 90 days

after the date that the center receives the initial written notice of

its noncompliance from the Director or 90 days after the date that the

center receives the Secretary's final decision pursuant to proposed

Sec. 366.46(c), whichever is later.

Proposed Sec. 366.41 describes the minimum amount of information

that the Secretary believes the initial written notice sent from the

Director to the center would have to contain to meet the statutory

requirement of providing notice to the center of the center's

noncompliance, including notice to the center that it would have 90

days from the date of receipt of the Director's initial written notice

to submit a corrective action plan to the Director and 120 days from

the date of receipt of the Director's initial written notice to appeal

to the Secretary the decision described in a Director's initial written

notice.

Pursuant to proposed Sec. 366.42, if the center submits a

corrective action plan, the Director would have to provide the center

with a final written decision approving or disapproving the center's

corrective action plan and informing the center, if appropriate, of the

termination of funds or other proposed significant adverse action

against the center. Pursuant to proposed Sec. 366.42(c), a Director's

final written decision would not take effect until 30 days after the

center receives it or, if appealed to the Secretary, until the

Secretary issues a final decision.

Proposed Sec. 366.43 describes the minimum amount of information

that the Secretary believes the final written decision from the

Director would have to contain to meet the statutory requirement of

providing notice to the center of the center's noncompliance with

statutory requirements, including the reasons why the Director could

not approve the center's corrective action plan, if such a plan was

submitted by the center, and notice to the center that it has the right

to appeal the Director's final written decision to the Secretary.

Proposed Sec. 366.44 describes the procedures that a center would

have to follow to appeal to the Secretary a final written decision from

the Director. Pursuant to proposed Sec. 366.44(a), if a Director did

not approve a center's corrective action plan, the center would be

given 30 days following receipt of the Director's final written

decision to appeal to the Secretary. Pursuant to proposed

Sec. 366.44(b), if a center does not submit a corrective action plan,

the center would be given 120 days following receipt of the Director's

initial written notice to appeal to the Secretary.

Proposed Sec. 366.44(c) through (f) describe how a center would

file an appeal to the Secretary. Proposed Sec. 366.44(g) would allow

the center to request an informal hearing with the Secretary, to which

the Director also would be invited to attend.

Proposed Sec. 366.44(h) would stay a Director's decision to

terminate funds as of the date that the center files a formal written

appeal with the Secretary.

Proposed Sec. 366.45 describes the procedures that a Director would

have to follow upon receipt of a copy of the formal written appeal that

the center files with the Secretary.

Proposed Sec. 366.46 describes the review procedures the Secretary

would follow upon receipt of a formal written appeal from a center.

All of the proposed provisions in proposed subpart E regarding the

enforcement of statutory requirements that centers must meet are

designed to ensure due process and fairness.

In response to public comment on the draft regulations, the

Secretary has added language to clarify the intent of proposed

Sec. 366.50. Section 725(c)(2) of the Act requires that the governing

board of a center must be composed of a majority of individuals with a

significant disability. The statutory definition of an individual with

a significant disability is limited to individuals who are receiving or

who could benefit from receiving IL services. If the statutory

definition is used to determine membership on the governing board,

those individuals with a significant disability who already have gained

their independence, either through the receipt of IL services or on

their own, could not be part of the majority of the governing board.

Therefore, the Secretary has added language at the end of proposed

Sec. 366.50(b) that would modify the definition of an individual with a

significant disability for purposes of this proposed section only. The

proposed definition would permit those individuals with a significant

disability who already have gained their independence, either through

the receipt of IL services or on their own, to be part of the majority

of the governing board.

Part 367

Proposed part 367 contains regulations regarding the OIB program,

authorized by chapter 2 of title VII of the Act.

In addition to incorporating the definitions in proposed

Sec. 364.4, proposed Sec. 367.5 includes the statutory definitions for

``older individual who is blind'' and ``independent living services for

older individuals who are blind.''

Pursuant to proposed Sec. 367.21, the Secretary would use the

selection criteria in proposed Sec. 367.22, which are based on

Sec. 75.210 of EDGAR, to evaluate applications for discretionary grants

under section 752(b)(1) of the Act.

In response to public comment on the draft regulations, the

Secretary has increased the value of ``Plan of operation'' from 20 to

25 points and decreased the value of ``Likelihood of sustaining the

program'' from 15 to 10 points in proposed Sec. 367.22(b) and (h),

respectively.

Pursuant to proposed Sec. 367.23, the Secretary also would consider

the geographic distribution of projects in awarding these discretionary

grants. The Secretary believes that it is important to have this

program operate in as many States as possible, and this proposed

provision would give the Secretary the flexibility to accomplish this

purpose.

Finally, proposed Sec. 367.41(a)(1) would incorporate section

752(g) of the Act that gives the designated State agency discretion to

operate or administer the OIB program or projects under Part 367

through grants to public or private nonprofit agencies or

organizations. In addition, proposed Sec. 367.41(a)(2) would

incorporate section 752(i)(2)(A) of the Act that gives the designated

State agency discretion to operate or administer the program or

projects under Part 367 either directly or through grants, as permitted

by section 752(g) of the Act and Sec. 367.41(a), or contracts. The

general authority to operate or administer the OIB through grants or

contracts given to States in section 752(i)(2)(A) of the Act is

overridden by the specific language in section 752(g) of the Act

limiting a State's authority to award grants only to public or private

nonprofit agencies or organizations. Because Congress could have added

contracts to section 752(g) or deleted the very specific reference to

public or private nonprofit agencies or organizations in section

752(g), proposed Sec. 367.41(a)(2) permits a State to contract only

with individuals, entities, or organizations that are not public or

private nonprofit agencies or organizations. However, proposed

Sec. 367.41(b) would permit States to use assistance contracts awarded

by a State (which are similar to subgrants), but not procurement

contracts, in a manner consistent with 34 CFR 366.32(e) through

366.32(g).

Executive Order 12866

Assessment of Costs and Benefits

These proposed regulations have been reviewed in accordance with

Executive Order 12866. Under the terms of the order the Secretary has

assessed the potential costs and benefits of this regulatory action.

The potential costs associated with the proposed regulations are

those resulting from statutory requirements and those determined by the

Secretary to be necessary for administering these programs effectively

and efficiently. Burdens specifically associated with information

collection requirements, if any, are identified and explained elsewhere

in this preamble under the heading Paperwork Reduction Act of 1980.

In assessing the potential costs and benefits--both quantitative

and qualitative--of these proposed regulations, the Secretary has

determined that the benefits of the proposed regulations justify the

costs.

The Secretary also determined that this regulatory action does not

unduly interfere with State, local, and tribal governments in the

exercise of their governmental functions.

To assist the Department in complying with the specific

requirements of Executive Order 12866, the Secretary invites comment on

whether there may be further opportunities to reduce any potential

costs or increase potential benefits resulting from these proposed

regulations without impeding the effective and efficient administration

of the program.

Clarity of the Regulations

Executive Order 12866 requires each agency to write regulations

that are easy to understand.

The Secretary invites comments on how to make these proposed

regulations easier to understand, including answers to questions such

as the following:

(1) Are the requirements in the proposed regulations clearly

stated?

(2) Do the regulations contain technical terms or other wording

that interferes with their clarity?

(3) Does the format of the regulations (grouping and order of

sections, use of headings, paragraphing, etc.) aid or reduce their

clarity? Would the regulations be easier to understand if they were

divided into more (but shorter) sections? (A ``section'' is preceded by

the symbol ``Sec. '' and a numbered heading; for example, Sec. 364.10.)

(4) Is the description of the regulations in the ``Supplementary

Information'' section of this preamble helpful in understanding the

regulations? How could this description be more helpful in making the

regulations easier to understand?

(5) What else could the Department do to make the regulations

easier to understand?

A copy of any comments that concern how the Department could make

these proposed regulations easier to understand should be sent to

Stanley M. Cohen, Regulations Quality Officer, U.S. Department of

Education, 400 Maryland Avenue SW. (room 5125, FOB-6), Washington, DC

20202-2241.

Regulatory Flexibility Act Certification

The Secretary certifies that these proposed regulations would not

have a significant economic impact on a substantial number of small

entities.

The small entities that would be affected by these proposed

regulations are centers receiving Federal funds under these programs.

However, the regulations would not have a significant economic impact

on the centers affected because the regulations would not impose

excessive regulatory burdens or require unnecessary Federal

supervision. The regulations would impose minimal requirements to

ensure the proper expenditure of program funds.

Paperwork Reduction Act of 1980

Sections 364.10, 364.11, 364.12, 364.13, 364.20, 364.21, 364.22,

364.23, 364.24, 364.25, 364.26, 364.27, 364.28, 364.29, 364.30, 364.31,

364.32, 364.33, 364.34, 364.35, 364.36, 364.37, 364.38, 364.39, 364.40,

364.41, 364.42, 364.43, 364.51, 364.52, 364.53, 365.2, 365.10, 365.30,

365.31, 366.2, 366.12, 366.15, 366.21, 366.22, 366.23, 366.24, 366.25,

366.27, 366.28, 366.29, 366.32, 366.33, 366.37, 366.38, 366.39, 366.40,

366.41, 366.42, 366.43, 366.44, 366.45, 366.50, 367.10, 367.11, 367.22,

367.31, 367.32, and 367.42 contain information collection requirements.

As required by the Paperwork Reduction Act of 1980, the Department of

Education will submit a copy of these sections to the Office of

Management and Budget (OMB) for its review. (44 U.S.C. 3504(h).)

State agencies and centers are eligible to apply for grants under

these proposed regulations. The Department needs and uses the

information to make grants. Annual public reporting burden for this

collection of information is estimated to average 40 hours per response

for 240 respondents, including the time for reviewing instructions,

searching existing data sources, gathering and maintaining the data

needed, and completing and reviewing the collection of information.

Organizations and individuals desiring to submit comments on the

information collection requirements should direct them to the Office of

Information and Regulatory Affairs, OMB, room 3002, New Executive

Office Building, Washington, DC 20503; Attention: Daniel J. Chenok.

Intergovernmental Review

These programs are subject to the requirements of Executive Order

12372 and the regulations in 34 CFR part 79. The objective of the

Executive order is to foster an intergovernmental partnership and a

strengthened federalism by relying on processes developed by State and

local governments for coordination and review of proposed Federal

financial assistance.

In accordance with the order, this document is intended to provide

early notification of the Department's specific plans and actions for

this program.

Invitation To Comment

Interested persons are invited to submit comments and

recommendations regarding these proposed regulations.

All comments submitted in response to these proposed regulations

will be available for public inspection, during and after the comment

period, in room 3214, Mary E. Switzer Building, 330 C Street SW.,

Washington, DC, between the hours of 8:30 a.m. and 4 p.m., Monday

through Friday of each week except Federal holidays.

Assessment of Educational Impact

The Secretary particularly requests comments on whether the

proposed regulations in this document would require transmission of

information that is being gathered by or is available from any other

agency or authority of the United States.

List of Subjects in 34 CFR Parts 364, 365, 366, and 367

Centers for independent living, Independent living services for

older individuals who are blind, Reporting and recordkeeping

requirements, State independent living services.

(Catalog of Federal Domestic Assistance Numbers: 84.132 Centers for

Independent Living; 84.169 State Independent Living Services; and

84.177 Independent Living Services for Older Individuals Who Are

Blind)

Dated: May 9, 1994.

Richard W. Riley,

Secretary of Education.

The Secretary proposes to amend title 34 of the Code of Federal

Regulations by adding a new part 364 and by revising parts 365, 366,

and 367 to read as follows:

PART 364--STATE INDEPENDENT LIVING SERVICES PROGRAM AND CENTERS FOR

INDEPENDENT LIVING PROGRAM: GENERAL PROVISIONS

Subpart A--General

Sec.

364.1 What programs are covered?

364.2 What is the purpose of the programs authorized by Chapter 1

of Title VII?

364.3 What regulations apply?

364.4 What definitions apply?

364.5 What are the limitations on allowable costs?

364.6 What is program income and how may it be used?

364.7 What requirements apply to the obligation of Federal funds

and program income?

Subpart B--What Are the Application Requirements?

364.10 What are the application requirements?

364.11 When must the State plan be submitted for approval?

364.12 How does the Secretary approve State plans?

364.13 Under what circumstances may funds be withheld, reduced,

limited, or terminated?

Subpart C--What Are the State Plan Requirements?

364.20 What are the general requirements for a State plan?

364.21 What are the requirements for the statewide Independent

Living Council (SILC)?

364.22 What is the State's responsibility for administration of the

programs authorized by Chapter 1 of Title VII?

364.23 What are the staffing requirements?

364.24 What assurances are required for staff development?

364.25 What are the requirements for a statewide network of centers

for independent living?

364.26 What are the requirements for cooperation, coordination, and

working relationships?

364.27 What are the requirements for coordinating independent

living (IL) services?

364.28 What requirements relate to IL services for older

individuals who are blind?

364.29 What are the requirements for coordinating Federal and State

sources of funding?

364.30 What notice must be given about the Client Assistance

Program (CAP)?

364.31 What are the affirmative action requirements?

364.32 What are the requirements for outreach?

364.33 What is required to meet minority needs?

364.34 What are the fiscal and accounting requirements?

364.35 What records must be maintained?

364.36 What are the reporting requirements?

364.37 What access to records must be provided?

364.38 What methods of evaluation must the State plan include?

364.39 What requirements apply to the administration of grants

under the Centers for Independent Living program?

364.40 Who is eligible to receive IL services?

364.41 What assurances must be included regarding eligibility?

364.42 What objectives and information must be included in the

State plan?

364.43 What requirements apply to the provision of State IL

services?

Subpart D--What Conditions Must Be Met After an Award?

364.50 What requirements apply to the processing of referrals and

applications?

364.51 What requirements apply to determinations of eligibility or

ineligibility?

364.52 What are the requirements for an IL plan?

364.53 What records must be maintained for the individual?

364.54 What are the durational limitations on IL services?

364.55 What standards shall service providers meet?

364.56 What are the special requirements pertaining to the

protection, use, and release of personal information?

364.57 What functions and responsibilities may the State delegate?

364.58 What appeal procedures must be available to consumers?

364.59 May the financial need of an individual be considered to

determine his or her participation in the costs of IL services?

Authority: 29 U.S.C. 796-796f-5, unless otherwise noted.

Subpart A--General

Sec. 364.1 What programs are covered?

(a) This part includes general requirements applicable to the

conduct of the following programs authorized under title VII of the

Rehabilitation Act of 1973, as amended:

(1) The State Independent Living Services (SILS) program (34 CFR

part 365).

(2) The Centers for Independent Living (CIL) program (34 CFR part

366).

(b) Some provisions in this part also are made specifically

applicable to the Independent Living Services for Older Individuals Who

Are Blind (OIB) program (34 CFR part 367).

(Authority: 29 U.S.C. 711(c) and 796-796f-5)

Sec. 364.2 What is the purpose of the programs authorized by chapter 1

of title VII?

The purpose of the SILS and CIL programs authorized by chapter 1 of

title VII of the Act is to promote a philosophy of independent living

(IL), including a philosophy of consumer control, peer support, self-

help, self-determination, equal access, and individual and system

advocacy, to maximize the leadership, empowerment, independence, and

productivity of individuals with significant disabilities, and to

promote and maximize the integration and full inclusion of individuals

with significant disabilities into the mainstream of American society

by providing financial assistance to States--

(a) For providing, expanding, and improving the provision of IL

services;

(b) To develop and support statewide networks of centers for

independent living (centers); and

(c) For improving working relationships among--

(1) SILS programs;

(2) Centers;

(3) Statewide Independent Living Councils (SILCs) established under

section 705 of the Act;

(4) State vocational rehabilitation (VR) programs receiving

assistance under title I and under part C of title VI of the Act;

(5) Client assistance programs receiving assistance under section

112 of the Act;

(6) Programs funded under other titles of the Act;

(7) Programs funded under other Federal law; and

(8) Programs funded through non-Federal sources.

(Authority: 29 U.S.C. 796)

Sec. 364.3 What regulations apply?

The following regulations apply to the SILS and CIL programs:

(a) The Education Department General Administrative Regulations

(EDGAR) as follows:

(1) 34 CFR part 74 (Administration of Grants to Institutions of

Higher Education, Hospitals, and Nonprofit Organizations), with respect

to grants or subgrants to an eligible agency that is not a State or

local government or Indian tribal organization.

(2) 34 CFR part 75 (Direct Grant Programs), with respect to grants

under subparts B and C of 34 CFR part 366.

(3) 34 CFR part 76 (State-Administered Programs), with respect to

grants under 34 CFR part 365 and subpart D of 34 CFR part 366.

(4) 34 CFR part 77 (Definitions that Apply to Department

Regulations).

(5) 34 CFR part 79 (Intergovernmental Review of Department of

Education Programs and Activities).

(6) 34 CFR part 80 (Uniform Administrative Requirements for Grants

and Cooperative Agreements to State and Local Governments), with

respect to grants to an eligible agency that is a State or local

government or Indian tribal organization.

(7) 34 CFR part 81 (General Education Provisions Act--Enforcement).

(8) 34 CFR part 82 (New Restrictions on Lobbying).

(9) 34 CFR part 85 (Governmentwide Debarment and Suspension

(Nonprocurement) and Governmentwide Requirements for Drug-Free

Workplace (Grants)).

(10) 34 CFR part 86 (Drug-Free Schools and Campuses).

(b) The regulations in this part 364.

(c) The regulations in 34 CFR parts 365 and 366 as applicable.

(Authority: 29 U.S.C. 711(c))

Sec. 364.4 What definitions apply?

(a) Definitions in EDGAR. The following terms used in this part and

in 34 CFR parts 365, 366, and 367 are defined in 34 CFR 77.1:

Applicant

Application

Award

Department

EDGAR

Fiscal year

Nonprofit

Private

Project

Public

Secretary

(b) Other definitions. The following definitions also apply to this

part and to 34 CFR parts 365, 366, and 367:

Act means the Rehabilitation Act of 1973, as amended.

Administrative support services mean assistance to support IL

programs and the activities of centers and may include financial and

technical assistance in planning, budget development, and evaluation of

center activities, and support for financial management (including

audits), personnel development, and recordkeeping activities.

(Authority: 29 U.S.C. 796c(c)(2))

Advocacy means pleading an individual's cause or speaking or

writing in support of an individual. To the extent permitted by State

law or the rules of the agency before which an individual is appearing,

a non-lawyer may engage in advocacy on behalf of another individual.

Advocacy may--

(1) Involve representing an individual--

(i) Before private entities or organizations, government agencies

(whether State, local, or Federal), or in a court of law (whether State

or Federal); or

(ii) In negotiations or mediation, in formal or informal

administrative proceedings before government agencies (whether State,

local, or Federal), or in legal proceedings in a court of law; and

(2) Be on behalf of--

(i) A single individual, in which case it is individual advocacy;

(ii) A group or class of individuals, in which case it is systems

(or systemic) advocacy; or

(iii) Oneself, in which case it is self advocacy.

Attendant care means a personal assistance service provided to an

individual with significant disabilities in performing a variety of

tasks required to meet essential personal needs in areas such as

bathing, communicating, cooking, dressing, eating, homemaking,

toileting, and transportation.

(Authority: 20 U.S.C. 706(30)(B)(vi))

Center for independent living means a consumer-controlled,

community-based, cross-disability, nonresidential, private nonprofit

agency that--

(1) Is designed and operated within a local community by

individuals with disabilities; and

(2) Provides an array of IL services.

(Authority: 29 U.S.C. 796a(1))

Consumer control means, with respect to a center or eligible

agency, that the center or eligible agency vests power and authority in

individuals with disabilities, including individuals who are or have

been recipients of IL services.

(Authority: 29 U.S.C. 796a(2))

Cross-disability means, with respect to a center, that a center

provides IL services to individuals representing a range of significant

disabilities and does not require the presence of one or more specific

significant disabilities before determining that an individual is

eligible for IL services.

(Authority: 29 U.S.C. 796a(1))

Designated State agency or State agency means the sole State agency

designated to administer (or supervise local administration of) the

State plan for VR services. The term includes the State agency for

individuals who are blind, if that agency has been designated as the

sole State agency with respect to that part of the State VR plan

relating to the vocational rehabilitation of individuals who are blind.

(Authority: 29 U.S.C. 706(3) and 721(a)(1)(A))

Designated State unit means either--

(1) The State agency VR bureau, division, or other organizational

unit that is primarily concerned with the vocational rehabilitation, or

vocational and other rehabilitation, of individuals with disabilities

and that is responsible for the administration of the VR program of the

State agency; or

(2) The independent State commission, board, or other agency that

has the vocational rehabilitation, or vocational and other

rehabilitation, of individuals with disabilities as its primary

function.

(Authority: 29 U.S.C. 706(3) and 721(a)(2)(A))

Eligible agency means a consumer-controlled, community-based,

cross-disability, nonresidential, private, nonprofit agency.

(Authority: 29 U.S.C. 796f-5)

Independent living core services mean, for purposes of services

that are supported under the SILS or CIL programs--

(1) Information and referral services;

(2) IL skills training;

(3) Peer counseling, including cross-disability peer counseling;

and

(4) Individual and systems advocacy.

(Authority: 29 U.S.C. 706(29))

Independent living services includes the independent living core

services and--

(1) Counseling services, including psychological,

psychotherapeutic, and related services;

(2) Services related to securing housing or shelter, including

services related to community group living, that are supportive of the

purposes of the Act, and adaptive housing services, including

appropriate accommodations to and modifications of any space used to

serve, or to be occupied by, individuals with significant disabilities;

(3) Rehabilitation technology;

(4) Mobility training;

(5) Services and training for individuals with cognitive and

sensory disabilities, including life skills training and interpreter

and reader services;

(6) Personal assistance services, including attendant care and the

training of personnel providing these services;

(7) Surveys, directories, and other activities to identify

appropriate housing, recreation opportunities, and accessible

transportation, and other support services;

(8) Consumer information programs on rehabilitation and IL services

available under the Act, especially for minorities and other

individuals with significant disabilities who have traditionally been

unserved or underserved by programs under the Act;

(9) Education and training necessary for living in a community and

participating in community activities;

(10) Supported living;

(11) Transportation, including referral and assistance for

transportation;

(12) Physical rehabilitation;

(13) Therapeutic treatment;

(14) Provision of needed prostheses and other appliances and

devices;

(15) Individual and group social and recreational services;

(16) Training to develop skills specifically designed for youths

who are individuals with significant disabilities to promote self-

awareness and esteem, develop advocacy and self-empowerment skills, and

explore career options;

(17) Services for children;

(18) Services under other Federal, State, or local programs

designed to provide resources, training, counseling, or other

assistance of substantial benefit in enhancing the independence,

productivity, and quality of life of individuals with significant

disabilities;

(19) Appropriate preventive services to decrease the need of

individuals with significant disabilities assisted under the Act for

similar services in the future;

(20) Community awareness programs to enhance the understanding and

integration into society of individuals with significant disabilities;

and

(21) Any other services that may be necessary to improve the

ability of an individual with a significant disability to function,

continue functioning, or move toward functioning independently in the

family or community or to continue in employment and that are not

inconsistent with any other provisions of the Act.

(Authority: 29 U.S.C. 796e-2(1))

Individual with a disability means an individual who--

(1) Has a physical, mental, cognitive, or sensory impairment that

substantially limits one or more of the individual's major life

activities;

(2) Has a record of such an impairment; or

(3) Is regarded as having such an impairment.

(Authority: 29 U.S.C. 706(8)(B))

Individual with a significant disability means an individual with a

severe physical or mental impairment whose ability to function

independently in the family or community or whose ability to obtain,

maintain, or advance in employment is substantially limited and for

whom the delivery of IL services will improve the ability to function,

continue functioning, or move toward functioning independently in the

family or community or to continue in employment.

(Authority: 29 U.S.C. 706(15)(B))

Minority group means Alaskan Natives, American Indians, Asian

Americans, Blacks (African Americans), Hispanic Americans, Native

Hawaiians, and Pacific Islanders.

Nonresidential means, with respect to a center, that the center, as

of October 1, 1994, does not operate or manage housing or shelter to

individuals as an IL service on either a temporary or long-term basis

unless the housing or shelter is--

(1) Incidental to the overall operation of the center;

(2) Necessary so that the individual may receive an IL service; and

(3) Limited to a period not to exceed eight weeks during any six-

month period.

(Authority: 29 U.S.C. 796a, 796f-1(f) and 706f-2(f))

Peer relationships mean relationships involving mutual support and

assistance among individuals with significant disabilities who are

actively pursuing IL goals.

Peer role models mean individuals with significant disabilities

whose achievements can serve as a positive example for other

individuals with significant disabilities.

Personal assistance services mean a range of IL services, provided

by one or more persons, designed to assist an individual with a

significant disability to perform daily living activities on or off the

job that the individual would typically perform if the individual did

not have a disability. These IL services must be designed to increase

the individual's control in life and ability to perform everyday

activities on or off the job.

(Authority: 29 U.S.C. 706(11))

Service provider means--

(1) A DSU that directly provides IL services to individuals with

significant disabilities;

(2) A center that receives financial assistance under parts B and C

of Chapter 1 of Title VII of the Act; or

(3) Any other entity or individual that meets the requirements of

Sec. 364.43(e) and provides IL services under a grant or contract from

the DSU pursuant to Sec. 364.43(b).

(Authority: 29 U.S.C. 711(c) and 796(e))

Significant disability means a severe physical or mental impairment

that substantially limits an individual's ability to function

independently in the family or community or to obtain, maintain, or

advance in employment.

State means, except for sections 711(a)(2)(A) and 721(c)(2)(A) and

where otherwise specified in the Act, in addition to each of the

several States of the United States, the District of Columbia, the

Commonwealth of Puerto Rico, the United States Virgin Islands, Guam,

American Samoa, the Commonwealth of the Northern Mariana Islands, and

the Republic of Palau (until the Compact of Free Association with Palau

takes effect).

(Authority: 29 U.S.C. 706(16))

State plan means the State IL plan required under section 704 of

Title VII of the Act.

Transportation means travel and related expenses that are necessary

to enable an individual with a significant disability to benefit from

another IL service and travel and related expenses for an attendant or

aide if the services of that attendant or aide are necessary to enable

an individual with a significant disability to benefit from that IL

service.

(Authority: 29 U.S.C. 706(30)(B)(xi) and 711(c))

Unserved and underserved groups or populations, with respect to

groups or populations of individuals with significant disabilities in a

State, include, but are not limited to, groups or populations of

individuals with significant disabilities who--

(1) Have cognitive and sensory impairments;

(2) Are members of racial and ethnic minority groups;

(3) Live in rural areas; or

(4) Have been identified by the eligible agency as unserved or

underserved within a center's project area.

(Authority: 29 U.S.C. 706, 711(c), and 796f--796f-5)

Sec. 364.5 What are the limitations on allowable costs?

Expenditures made with non-Federal funds in a particular fiscal

year that are not reported as costs charged to the program on the final

financial status reports for that program prior to the commencement of

an audit or compliance review for that year may not be used as an

allowable cost to offset any costs disallowed in a notice of

disallowance decision or preliminary departmental decision based on

that audit or compliance review.

(Authority: 29 U.S.C. 711(c))

Sec. 364.6 What is program income and how may it be used?

(a) Definition. Program income means gross income received by a

grantee under Title VII of the Act that is directly generated by an

activity supported under 34 CFR part 365, 366, or 367.

(b) Sources. Sources of program income include, but are not limited

to, payments received from workers' compensation funds or fees for

services to defray part or all of the costs of services provided to

particular clients.

(c) Use of program income. (1) Program income, whenever earned,

must be used for the provision of IL services or the administration of

the State plan, as appropriate.

(2) A service provider is authorized to treat program income as--

(i) A deduction from total allowable costs charged to a Federal

grant, in accordance with 34 CFR 80.25(g)(1); or

(ii) An addition to the grant funds to be used for additional

allowable program expenditures, in accordance with 34 CFR 80.25(g)(2).

(3) Program income may not be used to meet the non-Federal share

requirement under 34 CFR 365.12(b).

(Authority: 29 U.S.C. 711(c); 34 CFR 80.25)

Sec. 364.7 What requirements apply to the obligation of Federal funds

and program income?

(a) Except as provided in paragraphs (b) and (c) of this section,

any Federal funds, including reallotted funds, that are appropriated

for a fiscal year to carry out a program under 34 CFR part 365, 366, or

367 that are not obligated by the DSU or center prior to the beginning

of the succeeding fiscal year, and any program income received during a

fiscal year that is not obligated by the DSU or center prior to the

beginning of the succeeding fiscal year, must remain available for

obligation by the DSU or center during that succeeding fiscal year.

(b) Federal funds appropriated for a fiscal year under part B of

chapter 1 and under chapter 2 of title VII of the Act remain available

for obligation in the succeeding fiscal year only to the extent that

the DSU complied with any matching requirement by obligating, in

accordance with 34 CFR 76.707, the non-Federal share in the fiscal year

for which the funds were appropriated.

(c) The provisions of paragraphs (a) and (b) of this section do not

apply to discretionary grants awarded by the Secretary under sections

722 and 752 of the Act.

(Authority: 29 U.S.C. 718)

Subpart B--What Are the Application Requirements?

Sec. 364.10 What are the application requirements?

To receive a grant from a State's allotment of funds under parts B

and C of chapter 1 of title VII of the Act and 34 CFR parts 365 and

366, a State shall submit to the Secretary, and obtain approval of, a

three-year State plan meeting the requirements in subpart C of this

part.

(Authority: 29 U.S.C. 796c(a)(1))

Sec. 364.11 When must the State plan be submitted for approval?

The designated State unit (DSU) shall submit to the Secretary for

approval the three-year State plan no later than July 1 of the year

preceding the first fiscal year of the three-year period for which the

State plan is submitted.

(Authority: 29 U.S.C. 796c(a)(4))

Sec. 364.12 How does the Secretary approve State plans?

(a) General. The Secretary approves a State plan that the Secretary

determines meets the requirements of section 704 of the Act and

subparts B through D of this part and disapproves a plan that does not

meet these requirements.

(b) Informal resolution. If the Secretary intends to disapprove the

State plan, the Secretary attempts to resolve disputed issues

informally with State officials.

(c) Notice of formal hearing. If, after reasonable effort has been

made to resolve the dispute informally, no resolution has been reached,

the Secretary provides written notice to the DSU of the intention to

disapprove the State plan and of the opportunity for a hearing.

(d) Hearing. (1) If the DSU requests a hearing, the Secretary

designates one or more individuals, either from the Department or

elsewhere, not responsible for or connected with the Department's

administration of the programs authorized by Title VII of the Act, to

conduct a hearing.

(2) If more than one individual is designated, the Secretary

designates one of those individuals as the Chief Hearing Official of

the Hearing Panel. If one individual is designated, that individual is

the Hearing Official.

(e) Judicial review. A State may appeal the Secretary's decision to

disapprove its State plan by filing a petition for review with the U.S.

Court of Appeals for the circuit in which the State is located, in

accordance with section 107(d) of the Act.

(Authority: 29 U.S.C. 711(c) and 796d-1(a))

Sec. 364.13 Under what circumstances may funds be withheld, reduced,

limited, or terminated?

(a) When withheld, reduced, limited, or terminated. Payments to a

State under chapter 1 of title VII of the Act may be withheld, reduced,

limited, or terminated as provided by section 107(c) of the Act if the

Secretary finds that--

(1) The State plan has been so changed that it no longer conforms

with the requirements of section 704 of the Act; or

(2) In the administration of the State plan, there is a failure to

comply substantially with any provision of the plan.

(b) Informal resolution. If the Secretary intends to withhold,

reduce, limit, or terminate payment of funds to a State under Title VII

of the Act as provided by section 107(c) of the Act, the Secretary

attempts to resolve disputed issues informally with State officials.

(c) Notice of formal hearing. If, after reasonable effort has been

made to resolve the dispute informally, no resolution has been reached,

the Secretary provides written notice to the DSU of the intention to

withhold, reduce, limit, or terminate payment of funds under Title VII

of the Act and of the opportunity for a hearing.

(d) Hearing. If the DSU requests a hearing, the Secretary

designates an administrative law judge (ALJ) in the Office of

Administrative Law Judges to conduct a hearing in accordance with the

provisions of 34 CFR part 81, subpart A.

(e) Initial decision. The ALJ issues an initial decision in

accordance with 34 CFR 81.41.

(f) Petition for review of an initial decision. The DSU may seek

the Secretary's review of an ALJ's initial decision in accordance with

34 CFR 81.42.

(g) Review by the Secretary. The Secretary reviews an ALJ's initial

decision in accordance with 34 CFR 81.43.

(h) Final decision of the Department. The ALJ's initial decision

becomes the final decision of the Department in accordance with 34 CFR

81.44.

(i) Judicial review. A State may appeal the Secretary's final

decision to withhold, reduce, limit, or terminate payment of funds to a

State under Title VII of the Act by filing a petition for review with

the U.S. Court of Appeals for the circuit in which the State is

located, in accordance with section 107(d) of the Act.

(Authority: 29 U.S.C. 727(c)-(d) and 796d-1(a)) Subpart C--What Are

the State Plan Requirements?

Sec. 364.20 What are the general requirements for a State plan?

(a) Form and content. The State plan must contain, in the form

prescribed by the Secretary, the information required by this part and

any other information requested by the Secretary.

(b) Duration. (1) The State plan must cover a three-year period and

must be amended whenever necessary to reflect any material change in

State law, organization, policy, or agency operations that affects the

administration of the State plan.

(2) The Secretary may require a State to submit an interim State

plan for a period of less than three years following a reauthorization

of the Act and prior to the effective date of final regulations.

(c) Joint development-single agency. The State plan must be

jointly--

(1) Developed by the DSU and the SILC; and

(2) Signed by the--

(i) Director of the DSU (Director); and

(ii) Chairperson of the SILC, acting on behalf of and at the

direction of the SILC.

(d) Joint development-separate agency for individuals who are

blind. If a separate State agency is authorized by State law as the

sole State agency with authority to administer or supervise the

administration of that part of the State plan relating to the

vocational rehabilitation of individuals who are blind, the State plan

must be jointly--

(1) Developed by the DSU, the SILC, and the separate State agency

authorized to provide VR services for individuals who are blind; and

(2) Signed by the--

(i) Director;

(ii) Director of the separate State agency authorized to provide VR

services for individuals who are blind; and

(iii) Chairperson of the SILC, acting on behalf of and at the

direction of the SILC.

(Cross-reference: See Sec. 364.22(c).)

(e) The State plan must assure that, as appropriate, the DSU

actively consults in the development of the State plan with the

Director of the client assistance program authorized under section 112

of the Act.

(f) Periodic review and revision. The State plan must provide for

the review and revision of the plan, at least once every three years,

to ensure the existence of appropriate planning, financial support and

coordination, and other assistance to appropriately address, on a

statewide and comprehensive basis, the needs in the State for--

(1) Providing State IL services;

(2) Developing and supporting a statewide network of centers; and

(3) Working relationships between--

(i) Programs providing IL services and supporting or establishing

centers; and

(ii) The VR program established under title I of the Act, and other

programs providing services for individuals with disabilities.

(g) Public hearings. (1) The State plan must assure that the DSU

conducts public meetings to provide all segments of the public,

including interested groups, organizations, and individuals, an

opportunity to comment on the State plan prior to its submission to the

Secretary and on any revisions to the approved State plan. The DSU may

meet the public participation requirement by holding the public

meetings before a preliminary draft State plan is prepared or by

providing a preliminary draft State plan for comment at the public

meetings.

(2) The State plan must assure that the DSU establishes and

maintains a written description of procedures for conducting public

meetings in accordance with the following requirements:

(i) The DSU shall provide appropriate and sufficient notice of the

public meetings. Appropriate and sufficient notice means notice

provided at least 30 days prior to the public meeting through various

media available to the general public, such as newspapers and public

service announcements, and through specific contacts with appropriate

constituency groups and organizations identified by the DSU and SILC.

(ii) The DSU shall make reasonable accommodation to individuals

with disabilities who rely on special modes of communication in the

conduct of the public meetings, including providing sign language

interpreters and audio-loops.

(iii) The DSU shall provide the notices of the public meetings, any

written material provided prior to or at the public meetings, and the

approved State plan in accessible formats for individuals who rely on

special modes of communication.

(h) The State plan must assure that, at the public meetings to

develop the State plan, the DSU identifies those provisions in the

State plan that are State-imposed requirements. For purposes of this

section, a State-imposed requirement includes any State rule or policy

relating to the DSU's administration or operation of IL programs under

title VII of the Act, including any rule or policy based on State

interpretation of any Federal law, regulation, or guideline, that is

beyond what would be required to comply with the regulations in 34 CFR

parts 364, 365, 366, and 367.

(Authority: 29 U.S.C. 711(c) and 796c (a) and (m)(6))

Sec. 364.21 What are the requirements for the Statewide Independent

Living Council (SILC)?

(a) Establishment. (1) To be eligible to receive assistance under

chapter 1 of title VII of the Act, each State shall establish a SILC

that meets the requirements of section 705 of the Act.

(2) The SILC may not be established as an entity within a State

agency, including the designated State agency or DSU. The SILC shall be

independent of the DSU and all other State agencies.

(b) Appointment and composition--(1) Appointment. Members of the

SILC must be appointed by the Governor or the appropriate entity within

the State responsible, in accordance with State law, for making

appointments.

(2) Composition. (i) The SILC must include--

(A) At least one director of a center chosen by the directors of

centers within the State; and

(B) As ex officio, nonvoting members, a representative from the DSU

and representatives from other State agencies that provide services to

individuals with disabilities.

(ii) The SILC may include--

(A) Other representatives from centers;

(B) Parents and legal guardians of individuals with disabilities;

(C) Advocates of and for individuals with disabilities;

(D) Representatives from private businesses;

(E) Representatives from organizations that provide services for

individuals with disabilities; and

(F) Other appropriate individuals.

(iii) A majority of the members of the SILC must be individuals

with disabilities, as defined in Sec. 364.4(b), and not employed by any

State agency or center.

(c) Qualifications. The SILC must be composed of members--

(1) Who provide statewide representation;

(2) Who represent a broad range of individuals with disabilities;

and

(3) Who are knowledgeable about centers and IL services.

(d) Voting members. A majority of the voting members of the SILC

must be individuals with disabilities, as defined in Sec. 364.4(b), and

not employed by any State agency or center.

(e) Chairperson--(1) In general. Except as provided in paragraph

(e)(2) of this section, the SILC shall select a chairperson from among

the voting membership of the SILC.

(2) Designation by Governor. In States in which the Governor does

not have veto power pursuant to State law, the Governor shall designate

a voting member of the SILC to serve as the chairperson of the SILC or

shall require the SILC to so designate a voting member.

(f) Terms of appointment. Each member of the SILC shall serve for a

term of three years, except that--

(1) A member appointed to fill a vacancy occurring prior to the

expiration of the term for which a predecessor was appointed must be

appointed for the remainder of that term;

(2) The terms of service of the members initially appointed must be

(as specified by the appointing authority) for the fewer number of

years as will provide for the expiration of terms on a staggered basis;

and

(3) No member of the SILC may serve for more than two consecutive

full terms.

(g) Duties. The SILC shall--

(1) Jointly develop and sign (in conjunction with the DSU) the

State plan required by section 704 of the Act and Sec. 364.20;

(2) Monitor, review, and evaluate the implementation of the State

plan;

(3) Coordinate activities with the State Rehabilitation Advisory

Council established under section 105 of the Act and councils that

address the needs of specific disability populations and issues under

other Federal law;

(4) Ensure that all regularly scheduled meetings of the SILC are

open to the public and sufficient advance notice is provided; and

(5) Submit to the Secretary all periodic reports as the Secretary

may reasonably request and keep all records, and afford access to all

records, as the Secretary finds necessary to verify the periodic

reports.

(h) Hearings. The SILC is authorized to hold any hearings and

forums that the SILC determines to be necessary to carry out its

duties.

(i) Resource plan. (1) The SILC shall prepare, in conjunction with

the DSU, a resource plan for the provision of resources, including

staff and personnel, made available under parts B and C of chapter 1 of

title VII of the Act, part C of title I of the Act, and from other

public and private sources that may be necessary to carry out the

functions of the SILC under this part.

(2) The SILC's resource plan must, to the maximum extent possible,

rely on the use of resources in existence during the period of

implementation of the State plan.

(3) No conditions or requirements may be included in the SILC's

resource plan that may compromise the independence of the SILC.

(4) The SILC is responsible for the proper expenditure of funds and

use of resources that it receives under the resource plan.

(5) A description of the SILC's resource plan required by paragraph

(i)(1) of this section must be included in the State plan.

(j) Staff. (1) The SILC shall, consistent with State law, supervise

and evaluate its staff and other personnel as may be necessary to carry

out its functions under this section.

(2) While assisting the SILC in carrying out its duties, staff and

other personnel made available to the SILC by the DSU may not be

assigned duties by the designated State agency or DSU, or any other

agency or office of the State, that would create a conflict of

interest.

(k) Reimbursement and compensation. The SILC may use the resources

described in paragraph (i) of this section to reimburse members of the

SILC for reasonable and necessary expenses of attending SILC meetings

and performing SILC duties (including child care and personal

assistance services) and to pay compensation to a member of the SILC,

if the member is not employed or must forfeit wages from other

employment, for each day the member is engaged in performing SILC

duties.

(l) Conflict of interest. No member of the SILC is permitted to

cast a vote on any matter that may provide direct financial benefit to

the member or the member's organization, that creates some other

conflict of interest, or that otherwise gives the appearance of a

conflict of interest under State law, unless that member announces

publicly to all members of the SILC and to the public prior to his or

her vote of the possible financial benefit, conflict of interest, or

appearance of a conflict of interest.

(Authority: 29 U.S.C. 796d)

Sec. 364.22 What is the State's responsibility for administration of

the programs authorized by Chapter 1 of Title VII?

(a) General. The State plan must identify the DSU as the entity

that, on behalf of the State, shall--

(1) Receive, account for, and disburse funds received by the State

under part B of chapter 1 and section 723 of title VII of the Act (and

34 CFR parts 365 and 366, as applicable) based on the plan;

(2) Provide, as applicable, administrative support services for the

SILS and CIL programs under part B of chapter 1 and section 723 of

title VII of the Act, respectively, and 34 CFR parts 365 and 366,

respectively;

(3) Keep records and afford access to these records as the

Secretary finds to be necessary with respect to the SILS and CIL

programs; and

(4) Submit additional information or provide assurances as the

Secretary may require with respect to the SILS and CIL programs.

(b) Provision of administrative support services. The State plan

must describe the administrative support services to be provided by the

DSU under paragraph (a)(2) of this section.

(c) Designation of State unit for individuals who are blind. The

State plan may designate a State agency or the organizational unit of a

State agency that is authorized under State law to provide VR services

to individuals who are blind under a State VR plan as the DSU to

administer that part of the State IL plan under which IL services are

provided to individuals who are blind.

(Authority: 29 U.S.C. 796c(c))

Sec. 364.23 What are the staffing requirements?

(a) General staffing requirement. The State plan must assure that

the staff of the service provider includes personnel who are

specialists in the development and provision of IL services and in the

development and support of centers.

(b) Special communication needs staffing. The State plan must also

assure that, to the maximum extent feasible, the service provider makes

available personnel able to communicate--

(1) With individuals with significant disabilities who rely on

special modes of communication, such as manual communication, nonverbal

communication devices, Braille, or audio tapes, and who apply for or

receive IL services under title VII of the Act; and

(2) In the native languages of individuals with significant

disabilities whose English proficiency is limited and who apply for or

receive IL services under title VII of the Act.

(Authority: 29 U.S.C. 711(c) and 796c(a)(1))

Sec. 364.24 What assurances are required for staff development?

The State plan must assure that the service provider establishes

and maintains a program of staff development for all classes of

positions involved in providing IL services and, if appropriate, in

administering the CIL program. The staff development program must

emphasize improving the skills of staff directly responsible for the

provision of IL services, including knowledge of the IL philosophy.

(Authority: 29 U.S.C. 711(c) and 796c(a)(1))

Sec. 364.25 What are the requirements for a statewide network of

centers for independent living?

(a) The State plan must include a design for the establishment of a

statewide network of centers that comply with the standards and

assurances in section 725(b) and (c) of the Act and subparts F and G of

34 CFR part 366.

(b) The design required by paragraph (a) of this section must

identify unserved and underserved areas and must provide an order of

priority for serving these areas.

(Authority: 29 U.S.C. 711(c) and 796c(g))

Sec. 364.26 What are the requirements for cooperation, coordination,

and working relationships?

(a) The State plan must include steps that will be taken to

maximize the cooperation, coordination, and working relationships

among--

(1) The SILS program, the SILC, and centers; and

(2) The DSU, other State agencies represented on the SILC, other

councils that address the needs of specific disability populations and

issues, and other public and private entities determined to be

appropriate by the SILC.

(b) The State plan must identify the entities to which the DSU and

the SILC will relate in carrying out the requirements of paragraph (a)

of this section.

(Authority: 29 U.S.C. 796c(i))

Sec. 364.27 What are the requirements for coordinating independent

living (IL) services?

The State plan must describe how IL services funded under chapter 1

of title VII of the Act will be coordinated with, and complement, other

services, to avoid unnecessary duplication with other Federal, State,

and local programs, including the OIB program authorized by chapter 2

of title VII of the Act, that provide IL- or VR-related services. This

description must include those services provided by State and local

agencies administering the special education, vocational education,

developmental disabilities services, public health, mental health,

housing, transportation, and veterans' programs, and the programs

authorized under titles XVIII through XX of the Social Security Act

within the State.

(Authority: 29 U.S.C. 796c(j) and 752(i)(2)(C))

Sec. 364.28 What requirements relate to IL services for older

individuals who are blind?

The State plan must include an assurance that the DSU will seek to

incorporate into and describe in the State plan any new methods or

approaches for the provision to older individuals who are blind of IL

services that are developed under a project funded under chapter 2 of

title VII of the Act and that the DSU determines to be effective.

(Authority: 29 U.S.C. 711(c), 796c(j), and 796k(h))

Sec. 364.29 What are the requirements for coordinating Federal and

State sources of funding?

(a) The State plan must describe efforts to coordinate Federal and

State funding for centers and IL services.

(b) The State plan must identify the amounts, sources, and purposes

of the funding to be coordinated under paragraph (a) of this section,

including the amount of State funds earmarked for the general operation

of centers.

(Authority: 29 U.S.C. 796c(k))

Cross-reference: See 34 CFR 366.30(a).

Sec. 364.30 What notice must be given about the Client Assistance

Program (CAP)?

The State plan must include satisfactory assurances that all

service providers will use formats that are accessible to notify

individuals seeking or receiving IL services under Chapter 1 of title

VII about--

(a) The availability of the CAP authorized by section 112 of the

Act;

(b) The purposes of the services provided under the CAP; and

(c) How to contact the CAP.

(Authority: 29 U.S.C. 718a and 796c(m)(1))

Sec. 364.31 What are the affirmative action requirements?

The State plan must include satisfactory assurances that all

recipients of financial assistance under parts B and C of chapter 1 of

title VII of the Act will take affirmative action to employ and advance

in employment qualified individuals with significant disabilities on

the same terms and conditions required with respect to the employment

of individuals with disabilities under section 503 of the Act.

(Authority: 29 U.S.C. 796c(m)(2))

Sec. 364.32 What are the requirements for outreach?

(a) With respect to IL services and centers funded under chapter 1

of title VII of the Act, the plan must include steps to be taken

regarding outreach to populations in the State that are unserved or

underserved by programs under title VII, including minority groups and

urban and rural populations.

(b) The State plan must identify the populations to be designated

for special outreach efforts under paragraph (a) of this section and

the geographic areas in which they reside.

(Authority: 29 U.S.C. 796c(l))

Sec. 364.33 What is required to meet minority needs?

The State plan must demonstrate how the State will address the

needs of individuals with significant disabilities from minority group

backgrounds.

(Authority: 29 U.S.C. 711(c), 718b(b), and 796c(l))

Sec. 364.34 What are the fiscal and accounting requirements?

In addition to complying with applicable EDGAR fiscal and

accounting requirements, the State plan must include satisfactory

assurances that all recipients of financial assistance under parts B

and C of chapter 1 of title VII of the Act will adopt those fiscal

control and fund accounting procedures as may be necessary to ensure

the proper disbursement of and accounting for those funds.

(Authority: 29 U.S.C. 796c(m)(3))

Sec. 364.35 What records must be maintained?

In addition to complying with applicable EDGAR recordkeeping

requirements, the State plan must include satisfactory assurances that

all recipients of financial assistance under parts B and C of chapter 1

of title VII of the Act will maintain--

(a) Records that fully disclose and document--

(1) The amount and disposition by the recipient of that financial

assistance;

(2) The total cost of the project or undertaking in connection with

which the financial assistance is given or used;

(3) The amount of that portion of the cost of the project or

undertaking supplied by other sources; and

(4) Compliance with the requirements of chapter 1 of title VII of

the Act and this part; and

(b) Other records that the Secretary determines to be appropriate

to facilitate an effective audit.

(Authority: 29 U.S.C. 796c(m)(4))

Sec. 364.36 What are the reporting requirements?

With respect to the records that are required by Sec. 364.35, the

State plan must include satisfactory assurances that all recipients of

financial assistance under parts B and C of Chapter 1 and under chapter

2 of title VII of the Act will submit reports that the Secretary

determines to be appropriate.

(Authority: 29 U.S.C. 796c(m)(4)(D))

Sec. 364.37 What access to records must be provided?

For the purpose of conducting audits, examinations, and compliance

reviews, the State plan must include satisfactory assurances that all

recipients of financial assistance under parts B and C of chapter 1 and

Chapter 2 of title VII of the Act will provide access to the Secretary

and the Comptroller General, or any of their duly authorized

representatives, to--

(a) The records maintained under Sec. 364.35;

(b) Any other books, documents, papers, and records of the

recipients that are pertinent to the financial assistance received

under chapter 1 of title VII of the Act; and

(c) All individual case records or files or consumer service

records of individuals served under 34 CFR parts 365, 366, or 367,

including names, addresses, photographs, and records of evaluation

included in those individual case records or files or consumer service

records.

(Authority: 29 U.S.C. 711(c) and 796c(m)(4)(c) and (5))

Sec. 364.38 What methods of evaluation must the State plan include?

The State plan must establish a method for the periodic evaluation

of the effectiveness of the plan in meeting the objectives established

in Sec. 364.42, including evaluation of satisfaction by individuals

with significant disabilities who have participated in the program.

(Authority: 29 U.S.C. 796c(n))

Sec. 364.39 What requirements apply to the administration of grants

under the Centers for Independent Living program?

In States in which State funding for centers equals or exceeds the

amount of funds allotted to the State under part C of title VII of the

Act, as determined pursuant to 34 CFR 366.29 and 366.31, and in which

the State elects to administer the CIL program as provided in section

723 of the Act, the State plan must include policies, practices, and

procedures that are consistent with section 723 of the Act to govern

the awarding of grants to centers and the oversight of these centers.

(Authority: 29 U.S.C. 796c(g) and (h), 796f-1(d), and 796f-2(d)).

Sec. 364.40 Who is eligible to receive IL services?

The State plan must assure that--

(a) Any individual with a significant disability, as defined in

Sec. 364.4(b), is eligible for IL services under the SILS and CIL

programs authorized under chapter 1 of title VII of the Act;

(b) Any individual may seek information about IL services under

these programs and request referral to other services and programs for

individuals with significant disabilities, as appropriate; and

(c) The determination of an individual's eligibility for IL

services under the SILS and CIL programs meets the requirements of

Sec. 364.51.

(Authority: 29 U.S.C. 706(15)(B) and 796b)

Sec. 364.41 What assurances must be included regarding eligibility?

(a) The State plan must assure that the service provider applies

eligibility requirements without regard to age, gender, race, creed,

color, national origin, or type of significant disability of the

individual applying for IL services.

(b) The State plan must assure that the service provider does not

impose any State or local residence requirement that excludes from IL

services under the plan any individual who is present in the State and

who is otherwise eligible for IL services.

(Authority: 29 U.S.C. 711(c) and 796c(a)(1))

Sec. 364.42 What objectives and information must be included in the

State plan?

(a) The State plan must specifically describe--

(1) The objectives to be achieved;

(2) The financial plan for the use of Federal and non-Federal funds

to meet these objectives; and

(3) How funds received under sections 711, 721, and 752 of the Act

will further these objectives.

(b) The objectives required by paragraph (a) of this section must

address--

(1) The overall goals and mission of the State's IL programs and

services;

(2) The various priorities for the types of services and

populations to be served; and

(3) The types of services to be provided.

(c) In developing the objectives required by paragraph (a) of this

section, the DSU and the SILC shall consider, and incorporate if

appropriate, the priorities and objectives established by centers

pursuant to section 725(c)(4) of the Act.

(d) The State plan must establish timeframes for the achievement of

the objectives required by paragraph (a) of this section.

(e) The State plan must explain how the objectives required by

paragraph (a) of this section are consistent with and further the

purpose of chapter 1 of title VII of the Act, as stated in section 701

of the Act and Sec. 364.2.

(Authority: 29 U.S.C. 796c(d))

Sec. 364.43 What requirements apply to the provision of State IL

services?

(a) The State plan must describe the extent and scope of IL

services to be provided under title VII of the Act to meet the

objectives stated in Sec. 364.42.

(b) The State plan must provide that the State directly, or through

grants or contracts, will provide IL services with Federal, State, or

other funds.

(c) IL services provided to individuals with significant

disabilities must be in accordance with an IL plan that meets the

requirements of Sec. 364.52 and that is mutually agreed upon by--

(1) An appropriate staff member of the service provider; and

(2) The individual, unless the individual signs a waiver stating

that an IL plan is unnecessary.

(d) If the State provides the IL services that it is required to

provide by paragraph (b) of this section through grants or contracts

with third parties, the State plan must describe these arrangements.

(e) If the State contracts with or awards a grant to a center for

the general operation of the center, the State shall delegate to the

center the determination of an individual's eligibility for services

from that center. If the State contracts with or awards a grant to a

third party to provide specific IL services, the State may choose to

delegate to the IL service provider the determination of eligibility

for these services and the development of an IL plan for individuals

who receive these services.

(Authority: 29 U.S.C. 711(c), 796c(e)-(f), and 796f-4(b)(2))

Cross-reference: See 34 CFR Part 365.

Subpart D--What Conditions Must Be Met After an Award?

Sec. 364.50 What requirements apply to the processing of referrals and

applications?

The service provider shall apply the standards and procedures

established by the DSU pursuant to 34 CFR 365.30 to ensure expeditious

and equitable handling of referrals and applications for IL services

from individuals with significant disabilities.

(Authority: 29 U.S.C. 711(c) and 796-796f-5)

Sec. 364.51 What requirements apply to determinations of eligibility

or ineligibility?

(a) Eligibility. (1) Before or at the same time as an applicant for

IL services may begin receiving IL services funded under this part, the

service provider shall determine the applicant's eligibility and

maintain documentation that the applicant has met the basic

requirements specified in Sec. 364.40.

(2) The documentation must be dated and signed by an appropriate

staff member of the service provider.

(b) Ineligibility. (1) If a determination is made that an applicant

for IL services is not an individual with a significant disability, the

service provider shall provide documentation of the ineligibility

determination that is dated and signed by an appropriate staff member.

(2)(i) The service provider may determine an applicant to be

ineligible for IL services only after full consultation with the

applicant or, if the applicant chooses, the applicant's parent,

guardian, or other legally authorized advocate or representative, or

after providing a clear opportunity for this consultation.

(ii) The service provider shall notify the applicant in writing of

the action taken and inform the applicant or, if the applicant chooses,

the applicant's parent, guardian, or other legally authorized advocate

or representative, of the applicant's rights and the means by which the

applicant may appeal the action taken.

(Cross-reference: See Sec. 364.58(a).)

(iii) The service provider shall provide a detailed explanation of

the availability and purposes of the client assistance program

established within the State under section 112 of the Act, including

information on how to contact the program.

(iv) If appropriate, the service provider shall refer the applicant

to other agencies and facilities, including the State's VR program

under 34 CFR part 361.

(c) Review of ineligibility determination. (1) If an applicant for

IL services has been found ineligible, the service provider shall

review the applicant's current status no later than 12 months after the

determination has been made.

(2) The review need not be conducted in situations where the

applicant has refused the review, the applicant is no longer present in

the State, or the applicant's whereabouts are unknown.

(Authority: 29 U.S.C. 711(c) and 796c(e))

Sec. 364.52 What are the requirements for an IL plan?

(a) General. (1) Unless the individual who is to be provided IL

services under this part signs a waiver in accordance with paragraph

(a)(2) of this section, the service provider, in collaboration with the

individual with a significant disability, shall develop and

periodically review an IL plan for the individual in accordance with

the requirements in Sec. 364.43(c) and paragraphs (b) through (e) of

this section.

(2) The requirements of this section with respect to an IL plan do

not apply if the individual signs a waiver stating that an IL plan is

unnecessary.

(3) Subject to paragraph (a)(2) of this section, the service

provider shall provide each IL service in accordance with the IL plan.

(b) Initiation and development of an IL plan. (1) Development of an

individual's IL plan must be initiated after documentation of

eligibility under Sec. 364.51(a) and must indicate the goals or

objectives established, the services to be provided, and the

anticipated duration of the service program and each component service.

(2) The IL plan must be developed jointly and signed by the

appropriate staff member of the service provider and the individual

with a significant disability or, if consistent with State law and the

individual chooses, the individual's guardian, parent, or other legally

authorized advocate or representative.

(3) A copy of the IL plan, and any amendments, must be provided to

the individual with a significant disability or, if consistent with

State law and the individual chooses, the individual's guardian,

parent, or other legally authorized advocate or representative.

(c) Review. (1) The IL plan must be reviewed as often as necessary

but at least on an annual basis to determine whether services should be

continued, modified, or discontinued, or whether the individual should

be referred to a program of VR services under 34 CFR part 361 or to any

other program of assistance.

(2) Each individual with a significant disability or, if consistent

with State law and the individual chooses, the individual's guardian,

parent, or other legally authorized advocate or representative, must be

given an opportunity to review the IL plan and, if necessary, jointly

redevelop and agree by signature to its terms.

(d) Coordination with vocational rehabilitation, developmental

disabilities, and special education programs. The development of the IL

plan and the provision of IL services must be coordinated to the

maximum extent possible with any individualized--

(1) Written rehabilitation program for VR services for that

individual;

(2) Habilitation program for the individual prepared under the

Developmental Disabilities Assistance and Bill of Rights Act; and

(3) Education program for the individual prepared under part B of

the Individuals with Disabilities Education Act.

(e) Termination of services. If the service provider intends to

terminate services to an individual receiving IL services under an IL

plan, the service provider shall follow the procedures in

Sec. 364.51(b)(2)(ii) through (iv) and (c).

(Authority: 29 U.S.C. 711(c) and 796c(e))

Sec. 364.53 What records must be maintained for the individual?

For each applicant for IL services and for each individual

receiving IL services, the service provider shall maintain a consumer

service record that includes--

(a) Documentation concerning eligibility or ineligibility for

services;

(b) The services requested by the consumer;

(c) Either the IL plan developed with the consumer or a waiver

signed by the consumer stating that an IL plan is unnecessary;

(d) The services actually provided to the consumer; and

(e) The IL goals or objectives--

(1) Established with the consumer, whether or not in the consumer's

IL plan; and

(2) Achieved by the consumer.

(Authority: 29 U.S.C. 711(c), 712 and 796c(m)(4)(B))

Sec. 364.54 What are the durational limitations on IL services?

The service provider may not impose any uniform durational

limitations on the provision of IL services, except as otherwise

provided by Federal law or regulation.

(Authority: 29 U.S.C. 711(c) and 796-796f-5)

Sec. 364.55 What standards shall service providers meet?

In providing IL services to individuals with significant

disabilities, service providers shall comply with--

(a) The written standards for IL service providers established by

the DSU pursuant to 34 CFR 365.31; and

(b) All applicable State or Federal licensure or certification

requirements.

(Authority: 29 U.S.C. 711(c) and 796-796f-5)

Sec. 364.56 What are the special requirements pertaining to the

protection, use, and release of personal information?

(a) General provisions. The State plan must assure that each

service provider will adopt and implement policies and procedures to

safeguard the confidentiality of all personal information, including

photographs and lists of names. These policies and procedures must

assure that--

(1) Specific safeguards protect current and stored personal

information;

(2) All applicants for, or recipients of, IL services and, as

appropriate, those individuals' legally authorized representatives,

service providers, cooperating agencies, and interested persons are

informed of the confidentiality of personal information and the

conditions for gaining access to and releasing this information;

(3) All applicants or their legally authorized representatives are

informed about the service provider's need to collect personal

information and the policies governing its use, including--

(i) Identification of the authority under which information is

collected;

(ii) Explanation of the principal purposes for which the service

provider intends to use or release the information;

(iii) Explanation of whether providing requested information to the

service provider is mandatory or voluntary and the effects to the

individual of not providing requested information;

(iv) Identification of those situations in which the service

provider requires or does not require informed written consent of the

individual or his or her legally authorized representative before

information may be released; and

(v) Identification of other agencies to which information is

routinely released;

(4) Persons who are unable to communicate in English or who rely on

special modes of communication must be provided an explanation of

service provider policies and procedures affecting personal information

through methods that can be adequately understood by them;

(5) At least the same protections are provided to individuals with

significant disabilities as provided by State laws and regulations; and

(6) Access to records is governed by rules established by the

service provider and any fees charged for copies of records are

reasonable and cover only extraordinary costs of duplication or making

extensive searches.

(b) Service provider use. All personal information in the

possession of the service provider may be used only for the purposes

directly connected with the provision of IL services and the

administration of the IL program under which IL services are provided.

Information containing identifiable personal information may not be

shared with advisory or other bodies that do not have official

responsibility for the provision of IL services or the administration

of the IL program under which IL services are provided. In the

provision of IL services or the administration of the IL program under

which IL services are provided, the service provider may obtain

personal information from other 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 recipients of IL services. (1) Except as provided in

paragraphs (c)(2) and (c)(3) of this section, if requested in writing

by a recipient of IL services, the service provider shall release all

information in that individual's record of services to the individual

or the individual's legally authorized representative in a timely

manner.

(2) Medical, psychological, or other information that the service

provider determines may be harmful to the individual may not be

released directly to the individual, but must be provided through a

qualified medical or psychological professional or the individual's

legally authorized 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.

(d) Release for audit, evaluation, and research. Personal

information may be released to an organization, agency, or individual

engaged in audit, evaluation, or research activities only for purposes

directly connected with the administration of an IL program, or for

purposes that would significantly improve the quality of life for

individuals with significant disabilities and only if the organization,

agency, or individual assures that--

(1) The information will be used only for the purposes for which it

is being provided;

(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 personally identifying

information without the informed written consent of the involved

individual or the individual's legally authorized representative.

(e) Release to other programs or authorities. (1) Upon receiving

the informed written consent of the individual or, if appropriate, the

individual's legally authorized representative, the service provider

may release personal information to another agency or organization for

the latter's program purposes only to the extent that the information

may be released to the involved individual and only to the extent that

the other agency or organization demonstrates that the information

requested is necessary for the proper administration of its program.

(2) Medical or psychological information that the service provider

determines may be harmful to the individual may be released if the

other agency or organization assures the service provider that the

information will be used only for the purpose for which it is being

provided and will not be further released to the individual.

(3) The service provider shall release personal information if

required by Federal laws or regulations.

(4) The service provider shall 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 judicial order.

(5) The service provider also may release personal information to

protect the individual or others if the individual poses a threat to

his or her safety or to the safety of others.

(Authority: 29 U.S.C. 711(c))

Sec. 364.57 What functions and responsibilities may the State

delegate?

A DSU may carry out the functions and responsibilities described in

Secs. 364.50, 364.51 (subject to Sec. 364.43(d)), 364.52, 364.53, and

364.56 or, except as otherwise provided, may delegate these functions

and responsibilities to the appropriate service provider with which the

DSU subgrants or contracts to provide IL services.

(Authority: 29 U.S.C. 711(c), 796c(f) and 796e-2)

Sec. 364.58 What appeal procedures must be available to consumers?

Each service provider shall--

(a) Establish policies and procedures that an individual may use to

obtain review of decisions made by the service provider concerning the

individual's request for IL services or the provision of IL services to

the individual; and

(b) Use formats that are accessible to inform each individual who

seeks or is receiving IL services from the service provider about the

procedures required by paragraph (a) of this section.

(Authority: 29 U.S.C. 711(c))

Sec. 364.59 May the financial need of an individual be considered to

determine his or her participation in the costs of IL services?

(a) No Federal requirement. There is no Federal requirement that

the financial need of an individual eligible for IL services be

considered in the provision of IL services.

(b) State plan requirements. The State plan must--

(1) Specify the types of IL services for which a financial need

test may be applied; and

(2) Assure that any consideration of financial need is applied

uniformly so that all individuals who are eligible for IL services are

treated equally.

(c) Financial need. Consistent with paragraph (b) of this section,

a service provider may choose to consider the financial need of an

individual who is eligible for IL services.

(d) Written policies and documentation. If the service provider

chooses to consider financial need--

(1) It shall maintain written policies covering the specific types

of IL services for which a financial need test will be applied; and

(2) It shall document the individual's participation in the cost of

any IL services, including financial need information.

(Authority: 29 U.S.C. 711(c))

PART 365--STATE INDEPENDENT LIVING SERVICES

Subpart A--General

Sec.

365.1 What is the State Independent Living Services (SILS) program?

365.2 Who is eligible for an award?

365.3 What regulations apply?

Subpart B--How Does the Secretary Make a Grant to a State?

365.10 How does a State apply for a grant?

365.11 How is the allotment of Federal funds for State independent

living (IL) services computed?

365.12 How are payments from allotments for IL services made?

365.13 What requirements apply if the State's non-Federal share s

in cash?

365.14 What conditions relating to cash or in-kind contributions

apply to awards to grantees, subgrantees, or contractors?

365.15 What requirements apply if the State's non-Federal share is

in kind?

365.16 What requirements apply to refunds and rebates?

Subpart C--For What Purpose Are Funds Authorized or Required To Be

Used?

365.20 What are the authorized uses of funds?

365.21 What funds may the State use to provide the IL core

services?

365.22 What additional IL services may the State provide?

365.23 How does a State make a subgrant or enter into a contract?

Subpart D--What Conditions Must Be Met After an Award?

365.30 What are the standards for processing referrals and

applications?

365.31 What are the standards for service providers?

Authority: 29 U.S.C. 796e-796e-2, unless otherwise noted.

Subpart A--General

Sec. 365.1 What is the State Independent Living Services (SILS)

program?

The Secretary provides financial assistance to States under the

SILS program authorized by part B of chapter 1 of title VII of the Act

to--

(a) Provide the resources described in the resource plan required

by section 705(e) of the Act and 34 CFR 364.21(d) relating to the

Statewide IL Council (SILC);

(b) Provide to individuals with significant disabilities the

independent living (IL) services required by section 704(e) of the Act;

(c) Demonstrate ways to expand and improve IL services;

(d) Support the operation of centers for independent living

(centers) that are in compliance with the standards and assurances in

section 725(b) and (c) of the Act and subparts F and G of 34 CFR part

366;

(e) Support activities to increase the capacities of public or

nonprofit agencies and organizations and other entities to develop

comprehensive approaches or systems for providing IL services;

(f) Conduct studies and analyses, gather information, develop model

policies and procedures, and present information, approaches,

strategies, findings, conclusions, and recommendations to Federal,

State, and local policy makers in order to enhance IL services for

individuals with significant disabilities;

(g) Train individuals with significant disabilities, individuals

with disabilities, individuals providing services to individuals with

significant disabilities, and other persons regarding the IL

philosophy; and

(h) Provide outreach to populations that are unserved or

underserved by programs under Title VII of the Act, including minority

groups and urban and rural populations.

(Authority: 29 U.S.C. 796e)

Sec. 365.2 Who is eligible for an award?

Any designated State unit (DSU) identified by the State pursuant to

34 CFR 364.22 is eligible to apply for assistance under this part in

accordance with 34 CFR 364.10 and 364.11.

(Authority: 29 U.S.C. 796c(a) (1) and (c) and 796e(a))

Sec. 365.3 What regulations apply?

The following regulations apply to this part:

(a) The regulations in 34 CFR part 364.

(b) The regulations in this part 365.

(Authority: 29 U.S.C. 711(c) and 796e)

Subpart B--How Does the Secretary Make a Grant to a State?

Sec. 365.10 How does a State apply for a grant?

To receive a grant under this part, a State shall submit to the

Secretary and obtain approval of a State plan that meets the

requirements of part A of title VII of the Act and subparts B and C of

34 CFR part 364.

(Authority: 29 U.S.C. 796c(a)(1) and (c) and 796e(a))

Sec. 365.11 How is the allotment of Federal funds for State

independent living (IL) services computed?

(a) The allotment of Federal funds for State IL services for each

State is computed in accordance with the requirements of section

711(a)(1) of the Act.

(b) The allotment of Federal funds for Guam, American Samoa, the

United States Virgin Islands, the Commonwealth of the Northern Mariana

Islands, and the Republic of Palau is computed in accordance with

section 711(a)(2) of the Act.

(c) If the State plan designates, pursuant to Sec. 364.22(c), a

unit to administer the part of the plan under which State IL services

are provided for individuals who are blind and a separate or different

unit to administer the rest of the plan, the division of the State's

allotment between these two units is a matter for State determination.

(Authority: 29 U.S.C. 711(c) and 796e(a))

Sec. 365.12 How are payments from allotments for IL services made?

(a) From the allotment of a State for a fiscal year under

Sec. 365.11, the Secretary pays to the State the Federal share of the

expenditures incurred by the State during the year in accordance with

the State plan approved under section 706 of the Act. After any

necessary adjustments resulting from previously made overpayments or

underpayments, the payments may be made in advance or by reimbursement,

in installments, and on conditions that the Secretary may determine.

(b)(1) The Federal share with respect to any State for any fiscal

year is 90 percent of the expenditures incurred by the State during

that fiscal year under its State plan approved under section 706 of the

Act.

(2) The non-Federal share of the cost of any project that receives

assistance through an allotment under this part may be provided in cash

or in kind, fairly evaluated, including plant, equipment, or services.

(Authority: U.S.C. 796e-1)

Sec. 365.13 What requirements apply if the State's non-Federal share

is in cash?

(a) Except as further limited by paragraph (b) of this section,

expenditures that meet the requirements of 34 CFR 80.24(a) through

(b)(6) may be used to meet the non-Federal share matching requirement

under section 712(b) of the Act if--

(1) The expenditures are made with funds made available by

appropriation directly to the designated State agency or with funds

made available by allotment or transfer from any other unit of State or

local government;

(2) The expenditures are made with cash contributions from a donor

that are deposited in the account of the designated State agency in

accordance with State law for expenditure by, and at the sole

discretion of, the DSU for activities identified or described in the

State plan and authorized by Sec. 365.20; or

(3) The expenditures are made with cash contributions from a donor

that are earmarked for meeting the State's share for--

(i) Providing particular services (e.g., personal assistance

services);

(ii) Serving individuals with certain types of disabilities (e.g.,

older individuals who are blind);

(iii) Providing services to special groups that State or Federal

law permits to be targeted for services (e.g., children of migrant

laborers); or

(iv) Carrying out particular types of administrative activities

permissible under State law.

(b) Cash contributions are permissible under paragraph (a)(3) of

this section only if the cash contributions are not used for

expenditures that benefit or will benefit in any way the donor, an

individual to whom the donor is related by blood or marriage or with

whom the donor has a close personal relationship, or an individual,

entity, or organization with whom the donor shares a financial

interest.

(c) The receipt of a grant, subgrant, or contract under section 713

of the Act or a grant, subgrant, or assistance contract under section

723 of the Act from the DSU is not considered a benefit to the donor of

a cash contribution for purposes of paragraph (b) of this section if

the grant, subgrant, or contract was awarded under the State's regular

competitive procedures.

(d) For purposes of this section, a donor may be a private agency,

a profit-making or nonprofit organization, or an individual.

(Authority: 29 U.S.C. 711(c) and 796e-1(b))

Sec. 365.14 What conditions relating to cash or in-kind contributions

apply to awards to grantees, subgrantees, or contractors?

(a) A State may not condition the award of a grant, subgrant, or

contract under section 713 of the Act or a grant, subgrant, or

assistance contract under section 723 of the Act on the requirement

that the applicant for the grant or subgrant make a cash or in-kind

contribution of any particular amount or value to the State.

(b) An individual, entity, or organization that is a grantee or

subgrantee of the State, or has a contract with the State, may not

condition the award of a subgrant or subcontract under section 713 of

the Act or section 723 of the Act on the requirement that the applicant

for the subgrant or subcontract make a cash or in-kind contribution of

any particular amount or value to the State or to the grantee or

contractor of the State.

(Authority: 29 U.S.C. 711(c) and 796e-1(b))

Sec. 365.15 What requirements apply if the State's non-Federal share

is in kind?

Subject to Sec. 365.14, in-kind contributions may be--

(a) Used to meet the matching requirement under section 712(b) of

the Act if the in-kind contributions meet the requirements of 34 CFR

80.24(b)(7) through (g) and if the in-kind contributions would be

considered allowable costs under this part, as determined by the cost

principles made applicable by either subpart Q of 34 CFR part 74 or 34

CFR 80.22, as appropriate; and

(b) Made to the program or project by the State or by a third party

(i.e., an individual, entity, or organization, whether local, public,

private, for profit, or nonprofit), including a third party that is a

grantee, subgrantee, or contractor that is receiving or will receive

assistance under sections 713 or 723 of the Act.

(Authority: 29 U.S.C. 711(c) and 796e-1(b))

Sec. 365.16 What requirements apply to refunds and rebates?

The following must be treated as a reduction of expenditures

charged to the grant, subgrant, or contract awarded under this part and

may not be used for meeting the State's matching requirement under

section 712(b) of the Act:

(a) Rebates, deductions, refunds, discounts, or reductions to the

price of goods, products, equipment, rental property, real property, or

services.

(b) Premiums, bonuses, gifts, and any other payments related to the

purchase of goods, products, equipment, rental property, real property,

or services.

(Authority: 29 U.S.C. 711(c), 796e-1(b), and OMB Circulars A-87 and

A-122)

Subpart C--For What Purpose Are Funds Authorized or Required To Be

Used?

Sec. 365.20 What are the authorized uses of funds?

The State may use funds received under this part to support the

activities listed in Sec. 365.1 and to meet its obligation under

section 704(e) of the Act and 34 CFR 364.43(b).

(Authority: 29 U.S.C. 796e-2)

Sec. 365.21 What funds may the State use to provide the IL core

services?

(a) In providing IL services as required under section 704(e) of

the Act and 34 CFR 364.43(b), a State may use funds provided under this

part to provide directly, or through grants or contracts, the following

IL core services:

(1) Information and referral services.

(2) IL skills training.

(3) Peer counseling, including cross-disability peer counseling.

(4) Individual and systems advocacy.

(b) Information and referral services may be provided independently

of the other services described in paragraph (a) of this section and

without regard to subpart G of 34 CFR part 366.

(Authority: 29 U.S.C. 711(c) and 796c(e))

Sec. 365.22 What additional IL services may the State provide?

In addition to IL core services that the State is required to

provide under section 704(e) of the Act and 34 CFR 364.43(b), the State

may use funds received under part B of Chapter 1 of title VII of the

Act to provide the IL services defined in 34 CFR 364.4 (Independent

living services).

(Authority: 29 U.S.C. 796e-2(1))

Sec. 365.23 How does a State make a subgrant or enter into a contract?

If a State makes a subgrant or enters into a contract to provide IL

services to meet its obligation under section 704(e) of the Act--

(a) The provisions of this part apply to both the State and the

entity or individual to whom it awards a subgrant or with whom it

enters into a contract; and

(b) The provisions concerning the administration of subgrants and

contracts in 34 CFR parts 76 and 80 apply to the State.

(Authority: 29 U.S.C. 711(c), 796c(f), and 796e-2)

Cross-reference: See 34 CFR parts 74, 76, and 80.

Subpart D--What Conditions Must Be Met After an Award?

Sec. 365.30 What are the standards for processing referrals and

applications?

The DSU shall develop, establish, and maintain written standards

and procedures to be applied by the service provider to assure

expeditious and equitable handling of referrals and applications for IL

services from individuals with significant disabilities.

(Authority: 29 U.S.C. 711(c) and 796e)

Sec. 365.31 What are the standards for service providers?

(a) The DSU shall develop, establish, make available to the public,

maintain, and implement written minimum standards for the provision of

IL services to be met by providers that do not meet the standards and

assurances in section 725 of the Act and subparts F and G of 34 CFR

part 366 and that are used by the DSU to provide IL services to

individuals with significant disabilities.

(b) The DSU shall assure that participating service providers meet

all applicable State licensure or certification requirements.

(Authority: 29 U.S.C. 711(c))

PART 366--CENTERS FOR INDEPENDENT LIVING

Subpart A--General

Sec.

366.1 What is the Centers for Independent Living (CIL) program?

366.2 What agencies are eligible for assistance under the CIL

program?

366.3 What activities may the Secretary fund?

366.4 What regulations apply?

366.5 How are program funds allotted?

Subpart B--Training and Technical Assistance

366.10 What agencies are eligible for assistance to provide

training and technical assistance?

366.11 What financial assistance does the Secretary provide for

training and technical assistance?

366.12 How does the Secretary make an award?

366.13 How does the Secretary determine funding priorities?

366.14 How does the Secretary evaluate an application?

366.15 What selection criteria does the Secretary use?

Subpart C--Grants to Centers for Independent Living (Centers) in States

in Which Federal Funding Exceeds State Funding

366.20 When does the Secretary award grants to centers?

366.21 What are the application requirements for existing eligible

agencies?

366.22 What is the order of priorities?

366.23 What grants must be made to existing eligible agencies?

366.24 How is an award made to a new center?

366.25 What additional factor does the Secretary use in making a

grant for a new center under Sec. 366.24?

366.26 How does the Secretary evaluate an application?

366.27 What selection criteria does the Secretary use?

366.28 Under what circumstances may the Secretary award a grant to

a center in one State to serve individuals in another State?

Subpart D--Grants to Centers in States in Which State Funding Equals or

Exceeds Federal Funding

Determining Whether State Funding Equals or Exceeds Federal Funding

366.29 When may the Director of the designated State unit (DSU)

award grants to centers?

366.30 What are earmarked funds?

366.31 What happens if the amount of earmarked funds does not equal

or exceed the amount of Federal funds for a preceding fiscal year?

Awarding Grants

366.32 Under what circumstances may the DSU make grants?

366.33 What are the application requirements for existing eligible

agencies?

366.34 What is the order of priorities?

366.35 What grants must be made to existing eligible agencies?

366.36 How is an award made to a new center?

366.37 What procedures does the Director of the DSU (Director) use

in making a grant for a new center?

366.38 What are the procedures for review of centers?

Subpart E--Enforcement and Appeals Procedures

366.39 What procedures does the Secretary use for enforcement?

366.40 How does the Director initiate enforcement procedures?

366.41 What must be included in an initial written notice from the

Director?

366.42 When does a Director issue a final written decision?

366.43 What must be included in the Director's final written

decision?

366.44 How does a center appeal a decision included in a Director's

initial written notice or a Director's final written decision?

366.45 What must a Director do upon receipt of a copy of a center's

formal written appeal to the Secretary?

366.46 How does the Secretary review a center's appeal of a

decision included in a Director's initial written notice or a

Director's final written decision?

Subpart F--Assurances for Centers

366.50 What assurances shall a center provide and comply with?

Authority: 29 U.S.C. 796f through 796f-5, unless otherwise

noted.

Subpart A--General

Sec. 366.1 What is the Centers for Independent Living (CIL) program?

The CIL program provides financial assistance for planning,

conducting, administering, and evaluating centers for independent

living (centers) that comply with the standards and assurances in

section 725 (b) and (c) of the Act, consistent with the design included

in the State plan pursuant to 34 CFR 364.25 for establishing a

statewide network of centers.

(Authority: 29 U.S.C. 796f, 796f-1(a)(2), and 796f-2(a)(1)(A)(ii))

Sec. 366.2 What agencies are eligible for assistance under the CIL

program?

(a) In any State in which the Secretary has approved the State plan

required by section 704 of the Act, an applicant may receive a grant

under subparts C or D of this part, as applicable, if the applicant

demonstrates in its application submitted pursuant to Sec. 366.21,

366.24, 366.33, 366.35, or 366.36 that it--

(1) Has the power and authority to--

(i) Carry out the purpose of part C of title VII of the Act and

perform the functions listed in section 725 (b) and (c) of the Act and

subparts F and G of this part within a community; and

(ii) Receive and administer--

(A) Funds under this part;

(B) Funds and contributions from private or public sources that may

be used in support of a center; and

(C) Funds from other public and private programs; and

(2) Is able to plan, conduct, administer, and evaluate a center

consistent with the standards and assurances in section 725 (b) and (c)

of the Act and subparts F and G of this part.

(b) An applicant is eligible to apply as a new center if it--

(1) Has never received funds under part C of chapter 1 of title VII

of the Act;

(2) Proposes the expansion of an existing center through the

establishment of a separate and complete facility at a different

geographical location; or

(3) Receives assistance under part B of chapter 1 of title VII of

the Act (or received assistance under part A of title VII of the Act as

in effect on October 28, 1992) for a fiscal year for the general

operation of a center; and

(4) Meets the requirements of Sec. 366.24;

(c) A State that received assistance in fiscal year (FY) 1993 to

directly operate a center in accordance with section 724(a) of the Act

is eligible to continue to receive assistance under this part to

directly operate that center for FY 1994 or a succeeding fiscal year

if, for the fiscal year for which assistance is sought--

(1) No nonprofit private agency submits and obtains approval of an

acceptable application under sections 722 or 723 of the Act or

Sec. 366.21 or Sec. 366.24 to operate a center for that fiscal year

before a date specified by the Secretary; or

(2) After funding all applications so submitted and approved, the

Secretary determines that funds remain available to provide that

assistance.

(d) Except for the requirement that the center be a private

nonprofit agency, a center that is operated by a State that receives

assistance under paragraph (a), (b), or (c) of this section shall

comply with all of the requirements of Part C of title VII of the Act

and the requirements in subparts C or D, as applicable, and F of this

part.

(e) Eligibility requirements for assistance under Subpart B of this

part are described in Sec. 366.10.

(Authority: 29 U.S.C. 711(c), 796f-1(b) and (d)(3), 796f-2(b), and

796f-3(a)(2) and (b))

Sec. 366.3 What activities may the Secretary fund?

(a) An eligible agency may use funds awarded under subpart B of

this part to carry out activities described in Sec. 366.11(b).

(b) An eligible agency may use funds awarded under subparts C and D

of this part to--

(1) Plan, conduct, administer, and evaluate centers that comply

with the standards and assurances in section 725(b) and (c) of the Act;

(2) Promote and practice the independent living (IL) philosophy in

accordance with Evaluation Standard 1 (``Philosophy'');

(3) Provide IL services (including IL core services and, as

appropriate, a combination of any other IL services specified in

section 7(30)(B) of the Act) to individuals with a range of significant

disabilities in accordance with Evaluation Standards 2 and 5

(``Provision of services'' and ``Independent living core services,''

respectively);

(4) Facilitate the development and achievement of IL goals selected

by individuals with significant disabilities who seek assistance from

the center in accordance with Evaluation Standard 3 (``Independent

living goals'');

(5) Increase the availability and improve the quality of community

options for independent living in order to facilitate the development

and achievement of IL goals by individuals with significant

disabilities in accordance with Evaluation Standard 4 (``Community

options'');

(6) Increase the capacity of communities within the service area of

the center to meet the needs of individuals with significant

disabilities in accordance with Evaluation Standard 6 (``Activities to

increase community capacity'');

(7) Conduct resource development activities to obtain funding from

sources other than chapter 1 of title VII of the Act in accordance with

Evaluation Standard 7 (Resource development activities); and

(8) Conduct activities necessary to comply with the assurances in

section 725(c) of the Act, including, but not limited to the following:

(i) Aggressive outreach regarding services provided through the

center in an effort to reach populations of individuals with

significant disabilities that are unserved or underserved by programs

under title VII of the Act, especially minority groups and urban and

rural populations.

(ii) Training for center staff on how to serve unserved and

underserved populations, including minority groups and urban and rural

populations.

(Authority: 29 U.S.C. 796f through 796f-4)

(Cross-reference: See Sec. 366.71 in Subpart G.)

Sec. 366.4 What regulations apply?

The following regulations apply to the CIL program:

(a) The regulations in 34 CFR part 364.

(b) The regulations in this part 366.

(Authority: 29 U.S.C. 711(c) and 796f-796f-5)

Sec. 366.5 How are program funds allotted?

(a) The Secretary allots Federal funds appropriated for FY 1994 and

subsequent fiscal years for the CIL program to each State in accordance

with the requirements of section 721 of the Act.

(b)(1) After the Secretary makes the reservation required by

section 721(b) of the Act, the Secretary makes an allotment, from the

remainder of the amount appropriated for a fiscal year to carry out

Part C of Title VII of the Act, to each State whose State plan has been

approved under section 706 of the Act and 34 CFR part 364.

(2) The Secretary makes the allotment under paragraph (b)(1) of

this section subject to sections 721(c)(1)(B) and (C), 721(c)(2) and

(3), and 721(d) of the Act.

(Authority: 29 U.S.C. 796f)

Subpart B--Training and Technical Assistance

Sec. 366.10 What agencies are eligible for assistance to provide

training and technical assistance?

Entities that have experience in the operation of centers are

eligible to apply

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