The State Vocational Rehabilitation Services Program

SUMMARY: The Secretary amends the regulations governing The State

Vocational Rehabilitation Services Program. These amendments are needed

to implement changes to the Rehabilitation Act of 1973 (Act) made by

the Rehabilitation Act Amendments of 1992, enacted on October 29, 1992,

as amended by the 1993 technical amendments (hereinafter collectively

referred to as the 1992 Amendments).

EFFECTIVE DATE: These regulations take effect March 13, 1997.

FOR FURTHER INFORMATION CONTACT: Beverlee Stafford, U.S. Department of

Education, 600 Independence Avenue, SW., Room 3014, Mary E. Switzer

Building, Washington, DC. 20202-2531. Telephone (202) 205-8831.

Individuals who use a telecommunications device for the deaf (TDD) may

call (202) 205-5538.

SUPPLEMENTARY INFORMATION: The State Vocational Rehabilitation Services

Program (program) is authorized by Title I of the Act (29 U.S.C. 701-

744). This program provides support to each State to assist it in

operating a comprehensive, coordinated, effective, efficient, and

accountable State program to assess, plan, develop, and provide

vocational rehabilitation (VR) services to individuals with

disabilities so that those individuals may prepare for and engage in

gainful employment, consistent with their strengths, resources,

priorities, concerns, abilities, capabilities, and informed choice.

On December 15, 1995, the Secretary published a notice of proposed

rulemaking (NPRM) for this program in the Federal Register (60 FR

64476).

Additionally, pursuant to Executive Order 12866, which encourages

Federal agencies to facilitate meaningful participation in the

regulatory development process, the Rehabilitation Services

Administration (RSA) made available draft proposed regulations (draft

regulations) in accessible formats, including an electronic format, to

a broad spectrum of parties for informal review and comment prior to

publishing the December 15, 1995 NPRM. RSA also gathered public input

on the draft regulations through public meetings and focus groups and

analyzed over 600 letters of comments on the draft regulations.

These final regulations implement changes made to the program by

the 1992 Amendments with the exception of the evaluation standards and

performance indicator requirements in section 106 of the Act, which are

being implemented in a separate rulemaking document, and incorporate

some of the burden-reducing changes previously proposed in an NPRM for

this program that was published on July 3, 1991 (56 FR 30620) (1991

NPRM). The 1991 NPRM was not finalized at the request of Congress.

These regulations also implement changes that the Secretary believes

are important to update, consolidate, clarify, and in other ways

improve the regulations for this program.

The Supplementary Information section to the NPRM includes a

discussion of the major changes to Title I of the Act made by the 1992

Amendments. These changes have far-reaching implications for the

program. Individuals are encouraged to refer to the NPRM (60 FR 64476-

64477) for a discussion of the major themes associated with the 1992

Amendments.

These final regulations contain a limited number of significant

changes to the proposed regulations based on public comment and

interdepartmental review. A detailed description of these changes

follows. In addition, the final regulations have been reviewed and

revised in accordance with the Department's Principles for Regulating,

which were developed as part of the Administration's regulatory

reinvention initiative under the National Performance Review II. The

principles are designed to ensure that the Department regulates in the

most flexible, most equitable, and least burdensome way possible.

The Secretary also notes that the changes to supported employment

definitions included in these final regulations affect those

definitions in 34 CFR parts 363, 376, and 380. Corresponding regulatory

changes to those parts follow the final regulations amending 34 CFR

part 361.

Goals 2000: Educate America Act

The Goals 2000: Educate America Act (Goals 2000) focuses the

Nation's education reform efforts on the eight National Education Goals

and provides a framework for meeting them. Goals 2000 promotes new

partnerships to strengthen schools and expands the Department's

capacities for helping communities to exchange ideas and obtain

information needed to achieve the goals.

These regulations address the National Education Goal that every

adult American, including individuals with disabilities, will possess

the knowledge and skills necessary to compete in a global economy and

exercise the rights and responsibilities of citizenship.

Executive Order 12866

These final 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 final regulations are those

resulting from statutory requirements and those determined by the

Secretary as necessary for administering this program effectively and

efficiently.

In assessing the potential costs and benefits--both quantitative

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

determined that the benefits of the final regulations justify the

costs.

The Secretary has also determined that this regulatory action does

not unduly interfere with State, local, and tribal governments in the

exercise of their governmental functions.

Summary of potential costs and benefits

The potential costs and benefits of these final regulations were

summarized in the preamble to the NPRM under the following headings:

Improved Organization of Regulations; Notes and Examples; Reduction of

Grantee Burden; Enhanced Protections for Individuals with Disabilities

(60 FR 64495); Increased Flexibility of Grantees to Satisfy Statutory

Requirements; and Additional Benefits (60 FR 64496). Additional

discussion of potential costs and benefits is included in the following

Analysis of Comments and Changes section of this preamble.

Analysis of Comments and Changes

In response to the Secretary's invitation in the NPRM, more than

400 parties submitted comments on the proposed regulations. RSA

gathered additional public input on the NPRM through a series of public

meetings. An analysis of the comments and of the changes in the

regulations since publication of the NPRM follows.

Major issues are grouped according to subject under appropriate

sections of the regulations. Other substantive issues are discussed

under the section of the regulations to which they pertain. Technical

and other minor changes--and suggested changes the Secretary is not

legally authorized to make under the

[[Page 6309]]

applicable statutory authority--generally are not addressed. However,

some suggested changes that the Secretary is not authorized to make

also raise important policy issues and, therefore, are discussed under

the appropriate section of the analysis.

References in the analysis of comments to the ``proposed

regulations'' refer to the regulatory provisions in the December 15,

1995 NPRM, whereas references to the ``draft regulations'' refer to

provisions in the draft proposed regulations that were circulated for

informal comment prior to publishing the NPRM.

Section 361.5(b) Applicable definitions

Administrative Costs Under the State Plan

Comments: Some commenters requested that this definition be revised

to specifically limit administrative costs to expenditures incurred by

the Designated State Unit (DSU) in administering the VR program. One

commenter recommended that the definition identify indirect costs as a

type of administrative cost. Finally, one commenter sought to exclude

costs incurred by DSUs in providing technical assistance to businesses

and industries from the definition on the basis that those costs

represent expenditures for the provision of services under

Sec. 361.49(a) of the proposed regulations.

Discussion: The Secretary agrees that administrative costs under

the VR State plan are those costs that the DSU incurs in administering

the VR program. While most indirect costs (those costs that cannot be

allocated to a single cost objective and that benefit more than one

program) are generally types of administrative expenditures, they need

not be limited to administrative expenditures. The Secretary does not

believe it is necessary to classify indirect costs in order to ensure

their allowability under the program. All indirect costs that are

approved under an indirect cost agreement or cost allocation plan are

allowable. The Secretary emphasizes that indirect costs related to

multiple State programs (e.g., operating expenses for State buildings

occupied by DSU staff and staff from other State-administered programs)

can be charged to the VR program only to the extent that the costs are

attributable to the VR program.

In addition, the Secretary agrees that although technical

assistance to businesses, in some cases, is considered an

administrative cost, any technical assistance provided by a DSU to a

business or industry that seeks to employ individuals with disabilities

and that is not subject to the Americans with Disabilities Act (ADA)

does not constitute an administrative cost. Technical assistance

provided under these circumstances is authorized by section 103(b)(5)

of the Act and Sec. 361.49(a)(4) of the regulations as a service for

groups of individuals with disabilities.

Changes: The Secretary has revised Sec. 361.5(b)(2) to clarify that

administrative costs are expenditures that are incurred by the DSU in

performing administrative functions related to the VR program. The

definition also has been amended to exclude technical assistance

provided to businesses and industries as a service under the conditions

in Sec. 361.49(a)(4).

Appropriate Modes of Communication

Comments: One commenter opposed defining ``appropriate modes of

communication'' as specialized media systems and devices that

facilitate communication on the basis that not all modes of

communication used by persons with disabilities are ``media systems and

devices.'' Several commenters requested that the definition identify

graphic presentations, simple language, and other modes of

communication used by individuals with cognitive impairments.

Discussion: The Secretary agrees that ``appropriate modes of

communication'' are not limited to specific systems, devices, or

equipment, as indicated by the proposed definition, and include any

type of aid or support needed by an individual with a disability to

communicate with others effectively. For example, the use of an

interpreter by a person who is deaf is an appropriate mode of

communication, but is not typically viewed as a system or device.

The Secretary believes it would be useful for the definition of

appropriate modes of communication to include examples of communication

methods used by individuals with cognitive impairments. However, the

Secretary emphasizes that the examples of communication services and

materials listed in the definition in the final regulations are not

all-inclusive and that other appropriate modes of communication not

specified in the definition are also available to address the

particular communication needs of an individual with a disability.

Changes: The Secretary has amended Sec. 361.5(b)(5) to clarify that

appropriate modes of communication include any aid or support that

enables an individual with a disability to comprehend and respond to

information being communicated. In addition, the definition has been

amended to include graphic presentations and simple language materials

as examples of modes of communication that may be appropriate for

individuals with cognitive impairments.

Assistive Technology Service

Comments: Some commenters asked that particular services be

identified in this definition as examples of permissible assistive

technology services. For instance, one commenter suggested that the

definition specifically identify modifications to vehicles used by

individuals with disabilities as an assistive technology service.

Discussion: The definition of the term ``assistive technology

service'' in both the proposed and final regulations tracks the

definition of that term in the Technology-Related Assistance for

Individuals with Disabilities Act of 1988 (Tech Act), as required by

section 7(24) of the Act. The Tech Act defines assistive technology

services generally to include any service that directly assists an

individual with a disability in the selection, acquisition, or use of

an assistive technology device. The definition in the regulations,

therefore, is intended to address the scope of service-related needs of

individuals who use assistive technology devices (e.g., the need to

acquire a particular device or the need to receive training on the

operation of a device) rather than to identify actual services that an

individual might receive. Nevertheless, the Secretary recognizes that

any modification to a vehicle that is necessary to enable an individual

with a disability to use that vehicle is considered an adaptation or a

customization of an assistive technology device under

Sec. 361.5(b)(7)(iii) and, therefore, constitutes an assistive

technology service. This position is consistent with current RSA

policy.

Changes: None.

Community Rehabilitation Program

Comments: Some commenters requested that the definition of

``community rehabilitation program'' specify additional services, such

as rehabilitation teaching services, that could be provided under a

community rehabilitation program for individuals with disabilities.

Discussion: The definition of ``community rehabilitation program''

in both the proposed and final regulations is based on the statutory

definition in section 7(25) of the Act. However, paragraph (i)(Q) of

this definition, like section 7(25)(Q) of the Act, authorizes community

rehabilitation programs that

[[Page 6310]]

provide services similar to the services specified in the definition.

Thus, the Secretary believes that a community rehabilitation program

could provide rehabilitation teaching services for individuals who are

blind because those services are similar to orientation and mobility

services for individuals who are blind, which are expressly authorized

under paragraph (i)(K) of the definition.

Changes: None.

Comparable Services and Benefits

Comments: Several commenters requested clarification of the

requirement in the proposed regulations that comparable services and

benefits be available to the individual within a reasonable period of

time. Some commenters requested that the regulations allow DSUs to use

comparable services and benefits only if they are currently available

at the time the individual's Individualized Written Rehabilitation

Program (IWRP) is developed. Other commenters suggested that comparable

services and benefits should be available when necessary to meet the

rehabilitation objectives identified in the individual's IWRP.

Discussion: The definition of ``comparable services and benefits''

is intended to support the statutory purpose of conserving

rehabilitation funds, while ensuring the provision of appropriate and

timely services. The proposed requirement in the NPRM that comparable

services and benefits be available within a reasonable period of time

was intended to enable DSUs to conserve VR funds by searching for

alternative sources of funds without jeopardizing the timely provision

of VR services to eligible individuals. The Secretary agrees that

additional clarification in the regulations is required to ensure that

VR services are provided to eligible individuals at the time they are

needed.

Changes: The Secretary has revised Sec. 361.5(b)(9)(ii) of the

proposed regulations to require that comparable services and benefits

be available to the individual at the time that the relevant service is

needed to achieve the rehabilitation objectives in the individual's

IWRP. This change is consistent with revisions made to Sec. 361.53 of

the proposed regulations, which are discussed in the analysis of

comments to that section.

Competitive Employment and Integrated Setting

Comments: Some commenters opposed the definition of ``competitive

employment'' in the proposed regulations on the basis that it limited

competitive employment outcomes to those in which an individual with a

disability earns at least the minimum wage. Because the proposed

definition applied to supported employment placements, these commenters

believed that the minimum wage requirement would restrict employment

opportunities for individuals with the most severe disabilities who

need supported employment services in order to work. These commenters

stated that some individuals with the most severe disabilities would be

unable to obtain competitive employment unless the definition permitted

employers to compensate employees in accordance with section 14(c) of

the Fair Labor Standards Act (FLSA) (i.e., wages based on individual

productivity that would be less than the minimum wage). Other

commenters supported the proposed definition and the requirement that

individuals in competitive employment earn at least the minimum wage.

Several commenters opposed the requirement in the proposed

regulations that individuals in competitive employment earn at least

the prevailing wage for the same or similar work in the local community

performed by non-disabled individuals. The commenters believed that it

would be unduly burdensome for DSUs to ascertain the relevant

prevailing wage given the potential differences in wages provided by

employers within the same community. In addition, these commenters

stated that the prevailing wage standard would dissuade some employers

from hiring individuals with disabilities when the wage to be provided,

although at least the minimum wage, would have to be increased to be

consistent with higher wages provided by other employers in the

community for the same or similar work.

Several commenters on the proposed regulations opposed the

requirement that competitive employment be performed in an integrated

setting. Several other commenters questioned or requested clarification

of the proposed definition of integrated setting with respect to the

provision of services or the achievement of an employment outcome. In

light of the interrelationship between the terms ``competitive

employment'' and ``integrated setting'' and the fact that the Secretary

considers integration to be an essential component of competitive

employment, comments on both the proposed definition of ``integrated

setting'' and the use of the term ``integrated setting'' as an element

of competitive employment are addressed in the following paragraphs.

Commenters who opposed limiting competitive employment to

placements in integrated settings believed that requiring individuals

with disabilities to interact with non-disabled persons at the work

site would preclude certain kinds of employment outcomes from the scope

of competitive employment. Specifically, the commenters identified

self-employment, home-based employment, and various forms of

telecommuting as examples of employment outcomes that are competitive

but are not located in integrated settings. The commenters stated that

these placement options should be available to individuals with

disabilities to same extent that they are available to non-disabled

persons.

Some commenters believed that the definition of ``integrated

setting'' in the proposed regulations was too weak. These commenters

recommended that the proposed definition, which defined integrated

setting as ``. . . a setting typically found in the community in which

an applicant or eligible individual has an opportunity to interact

regularly with non-disabled persons . . .,'' be amended to require

actual interaction between the applicant or eligible individual and

non-disabled individuals. Other commenters stated that individuals in

competitive employment should be required to interact with non-disabled

persons only to the extent that non-disabled individuals in similar

positions interact with others. Finally, some commenters suggested that

the definition clarify that sheltered workshops and other employment

settings that are established specifically for the purpose of employing

individuals with disabilities do not constitute integrated settings.

Discussion: The Secretary agrees with the commenters who believe

that competitive employment outcomes should be limited to those in

which individuals earn at least the minimum wage. Consequently, the

Secretary does not consider placements in supported employment settings

in which individuals receive wages below the minimum wage under section

14(c) of the FLSA to be competitive employment. This position, which

would modify longstanding RSA regulatory policy, is consistent with the

requirement in the 1992 Amendments (section 101(a)(16) of the Act) that

DSUs annually review and reevaluate the status of each individual in an

employment setting under section 14(c) of the FLSA in order to

determine the individual's readiness for competitive employment. This

statutory requirement indicates that supported employment

[[Page 6311]]

settings in which individuals are compensated below the minimum wage in

accordance with the FLSA do not constitute competitive employment. The

Secretary wishes to clarify that the minimum wage requirement for

individuals placed in supported employment applies at the time of

transition to extended services. If an individual is unable to obtain

the minimum wage at this time, the individual would still be considered

to have achieved an employment outcome but it would not be considered a

supported employment outcome.

The Secretary agrees that requiring individuals in competitive

employment to earn at least the prevailing wage for the same or similar

work in the local community performed by non-disabled individuals is

unduly restrictive and that requiring individuals with disabilities who

achieve competitive employment outcomes to be compensated at the wage

level typically paid to non-disabled individuals who perform the same

or similar work for the same employer is a more reasonable standard.

This standard requires that competitively employed individuals with

disabilities receive the customary wage and level of benefits (e.g.,

insurance premiums, retirement contributions) received by non-disabled

workers performing comparable jobs for the same employer. Clarification

in the final regulations that comparable compensation includes both the

wage and benefit level typically paid by the employer is necessary, the

Secretary believes, in order to ensure that competitive employment

outcomes for individuals with disabilities are truly ``competitive.'

A key purpose of the 1992 Amendments is to ensure that individuals

with disabilities achieve employment outcomes in the most integrated

settings possible, consistent with the individual's informed choice.

Consequently, the Secretary believes that placement in an integrated

setting is an essential component of ``competitive employment.'

The Secretary agrees with those commenters who believe that the

definition of integrated setting in the proposed regulations did not

sufficiently ensure actual interaction between individuals with

disabilities and non-disabled persons. The Secretary also agrees with

those commenters who contend that the best measure of integration in an

employment setting for individuals with disabilities is to require

parity with the integration experienced by non-disabled workers in

similar positions. Consequently, the final regulations establish a

standard of integration with respect to employment outcomes that is

based on ensuring the same level of interaction by disabled individuals

with non-disabled persons as that experienced by a non-disabled worker

in the same or similar job. An integrated setting for purposes of a job

placement is one in which an applicant or eligible individual interacts

with non-disabled persons, excluding service providers, to the same

extent that a non-disabled worker in a comparable position interacts

with others.

The Secretary believes, however, that interaction between

individuals with disabilities and non-disabled persons need not be

face-to-face in order to meet this standard. Persons with disabilities

who are self-employed or telecommute may interact regularly with non-

disabled persons through a number of mediums (e.g., telephone,

facsimile, or computer). Self-employment, home-based employment, and

other forms of employment in which individuals communicate regularly

from separate locations, therefore, would satisfy the integration

requirement of competitive employment as long as the eligible

individual interacts with non-disabled persons other than service

providers to the same extent as a non-disabled person in a comparable

job.

The Secretary, like many of the commenters, also believes that

settings that are established specifically for the purpose of employing

individuals with disabilities (e.g., sheltered workshops) do not

constitute integrated settings since there are no comparable settings

for non-disabled individuals.

Changes: The Secretary has amended Sec. 361.5(b)(10) to define

``competitive employment,'' in part, as work for which an individual

earns at least the minimum wage but not less than the customary wage

and level of benefits provided by the same employer to non-disabled

workers who perform the same or similar work. The Secretary also has

amended Sec. 361.5(b)(30) to define ``integrated setting'' with respect

to an employment outcome as a setting typically found in the community

in which applicants or eligible individuals interact with non-disabled

individuals to the same extent that non-disabled individuals in

comparable positions interact with other persons. The definition of

``integrated setting'' with respect to the provision of services has

been similarly strengthened to require actual interaction between

individuals with disabilities receiving services and non-disabled

individuals.

Designated State Unit

Comments: Some commenters requested that the regulatory definition

of ``designated State unit'' prohibit DSUs from administering

vocational and other rehabilitation programs other than those programs

authorized or funded under the Act.

Discussion: Sections 101(a)(1) and (a)(2) of the Act require that

the State VR Services Program be administered by a State entity that is

primarily concerned with vocational rehabilitation or vocational and

other rehabilitation of individuals with disabilities, but does not

restrict this rehabilitation focus to only programs authorized or

funded under the Act. The Secretary wishes to give States as much

organizational flexibility as is permitted by statute.

Changes: None.

Employment Outcome

Comments: Several commenters opposed the definition of ``employment

outcome'' in the proposed regulations on the basis that it failed to

exclude outcomes other than competitive employment (e.g., homemaker,

self-employment). Other commenters disagreed with the emphasis in the

definition on competitive employment.

Discussion: The definition of ``employment outcome'' in the final

regulations, like the proposed definition, elaborates on the definition

in section 7(5) of the Act by incorporating into the definition the

statutory concept that an employment outcome must be consistent with an

individual's strengths, resources, priorities, concerns, abilities,

capabilities, interests, and informed choice. Although the definition

does not contain a full list of permissible employment outcomes, it

does not exclude any employment outcomes that have been permitted in

the past. Thus, for example, homemaker, extended employment, and self-

employment remain acceptable employment outcomes even though they are

not specifically identified in the definition. The Secretary also

believes, however, that competitive employment, which is the optimal

employment outcome under the program, should be considered for each

individual who receives services under the program and should,

therefore, be highlighted in the definition.

Changes: None.

Establishment, Development, or Improvement of a Public or

Nonprofit Community Rehabilitation Program

Comments: Some commenters opposed that part of the proposed

[[Page 6312]]

definition of the term ``establishment, development, or improvement of

a public or nonprofit community rehabilitation program'' that would

reduce over a four-year period Federal financial support of staffing

costs associated with operating a community rehabilitation program.

Some of these commenters also opposed the prohibition in the definition

of Federal support for ongoing operating expenses of a community

rehabilitation program. The commenters were concerned that these

provisions would make it difficult or impossible to develop new

community rehabilitation programs.

Discussion: The definition elaborates on the statutory definition

of the term ``establishment of a community rehabilitation program''

under section 7(6) of the Act by incorporating all of the types of

expenditures for which a DSU can receive Federal financial support. The

limitations on staffing costs in the proposed definition are based on

the authorization in section 7(6) of the Act for the Secretary to

include as part of the costs of establishment any additional staffing

costs that the Secretary considers appropriate. The limitations are

similar to those previously proposed in the 1991 NPRM. Specifically,

the proposed regulations established a limitation on staffing costs by

providing, after the first 12 months of staffing assistance, for an

annual decrease in the percentage of staffing costs (from 100 percent

to 45 percent) for which Federal financial participation (FFP) is

available. This limitation, like the staffing cost requirements

proposed in the 1991 NPRM, is influenced by and in part based on the

conclusions of a 1979 General Accounting Office (GAO) report (HRD-79-

84). The GAO Report to Congress recommended amending the Act to provide

for a gradual reduction of Federal funding for staffing costs in the

establishment authority. Legislative change is unnecessary to

accomplish this purpose because section 7(6) of the Act vests the

Secretary with the authority to determine what staffing costs are

appropriate for Federal financial participation. The Secretary believes

that the GAO recommendation is still relevant and needs to be

implemented. The limitation on staffing costs is intended, in part, to

ensure that facilities bear an increasing share of the responsibility

for running community rehabilitation programs, while preserving VR

funds needed to support necessary development or expansion of community

rehabilitation facilities. More generally, the limitation on staffing

costs is intended to preserve the amount of funds available to the DSU

for providing VR services to eligible individuals.

The final regulations also authorize Federal support for other

costs needed to establish, develop, or improve a community

rehabilitation program as long as these costs are not ongoing

operational expenses of the program. The Secretary believes that this

prohibition is consistent with the Act, which limits Federal financial

support to costs associated with setting up, renovating, converting, or

otherwise improving community rehabilitation programs.

The Secretary also notes that recent audits of State agencies have

indicated, in some cases, that VR funds have been used under the

authority for establishing community rehabilitation programs for

purposes other than providing services under the VR program. In

response, the Secretary believes the proposed definition should be

amended to ensure that Federal support for the establishment,

development, or improvement of a public or nonprofit community

rehabilitation program is provided only if the purpose of the

expenditures is to provide services to applicants and eligible

individuals under the VR program.

Changes: The Secretary has amended Sec. 361.5(b)(16) to ensure that

costs associated with the establishment, development, or improvement of

a public or nonprofit community rehabilitation program must be

necessary to the provision of VR services to applicants and eligible

individuals. Changes to this definition and to the State plan

requirements in Sec. 361.33(b) of the regulations are intended to

address the violations identified in recent audits of State agencies.

Extended Employment

Comments: Several commenters requested that the definition of

``extended employment'' in the proposed regulations be broadened to

include placements in integrated settings. Other commenters sought to

expand the proposed definition to include employment with profitmaking

organizations. Finally, some commenters requested that the regulations

exclude extended employment from the scope of potential employment

outcomes under the program.

Discussion: Section 101(a)(16) of the Act requires DSUs to annually

review and reevaluate the status of each individual in extended

employment to determine the individual's readiness for competitive

employment in an integrated setting. This statutory requirement

indicates that extended employment is limited to placements in non-

integrated settings. The lack of integration in extended employment

placements is a key factor in differentiating between extended

employment and competitive employment outcomes.

The Secretary does not believe that extended employment includes

work performed on behalf of profitmaking organizations. Extended

employment, according to section 101(a)(16) of the Act, means work

performed in community rehabilitation programs, including workshops, or

in other non-integrated employment settings in which individuals are

compensated pursuant to the FLSA. The Secretary believes that

employment in private, profitmaking organizations should be viewed as

competitive employment in which individuals shall earn at least the

minimum wage and work in integrated settings. Incorporating placements

in profitmaking organizations into the definition of extended

employment would expand the scope of potential extended employment

placements and would be contrary to the statutory policy that promotes

movement from extended employment to competitive employment, the

optimal employment outcome under the program. Nevertheless, the final

regulations will continue to recognize extended employment as a

possible employment outcome under the program consistent with

101(a)(16) of the Act.

Changes: None.

Impartial Hearing Officer

Comments: One commenter requested that the regulations prohibit a

member of a State Rehabilitation Advisory Council from serving as an

impartial hearing officer for any DSU within that State.

Discussion: The definition of ``impartial hearing officer'' in the

proposed regulations specified that a member of a DSU's State

Rehabilitation Advisory Council (Council) could not serve as an

impartial hearing officer for that same DSU. The proposed definition,

however, did allow a member of a DSU's Council to serve as an impartial

hearing officer in cases involving another DSU within the same State.

For example, a member of the Council for a State unit serving

individuals who are blind was not precluded under the proposed

regulations, solely on the basis of that membership, from serving as an

impartial hearing officer in cases involving the State unit that serves

[[Page 6313]]

individuals with disabilities other than individuals with visual

disabilities. The Secretary believes that prohibiting members of a

Council from serving as impartial hearing officers in cases involving

any DSU within the State would be unduly restrictive. The Secretary

also believes that other impartiality requirements in the definition

that apply to all impartial hearing officers, including those who are

members of Councils for other DSUs (e.g., the individual has no

personal, professional, or financial conflict of interest) will

sufficiently ensure the absence of potential conflicts between the

hearing officer and the parties to the dispute.

Changes: None.

Maintenance

Comments: Some commenters requested that the definition of

``maintenance'' in the proposed regulations be expanded to include

expenses other than living expenses (e.g., food, shelter, and

clothing). As an example, the commenters stated that maintenance should

be authorized to support costs incurred by eligible individuals who

take part in enrichment activities as part of a training program in a

higher education institution. Several other commenters recommended

deletion of the fourth example in the note following the proposed

definition, which stated that maintenance could be used to pay for

food, shelter, and clothing for homeless or recently

deinstitutionalized individuals until other financial assistance is

secured. These commenters asserted that these costs should be supported

by welfare or other public assistance agencies rather than DSUs.

Discussion: The Secretary agrees that maintenance may include costs

other than standard living expenses (i.e., food, shelter, and clothing)

as long as the expenses are in excess of the normal expenses incurred

by an eligible individual or an individual receiving extended

evaluation services. Limiting maintenance to additional costs incurred

by individuals receiving services under an IWRP or under a written plan

for providing extended evaluation services is consistent with section

103(a)(5) of the Act, which restricts the provision of maintenance to

``additional costs while participating in rehabilitation.'

The Secretary also agrees that the fourth example of permissible

maintenance expenses in the proposed regulations was inadvisable.

Permitting DSUs to support the full costs of a homeless or

deinstitutionalized individual's subsistence under the maintenance

authority, until other financial assistance becomes available, is

inconsistent with the policy of limiting maintenance costs to those in

excess of the individual's normal expenses. In addition, the Secretary

agrees that welfare and other social service agencies are better

equipped to support the everyday living expenses of the homeless or

deinstitutionalized. However, a DSU could choose to provide short-term

emergency financial assistance to those individuals under

Sec. 361.48(a)(20) as ``other'' services that the DSU determines are

necessary for the individual to achieve an employment outcome.

Changes: The Secretary has deleted the term ``living'' from

Sec. 361.5(b)(31) of the proposed regulations to clarify that

maintenance may include expenses other than living expenses. In

addition, the Secretary has deleted the fourth example in the note

following the proposed definition of maintenance and replaced it with

an example of a permissible maintenance cost that would not constitute

a living expense.

Ongoing Support Services

Comments: Some commenters recommended that the Secretary place a

time limit on the provision of ongoing support services furnished by

extended services providers. The commenters stated that the regulations

should permit ongoing support services to ``fade'' once they are no

longer needed to maintain an individual in supported employment.

Discussion: It is RSA's longstanding policy that individuals with

the most severe disabilities who are placed in supported employment

should require ongoing support services throughout the course of their

placement. The need for ongoing support services provides a critical

distinction (i.e., the provision of ongoing supports) between supported

employment and other kinds of employment outcomes. The Secretary

believes that if an individual in supported employment no longer

requires ongoing support services that individual is no longer an

appropriate candidate for supported employment.

Changes: None.

Personal Assistance Services

Comments: Some commenters requested that the definition of

``personal assistance services'' in the proposed regulations be amended

to more closely track the statutory definition of that term in section

7(11) of the Act. The commenters stated that revision to the proposed

definition is needed to clarify that personal assistance services need

not be provided on the job site.

Discussion: The Secretary agrees that personal assistance services

may be provided off the job site as long as they are necessary to

assist an individual with a disability to perform daily living

functions and achieve an employment outcome and are provided while the

individual is participating in a program of VR services. The Secretary

believes the proposed definition clearly authorized personal assistance

services needed by an individual to perform everyday activities off the

job but, nevertheless, agrees that further clarification may be

helpful.

Changes: The Secretary has amended Sec. 361.5(b)(34) of the

proposed regulations to track the language in section 7(11) of the Act

authorizing personal assistance services needed to increase the

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

on or off the job.

Physical and Mental Restoration Services

Comments: Some commenters requested that the regulatory definition

of ``physical and mental restoration services'' specifically include

psychological services provided by qualified personnel under State

licensure laws.

Discussion: The Secretary agrees that psychological services are a

form of mental restoration services. Psychological services, however,

are subsumed within the broader term ``mental health services'' in

paragraph (xiii) of the definition and need not be identified

separately. Moreover, section 103(a)(4) of the Act authorizes services,

including psychological services, that are needed to diagnose and treat

mental or emotional disorders only if those services are provided by

qualified personnel in accordance with State licensure laws. This

requirement, which was included in the proposed definition, is

reflected in paragraph (ii) of the definition in the final regulations.

Changes: None.

Physical or Mental Impairment

Comments: Some commenters requested clarification of the

requirement in the proposed regulations that a physical or mental

impairment will probably result in materially limiting mental or

physical functioning if it is not treated. One commenter stated that

the definition should be limited to conditions that cause present

functional limitations so as not to unnecessarily expand the pool of

eligible individuals.

[[Page 6314]]

Discussion: The Secretary agrees that clarification is needed. The

proposed regulations defined ``physical or mental impairment'' as an

injury, disease, or other condition that materially limits, or if not

treated will probably result in materially limiting, mental or physical

functioning. The existence of a physical or mental impairment is the

first criterion for determining eligibility under the program (see

Sec. 361.42(a) of the final regulations). The proposed definition was

designed to include progressive conditions that may cause functional

limitations in the future even though current functional limitations

may not be evident. Although a DSU may not always know with certainty

whether a certain condition will limit an individual's functional

abilities, the Secretary believes that the definition must account for

situations in which there is a strong likelihood that functional

limitations will result if treatment is not provided. On the other

hand, the Secretary does not believe that accounting for progressive

conditions will result in an unwarranted increase in eligible

individuals since all eligible individuals, including those who do not

currently experience a limitation in functioning, must meet each of the

eligibility criteria in Sec. 361.42(a).

Changes: The Secretary has amended Sec. 361.5(b)(36) of the

proposed regulations to clarify that a physical or mental impairment

must materially limit, or if untreated must be expected to materially

limit, physical or mental functioning.

Post-Employment Services

Comments: Some commenters requested that the regulations specify a

time limit for providing post-employment services following the

achievement of an employment outcome. Other commenters opposed the

availability of post-employment services for purposes of assisting an

individual to advance in employment. Finally, several commenters

recommended that the definition enable individuals to receive post-

employment services in order to maintain, regain, or advance in

employment that is consistent with the individual's informed choice.

Discussion: The Secretary believes that it would be inappropriate

to establish an absolute time limit after which post-employment

services would be unavailable. DSUs are responsible for determining on

a case-by-case basis whether an eligible individual who has achieved an

employment outcome requires post-employment services in accordance with

the definition in the regulations. As stated in the note following the

proposed definition, post-employment services are available to meet

rehabilitation needs that do not require a complex and comprehensive

provision of services and, therefore, should be limited in scope and

duration. If the DSU determines that an individual requires extensive

services or requires services over an extended period of time, then the

DSU should consider beginning a new rehabilitation effort for the

individual, starting with a redetermination of whether, under current

circumstances, the individual is eligible under the VR program.

The Secretary emphasizes that post-employment services are

available if the DSU determines that the services are necessary to

enable an individual to advance in employment consistent with the

individual's strengths, resources, priorities, concerns, abilities,

capabilities, and interests. Section 103(a)(2) of the Act specifically

authorizes the provision of post-employment services for purposes of

assisting an individual to maintain, regain, or advance in employment.

The Secretary agrees that the provision of post-employment services

must be consistent with the individual's informed choice. However, the

Secretary believes that it is unnecessary to add informed choice as an

element in the definition of ``post-employment services'' because

informed choice is specifically identified as a condition that applies

to the provision of any VR service, including post-employment services,

under Sec. 361.48(a).

Changes: None.

Substantial Impediment To Employment

Comments: The majority of commenters supported the definition of

``substantial impediment to employment'' in the proposed regulations.

However, some commenters opposed the proposed definition on the basis

that it requires only that an impairment hinder the individual from

preparing for, entering into, engaging in, or retaining employment.

These commenters recommended that the Secretary reinstate the standard

from the draft regulations that an impairment must prevent the

individual from employment in order for it to constitute a substantial

impediment to employment.

Discussion: An individual's disability must result in a substantial

impediment to employment for the individual to be found eligible under

the VR program (see Sec. 361.42(a)). The Secretary believes that the

proposed definition establishes the appropriate standard for

determining whether the individual's impairment causes a substantial

impediment to employment when read in conjunction with the remaining

eligibility requirements in Sec. 361.42(a). This standard does not

extend eligibility under the program to individuals with disabilities

who do not experience material functional limitation or who do not need

VR services to obtain appropriate employment since these individuals

would not meet the criteria in Sec. 361.42(a). On the other hand, the

Secretary believes that requiring that an impairment prevent the

individual from employment is too stringent and would exclude from the

program those individuals who are underemployed and who need VR

services to obtain new employment that is consistent with their

abilities and capabilities.

Changes: None.

Supported Employment

Comments: One commenter suggested that, given the requirement in

the proposed regulations that limits competitive employment outcomes to

those in which individuals earn at least the minimum wage, competitive

employment should not be a required element of supported employment.

Another commenter stated that an individual in a supported employment

setting should be viewed as competitively employed as long as the

individual earns at least the minimum wage at the time of transition to

an extended services provider rather than at the time of initial

placement in supported employment.

Discussion: Section 7(18) of the Act defines supported employment

as competitive employment in an integrated setting with ongoing support

services. Thus, individuals in supported employment shall earn at least

the minimum wage consistent with the definition of competitive

employment in the final regulations. The Secretary agrees, however,

that the minimum wage requirement applies to individuals in supported

employment at the time the individual has made the transition from

support provided by the DSU to extended services provided by an

appropriate State or private entity.

Changes: None.

Transitioning Student

Comments: Some commenters were concerned that omitting the term

applicant from the definition of ``transitioning student'' would mean

that students with disabilities who apply for VR services might not be

evaluated for program eligibility. In addition, some commenters stated

that the term ``transitioning student'' is confusing and is

inappropriately used in

[[Page 6315]]

other sections of the proposed regulations, specifically Sec. 361.22

(Cooperation with agencies responsible for transitioning students).

Discussion: The proposed regulations defined ``transitioning

student'' as a student who is eligible under the VR program and is

receiving transition services. The Secretary believes that transition

services, which are authorized under section 103(a)(14) of the Act and

defined in Sec. 361.5(b)(47) of the final regulations, are limited to

those services identified in an eligible student's IWRP that promote or

facilitate the accomplishment of long-term rehabilitation goals and

intermediate rehabilitation objectives. Because assessment services are

provided prior to the development of an IWRP and, therefore, are not

transition services, student applicants under the program were not

included within the proposed definition of ``transitioning student.''

Nevertheless, this interpretation does not alter the responsibility of

DSUs to evaluate student applicants for eligibility for VR services. As

with any individual with a disability, DSUs shall promptly handle a

referral of a student for VR services, evaluate the student following

application for services, and determine the student's eligibility under

the program within 60 days after the application is submitted.

The Secretary agrees that the definition of the term

``transitioning student'' in the proposed regulations is confusing, as

evidenced by the previous comments questioning the DSU's responsibility

with regard to student applicants. Other commenters were confused by

Sec. 361.22(b) of the proposed regulations, which referred to students

with disabilities who are not receiving special education services as

``transitioning students.'

Changes: The Secretary has eliminated the definition of the term

``transitioning student'', which is not defined in the Act, from the

final regulations and has replaced that term in the regulations with

the term ``student with a disability,'' which includes students who are

receiving special education services and students who are not.

Transportation

Comments: One commenter requested that the regulations clarify that

transportation is a support service. Other commenters opposed the

example following the definition that identified the purchase and

repair of vehicles as a possible transportation expense. These

commenters stated that adherence to this example would severely deplete

DSU resources.

Discussion: ``Transportation'' is defined in both the proposed and

final regulations as travel and related expenses that are necessary to

enable an applicant or eligible individual to participate in a VR

service. The Secretary believes that it is clear from this definition

that transportation is not a stand-alone service but must be tied to

the provision of other services identified in an IWRP.

The Secretary emphasizes that the examples provided under this

definition, like all examples throughout the regulations, are provided

solely for purposes of illustration and guidance and are not intended

to substitute for DSU determinations in individual cases. Accordingly,

the example opposed by some commenters neither requires nor encourages

DSUs to purchase or repair vehicles. The example states only that the

purchase or repair of vehicles is authorized as a transportation

expense in those limited circumstances in which the DSU determines that

provision of this service is necessary for an individual to participate

in a VR service and is consistent with DSU policies that govern the

provision of services. Appropriately developed DSU policies covering

the nature and scope of services dictate the extent to which any

service, including transportation, can be provided.

Changes: None.

Sec. 361.10 Submission, approval, and disapproval of the State plan.

Comments: None.

Discussion: The Secretary has revised the requirements governing

the duration of State plans to reflect recent amendments to section 436

of the General Education Provisions Act (GEPA). Section 436 of GEPA,

which applies to Rehabilitation Act programs, authorizes the Secretary

to establish a State plan period that is longer than the standard

three-year period specified in section 101(a) of the Rehabilitation Act

and Sec. 361.10(e) of the proposed regulations. Although RSA will

continue to require the submission of a new State plan every three

years, the regulations now permit RSA to establish a State plan period

other than the regular three-year period if circumstances warrant. For

example, RSA used this statutory authority in FY 1996 to extend for a

fourth year the State plan covering FYs 1994 through 1996 in order to

allow these final regulations to become effective before requiring

submission of a new State plan. The flexibility afforded RSA through

this regulatory change also obviates the need for Sec. 361.10(h) of the

proposed regulations, which would have permitted the Secretary to

require an interim State plan covering less than three years following

a reauthorization of the Act and prior to the publication of final

regulations.

Changes: The Secretary has amended Sec. 361.10(e) to state that the

State plan must cover a multi-year period as determined by the

Secretary. In addition, Sec. 361.10(h) of the proposed regulations has

been deleted from the final regulations.

Sec. 361.13 State agency for administration

Comments: Some commenters opposed the elimination of the

requirement from the draft proposed regulations that the State plan

describe the organizational structure of the State agency and its

organizational units. These commenters stated that the absence of this

description in the State plan would make it impossible for RSA to

determine whether each DSU operates at a level comparable to that of

other organizational units within the State agency. Other commenters

recommended, consistent with requirements in the draft proposed

regulations, that the final regulations authorize the designated State

agency to define the scope of the program and direct its administration

without external administrative controls. Additionally, in response to

the Secretary's request in the NPRM, some commenters identified

additional program functions that were not included in the proposed

regulations for which the DSU shall be responsible in order to meet the

statutory requirement in section 101(a)(2)(A) that it be responsible

for the VR program. The additional functions identified by the

commenters (determinations of whether an individual has achieved an

employment outcome; policy development; and administrative control of

VR funds) were specified in the draft proposed regulations. Finally,

some commenters stated that the requirement in the proposed regulations

that at least 90 percent of DSU staff shall be employed full time on

rehabilitation work was unduly restrictive.

Discussion: This section of the proposed regulations was

significantly revised under the Department's Principles for Regulating

in an effort to reduce the paperwork requirements imposed on State

agencies. For example, the Secretary proposed to remove from current

regulations the requirement that the State plan describe the

organizational structure of the State agency and its organizational

units

[[Page 6316]]

because the Secretary considered the requirement unduly burdensome. The

Secretary intended to reduce the paperwork burden on State agencies in

developing their State plans and to emphasize the underlying

administrative responsibility of States by relying on an assurance,

required by statute, that if the State agency is required to have a

vocational rehabilitation unit, the unit is located at an

organizational level comparable to other organizational units within

the State agency. The Secretary does not believe that continuing to

require by regulations that an organizational description be included

in the State plan would necessarily ensure that a DSU actually operates

at a level comparable to that of other units within the State agency.

Moreover, the Secretary believes that determinations as to whether a

State agency meets the organizational requirements in this section,

including whether the State unit operates at a comparable level to that

of other State entities, can be better addressed by RSA through its

monitoring process.

In an effort to reduce regulatory burden and increase State

flexibility in accordance with the Department's Principles for

Regulating, the Secretary also proposed to remove from current

regulations the requirement that a designated State agency that has as

its major function vocational rehabilitation or vocational and other

rehabilitation of individuals with disabilities shall ``have the

authority, subject to the supervision of the Governor, if appropriate,

to define the scope of the program within the provisions of State and

Federal law and to direct its administration without external

administrative controls.'' This non-statutory requirement applies under

current regulations to only one of the three designated State agency

options. The Secretary believes, however, that a State should have the

same authority to review or oversee the administration of its VR

program regardless of the option under which it chooses to organize its

agency. Elimination of this requirement will enable a State to locate

and administer its vocational rehabilitation program within the limits

permitted by statute without being influenced by the existence or non-

existence of varying levels of control outside of the DSU.

In the preamble to the proposed regulations, the Secretary

solicited public comment on whether the regulations should expand or

otherwise clarify essential program functions for which the DSU shall

be responsible in order to meet the statutory requirement in section

101(a)(2)(A) of the Act that it be responsible for the VR program.

Consistent with current regulations, the proposed regulations specified

that the DSU shall be responsible for determinations of eligibility,

development of IWRPs, and decisions regarding the provision of

services. The Secretary interprets this non-delegation provision to

mean that the DSU shall carry out these functions or activities using

its own staff. While some commenters believed that States should have

the flexibility to delegate responsibility for other programmatic

functions to State entities other than the DSU, the overwhelming

majority of commenters stated that the additional functions that were

identified in the draft regulations (determinations that service

recipients have achieved appropriate employment outcomes, the

formulation and implementation of program policy, and the allocation

and expenditure of program funds) must be carried out by the DSU to

ensure that the program is administered properly. In light of the

public comment received, the Secretary agrees that responsibility for

these additional functions must be retained by the DSU to ensure that

State agencies that consolidate staff to administer multiple State and

federally funded programs do not entrust these key VR programmatic

decisions to individuals who lack experience in meeting the needs of

individuals with disabilities. Moreover, the Secretary believes that

the benefits derived from DSU retention of these functions--enhanced

program efficiency and effectiveness--outweigh any costs that may be

associated with the non-delegation requirements in the final

regulations.

The Secretary does not believe that the proposed requirement that

at least 90 percent of the designated State unit staff shall work full

time on the rehabilitation work of the organizational unit is unduly

restrictive. This provision means that if the organizational unit

provides other rehabilitation services, in addition to vocational

rehabilitation, the 90 percent staffing requirement applies to all unit

staff providing rehabilitation services, not to just the vocational

rehabilitation staff. ``Other rehabilitation'' includes, but is not

limited to, other programs that provide medical, psychological,

educational, or social services to individuals with disabilities.

Although some commenters believed the 90 percent staffing requirement

sets too restrictive a standard, the Secretary believes that this

requirement is consistent with the statutory requirement in section

101(a)(2)(A)(iii) of the Act that ``substantially all'' of the DSU's

staff shall work on rehabilitation and with RSA's longstanding

interpretation of ``substantially all'' to mean 90 percent.

Changes: The Secretary has revised Sec. 361.13(c) by adding three

functions--determination that an individual has achieved an employment

outcome, formulation and implementation of program policy, and

allocation and expenditure of program funds--that must be carried out

by the DSU.

Sec. 361.15 Local administration

Comments: One commenter requested clarification of the requirement

that each local agency administering the program be ``under the

supervision of the DSU.''

Discussion: Section 7(9) of the Act defines the term ``local

agency'' as a local governmental unit that has an agreement with the

designated State agency to conduct the VR program in accordance with

the State plan. Accordingly, the requirement in this section that each

local agency is subject to the supervision of the DSU means that the

DSU is responsible for ensuring that the program is administered in

accordance with the State plan. This provision does not require the DSU

to supervise the day-to-day operations of each local agency's program

staff.

Changes: For purposes of clarification, the Secretary has revised

Sec. 361.15 to add a cross-reference to the regulatory definition of

``sole local agency.'' The Secretary has also made technical changes to

the citations of authority for this section.

Sec. 361.16 Establishment of an independent commission or a State

Rehabilitation Advisory Council

Comments: One commenter requested clarification of the scope of the

proposed requirement that the State plan summarize annually the advice

provided by the Council.

Discussion: Section 101(a)(36)(A)(iii) of the Act requires the DSU

to include in its State plan or amendment to the plan a summary of

advice provided by the Council. Accordingly, Sec. 361.16(a)(2)(iv) of

the regulations requires that the State plan ``annually summarize the

advice provided by the Council.'' This ``annual'' requirement means

that any State plan submission, whether a new three-year plan or an

annual amendment to an existing plan, must include, as appropriate, a

summary of the advice provided by the Council on the new plan or the

plan amendment. Thus, a summary of the advice provided by the Council

on the entire plan must be submitted once every three years in

conjunction with

[[Page 6317]]

the DSU's new, three-year State plan. During the interim between new

plans, the DSU shall summarize the advice provided by the Council on

the amendments to the existing plan and submit that summary in

conjunction with its annual submission of amendments to the plan.

Annual amendments to the plan include any amendment generated by a

change to a State policy or practice that is reflected in the current

State plan, as well as those amendments that are required by the Act or

these regulations. Consistent with the general requirement in section

101(a)(36)(A)(iii), this section also requires the DSU to annually

summarize the advice provided by the Council on matters other than

those addressed in the State plan. A summary of the advice provided by

the Council on these issues should be included also in the annual

summaries.

Changes: None.

Sec. 361.18 Comprehensive system of personnel development

Comments: Some commenters questioned the authority for requiring

the involvement of the State Rehabilitation Advisory Council in the

development of the State agency's personnel standards, whereas other

commenters supported a role for the Council in this area. Some

commenters sought clarification of what it means for the Council to be

``involved'' in the development of personnel standards. Additional

commenters sought an expanded role for the Council that would involve

it in the formulation of other aspects of the State agency's

comprehensive system of personnel development in addition to the State

agency's personnel standards.

Some commenters stated that the data collection requirements in

paragraph (a) of this section are unduly burdensome and should be

eliminated.

A number of commenters opposed the authorization of State personnel

requirements as comparable requirements upon which a State agency could

develop its personnel standards under paragraph (c) of this section.

These commenters stated that a State agency's personnel standards

should be based solely on the licensing and certification requirements

applicable to the profession in which DSU employees provide VR services

in order to ensure that DSU personnel are ``qualified'' within the

meaning of the Act. Similarly, several commenters opposed the use of

``equivalent experience'' as a substitute for academic degrees in the

definition of ``highest requirements in the State* * *'' under

paragraph (c) of this section. One commenter stated that the personnel

standards developed by State agencies under this section should be

prospective only and that agencies should be permitted to retain

current DSU personnel who do not meet the ``highest requirements in the

State.'' In addition, some commenters recommended that the regulations

specifically provide for DSU employment for individuals who, due to the

existence of their disability, are unable to satisfy certification or

licensure standards applicable to a particular profession. As an

example, these commenters stated that, historically, individuals who

are blind have been excluded on the basis of their disability from

obtaining necessary certification to teach orientation and mobility to

other blind individuals even though they are fully qualified to work in

that profession.

Some commenters believed that the regulations should require that

DSU staff receive mandatory training in all of the areas identified in

paragraph (d)(2) of this section. Paragraph (d)(2) listed examples of

training areas (e.g., the Americans with Disabilities Act and the

Individuals with Disabilities Education Act (IDEA)) that State

agencies, at their discretion, may incorporate into their staff

development systems.

Several commenters opposed the statement in the preamble to the

proposed regulations that supported a DSU's use of family members and

community volunteers for purposes of communicating in an applicant's or

eligible individual's native language. The commenters believed that the

availability of family members or volunteers should not relieve the

State agency of its responsibility to hire qualified personnel who are

able to meet the communication needs of individuals with disabilities.

One commenter asked whether the State agency's responsibility to employ

persons who can address the communication needs of applicants and

eligible individuals means that the State agency shall include sign-

language interpreters among its personnel.

Finally, one commenter stated that the number of individuals that a

rehabilitation counselor assists in achieving an employment outcome

should not be considered as a factor in the evaluation of the

rehabilitation counselor's performance under paragraph (f) of this

section.

Discussion: The Act requires that the Council generally advise the

State unit in connection with the carrying out of its responsibilities.

In addition, the Council is required to advise the State agency on

issues affecting the development of the State plan. Because an

effective system of personnel development is an essential part of the

State plan and a critical element to the success of The State

Vocational Rehabilitation Services Program, the Secretary believes it

is necessary for the Council to be involved in the development of key

aspects of the State agency's personnel development system.

Specifically, the Secretary agrees with the commenters who stated that

the Council should provide advice to the State agency in connection

with the development of the recruitment, preparation, and retention

plan under paragraph (b) of this section; staff development policies

and procedures under paragraph (d) of this section; and the performance

evaluation system under paragraph (f) of this section; as well as in

the development of personnel standards under paragraph (c) of this

section, as was stated in the proposed regulations.

The Secretary emphasizes that this section of the regulations is

not intended to expand or alter the role of the Council beyond the

advisory role contemplated by the Act, but only to identify those areas

of personnel development in which the Council must be involved in an

advisory capacity. The Secretary believes that to fulfill its advisory

role, the Council, at a minimum, must be afforded an opportunity to

review and comment on relevant plans, policies, and procedures prior to

their implementation. This ``opportunity for review and comment'' is

necessary to ensure that the Council plays a meaningful, although

advisory, role in the development of a system that ensures an adequate

supply of qualified DSU personnel.

The data system and data collection requirements specified in

paragraph (a) of this section are statutorily required. However, the

Secretary emphasizes that the regulations require only that the State

plan include a description of the system used to collect the data on

personnel needs and personnel development and do not require the State

to submit the actual data to the Secretary.

The Secretary agrees with those commenters who stated that the

State agency's personnel standards must be based solely on existing

licensing or certification requirements applicable to the profession in

which DSU employees provide VR services. The Secretary interprets

section 101(a)(7)(B) of the Act to permit DSUs to base their personnel

standards on other ``comparable'' requirements only if certification or

licensing requirements applicable to a particular profession do not

exist. This interpretation is consistent with the

[[Page 6318]]

statute's emphasis on qualified personnel and with the requirement in

the Act that State agencies develop personnel standards that are based

on the ``highest requirements in the State.'' State personnel

requirements may be used as ``comparable requirements'' by the State

agency only in those very limited instances in which there is no

national or statewide certification or license that applies to the

professional or paraprofessional providing VR services (e.g., case

aides). Under those circumstances, State personnel requirements may, in

fact, represent the highest requirements in the State for the

particular profession.

The proposed regulations authorized States to base the highest

personnel standards in the State on equivalent experience, as well as

on academic degrees, in an effort to stress the significance of

relevant work experience and to expand the pool from which qualified

personnel can be selected. The overwhelming majority of commenters on

this issue, however, asserted that the use of ``equivalent experience''

as a substitute for academic degrees for purposes of meeting the

``highest requirements in the State * * *'' significantly weakened the

Act's focus on qualified personnel. In light of these comments, the

Secretary agrees that the ``highest requirements in the State'' should

be limited to the highest entry-level academic degree needed for a

national or State license or certification in order to ensure that the

DSU employs those professionals who are most capable of assessing the

specialized needs of individuals with disabilities and addressing those

needs through an appropriate provision of VR services. The Secretary

recognizes the extent to which the qualified personnel standard in the

Act would be undermined if States chose to ignore widely recognized,

nationally approved or State-approved licensing standards and to employ

less qualified individuals on the basis of ``equivalent experience.''

The Secretary interprets the Act and regulations to permit State

agencies to retain current DSU personnel who do not meet the ``highest

requirements in the State.'' This position is consistent with paragraph

(c)(1)(ii) of this section, which requires the State agency to describe

the steps it plans to take to retrain or hire personnel to meet

standards that are based on the highest requirements in the State if

the State's current standards are not based on the highest requirements

in the State.

The Secretary recognizes the concerns of those commenters who

sought to safeguard DSU employment opportunities for individuals who,

because of their disability, are prohibited from obtaining the license

or certification applicable to their particular profession. To the

extent that certification and licensing requirements are discriminatory

on the basis of disability, these issues should be addressed as

compliance issues under section 504 of the Act and the ADA.

Nevertheless, the Secretary is cognizant of the particular difficulty

experienced by blind individuals who, historically, have been excluded

on the basis of their disability from becoming certified as orientation

and mobility instructors. The Secretary emphasizes that these

regulations do not inhibit DSUs or other VR service providers from

hiring blind individuals as orientation and mobility teachers even

though those individuals may not meet current certification

requirements. To the extent that a DSU employs blind individuals who do

not meet the ``highest requirements in the State'' applicable to the

orientation and mobility profession, the State agency's plan under

paragraph (c)(1)(ii) of this section must identify the steps the agency

plans to take to assist employees in meeting those requirements. In

this regard, the Secretary is supporting a national project to develop

alternative certification standards for orientation and mobility

instructors in order to ensure that individuals who are blind can meet

necessary certification standards within the timeframe outlined in the

DSU's plan under paragraph (c)(1)(ii) of this section.

The Secretary does not believe it is prudent to make the training

areas identified in paragraph (d) of this section mandatory for all

staff employed by each DSU. The Secretary believes that the specific

training areas for staff development adopted by a State unit must be

based on the particular needs of that State unit. Thus, the final

regulations, like the proposed regulations, identify specific training

areas as examples that State agencies may incorporate into their staff

development systems in light of the DSU's needs.

Paragraph (e) of this section requires the State unit to describe

in the State plan how it includes among its personnel or obtains the

services of--(1) Individuals able to communicate in the native

languages of applicants and eligible individuals who have limited

English speaking ability; and (2) Individuals able to communicate with

applicants or eligible individuals in appropriate modes of

communication. Personnel under the first requirement may include State

agency staff, family members of an applicant or eligible individual,

community volunteers, and other individuals able to communicate in the

appropriate native language. However, the Secretary agrees that a DSU

cannot institute an across-the-board policy of using family members or

volunteers as a substitute for addressing the communication needs of

individuals with limited English proficiency through the use of DSU

staff or contract personnel. DSUs shall be prepared to address the

individual communication needs of each applicant or eligible individual

it serves. In addition, the Secretary believes that the DSU is

responsible for employing or obtaining the services of sign-language

interpreters, which fall within the definition of ``appropriate modes

of communication'' in Sec. 361.5(b)(5), to the extent necessary to meet

the communication needs of individuals who are deaf.

The Secretary believes that in evaluating a rehabilitation

counselor's performance, States should not focus primarily on the

number of individuals that the counselor has assisted in achieving an

employment outcome. At most, the number of employment outcomes for

which the counselor is responsible should be considered as one of many

factors in the assessment of the counselor's performance. The Act

requires that the State's performance evaluation system facilitate the

accomplishment of the policies and procedures outlined in the statute,

including the policy of serving, among others, individuals with the

most severe disabilities. Thus, counselors should be evaluated on the

basis of their efforts in advancing the purposes of the program and,

more precisely, on the basis of their performance in serving the most

severely disabled. The Secretary notes the following passage from the

report of the Senate Committee on Labor and Human Resources, which was

also referenced in the preamble to the proposed regulations, to further

support this position: ``The Committee is concerned that in some

States, procedures used for evaluating performance of counselors may

have the unintended consequence of providing a disincentive to serve

individuals with the most severe disabilities and those clients

requiring complex services.'' The performance evaluation system

required under the Act and included in the regulations is designed to

address these disincentives.

Changes: The Secretary has amended Sec. 361.18 to require that the

State Rehabilitation Advisory Council must be afforded an opportunity

to review and comment on the following aspects of the State agency's

comprehensive system of personnel development: The

[[Page 6319]]

plan for recruitment, preparation, and retention of qualified

personnel. Personnel standards. Staff development. The performance

evaluation system. In addition, the Secretary has clarified paragraph

(c) of this section to permit DSUs to base their personnel standards on

comparable requirements (including State personnel requirements) only

if national or State-approved or -recognized certification, licensing,

or registration requirements applicable to a particular profession do

not exist. Finally, the term ``equivalent experience'' has been deleted

from the definition of ``highest requirements in the State'' under

paragraph (c) of this section.

Sec. 361.22 Cooperation with agencies responsible for students with

disabilities

Comments: Some commenters questioned whether this section requires

DSUs to develop policies that enable transitioning students to live

independently before leaving school. The commenters stated that the

proposed regulations appeared to require DSUs to assist students in

living independently while the student continues to receive special

education services from an educational agency. Other commenters

recommended that the regulations be revised to require the development

and completion of the IWRP for a special education student who is

eligible for VR services before the student leaves the school system.

Several commenters believed that the elements of formal interagency

agreements between State units and educational agencies identified in

the proposed regulations should be mandatory for all interagency

agreements developed under this section. Another commenter asked

whether the regulations require DSUs to enter into formal interagency

agreements with each local educational agency within the State.

One commenter opposed the distinction in the proposed regulations

between those students who receive special education services and those

who do not receive special education services and argued that the

requirements governing coordination between educational agencies and

State units should apply for both groups of students. Finally, some

commenters recommended that the term ``transitioning student'' be

replaced by the term ``student with a disability'' for purposes of

referring to students who do not receive special education services

from an educational agency.

Discussion: The proposed regulations required the DSU to develop

plans, policies, and procedures designed to facilitate the transition

of special education students from the school setting to the VR

program. Specifically, the regulations stated these policies must be

designed to facilitate the development and accomplishment of long-term

rehabilitation goals, intermediate rehabilitation objectives, and goals

and objectives related to enabling a transitioning student to live

independently before leaving school. Although these regulatory

requirements largely track the statutory requirements in section

101(a)(24) of the Act, the Secretary agrees that clarification is

needed.

The Secretary does not believe that the Act places on the DSU the

responsibility for assisting a student with a disability to become

independent prior to leaving school. However, the Secretary interprets

the Act to require that, before a student with a disability who is in a

special education program leaves school, the DSU shall plan for that

student's transition to the VR program in order to ensure that there is

no delay in the provision of VR services once special education

services end. This means that the IWRP for each student determined to

be eligible under the VR program or, if the designated State unit is

operating under an order of selection, the IWRP for each eligible

student able to be served under the order, must be completed before the

student leaves school and must, at a minimum, be consistent with the

rehabilitation goals and objectives, including goals and objectives

related to enabling the student to live independently, that were

previously identified in the student's individualized education

program. The Secretary believes that this position is further supported

by the legislative history to the Act, particularly the Report of the

Senate Committee on Labor and Human Resources, portions of which are

restated in the note following this section of the regulations.

Furthermore, the Secretary believes that requiring the development of

the IWRP before a VR-eligible student leaves school does not impose any

additional costs on the DSU since DSUs are already required to develop

IWRPs for eligible individuals, including students with disabilities,

if those individuals can be served. More importantly, the Secretary

believes that this requirement will improve coordination between the

State's special education and VR programs and will ensure that services

are not interrupted after an eligible student leaves school.

In the proposed regulations, the Secretary attempted to lessen the

paperwork burden on State units by reducing the mandatory content

requirements that the draft regulations made applicable to all formal

interagency agreements between State units and educational agencies.

Accordingly, the proposed regulations required only that interagency

agreements identify provisions for determining State lead agencies and

qualified personnel responsible for transition services and identify

policies and practices that can be coordinated between the agencies.

The remaining elements under the draft regulations (identification of

available resources, financial responsibilities of each agency, dispute

resolution procedures, and other necessary cooperative policies) were

discretionary under the proposed regulations. However, most commenters

on this section opposed the reduction in required elements and stated

that each component is essential for ensuring the appropriate

transition of special education students from the school setting to the

VR program. Without detailed agreements, the commenters argue,

resources may be wasted and key processes may not be delineated,

resulting in delays in services once the special education student

leaves school. Consequently, each identified element of formal

interagency agreements is mandatory for all agreements developed under

this section of the final regulations. The Secretary believes this

position is consistent with the statutory requirements governing formal

interagency agreements in section 101 (a)(11) and (a)(24) of the Act.

In reviewing the regulations since publication of the NPRM, the

Secretary identified an additional mandatory element of formal

interagency agreements that was inadvertently omitted from the proposed

regulations. This additional element implements the requirement in

section 101(a)(11)(B) of the Act, which specifies that interagency

cooperation between the DSU and other agencies, including educational

agencies, must include training for staff of the agencies as to the

availability, benefits of, and eligibility standards for vocational

rehabilitation services, to the extent practicable.

The Secretary notes that, although the regulations require the DSU

to enter into a formal agreement with the State educational agency, it

is within the discretion of each State to determine which local

educational agencies should be parties to agreements with the DSU.

The Secretary agrees that classifying students who do not receive

special education services as ``transitioning students'' is confusing.

As stated previously in the preamble analysis of comments on

Sec. 361.5(b)(49), the

[[Page 6320]]

Secretary believes that replacing all references to ``transitioning

students'' in the final regulations with the term ``students with

disabilities'' and eliminating the definition of ``transitioning

student'' from the final regulations will enable DSUs and educational

agencies to more easily refer to, and differentiate between, students

with disabilities who are receiving special education services and

students with disabilities who are not receiving special education

services. Moreover, these changes are consistent with the reference to

``students who are individuals with disabilities'' in section 101

(a)(24) and (a)(30) of the Act.

The Secretary also notes that section 101(a)(30) of the Act

warrants the separate treatment that is afforded students with

disabilities who are not in special education programs as opposed to

those who receive special education services. Paragraph (b) of this

section implements this statutory provision by requiring DSUs to

develop and implement policies for providing VR services to students

with disabilities who do not receive special education services.

Changes: The Secretary has revised Sec. 361.22 to clarify that DSU

policies must provide for the development and completion of the IWRP

for each student with a disability determined to be eligible for

vocational rehabilitation services before the student leaves the school

setting. This section has been revised further to expand the number of

mandatory elements, including staff training to the extent practicable,

that must be included in formal interagency agreements between DSUs and

educational agencies. The Secretary also has revised this section by

replacing the term ``transitioning student'' with the term ``student

with a disability.'' Finally, the Secretary has expanded the note

following this section in order to highlight the emphasis in the Act on

the timely provision of VR services to special education students.

Sec. 361.23 Cooperation with other public agencies

Comments: None.

Discussion: The Secretary wishes to clarify the requirements

governing interagency cooperation between State units and other public

agencies that provide rehabilitation services to individuals with

disabilities. Section 361.23(b)(3) of the proposed regulations would

have required that all types of interagency cooperative initiatives

developed pursuant to this section meet certain requirements. However,

consistent with section 101(a)(11) of the Act, the Secretary wishes to

clarify that the requirements specified in paragraph (b)(3) of this

section (e.g., identification of policies that can be coordinated

between agencies, description of financial responsibility of each

agency, and procedures for resolving disputes) apply only if the State

unit chooses to enter into formal interagency cooperative agreements

with other agencies. It is within the discretion of the State to

determine how the State unit will cooperate with agencies other than

agencies responsible for students with disabilities and to determine

whether the requirements identified in paragraph (b)(3) of this section

should be addressed if the State adopts cooperative methods other than

formal interagency agreements (e.g., interagency working groups).

Changes: The Secretary has revised Sec. 361.23 to clarify that the

mandatory policies, practices, and procedures specified in paragraph

(b)(3) apply only to formal interagency cooperative agreements

developed under this section.

Sec. 361.27 Shared funding and administration of joint programs

Comments: One commenter supported the proposal to no longer require

written agreements for joint programs. The majority of commenters,

however, stated that written agreements are necessary to ensure that

joint programs are administered consistent with the purposes of the VR

program.

Discussion: The proposed regulations removed the current regulatory

requirements relating to written agreements for programs involving

shared funding and administrative responsibility as part of the effort

to reduce paperwork burden on State units and increase State

flexibility. The Secretary maintains that it is within the discretion

of the State to determine whether the public agencies administering a

joint program for providing services to individuals with disabilities

shall enter into a formal written agreement. However, the Secretary

agrees with the commenters who indicated that DSUs should be

accountable for the proper administration of joint rehabilitation

programs authorized under section 101(a)(1)(A) of the Act.

Accountability will be based on the extent to which joint programs are

carried out consistent with the State plan description required by the

final regulations. This limited description is much less extensive, and

therefore less burdensome to DSUs, than the State plan requirements in

the current regulations related to joint programs.

Changes: The Secretary has amended Sec. 361.27 to require that the

State plan describe the nature and scope of any joint program to be

entered into by the DSU, including the services to be provided, the

respective roles of each participating agency in the provision of

services and in the administration of the services, and the share of

the costs to be assumed by each agency.

Sec. 361.29 Statewide studies and evaluations

Comments: One commenter requested that DSUs be required to conduct

a comprehensive assessment of the rehabilitation needs of individuals

with severe disabilities every five years rather than every three years

as was specified in the proposed regulations. Another commenter asked

whether the review of outreach procedures to identify and serve

underserved populations and the review of the provision of VR services

to individuals with the most severe disabilities required under

paragraph (a) of this section are to be conducted on an annual or

triennial basis. In addition, one commenter questioned the statutory

basis for requiring the DSU to analyze the characteristics of

individuals determined to be ineligible for VR services and the reasons

for the ineligibility determinations.

One commenter stated that requiring the DSU to analyze, as part of

its annual evaluation under paragraph (b) of this section, the extent

to which the State has achieved the objectives of the strategic plan is

unnecessary and duplicative of the requirements in Sec. 361.72. Other

commenters stated that it is unduly burdensome to require the

submission of summaries or copies of the statewide studies and annual

evaluations as attachments to the State plan. Finally, one commenter

asked whether the DSU must provide copies of the statewide studies and

annual evaluations to the State Rehabilitation Advisory Council.

Discussion: The Secretary believes it is appropriate and necessary

that a comprehensive assessment of the rehabilitation needs of

individuals with severe disabilities be conducted every three years.

This time period is intended to ensure that the DSU conducts the

assessment and reviews its results in connection with the development

of a new State plan which, in most instances, must be submitted every

three years. Moreover, the Secretary believes that each review or

assessment identified in the regulations as a minimum component of the

DSU's continuing statewide studies must be conducted on a triennial

basis in

[[Page 6321]]

conjunction with the development of the State plan.

Section 101(a)(9)(D) of the Act requires that the State agency

annually provide to the Secretary an analysis of the characteristics of

those individuals determined to be ineligible for VR services and the

reasons for the ineligibility determinations. This requirement,

however, was mischaracterized in the proposed regulations as a

statewide study component and should have been identified as an annual

reporting requirement to be submitted in the State plan.

The Secretary agrees that the proposed annual evaluation

requirement related to the State's achievement of the objectives in its

strategic plan is duplicative of the requirements in Sec. 361.72(e) and

that the requirement should be deleted from paragraph (b) of this

section.

In recognition of the paperwork burden associated with including

summaries or copies of the statewide studies and annual evaluations as

attachments to the State plan, the Secretary intends to require only

that DSUs maintain copies of the studies and evaluations and provide

copies to the Secretary upon request. Copies of the studies and

evaluations, however, should be provided to the State Rehabilitation

Advisory Council so that the Council can meaningfully fulfill its

advisory role in connection with the development of those documents as

is required under section 105(c) of the Act. Additionally, although

this program reporting requirement has been revised, the Secretary

notes that, pursuant to section 635 of the Act, State agencies shall

submit as part of the supported employment supplement to their State

plan a summary of the results of the comprehensive, statewide

assessment on the rehabilitation and career needs of individuals with

severe disabilities and the need for supported employment services.

Changes: The Secretary has amended Sec. 361.29 to clarify that each

mandatory assessment and review identified in paragraph (a) as part of

the DSU's continuing statewide studies must be conducted triennially in

conjunction with the development of the State plan. In addition,

paragraph (a)(3) of this section of the proposed regulations (annual

analysis of ineligible individuals and ineligibility determinations)

has been changed to a reporting requirement in the State plan and

relocated to paragraph (c)(3) in the final regulations. The Secretary

also has deleted the analysis of the State's progress in achieving the

objectives in the strategic plan from the annual evaluation

requirements in paragraph (b) of this section. Finally, the Secretary

has revised paragraph (c)(3) of this section to require that the DSU

maintain copies of its statewide studies and annual evaluations and

make those copies available upon the request of the Secretary. This

provision has been relocated to paragraph (c)(4) in the final

regulations.

Sec. 361.33 Use, assessment, and support of community rehabilitation

programs

Comments: Some commenters opposed the requirement that vocational

rehabilitation services received through community rehabilitation

programs must be provided in the most integrated settings possible.

Other commenters requested that this section be revised to require the

development of a plan for improving existing community rehabilitation

programs.

Discussion: Section 102(b)(1)(B) of the Act requires that

vocational rehabilitation services, including those provided by

community rehabilitation programs, be provided in the most integrated

settings possible. Thus, the standard of integration specified in this

section is consistent with the Act and with other sections of the

regulations governing the provision of services.

The Secretary recognizes that the proposed regulations did not

adequately address each statutory requirement in section 101(a) of the

Act related to community rehabilitation programs. Consequently, the

Secretary believes that this section of the final regulations should be

reorganized, revised, and retitled in an effort to more accurately

reflect all of these statutory requirements, including the requirement

that DSUs develop plans for improving existing programs.

In addition, the Secretary believes that DSUs should be required to

describe in the State plan the need to use Federal funds in support of

new or existing community rehabilitation programs in light of recent

program audit findings indicating that some States have used Federal

funds received under the authority for establishing, developing, or

improving community rehabilitation programs for purposes other than

providing VR services to applicants and eligible individuals. Any

paperwork burden or cost associated with this description, the

Secretary believes, is significantly outweighed by the need to ensure

that program funds used to support community rehabilitation programs

are properly expended.

Changes: The Secretary has revised Sec. 361.33 to require that the

State plan contain plans for improving existing community

rehabilitation programs. In addition, the Secretary has revised this

section to require States to describe in the State plan the need to

establish, develop, or improve, as appropriate, a community

rehabilitation program to provide VR services to applicants and

eligible individuals. This requirement is consistent with revisions

made to the definition of ``establishment, development, or improvement

of a public or nonprofit community rehabilitation program'' in

Sec. 361.5(b)(16) to clarify that Federal support of community

rehabilitation programs is limited to the provision of services to

applicants and eligible individuals under the VR program. Finally, this

section has been retitled ``use, assessment, and support of community

rehabilitation programs'' and has been reorganized to reflect these

three types of requirements.

Sec. 361.34 Supported employment plan

Comments: One commenter opposed the requirement in the proposed

regulations that the DSU submit annual revisions to its supported

employment plan as a supplement to its State plan.

Discussion: The Secretary does not intend to require DSUs to

annually revise each provision of its supported employment plan and

submit those revisions to RSA every year. Section 635(a) of the Act

requires that each State submit a State plan supplement for providing

supported employment services and ``annual revisions [to] the plan

supplement as may be necessary.'' Pursuant to section 635(b)(3) of the

Act, however, RSA requires that each year the DSU explain how it will

expend its annual allotment of supported employment funds received

under section 632 of the Act. Thus, at a minimum, the DSU is required

to submit an annual revision to its State plan attachment that

describes its plans for distributing section 632 funds for purposes of

providing supported employment services to individuals with the most

severe disabilities. In addition, the State unit shall provide, on an

annual basis, any revisions to its supported employment plan that are

necessary to reflect corresponding changes in State policies or

practices regarding the provision of supported employment services.

Changes: The Secretary has revised Sec. 361.34(b) to clarify that

the DSU is required to submit ``any needed'' annual revisions to its

supported employment plan.

[[Page 6322]]

Sec. 361.35 Strategic plan

Comments: Two commenters opposed the requirement that the strategic

plan be submitted as a supplement to the State plan.

Discussion: Section 120 of the Act requires that each State develop

a strategic plan for developing, expanding, and improving VR services

and submit the plan to RSA. In addition, section 101(a)(34)(A) of the

Act requires that the State plan include an assurance that the State

has developed and implemented a strategic plan. The statute, however,

does not authorize the Secretary to approve or disapprove the strategic

plan. Consistent with these requirements, the Secretary does not

consider the strategic plan to be part of the State plan that is

subject to the approval of the Secretary, but is requiring the DSU to

submit the strategic plan and the State plan at the same time for

purposes of administrative efficiency.

Changes: The Secretary has amended Sec. 361.35(b) to require that

the DSU submit the strategic plan at the same time that it submits the

State plan.

Sec. 361.37 Establishment and maintenance of information and referral

programs

Comments: The majority of commenters on this section of the

proposed regulations supported the new provision that would authorize

State units operating under an order of selection to establish an

expanded information and referral program for eligible individuals who

do not meet the order of selection criteria for receiving VR services.

Some commenters did seek additional clarification as to whether

counseling and guidance services are authorized or whether an IWRP is

to be developed for individuals served under the expanded program. One

commenter requested that the Secretary define the term ``referral for

job placement.'' Other commenters requested that DSUs be permitted to

count as successful outcomes those individuals who obtain employment

following a referral by the DSU. A limited number of commenters

believed the expanded program to be inconsistent with the order of

selection requirements in the Act.

Discussion: The expanded information and referral program

authorized in this section is intended to address the concerns of some

State units operating under an order of selection. These State units

believe they should be permitted to provide limited non-purchased

services to eligible individuals who do not qualify for services under

the State unit's priority categories. An order of selection is required

under section 101(a)(5)(A) of the Act if a State unit determines that

it is unable to provide services to all eligible individuals.

Authorization of an expanded information and referral program under

this section is consistent with the Act as long as the DSU, in carrying

out the expanded program, does not use funds needed to provide VR

services to eligible individuals who are able to be served under the

State unit's order of selection. An assurance to this effect is a key

condition to operating an expanded program. In addition, the Secretary

expects a DSU to expend a limited level of resources (e.g., staff time

and equipment) in support of its referral program. For example, a DSU

staff member can administer the expanded program only to extent that

the staff person is not needed to provide VR services to eligible

individuals who qualify for services. This limited commitment of

resources must be reflected in the DSU's description of its program

under paragraph (c)(2) of this section.

The Secretary agrees that it is appropriate to provide counseling

and guidance services under the expanded referral program.

Authorization of these services further distinguishes the expanded

program from the general information and referral functions performed

by the DSU for any individual with a disability. However, DSUs are not

expected to develop IWRPs for eligible individuals receiving expanded

information and referral services since these individuals do not meet

the DSU's criteria for receiving services under its order of selection

and, therefore, cannot receive the full range of services under section

103(a) of the Act to address their rehabilitation needs.

The Secretary believes that the term ``referral for job placement''

is self-explanatory. The expanded program authorizes DSUs to refer

individuals to various public and private placement agencies in the

community that may be able to assist the individual in obtaining

employment.

Although the proposed regulations had required DSUs to track the

results of its expanded information and referral program, the final

regulations make this a State option. For those DSUs that choose to

track and report on individuals who obtain employment following their

participation in the expanded information and referral program, the

final regulations require that the DSU report to RSA the number of

individuals served and the number who obtain employment. However, the

Secretary emphasizes that the number of individuals who are assisted,

in part, under the expanded information and referral program and who

subsequently obtain employment must be identified separately from those

individuals who receive full services under an IWRP and achieve an

employment outcome under the VR program. Individuals who obtain

employment following their receipt of limited counseling, guidance, and

referral services through the expanded program are not considered to

have achieved an employment outcome under Sec. 361.56 of the

regulations.

Changes: The Secretary has revised Sec. 361.37(c) to authorize

counseling and guidance services under the DSU's expanded information

and referral program. In addition, paragraph (c) of this section has

been amended to give the DSU the discretion to determine whether to

track the results of its expanded information and referral program.

Sec. 361.38 Protection, use, and release of personal information

Comments: One commenter questioned whether the regulations

authorize the release of personal information to the State

Rehabilitation Advisory Council for purposes of evaluating program

effectiveness and consumer satisfaction. Other commenters stated that

this section should permit applicants or eligible individuals to

examine, as well as receive copies of, the information in their record

of services.

Some commenters argued that determinations as to whether

information is harmful under paragraph (c)(2) of this section should be

made by objective third parties rather than DSUs. These commenters were

concerned that a conservative interpretation of the term ``harmful'' by

a State unit would result in limited access to important information.

Additional commenters requested that applicants and eligible

individuals be given unrestricted access to personal information

obtained by the DSU from other agencies and organizations. Other

commenters sought authorization in this section for the removal of

inaccurate or misleading information from the record of services.

Finally, some commenters requested clarification of the term ``judicial

officer'' in paragraph (e)(4) of this section, which is used in

connection with the release of information in response to a judicial

order.

Discussion: Paragraph (d) of this section authorizes the release of

personal information to entities that evaluate the VR program as long

as the evaluation is directly related to the

[[Page 6323]]

administration of the program or to the improvement of the quality of

life for applicants and eligible individuals. State Rehabilitation

Advisory Councils are responsible for evaluating the effectiveness of,

and consumer satisfaction with, the State agency and VR services.

Because the Council's evaluations are designed to facilitate

improvement in the administration of the VR program and in the

provision of VR services, personal information may be released to the

Council for purposes of carrying out its evaluative functions, provided

that the Council safeguards the confidentiality of the information

consistent with the requirements in paragraph (d).

The Secretary recognizes that, in some instances, an applicant or

eligible individual may need ready access to the information in his or

her case record, in addition to copies of the information. The proposed

regulations were not intended to foreclose the current regulatory

option that permits applicants and eligible individuals to examine the

information in their record of services.

The Secretary believes it would be unduly burdensome to require

that an objective third party rather than the DSU determine whether

information requested by an applicant or eligible individual is

``harmful'' to that individual. Moreover, the Secretary regards any

inconvenience resulting from the individual's inability to directly

receive ``harmful'' information as minimal since the relevant

information must still be provided to the individual, except that it

shall be provided through a third party chosen by the applicant or

eligible individual. The Secretary also notes that the individual's

right under paragraph (c)(2) of this section to choose the person to

whom harmful information is released supersedes any conflicting State

confidentiality policy developed under paragraph (a)(1) that designates

a specific individual to receive harmful information (e.g., medical

professional). Nevertheless, if a representative has been assigned by a

court to represent the applicant or eligible individual, the harmful

information must be released to the individual through the court-

appointed representative. This exception is particularly applicable if

the applicant or eligible individual is a minor or has limited

cognitive capacity.

The Secretary does not believe that there is a basis for requiring

that applicants and eligible individuals be given unrestricted access

to personal information obtained by the DSU from other agencies and

organizations. Release of information developed or compiled by another

agency or organization is subject to the conditions established by that

entity in accordance with paragraph (c)(3) of this section.

The Secretary recognizes that any applicant or eligible individual

would prefer that inaccurate or misleading information be removed from

the individual's record of services. On the other hand, the Secretary

also believes it would be unduly burdensome to impose, through these

regulations, costly and time-consuming due process procedures that

would enable an individual to legally challenge the accuracy of the

information in his or her file. It is within the discretion of the DSU

to determine the extent to which an individual may challenge the

information in that individual's record of services. However, the

Secretary believes, at a minimum, that applicants and eligible

individuals should be given an opportunity to question the accuracy of

the information in the individual's record of services and, if

unsuccessful in having the information removed, should be permitted to

include a statement in the record that identifies the information that

the individual considers to be inaccurate.

The Secretary emphasizes that DSUs are not authorized to release

personal information in response to a subpoena or other document issued

by a party to a dispute or an attorney. Release is authorized only if a

judge or other judicial officer orders the State unit to release the

information. The term ``judicial officer'' in the proposed regulations

was intended to mean any judge, magistrate, or other official who is

authorized to decide the merits of, and issue, a court order. The

Secretary has clarified this intention in the final regulations.

Changes: The Secretary has expanded paragraph (c)(1) of Sec. 361.38

to require that the DSU make the information in the record of services

available for inspection by the applicant or eligible individual. In

addition, paragraph (c)(2) has been amended to clarify that if a court

has appointed a representative to represent an applicant or eligible

individual, then any requested information that is considered harmful

to the individual shall be provided to the individual through the

court-appointed representative. The Secretary also has expanded

paragraph (c) to authorize applicants and eligible individuals to

request that misleading or inaccurate information in the individual's

record of services be amended and to have the request documented in the

individual's file. Finally, paragraph (e)(4) has been clarified to

require the release of information in response to an order issued by a

judge, magistrate, or other authorized judicial officer.

Sec. 361.41 Processing referrals and applications

Comments: Some commenters opposed the proposed requirement that the

DSU develop timelines for informing individuals referred to the DSU for

VR services of its application requirements and for gathering

information necessary to assess the individual's eligibility and

priority for services. While these commenters viewed the timeline

requirements as unduly burdensome, other commenters supported the

provision and emphasized the need for DSUs to respond timely to

individuals during the pre-application stage.

One commenter stated that authorized extensions of the 60-day time

period for determining eligibility should be limited in duration. Other

commenters stated that all individuals should be required to complete

the DSU's formal application form before the 60-day time period begins

to run. Finally, one commenter requested clarification as to whether

all individuals must provide information necessary to conduct an

assessment for determining eligibility and priority for services before

being considered ``to have submitted an application.''

Discussion: The Secretary believes that it is important to retain

in the final regulations the requirement that DSUs develop timelines

for making good faith efforts to inform individuals referred to the VR

program of the DSU's application requirements and to obtain information

needed to assess the individual's eligibility and priority for

services. The Secretary agrees with those commenters who indicated that

these timelines are necessary to ensure that there is no unreasonable

delay between the individual's referral and application for VR

services. Moreover, this requirement is unlikely to cause DSUs undue

burden since many States already have in place timelines for handling

referrals. However, the Secretary believes that the development of an

appropriate, good faith timeline for processing referrals is a matter

of State discretion and that it would be inappropriate to impose in the

final regulations a specific Federal time period for this purpose.

Section 102(a)(5)(A) authorizes extensions of the 60-day time

period for determining eligibility if (1) exceptional or unforeseen

circumstances arise or (2) an extended evaluation of the individual is

necessary, which may not exceed 18 months. The Secretary agrees,

[[Page 6324]]

however, that extensions due to exceptional or unforeseen circumstances

cannot be open-ended but must be limited to a specific time period that

is mutually agreed upon by the individual and the DSU.

The Secretary believes it would be unduly restrictive to require in

all instances that an individual with a disability complete the DSU's

application form before the DSU initiates an assessment for determining

eligibility and priority for services. This limitation would be

particularly burdensome for individuals in rural areas who may not have

ready access to a DSU application form. Although the regulations

require the DSU to make its application form widely available

throughout the State, the Secretary considers it inappropriate to

penalize individuals who are unable to secure an application. Thus, the

Secretary maintains that the 60-day time period for determining

eligibility begins once the individual (1) has either completed and

signed an agency application form or has otherwise requested services

and (2) has provided information necessary for the DSU to initiate the

assessment. Once an individual or the individual's representative, as

appropriate, requests services, it is expected that State units will

make good faith efforts to obtain the assessment information as quickly

as possible. The Secretary also notes that information needed to

initiate the assessment must be provided before the 60-day timeline

begins to run, whether the individual has completed an agency

application form or has otherwise requested services. Of course, it is

essential that the individual remain available during this period to

complete the assessment process.

Changes: The Secretary has amended Sec. 361.41 to require that

extensions of the 60-day time period for determining eligibility due to

exceptional or unforeseen circumstances be limited in duration and that

a specific time period be agreed to by the individual and the DSU. In

addition, the Secretary has revised this section to clarify that all

individuals who have requested VR services, whether through the

completion of an agency application or otherwise, shall be available to

complete the assessment before the individual is considered to have

submitted an application for VR services.

Sec. 361.42 Assessment for determining eligibility and priority for

services

Comments: With respect to the first eligibility criterion, several

commenters opposed the standard in the proposed regulations that

required qualified personnel ``licensed or certified in accordance with

State law and regulation'' to determine the existence of a physical or

mental impairment. The commenters further recommended that the

regulations permit DSU employees who meet requirements that are

``comparable'' to licensing or certification requirements to determine

the existence of obvious physical impairments.

Some commenters sought clarification under the second eligibility

criterion that an impairment that hinders an individual from

maintaining a job placement constitutes a ``substantial impediment to

employment.'' These commenters were concerned that the proposed

regulations appeared to limit ``substantial impediments to employment''

to impairments that prevent unemployed individuals from obtaining jobs.

Other commenters recommended that the term ``determine'' be

replaced by the statutory term ``demonstrate'' in paragraph (a)(2) of

this section, in connection with rebutting the presumption that an

individual who has a substantial impediment to employment can benefit

in terms of an employment outcome from VR services. Finally, one

commenter requested clarification as to whether individuals who qualify

for Social Security benefits are presumed eligible for VR services.

Several commenters recommended specific clarifying changes to some

of the examples following this section, whereas other commenters

opposed the use of examples under this section altogether.

Discussion: The Secretary believes that the personnel standard

proposed in connection with the first eligibility criterion is

consistent with the Act. The proposed standard was based on the

requirement in section 103(a)(1) of the Act, which states that the

assessment for determining an individual's eligibility and VR needs

must be conducted by qualified personnel. The Secretary interprets the

term ``qualified personnel'' under section 103(a)(1) of the Act to

refer to personnel who meet the DSU's personnel standards under

Sec. 361.18(c) of these final regulations (i.e., national or State-

approved certification, licensing, or registration requirements or, if

none of these requirements exist, other ``comparable requirements''

that apply to the profession in which the individual provides VR

services). Thus, a determination that an individual has a physical or

mental impairment, or meets any of the other eligibility criteria in

Sec. 361.42(a), must be made by personnel who meet existing licensure,

certification, or registration requirements applicable to their

profession. Moreover, because DSUs are required under Sec. 361.18(c) to

develop personnel standards based on existing certification or

licensure requirements, it is expected that DSU personnel who determine

the existence of impairments, including obvious physical impairments,

will be qualified within the meaning of the Act.

The Secretary agrees that an individual does not have to be

unemployed to have a ``substantial impediment to employment.'' A

``substantial impediment to employment,'' as defined in

Sec. 361.5(b)(44), includes any impairment that hinders the individual

from entering into, engaging in, or retaining employment consistent

with the individual's abilities and capabilities. Given that the

regulatory definition of the term ``substantial impediment to

employment'' clearly recognizes that currently employed individuals may

qualify for VR services for purposes of ``retaining'' their employment,

the Secretary does not believe it is necessary to revise the second

eligibility criterion in paragraph (a)(1)(ii) as the commenters

recommended.

Section 102(a)(4)(A) of the Act requires the DSU to presume that an

individual can benefit in terms of an employment outcome, unless the

DSU can ``demonstrate,'' based on clear and convincing evidence, that

the individual is incapable of benefitting in terms of an employment

outcome from VR services. The Secretary did not intend to weaken this

statutory presumption by using the term ``determine'' in place of the

term ``demonstrate'' in the proposed regulations and agrees that the

regulations should be changed to track the stronger statutory language.

In addition, the Secretary emphasizes that Social Security

beneficiaries are not automatically eligible to receive VR services,

but are presumed under section 102(a)(2) of the Act to meet only the

first two eligibility criteria under paragraph (a)(1) of this section

(i.e., the individual has a physical or mental impairment that

constitutes or results in a substantial impediment to employment).

Eligibility for services under the Social Security Act also means that

the individual is presumed to meet the first element in the definition

of ``individual with a severe disability'' under Sec. 361.5(b)(28). The

Secretary believes that these limited presumptions were clearly

reflected in the proposed regulations.

Although the Secretary believes that most of the examples in the

regulations represent useful guidance material, the Secretary agrees

that the examples

[[Page 6325]]

following this section of the proposed regulations, which had

identified six potential applications of the fourth eligibility

criterion (an individual requires VR services), should be removed from

the final regulations in light of the confusion expressed by commenters

and in recognition of the fact that eligibility determinations are

highly individualized. The commenters' confusion, the Secretary

believes, stems from the possibility that the application of the fourth

eligibility criterion may result in different outcomes for individuals

with disabilities who face apparently similar circumstances. By

removing these examples, the Secretary seeks to avoid causing similar

confusion on the part of individual counselors charged with making

individual eligibility determinations. Because the examples used

elsewhere in the regulations (e.g., permissible expenses under the

definitions of ``maintenance'' and ``transportation'') are

straightforward applications of clear issues and do not create similar

confusion among commenters, the Secretary believes that those examples

should be retained in the final regulations.

Changes: The Secretary has amended Sec. 361.42(a)(2) of this

section to require a ``demonstration,'' based on clear and convincing

evidence, that an individual is incapable of benefitting from VR

services in order for the DSU to overcome the presumption that an

individual can benefit from VR services. A technical change also has

been made to paragraph (a)(1)(iii) to identify more accurately the

third eligibility criterion as a ``presumption'' of benefit, not a

``determination'' of benefit. In addition, the Secretary has removed

from the final regulations the examples that had followed this section

in the proposed regulations of how an individual may or may not meet

the final eligibility criterion.

Sec. 361.43 Procedures for ineligibility determination

Comments: Several commenters stated that DSUs should be required,

in all instances, to inform individuals in writing of the DSU's

ineligibility determination. These commenters were concerned that the

proposed regulations authorized DSUs to inform individuals of

ineligibility determinations through an appropriate mode of

communication without a written record.

In addition, several commenters indicated that it is unduly

burdensome to require DSUs to review all ineligibility determinations

within 12 months. These commenters stated that the review of

ineligibility determinations should be limited to those determinations

that are based on a finding that the individual is incapable of

achieving an employment outcome. Other commenters asked that the

regulations specify additional bases for not reviewing ineligibility

determinations (e.g., that the individual's disability is rapidly

progressive or terminal).

Discussion: The proposed regulations incorrectly indicated that

DSUs have the option of providing ineligibility notices in writing or

through an appropriate mode of communication. The Secretary agrees

that, at a minimum, notice of an ineligibility determination and other

required information should be provided to the individual in writing

and supplemented, as necessary, by other appropriate modes of

communication in accordance with the individual's informed choice.

The Secretary agrees with the suggestion to modify the requirements

in paragraph (d) of this section governing the review of ineligibility

determinations in light of the views expressed by public commenters.

The proposed regulations required DSUs to review all ineligibility

determinations at least once within 12 months and to review annually

thereafter if requested by the individual determinations based on a

finding that the individual cannot achieve an employment outcome. In

order to reduce the process burden and associated costs on DSUs,

however, the Secretary believes that DSUs should be required to review

within 12 months, and annually thereafter if requested by the

individual, only those ineligibility determinations that are based on a

finding that the individual is incapable of achieving an employment

outcome. Moreover, an additional exception to this review requirement,

which is authorized under the current regulations, should be permitted

for situations in which the individual's medical condition is rapidly

progressive or terminal. The Secretary believes this narrower

interpretation of the review requirements is supported by sections

101(a)(9)(D) and 102(c) of the Act and notes that this position is

consistent with the current regulations in 34 CFR 361.35(d). The

Secretary also notes that the requirements of this section apply both

to ineligibility determinations following an extended evaluation and to

ineligibility determinations made after an individual has begun to

receive services under an IWRP.

Changes: The Secretary has revised Sec. 361.43 to specify that

notice of ineligibility determinations must be provided in writing and

must be supplemented, as necessary, by other appropriate modes of

communication consistent with the individual's informed choice. For

example, a DSU could meet these requirements by providing an

ineligibility notice in braille or large print form to an applicant who

has a visual impairment. In addition, the Secretary has revised this

section to require DSUs to review only ineligibility determinations

that are based on a finding that the individual is incapable of

achieving an employment outcome. The final regulations also clarify

that this review of ineligibility determinations need not be conducted

if the individual's medical condition is rapidly progressive or

terminal.

Sec. 361.44 Closure without eligibility determination

Comments: One commenter requested that this section be amended to

state that a DSU ``shall not close'' (rather than ``may not close'') an

applicant's case prior to making an eligibility determination in order

to clarify that the prohibition under this section is mandatory.

Discussion: The Secretary emphasizes that State units are

prohibited from closing an applicant's record of services prior to

making an eligibility determination unless certain circumstances are

evident (e.g., the applicant declines to participate in the assessment,

and the DSU has made a reasonable number of attempts to encourage the

applicant's participation). The Secretary interprets the phrase ``may

not close'' to signify a mandatory prohibition.

Changes: None.

Sec. 361.45 Development of the individualized written rehabilitation

program

Comments: Several commenters stated that the regulations should be

strengthened to ensure that the eligible individual's employment goal

is consistent with that individual's informed choice. In addition, some

commenters opposed requiring DSUs to develop timelines for the prompt

development of IWRPs, whereas other commenters supported the timeline

requirement as a necessary protection for eligible individuals.

Commenters also stated that the DSU should not be required to revise an

individual's IWRP to reflect minor changes to services that are already

identified in the IWRP.

Discussion: The Secretary agrees that the informed choice of the

individual, as well as the individual's strengths, priorities,

concerns, abilities, capabilities, and interests, should be considered

in determining the individual's employment goal. Addition

[[Page 6326]]

of the term ``informed choice'' to the list of factors to be considered

under paragraph (a) of this section is also consistent with the

consideration of informed choice in connection with the provision of

services under Sec. 361.48 and in connection with the achievement of an

employment outcome under Sec. 361.56.

The Secretary believes that the proposed requirement that DSUs

establish and implement timelines for the prompt development of IWRPs

should be retained in the final regulations. The Secretary agrees with

those commenters who indicated that these timelines are necessary to

guard against unreasonable delays in the development of the IWRP once

an individual is determined eligible for VR services. It should also be

noted that this section does not require DSUs to apply an arbitrary

time limit to the development of all IWRPs, as some commenters had

questioned. Instead, DSUs are required to develop general standards

that ensure the timely development of IWRPs as long as the standards

include timelines that take into account the specific needs of the

individual.

Changes in an individual's vocational goal, intermediate

objectives, or VR services must be documented through a revision in the

IWRP after obtaining the agreement and signature of the individual. The

Secretary believes that changing the reference from ``VR needs'' to

``VR services'' will help clarify this provision.

In addition, the Secretary agrees that minor changes to an

individual's program of services do not have to be recorded in a

revision to the IWRP. This means, for example, that a slight change in

the cost of a previously authorized VR service would not warrant a

revision to the IWRP. On the other hand, a substantive change to an

existing service (e.g., a change in service provider) or the addition

of a new service must be documented by a revision. Regardless of

whether a particular change to an individual's program necessitates a

revision to the IWRP, however, the Secretary expects that the DSU will

obtain the agreement of the individual before the change is

implemented.

Changes: The Secretary has revised Sec. 361.45 to clarify that the

informed choice of the individual must be considered in the development

of the IWRP and the identification of a vocational goal. The Secretary

also has amended this section to require the DSU to incorporate into

the IWRP any revisions necessary to reflect changes to the individual's

goal, objectives, or VR services and to obtain the individual's

agreement and signature to the revisions.

Sec. 361.46 Content of the IWRP

Comments: Some commenters on the proposed regulations questioned

certain required elements of the IWRP, contending they were

inconsistent with the Act and unnecessarily burdensome. Specifically,

several commenters questioned the basis for requiring that the long-

term vocational goal identified in the IWRP be ``specific.'' Similarly,

other commenters stated that intermediate rehabilitation objectives

need not be ``measurable.'' Additional commenters opposed requiring a

projected date for the achievement of the vocational goal. Several

commenters recommended that the record of the DSU's evaluations of

individual progress be removed from the IWRP and added to the record of

services under Sec. 361.47. Finally, some commenters opposed the

requirement that the individual be provided with information concerning

the availability and qualifications of alternative service providers.

Discussion: The Secretary believes that the long-term vocational

goal must be stated with some specificity in the IWRP in order for it

to be meaningful. The Secretary does not intend that the IWRP identify

the exact job that the individual intends to obtain, but expects, at a

minimum, that the vocational goal be described in terms of a particular

type of profession or occupation. For example, ``clerical work'' is a

sufficiently detailed vocational goal under this requirement, whereas a

vocational goal of ``supported employment'' or ``self-employment''

would be impermissibly vague.

The requirement in the proposed regulations that the intermediate

rehabilitation objectives must be ``measurable'' was misplaced and has

been eliminated from the final regulations. The use of this term was

based on the requirement in section 102(b)(1)(B)(vii) of the Act that

the DSU shall develop procedures for evaluating the individual's

progress toward meeting the intermediate rehabilitation objectives. The

final regulations also clarify that the progress of the individual in

satisfying the objectives must be measured periodically by the DSU, but

a record of the reviews and evaluations need not be included in the

IWRP. These reviews and evaluations, the Secretary agrees, should be

maintained as part of the individual's record of services under

Sec. 361.47, as some commenters suggested.

The Secretary does not expect DSUs to specify a date certain on

which an employment outcome shall be achieved. Thus, the term

``projected date'' for the achievement of the individual's vocational

goal in paragraph (a)(4) of this section in the proposed regulations

has been replaced by the term ``projected timeframe'' in the final

regulations. This provision is intended to ensure that the individual

understands how long the rehabilitation process is expected to take.

The Secretary believes that the requirement in this section

concerning the individual's description of how information was provided

about the availability and qualification of alternative service

providers should be removed from the final regulations since it is

duplicative of the choice requirements in Sec. 361.52. Section

361.52(b) specifies that the DSU shall provide the individual, or

assist the individual in acquiring, information necessary to make an

informed choice about VR services and service providers, including

information about the qualifications of potential service providers.

Changes: The Secretary has revised Sec. 361.46 by removing the term

``measurable'' from paragraph (a)(2). The Secretary also has replaced

the term ``projected date'' in paragraph (a)(4) of this section with

the term ``projected timeframe'' in connection with the achievement of

the individual's vocational goal. Additionally, the record of reviews

and evaluations of individual progress has been removed from paragraph

(a)(5) of this section as an IWRP requirement and relocated to

Sec. 361.47(h) as a record of services requirement. Finally, the

reference in the individual's statement to the availability and

qualifications of alternative service providers has been removed from

paragraph (a)(6).

Sec. 361.47 Record of services

Comments: None.

Discussion: In the proposed regulations, the Secretary proposed to

delete from the record of services a number of requirements that were

considered burdensome or were adequately addressed in other regulatory

provisions. In particular, several requirements that were duplicative

of IWRP content requirements in Sec. 361.46 were proposed for removal

from this section. For the same reason, the Secretary believes that

proposed Sec. 361.47(h) should be deleted from the final regulations.

This provision would have required documentation in the record of

services of the DSU's reasons for terminating services to an individual

and, if appropriate, documentation of the

[[Page 6327]]

DSU's basis for determining that the individual has achieved an

employment outcome under Sec. 361.56. The Secretary believes that

further reducing the paperwork burden on DSUs by removing proposed

Sec. 361.47(h) is appropriate given that this requirement is adequately

addressed by Sec. 361.46(a)(10).

However, in order to ensure that individuals in competitive

employment are compensated in accordance with the definition of

``competitive employment'' in Sec. 361.5(b)(10), the Secretary believes

that the record of services for those individuals must include

documentation that the individual is compensated at or above the

minimum wage and receives at least the customary wage and benefit level

paid to non-disabled persons performing similar work for the same

employer.

Changes: The Secretary has removed from Sec. 361.47 the

documentation requirements relating to the termination of services and

the achievement of an employment outcome and has added a cross-

reference in Sec. 361.46(a)(10) to Sec. 361.56 for additional

clarification. In addition, this section has been amended to require

that the DSU verify in the record of services that an individual with a

disability in competitive employment is compensated at or above the

minimum wage and that the individual's wage and level of benefits are

not less than that paid by the employer for the same or similar work

performed by non-disabled individuals. This new requirement is located

in paragraph (i) of this section.

Sec. 361.48 Scope of vocational rehabilitation services for

individuals with disabilities

Comments: Some commenters recommended that this section of the

final regulations identify assessment services, counseling and

guidance, and rehabilitation technology as mandatory services that the

DSU shall provide to all individuals in need of these services. Other

commenters opposed limiting counseling and guidance services authorized

under this section to ``vocational counseling and guidance.'' Two

commenters requested that the final regulations clarify that it is the

joint responsibility of the DSU and the individual to secure grant

assistance from sources other than VR program funds to pay for training

in institutions of higher education. Other commenters recommended that

language be added to paragraph (a)(13) of this section to ensure that

job search and placement services are not discontinued before an

individual achieves the employment outcome specified in the

individual's IWRP. One commenter opposed the requirement in paragraph

(b) that the State plan descriptions related to the provision of

rehabilitation technology and personal assistance services be provided

on an annual basis. Another commenter stated that the description of

the DSU's strategies for expanding the availability of personal

assistance services under Sec. 361.48(b)(3) of the proposed regulations

is unduly burdensome and is not required by the Act. Finally, several

commenters recommended that the final regulations require, consistent

with the Act, a description in the State plan of how assistive

technology devices are provided or worksite assessments are made as

part of the assessment for determining eligibility and VR needs of the

individual.

Discussion: Section 361.48, which implements section 103(a) of the

Act, authorizes specific vocational rehabilitation services necessary

to address the rehabilitation needs of individuals with disabilities.

These services must be included in each DSU's program of VR services

and, consistent with Sec. 361.45(a) and Sec. 361.46(a), must be

provided to an eligible individual if the service is needed to achieve

the intermediate rehabilitation objectives or vocational goal included

in the individual's IWRP. In addition, Sec. 361.42 requires DSUs to

conduct an assessment for determining eligibility and priority for

services for each applicant and to provide rehabilitation technology

devices and services during the assessment if needed to determine

eligibility. In light of these requirements, the Secretary does not

believe it is necessary to identify assessment services, counseling and

guidance, and rehabilitation technology as mandatory services under

this section of the regulations, as some commenters had recommended.

The commenters correctly noted that section 101(a)(8) of the Act

exempts these services from the required search for comparable service

and benefits. Regardless of whether a particular service is subject to

the comparable service and benefits requirements, however, the

regulations clearly require DSUs to conduct an assessment for

determining eligibility and priority for services for each applicant

and to ensure that each eligible individual receives needed VR services

in accordance with the individual's IWRP.

Those commenters who opposed changing the term ``counseling and

guidance'' to ``vocational counseling and guidance'' in the proposed

regulations were concerned that the change would limit the scope of

counseling and guidance currently provided under the program.

Specifically, the commenters were concerned that this term would

prohibit the provision of personal adjustment counseling and other

related counseling services currently provided by vocational

rehabilitation counselors--services that are necessary to address

issues confronted by individuals with disabilities seeking employment,

including issues associated with adjusting to environmental barriers,

medical issues, family and social issues, and other related issues that

are not considered ``vocational.'' However, the use of the term

``vocational counseling and guidance'' in the proposed regulations was

not intended to limit the scope of the counseling and guidance that an

individual may need in order to achieve a vocational goal. Rather, the

term ``vocational counseling and guidance'' was intended merely as a

means of distinguishing discrete, therapeutic counseling and guidance

services that are necessary for an individual to achieve an employment

outcome from the general supportive role that the VR counselor performs

throughout the rehabilitation process in connection with any service.

Discrete, therapeutic counseling and guidance services include personal

adjustment counseling, counseling that addresses medical, family, or

social issues, vocational counseling, and any other form of counseling

and guidance that is necessary for an individual with a disability to

achieve an employment outcome. The Secretary agrees that changing the

term ``vocational counseling and guidance'' to ``vocational

rehabilitation counseling and guidance'' in the final regulations, as

some commenters suggested, better reflects this broad interpretation.

Like the term used in the proposed regulations, this change does not

affect the general counseling and guidance relationship that exists

between the counselor and the individual during the entire

rehabilitation process.

The Secretary agrees that the DSU and the individual share a joint

responsibility to secure grant assistance from sources other than VR

program funds in order to pay for training in institutions of higher

education. This position is consistent with RSA's longstanding policy

relating to the requirement that available comparable services and

benefits be located and used before a DSU expends program funds to pay

for VR services. Under this policy, DSUs are responsible for

identifying providers of comparable services and benefits and for

assisting

[[Page 6328]]

eligible individuals in obtaining those resources. The individual, on

the other hand, is responsible for applying for appropriate comparable

services and benefits identified by the DSU. The Secretary believes

that this policy is equally applicable to the requirement in section

103(a)(3) of the Act that maximum efforts be made to secure alternative

sources to pay for training in institutions of higher education.

Accordingly, it is expected that DSUs will locate alternative funding

sources to support the cost of training in colleges and universities

and, to the extent necessary, assist eligible individuals in obtaining

this assistance. It is further expected that an individual in need of

training in a higher education institution will pursue and apply for

alternative funding sources identified by the DSU.

Commenters on Sec. 361.48(a)(13) of the proposed regulations were

concerned that DSUs could terminate job placement services anytime an

eligible individual obtains a job even if the job is inconsistent with

the vocational goal identified in the individual's IWRP. As a result,

these commenters recommended that this section specifically authorize

job search and placement assistance until the individual achieves an

employment outcome that is consistent with his or her abilities,

capabilities, interests, and informed choice. The Secretary believes,

however, that the commenters' concerns are fully addressed by

Sec. 361.56 of the regulations. That section contains the requirements

for determining whether an individual has achieved an employment

outcome, including the requirement in Sec. 361.56(b) that the

employment outcome be consistent with the individual's abilities,

capabilities, interests, and informed choice. Thus, termination of

services on the basis that the individual has achieved an employment

outcome is dependent, in part, upon whether the job placement is

appropriate for the individual in accordance with Sec. 361.56(b). If an

eligible individual receiving VR services is underemployed (i.e.,

placed in a job that is not consistent with the individual's abilities,

capabilities, interests, and informed choice), the DSU may not

discontinue services, including job search and placement assistance,

that the individual needs in order to achieve the vocational goal

specified in the individual's IWRP.

In an effort to further reduce the paperwork burden and associated

costs on DSUs, the Secretary has made two regulatory changes to

paragraph (b) of this section that were recommended by commenters on

the proposed regulations. First, the final regulations require the DSU

to submit descriptions related to the provision of rehabilitation

technology and personal assistance services triennially as part of its

new State plan. The proposed regulations would have required submission

of these descriptions annually as revisions to the State plan. Second,

the proposed State plan description of the DSU's strategies for

expanding the availability of personal assistance services has been

removed from the final regulations because it is not required by

statute and could be more appropriately addressed in a DSU's strategic

plan. Additionally, the Secretary has added to Sec. 361.48(b) of the

final regulations a requirement that the State plan describe how

assistive technology devices are provided or worksite assessments are

made as part of the assessment for determining eligibility and VR needs

of the individual. This State plan component, which is required under

section 101(a)(31) of the Act, was inadvertently omitted from the

proposed regulations.

Changes: The Secretary has revised Sec. 361.48 of the proposed

regulations by changing the term ``vocational counseling and guidance''

under paragraph (a)(3) of this section to ``vocational rehabilitation

counseling and guidance.'' The Secretary also has revised this section

by clarifying under paragraph (a)(6) that it is the joint

responsibility of the DSU and the individual to secure grant assistance

from other sources before using VR funds to pay for training in

institutions of higher education. In addition, the term ``annually''

has been removed from paragraph (b) of this section. The description in

the State plan regarding the DSU's strategies for expanding the

availability of personal assistance services that would have been

required under Sec. 361.48(b)(3) of the proposed regulations also has

been removed from the final regulations. Finally, the Secretary has

added to this section the requirement that the State plan describe the

manner in which assistive technology devices are provided or worksite

assessments are made as part of the assessment for determining

eligibility and VR needs of the individual.

Sec. 361.49 Scope of Vocational Rehabilitation Services for Groups of

Individuals With Disabilities

Comments: None.

Discussion: Because the final regulations limit Sec. 361.50 to

written policies that cover the nature and scope of services provided

to individuals under Sec. 361.48, the Secretary believes that the

requirement regarding written policies for services to groups properly

belongs in Sec. 361.49(b)(2) of the final regulations. This provision

is intended to ensure that if a DSU chooses to provide services to

groups under Sec. 361.49, then the DSU develops and maintains written

policies covering each service and the criteria under which each

service is provided.

Changes: The Secretary has revised Sec. 361.49 by relocating the

requirement regarding written policies for services to groups from

Sec. 361.50 of the proposed regulations to Sec. 361.49(b)(2).

Sec. 361.50 Written Policies Governing the Provision of Services for

Individuals With Disabilities

Comments: One commenter stated that it is inappropriate for this

section to require DSUs to develop written policies governing the

provision of VR services to groups since these services are not

included in the individual's IWRP. Several commenters recommended

requiring that the written policies developed under this section must

ensure that the provision of services to each individual is consistent

with the individual's informed choice. Finally, one commenter

questioned whether DSUs can prohibit verbal authorization for services

in all instances.

Discussion: The Secretary recognizes the inconsistency in requiring

the DSU to develop written policies that cover the scope of VR services

for groups under Sec. 361.49 and, at the same time, ensure that the

provision of services is based on the needs of the individual as

identified in the individual's IWRP. The commenter on the proposed

regulations who raised this issue correctly noted that group services

under Sec. 361.49 are not necessarily included in the IWRP to address a

rehabilitation need of the individual. The Secretary intends that the

policies developed under Sec. 361.50 will ensure that the provision of

services to any eligible individual will be based on that individual's

needs and that no arbitrary limits, including limits pertaining to the

location, cost, or duration of a particular service, will be placed on

an individual's receipt of VR services.

The Secretary agrees that the provision of VR services must be

consistent with the informed choice of the individual. This position is

clearly reflected in Sec. 361.48 of the regulations. Consequently, the

final regulations specify that the DSU's written policies developed

under Sec. 361.50 must ensure that the provision of VR services is

based on the individual's rehabilitation needs and is consistent with

the individual's informed choice.

[[Page 6329]]

Consistent with the proposed regulations, Sec. 361.50(d) of the

final regulations requires DSUs to establish policies related to the

timely authorization of services, including any conditions under which

it allows verbal authorization. Although the Secretary expects that, in

most instances, the DSU will provide written authorization of services

before or at the same time that the services are provided, the

Secretary agrees that DSUs should have the flexibility to determine the

circumstances under which verbal authorization for services is

permitted. The Secretary recognizes, however, that some States prohibit

verbal authorization under all circumstances. This provision is not

intended to infringe on this State prerogative and requires only that

the DSU specify the conditions, if any, under which verbal

authorization can be given.

Changes: The Secretary has amended Sec. 361.50 by clarifying that

this section applies only to the provision of services to individuals

with disabilities under Sec. 361.48. This section also has been

retitled to reflect this change. A corresponding requirement regarding

written policies for services to groups has been added to

Sec. 361.49(b) of the final regulations. In addition, the Secretary has

revised Sec. 361.50 to specify that the DSU's written policies must

ensure that the provision of services is consistent with the

individual's informed choice. Finally, paragraph (d) of this section

has been clarified to require that the DSU's policies regarding the

timely authorization of services identify any conditions under which

verbal authorization can be given.

Sec. 361.51 Written Standards for Facilities and Providers of Services

Comments: None.

Discussion: The Secretary believes it is necessary to revise the

requirements relating to qualified personnel in paragraph (b)(1) of

this section to reflect corresponding changes to the personnel

standards included in the State agency's comprehensive system of

personnel development under Sec. 361.18(c) of these regulations. A

change is necessary to clarify that individuals who provide VR services

shall meet existing national or State-approved certification,

licensing, or registration requirements that apply to the discipline in

which that rehabilitation professional provides VR services.

Individuals who meet ``comparable requirements,'' such as State

personnel requirements, developed by the DSU under Sec. 361.18(c) would

be authorized to provide VR services only if there are no existing

licensing, certification, or registration requirements applicable to

their particular profession. As stated in the analysis of comments on

Sec. 361.18(c), the Secretary believes that the Act precludes the use

of less rigorous ``comparable requirements'' in place of existing

national or statewide certification, licensing, or registration

requirements that apply to the discipline in which a rehabilitation

professional provides VR services.

Changes: The Secretary has revised Sec. 361.51(b) consistent with

Sec. 361.18(c) to clarify that individuals who provide VR services

shall meet applicable certification, licensing, or registration

requirements or, if none exist, other ``comparable requirements''

developed by the DSU under its comprehensive system of personnel

development.

Sec. 361.52 Opportunity To Make Informed Choices

Comments: Some commenters requested clarification of the meaning of

the term ``informed choice.'' Other commenters stated that the DSUs

should be required to inform individuals of their right to make

informed choices and to explain how informed choice may be exercised.

Additional commenters recommended requiring DSUs to provide through

appropriate modes of communication information that is necessary for an

individual to make an informed choice and to assist individuals with

cognitive disabilities in exercising choice.

Some commenters opposed the requirement that DSUs provide, or

assist individuals in obtaining, information related to the level of

consumer satisfaction with each service. These commenters stated that

information pertaining to consumer satisfaction may not be available to

the DSU in all instances. In addition, several commenters questioned

whether the sources of information specified in paragraph (c) of this

section must be used by DSUs to ensure that individuals have sufficient

information to make informed choices.

Discussion: ``Informed choice'' is a decisionmaking process in

which the individual analyzes relevant information and selects, with

the assistance of the rehabilitation counselor or coordinator, a

vocational goal, intermediate rehabilitation objectives, VR services,

and VR service providers. Accordingly, this section of the regulations

requires each DSU, in consultation with its Council if it has one, to

develop its own policies and procedures that enable individuals with

disabilities to make informed choices throughout their participation in

the VR program. In addition, the regulations identify minimum types of

information that must be provided to the individual by the DSU or

through the DSU's assistance in connection with the development of the

IWRP (e.g., informatio

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