Systems-Change Projects To Expand Employment Opportunities for Individuals With Mental or Physical Disabilities, or Both, Who Receive Public Support

SUMMARY: The Secretary proposes a priority for fiscal year (FY) 1998

and subsequent years under section 12(a)(3) of the Rehabilitation Act

of 1973, as amended (the Act) (29 U.S.C. 762(b)(3)), authorizing the

conduct of special projects and demonstrations in carrying out the

purposes of the Act. The priority would support five-year projects to

expand employment outcomes for individuals with mental or physical

disabilities, or both, who receive public support. The priority is

intended to enhance collaboration in existing systems to increase

competitive employment opportunities for individuals with disabilities

who are participants in public support programs funded by Federal,

State, and local agencies.

DATES: Comments must be received by the Department on or before June

19, 1998.

ADDRESSES: All comments concerning this proposed priority should be

addressed to Dr. Thomas Finch, U.S. Department of Education, 600

Independence Avenue, SW., Room 3038, MES Building, Washington, DC.

20202-2650. Comments may also be sent through the Internet to:

[email protected]

You must include the term ``Systems-Change Projects'' in the

subject line of your electronic message.

FOR FURTHER INFORMATION CONTACT: Pedro Romero, U.S. Department of

Education, 600 Independence Avenue, SW., Room 3316, MES Building,

Washington, DC. 20202-2650. Telephone: (202) 205-9797. Individuals who

use a telecommunications device for the deaf (TDD) may call the Federal

Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8

p.m., Eastern time, Monday through Friday.

Individuals with disabilities may obtain this document in an

alternate format (e.g., Braille, large print, audiotape, or computer

diskette) on request to the contact person listed in the preceding

paragraph.

Electronic Access to This Document

Anyone may view this document, as well as all other Department of

Education documents published in the Federal Register, in text or

portable document format (pdf) on the World Wide Web at either of the

following sites:

http://ocfo.ed.gov/fedreg.htm

http://www.ed.gov/news.html

To use the pdf you must have the Adobe Acrobat Reader Program with

Search, which is available free at either of the previous sites. If you

have questions about using the pdf, call the U.S. Government Printing

Office toll free at 1-888-293-6498.

Anyone may also view these documents in text copy only on an

electronic bulletin board of the Department. Telephone: (202) 219-1511

or, toll free, 1-800-222-4922. The documents are located under option

G--Files/Announcements, Bulletins and Press Releases.

Note: The official version of this document is the document

published in the Federal Register.

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.

This proposed priority would 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.

The Secretary will announce the final priority in a notice in the

Federal Register. The final priority will be determined by responses to

this notice, available funds, and other considerations. Funding of

particular projects depends on the availability of funds, the nature of

the final priority, and the quality of the applications received. The

publication of this proposed priority does not preclude the Secretary

from proposing or funding additional priorities, subject to meeting

applicable rulemaking requirements.

Note: This notice of proposed priority does not solicit

applications. In any year in which the Secretary chooses to use this

proposed priority, the Secretary invites applications through a

notice in the Federal Register.

Priority

Background

According to the 1994 Harris Survey of Americans with Disabilities,

two-thirds of individuals with disabilities between the ages of 16 and

64 are not working. Many of these individuals receive financial support

or services through programs funded by Federal, State, and local

agencies. Examples of these programs include Temporary Aid to Needy

Families (TANF), Supplemental Security Income (SSI), Social Security

Disability Income (SSDI), Medicaid (including Medicaid waiver

programs), Medicare, subsidized housing, and food stamps.

Statistical data reveal that of the 32 percent of adult recipients

of Aid to Families with Dependent Children (AFDC) who had a work or

functional disability, 15 percent were able to work despite their

functional limitations (National Health Interview Survey on Disability,

U.S. Department of Health and Human Services, 1994). Studies conducted

in Kansas and Washington indicate that up to 60 percent of the current

TANF recipients in those States have some type of disability. At the

same time, the TANF program requires recipients to work and also limits

the length of TANF assistance--recent developments that further

underscore the need to reduce barriers to employment confronted by

individuals with disabilities on public support.

In addition, the proportion of individuals with disabilities

receiving public support through SSI or SSDI continues to increase.

Over the past decade, the total number of SSI and SSDI beneficiaries

has doubled, and cash payments for these individuals increased to over

$55 billion (World Institute on Disability, 1996). Social Security

recipients often do not work since they would lose their Social

Security and Medicaid benefits if their earnings increased beyond a

threshold level. Thus, few individuals leave the Social Security

system. New adult SSI recipients receive benefits for an average of 10

years, whereas individuals who receive SSI benefits as children remain

on the rolls for an average of approximately 27 years (Rupp and Scott,

1995).

Many individuals participating in public support programs,

including the programs discussed previously, are unable to obtain the

services or supports they need to become competitively employed and

achieve economic independence. Employment training

[[Page 27807]]

programs that serve the general population, as well as employers

themselves, are often unable to meet the specialized needs of these

individuals. In addition, individuals with disabilities who are not

eligible for State vocational rehabilitation services, or who do not

believe that they need a comprehensive rehabilitation program, are

still unlikely to receive work-related services from employment

training programs that serve the general population. Consequently, many

individuals with disabilities who are capable of working essentially

``fall between the cracks.'' The Secretary expects that the models

developed under the proposed priority will demonstrate how employment

training and other related programs can more effectively coordinate

services so that individuals with disabilities can obtain employment.

Seventy-nine percent of unemployed individuals with disabilities

have indicated that they would prefer to be working (Harris Survey,

1994). The combination of the high costs associated with living with a

disability, work-related expenses, and the reduction in public supports

available to persons once they become employed often dissuade

individuals with disabilities from pursuing competitive work. Some of

the specific barriers to the employment that individuals with

disabilities commonly confront include--

Lack of adequate health insurance (e.g., individuals' fear

of losing public health care coverage, inability to obtain private

medical insurance, or limited access to treatment and prescription

services);

Underutilization of existing work incentives from Social

Security and other State and local agencies (e.g., Plan for Achieving

Self Support (PASS), and Impairment Related Work Expenses, section

1619a and b of the Social Security Act);

Lack of affordable, accessible housing and transportation;

Insufficient education and training services;

Lack of child care;

Inadequate supports for employees with disabilities (e.g.,

onsite and offsite job accommodations and long-term follow-along

services); and

Inadequate supports for employers (e.g., incentives for

hiring, retaining, and promoting individuals with disabilities and

technical assistance and follow-along consultation to assist employers

in addressing the ongoing needs of employees with disabilities and to

clarify employer misperceptions and misinformation).

Lack of information and coordination of public support programs can

cause program-related barriers that inhibit individuals with

disabilities from effectively using available services. In many

instances, individuals with disabilities are simply unaware of existing

employment-related programs, work incentives, or available services.

Another common barrier is the lack of coordination between separate

programs with separate eligibility criteria even though the same

individuals often require services from each program. The Secretary

expects projects to address these types of program-related barriers, as

well as any other type of barrier that impedes individuals with

disabilities from becoming employed and self-sufficient.

There is a critical need for greater coordination between multiple

public programs that support individuals with disabilities that would

foster increased economic self-sufficiency and a more efficient use of

public resources. In an effort to address this need, the Secretary

proposes the following priority in order to provide a framework for

assisting individuals with disabilities to reduce their reliance on

various public support programs and obtain and maintain employment in

the competitive labor market.

The requirements in the priority are designed to facilitate

systems-change projects that eliminate barriers to employment for

individuals with disabilities and are based on existing studies and

reports, the experiences of State vocational rehabilitation agencies in

working with individuals participating in other public support

programs, and on information provided by other Federal agencies that

administer disability-related programs. These Federal agencies were

particularly helpful in assisting the Secretary to identify the

employment-related barriers confronted by individuals with disabilities

that the Secretary proposes to target through this priority and to

identify the types of State agencies whose participation in the project

would be most critical to eliminating those barriers. The identified

State agencies would serve as members of a consortium that the systems-

change project would establish under paragraph (A) of the priority.

The Secretary emphasizes that the model systems-change projects

that would be supported under this priority are part of a larger effort

on the part of the Federal Government to create a coordinated and

aggressive national policy to reduce the unemployment rate of

individuals with disabilities and to assist those individuals in

obtaining competitive jobs. This effort is directly reflected in

Executive Order 13078, signed on March 13, 1998, entitled ``Increasing

Employment of Adults With Disabilities'' (63 FR 13111, March 18, 1998).

For example, Executive Order 13078, in part, calls for an analysis of

existing programs and policies to determine what modifications and

innovations may be necessary to remove work-related barriers

experienced by individuals with disabilities; the development and

recommendation of options for eliminating barriers to health insurance

coverage for those with disabilities; and an analysis of work-related

youth programs and the outcomes of these programs for young people with

disabilities. The Secretary proposes the following priority as one

means of addressing the purposes of Executive Order 13078. As other

Federal agencies design and carry out activities in response to the

Executive order, it is expected that many of those activities will

complement the systems-change projects funded under this priority.

The Secretary also emphasizes the need for projects supported under

this priority to begin implementing strategies for removing barriers

early in the project period in order for the project to have a

measurable effect on the rate by which individuals with disabilities

become competitively employed. For that reason, the Secretary expects

project recipients to work with Rehabilitation Services Administration

staff to ensure that planning steps, including development of

partnership agreements and, if appropriate, submission of Medicaid

waiver requests under paragraph (C) of the priority, are promptly

completed and that projects begin implementing their barrier-removal

strategies as soon as possible.

The purpose of the proposed absolute priority is to establish five-

year model demonstration projects that stimulate and advance systems-

change in order to expand employment outcomes for individuals with

mental or physical disabilities, or both, who are participants in

Federal, State, and local public support programs (e.g., TANF, SSI,

SSDI, Medicaid, Medicare, subsidized housing, and food stamps, etc.)

Absolute Priority

Under 34 CFR 75.105(c)(3) and section 12(a)(3) of the Act, the

Secretary proposes to give an absolute preference to applications that

meet the following priority. The Secretary proposes to fund under this

competition only applications that meet this absolute priority:

[[Page 27808]]

A. General Requirements for Applicants

Applicants under this priority shall satisfy the following

requirements:

(1) Applicants shall form a consortium of, at a minimum, the State

vocational rehabilitation agency, the State welfare agency, the State

educational agency, the State agency responsible for administering the

Medicaid program, and an agency administering an employment or

employment training program supported by the U.S. Department of Labor.

Additional entities (e.g., public and private nonprofit organizations)

that could effectively assist in removing barriers to employment for

individuals with disabilities also may be included as part of the

consortium.

(2) The members of the consortium shall either designate one of

their members to apply for the grant or establish a separate, eligible

legal entity to apply for the grant. The designated applicant shall

serve as the grantee and be legally responsible for the use of all

grant funds, overall fiscal and programmatic oversight of the project,

and for ensuring that the project is carried out by consortium members

in accordance with Federal requirements.

(3) Consortium members shall be substantially involved in the

development of the application. Each consortium member's advisory

council, if the member has such a council, shall also participate in

the development of the application.

(4) The members of the consortium shall enter into an agreement

that details the activities that each member plans to perform and that

binds each member to the statements and assurances included in the

application. Each member is legally responsible for carrying out the

activities it agrees to perform and for using the funds that it

receives under the agreement in accordance with Federal requirements

that apply to the grant. The agreement must be submitted as part of the

application.

(5) The application submitted under this priority also must

identify the specific locality or region that would be served by the

project.

B. Project Objectives

Projects supported under this priority must--

(1) Identify systemic barriers, including State or local agency

policies, practices, procedures, or rules that inhibit individuals with

disabilities who are participants in public support programs from

becoming employed.

(2) Develop and implement replicable strategies to remove

identified barriers, including, at a minimum, strategies for--

(a) Establishing effective collaborative working relationships

among project consortium members and their partners as described in

paragraph (C)(1) of this priority (e.g., providing interagency staff

training and technical assistance on program requirements and services

or collaboratively using labor market and job vacancy information);

(b) Establishing coordinated service delivery systems (e.g., common

intake and referral procedures, customer databases, and resource

information) and developing innovative services and service approaches

that address service gaps (e.g., developing employee and employer

support networks);

(c) Improving access to health insurance for individuals with

disabilities who become employed;

(d) Increasing the use of existing resources by State and local

agencies (e.g., Medicaid waivers, Home Community Based Services

waivers, Job Training Partnership Act income exemptions, and work

incentive provisions such as Plan for Achieving Self Support);

(3) Design and implement an internal evaluation plan for which--

(a) The methods of evaluation are thorough, feasible, and

appropriate to the goals, objectives, and outcomes of the project;

(b) The methods of evaluation provide for examining the

effectiveness of project implementation strategies;

(c) The methods of evaluation include the use of objective

performance measures that are clearly related to the intended outcomes

of the project and will produce quantitative and qualitative data to

the extent possible;

(d) The methods of evaluation will provide performance feedback and

permit periodic assessment of progress toward achieving intended

outcomes; and

(e) The evaluation will provide guidance about effective strategies

suitable for replication or testing in other settings; and

(4) Disseminate information on effective systems-change approaches

developed under these projects to Federal, State, and local

stakeholders and facilitate the use of systems-change models in other

geographic areas. As examples, consortia may make presentations before

national, State, or local conferences, consult with and provide

technical assistance to other States or localities, develop Internet

web sites, and distribute project publications.

C. Project Requirements

In carrying out the priority, the projects must--

(1) Develop partnership agreements, as described under DEFINITIONS,

with the local district offices of the Social Security Administration;

the State agency or agencies responsible for mental retardation,

developmental disabilities, and mental health services; existing

transportation or paratransit service providers; and appropriate public

and private sector employers. Partnerships also may be formed with

other appropriate entities identified by the consortium, including, but

not limited to, Centers for Independent Living, consumer advocacy

organizations, economic development councils, Private Industry

Councils, Governor's committees on the employment of persons with

disabilities, developmental disabilities councils, mental health

centers, community rehabilitation programs, Indian Tribes, labor

unions, and employment and training organizations funded by the U.S.

Department of Labor;

(2) Make timely, formal requests for Medicaid waivers if necessary

for projects to be able to implement developed strategies;

(3) Implement, in a timely manner, the strategies developed by the

project to expand employment outcomes for individuals with mental or

physical disabilities, or both;

(4) Participate, as appropriate, in meetings of a Federal

Interagency Employment Initiative Workgroup and inform workgroup

members of project activities; and

(5) Participate in, and provide data for, an external evaluation of

the systems-change projects as directed by the Commissioner of the

Rehabilitation Services Administration. The evaluation would examine--

(a) The effect of specific innovative systems-change approaches and

strategies on State or local agency policies, practices, or rules

affecting the employment of individuals with disabilities; (b) The

effect of specific innovative systems-change approaches and strategies

on increasing the number of individuals with disabilities who obtain

competitive employment, including job retention, promotion,

satisfaction, and wage growth; and (c) The cost effectiveness of

employment supports and services implemented by the project.

Proposed Definitions

Consortium means a group of eligible parties formed by the

applicant seeking a Federal award under this priority. Members of the

consortium shall enter

[[Page 27809]]

into an agreement and carry out their responsibilities consistent with

the requirements in paragraph (A) of the priority. Members of the

consortium shall also ensure that project partners carry out their

agreed-upon activities.

Disability with respect to an individual means a physical or mental

impairment that substantially limits one or more of the major life

activities of that individual, having a record of such an impairment,

or being regarded as having such an impairment.

Locality means specific geographical areas within a State or

States.

Partner means an entity with which the consortium has entered into

an agreement to carry out specific activities, goals, and objectives of

the project.

Partnership agreement means a written arrangement between a

consortium and its partners to carry out specific activities related to

the project.

Public Support means Federal, State, and local public programs that

provide resources or services to individuals with disabilities. These

programs include, but are not limited to, Temporary Aid to Needy

Families (TANF), Supplemental Security Income (SSI), Social Security

Disability Income (SSDI), Medicaid (including Medicaid waiver

programs), Medicare, subsidized housing, and food stamps.

Region means two or more States participating in the project.

Selection Criteria

In evaluating an application for a new grant under this

competition, the Secretary uses selection criteria chosen from the

general selection criteria in Sec. 75.210 of the Education Department

General Administrative Regulations. The selection criteria to be used

for this competition will be provided in the application package for

this competition.

Executive Order 12866

This proposed priority has 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 Secretary has determined that there are no costs associated

with this priority. Announcement of the priority would not result in

costs to State and local governments, recipients of grant funds, or to

individuals with disabilities and their families. The benefit from this

priority would be to focus activities and Federal assistance on

increasing competitive employment outcomes for individuals with

disabilities who are participants in public support programs through

enhanced collaboration and coordination.

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.

To assist the Department in complying with the specific

requirements of Executive Order 12866, the Secretary invites comment on

whether there may be opportunities to increase potential benefits

resulting from this proposed priority without impeding the effective

and efficient administration of the program.

Intergovernmental Review

This program is subject to the requirements of Executive Order

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

Executive order is to foster an intergovernmental partnership and a

strengthened federalism by relying on processes developed by State and

local governments for coordination and review of proposed Federal

financial assistance.

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

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

this program.

Invitation To Comment

Interested persons are invited to submit comments and

recommendations regarding this proposed priority. The Secretary is

particularly interested in receiving comments on the composition of the

consortium and other consortium requirements. In addition, the

Secretary invites comment on whether it is appropriate or feasible for

a consortium to serve more than one State.

All comments submitted in response to this proposed priority will

be available for public inspection, during and after the comment

period, in Room 3038, MES Building, 330 C Street, S.W., Washington, DC,

between the hours of 8:30 a.m. and 4:00 p.m., Eastern time, Monday

through Friday of each week except Federal holidays.

On request the Department supplies an appropriate aid, such as a

reader or print magnifier, to an individual with a disability who needs

assistance to review the comments or other documents in the public

rulemaking docket for this proposed priority. An individual with a

disability who wants to schedule an appointment for this type of aid

may call (202) 205-8113 or (202) 260-9895. An individual who uses a TDD

may call the Federal Information Relay Service at 1-800-877-8339

between 8 a.m. and 8 p.m., Eastern time, Monday through Friday.

Program Authority: 29 U.S.C. 762(b)(3).

(Catalog of Federal Domestic Assistance Number has not been

assigned)

Dated: March 24, 1998.

Judith E. Heumann,

Assistant Secretary for Special Education and Rehabilitative Services.

[FR Doc. 98-13398 Filed 5-19-98; 8:45 am]

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