Att_VR regulationsPart361

Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
Subpart A—General .......................................................... 3
§ 361.1 Purpose. ............................................................... 3
§ 361.2 Eligibility for a grant. ............................................. 3
§ 361.3 Authorized activities. ............................................ 3
§ 361.4 Applicable regulations. ......................................... 3
§ 361.5 Applicable definitions. .......................................... 3
Subpart B—State Plan and Other Requirements for
Vocational Rehabilitation Services .................................. 15
§ 361.10 Submission, approval, and disapproval of the
State plan. ....................................................................... 15
§ 361.11 Withholding of funds......................................... 16
ADMINISTRATION ......................................................... 17
§ 361.12 Methods of administration. ............................... 17
§ 361.13 State agency for administration. ...................... 17
§ 361.14 Substitute State agency. .................................. 18
§ 361.15 Local administration. ........................................ 18
§ 361.16 Establishment of an independent commission or
a state rehabilitation council. ........................................... 19
§ 361.17 Requirements for a state rehabilitation council.20
§ 361.18 Comprehensive system of personnel
development. ................................................................... 23
§ 361.19 Affirmative action for individuals with disabilities.
........................................................................................ 25
§ 361.20 Public participation requirements. .................... 25
§ 361.21 Consultations regarding the administration of the
state plan. ........................................................................ 26
§ 361.22 Coordination with education officials................ 26
§ 361.23 Requirements related to the statewide workforce
investment system. ......................................................... 27
§ 361.24 Cooperation and coordination with other entities.
........................................................................................ 28
§ 361.25 Statewideness. ................................................. 29
§ 361.26 Waiver of statewideness. ................................. 29
§ 361.27 Shared funding and administration of joint
programs. ........................................................................ 29
§ 361.28 Third-party cooperative arrangements involving
funds from other public agencies. ................................... 29
§ 361.29 Statewide assessment; annual estimates; annual
State goals and priorities; strategies; and progress
reports. ............................................................................ 30
§ 361.30 Services to American Indians. ......................... 32
§ 361.31 Cooperative agreements with private nonprofit
organizations. .................................................................. 32
§ 361.32 Use of profitmaking organizations for on-the-job
training in connection with selected projects................... 32
§ 361.33 [Reserved] ........................................................ 32
§ 361.34 Supported employment State plan supplement.
........................................................................................ 32
§ 361.35 Innovation and expansion activities. ................ 32
§ 361.36 Ability to serve all eligible individuals; order of
selection for services....................................................... 33
§ 361.37 Information and referral programs. .................. 35
§ 361.38 Protection, use, and release of personal
information....................................................................... 36
§ 361.39 State-imposed requirements. ........................... 38
§ 361.40 Reports. ............................................................ 38

§ 361.41 Processing referrals and applications. ............. 38
§ 361.42 Assessment for determining eligibility and priority
for services. ..................................................................... 39
§ 361.43 Procedures for ineligibility determination. ........ 42
§ 361.44 Closure without eligibility determination. .......... 42
§ 361.45 Development of the individualized plan for
employment. .................................................................... 43
§ 361.46 Content of the individualized plan for
employment. .................................................................... 45
§ 361.47 Record of services............................................ 46
§ 361.48 Scope of vocational rehabilitation services for
individuals with disabilities............................................... 47
§ 361.49 Scope of vocational rehabilitation services for
groups of individuals with disabilities. ............................. 48
§ 361.50 Written policies governing the provision of
services for individuals with disabilities. .......................... 50
§ 361.51 Standards for facilities and providers of services.
......................................................................................... 51
§ 361.52 Informed choice. ............................................... 51
§ 361.53 Comparable services and benefits. .................. 52
§ 361.54 Participation of individuals in cost of services
based on financial need. ................................................. 54
§ 361.55 Annual review of individuals in extended
employment and other employment under special
certificate provisions of the Fair Labor Standards Act. ... 55
§ 361.56 Requirements for closing the record of services
of an individual who has achieved an employment
outcome. .......................................................................... 55
§ 361.57 Review of determinations made by designated
State unit personnel. ....................................................... 56
Subpart C—Financing of State Vocational Rehabilitation
Programs ......................................................................... 60
§ 361.60 Matching requirements. .................................... 60
§ 361.61 Limitation on use of funds for construction
expenditures. ................................................................... 61
§ 361.62 Maintenance of effort requirements. ................ 61
§ 361.63 Program income. .............................................. 62
§ 361.64 Obligation of Federal funds and program
income. ............................................................................ 63
§ 361.65 Allotment and payment of Federal funds for
vocational rehabilitation services. ................................... 63
Subpart D [Reserved] ...................................................... 63
Subpart E—Evaluation Standards and Performance
Indicators ......................................................................... 63
§ 361.80 Purpose. ........................................................... 63
§ 361.81 Applicable definitions. ...................................... 63
§ 361.82 Evaluation standards. ....................................... 64
§ 361.84 Performance indicators. ................................... 65
§ 361.86 Performance levels........................................... 65
§ 361.88 Reporting requirements. ................................... 66
§ 361.89 Enforcement procedures. ................................. 67
APPENDIX A TO PART 361—QUESTIONS AND
ANSWERS ...................................................................... 67

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM

Subpart A—General
Sec.
361.1 Purpose.
361.2 Eligibility for a grant.
361.3 Authorized activities.
361.4 Applicable regulations.
361.5 Applicable definitions.
Subpart B—State Plan and Other Requirements
for Vocational Rehabilitation
Services
361.10 Submission, approval, and disapproval
of the State plan.
361.11 Withholding of funds.
ADMINISTRATION
361.12 Methods of administration.
361.13 State agency for administration.
361.14 Substitute State agency.
361.15 Local administration.
361.16 Establishment of an independent
commission or a State Rehabilitation
Council.
361.17 Requirements for a State Rehabilitation
Council.
361.18 Comprehensive system of personnel
development.
361.19 Affirmative action for individuals
with disabilities.
361.20 Public participation requirements.
361.21 Consultations regarding the administration
of the State plan.
361.22 Coordination with education officials.
361.23 Requirements related to the statewide
workforce investment system.
361.24 Cooperation and coordination with
other entities.
361.25 Statewideness.
361.26 Waiver of statewideness.
361.27 Shared funding and administration of
joint programs.
361.28 Third-party cooperative arrangements
involving funds from other public
agencies.
361.29 Statewide assessment; annual estimates;
annual State goals and priorities;
strategies; and progress reports.
361.30 Services to American Indians.
361.31 Cooperative agreements with private
nonprofit organizations.
361.32 Use of profitmaking organizations for
on-the-job training in connection with
selected projects.
361.33 [Reserved.]
361.34 Supported employment State plan
supplement.
361.35 Innovation and expansion activities.

361.36 Ability to serve all eligible individuals;
order of selection for services.
361.37 Information and referral services.
361.38 Protection, use, and release of personal
information.
361.39 State-imposed requirements.
361.40 Reports.
PROVISION AND SCOPE OF SERVICES
361.41 Processing referrals and applications.
361.42 Assessment for determining eligibility
and priority for services.
361.43 Procedures for ineligibility determination.
361.44 Closure without eligibility determination.
361.45 Development of the individualized
plan for employment.
361.46 Content of the individualized plan for
employment.
361.47 Record of services.
361.48 Scope of vocational rehabilitation
services for individuals with disabilities.
361.49 Scope of vocational rehabilitation
services for groups of individuals with
disabilities.
361.50 Written policies governing the provision
of services for individuals with disabilities.
361.51 Standards for facilities and providers
of services.
361.52 Informed choice.
361.53 Comparable services and benefits.
361.54 Participation of individuals in cost of
services based on financial need.
361.55 Annual review of individuals in extended
employment and other employment
under special certificate provisions
of the Fair Labor Standards Act.
361.56 Requirements for closing the record
of services of an individual who has
achieved an employment outcome.
361.57 Review of determinations made by
designated State unit personnel.
Subpart C—Financing of State Vocational
Rehabilitation Programs
361.60 Matching requirements.
361.61 Limitation on use of funds for construction
expenditures.
361.62 Maintenance of effort requirements.
361.63 Program income.
361.64 Obligation of Federal funds and program
income.
361.65 Allotment and payment of Federal
funds for vocational rehabilitation services.
Subpart D [Reserved]
Subpart E—Evaluation Standards and
Performance Indicators
361.80 Purpose.
361.81 Applicable definitions.

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
361.82 Evaluation standards.
Off. of Spec. Educ. and Rehab. Services, Education §
361.5
361.84 Performance indicators.
361.86 Performance levels.
361.88 Reporting requirements.
361.89 Enforcement procedures.
APPENDIX A TO PART 361—QUESTIONS AND
ANSWERS
AUTHORITY: 29 U.S.C. 709(c), unless otherwise
noted.
SOURCE: 66 FR 4382, Jan. 17, 2001, unless
otherwise noted.

Subpart A—General
§ 361.1 Purpose.
Under the State Vocational Rehabilitation
Services Program (Program),
the Secretary provides grants to assist
States in operating statewide comprehensive,
coordinated, effective, efficient,
and accountable programs, each
of which is—
(a) An integral part of a statewide
workforce investment system; and
(b) Designed to assess, plan, develop,
and provide vocational rehabilitation
services for individuals with disabilities,
consistent with their strengths,
resources, priorities, concerns, abilities,
capabilities, interests, and informed
choice, so that they may prepare
for and engage in gainful employment.
(Authority: Section 100(a)(2) of the Act; 29
U.S.C. 720(a)(2))

§ 361.2 Eligibility for a grant.
Any State that submits to the Secretary
a State plan that meets the requirements
of section 101(a) of the Act
and this part is eligible for a grant
under this Program.
(Authority: Section 101(a) of the Act; 29
U.S.C. 721(a))

§ 361.3 Authorized activities.
The Secretary makes payments to a
State to assist in—
(a) The costs of providing vocational
rehabilitation services under the State
plan; and
(b) Administrative costs under the
State plan.

(Authority: Section 111(a)(1) of the Act; 29
U.S.C. 731(a)(1))

§ 361.4 Applicable regulations.
The following regulations apply to
this Program:
(a) The Education Department General
Administrative Regulations
(EDGAR) as follows:
(1) 34 CFR part 74 (Administration of
Grants and Agreements with Institutions
of Higher Education, Hospitals,
and other Non-profit Organizations),
with respect to subgrants to entities
that are not State or local governments
or Indian tribal organizations.
(2) 34 CFR part 76 (State-Administered
Programs).
(3) 34 CFR part 77 (Definitions that
Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental
Review of Department of Education
Programs and Activities).
(5) 34 CFR part 80 (Uniform Administrative
Requirements for Grants and
Cooperative Agreements to State and
Local Governments), except for
§ 80.24(a)(2).
(6) 34 CFR part 81 (General Education
Provisions Act—Enforcement).
(7) 34 CFR part 82 (New Restrictions
on Lobbying).
(8) 34 CFR part 85 (Governmentwide
Debarment and Suspension (Nonprocurement)
and Governmentwide Requirements
for Drug-Free Workplace
(Grants)).
(9) 34 CFR part 86 (Drug and Alcohol
Abuse Prevention).
(b) The regulations in this part 361.
(c) 20 CFR part 662 (Description of
One-Stop Service Delivery System
under Title I of the Workforce Investment
Act of 1998).
(d) 29 CFR part 37, to the extent programs
and activities are being conducted
as part of the One-Stop service
delivery system under section 121(b) of
the Workforce Investment Act of 1998.
(Authority: Section 12(c) of the Act; 29
U.S.C. 709(c))

§ 361.5 Applicable definitions.
(a) Definitions in EDGAR. The following
terms used in this part are defined

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
in 34 CFR 77.1:
Department
EDGAR
Fiscal year
Nonprofit
Private
Public
Secretary
(b) Other definitions. The following
definitions also apply to this part:
(1) Act means the Rehabilitation Act
of 1973, as amended (29 U.S.C. 701 et
seq.).
(2) Administrative costs under the State
plan means expenditures incurred in
the performance of administrative
functions under the vocational rehabilitation
program carried out under
this part, including expenses related to
program planning, development, monitoring,
and evaluation, including, but
not limited to, expenses for—
(i) Quality assurance;
(ii) Budgeting, accounting, financial
management, information systems, and
related data processing;
(iii) Providing information about the
program to the public;
(iv) Technical assistance and support
services to other State agencies, private
nonprofit organizations, and businesses
and industries, except for technical
assistance and support services
described in § 361.49(a)(4);
(v) The State Rehabilitation Council
and other advisory committees;
(vi) Professional organization membership
dues for designated State unit
employees;
(vii) The removal of architectural
barriers in State vocational rehabilitation
agency offices and State-operated
rehabilitation facilities;
(viii) Operating and maintaining designated
State unit facilities, equipment,
and grounds;
(ix) Supplies;
(x) Administration of the comprehensive
system of personnel development
described in § 361.18, including personnel
administration, administration
of affirmative action plans, and training
and staff development;
(xi) Administrative salaries, including
clerical and other support staff salaries,
in support of these administrative

functions;
(xii) Travel costs related to carrying
out the program, other than travel
costs related to the provision of services;
(xiii) Costs incurred in conducting reviews
of determinations made by personnel
of the designated State unit, including
costs associated with mediation
and impartial due process hearings
under § 361.57; and
(xiv) Legal expenses required in the
administration of the program.
(Authority: Section 7(1) of the Act; 29 U.S.C.
705(1))
(3) American Indian means an individual
who is a member of an Indian
tribe.
(Authority: Section 7(19)(A) of the Act; 29
U.S.C. 705(19)(A))
(4) Applicant means an individual who
submits an application for vocational
rehabilitation services in accordance
with § 361.41(b)(2).
(Authority: Section 12(c) of the Act; 29
U.S.C. 709(c))
(5) Appropriate modes of communication
means specialized aids and supports
that enable an individual with a disability
to comprehend and respond to
information that is being communicated.
Appropriate modes of communication
include, but are not limited
to, the use of interpreters, open and
closed captioned videos, specialized
telecommunications services and audio
recordings, Brailled and large print
materials, materials in electronic formats,
augmentative communication
devices, graphic presentations, and
simple language materials.
(Authority: Section 12(c) of the Act; 29
U.S.C. 709(c))
(6) Assessment for determining eligibility
and vocational rehabilitation needs
means, as appropriate in each case—
(i)(A) A review of existing data—
(1) To determine if an individual is
eligible for vocational rehabilitation
services; and
(2) To assign priority for an order of
selection described in § 361.36 in the
States that use an order of selection;
and
(B) To the extent necessary, the provision
of appropriate assessment activities
to obtain necessary additional

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
data to make the eligibility determination
and assignment;
(ii) To the extent additional data are
necessary to make a determination of
the employment outcomes and the nature
and scope of vocational rehabilitation
services to be included in the individualized
plan for employment of an
eligible individual, a comprehensive assessment
to determine the unique
strengths, resources, priorities, concerns,
abilities, capabilities, interests,
and informed choice, including the
need for supported employment, of the
eligible individual. This comprehensive
assessment—
(A) Is limited to information that is
necessary to identify the rehabilitation
needs of the individual and to develop
the individualized plan of employment
of the eligible individual;
(B) Uses as a primary source of information,
to the maximum extent possible
and appropriate and in accordance
with confidentiality requirements—
(1) Existing information obtained for
the purposes of determining the eligibility
of the individual and assigning
priority for an order of selection described
in § 361.36 for the individual;
and
(2) Information that can be provided
by the individual and, if appropriate,
by the family of the individual;
(C) May include, to the degree needed
to make such a determination, an assessment
of the personality, interests,
interpersonal skills, intelligence and
related functional capacities, educational
achievements, work experience,
vocational aptitudes, personal
and social adjustments, and employment
opportunities of the individual
and the medical, psychiatric, psychological,
and other pertinent vocational,
educational, cultural, social, recreational,
and environmental factors
that affect the employment and rehabilitation
needs of the individual; and
(D) May include, to the degree needed,
an appraisal of the patterns of work
behavior of the individual and services
needed for the individual to acquire occupational
skills and to develop work
attitudes, work habits, work tolerance,
and social and behavior patterns necessary

for successful job performance,
including the use of work in real job
situations to assess and develop the capacities
of the individual to perform
adequately in a work environment;
(iii) Referral, for the provision of rehabilitation
technology services to the
individual, to assess and develop the
capacities of the individual to perform
in a work environment; and
(iv) An exploration of the individual’s
abilities, capabilities, and capacity to
perform in work situations, which
must be assessed periodically during
trial work experiences, including experiences
in which the individual is provided
appropriate supports and training.
(Authority: Section 7(2) of the Act; 29 U.S.C.
705(2))
(7) Assistive technology device means
any item, piece of equipment, or product
system, whether acquired commercially
off the shelf, modified, or customized,
that is used to increase, maintain,
or improve the functional capabilities
of an individual with a disability.
(Authority: Section 7(3) of the Act; 29 U.S.C.
705(3))
(8) Assistive technology service means
any service that directly assists an individual
with a disability in the selection,
acquisition, or use of an assistive
technology device, including—
(i) The evaluation of the needs of an
individual with a disability, including
a functional evaluation of the individual
in his or her customary environment;
(ii) Purchasing, leasing, or otherwise
providing for the acquisition by an individual
with a disability of an assistive
technology device;
(iii) Selecting, designing, fitting, customizing,
adapting, applying, maintaining,
repairing, or replacing assistive
technology devices;
(iv) Coordinating and using other
therapies, interventions, or services
with assistive technology devices, such
as those associated with existing education
and rehabilitation plans and
programs;
(v) Training or technical assistance
for an individual with a disability or, if
appropriate, the family members,
guardians, advocates, or authorized
representatives of the individual; and

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(vi) Training or technical assistance
for professionals (including individuals
providing education and rehabilitation
services), employers, or others who
provide services to, employ, or are otherwise
substantially involved in the
major life functions of individuals with
disabilities, to the extent that training
or technical assistance is necessary to
the achievement of an employment
outcome by an individual with a disability.
(Authority: Sections 7(4) and 12(c) of the Act;
29 U.S.C. 705(4) and 709(c))
(9) Community rehabilitation program.
(i) Community rehabilitation program
means a program that provides directly
or facilitates the provision of one or
more of the following vocational rehabilitation
services to individuals with
disabilities to enable those individuals
to maximize their opportunities for
employment, including career advancement:
(A) Medical, psychiatric, psychological,
social, and vocational services
that are provided under one management.
(B) Testing, fitting, or training in the
use of prosthetic and orthotic devices.
(C) Recreational therapy.
(D) Physical and occupational therapy.
(E) Speech, language, and hearing
therapy.
(F) Psychiatric, psychological, and
social services, including positive behavior
management.
(G) Assessment for determining eligibility
and vocational rehabilitation
needs.
(H) Rehabilitation technology.
(I) Job development, placement, and
retention services.
(J) Evaluation or control of specific
disabilities.
(K) Orientation and mobility services
for individuals who are blind.
(L) Extended employment.
(M) Psychosocial rehabilitation services.
(N) Supported employment services
and extended services.
(O) Services to family members if
necessary to enable the applicant or eligible
individual to achieve an employment
outcome.
(P) Personal assistance services.
(Q) Services similar to the services
described in paragraphs (A) through (P)
of this definition.

(ii) For the purposes of this definition,
the word program means an agency,
organization, or institution, or unit
of an agency, organization, or institution,
that provides directly or facilitates
the provision of vocational rehabilitation
services as one of its major
functions.
(10) Comparable services and benefits
means—
(i) Services and benefits that are—
(A) Provided or paid for, in whole or
in part, by other Federal, State, or
local public agencies, by health insurance,
or by employee benefits;
(B) Available to the individual at the
time needed to ensure the progress of
the individual toward achieving the
employment outcome in the individual’s
individualized plan for employment
in accordance with § 361.53; and
(C) Commensurate to the services
that the individual would otherwise receive
from the designated State vocational
rehabilitation agency.
(ii) For the purposes of this definition,
comparable benefits do not include
awards and scholarships based on
merit.
(Authority: Sections 12(c) and 101(a)(8) of the
Act; 29 U.S.C. 709(c) and 721(a)(8))
(11) Competitive employment means
work—
(i) In the competitive labor market
that is performed on a full-time or
part-time basis in an integrated setting;
and
(ii) For which an individual is compensated
at or above the minimum
wage, but not less than the customary
wage and level of benefits paid by the
employer for the same or similar work
performed by individuals who are not
disabled.
(Authority: Sections 7(11) and 12(c) of the Act;
29 U.S.C. 705(11) and 709(c))
(12) Construction of a facility for a public
or nonprofit community rehabilitation
program means—
(i) The acquisition of land in connection
with the construction of a new
building for a community rehabilitation
program;
(ii) The construction of new buildings;
(iii) The acquisition of existing buildings;
(iv) The expansion, remodeling, alteration,

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
or renovation of existing buildings;
(v) Architect’s fees, site surveys, and
soil investigation, if necessary, in connection
with the construction project;
(vi) The acquisition of initial fixed or
movable equipment of any new, newly
acquired, newly expanded, newly remodeled,
newly altered, or newly renovated
buildings that are to be used for
community rehabilitation program
purposes; and
(vii) Other direct expenditures appropriate
to the construction project, except
costs of off-site improvements.
(Authority: Sections 7(6) and 12(c) of the Act;
29 U.S.C. 705(6) and 709(c))
(13) Designated State agency or State
agency means the sole State agency,
designated in accordance with
§ 361.13(a), to administer, or supervise
the local administration of, the State
plan for vocational rehabilitation services.
The term includes the State agency
for individuals who are blind, if designated
as the sole State agency with
respect to that part of the plan relating
to the vocational rehabilitation of
individuals who are blind.
(Authority: Sections 7(8)(A) and 101(a)(2)(A)
of the Act; 29 U.S.C. 705(8)(A) and
721(a)(2)(A))
(14) Designated State unit or State unit
means either—
(i) The State vocational rehabilitation
bureau, division, or other organizational
unit that is primarily concerned
with vocational rehabilitation
or vocational and other rehabilitation
of individuals with disabilities and that
is responsible for the administration of
the vocational rehabilitation program
of the State agency, as required under
§ 361.13(b); or
(ii) The State agency that is primarily
concerned with vocational rehabilitation
or vocational and other rehabilitation
of individuals with disabilities.
(Authority: Sections 7(8)(B) and 101(a)(2)(B)
of the Act; 29 U.S.C. 705(8)(B) and 721(a)(2)(B))
(15) Eligible individual means an applicant
for vocational rehabilitation services
who meets the eligibility requirements
of § 361.42(a).
(Authority: Sections 7(20)(A) and 102(a)(1) of
the Act; 29 U.S.C. 705(20)(A) and 722(a)(1))
(16) Employment outcome means, with

respect to an individual, entering or retaining
full-time or, if appropriate,
part-time competitive employment, as
defined in § 361.5(b)(11), in the integrated
labor market, supported employment,
or any other type of employment
in an integrated setting, including
self-employment, telecommuting,
or business ownership, that is consistent
with an individual’s strengths,
resources, priorities, concerns, abilities,
capabilities, interests, and informed
choice.
(Authority: Sections 7(11), 12(c), 100(a)(2), and
102(b)(3)(A) of the Act; 29 U.S.C. 705(11),
709(c), 720(a)(2), and 722(b)(3)(A))
(17) Establishment, development, or improvement
of a public or nonprofit community
rehabilitation program means—
(i) The establishment of a facility for
a public or nonprofit community rehabilitation
program as defined in paragraph
(b)(18) of this section to provide
vocational rehabilitation services to
applicants or eligible individuals;
(ii) Staffing, if necessary to establish,
develop, or improve a community
rehabilitation program for the purpose
of providing vocational rehabilitation
services to applicants or eligible individuals,
for a maximum period of 4
years, with Federal financial participation
available at the applicable matching
rate for the following levels of
staffing costs:
(A) 100 percent of staffing costs for
the first year.
(B) 75 percent of staffing costs for the
second year.
(C) 60 percent of staffing costs for the
third year.
(D) 45 percent of staffing costs for the
fourth year; and
(iii) Other expenditures related to the
establishment, development, or improvement
of a community rehabilitation
program that are necessary to
make the program functional or increase
its effectiveness in providing vocational
rehabilitation services to applicants
or eligible individuals, but are
not ongoing operating expenses of the
program.
(Authority: Sections 7(12) and 12(c) of the
Act; 29 U.S.C. 705(12) and 709(c))
(18) Establishment of a facility for a

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
public or nonprofit community rehabilitation
program means—
(i) The acquisition of an existing
building and, if necessary, the land in
connection with the acquisition, if the
building has been completed in all respects
for at least 1 year prior to the
date of acquisition and the Federal
share of the cost of acquisition is not
more than $300,000;
(ii) The remodeling or alteration of
an existing building, provided the estimated
cost of remodeling or alteration
does not exceed the appraised value of
the existing building;
(iii) The expansion of an existing
building, provided that—
(A) The existing building is complete
in all respects;
(B) The total size in square footage of
the expanded building, notwithstanding
the number of expansions, is
not greater than twice the size of the
existing building;
(C) The expansion is joined structurally
to the existing building and
does not constitute a separate building;
and
(D) The costs of the expansion do not
exceed the appraised value of the existing
building;
(iv) Architect’s fees, site survey, and
soil investigation, if necessary in connection
with the acquisition, remodeling,
alteration, or expansion of an existing
building; and
(v) The acquisition of fixed or movable
equipment, including the costs of
installation of the equipment, if necessary
to establish, develop, or improve
a community rehabilitation program.
(Authority: Sections 7(12) and 12(c) of the
Act; 29 U.S.C. 705(12) and 709(c))
(19) Extended employment means work
in a non-integrated or sheltered setting
for a public or private nonprofit agency
or organization that provides compensation
in accordance with the Fair
Labor Standards Act.
(Authority: Section 12(c) of the Act; 29
U.S.C. 709(c))
(20) Extended services means ongoing
support services and other appropriate
services that are needed to support and
maintain an individual with a most
significant disability in supported employment

and that are provided by a
State agency, a private nonprofit organization,
employer, or any other appropriate
resource, from funds other than
funds received under this part and 34
CFR part 363 after an individual with a
most significant disability has made
the transition from support provided
by the designated State unit.
(Authority: Sections 7(13) and 623 of the Act;
29 U.S.C. 705(13) and 795i)
(21) Extreme medical risk means a
probability of substantially increasing
functional impairment or death if medical
services, including mental health
services, are not provided expeditiously.
(Authority: Sections 12(c) and
101(a)(8)(A)(i)(III) of the Act; 29 U.S.C. 709(c)
and 721(a)(8)(A)(i)(III))
(22) Fair hearing board means a committee,
body, or group of persons established
by a State prior to January 1,
1985 that—
(i) Is authorized under State law to
review determinations made by personnel
of the designated State unit
that affect the provision of vocational
rehabilitation services; and
(ii) Carries out the responsibilities of
the impartial hearing officer in accordance
with the requirements in
§ 361.57(j).
(Authority: Section 12(c) of the Act; 29
U.S.C. 709(c))
(23) Family member, for purposes of receiving
vocational rehabilitation services
in accordance with § 361.48(i),
means an individual—
(i) Who either—
(A) Is a relative or guardian of an applicant
or eligible individual; or
(B) Lives in the same household as an
applicant or eligible individual;
(ii) Who has a substantial interest in
the well-being of that individual; and
(iii) Whose receipt of vocational rehabilitation
services is necessary to enable
the applicant or eligible individual
to achieve an employment outcome.
(Authority: Sections 12(c) and 103(a)(17) of
the Act; 29 U.S.C. 709(c) and 723(a)(17))
(24) Governor means a chief executive
officer of a State.
(Authority: Section 7(15) of the Act; 29 U.S.C.
705(15))
(25) Impartial hearing officer.

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(i) Impartial hearing officer means an
individual who—
(A) Is not an employee of a public
agency (other than an administrative
law judge, hearing examiner, or employee
of an institution of higher education);
(B) Is not a member of the State Rehabilitation
Council for the designated
State unit;
(C) Has not been involved previously
in the vocational rehabilitation of the
applicant or eligible individual;
(D) Has knowledge of the delivery of
vocational rehabilitation services, the
State plan, and the Federal and State
regulations governing the provision of
services;
(E) Has received training with respect
to the performance of official duties;
and
(F) Has no personal, professional, or
financial interest that would be in conflict
with the objectivity of the individual.
(ii) An individual is not considered to
be an employee of a public agency for
the purposes of this definition solely
because the individual is paid by the
agency to serve as a hearing officer.
(Authority: Section 7(16) of the Act; 29 U.S.C.
705(16))
(26) Indian tribe means any Federal or
State Indian tribe, band, rancheria,
pueblo, colony, or community, including
any Alaskan native village or regional
village corporation (as defined
in or established pursuant to the Alaska
Native Claims Settlement Act).
(Authority: Section 7(19)(B) of the Act; 29
U.S.C. 705(19)(B))
(27) Individual who is blind means a
person who is blind within the meaning
of applicable State law. (Authority:
Section 12(c) of the Act; 29 U.S.C.
709(c))
(28) Individual with a disability, except
as provided in § 361.5(b)(29), means an
individual—
(i) Who has a physical or mental impairment;
(ii) Whose impairment constitutes or
results in a substantial impediment to
employment; and
(iii) Who can benefit in terms of an
employment outcome from the provision
of vocational rehabilitation services.
(Authority: Section 7(20)(A) of the Act; 29
U.S.C. 705(20)(A))

(29) Individual with a disability, for
purposes of §§ 361.5(b)(14), 361.13(a),
361.13(b)(1), 361.17(a), (b), (c), and (j),
361.18(b), 361.19, 361.20, 361.23(b)(2),
361.29(a) and (d)(5), and 361.51(b), means
an individual—
(i) Who has a physical or mental impairment
that substantially limits one
or more major life activities;
(ii) Who has a record of such an impairment;
or
(iii) Who is regarded as having such
an impairment.
(Authority: Section 7(20)(B) of the Act; 29
U.S.C. 705(20)(B))
(30) Individual with a most significant
disability means an individual with a
significant disability who meets the
designated State unit’s criteria for an
individual with a most significant disability.
These criteria must be consistent
with the requirements in
§ 361.36(d)(1) and (2).
(Authority: Sections 7(21)(E)(i) and
101(a)(5)(C) of the Act; 29 U.S.C. 705(21)(E)(i)
and 721(a)(5)(C))
(31) Individual with a significant disability
means an individual with a disability—
(i) Who has a severe physical or mental
impairment that seriously limits
one or more functional capacities (such
as mobility, communication, self-care,
self-direction, interpersonal skills,
work tolerance, or work skills) in
terms of an employment outcome;
(ii) Whose vocational rehabilitation
can be expected to require multiple vocational
rehabilitation services over an
extended period of time; and
(iii) Who has one or more physical or
mental disabilities resulting from amputation,
arthritis, autism, blindness,
burn injury, cancer, cerebral palsy,
cystic fibrosis, deafness, head injury,
heart disease, hemiplegia, hemophilia,
respiratory or pulmonary dysfunction,
mental retardation, mental illness,
multiple sclerosis, muscular dystrophy,
musculo-skeletal disorders, neurological
disorders (including stroke and
epilepsy), spinal cord conditions (including
paraplegia and quadriplegia),
sickle cell anemia, specific learning
disability, end-stage renal disease, or
another disability or combination of
disabilities determined on the basis of

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
an assessment for determining eligibility
and vocational rehabilitation
needs to cause comparable substantial
functional limitation.
(Authority: Section 7(21)(A) of the Act; 29
U.S.C. 705(21)(A))
(32) Individual’s representative means
any representative chosen by an applicant
or eligible individual, as appropriate,
including a parent, guardian,
other family member, or advocate, unless
a representative has been appointed
by a court to represent the individual,
in which case the court-appointed
representative is the individual’s
representative.
(Authority: Sections 7(22) and 12(c) of the
Act; 29 U.S.C. 705(22) and 709(c))
(33) Integrated setting,—
(i) With respect to the provision of
services, means a setting typically
found in the community in which applicants
or eligible individuals interact
with non-disabled individuals other
than non-disabled individuals who are
providing services to those applicants
or eligible individuals;
(ii) With respect to an employment
outcome, means a setting typically
found in the community in which applicants
or eligible individuals interact
with non-disabled individuals, other
than non-disabled individuals who are
providing services to those applicants
or eligible individuals, to the same extent
that non-disabled individuals in
comparable positions interact with
other persons.
(Authority: Section 12(c) of the Act; 29
U.S.C. 709(c))
(34) Local workforce investment board
means a local workforce investment
board established under section 117 of
the Workforce Investment Act of 1998.
(Authority: Section 7(25) of the Act; 29 U.S.C.
705(25))
(35) Maintenance means monetary
support provided to an individual for
expenses, such as food, shelter, and
clothing, that are in excess of the normal
expenses of the individual and that
are necessitated by the individual’s
participation in an assessment for determining
eligibility and vocational rehabilitation
needs or the individual’s
receipt of vocational rehabilitation

services under an individualized plan
for employment.
(Authority: Sections 12(c) and 103(a)(7) of the
Act; 29 U.S.C. 709(c) and 723(a)(7))
(i) Examples: The following are examples
of expenses that would meet the
definition of maintenance. The examples
are illustrative, do not address all
possible circumstances, and are not intended
to substitute for individual
counselor judgment.
Example 1: The cost of a uniform or other
suitable clothing that is required for an individual’s
job placement or job-seeking activities.
Example 2: The cost of short-term shelter
that is required in order for an individual to
participate in assessment activities or vocational
training at a site that is not within
commuting distance of an individual’s home.
Example 3: The initial one-time costs, such
as a security deposit or charges for the initiation
of utilities, that are required in order
for an individual to relocate for a job placement.
Example 4: The costs of an individual’s participation
in enrichment activities related to
that individual’s training program.
(ii) [Reserved]
(36) Mediation means the act or process
of using an independent third party
to act as a mediator, intermediary, or
conciliator to assist persons or parties
in settling differences or disputes prior
to pursuing formal administrative or
other legal remedies. Mediation under
the program must be conducted in accordance
with the requirements in
§ 361.57(d) by a qualified and impartial
mediator as defined in § 361.5(b)(43).
(Authority: Section 12(c) of the Act; 29
U.S.C. 709(c))
(37) Nonprofit, with respect to a community
rehabilitation program, means
a community rehabilitation program
carried out by a corporation or association,
no part of the net earnings of
which inures, or may lawfully inure, to
the benefit of any private shareholder
or individual and the income of which
is exempt from taxation under section
501(c)(3) of the Internal Revenue Code
of 1986.
(Authority: Section 7(26) of the Act; 29 U.S.C.
705(26))
(38) Ongoing support services, as used
in the definition of ‘‘Supported employment’’
(i) Means services that are—

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(A) Needed to support and maintain
an individual with a most significant
disability in supported employment;
(B) Identified based on a determination
by the designated State unit of
the individual’s need as specified in an
individualized plan for employment;
and
(C) Furnished by the designated
State unit from the time of job placement
until transition to extended services,
unless post-employment services
are provided following transition, and
thereafter by one or more extended
services providers throughout the individual’s
term of employment in a particular
job placement or multiple
placements if those placements are
being provided under a program of
transitional employment;
(ii) Must include an assessment of
employment stability and provision of
specific services or the coordination of
services at or away from the worksite
that are needed to maintain stability
based on—
(A) At a minimum, twice-monthly
monitoring at the worksite of each individual
in supported employment; or
(B) If under specific circumstances,
especially at the request of the individual,
the individualized plan for employment
provides for off-site monitoring,
twice monthly meetings with
the individual;
(iii) Consist of—
(A) Any particularized assessment
supplementary to the comprehensive
assessment of rehabilitation needs described
in paragraph (b)(6)(ii) of this
section;
(B) The provision of skilled job trainers
who accompany the individual for
intensive job skill training at the work
site;
(C) Job development and training;
(D) Social skills training;
(E) Regular observation or supervision
of the individual;
(F) Follow-up services including regular
contact with the employers, the
individuals, the parents, family members,
guardians, advocates or authorized
representatives of the individuals,
and other suitable professional and informed
advisors, in order to reinforce

and stabilize the job placement;
(G) Facilitation of natural supports
at the worksite;
(H) Any other service identified in
the scope of vocational rehabilitation
services for individuals, described in
§ 361.48; or
(I) Any service similar to the foregoing
services.
(Authority: Sections 7(27) and 12(c) of the
Act; 29 U.S.C. 705(27) and 709(c))
(39) Personal assistance services means
a range of services provided by one or
more persons designed to assist an individual
with a disability to perform
daily living activities on or off the job
that the individual would typically
perform without assistance if the individual
did not have a disability. The
services must be designed to increase
the individual’s control in life and ability
to perform everyday activities on
or off the job. The services must be
necessary to the achievement of an employment
outcome and may be provided
only while the individual is receiving
other vocational rehabilitation
services. The services may include
training in managing, supervising, and
directing personal assistance services.
(Authority: Sections 7(28), 102(b)(3)(B)(i)(I),
and 103(a)(9) of the Act; 29 U.S.C. 705(28),
722(b)(3)(B)(i)(I), and 723(a)(9))
(40) Physical and mental restoration
services means—
(i) Corrective surgery or therapeutic
treatment that is likely, within a reasonable
period of time, to correct or
modify substantially a stable or slowly
progressive physical or mental impairment
that constitutes a substantial
impediment to employment;
(ii) Diagnosis of and treatment for
mental or emotional disorders by
qualified personnel in accordance with
State licensure laws;
(iii) Dentistry;
(iv) Nursing services;
(v) Necessary hospitalization (either
inpatient or outpatient care) in connection
with surgery or treatment and
clinic services;
(vi) Drugs and supplies;
(vii) Prosthetic and orthotic devices;
(viii) Eyeglasses and visual services,
including visual training, and the examination

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and services necessary for
the prescription and provision of eyeglasses,
contact lenses, microscopic
lenses, telescopic lenses, and other special
visual aids prescribed by personnel
that are qualified in accordance with
State licensure laws;
(ix) Podiatry;
(x) Physical therapy;
(xi) Occupational therapy;
(xii) Speech or hearing therapy;
(xiii) Mental health services;
(xiv) Treatment of either acute or
chronic medical complications and
emergencies that are associated with
or arise out of the provision of physical
and mental restoration services, or
that are inherent in the condition
under treatment;
(xv) Special services for the treatment
of individuals with end-stage
renal disease, including transplantation,
dialysis, artificial kidneys, and
supplies; and
(xvi) Other medical or medically related
rehabilitation services.
(Authority: Sections 12(c) and 103(a)(6) of the
Act; 29 U.S.C. 709(c) and 723(a)(6))
(41) Physical or mental impairment
means—
(i) Any physiological disorder or condition,
cosmetic disfigurement, or anatomical
loss affecting one or more of
the following body systems: neurological,
musculo-skeletal, special sense
organs, respiratory (including speech
organs), cardiovascular, reproductive,
digestive, genitourinary, hemic and
lymphatic, skin, and endocrine; or
(ii) Any mental or psychological disorder
such as mental retardation, organic
brain syndrome, emotional or
mental illness, and specific learning
disabilities.
(Authority: Sections 7(20)(A) and 12(c) of the
Act; 29 U.S.C. 705(20)(A) and 709(c))
(42) Post-employment services means
one or more of the services identified
in § 361.48 that are provided subsequent
to the achievement of an employment
outcome and that are necessary for an
individual to maintain, regain, or advance
in employment, consistent with
the individual’s strengths, resources,
priorities, concerns, abilities, capabilities,
interests, and informed choice.

(Authority: Sections 12(c) and 103(a)(18) of
the Act; 29 U.S.C. 709(c)) and 723(a)(18))
NOTE TO PARAGRAPH (B)(42): Post-employment
services are intended to ensure that
the employment outcome remains consistent
with the individual’s strengths, resources,
priorities, concerns, abilities, capabilities,
interests, and informed choice. These services
are available to meet rehabilitation
needs that do not require a complex and
comprehensive provision of services and,
thus, should be limited in scope and duration.
If more comprehensive services are required,
then a new rehabilitation effort
should be considered. Post-employment services
are to be provided under an amended individualized
plan for employment; thus, a redetermination
of eligibility is not required.
The provision of post-employment services is
subject to the same requirements in this
part as the provision of any other vocational
rehabilitation service. Post-employment
services are available to assist an individual
to maintain employment, e.g., the individual’s
employment is jeopardized because of
conflicts with supervisors or co-workers, and
the individual needs mental health services
and counseling to maintain the employment;
to regain employment, e.g., the individual’s
job is eliminated through reorganization and
new placement services are needed; and to
advance in employment, e.g., the employment
is no longer consistent with the individual’s
strengths, resources, priorities, concerns,
abilities, capabilities, interests, and
informed choice.
(43) Qualified and impartial mediator.
(i) Qualified and impartial mediator
means an individual who—
(A) Is not an employee of a public
agency (other than an administrative
law judge, hearing examiner, employee
of a State office of mediators, or employee
of an institution of higher education);
(B) Is not a member of the State Rehabilitation
Council for the designated
State unit;
(C) Has not been involved previously
in the vocational rehabilitation of the
applicant or eligible individual;
(D) Is knowledgeable of the vocational
rehabilitation program and the
applicable Federal and State laws, regulations,
and policies governing the
provision of vocational rehabilitation
services;

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(E) Has been trained in effective mediation
techniques consistent with any
State-approved or -recognized certification,
licensing, registration, or other
requirements; and
(F) Has no personal, professional, or
financial interest that would be in conflict
with the objectivity of the individual
during the mediation proceedings.
(ii) An individual serving as a mediator
is not considered to be an employee
of the designated State agency
or designated State unit for the purposes
of this definition solely because
the individual is paid by the designated
State agency or designated State unit
to serve as a mediator.
(Authority: Sections 12(c) and 102(c)(4) of the
Act; 29 U.S.C. 709(c) and 722(c)(4))
(44) Rehabilitation engineering means
the systematic application of engineering
sciences to design, develop, adapt,
test, evaluate, apply, and distribute
technological solutions to problems
confronted by individuals with disabilities
in functional areas, such as mobility,
communications, hearing, vision,
and cognition, and in activities associated
with employment, independent
living, education, and integration into
the community.
(Authority: Section 7(12)(c) of the Act; 29
U.S.C. 709(c))
(45) Rehabilitation technology means
the systematic application of technologies,
engineering methodologies,
or scientific principles to meet the
needs of, and address the barriers confronted
by, individuals with disabilities
in areas that include education, rehabilitation,
employment, transportation,
independent living, and recreation.
The term includes rehabilitation
engineering, assistive technology devices,
and assistive technology services.
(Authority: Section 7(30) of the Act; 29 U.S.C.
705(30))
(46) Reservation means a Federal or
State Indian reservation, public domain
Indian allotment, former Indian
reservation in Oklahoma, and land held
by incorporated Native groups, regional
corporations, and village corporations
under the provisions of the
Alaska Native Claims Settlement Act.
(Authority: Section 121(c) of the Act; 29

U.S.C. 741(c))
(47) Sole local agency means a unit or
combination of units of general local
government or one or more Indian
tribes that has the sole responsibility
under an agreement with, and the supervision
of, the State agency to conduct
a local or tribal vocational rehabilitation
program, in accordance with
the State plan.
(Authority: Section 7(24) of the Act; 29 U.S.C.
705(24))
(48) State means any of the 50 States,
the District of Columbia, the Commonwealth
of Puerto Rico, the United
States Virgin Islands, Guam, American
Samoa, and the Commonwealth of the
Northern Mariana Islands.
(Authority: Section 7(32) of the Act; 29 U.S.C.
705(32))
(49) State workforce investment board
means a State workforce investment
board established under section 111 of
the Workforce Investment Act of 1998.
(Authority: Section 7(33) of the Act; 29 U.S.C.
705(33))
(50) Statewide workforce investment system
means a system described in section
111(d)(2) of the Workforce Investment
Act of 1998.
(Authority: Section 7(34) of the Act; 29 U.S.C.
705(34))
(51) State plan means the State plan
for vocational rehabilitation services
submitted under § 361.10.
(Authority: Sections 12(c) and 101 of the Act;
29 U.S.C. 709(c) and 721)
(52) Substantial impediment to employment
means that a physical or mental
impairment (in light of attendant medical,
psychological, vocational, educational,
communication, and other related
factors) hinders an individual
from preparing for, entering into, engaging
in, or retaining employment
consistent with the individual’s abilities
and capabilities.
(Authority: Sections 7(20)(A) and 12(c) of the
Act; 29 U.S.C. 705(20)(A) and 709(c))
(53) Supported employment means—
(i) Competitive employment in an integrated
setting, or employment in integrated
work settings in which individuals
are working toward competitive
employment, consistent with the
strengths, resources, priorities, concerns,

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
abilities, capabilities, interests,
and informed choice of the individuals
with ongoing support services for individuals
with the most significant disabilities—
(A) For whom competitive employment
has not traditionally occurred or
for whom competitive employment has
been interrupted or intermittent as a
result of a significant disability; and
(B) Who, because of the nature and
severity of their disabilities, need intensive
supported employment services
from the designated State unit and extended
services after transition as described
in paragraph (b)(20) of this section
to perform this work; or
(ii) Transitional employment, as defined
in paragraph (b)(54) of this section,
for individuals with the most significant
disabilities due to mental illness.
(Authority: Section 7(35) of the Act; 29 U.S.C.
705(35))
(54) Supported employment services
means ongoing support services and
other appropriate services needed to
support and maintain an individual
with a most significant disability in
supported employment that are provided
by the designated State unit—
(i) For a period of time not to exceed
18 months, unless under special circumstances
the eligible individual and
the rehabilitation counselor or coordinator
jointly agree to extend the time
to achieve the employment outcome
identified in the individualized plan for
employment; and
(ii) Following transition, as post-employment
services that are unavailable
from an extended services provider and
that are necessary to maintain or regain
the job placement or advance in
employment.
(Authority: Sections 7(36) and 12(c) of the
Act; 29 U.S.C. 705(36) and 709(c))
(55) Transition services means a coordinated
set of activities for a student
designed within an outcome-oriented
process that promotes movement from
school to post-school activities, including
postsecondary education, vocational
training, integrated employment
(including supported employment),
continuing and adult education,
adult services, independent living, or
community participation. The coordinated

set of activities must be based
upon the individual student’s needs,
taking into account the student’s preferences
and interests, and must include
instruction, community experiences,
the development of employment and
other post-school adult living objectives,
and, if appropriate, acquisition of
daily living skills and functional vocational
evaluation. Transition services
must promote or facilitate the achievement
of the employment outcome identified
in the student’s individualized
plan for employment.
(Authority: Section 7(37) and 103(a)(15) of the
Act; 29 U.S.C. 705(37) and 723(a)(15))
(56) Transitional employment, as used
in the definition of ‘‘Supported employment,’’
means a series of temporary
job placements in competitive
work in integrated settings with ongoing
support services for individuals
with the most significant disabilities
due to mental illness. In transitional
employment, the provision of ongoing
support services must include continuing
sequential job placements until
job permanency is achieved.
(Authority: Sections 7(35)(B) and 12(c) of the
Act; 29 U.S.C. 705(35)(B) and 709(c)
(57) Transportation means travel and
related expenses that are necessary to
enable an applicant or eligible individual
to participate in a vocational
rehabilitation service, including expenses
for training in the use of public
transportation vehicles and systems.
(Authority: 103(a)(8) of the Act; 29 U.S.C.
723(a)(8))
(i) Examples: The following are examples
of expenses that would meet the
definition of transportation. The examples
are purely illustrative, do not address
all possible circumstances, and
are not intended to substitute for individual
counselor judgment.
Example 1: Travel and related expenses for
a personal care attendant or aide if the services
of that person are necessary to enable
the applicant or eligible individual to travel
to participate in any vocational rehabilitation
service.
Example 2: The purchase and repair of vehicles,
including vans, but not the modification
of these vehicles, as modification would
be considered a rehabilitation technology

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
service.
Example 3: Relocation expenses incurred by
an eligible individual in connection with a
job placement that is a significant distance
from the eligible individual’s current residence.
(ii) [Reserved]
(58) Vocational rehabilitation services—
(i) If provided to an individual,
means those services listed in § 361.48;
and
(ii) If provided for the benefit of
groups of individuals, also means those
services listed in § 361.49.
(Authority: Sections 7(38) and 103(a) and (b)
of the Act; 29 U.S.C. 705(38), 723(a) and (b))
66 FR 4382, Jan. 17, 2001, as amended at 66 FR
7252, Jan. 22, 2001]

Subpart B—State Plan and Other
Requirements for Vocational Rehabilitation
Services
§ 361.10 Submission, approval, and
disapproval of the State plan.
(a) Purpose. For a State to receive a
grant under this part, the designated
State agency must submit to the Secretary,
and obtain approval of, a State
plan that contains a description of the
State’s vocational rehabilitation services
program, the plans and policies to
be followed in carrying out the program,
and other information requested
by the Secretary, in accordance with
the requirements of this part.
(b) Separate part relating to the vocational
rehabilitation of individuals who
are blind. If a separate State agency administers
or supervises the administration
of a separate part of the State
plan relating to the vocational rehabilitation
of individuals who are blind,
that part of the State plan must separately
conform to all requirements
under this part that are applicable to a
State plan.
(c) State unified plan. The State may
choose to submit the State plan for vocational
rehabilitation services as part
of the State unified plan under section
501 of the Workforce Investment Act of
1998. The portion of the State unified

plan that includes the State plan for
vocational rehabilitation services must
meet the State plan requirements in
this part.
(d) Public participation. Prior to the
adoption of any substantive policies or
procedures governing the provision of
vocational rehabilitation services
under the State plan, including making
any substantive amendment to those
policies and procedures, the designated
State agency must conduct public
meetings throughout the State, in accordance
with the requirements of
§ 361.20.
(e) Duration. The State plan remains
in effect subject to the submission of
modifications the State determines to
be necessary or the Secretary may require
based on a change in State policy,
a change in Federal law, including
regulations, an interpretation of the
Act by a Federal court or the highest
court of the State, or a finding by the
Secretary of State noncompliance with
the requirements of the Act or this
part.
(f) Submission of the State plan. The
State must submit the State plan for
approval—
(1) To the Secretary on the same date
that the State submits a State plan relating
to the statewide workforce investment
system under section 112 of
the Workforce Investment Act of 1998;
(2) As part of the State unified plan
submitted under section 501 of that
Act; or
(3) To the Secretary on the same date
that the State submits a State unified
plan under section 501 of that Act that
does not include the State plan under
this part.
(g) Annual submission. (1) The State
must submit to the Secretary for approval
revisions to the State plan in
accordance with paragraph (e) of this
section and 34 CFR 76.140.
(2) The State must submit to the Secretary
reports containing annual updates
of the information required under
§§ 361.18, 361.29, and 361.35 and any other
updates of the information required
under this part that are requested by
the Secretary.
(3) The State is not required to submit

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
policies, procedures, or descriptions
required under this part that
have been previously submitted to the
Secretary and that demonstrate that
the State meets the requirements of
this part, including any policies, procedures,
or descriptions submitted under
this part that are in effect on August 6,
1998.
(h) Approval. The Secretary approves
any State plan and any revisions to the
State plan that conform to the requirements
of this part and section 101(a) of
the Act.
(i) Disapproval. The Secretary disapproves
any State plan that does not
conform to the requirements of this
part and section 101(a) of the Act, in
accordance with the following procedures:
(1) Informal resolution. Prior to disapproving
any State plan, the Secretary
attempts to resolve disputes informally
with State officials.
(2) Notice. If, after reasonable effort
has been made to resolve the dispute,
no resolution has been reached, the
Secretary provides notice to the State
agency of the intention to disapprove
the State plan and of the opportunity
for a hearing.
(3) State plan hearing. If the State
agency requests a hearing, the Secretary
designates one or more individuals,
either from the Department or
elsewhere, not responsible for or connected
with the administration of this
Program, to conduct a hearing in accordance
with the provisions of 34 CFR
part 81, subpart A.
(4) Initial decision. The hearing officer
issues an initial decision in accordance
with 34 CFR 81.41.
(5) Petition for review of an initial decision.
The State agency may seek the
Secretary’s review of the initial decision
in accordance with 34 CFR part 81.
(6) Review by the Secretary. The Secretary
reviews the initial decision in
accordance with 34 CFR 81.43.
(7) Final decision of the Department.
The final decision of the Department is
made in accordance with 34 CFR 81.44.
(8) Judicial review. A State may appeal
the Secretary’s decision to disapprove
the State plan by filing a petition
for review with the United States

Court of Appeals for the circuit in
which the State is located, in accordance
with section 107(d) of the Act.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a) and (b), and 107(d)
of the Act; 20 U.S.C. 1231g(a); and 29 U.S.C.
721(a) and (b), and 727(d))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.11 Withholding of funds.
(a) Basis for withholding. The Secretary
may withhold or limit payments
under section 111 or 622(a) of the Act,
as provided by section 107(c) and (d) of
the Act, if the Secretary determines
that—
(1) The State plan, including the supported
employment supplement, has
been so changed that it no longer conforms
with the requirements of this
part or 34 CFR part 363; or
(2) In the administration of the State
plan, there has been a failure to comply
substantially with any provision of
that plan or a program improvement
plan established in accordance with
section 106(b)(2) of the Act.
(b) Informal resolution. Prior to withholding
or limiting payments in accordance
with this section, the Secretary
attempts to resolve disputed
issues informally with State officials.
(c) Notice. If, after reasonable effort
has been made to resolve the dispute,
no resolution has been reached, the
Secretary provides notice to the State
agency of the intention to withhold or
limit payments and of the opportunity
for a hearing.
(d) Withholding hearing. If the State
agency requests a hearing, the Secretary
designates one or more individuals,
either from the Department or
elsewhere, not responsible for or connected
with the administration of this
Program, to conduct a hearing in accordance
with the provisions of 34 CFR
part 81, subpart A.
(e) Initial decision. The hearing officer
issues an initial decision in accordance
with 34 CFR 81.41.
(f) Petition for review of an initial decision.

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
The State agency may seek the
Secretary’s review of the initial decision
in accordance with 34 CFR 81.42.
(g) Review by the Secretary. The Secretary
reviews the initial decision in
accordance with 34 CFR 81.43.
(h) Final decision of the Department.
The final decision of the Department is
made in accordance with 34 CFR 81.44.
(i) Judicial review. A State may appeal
the Secretary’s decision to withhold
or limit payments by filing a petition
for review with the U.S. Court of
Appeals for the circuit in which the
State is located, in accordance with
section 107(d) of the Act.
(Authority: Sections 101(b), 107(c), and 107(d)
of the Act; 29 U.S.C. 721(b), 727(c)(1) and (2),
and 727(d))

ADMINISTRATION
§ 361.12 Methods of administration.
The State plan must assure that the
State agency, and the designated State
unit if applicable, employs methods of
administration found necessary by the
Secretary for the proper and efficient
administration of the plan and for carrying
out all functions for which the
State is responsible under the plan and
this part. These methods must include
procedures to ensure accurate data collection
and financial accountability.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(6) and (a)(10)(A)
of the Act; 29 U.S.C. 721(a)(6) and (a)(10)(A))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.13 State agency for administration.
(a) Designation of State agency. The
State plan must designate a State
agency as the sole State agency to administer
the State plan, or to supervise
its administration in a political subdivision
of the State by a sole local
agency, in accordance with the following
requirements:
(1) General. Except as provided in
paragraphs (a)(2) and (3) of this section,
the State plan must provide that the

designated State agency is one of the
following types of agencies:
(i) A State agency that is primarily
concerned with vocational rehabilitation
or vocational and other rehabilitation
of individuals with disabilities; or
(ii) A State agency that includes a
vocational rehabilitation unit as provided
in paragraph (b) of this section.
(2) American Samoa. In the case of
American Samoa, the State plan must
designate the Governor.
(3) Designated State agency for individuals
who are blind. If a State commission
or other agency that provides assistance
or services to individuals who
are blind is authorized under State law
to provide vocational rehabilitation
services to individuals who are blind,
and this commission or agency is primarily
concerned with vocational rehabilitation
or includes a vocational rehabilitation
unit as provided in paragraph
(b) of this section, the State plan
may designate that agency as the sole
State agency to administer the part of
the plan under which vocational rehabilitation
services are provided for individuals
who are blind or to supervise
its administration in a political subdivision
of the State by a sole local
agency.
(b) Designation of State unit.
(1) If the designated State agency is
not of the type specified in paragraph
(a)(1)(i) of this section or if the designated
State agency specified in paragraph
(a)(3) of this section is not primarily
concerned with vocational rehabilitation
or vocational and other rehabilitation
of individuals with disabilities,
the State plan must assure that
the agency (or each agency if two agencies
are designated) includes a vocational
rehabilitation bureau, division,
or unit that—
(i) Is primarily concerned with vocational
rehabilitation or vocational and
other rehabilitation of individuals with
disabilities and is responsible for the
administration of the State agency’s
vocational rehabilitation program
under the State plan;
(ii) Has a full-time director;
(iii) Has a staff, at least 90 percent of
whom are employed full time on the rehabilitation

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
work of the organizational
unit; and
(iv) Is located at an organizational
level and has an organizational status
within the State agency comparable to
that of other major organizational
units of the agency.
(2) In the case of a State that has not
designated a separate State agency for
individuals who are blind, as provided
for in paragraph (a)(3) of this section,
the State may assign responsibility for
the part of the plan under which vocational
rehabilitation services are provided
to individuals who are blind to
one organizational unit of the designated
State agency and may assign
responsibility for the rest of the plan
to another organizational unit of the
designated State agency, with the provisions
of paragraph (b)(1) of this section
applying separately to each of
these units.
(c) Responsibility for administration.
(1) At a minimum, the following activities
are the responsibility of the
designated State unit or the sole local
agency under the supervision of the
State unit:
(i) All decisions affecting eligibility
for vocational rehabilitation services,
the nature and scope of available services,
and the provision of these services.
(ii) The determination to close the
record of services of an individual who
has achieved an employment outcome
in accordance with § 361.56.
(iii) Policy formulation and implementation.
(iv) The allocation and expenditure
of vocational rehabilitation funds.
(v) Participation as a partner in the
One-Stop service delivery system under
Title I of the Workforce Investment
Act of 1998, in accordance with 20 CFR
part 662.
(2) The responsibility for the functions
described in paragraph (c)(1) of
this section may not be delegated to
any other agency or individual.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 101(a)(2) of the Act; 29
U.S.C. 721(a)(2))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.14 Substitute State agency.
(a) General provisions.
(1) If the Secretary has withheld all
funding from a State under § 361.11, the
State may designate another agency to
substitute for the designated State
agency in carrying out the State’s program
of vocational rehabilitation services.
(2) Any public or nonprofit private
organization or agency within the
State or any political subdivision of
the State is eligible to be a substitute
agency.
(3) The substitute agency must submit
a State plan that meets the requirements
of this part.
(4) The Secretary makes no grant to
a substitute agency until the Secretary
approves its plan.
(b) Substitute agency matching share.
The Secretary does not make any payment
to a substitute agency unless it
has provided assurances that it will
contribute the same matching share as
the State would have been required to
contribute if the State agency were
carrying out the vocational rehabilitation
program.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 107(c)(3) of the Act; 29
U.S.C. 727(c)(3))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.15 Local administration.
(a) If the State plan provides for the
administration of the plan by a local
agency, the designated State agency
must—
(1) Ensure that each local agency is
under the supervision of the designated
State unit and is the sole local agency
as defined in § 361.5(b)(47) that is responsible
for the administration of the
program within the political subdivision
that it serves; and
(2) Develop methods that each local
agency will use to administer the vocational
rehabilitation program, in accordance
with the State plan.
(b) A separate local agency serving
individuals who are blind may administer
that part of the plan relating to
vocational rehabilitation of individuals

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
who are blind, under the supervision of
the designated State unit for individuals
who are blind.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 7(24) and 101(a)(2)(A) of
the Act; 29 U.S.C. 705(24) and 721(a)(2)(A))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.16 Establishment of an independent
commission or a state rehabilitation council.
(a) General requirement. Except as provided
in paragraph (b) of this section,
the State plan must contain one of the
following two assurances:
(1) An assurance that the designated
State agency is an independent State
commission that—
(i) Is responsible under State law for
operating, or overseeing the operation
of, the vocational rehabilitation program
in the State and is primarily concerned
with vocational rehabilitation
or vocational and other rehabilitation
services, in accordance with
§ 361.13(a)(1)(i);
(ii) Is consumer-controlled by persons
who—
(A) Are individuals with physical or
mental impairments that substantially
limit major life activities; and
(B) Represent individuals with a
broad range of disabilities, unless the
designated State unit under the direction
of the commission is the State
agency for individuals who are blind;
(iii) Includes family members, advocates,
or other representatives of individuals
with mental impairments; and
(iv) Conducts the functions identified
in § 361.17(h)(4).
(2) An assurance that—
(i) The State has established a State
Rehabilitation Council (Council) that
meets the requirements of § 361.17;
(ii) The designated State unit, in accordance
with § 361.29, jointly develops,
agrees to, and reviews annually State
goals and priorities and jointly submits
to the Secretary annual reports of
progress with the Council;
(iii) The designated State unit regularly
consults with the Council regarding
the development, implementation,

and revision of State policies and procedures
of general applicability pertaining
to the provision of vocational
rehabilitation services;
(iv) The designated State unit transmits
to the Council—
(A) All plans, reports, and other information
required under this part to
be submitted to the Secretary;
(B) All policies and information on
all practices and procedures of general
applicability provided to or used by rehabilitation
personnel providing vocational
rehabilitation services under
this part; and
(C) Copies of due process hearing decisions
issued under this part and
transmitted in a manner to ensure that
the identity of the participants in the
hearings is kept confidential; and
(v) The State plan, and any revision
to the State plan, includes a summary
of input provided by the Council, including
recommendations from the annual
report of the Council, the review
and analysis of consumer satisfaction
described in § 361.17(h)(4), and other reports
prepared by the Council, and the
designated State unit’s response to the
input and recommendations, including
explanations of reasons for rejecting
any input or recommendation of the
Council.
(b) Exception for separate State agency
for individuals who are blind. In the case
of a State that designates a separate
State agency under § 361.13(a)(3) to administer
the part of the State plan
under which vocational rehabilitation
services are provided to individuals
who are blind, the State must either
establish a separate State Rehabilitation
Council for each agency that does
not meet the requirements in paragraph
(a)(1) of this section or establish
one State Rehabilitation Council for
both agencies if neither agency meets
the requirements of paragraph (a)(1) of
this section.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(21) of the Act; 29
U.S.C. 721(a)(21))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
§ 361.17 Requirements for a state
rehabilitation council.
If the State has established a Council
under § 361.16(a)(2) or (b), the Council
must meet the following requirements:
(a) Appointment.
(1) The members of the Council must
be appointed by the Governor or, in the
case of a State that, under State law,
vests authority for the administration
of the activities carried out under this
part in an entity other than the Governor
(such as one or more houses of
the State legislature or an independent
board), the chief officer of that entity.
(2) The appointing authority must select
members of the Council after soliciting
recommendations from representatives
of organizations representing a
broad range of individuals with disabilities
and organizations interested in individuals
with disabilities. In selecting
members, the appointing authority
must consider, to the greatest extent
practicable, the extent to which minority
populations are represented on the
Council.
(b) Composition.
(1) General. Except as provided in
paragraph (b)(3) of this section, the
Council must be composed of at least 15
members, including—
(i) At least one representative of the
Statewide Independent Living Council,
who must be the chairperson or other
designee of the Statewide Independent
Living Council;
(ii) At least one representative of a
parent training and information center
established pursuant to section 682(a)
of the Individuals with Disabilities
Education Act;
(iii) At least one representative of
the Client Assistance Program established
under 34 CFR part 370, who must
be the director of or other individual
recommended by the Client Assistance
Program;
(iv) At least one qualified vocational
rehabilitation counselor with knowledge
of and experience with vocational
rehabilitation programs who serves as
an ex officio, nonvoting member of the
Council if employed by the designated
State agency;

(v) At least one representative of
community rehabilitation program
service providers;
(vi) Four representatives of business,
industry, and labor;
(vii) Representatives of disability
groups that include a cross section of—
(A) Individuals with physical, cognitive,
sensory, and mental disabilities;
and
(B) Representatives of individuals
with disabilities who have difficulty
representing themselves or are unable
due to their disabilities to represent
themselves;
(viii) Current or former applicants
for, or recipients of, vocational rehabilitation
services;
(ix) In a State in which one or more
projects are carried out under section
121 of the Act (American Indian Vocational
Rehabilitation Services), at
least one representative of the directors
of the projects;
(x) At least one representative of the
State educational agency responsible
for the public education of students
with disabilities who are eligible to receive
services under this part and part
B of the Individuals with Disabilities
Education Act;
(xi) At least one representative of the
State workforce investment board; and
(xii) The director of the designated
State unit as an ex officio, nonvoting
member of the Council.
(2) Employees of the designated State
agency. Employees of the designated
State agency may serve only as nonvoting
members of the Council. This
provision does not apply to the representative
appointed pursuant to
paragraph (b)(1)(iii) of this section.
(3) Composition of a separate Council
for a separate State agency for individuals
who are blind. Except as provided
in paragraph (b)(4) of this section, if
the State establishes a separate Council
for a separate State agency for individuals
who are blind, that Council
must—
(i) Conform with all of the composition
requirements for a Council under
paragraph (b)(1) of this section, except
the requirements in paragraph
(b)(1)(vii), unless the exception in paragraph

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(b)(4) of this section applies; and
(ii) Include—
(A) At least one representative of a
disability advocacy group representing
individuals who are blind; and
(B) At least one representative of an
individual who is blind, has multiple
disabilities, and has difficulty representing
himself or herself or is unable
due to disabilities to represent
himself or herself.
(4) Exception. If State law in effect on
October 29, 1992 requires a separate
Council under paragraph (b)(3) of this
section to have fewer than 15 members,
the separate Council is in compliance
with the composition requirements in
paragraphs (b)(1)(vi) and (b)(1)(viii) of
this section if it includes at least one
representative who meets the requirements
for each of those paragraphs.
(c) Majority.
(1) A majority of the Council members
must be individuals with disabilities
who meet the requirements of
§ 361.5(b)(29) and are not employed by
the designated State unit.
(2) In the case of a separate Council
established under § 361.16(b), a majority
of the Council members must be individuals
who are blind and are not employed
by the designated State unit.
(d) Chairperson. The chairperson must
be—
(1) Selected by the members of the
Council from among the voting members
of the Council, subject to the veto
power of the Governor; or
(2) In States in which the Governor
does not have veto power pursuant to
State law, the appointing authority described
in paragraph (a)(1) of this section
must designate a member of the
Council to serve as the chairperson of
the Council or must require the Council
to designate a member to serve as
chairperson.
(e) Terms of appointment.
(1) Each member of the Council must
be appointed for a term of no more
than 3 years, and each member of the
Council, other than a representative
identified in paragraph (b)(1)(iii) or (ix)
of this section, may serve for no more
than two consecutive full terms.
(2) A member appointed to fill a vacancy

occurring prior to the end of the
term for which the predecessor was appointed
must be appointed for the remainder
of the predecessor’s term.
(3) The terms of service of the members
initially appointed must be, as
specified by the appointing authority
as described in paragraph (a)(1) of this
section, for varied numbers of years to
ensure that terms expire on a staggered
basis.
(f) Vacancies.
(1) A vacancy in the membership of
the Council must be filled in the same
manner as the original appointment,
except the appointing authority as described
in paragraph (a)(1) of this section
may delegate the authority to fill
that vacancy to the remaining members
of the Council after making the
original appointment.
(2) No vacancy affects the power of
the remaining members to execute the
duties of the Council.
(g) Conflict of interest. No member of
the Council shall cast a vote on any
matter that would provide direct financial
benefit to the member or the member’s
organization or otherwise give
the appearance of a conflict of interest
under State law.
(h) Functions. The Council must,
after consulting with the State workforce
investment board—
(1) Review, analyze, and advise the
designated State unit regarding the
performance of the State unit’s responsibilities
under this part, particularly
responsibilities related to—
(i) Eligibility, including order of selection;
(ii) The extent, scope, and effectiveness
of services provided; and
(iii) Functions performed by State
agencies that affect or potentially affect
the ability of individuals with disabilities
in achieving employment outcomes
under this part;
(2) In partnership with the designated
State unit—
(i) Develop, agree to, and review
State goals and priorities in accordance
with § 361.29(c); and
(ii) Evaluate the effectiveness of the
vocational rehabilitation program and
submit reports of progress to the Secretary
in accordance with § 361.29(e);

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(3) Advise the designated State agency
and the designated State unit regarding
activities carried out under
this part and assist in the preparation
of the State plan and amendments to
the plan, applications, reports, needs
assessments, and evaluations required
by this part;
(4) To the extent feasible, conduct a
review and analysis of the effectiveness
of, and consumer satisfaction with—
(i) The functions performed by the
designated State agency;
(ii) The vocational rehabilitation
services provided by State agencies and
other public and private entities responsible
for providing vocational rehabilitation
services to individuals
with disabilities under the Act; and
(iii) The employment outcomes
achieved by eligible individuals receiving
services under this part, including
the availability of health and other
employment benefits in connection
with those employment outcomes;
(5) Prepare and submit to the Governor
and to the Secretary no later
than 90 days after the end of the Federal
fiscal year an annual report on the
status of vocational rehabilitation programs
operated within the State and
make the report available to the public
through appropriate modes of communication;
(6) To avoid duplication of efforts and
enhance the number of individuals
served, coordinate activities with the
activities of other councils within the
State, including the Statewide Independent
Living Council established
under 34 CFR part 364, the advisory
panel established under section
612(a)(21) of the Individuals with Disabilities
Education Act, the State Developmental
Disabilities Planning
Council described in section 124 of the
Developmental Disabilities Assistance
and Bill of Rights Act, the State mental
health planning council established
under section 1914(a) of the Public
Health Service Act, and the State
workforce investment board;
(7) Provide for coordination and the
establishment of working relationships
between the designated State agency
and the Statewide Independent Living
Council and centers for independent

living within the State; and
(8) Perform other comparable functions,
consistent with the purpose of
this part, as the Council determines to
be appropriate, that are comparable to
the other functions performed by the
Council.
(i) Resources.
(1) The Council, in conjunction with
the designated State unit, must prepare
a plan for the provision of resources,
including staff and other personnel,
that may be necessary and sufficient
for the Council to carry out its
functions under this part.
(2) The resource plan must, to the
maximum extent possible, rely on the
use of resources in existence during the
period of implementation of the plan.
(3) Any disagreements between the
designated State unit and the Council
regarding the amount of resources necessary
to carry out the functions of the
Council must be resolved by the Governor,
consistent with paragraphs (i)(1)
and (2) of this section.
(4) The Council must, consistent with
State law, supervise and evaluate the
staff and personnel that are necessary
to carry out its functions.
(5) Those staff and personnel that are
assisting the Council in carrying out
its functions may not be assigned duties
by the designated State unit or
any other agency or office of the State
that would create a conflict of interest.
(j) Meetings. The Council must—
(1) Convene at least four meetings a
year in locations determined by the
Council to be necessary to conduct
Council business. The meetings must
be publicly announced, open, and accessible
to the general public, including
individuals with disabilities, unless
there is a valid reason for an executive
session; and
(2) Conduct forums or hearings, as
appropriate, that are publicly announced,
open, and accessible to the
public, including individuals with disabilities.
(k) Compensation. Funds appropriated
under Title I of the Act, except funds
to carry out sections 112 and 121 of the
Act, may be used to compensate and
reimburse the expenses of Council
members in accordance with section

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
105(g) of the Act.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 105 of the Act; 29 U.S.C.
725)
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.18 Comprehensive system of
personnel development.
The State plan must describe the
procedures and activities the State
agency will undertake to establish and
maintain a comprehensive system of
personnel development designed to ensure
an adequate supply of qualified rehabilitation
personnel, including professionals
and paraprofessionals, for
the designated State unit. If the State
agency has a State Rehabilitation
Council, this description must, at a
minimum, specify that the Council has
an opportunity to review and comment
on the development of plans, policies,
and procedures necessary to meet the
requirements of paragraphs (b) through
(d) of this section. This description
must also conform with the following
requirements:
(a) Data system on personnel and personnel
development. The State plan
must describe the development and
maintenance of a system by the State
agency for collecting and analyzing on
an annual basis data on qualified personnel
needs and personnel development,
in accordance with the following
requirements:
(1) Data on qualified personnel needs
must include—
(i) The number of personnel who are
employed by the State agency in the
provision of vocational rehabilitation
services in relation to the number of
individuals served, broken down by personnel
category;
(ii) The number of personnel currently
needed by the State agency to
provide vocational rehabilitation services,
broken down by personnel category;
and
(iii) Projections of the number of personnel,
broken down by personnel category,
who will be needed by the State
agency to provide vocational rehabilitation

services in the State in 5 years
based on projections of the number of
individuals to be served, including individuals
with significant disabilities,
the number of personnel expected to retire
or leave the field, and other relevant
factors.
(2) Data on personnel development
must include—
(i) A list of the institutions of higher
education in the State that are preparing
vocational rehabilitation professionals,
by type of program;
(ii) The number of students enrolled
at each of those institutions, broken
down by type of program; and
(iii) The number of students who
graduated during the prior year from
each of those institutions with certification
or licensure, or with the credentials
for certification or licensure, broken
down by the personnel category for
which they have received, or have the
credentials to receive, certification or
licensure.
(b) Plan for recruitment, preparation,
and retention of qualified personnel. The
State plan must describe the development,
updating, and implementation of
a plan to address the current and projected
needs for personnel who are
qualified in accordance with paragraph
(c) of this section. The plan must identify
the personnel needs based on the
data collection and analysis system described
in paragraph (a) of this section
and must provide for the coordination
and facilitation of efforts between the
designated State unit and institutions
of higher education and professional
associations to recruit, prepare, and retain
personnel who are qualified in accordance
with paragraph (c) of this section,
including personnel from minority
backgrounds and personnel who are
individuals with disabilities.
(c) Personnel standards.
(1) The State plan must include the
State agency’s policies and describe
the procedures the State agency will
undertake to establish and maintain
standards to ensure that all professional
and paraprofessional personnel
needed within the designated State
unit to carry out this part are appropriately
and adequately prepared and

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
trained, including—
(i) Standards that are consistent
with any national or State-approved or
-recognized certification, licensing, or
registration requirements, or, in the
absence of these requirements, other
comparable requirements (including
State personnel requirements) that
apply to the profession or discipline in
which that category of personnel is
providing vocational rehabilitation
services; and
(ii) To the extent that existing standards
are not based on the highest requirements
in the State, the steps the
State is currently taking and the steps
the State plans to take to retrain or
hire personnel to meet standards that
are based on the highest requirements
in the State, including measures to notify
State unit personnel, the institutions
of higher education identified
under paragraph (a)(2)(i) of this section,
and other public agencies of these
steps and the timelines for taking each
step. The steps taken by the State unit
under this paragraph must be described
in a written plan that includes—
(A) Specific strategies for retraining,
recruiting, and hiring personnel;
(B) The specific time period by which
all State unit personnel will meet the
standards described in paragraph
(c)(1)(i) of this section;
(C) Procedures for evaluating the
State unit’s progress in hiring or retraining
personnel to meet applicable
personnel standards within the time
period established under paragraph
(c)(1)(ii)(B) of this section; and
(D) In instances in which the State
unit is unable to immediately hire new
personnel who meet the requirements
in paragraph (c)(1)(i) of this section,
the initial minimum qualifications
that the designated State unit will require
of newly hired personnel and a
plan for training those individuals to
meet applicable requirements within
the time period established under paragraph
(c)(1)(ii)(B) of this section.
(2) As used in this section—
(i) Highest requirements in the State applicable
to that profession or discipline
means the highest entry-level academic
degree needed for any national

or State-approved or -recognized certification,
licensing, registration, or, in
the absence of these requirements,
other comparable requirements that
apply to that profession or discipline.
The current requirements of all State
statutes and regulations of other agencies
in the State applicable to that profession
or discipline must be considered
and must be kept on file by the designated
State unit and available to the
public.
(ii) Profession or discipline means a
specific occupational category, including
any paraprofessional occupational
category, that—
(A) Provides rehabilitation services
to individuals with disabilities;
(B) Has been established or designated
by the State unit; and
(C) Has a specified scope of responsibility.
(d) Staff development.
(1) The State plan must include the
State agency’s policies and describe
the procedures and activities the State
agency will undertake to ensure that
all personnel employed by the State
unit receive appropriate and adequate
training, including a description of—
(i) A system of staff development for
rehabilitation professionals and paraprofessionals
within the State unit,
particularly with respect to assessment,
vocational counseling, job placement,
and rehabilitation technology;
and
(ii) Procedures for acquiring and disseminating
to rehabilitation professionals
and paraprofessionals within
the designated State unit significant
knowledge from research and other
sources.
(2) The specific training areas for
staff development must be based on the
needs of each State unit and may include,
but are not limited to—
(i) Training regarding the Workforce
Investment Act of 1998 and the amendments
to the Rehabilitation Act of 1973
made by the Rehabilitation Act
Amendments of 1998;
(ii) Training with respect to the requirements
of the Americans with Disabilities
Act, the Individuals with Disabilities
Education Act, and Social Security
work incentive programs, including

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
programs under the Ticket to
Work and Work Incentives Improvement
Act of 1999, training to facilitate
informed choice under this program,
and training to improve the provision
of services to culturally diverse populations;
and
(iii) Activities related to—
(A) Recruitment and retention of
qualified rehabilitation personnel;
(B) Succession planning; and
(C) Leadership development and capacity
building.
(e) Personnel to address individual communication
needs. The State plan must
describe how the State unit—
(1) Includes among its personnel, or
obtains the services of, individuals able
to communicate in the native languages
of applicants and eligible individuals
who have limited English
speaking ability; and
(2) Includes among its personnel, or
obtains the services of, individuals able
to communicate with applicants and
eligible individuals in appropriate
modes of communication.
(f) Coordination with personnel development
under the Individuals with Disabilities
Education Act. The State plan
must describe the procedures and activities
the State agency will undertake
to coordinate its comprehensive
system of personnel development under
the Act with personnel development
under the Individuals with Disabilities
Education Act.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 101(a)(7) of the Act; 29
U.S.C. 721(a)(7))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

(Authority: Section 101(a)(6)(B) of the Act; 29
U.S.C. 721(a)(6)(B))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.20 Public participation requirements.

§ 361.19 Affirmative action for individuals
with disabilities.
The State plan must assure that the
State agency takes affirmative action
to employ and advance in employment
qualified individuals with disabilities
covered under and on the same terms
and conditions as stated in section 503
of the Act.
(Approved by the Office of Management and
Budget under control number 1820–0500)

(a) Conduct of public meetings. The
State plan must assure that prior to
the adoption of any substantive policies
or procedures governing the provision
of vocational rehabilitation services
under the State plan, including
making any substantive amendments
to the policies and procedures, the designated
State agency conducts public
meetings throughout the State to provide
the public, including individuals
with disabilities, an opportunity to
comment on the policies or procedures.
(b) Notice requirements. The State plan
must assure that the designated State
agency, prior to conducting the public
meetings, provides appropriate and sufficient
notice throughout the State of
the meetings in accordance with—
(1) State law governing public meetings;
or
(2) In the absence of State law governing
public meetings, procedures developed
by the designated State agency
in consultation with the State Rehabilitation
Council.
(c) Summary of input of the State Rehabilitation
Council. The State plan must
provide a summary of the input of the
State Rehabilitation Council, if the
State agency has a Council, into the
State plan and any amendment to the
plan, in accordance with
§ 361.16(a)(2)(v).
(d) Special consultation requirements.
The State plan must assure that the
State agency actively consults with
the director of the Client Assistance
Program, the State Rehabilitation
Council, if the State agency has a
Council, and, as appropriate, Indian
tribes, tribal organizations, and native
Hawaiian organizations on its policies
and procedures governing the provision
of vocational rehabilitation services
under the State plan.
(e) Appropriate modes of communication.
The State unit must provide to
the public, through appropriate modes

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
of communication, notices of the public
meetings, any materials furnished
prior to or during the public meetings,
and the policies and procedures governing
the provision of vocational rehabilitation
services under the State
plan.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(16)(A) and
105(c)(3) of the Act; 29 U.S.C. 721(a)(16)(A),
and 725(c)(3))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.21 Consultations regarding the
administration of the state plan.
The State plan must assure that, in
connection with matters of general policy
arising in the administration of the
State plan, the designated State agency
takes into account the views of—
(a) Individuals and groups of individuals
who are recipients of vocational
rehabilitation services or, as appropriate,
the individuals’ representatives;
(b) Personnel working in programs
that provide vocational rehabilitation
services to individuals with disabilities;
(c) Providers of vocational rehabilitation
services to individuals with disabilities;
(d) The director of the Client Assistance
Program; and
(e) The State Rehabilitation Council,
if the State has a Council.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(16)(B) of the Act;
29 U.S.C. 721(a)(16)(B))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.22 Coordination with education
officials.
(a) Plans, policies, and procedures. (1)
The State plan must contain plans,
policies, and procedures for coordination
between the designated State
agency and education officials responsible
for the public education of students
with disabilities that are designed
to facilitate the transition of
students with disabilities from the receipt
of educational services in school

to the receipt of vocational rehabilitation
services under the responsibility
of the designated State agency.
(2) These plans, policies, and procedures
in paragraph (a)(1) of this section
must provide for the development and
approval of an individualized plan for
employment in accordance with § 361.45
as early as possible during the transition
planning process but, at the latest,
by the time each student determined
to be eligible for vocational rehabilitation
services leaves the school
setting or, if the designated State unit
is operating under an order of selection,
before each eligible student able
to be served under the order leaves the
school setting.
(b) Formal interagency agreement. The
State plan must include information
on a formal interagency agreement
with the State educational agency
that, at a minimum, provides for—
(1) Consultation and technical assistance
to assist educational agencies in
planning for the transition of students
with disabilities from school to postschool
activities, including vocational
rehabilitation services;
(2) Transition planning by personnel
of the designated State agency and
educational agency personnel for students
with disabilities that facilitates
the development and completion of
their individualized education programs
(IEPs) under section 614(d) of the
Individuals with Disabilities Education
Act;
(3) The roles and responsibilities, including
financial responsibilities, of
each agency, including provisions for
determining State lead agencies and
qualified personnel responsible for
transition services; and
(4) Procedures for outreach to and
identification of students with disabilities
who are in need of transition services.
Outreach to these students should
occur as early as possible during the
transition planning process and must
include, at a minimum, a description of
the purpose of the vocational rehabilitation
program, eligibility requirements,
application procedures, and
scope of services that may be provided
to eligible individuals.

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 101(a)(11)(D) of the Act;
29 U.S.C. 721 (a)(11)(D))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.23 Requirements related to the
statewide workforce investment system.
(a) Responsibilities as a partner of the
One-Stop service delivery system. As a required
partner in the One-Stop service
delivery system (which is part of the
statewide workforce investment system
under Title I of the Workforce Investment
Act of 1998), the designated
State unit must carry out the following
functions consistent with the
Act, this part, Title I of the Workforce
Investment Act of 1998, and the regulations
in 20 CFR part 662:
(1) Make available to participants
through the One-Stop service delivery
system the core services (as described
in 20 CFR 662.240) that are applicable to
the Program administered by the designated
State unit under this part.
(2) Use a portion of funds made available
to the Program administered by
the designated State unit under this
part, consistent with the Act and this
part, to—
(i) Create and maintain the One-Stop
service delivery system; and
(ii) Provide core services (as described
in 20 CFR 662.240).
(3) Enter into a memorandum of understanding
(MOU) with the Local
Workforce Investment Board under section
117 of the Workforce Investment
Act of 1998 relating to the operation of
the One-Stop service delivery system
that meets the requirements of section
121(c) of the Workforce Investment Act
and 20 CFR 662.300, including a description
of services, how the cost of the
identified services and operating costs
of the system will be funded, and methods
for referrals.
(4) Participate in the operation of the
One-Stop service delivery system consistent
with the terms of the MOU and
the requirements of the Act and this
part.
(5) Provide representation on the

Local Workforce Investment Board
under section 117 of the Workforce Investment
Act of 1998.
(b) Cooperative agreements with OneStop partners. (1) The State plan must
assure that the designated State unit
or the designated State agency enters
into cooperative agreements with the
other entities that are partners under
the One-Stop service delivery system
under Title I of the Workforce Investment
Act of 1998 and replicates those
agreements at the local level between
individual offices of the designated
State unit and local entities carrying
out the One-Stop service delivery system
or other activities through the
statewide workforce investment system.
(2) Cooperative agreements developed
under paragraph (b)(1) of this section
may provide for—
(i) Intercomponent training and technical
assistance regarding—
(A) The availability and benefits of,
and information on eligibility standards
for, vocational rehabilitation
services; and
(B) The promotion of equal, effective
and meaningful participation by individuals
with disabilities in the OneStop service delivery system and other
workforce investment activities
through the promotion of program accessibility
consistent with the requirements
of the Americans with Disabilities
Act of 1990 and section 504 of the
Act, the use of nondiscriminatory policies
and procedures, and the provision
of reasonable accommodations, auxiliary
aids and services, and rehabilitation
technology for individuals with
disabilities;
(ii) The use of information and financial
management systems that link all
of the partners of the One-Stop service
delivery system to one another and to
other electronic networks, including
nonvisual electronic networks, and
that relate to subjects such as employment
statistics, job vacancies, career
planning, and workforce investment
activities;
(iii) The use of customer service features
such as common intake and referral
procedures, customer databases, resource
information, and human services

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
hotlines;
(iv) The establishment of cooperative
efforts with employers to facilitate job
placement and carry out other activities
that the designated State unit and
the employers determine to be appropriate;
(v) The identification of staff roles,
responsibilities, and available resources
and specification of the financial
responsibility of each partner of
the One-Stop service delivery system
with respect to providing and paying
for necessary services, consistent with
the requirements of the Act, this part,
other Federal requirements, and State
law; and
(vi) The specification of procedures
for resolving disputes among partners
of the One-Stop service delivery system.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 101(a)(11)(A) of the Act;
29 U.S.C. 721(a)(11)(A); Sections 121 and 134 of
the Workforce Investment Act of 1998; 29
U.S.C. 2841 and 2864)
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.24 Cooperation and coordination with
other entities.
(a) Interagency cooperation. The State
plan must describe the designated
State agency’s cooperation with and
use of the services and facilities of Federal,
State, and local agencies and programs,
including programs carried out
by the Under Secretary for Rural Development
of the Department of Agriculture
and State use contracting programs,
to the extent that those agencies
and programs are not carrying out
activities through the statewide workforce
investment system.
(b) Coordination with the Statewide
Independent Living Council and independent
living centers. The State plan
must assure that the designated State
unit, the Statewide Independent Living
Council established under 34 CFR part
364, and the independent living centers
established under 34 CFR part 366 have
developed working relationships and
coordinate their activities.
(c) Cooperative agreement with recipients
of grants for services to American Indians.

(1) General. In applicable cases, the
State plan must assure that the designated
State agency has entered into
a formal cooperative agreement with
each grant recipient in the State that
receives funds under part C of the Act
(American Indian Vocational Rehabilitation
Services).
(2) Contents of formal cooperative
agreement. The agreement required
under paragraph (a)(1) of this section
must describe strategies for collaboration
and coordination in providing vocational
rehabilitation services to
American Indians who are individuals
with disabilities, including—
(i) Strategies for interagency referral
and information sharing that will assist
in eligibility determinations and
the development of individualized
plans for employment;
(ii) Procedures for ensuring that
American Indians who are individuals
with disabilities and are living near a
reservation or tribal service area are
provided vocational rehabilitation
services; and
(iii) Provisions for sharing resources
in cooperative studies and assessments,
joint training activities, and other collaborative
activities designed to improve
the provision of services to
American Indians who are individuals
with disabilities.
(d) Reciprocal referral services between
two designated State units in the same
State. If there is a separate designated
State unit for individuals who are
blind, the two designated State units
must establish reciprocal referral services,
use each other’s services and facilities
to the extent feasible, jointly
plan activities to improve services in
the State for individuals with multiple
impairments, including visual impairments,
and otherwise cooperate to provide
more effective services, including,
if appropriate, entering into a written
cooperative agreement.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 12(c) and 101(a)(11)(C),
(E), and (F) of the Act; 29 U.S.C. 709(c) and
721(a)(11) (C), (E), and (F))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
§ 361.25 Statewideness.
The State plan must assure that
services provided under the State plan
will be available in all political subdivisions
of the State, unless a waiver
of statewideness is requested and approved
in accordance with § 361.26.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 101(a)(4) of the Act; 29
U.S.C. 721(a)(4))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.26 Waiver of statewideness.
(a) Availability. The State unit may
provide services in one or more political
subdivisions of the State that increase
services or expand the scope of
services that are available statewide
under the State plan if—
(1) The non-Federal share of the cost
of these services is met from funds provided
by a local public agency, including
funds contributed to a local public
agency by a private agency, organization,
or individual;
(2) The services are likely to promote
the vocational rehabilitation of substantially
larger numbers of individuals
with disabilities or of individuals
with disabilities with particular types
of impairments; and
(3) For purposes other than those
specified in § 361.60(b)(3)(i) and consistent
with the requirements in
§ 361.60(b)(3)(ii), the State includes in
its State plan, and the Secretary approves,
a waiver of the statewideness
requirement, in accordance with the
requirements of paragraph (b) of this
section.
(b) Request for waiver. The request for
a waiver of statewideness must—
(1) Identify the types of services to be
provided;
(2) Contain a written assurance from
the local public agency that it will
make available to the State unit the
non-Federal share of funds;
(3) Contain a written assurance that
State unit approval will be obtained for
each proposed service before it is put
into effect; and
(4) Contain a written assurance that

all other State plan requirements, including
a State’s order of selection requirements,
will apply to all services
approved under the waiver.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 101(a)(4) of the Act; 29
U.S.C. 721(a)(4))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.27 Shared funding and administration
of joint programs.
(a) If the State plan provides for the
designated State agency to share funding
and administrative responsibility
with another State agency or local
public agency to carry out a joint program
to provide services to individuals
with disabilities, the State must submit
to the Secretary for approval a
plan that describes its shared funding
and administrative arrangement.
(b) The plan under paragraph (a) of
this section must include—
(1) A description of the nature and
scope of the joint program;
(2) The services to be provided under
the joint program;
(3) The respective roles of each participating
agency in the administration
and provision of services; and
(4) The share of the costs to be assumed
by each agency.
(c) If a proposed joint program does
not comply with the statewideness requirement
in § 361.25, the State unit
must obtain a waiver of statewideness,
in accordance with § 361.26.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 101(a)(2)(A) of the Act; 29
U.S.C. 721(a)(2)(A))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.28 Third-party cooperative
arrangements involving funds from other
public agencies.
(a) The designated State unit may
enter into a third-party cooperative arrangement
for providing or administering
vocational rehabilitation services
with another State agency or a

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
local public agency that is furnishing
part or all of the non-Federal share, if
the designated State unit ensures
that—
(1) The services provided by the cooperating
agency are not the customary
or typical services provided by
that agency but are new services that
have a vocational rehabilitation focus
or existing services that have been
modified, adapted, expanded, or reconfigured
to have a vocational rehabilitation
focus;
(2) The services provided by the cooperating
agency are only available to
applicants for, or recipients of, services
from the designated State unit;
(3) Program expenditures and staff
providing services under the cooperative
arrangement are under the administrative
supervision of the designated
State unit; and
(4) All State plan requirements, including
a State’s order of selection,
will apply to all services provided
under the cooperative program.
(b) If a third party cooperative agreement
does not comply with the
statewideness requirement in § 361.25,
the State unit must obtain a waiver of
statewideness, in accordance with
§ 361.26.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 12(c) of the Act; 29
U.S.C. 709(c))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.29 Statewide assessment; annual
estimates; annual State goals and priorities;
strategies; and progress reports.
(a) Comprehensive statewide assessment.
(1) The State plan must include—
(i) The results of a comprehensive,
statewide assessment, jointly conducted
by the designated State unit
and the State Rehabilitation Council
(if the State unit has a Council) every
3 years describing the rehabilitation
needs of individuals with disabilities
residing within the State, particularly
the vocational rehabilitation services
needs of—
(A) Individuals with the most significant

disabilities, including their need
for supported employment services;
(B) Individuals with disabilities who
are minorities and individuals with disabilities
who have been unserved or underserved
by the vocational rehabilitation
program carried out under this
part; and
(C) Individuals with disabilities
served through other components of
the statewide workforce investment
system as identified by those individuals
and personnel assisting those individuals
through the components of the
system; and
(ii) An assessment of the need to establish,
develop, or improve community
rehabilitation programs within
the State.
(2) The State plan must assure that
the State will submit to the Secretary
a report containing information regarding
updates to the assessments
under paragraph (a) of this section for
any year in which the State updates
the assessments.
(b) Annual estimates. The State plan
must include, and must assure that the
State will annually submit a report to
the Secretary that includes, State estimates
of—
(1) The number of individuals in the
State who are eligible for services
under this part;
(2) The number of eligible individuals
who will receive services provided with
funds provided under part B of Title I
of the Act and under part B of Title VI
of the Act, including, if the designated
State agency uses an order of selection
in accordance with § 361.36, estimates of
the number of individuals to be served
under each priority category within
the order; and
(3) The costs of the services described
in paragraph (b)(1) of this section, including,
if the designated State agency
uses an order of selection, the service
costs for each priority category within
the order.
(c) Goals and priorities.
(1) In general. The State plan must
identify the goals and priorities of the
State in carrying out the program.
(2) Council. The goals and priorities
must be jointly developed, agreed to,

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
reviewed annually, and, as necessary,
revised by the designated State unit
and the State Rehabilitation Council,
if the State unit has a Council.
(3) Submission. The State plan must
assure that the State will submit to
the Secretary a report containing information
regarding revisions in the
goals and priorities for any year in
which the State revises the goals and
priorities.
(4) Basis for goals and priorities. The
State goals and priorities must be
based on an analysis of—
(i) The comprehensive statewide assessment
described in paragraph (a) of
this section, including any updates to
the assessment;
(ii) The performance of the State on
the standards and indicators established
under section 106 of the Act; and
(iii) Other available information on
the operation and the effectiveness of
the vocational rehabilitation program
carried out in the State, including any
reports received from the State Rehabilitation
Council under § 361.17(h) and
the findings and recommendations
from monitoring activities conducted
under section 107 of the Act.
(5) Service and outcome goals for categories
in order of selection. If the designated
State agency uses an order of
selection in accordance with § 361.36,
the State plan must identify the
State’s service and outcome goals and
the time within which these goals may
be achieved for individuals in each priority
category within the order.
(d)Strategies. The State plan must describe
the strategies the State will use
to address the needs identified in the
assessment conducted under paragraph
(a) of this section and achieve the goals
and priorities identified in paragraph
(c) of this section, including—
(1) The methods to be used to expand
and improve services to individuals
with disabilities, including how a broad
range of assistive technology services
and assistive technology devices will
be provided to those individuals at
each stage of the rehabilitation process
and how those services and devices will
be provided to individuals with disabilities
on a statewide basis;

(2) Outreach procedures to identify
and serve individuals with disabilities
who are minorities and individuals
with disabilities who have been
unserved or underserved by the vocational
rehabilitation program;
(3) As applicable, the plan of the
State for establishing, developing, or
improving community rehabilitation
programs;
(4) Strategies to improve the performance
of the State with respect to
the evaluation standards and performance
indicators established pursuant to
section 106 of the Act; and
(5) Strategies for assisting other
components of the statewide workforce
investment system in assisting individuals
with disabilities.
(e) Evaluation and reports of progress.
(1) The State plan must include—
(i) The results of an evaluation of the
effectiveness of the vocational rehabilitation
program; and
(ii) A joint report by the designated
State unit and the State Rehabilitation
Council, if the State unit has a
Council, to the Secretary on the
progress made in improving the effectiveness
of the program from the previous
year. This evaluation and joint
report must include—
(A) An evaluation of the extent to
which the goals and priorities identified
in paragraph (c) of this section
were achieved;
(B) A description of the strategies
that contributed to the achievement of
the goals and priorities;
(C) To the extent to which the goals
and priorities were not achieved, a description
of the factors that impeded
that achievement; and
(D) An assessment of the performance
of the State on the standards and
indicators established pursuant to section
106 of the Act.
(2) The State plan must assure that
the designated State unit and the
State Rehabilitation Council, if the
State unit has a Council, will jointly
submit to the Secretary an annual report
that contains the information described
in paragraph (e)(1) of this section.
(Approved by the Office of Management and
Budget under control number 1820–0500)

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(Authority: Section 101(a)(15) of the Act; 29
U.S.C. 721(a)(15))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 101(a)(24)(A) of the Act;
29 U.S.C. 721(a)(24)(A))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.30 Services to American Indians.
The State plan must assure that the
designated State agency provides vocational
rehabilitation services to American
Indians who are individuals with
disabilities residing in the State to the
same extent as the designated State
agency provides vocational rehabilitation
services to other significant populations
of individuals with disabilities
residing in the State.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(13) and 121(b)(3)
of the Act; 29 U.S.C. 721(a)(13) and 741(b)(3))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.33 [Reserved]
§ 361.34 Supported employment State plan
supplement.
(a) The State plan must assure that
the State has an acceptable plan under
34 CFR part 363 that provides for the
use of funds under that part to supplement
funds under this part for the cost
of services leading to supported employment.
(b) The supported employment plan,
including any needed annual revisions,
must be submitted as a supplement to
the State plan submitted under this
part.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(22) and 625(a) of
the Act; 29 U.S.C. 721(a)(22) and 795(k))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.31 Cooperative agreements with
private nonprofit organizations.
The State plan must describe the
manner in which cooperative agreements
with private nonprofit vocational
rehabilitation service providers
will be established.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(24)(B); 29 U.S.C.
721(a)(24)(B))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.35 Innovation and expansion activities.

§ 361.32 Use of profitmaking organizations
for on-the-job training in connection with
selected projects.
The State plan must assure that the
designated State agency has the authority
to enter into contracts with
for-profit organizations for the purpose
of providing, as vocational rehabilitation
services, on-the-job training and
related programs for individuals with
disabilities under the Projects With Industry
program, 34 CFR part 379, if the
designated State agency has determined
that for-profit agencies are better
qualified to provide needed vocational
rehabilitation services than nonprofit
agencies and organizations.

(a) The State plan must assure that
the State will reserve and use a portion
of the funds allotted to the State under
section 110 of the Act—
(1) For the development and implementation
of innovative approaches to
expand and improve the provision of
vocational rehabilitation services to
individuals with disabilities, particularly
individuals with the most significant
disabilities, consistent with the
findings of the comprehensive, statewide
assessment of the rehabilitation
needs of individuals with disabilities
under § 361.29(a) and the State’s goals
and priorities under § 361.29(c); and
(2) To support the funding of—
(i) The State Rehabilitation Council,
if the State has a Council, consistent
with the resource plan identified in
§ 361.17(i); and
(ii) The Statewide Independent Living
Council, consistent with the plan
prepared under 34 CFR 364.21(i).

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(b) The State plan must—
(1) Describe how the reserved funds
will be used; and
(2) Include, on an annual basis, a report
describing how the reserved funds
were used during the preceding year.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 101(a)(18) of the Act; 29
U.S.C. 721(a)(18))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.36 Ability to serve all eligible
individuals; order of selection for services.
(a) General provisions.
(1) The designated State unit either
must be able to provide the full range
of services listed in section 103(a) of the
Act and § 361.48, as appropriate, to all
eligible individuals or, in the event
that vocational rehabilitation services
cannot be provided to all eligible individuals
in the State who apply for the
services, include in the State plan the
order to be followed in selecting eligible
individuals to be provided vocational
rehabilitation services.
(2) The ability of the designated
State unit to provide the full range of
vocational rehabilitation services to
all eligible individuals must be supported
by a determination that satisfies
the requirements of paragraph (b)
or (c) of this section and a determination
that, on the basis of the designated
State unit’s projected fiscal
and personnel resources and its assessment
of the rehabilitation needs of individuals
with significant disabilities
within the State, it can—
(i) Continue to provide services to all
individuals currently receiving services;
(ii) Provide assessment services to all
individuals expected to apply for services
in the next fiscal year;
(iii) Provide services to all individuals
who are expected to be determined
eligible in the next fiscal year; and
(iv) Meet all program requirements.
(3) If the designated State unit is unable
to provide the full range vocational
rehabilitation services to all eligible
individuals in the State who
apply for the services, the State plan

must—
(i) Show the order to be followed in
selecting eligible individuals to be provided
vocational rehabilitation services;
(ii) Provide a justification for the
order of selection;
(iii) Identify service and outcome
goals and the time within which the
goals may be achieved for individuals
in each priority category within the
order, as required under § 361.29(c)(5);
and
(iv) Assure that—
(A) In accordance with criteria established
by the State for the order of selection,
individuals with the most significant
disabilities will be selected
first for the provision of vocational rehabilitation
services; and
(B) Individuals who do not meet the
order of selection criteria will have access
to services provided through the
information and referral system established
under § 361.37.
(b) Basis for assurance that services can
be provided to all eligible individuals.
(1) For a designated State unit that
determined, for the current fiscal year
and the preceding fiscal year, that it is
able to provide the full range of services,
as appropriate, to all eligible individuals,
the State unit, during the current
fiscal and preceding fiscal year,
must have in fact—
(i) Provided assessment services to
all applicants and the full range of
services, as appropriate, to all eligible
individuals;
(ii) Made referral forms widely available
throughout the State;
(iii) Conducted outreach efforts to
identify and serve individuals with disabilities
who have been unserved or underserved
by the vocational rehabilitation
system; and
(iv) Not delayed, through waiting
lists or other means, determinations of
eligibility, the development of individualized
plans for employment for individuals
determined eligible for vocational
rehabilitation services, or the
provision of services for eligible individuals
for whom individualized plans
for employment have been developed.
(2) For a designated State unit that
was unable to provide the full range of

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
services to all eligible individuals during
the current or preceding fiscal year
or that has not met the requirements
in paragraph (b)(1) of this section, the
determination that the designated
State unit is able to provide the full
range of vocational rehabilitation services
to all eligible individuals in the
next fiscal year must be based on—
(i) Circumstances that have changed
that will allow the designated State
unit to meet the requirements of paragraph
(a)(2) of this section in the next
fiscal year, including—
(A) An estimate of the number of and
projected costs of serving, in the next
fiscal year, individuals with existing
individualized plans for employment;
(B) The projected number of individuals
with disabilities who will apply for
services and will be determined eligible
in the next fiscal year and the projected
costs of serving those individuals;
(C) The projected costs of administering
the program in the next fiscal
year, including, but not limited to,
costs of staff salaries and benefits, outreach
activities, and required statewide
studies; and
(D) The projected revenues and projected
number of qualified personnel
for the program in the next fiscal year;
(ii) Comparable data, as relevant, for
the current or preceding fiscal year, or
for both years, of the costs listed in
paragraphs (b)(2)(i)(A) through (C) of
this section and the resources identified
in paragraph (b)(2)(i)(D) of this section
and an explanation of any projected
increases or decreases in these
costs and resources; and
(iii) A determination that the projected
revenues and the projected number
of qualified personnel for the program
in the next fiscal year are adequate
to cover the costs identified in
paragraphs (b)(2)(i)(A) through (C) of
this section to ensure the provision of
the full range of services, as appropriate,
to all eligible individuals.
(c) Determining need for establishing
and implementing an order of selection.
(1) The designated State unit must
determine, prior to the beginning of
each fiscal year, whether to establish
and implement an order of selection.

(2) If the designated State unit determines
that it does not need to establish
an order of selection, it must reevaluate
this determination whenever
changed circumstances during the
course of a fiscal year, such as a decrease
in its fiscal or personnel resources
or an increase in its program
costs, indicate that it may no longer be
able to provide the full range of services,
as appropriate, to all eligible individuals,
as described in paragraph (a)(2)
of this section.
(3) If a DSU establishes an order of
selection, but determines that it does
not need to implement that order at
the beginning of the fiscal year, it
must continue to meet the requirements
of paragraph (a)(2) of this section,
or it must implement the order of
selection by closing one or more priority
categories.
(d) Establishing an order of selection.
(1) Basis for order of selection. An
order of selection must be based on a
refinement of the three criteria in the
definition of ‘‘individual with a significant
disability’’ in section 7(21)(A) of
the Act and § 361.5(b)(31).
(2) Factors that cannot be used in determining
order of selection of eligible individuals.
An order of selection may not
be based on any other factors, including—
(i) Any duration of residency requirement,
provided the individual is
present in the State;
(ii) Type of disability;
(iii) Age, gender, race, color, or national
origin;
(iv) Source of referral;
(v) Type of expected employment
outcome;
(vi) The need for specific services or
anticipated cost of services required by
an individual; or
(vii) The income level of an individual
or an individual’s family.
(e) Administrative requirements. In administering
the order of selection, the
designated State unit must—
(1) Implement the order of selection
on a statewide basis;
(2) Notify all eligible individuals of
the priority categories in a State’s
order of selection, their assignment to
a particular category, and their right

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
to appeal their category assignment;
(3) Continue to provide all needed
services to any eligible individual who
has begun to receive services under an
individualized plan for employment
prior to the effective date of the order
of selection, irrespective of the severity
of the individual’s disability; and
(4) Ensure that its funding arrangements
for providing services under the
State plan, including third-party arrangements
and awards under the establishment
authority, are consistent
with the order of selection. If any funding
arrangements are inconsistent with
the order of selection, the designated
State unit must renegotiate these
funding arrangements so that they are
consistent with the order of selection.
(f) State Rehabilitation Council. The
designated State unit must consult
with the State Rehabilitation Council,
if the State unit has a Council, regarding
the—
(1) Need to establish an order of selection,
including any reevaluation of
the need under paragraph (c)(2) of this
section;
(2) Priority categories of the particular
order of selection;
(3) Criteria for determining individuals
with the most significant disabilities;
and
(4) Administration of the order of selection.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 12(d); 101(a)(5);
101(a)(12); 101(a)(15)(A), (B) and (C);
101(a)(21)(A)(ii); and 504(a) of the Act; 29
U.S.C. 709(d), 721(a)(5), 721(a)(12),
721(a)(15)(A), (B) and (C); 721(a)(21)(A)(ii), and
794(a))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.37 Information and referral programs.
(a) General provisions. The State plan
must assure that—
(1) The designated State agency will
implement an information and referral
system adequate to ensure that individuals
with disabilities, including eligible
individuals who do not meet the
agency’s order of selection criteria for
receiving vocational rehabilitation

services if the agency is operating on
an order of selection, are provided accurate
vocational rehabilitation information
and guidance (which may include
counseling and referral for job
placement) using appropriate modes of
communication to assist them in preparing
for, securing, retaining, or regaining
employment; and
(2) The designated State agency will
refer individuals with disabilities to
other appropriate Federal and State
programs, including other components
of the statewide workforce investment
system.
(b) The State unit must refer to local
extended employment providers an individual
with a disability who makes
an informed choice to pursue extended
employment as the individual’s employment
goal. Before making the referral
required by this paragraph, the
State unit must—
(1) Consistent with § 361.42(a)(4)(i) of
this part, explain to the individual that
the purpose of the vocational rehabilitation
program is to assist individuals
to achieve an employment outcome as
defined in § 361.5(b)(16) (i.e., employment
in an integrated setting);
(2) Consistent with § 361.52 of this
part, provide the individual with information
concerning the availability of
employment options, and of vocational
rehabilitation services, in integrated
settings;
(3) Inform the individual that services
under the vocational rehabilitation
program can be provided to eligible
individuals in an extended employment
setting if necessary for purposes
of training or otherwise preparing for
employment in an integrated setting;
(4) Inform the individual that, if he
or she initially chooses not to pursue
employment in an integrated setting,
he or she can seek services from the
designated State unit at a later date if,
at that time, he or she chooses to pursue
employment in an integrated setting;
and
(5) Refer the individual, as appropriate,
to the Social Security Administration
in order to obtain information
concerning the ability of individuals
with disabilities to work while receiving

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
benefits from the Social Security
Administration.
(c) Criteria for appropriate referrals. In
making the referrals identified in paragraph
(a)(2) of this section, the designated
State unit must—
(1) Refer the individual to Federal or
State programs, including programs
carried out by other components of the
statewide workforce investment system,
best suited to address the specific
employment needs of an individual
with a disability; and
(2) Provide the individual who is
being referred—
(i) A notice of the referral by the designated
State agency to the agency
carrying out the program;
(ii) Information identifying a specific
point of contact within the agency to
which the individual is being referred;
and
(iii) Information and advice regarding
the most suitable services to assist
the individual to prepare for, secure,
retain, or regain employment.
(d) Order of selection. In providing the
information and referral services under
this section to eligible individuals who
are not in the priority category or categories
to receive vocational rehabilitation
services under the State’s order
of selection, the State unit must identify,
as part of its reporting under section
101(a)(10) of the Act and § 361.40,
the number of eligible individuals who
did not meet the agency’s order of selection
criteria for receiving vocational
rehabilitation services and did
receive information and referral services
under this section.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(AUTHORITY: Sections 7(11), 12(c), 101(a)(5)(D),
101(a)(10)(C)(ii), and 101(a)(20) of the Act; 29
U.S.C. 709(c), 721(a)(5)(D), 721(a)(10)(C)(ii), and
721(a)(20))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.38 Protection, use, and release of
personal information.
(a) General provisions.
(1) The State agency and the State
unit must adopt and implement written

policies and procedures to safeguard
the confidentiality of all personal
information, including photographs
and lists of names. These policies
and procedures must ensure that—
(i) Specific safeguards are established
to protect current and stored personal
information;
(ii) All applicants and eligible individuals
and, as appropriate, those individuals’
representatives, service providers,
cooperating agencies, and interested
persons are informed through appropriate
modes of communication of
the confidentiality of personal information
and the conditions for accessing
and releasing this information;
(iii) All applicants or their representatives
are informed about the State
unit’s need to collect personal information
and the policies governing its use,
including—
(A) Identification of the authority
under which information is collected;
(B) Explanation of the principal purposes
for which the State unit intends
to use or release the information;
(C) Explanation of whether providing
requested information to the State
unit is mandatory or voluntary and the
effects of not providing requested information;
(D) Identification of those situations
in which the State unit requires or
does not require informed written consent
of the individual before information
may be released; and
(E) Identification of other agencies
to which information is routinely released;
(iv) An explanation of State policies
and procedures affecting personal information
will be provided to each individual
in that individual’s native language
or through the appropriate mode
of communication; and
(v) These policies and procedures provide
no fewer protections for individuals
than State laws and regulations.
(2) The State unit may establish reasonable
fees to cover extraordinary
costs of duplicating records or making
extensive searches and must establish
policies and procedures governing access
to records.
(b) State program use. All personal information
in the possession of the
State agency or the designated State

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
unit must be used only for the purposes
directly connected with the administration
of the vocational rehabilitation
program. Information containing identifiable
personal information may not
be shared with advisory or other bodies
that do not have official responsibility
for administration of the program. In
the administration of the program, the
State unit may obtain personal information
from service providers and cooperating
agencies under assurances
that the information may not be further
divulged, except as provided under
paragraphs (c), (d), and (e) of this section.
(c) Release to applicants and eligible individuals.
(1) Except as provided in paragraphs
(c)(2) and (c)(3) of this section, if requested
in writing by an applicant or
eligible individual, the State unit must
make all requested information in that
individual’s record of services accessible
to and must release the information
to the individual or the individual’s
representative in a timely manner.
(2) Medical, psychological, or other
information that the State unit determines
may be harmful to the individual
may not be released directly to
the individual, but must be provided to
the individual through a third party
chosen by the individual, which may
include, among others, an advocate, a
family member, or a qualified medical
or mental health professional, unless a
representative has been appointed by a
court to represent the individual, in
which case the information must be released
to the court-appointed representative.
(3) If personal information has been
obtained from another agency or organization,
it may be released only by, or
under the conditions established by,
the other agency or organization.
(4) An applicant or eligible individual
who believes that information in the
individual’s record of services is inaccurate
or misleading may request that
the designated State unit amend the
information. If the information is not
amended, the request for an amendment
must be documented in the
record of services, consistent with
§ 361.47(a)(12).
(d) Release for audit, evaluation, and
research. Personal information may be

released to an organization, agency, or
individual engaged in audit, evaluation,
or research only for purposes directly
connected with the administration
of the vocational rehabilitation
program or for purposes that would significantly
improve the quality of life
for applicants and eligible individuals
and only if the organization, agency, or
individual assures that—
(1) The information will be used only
for the purposes for which it is being
provided;
(2) The information will be released
only to persons officially connected
with the audit, evaluation, or research;
(3) The information will not be released
to the involved individual;
(4) The information will be managed
in a manner to safeguard confidentiality;
and
(5) The final product will not reveal
any personal identifying information
without the informed written consent
of the involved individual or the individual’s
representative.
(e) Release to other programs or authorities.
(1) Upon receiving the informed written
consent of the individual or, if appropriate,
the individual’s representative,
the State unit may release personal
information to another agency or
organization for its program purposes
only to the extent that the information
may be released to the involved individual
or the individual’s representative
and only to the extent that the
other agency or organization demonstrates
that the information requested
is necessary for its program.
(2) Medical or psychological information
that the State unit determines
may be harmful to the individual may
be released if the other agency or organization
assures the State unit that
the information will be used only for
the purpose for which it is being provided
and will not be further released
to the individual.
(3) The State unit must release personal
information if required by Federal
law or regulations.
(4) The State unit must release personal
information in response to investigations
in connection with law enforcement,
fraud, or abuse, unless expressly

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
prohibited by Federal or State
laws or regulations, and in response to
an order issued by a judge, magistrate,
or other authorized judicial officer.
(5) The State unit also may release
personal information in order to protect
the individual or others if the individual
poses a threat to his or her safety
or to the safety of others.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 12(c) and 101(a)(6)(A) of
the Act; 29 U.S.C. 709(c) and 721(a)(6)(A))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.39 State-imposed requirements.
The designated State unit must,
upon request, identify those regulations
and policies relating to the administration
or operation of its vocational
rehabilitation program that are
State-imposed, including any regulations
or policy based on State interpretation
of any Federal law, regulations,
or guideline.
(Authority: Section 17 of the Act; 29 U.S.C.
714)

§ 361.40 Reports.
(a) The State plan must assure that
the designated State agency will submit
reports, including reports required
under sections 13, 14, and 101(a)(10) of
the Act—
(1) In the form and level of detail and
at the time required by the Secretary
regarding applicants for and eligible
individuals receiving services under
this part; and
(2) In a manner that provides a complete
count (other than the information
obtained through sampling consistent
with section 101(a)(10)(E) of the
Act) of the applicants and eligible individuals
to—
(i) Permit the greatest possible crossclassification
of data; and
(ii) Protect the confidentiality of the
identity of each individual.
(b) The designated State agency must
comply with any requirements necessary
to ensure the accuracy and
verification of those reports.
(Approved by the Office of Management and

Budget under control number 1820–0500)
(Authority: Section 101(a)(10)(A) and (F) of
the Act; 29 U.S.C. 721(a)(10)(A) and (F))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]
PROVISION AND SCOPE OF SERVICES

§ 361.41 Processing referrals and
applications.
(a) Referrals. The designated State
unit must establish and implement
standards for the prompt and equitable
handling of referrals of individuals for
vocational rehabilitation services, including
referrals of individuals made
through the One-Stop service delivery
systems established under section 121
of the Workforce Investment Act of
1998. The standards must include
timelines for making good faith efforts
to inform these individuals of application
requirements and to gather information
necessary to initiate an assessment
for determining eligibility and
priority for services.
(b) Applications.
(1) Once an individual has submitted
an application for vocational rehabilitation
services, including applications
made through common intake procedures
in One-Stop centers established
under section 121 of the Workforce Investment
Act of 1998, an eligibility determination
must be made within 60
days, unless—
(i) Exceptional and unforeseen circumstances
beyond the control of the
designated State unit preclude making
an eligibility determination within 60
days and the designated State unit and
the individual agree to a specific extension
of time; or
(ii) An exploration of the individual’s
abilities, capabilities, and capacity to
perform in work situations is carried
out in accordance with § 361.42(e) or, if
appropriate, an extended evaluation is
carried out in accordance with
§ 361.42(f).
(2) An individual is considered to
have submitted an application when
the individual or the individual’s representative,
as appropriate—
(i)(A) Has completed and signed an
agency application form;

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(B) Has completed a common intake
application form in a One-Stop center
requesting vocational rehabilitation
services; or
(C) Has otherwise requested services
from the designated State unit;
(ii) Has provided to the designated
State unit information necessary to
initiate an assessment to determine
eligibility and priority for services;
and
(iii) Is available to complete the assessment
process.
(3) The designated State unit must
ensure that its application forms are
widely available throughout the State,
particularly in the One-Stop centers
established under section 121 of the
Workforce Investment Act of 1998.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(6)(A) and 102(a)(6)
of the Act; 29 U.S.C. 721(a)(6)(A) and 722(a)(6))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.42 Assessment for determining
eligibility and priority for services.
In order to determine whether an individual
is eligible for vocational rehabilitation
services and the individual’s
priority under an order of selection for
services (if the State is operating under
an order of selection), the designated
State unit must conduct an assessment
for determining eligibility and priority
for services. The assessment must be
conducted in the most integrated setting
possible, consistent with the individual’s
needs and informed choice, and
in accordance with the following provisions:
(a) Eligibility requirements.
(1) Basic requirements. The designated
State unit’s determination of an applicant’s
eligibility for vocational rehabilitation
services must be based only
on the following requirements:
(i) A determination by qualified personnel
that the applicant has a physical
or mental impairment.
(ii) A determination by qualified personnel
that the applicant’s physical or
mental impairment constitutes or results
in a substantial impediment to
employment for the applicant.

(iii) A determination by a qualified
vocational rehabilitation counselor
employed by the designated State unit
that the applicant requires vocational
rehabilitation services to prepare for,
secure, retain, or regain employment
consistent with the applicant’s unique
strengths, resources, priorities, concerns,
abilities, capabilities, interests,
and informed choice.
(iv) A presumption, in accordance
with paragraph (a)(2) of this section,
that the applicant can benefit in terms
of an employment outcome from the
provision of vocational rehabilitation
services.
(2) Presumption of benefit. The designated
State unit must presume that
an applicant who meets the eligibility
requirements in paragraphs (a)(1)(i)
and (ii) of this section can benefit in
terms of an employment outcome unless
it demonstrates, based on clear
and convincing evidence, that the applicant
is incapable of benefiting in
terms of an employment outcome from
vocational rehabilitation services due
to the severity of the applicant’s disability.
(3) Presumption of eligibility for Social
Security recipients and beneficiaries.
(i) Any applicant who has been determined
eligible for Social Security benefits
under Title II or Title XVI of the
Social Security Act is—
(A) Presumed eligible for vocational
rehabilitation services under paragraphs
(a)(1) and (2) of this section; and
(B) Considered an individual with a
significant disability as defined in
§ 361.5(b)(31).
(ii) If an applicant for vocational rehabilitation
services asserts that he or
she is eligible for Social Security benefits
under Title II or Title XVI of the
Social Security Act (and, therefore, is
presumed eligible for vocational rehabilitation
services under paragraph
(a)(3)(i)(A) of this section), but is unable
to provide appropriate evidence,
such as an award letter, to support
that assertion, the State unit must
verify the applicant’s eligibility under
Title II or Title XVI of the Social Security
Act by contacting the Social Security
Administration. This
verification must be made within a reasonable

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period of time that enables the
State unit to determine the applicant’s
eligibility for vocational rehabilitation
services within 60 days of the individual
submitting an application for
services in accordance with
§ 361.41(b)(2).
(4) Achievement of an employment outcome.
Any eligible rehabilitation services
is based on the individual being eligible
for Social Security benefits
under Title II or Title XVI of the Social
Security Act, must intend to
achieve an employment outcome that
is consistent with the applicant’s
unique strengths, resources, priorities,
concerns, abilities, capabilities, interests,
and informed choice.
(i) The State unit is responsible for
informing individuals, through its application
process for vocational rehabilitation
services, that individuals
who receive services under the program
must intend to achieve an employment
outcome.
(ii) The applicant’s completion of the
application process for vocational rehabilitation
services is sufficient evidence
of the individual’s intent to
achieve an employment outcome, and
no additional demonstration on the
part of the applicant is required for
purposes of satisfying paragraph (a)(4)
of this section.
(5) Interpretation. Nothing in this section,
including paragraph (a)(3)(i), is to
be construed to create an entitlement
to any vocational rehabilitation service.
(b) Interim determination of eligibility.
(1) The designated State unit may
initiate the provision of vocational rehabilitation
services for an applicant
on the basis of an interim determination
of eligibility prior to the 60-day
period described in § 361.41(b)(2).
(2) If a State chooses to make interim
determinations of eligibility, the
designated State unit must—
(i) Establish criteria and conditions
for making those determinations;
(ii) Develop and implement procedures
for making the determinations;
and
(iii) Determine the scope of services
that may be provided pending the final
determination of eligibility.

(3) If a State elects to use an interim
eligibility determination, the designated
State unit must make a final
determination of eligibility within 60
days of the individual submitting an
application for services in accordance
with § 361.41(b)(2).
(c) Prohibited factors.
(1) The State plan must assure that
the State unit will not impose, as part
of determining eligibility under this
section, a duration of residence requirement
that excludes from services
any applicant who is present in the
State.
(2) In making a determination of eligibility
under this section, the designated
State unit also must ensure
that—
(i) No applicant or group of applicants
is excluded or found ineligible
solely on the basis of the type of disability;
and
(ii) The eligibility requirements are
applied without regard to the—
(A) Age, gender, race, color, or national
origin of the applicant;
(B) Type of expected employment
outcome;
(C) Source of referral for vocational
rehabilitation services; and
(D) Particular service needs or anticipated
cost of services required by
an applicant or the income level of an
applicant or applicant’s family.
(d) Review and assessment of data for
eligibility determination. Except as provided
in paragraph (e) of this section,
the designated State unit—
(1) Must base its determination of
each of the basic eligibility requirements
in paragraph (a) of this section
on—
(i) A review and assessment of existing
data, including counselor observations,
education records, information
provided by the individual or the individual’s
family, particularly information
used by education officials, and
determinations made by officials of
other agencies; and
(ii) To the extent existing data do
not describe the current functioning of
the individual or are unavailable, insufficient,
or inappropriate to make an
eligibility determination, an assessment

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
of additional data resulting from
the provision of vocational rehabilitation
services, including trial work experiences,
assistive technology devices
and services, personal assistance services,
and any other support services
that are necessary to determine whether
an individual is eligible; and
(2) Must base its presumption under
paragraph (a)(3)(i) of this section that
an applicant who has been determined
eligible for Social Security benefits
under Title II or Title XVI of the Social
Security Act satisfies each of the
basic eligibility requirements in paragraph
(a) of this section on determinations
made by the Social Security Administration.
(e) Trial work experiences for individuals
with significant disabilities.
(1) Prior to any determination that
an individual with a disability is incapable
of benefiting from vocational
rehabilitation services in terms of an
employment outcome because of the
severity of that individual’s disability,
the designated State unit must conduct
an exploration of the individual’s
abilities, capabilities, and capacity to
perform in realistic work situations to
determine whether or not there is clear
and convincing evidence to support
such a determination.
(2)(i) The designated State unit must
develop a written plan to assess periodically
the individual’s abilities, capabilities,
and capacity to perform in
work situations through the use of
trial work experiences, which must be
provided in the most integrated setting
possible, consistent with the informed
choice and rehabilitation needs of the
individual.
(ii) Trial work experiences include
supported employment, on-the-job
training, and other experiences using
realistic work settings.
(iii) Trial work experiences must be
of sufficient variety and over a sufficient
period of time for the designated
State unit to determine that—
(A) There is sufficient evidence to
conclude that the individual can benefit
from the provision of vocational
rehabilitation services in terms of an
employment outcome; or
(B) There is clear and convincing evidence

that the individual is incapable
of benefiting from vocational rehabilitation
services in terms of an employment
outcome due to the severity of
the individual’s disability.
(iv) The designated State unit must
provide appropriate supports, including
assistive technology devices and services
and personal assistance services,
to accommodate the rehabilitation
needs of the individual during the trial
work experiences.
(f) Extended evaluation for certain individuals
with significant disabilities.
(1) Under limited circumstances if an
individual cannot take advantage of
trial work experiences or if options for
trial work experiences have been exhausted
before the State unit is able to
make the determinations described in
paragraph (e)(2)(iii) of this section, the
designated State unit must conduct an
extended evaluation to make these determinations.
(2) During the extended evaluation
period, vocational rehabilitation services
must be provided in the most integrated
setting possible, consistent with
the informed choice and rehabilitation
needs of the individual.
(3) During the extended evaluation
period, the designated State unit must
develop a written plan for providing
services necessary to make a determination
under paragraph (e)(2)(iii) of
this section.
(4) During the extended evaluation
period, the designated State unit provides
only those services that are necessary
to make the determinations described
in paragraph (e)(2)(iii) of this
section and terminates extended evaluation
services when the State unit is
able to make the determinations.
(g) Data for determination of priority
for services under an order of selection. If
the designated State unit is operating
under an order of selection for services,
as provided in § 361.36, the State unit
must base its priority assignments
on—
(1) A review of the data that was developed
under paragraphs (d) and (e) of
this section to make the eligibility determination;
and
(2) An assessment of additional data,
to the extent necessary.

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(Authority: Sections 7(2)(A), 7(2)(B)(ii)(I),
7(2)(C), 7(2)(D), 101(a)(12), 102(a)(1), 102(a)(2),
102(a)(3), 102(a)(4)(A), 102(a)(4)(B), 102(a)(4)(C),
103(a)(1), 103(a)(9), 103(a)(10) and 103(a)(14) of
the Act; 29 U.S.C. 705(2)(A), 705(2)(B)(ii)(I),
705(2)(C), 705(2)(D), 721(a)(12), 722(a)(1),
722(a)(2), 722(a)(3), 722(a)(4)(A), 722(a)(4)(B),
722(a)(4)(C), 723(a)(1), 723(a)(9), 723(a)(10) and
723(a)(14))
NOTE TO § 361.42: Clear and convincing evidence
means that the designated State unit
shall have a high degree of certainty before
it can conclude that an individual is incapable
of benefiting from services in terms of an
employment outcome. The ‘‘clear and convincing’’
standard constitutes the highest
standard used in our civil system of law and
is to be individually applied on a case-bycase
basis. The term clear means unequivocal.
For example, the use of an intelligence
test result alone would not constitute clear
and convincing evidence. Clear and convincing
evidence might include a description
of assessments, including situational assessments
and supported employment assessments,
from service providers who have concluded
that they would be unable to meet
the individual’s needs due to the severity of
the individual’s disability. The demonstration
of ‘‘clear and convincing evidence’’ must
include, if appropriate, a functional assessment
of skill development activities, with
any necessary supports (including assistive
technology), in real life settings. (S. Rep. No.
357, 102d Cong., 2d. Sess. 37–38 (1992))

§ 361.43 Procedures for ineligibility
determination.
If the State unit determines that an
applicant is ineligible for vocational
rehabilitation services or determines
that an individual receiving services
under an individualized plan for employment
is no longer eligible for services,
the State unit must—
(a) Make the determination only
after providing an opportunity for full
consultation with the individual or, as
appropriate, with the individual’s representative;
(b) Inform the individual in writing,
supplemented as necessary by other appropriate
modes of communication
consistent with the informed choice of
the individual, of the ineligibility determination,

including the reasons for
that determination, the requirements
under this section, and the means by
which the individual may express and
seek remedy for any dissatisfaction, including
the procedures for review of
State unit personnel determinations in
accordance with § 361.57;
(c) Provide the individual with a description
of services available from a
client assistance program established
under 34 CFR part 370 and information
on how to contact that program;
(d) Refer the individual—
(1) To other programs that are part
of the One-Stop service delivery system
under the Workforce Investment
Act that can address the individual’s
training or employment-related needs;
or
(2) To local extended employment
providers if the ineligibility determination
is based on a finding that the individual
is incapable of achieving an employment
outcome as defined in
§ 361.5(b)(16).
(e) Review within 12 months and annually
thereafter if requested by the
individual or, if appropriate, by the individual’s
representative any ineligibility
determination that is based on a
finding that the individual is incapable
of achieving an employment outcome.
This review need not be conducted in
situations in which the individual has
refused it, the individual is no longer
present in the State, the individual’s
whereabouts are unknown, or the individual’s
medical condition is rapidly
progressive or terminal.
(AUTHORITY: Sections 12(c), 102(a)(5), and
102(c) of the Act; 29 U.S.C. 709(c), 722(a)(5),
and 722(c))
[66 FR 4382, Jan. 11, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.44 Closure without eligibility
determination.
The designated State unit may not
close an applicant’s record of services
prior to making an eligibility determination
unless the applicant declines
to participate in, or is unavailable to
complete, an assessment for determining
eligibility and priority for services,

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and the State unit has made a
reasonable number of attempts to contact
the applicant or, if appropriate,
the applicant’s representative to encourage
the applicant’s participation.
(Authority: Section 12(c) of the Act; 29
U.S.C. 709(c))

§ 361.45 Development of the individualized
plan for employment.
(a) General requirements. The State
plan must assure that—
(1) An individualized plan for employment
(IPE) meeting the requirements
of this section and § 361.46 is developed
and implemented in a timely manner
for each individual determined to be eligible
for vocational rehabilitation
services or, if the designated State unit
is operating under an order of selection
in accordance with § 361.36, for each eligible
individual to whom the State
unit is able to provide services; and
(2) Services will be provided in accordance
with the provisions of the
IPE.
(b) Purpose.
(1) The designated State unit must
conduct an assessment for determining
vocational rehabilitation needs, if appropriate,
for each eligible individual
or, if the State is operating under an
order of selection, for each eligible individual
to whom the State is able to
provide services. The purpose of this
assessment is to determine the employment
outcome, and the nature and
scope of vocational rehabilitation services
to be included in the IPE.
(2) The IPE must be designed to
achieve a specific employment outcome,
as defined in § 361.5(b)(16), that is
selected by the individual consistent
with the individual’s unique strengths,
resources, priorities, concerns, abilities,
capabilities, interests, and informed
choice.
(c) Required information. The State
unit must provide the following information
to each eligible individual or,
as appropriate, the individual’s representative,
in writing and, if appropriate,
in the native language or mode
of communication of the individual or
the individual’s representative:

(1) Options for developing an IPE. Information
on the available options for
developing the IPE, including the option
that an eligible individual or, as
appropriate, the individual’s representative
may develop all or part of the
IPE—
(i) Without assistance from the State
unit or other entity; or
(ii) With assistance from—
(A) A qualified vocational rehabilitation
counselor employed by the State
unit;
(B) A qualified vocational rehabilitation
counselor who is not employed by
the State unit; or
(C) Resources other than those in
paragraph (A) or (B) of this section.
(2) Additional information. Additional
information to assist the eligible individual
or, as appropriate, the individual’s
representative in developing the
IPE, including—
(i) Information describing the full
range of components that must be included
in an IPE;
(ii) As appropriate to each eligible individual—
(A) An explanation of agency guidelines
and criteria for determining an
eligible individual’s financial commitments
under an IPE;
(B) Information on the availability of
assistance in completing State unit
forms required as part of the IPE; and
(C) Additional information that the
eligible individual requests or the
State unit determines to be necessary
to the development of the IPE;
(iii) A description of the rights and
remedies available to the individual,
including, if appropriate, recourse to
the processes described in § 361.57; and
(iv) A description of the availability
of a client assistance program established
under 34 CFR part 370 and information
on how to contact the client assistance
program.
(d) Mandatory procedures. The designated
State unit must ensure that—
(1) The IPE is a written document
prepared on forms provided by the
State unit;
(2) The IPE is developed and implemented
in a manner that gives eligible
individuals the opportunity to exercise
informed choice, consistent with

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
§ 361.52, in selecting—
(i) The employment outcome, including
the employment setting;
(ii) The specific vocational rehabilitation
services needed to achieve the
employment outcome, including the
settings in which services will be provided;
(iii) The entity or entities that will
provide the vocational rehabilitation
services; and
(iv) The methods available for procuring
the services;
(3) The IPE is—
(i) Agreed to and signed by the eligible
individual or, as appropriate, the
individual’s representative; and
(ii) Approved and signed by a qualified
vocational rehabilitation counselor
employed by the designated State
unit;
(4) A copy of the IPE and a copy of
any amendments to the IPE are provided
to the eligible individual or, as
appropriate, to the individual’s representative,
in writing and, if appropriate,
in the native language or mode
of communication of the individual or,
as appropriate, the individual’s representative;
(5) The IPE is reviewed at least annually
by a qualified vocational rehabilitation
counselor and the eligible individual
or, as appropriate, the individual’s
representative to assess the eligible
individual’s progress in achieving
the identified employment outcome;
(6) The IPE is amended, as necessary,
by the individual or, as appropriate,
the individual’s representative, in collaboration
with a representative of the
State unit or a qualified vocational rehabilitation
counselor (to the extent
determined to be appropriate by the individual),
if there are substantive
changes in the employment outcome,
the vocational rehabilitation services
to be provided, or the providers of the
vocational rehabilitation services;
(7) Amendments to the IPE do not
take effect until agreed to and signed
by the eligible individual or, as appropriate,
the individual’s representative
and by a qualified vocational rehabilitation
counselor employed by the designated
State unit; and
(8) An IPE for a student with a disability
receiving special education

services is developed—
(i) In consideration of the student’s
IEP; and
(ii) In accordance with the plans,
policies, procedures, and terms of the
interagency agreement required under
§ 361.22.
(e) Standards for developing the IPE.
The designated State unit must establish
and implement standards for the
prompt development of IPEs for the individuals
identified under paragraph
(a) of this section, including timelines
that take into consideration the needs
of the individuals.
(f) Data for preparing the IPE.
(1) Preparation without comprehensive
assessment. To the extent possible, the
employment outcome and the nature
and scope of rehabilitation services to
be included in the individual’s IPE
must be determined based on the data
used for the assessment of eligibility
and priority for services under § 361.42.
(2) Preparation based on comprehensive
assessment.
(i) If additional data are necessary to
determine the employment outcome
and the nature and scope of services to
be included in the IPE of an eligible individual,
the State unit must conduct a
comprehensive assessment of the
unique strengths, resources, priorities,
concerns, abilities, capabilities, interests,
and informed choice, including
the need for supported employment
services, of the eligible individual, in
the most integrated setting possible,
consistent with the informed choice of
the individual in accordance with the
provisions of § 361.5(b)(6)(ii).
(ii) In preparing the comprehensive
assessment, the State unit must use, to
the maximum extent possible and appropriate
and in accordance with confidentiality
requirements, existing information
that is current as of the date
of the development of the IPE, including—
(A) Information available from other
programs and providers, particularly
information used by education officials
and the Social Security Administration;
(B) Information provided by the individual
and the individual’s family; and
(C) Information obtained under the
assessment for determining the individual’s

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eligibility and vocational rehabilitation
needs.
(Authority: Sections 7(2)(B), 101(a)(9),
102(b)(1), 102(b)(2), 102(c) and 103(a)(1); 29
U.S.C. 705(2)(B), 721(a)(9), 722(b)(1), 722(b)(2),
722(c) and 723(a)(1))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.46 Content of the individualized plan
for employment.
(a) Mandatory components. Regardless
of the approach in § 361.45(c)(1) that an
eligible individual selects for purposes
of developing the IPE, each IPE must
include—
(1) A description of the specific employment
outcome, as defined in
§ 361.5(b)(16), that is chosen by the eligible
individual and is consistent with
the individual’s unique strengths, resources,
priorities, concerns, abilities,
capabilities, career interests, and informed
choice.
(2) A description of the specific rehabilitation
services under § 361.48 that
are—
(i) Needed to achieve the employment
outcome, including, as appropriate,
the provision of assistive technology
devices, assistive technology
services, and personal assistance services,
including training in the management
of those services; and
(ii) Provided in the most integrated
setting that is appropriate for the services
involved and is consistent with the
informed choice of the eligible individual;
(3) Timelines for the achievement of
the employment outcome and for the
initiation of services;
(4) A description of the entity or entities
chosen by the eligible individual
or, as appropriate, the individual’s representative
that will provide the vocational
rehabilitation services and the
methods used to procure those services;
(5) A description of the criteria that
will be used to evaluate progress toward
achievement of the employment
outcome; and
(6) The terms and conditions of the
IPE, including, as appropriate, information
describing—
(i) The responsibilities of the designated

State unit;
(ii) The responsibilities of the eligible
individual, including—
(A) The responsibilities the individual
will assume in relation to
achieving the employment outcome;
(B) If applicable, the extent of the individual’s
participation in paying for
the cost of services; and
(C) The responsibility of the individual
with regard to applying for and
securing comparable services and benefits
as described in § 361.53; and
(iii) The responsibilities of other entities
as the result of arrangements
made pursuant to the comparable services
or benefits requirements in § 361.53.
(b) Supported employment requirements.
An IPE for an individual with a most
significant disability for whom an employment
outcome in a supported employment
setting has been determined
to be appropriate must—
(1) Specify the supported employment
services to be provided by the
designated State unit;
(2) Specify the expected extended
services needed, which may include
natural supports;
(3) Identify the source of extended
services or, to the extent that it is not
possible to identify the source of extended
services at the time the IPE is
developed, include a description of the
basis for concluding that there is a reasonable
expectation that those sources
will become available;
(4) Provide for periodic monitoring to
ensure that the individual is making
satisfactory progress toward meeting
the weekly work requirement established
in the IPE by the time of transition
to extended services;
(5) Provide for the coordination of
services provided under an IPE with
services provided under other individualized
plans established under other
Federal or State programs;
(6) To the extent that job skills
training is provided, identify that the
training will be provided on site; and
(7) Include placement in an integrated
setting for the maximum number
of hours possible based on the
unique strengths, resources, priorities,
concerns, abilities, capabilities, interests,

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
and informed choice of individuals
with the most significant disabilities.
(c) Post-employment services. The IPE
for each individual must contain, as determined
to be necessary, statements
concerning—
(1) The expected need for post-employment
services prior to closing the
record of services of an individual who
has achieved an employment outcome;
(2) A description of the terms and
conditions for the provision of any
post-employment services; and
(3) If appropriate, a statement of how
post-employment services will be provided
or arranged through other entities
as the result of arrangements
made pursuant to the comparable services
or benefits requirements in § 361.53.
(d) Coordination of services for students
with disabilities who are receiving special
education services. The IPE for a student
with a disability who is receiving
special education services must be coordinated
with the IEP for that individual
in terms of the goals, objectives,
and services identified in the IEP.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(8), 101(a)(9),
102(b)(3), and 625(b)(6) of the Act; 29 U.S.C.
721(a)(8), 721(a)(9), 722(b)(3), and 795(k))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.47 Record of services.
(a) The designated State unit must
maintain for each applicant and eligible
individual a record of services that
includes, to the extent pertinent, the
following documentation:
(1) If an applicant has been determined
to be an eligible individual, documentation
supporting that determination
in accordance with the requirements
under § 361.42.
(2) If an applicant or eligible individual
receiving services under an IPE
has been determined to be ineligible,
documentation supporting that determination
in accordance with the requirements
under § 361.43.
(3) Documentation that describes the
justification for closing an applicant’s
or eligible individual’s record of services

if that closure is based on reasons
other than ineligibility, including, as
appropriate, documentation indicating
that the State unit has satisfied the requirements
in § 361.44.
(4) If an individual has been determined
to be an individual with a significant
disability or an individual
with a most significant disability, documentation
supporting that determination.
(5) If an individual with a significant
disability requires an exploration of
abilities, capabilities, and capacity to
perform in realistic work situations
through the use of trial work experiences
or, as appropriate, an extended
evaluation to determine whether the
individual is an eligible individual,
documentation supporting the need for,
and the plan relating to, that exploration
or, as appropriate, extended
evaluation and documentation regarding
the periodic assessments carried
out during the trial work experiences
or, as appropriate, the extended evaluation,
in accordance with the requirements
under § 361.42(e) and (f).
(6) The IPE, and any amendments to
the IPE, consistent with the requirements
under § 361.46.
(7) Documentation describing the extent
to which the applicant or eligible
individual exercised informed choice
regarding the provision of assessment
services and the extent to which the eligible
individual exercised informed
choice in the development of the IPE
with respect to the selection of the specific
employment outcome, the specific
vocational rehabilitation services
needed to achieve the employment outcome,
the entity to provide the services,
the employment setting, the settings
in which the services will be provided,
and the methods to procure the
services.
(8) In the event that an individual’s
IPE provides for vocational rehabilitation
services in a non-integrated setting,
a justification to support the need
for the non-integrated setting.
(9) In the event that an individual obtains
competitive employment,
verification that the individual is compensated
at or above the minimum
wage and that the individual’s wage

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and level of benefits are not less than
that customarily paid by the employer
for the same or similar work performed
by non-disabled individuals in accordance
with § 361.5(b)(11)(ii).
(10) In the event an individual
achieves an employment outcome in
which the individual is compensated in
accordance with section 14(c) of the
Fair Labor Standards Act or the designated
State unit closes the record of
services of an individual in extended
employment on the basis that the individual
is unable to achieve an employment
outcome consistent with
§ 361.5(b)(16) or that an eligible individual
through informed choice chooses
to remain in extended employment,
documentation of the results of the annual
reviews required under § 361.55, of
the individual’s input into those reviews,
and of the individual’s or, if appropriate,
the individual’s representative’s
acknowledgment that those reviews
were conducted.
(11) Documentation concerning any
action or decision resulting from a request
by an individual under § 361.57 for
a review of determinations made by
designated State unit personnel.
(12) In the event that an applicant or
eligible individual requests under
§ 361.38(c)(4) that documentation in the
record of services be amended and the
documentation is not amended, documentation
of the request.
(13) In the event an individual is referred
to another program through the
State unit’s information and referral
system under § 361.37, including other
components of the statewide workforce
investment system, documentation on
the nature and scope of services provided
by the designated State unit to
the individual and on the referral
itself, consistent with the requirements
of § 361.37.
(14) In the event an individual’s
record of service is closed under § 361.56,
documentation that demonstrates the
services provided under the individual’s
IPE contributed to the achievement
of the employment outcome.
(15) In the event an individual’s
record of service is closed under § 361.56,
documentation verifying that the provisions

of § 361.56 have been satisfied.
(b) The State unit, in consultation
with the State Rehabilitation Council
if the State has a Council, must determine
the type of documentation that
the State unit must maintain for each
applicant and eligible individual in
order to meet the requirements in
paragraph (a) of this section.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(6), (9), (14), (20)
and 102(a), (b), and (d) of the Act; 29 U.S.C.
721(a)(6), (9), (14), (20) and 722(a),(b), and (d))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.48 Scope of vocational rehabilitation
services for individuals with disabilities.
As appropriate to the vocational rehabilitation
needs of each individual
and consistent with each individual’s
informed choice, the designated State
unit must ensure that the following vocational
rehabilitation services are
available to assist the individual with
a disability in preparing for, securing,
retaining, or regaining an employment
outcome that is consistent with the individual’s
strengths, resources, priorities,
concerns, abilities, capabilities,
interests, and informed choice:
(a) Assessment for determining eligibility
and priority for services by
qualified personnel, including, if appropriate,
an assessment by personnel
skilled in rehabilitation technology, in
accordance with § 361.42.
(b) Assessment for determining vocational
rehabilitation needs by qualified
personnel, including, if appropriate, an
assessment by personnel skilled in rehabilitation
technology, in accordance
with § 361.45.
(c) Vocational rehabilitation counseling
and guidance, including information
and support services to assist an
individual in exercising informed
choice in accordance with § 361.52.
(d) Referral and other services necessary
to assist applicants and eligible
individuals to secure needed services
from other agencies, including other
components of the statewide workforce
investment system, in accordance with

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§§ 361.23, 361.24, and 361.37, and to advise
those individuals about client assistance
programs established under 34
CFR part 370.
(e) In accordance with the definition
in § 361.5(b)(40), physical and mental
restoration services, to the extent that
financial support is not readily available
from a source other than the designated
State unit (such as through
health insurance or a comparable service
or benefit as defined in
§ 361.5(b)(10)).
(f) Vocational and other training
services, including personal and vocational
adjustment training, books,
tools, and other training materials, except
that no training or training services
in an institution of higher education
(universities, colleges, community
or junior colleges, vocational
schools, technical institutes, or hospital
schools of nursing) may be paid
for with funds under this part unless
maximum efforts have been made by
the State unit and the individual to secure
grant assistance in whole or in
part from other sources to pay for that
training.
(g) Maintenance, in accordance with
the definition of that term in
§ 361.5(b)(35).
(h) Transportation in connection
with the rendering of any vocational
rehabilitation service and in accordance
with the definition of that term in
§ 361.5(b)(57).
(i) Vocational rehabilitation services
to family members, as defined in
§ 361.5(b)(23), of an applicant or eligible
individual if necessary to enable the
applicant or eligible individual to
achieve an employment outcome.
(j) Interpreter services, including
sign language and oral interpreter
services, for individuals who are deaf or
hard of hearing and tactile interpreting
services for individuals who are deafblind
provided by qualified personnel.
(k) Reader services, rehabilitation
teaching services, and orientation and
mobility services for individuals who
are blind.
(l) Job-related services, including job
search and placement assistance, job
retention services, follow-up services,

and follow-along services.
(m) Supported employment services
in accordance with the definition of
that term in § 361.5(b)(54).
(n) Personal assistance services in accordance
with the definition of that
term in § 361.5(b)(39).
(o) Post-employment services in accordance
with the definition of that
term in § 361.5(b)(42).
(p) Occupational licenses, tools,
equipment, initial stocks, and supplies.
(q) Rehabilitation technology in accordance
with the definition of that
term in § 361.5(b)(45), including vehicular
modification, telecommunications,
sensory, and other technological
aids and devices.
(r) Transition services in accordance
with the definition of that term in
§ 361.5(b)(55).
(s) Technical assistance and other
consultation services to conduct market
analyses, develop business plans,
and otherwise provide resources, to the
extent those resources are authorized
to be provided through the statewide
workforce investment system, to eligible
individuals who are pursuing selfemployment
or telecommuting or establishing
a small business operation
as an employment outcome.
(t) Other goods and services determined
necessary for the individual
with a disability to achieve an employment
outcome.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 103(a) of the Act; 29
U.S.C. 723(a))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.49 Scope of vocational rehabilitation
services for groups of individuals with
disabilities.
(a) The designated State unit may
also provide for the following vocational
rehabilitation services for the
benefit of groups of individuals with
disabilities:
(1) The establishment, development,
or improvement of a public or other
nonprofit community rehabilitation
program that is used to provide vocational

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rehabilitation services that promote
integration and competitive employment,
including, under special circumstances,
the construction of a facility
for a public or nonprofit community
rehabilitation program. Examples
of ‘‘special circumstances’’ include the
destruction by natural disaster of the
only available center serving an area
or a State determination that construction
is necessary in a rural area
because no other public agencies or private
nonprofit organizations are currently
able to provide vocational rehabilitation
services to individuals.
(2) Telecommunications systems that
have the potential for substantially
improving vocational rehabilitation
service delivery methods and developing
appropriate programming to
meet the particular needs of individuals
with disabilities, including telephone,
television, video description
services, satellite, tactile-vibratory devices,
and similar systems, as appropriate.
(3) Special services to provide nonvisual
access to information for individuals
who are blind, including the
use of telecommunications, Braille,
sound recordings, or other appropriate
media; captioned television, films, or
video cassettes for individuals who are
deaf or hard of hearing; tactile materials
for individuals who are deaf-blind;
and other special services that provide
information through tactile, vibratory,
auditory, and visual media.
(4) Technical assistance and support
services to businesses that are not subject
to Title I of the Americans with
Disabilities Act of 1990 and that are
seeking to employ individuals with disabilities.
(5) In the case of any small business
enterprise operated by individuals with
significant disabilities under the supervision
of the designated State unit, including
enterprises established under
the Randolph-Sheppard program, management
services and supervision provided
by the State unit along with the
acquisition by the State unit of vending
facilities or other equipment, initial
stocks and supplies, and initial operating
expenses, in accordance with
the following requirements:
(i) ‘‘Management services and supervision’’

includes inspection, quality
control, consultation, accounting, regulating,
in-service training, and related
services provided on a systematic basis
to support and improve small business
enterprises operated by individuals
with significant disabilities. ‘‘Management
services and supervision’’ may be
provided throughout the operation of
the small business enterprise.
(ii) ‘‘Initial stocks and supplies’’ includes
those items necessary to the establishment
of a new business enterprise
during the initial establishment
period, which may not exceed 6
months.
(iii) Costs of establishing a small
business enterprise may include operational
costs during the initial establishment
period, which may not exceed
6 months.
(iv) If the designated State unit provides
for these services, it must ensure
that only individuals with significant
disabilities will be selected to participate
in this supervised program.
(v) If the designated State unit provides
for these services and chooses to
set aside funds from the proceeds of the
operation of the small business enterprises,
the State unit must maintain a
description of the methods used in setting
aside funds and the purposes for
which funds are set aside. Funds may
be used only for small business enterprises
purposes, and benefits that are
provided to operators from set-aside
funds must be provided on an equitable
basis.
(6) Other services that promise to
contribute substantially to the rehabilitation
of a group of individuals but
that are not related directly to the individualized
plan for employment of
any one individual. Examples of those
other services might include the purchase
or lease of a bus to provide transportation
to a group of applicants or
eligible individuals or the purchase of
equipment or instructional materials
that would benefit a group of applicants
or eligible individuals.
(7) Consultative and technical assistance
services to assist educational
agencies in planning for the transition
of students with disabilities from

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school to post-school activities, including
employment.
(b) If the designated State unit provides
for vocational rehabilitation
services for groups of individuals, it
must—
(1) Develop and maintain written
policies covering the nature and scope
of each of the vocational rehabilitation
services it provides and the criteria
under which each service is provided;
and
(2) Maintain information to ensure
the proper and efficient administration
of those services in the form and detail
and at the time required by the Secretary,
including the types of services
provided, the costs of those services,
and, to the extent feasible, estimates of
the numbers of individuals benefiting
from those services.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 12(c), 101(a)(6)(A), and
103(b) of the Act; 29 U.S.C. 709(c), 721(a)(6),
and 723(b))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.50 Written policies governing the
provision of services for individuals with
disabilities.
(a) Policies. The State unit must develop
and maintain written policies
covering the nature and scope of each
of the vocational rehabilitation services
specified in § 361.48 and the criteria
under which each service is provided.
The policies must ensure that the provision
of services is based on the rehabilitation
needs of each individual as
identified in that individual’s IPE and
is consistent with the individual’s informed
choice. The written policies
may not establish any arbitrary limits
on the nature and scope of vocational
rehabilitation services to be provided
to the individual to achieve an employment
outcome. The policies must be
developed in accordance with the following
provisions:
(b) Out-of-State services.
(1) The State unit may establish a
preference for in-State services, provided
that the preference does not effectively

deny an individual a necessary
service. If the individual chooses
an out-of-State service at a higher cost
than an in-State service, if either service
would meet the individual’s rehabilitation
needs, the designated State
unit is not responsible for those costs
in excess of the cost of the in-State
service.
(2) The State unit may not establish
policies that effectively prohibit the
provision of out-of-State services.
(c) Payment for services.
(1) The State unit must establish and
maintain written policies to govern the
rates of payment for all purchased vocational
rehabilitation services.
(2) The State unit may establish a fee
schedule designed to ensure a reasonable
cost to the program for each service,
if the schedule is—
(i) Not so low as to effectively deny
an individual a necessary service; and
(ii) Not absolute and permits exceptions
so that individual needs can be
addressed.
(3) The State unit may not place absolute
dollar limits on specific service
categories or on the total services provided
to an individual.
(d) Duration of services.
(1) The State unit may establish reasonable
time periods for the provision
of services provided that the time periods
are—
(i) Not so short as to effectively deny
an individual a necessary service; and
(ii) Not absolute and permit exceptions
so that individual needs can be
addressed.
(2) The State unit may not establish
absolute time limits on the provision
of specific services or on the provision
of services to an individual. The duration
of each service needed by an individual
must be determined on an individual
basis and reflected in that individual’s
individualized plan for employment.
(e) Authorization of services. The State
unit must establish policies related to
the timely authorization of services,
including any conditions under which
verbal authorization can be given.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 12(c) and 101(a)(6) of the

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Act and 29 U.S.C. 709(c) and 721(a)(6))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.51 Standards for facilities and
providers of services.
(a) Accessibility of facilities. The State
plan must assure that any facility used
in connection with the delivery of vocational
rehabilitation services under
this part meets program accessibility
requirements consistent with the requirements,
as applicable, of the Architectural
Barriers Act of 1968, the Americans
with Disabilities Act of 1990, section
504 of the Act, and the regulations
implementing these laws.
(b) Affirmative action. The State plan
must assure that community rehabilitation
programs that receive assistance
under part B of Title I of the Act
take affirmative action to employ and
advance in employment qualified individuals
with disabilities covered under
and on the same terms and conditions
as in section 503 of the Act.
(c) Special communication needs personnel.
The designated State unit must
ensure that providers of vocational rehabilitation
services are able to communicate—
(1) In the native language of applicants
and eligible individuals who have
limited English speaking ability; and
(2) By using appropriate modes of
communication used by applicants and
eligible individuals.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 12(c) and 101(a)(6)(B)
and (C) of the Act; 29 U.S.C. 709(c) and
721(a)(6)(B) and (C))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.52 Informed choice.
(a) General provision. The State plan
must assure that applicants and eligible
individuals or, as appropriate, their
representatives are provided information
and support services to assist applicants
and eligible individuals in exercising
informed choice throughout
the rehabilitation process consistent
with the provisions of section 102(d) of
the Act and the requirements of this

section.
(b) Written policies and procedures. The
designated State unit, in consultation
with its State Rehabilitation Council,
if it has a Council, must develop and
implement written policies and procedures
that enable an applicant or eligible
individual to exercise informed
choice throughout the vocational rehabilitation
process. These policies and
procedures must provide for—
(1) Informing each applicant and eligible
individual (including students
with disabilities who are making the
transition from programs under the responsibility
of an educational agency
to programs under the responsibility of
the designated State unit), through appropriate
modes of communication,
about the availability of and opportunities
to exercise informed choice, including
the availability of support
services for individuals with cognitive
or other disabilities who require assistance
in exercising informed choice
throughout the vocational rehabilitation
process;
(2) Assisting applicants and eligible
individuals in exercising informed
choice in decisions related to the provision
of assessment services;
(3) Developing and implementing
flexible procurement policies and
methods that facilitate the provision of
vocational rehabilitation services and
that afford eligible individuals meaningful
choices among the methods used
to procure vocational rehabilitation
services;
(4) Assisting eligible individuals or,
as appropriate, the individuals’ representatives
in acquiring information
that enables them to exercise informed
choice in the development of their
IPEs with respect to the selection of
the—
(i) Employment outcome;
(ii) Specific vocational rehabilitation
services needed to achieve the employment
outcome;
(iii) Entity that will provide the services;
(iv) Employment setting and the settings
in which the services will be provided;
and
(v) Methods available for procuring
the services; and

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(5) Ensuring that the availability and
scope of informed choice is consistent
with the obligations of the designated
State agency under this part.
(c) Information and assistance in the
selection of vocational rehabilitation services
and service providers. In assisting an
applicant and eligible individual in exercising
informed choice during the assessment
for determining eligibility
and vocational rehabilitation needs
and during development of the IPE, the
designated State unit must provide the
individual or the individual’s representative,
or assist the individual or
the individual’s representative in acquiring,
information necessary to
make an informed choice about the
specific vocational rehabilitation services,
including the providers of those
services, that are needed to achieve the
individual’s employment outcome.
This information must include, at a
minimum, information relating to
the—
(1) Cost, accessibility, and duration
of potential services;
(2) Consumer satisfaction with those
services to the extent that information
relating to consumer satisfaction is
available;
(3) Qualifications of potential service
providers;
(4) Types of services offered by the
potential providers;
(5) Degree to which services are provided
in integrated settings; and
(6) Outcomes achieved by individuals
working with service providers, to the
extent that such information is available.
(d) Methods or sources of information.
In providing or assisting the individual
or the individual’s representative in acquiring
the information required under
paragraph (c) of this section, the State
unit may use, but is not limited to, the
following methods or sources of information:
(1) Lists of services and service providers.
(2) Periodic consumer satisfaction
surveys and reports.
(3) Referrals to other consumers, consumer
groups, or disability advisory
councils qualified to discuss the services
or service providers.
(4) Relevant accreditation, certification,
or other information relating

to the qualifications of service providers.
(5) Opportunities for individuals to
visit or experience various work and
service provider settings.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 12(c), 101(a)(19);
102(b)(2)(B) and 102(d) of the Act; 29 U.S.C.
709(c), 721(a)(19); 722(b)(2)(B) and 722(d))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.53 Comparable services and benefits.
(a) Determination of availability. The
State plan must assure that prior to
providing any vocational rehabilitation
services, except those services
listed in paragraph (b) of this section,
to an eligible individual, or to members
of the individual’s family, the
State unit must determine whether
comparable services and benefits, as
defined in § 361.5(b)(10), exist under any
other program and whether those services
and benefits are available to the
individual unless such a determination
would interrupt or delay—
(1) The progress of the individual toward
achieving the employment outcome
identified in the individualized
plan for employment;
(2) An immediate job placement; or
(3) The provision of vocational rehabilitation
services to any individual
who is determined to be at extreme
medical risk, based on medical evidence
provided by an appropriate qualified
medical professional.
(b) Exempt services. The following vocational
rehabilitation services described
in § 361.48(a) are exempt from a
determination of the availability of
comparable services and benefits under
paragraph (a) of this section:
(1) Assessment for determining eligibility
and vocational rehabilitation
needs.
(2) Counseling and guidance, including
information and support services to
assist an individual in exercising informed
choice.
(3) Referral and other services to secure
needed services from other agencies,
including other components of the
statewide workforce investment system,

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
if those services are not available
under this part.
(4) Job-related services, including job
search and placement assistance, job
retention services, follow-up services,
and follow-along services.
(5) Rehabilitation technology, including
telecommunications, sensory, and
other technological aids and devices.
(6) Post-employment services consisting
of the services listed under
paragraphs (b)(1) through (5) of this
section.
(c) Provision of services.
(1) If comparable services or benefits
exist under any other program and are
available to the individual at the time
needed to ensure the progress of the individual
toward achieving the employment
outcome in the individual’s IPE,
the designated State unit must use
those comparable services or benefits
to meet, in whole or part, the costs of
the vocational rehabilitation services.
(2) If comparable services or benefits
exist under any other program, but are
not available to the individual at the
time needed to ensure the progress of
the individual toward achieving the
employment outcome in the individual’s
IPE, the designated State unit
must provide vocational rehabilitation
services until those comparable services
and benefits become available.
(d) Interagency coordination.
(1) The State plan must assure that
the Governor, in consultation with the
entity in the State responsible for the
vocational rehabilitation program and
other appropriate agencies, will ensure
that an interagency agreement or
other mechanism for interagency coordination
takes effect between the
designated State vocational rehabilitation
unit and any appropriate public
entity, including the State entity responsible
for administering the State
medicaid program, a public institution
of higher education, and a component
of the statewide workforce investment
system, to ensure the provision of vocational
rehabilitation services (other
than those services listed in paragraph
(b) of this section) that are included in
the IPE, including the provision of
those vocational rehabilitation services

during the pendency of any interagency
dispute in accordance with the
provisions of paragraph (d)(3)(iii) of
this section.
(2) The Governor may meet the requirements
of paragraph (d)(1) of this
section through—
(i) A State statute or regulation;
(ii) A signed agreement between the
respective officials of the public entities
that clearly identifies the responsibilities
of each public entity for the
provision of the services; or
(iii) Another appropriate mechanism
as determined by the designated State
vocational rehabilitation unit.
(3) The interagency agreement or
other mechanism for interagency coordination
must include the following:
(i) Agency financial responsibility. An
identification of, or description of a
method for defining, the financial responsibility
of the public entity for
providing the vocational rehabilitation
services other than those listed in
paragraph (b) of this section and a provision
stating the financial responsibility
of the public entity for providing
those services.
(ii) Conditions, terms, and procedures of
reimbursement. Information specifying
the conditions, terms, and procedures
under which the designated State unit
must be reimbursed by the other public
entities for providing vocational rehabilitation
services based on the terms
of the interagency agreement or other
mechanism for interagency coordination.
(iii) Interagency disputes. Information
specifying procedures for resolving
interagency disputes under the interagency
agreement or other mechanism
for interagency coordination, including
procedures under which the designated
State unit may initiate proceedings to
secure reimbursement from other public
entities or otherwise implement the
provisions of the agreement or mechanism.
(iv) Procedures for coordination of services.
Information specifying policies
and procedures for public entities to
determine and identify interagency coordination
responsibilities of each public
entity to promote the coordination
and timely delivery of vocational rehabilitation
services other than those

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
listed in paragraph (b) of this section.
(e) Responsibilities under other law.
(1) If a public entity (other than the
designated State unit) is obligated
under Federal law (such as the Americans
with Disabilities Act, section 504
of the Act, or section 188 of the Workforce
Investment Act) or State law, or
assigned responsibility under State
policy or an interagency agreement established
under this section, to provide
or pay for any services considered to be
vocational rehabilitation services (e.g.,
interpreter services under § 361.48(j)),
other than those services listed in
paragraph (b) of this section, the public
entity must fulfill that obligation or
responsibility through—
(i) The terms of the interagency
agreement or other requirements of
this section;
(ii) Providing or paying for the service
directly or by contract; or
(iii) Other arrangement.
(2) If a public entity other than the
designated State unit fails to provide
or pay for vocational rehabilitation
services for an eligible individual as established
under this section, the designated
State unit must provide or pay
for those services to the individual and
may claim reimbursement for the services
from the public entity that failed
to provide or pay for those services.
The public entity must reimburse the
designated State unit pursuant to the
terms of the interagency agreement or
other mechanism described in paragraph
(d) of this section in accordance
with the procedures established in the
agreement or mechanism pursuant to
paragraph (d)(3)(ii) of this section.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 12(c) and 101(a)(8) of the
Act; 29 U.S.C. 709(c) and 721(a)(8))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.54 Participation of individuals in cost
of services based on financial need.
(a) No Federal requirement. There is no
Federal requirement that the financial
need of individuals be considered in the
provision of vocational rehabilitation

services.
(b) State unit requirements.
(1) The State unit may choose to consider
the financial need of eligible individuals
or individuals who are receiving
services through trial work experiences
under § 361.42(e) or during an extended
evaluation under § 361.42(f) for
purposes of determining the extent of
their participation in the costs of vocational
rehabilitation services, other
than those services identified in paragraph
(b)(3) of this section.
(2) If the State unit chooses to consider
financial need—
(i) It must maintain written policies—
(A) Explaining the method for determining
the financial need of an eligible
individual; and
(B) Specifying the types of vocational
rehabilitation services for which
the unit has established a financial
needs test;
(ii) The policies must be applied uniformly
to all individuals in similar circumstances;
(iii) The policies may require different
levels of need for different geographic
regions in the State, but must
be applied uniformly to all individuals
within each geographic region; and
(iv) The policies must ensure that the
level of an individual’s participation in
the cost of vocational rehabilitation
services is—
(A) Reasonable;
(B) Based on the individual’s financial
need, including consideration of
any disability-related expenses paid by
the individual; and
(C) Not so high as to effectively deny
the individual a necessary service.
(3) The designated State unit may
not apply a financial needs test, or require
the financial participation of the
individual—
(i) As a condition for furnishing the
following vocational rehabilitation
services:
(A) Assessment for determining eligibility
and priority for services under
§ 361.48(a), except those non-assessment
services that are provided to an individual
with a significant disability during
either an exploration of the individual’s
abilities, capabilities, and capacity
to perform in work situations

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through the use of trial work experiences
under § 361.42(e) or an extended
evaluation under § 361.42(f).
(B) Assessment for determining vocational
rehabilitation needs under
§ 361.48(b).
(C) Vocational rehabilitation counseling
and guidance under § 361.48(c).
(D) Referral and other services under
§ 361.48(d).
(E) Job-related services under
§ 361.48(l).
(F) Personal assistance services
under § 361.48(n).
(G) Any auxiliary aid or service (e.g.,
interpreter services under § 361.48(j),
reader services under § 361.48(k)) that
an individual with a disability requires
under section 504 of the Act (29 U.S.C.
794) or the Americans with Disabilities
Act (42 U.S.C. 12101, et seq.), or regulations
implementing those laws, in
order for the individual to participate
in the VR program as authorized under
this part; or
(ii) As a condition for furnishing any
vocational rehabilitation service if the
individual in need of the service has
been determined eligible for Social Security
benefits under Titles II or XVI
of the Social Security Act.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 12(c) of the Act; 29
U.S.C. 709(c))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.55 Annual review of individuals in
extended employment and other employment
under special certificate provisions of the
Fair Labor Standards Act.
(a) The State plan must assure that
the designated State unit conducts an
annual review and reevaluation in accordance
with the requirements in
paragraph (b) of this section for an individual
with a disability served under
this part—
(1) Who has achieved an employment
outcome in which the individual is
compensated in accordance with section
14(c) of the Fair Labor Standards
Act; or
(2) Whose record of services is closed

while the individual is in extended employment
on the basis that the individual
is unable to achieve an employment
outcome consistent with
§ 361.5(b)(16) or that the individual
made an informed choice to remain in
extended employment.
(b) For each individual with a disability
who meets the criteria in paragraph
(a) of this section, the designated
State unit must—
(1) Annually review and reevaluate
the status of each individual for 2 years
after the individual’s record of services
is closed (and thereafter if requested by
the individual or, if appropriate, the individual’s
representative) to determine
the interests, priorities, and needs of
the individual with respect to competitive
employment or training for competitive
employment;
(2) Enable the individual or, if appropriate,
the individual’s representative
to provide input into the review and reevaluation
and must document that
input in the record of services, consistent
with § 361.47(a)(10), with the individual’s
or, as appropriate, the individual’s
representative’s signed acknowledgment
that the review and reevaluation
have been conducted; and
(3) Make maximum efforts, including
identifying and providing vocational
rehabilitation services, reasonable accommodations,
and other necessary
support services, to assist the individual
in engaging in competitive employment
as defined in § 361.5(b)(11).
(AUTHORITY: Sections 12(c) and 101(a)(14) of
the Act; 29 U.S.C. 709(c) and 721(a)(14))
[66 FR 7253, Jan. 22, 2001]

§ 361.56 Requirements for closing the record
of services of an individual who has
achieved an employment outcome.
The record of services of an individual
who has achieved an employment
outcome may be closed only if all
of the following requirements are met:
(a) Employment outcome achieved. The
individual has achieved the employment
outcome that is described in the
individual’s IPE in accordance with
§ 361.46(a)(1) and is consistent with the
individual’s strengths, resources, priorities,

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concerns, abilities, capabilities,
interests, and informed choice.
(b) Employment outcome maintained.
The individual has maintained the employment
outcome for an appropriate
period of time, but not less than 90
days, necessary to ensure the stability
of the employment outcome, and the
individual no longer needs vocational
rehabilitation services.
(c) Satisfactory outcome. At the end of
the appropriate period under paragraph
(b) of this section, the individual and
the qualified rehabilitation counselor
employed by the designated State unit
consider the employment outcome to
be satisfactory and agree that the individual
is performing well in the employment.
(d) Post-employment services. The individual
is informed through appropriate
modes of communication of the availability
of post-employment services.
(Authority: Sections 12(c), 101(a)(6), and
106(a)(2) of the Act; 29 U.S.C. 711(c), 721(a)(6),
and 726(a)(2))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.57 Review of determinations made by
designated State unit personnel.
(a) Procedures. The designated State
unit must develop and implement procedures
to ensure that an applicant or
eligible individual who is dissatisfied
with any determination made by personnel
of the designated State unit
that affects the provision of vocational
rehabilitation services may request, or,
if appropriate, may request through
the individual’s representative, a timely
review of that determination. The
procedures must be in accordance with
paragraphs (b) through (k) of this section:
(b) General requirements.
(1) Notification. Procedures established
by the State unit under this section
must provide an applicant or eligible
individual or, as appropriate, the
individual’s representative notice of—
(i) The right to obtain review of
State unit determinations that affect
the provision of vocational rehabilitation
services through an impartial due
process hearing under paragraph (e) of
this section;

(ii) The right to pursue mediation
under paragraph (d) of this section
with respect to determinations made
by designated State unit personnel
that affect the provision of vocational
rehabilitation services to an applicant
or eligible individual;
(iii) The names and addresses of individuals
with whom requests for mediation
or due process hearings may be
filed;
(iv) The manner in which a mediator
or impartial hearing officer may be selected
consistent with the requirements
of paragraphs (d) and (f) of this
section; and
(v) The availability of the client assistance
program, established under 34
CFR part 370, to assist the applicant or
eligible individual during mediation
sessions or impartial due process hearings.
(2) Timing. Notice described in paragraph
(b)(1) of this section must be provided
in writing—
(i) At the time the individual applies
for vocational rehabilitation services
under this part;
(ii) At the time the individual is assigned
to a category in the State’s
order of selection, if the State has established
an order of selection under
§ 361.36;
(iii) At the time the IPE is developed;
and
(iv) Whenever vocational rehabilitation
services for an individual are reduced,
suspended, or terminated.
(3) Evidence and representation. Procedures
established under this section
must—
(i) Provide an applicant or eligible
individual or, as appropriate, the individual’s
representative with an opportunity
to submit during mediation sessions
or due process hearings evidence
and other information that supports
the applicant’s or eligible individual’s
position; and
(ii) Allow an applicant or eligible individual
to be represented during mediation
sessions or due process hearings
by counsel or other advocate selected
by the applicant or eligible individual.
(4) Impact on provision of services. The
State unit may not institute a suspension,
reduction, or termination of vocational

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
rehabilitation services being
provided to an applicant or eligible individual,
including evaluation and assessment
services and IPE development,
pending a resolution through
mediation, pending a decision by a
hearing officer or reviewing official, or
pending informal resolution under this
section unless—
(i) The individual or, in appropriate
cases, the individual’s representative
requests a suspension, reduction, or
termination of services; or
(ii) The State agency has evidence
that the services have been obtained
through misrepresentation, fraud, collusion,
or criminal conduct on the part
of the individual or the individual’s
representative.
(5) Ineligibility. Applicants who are
found ineligible for vocational rehabilitation
services and previously eligible
individuals who are determined to be
no longer eligible for vocational rehabilitation
services pursuant to § 361.43
are permitted to challenge the determinations
of ineligibility under the
procedures described in this section.
(c) Informal dispute resolution. The
State unit may develop an informal
process for resolving a request for review
without conducting mediation or
a formal hearing. A State’s informal
process must not be used to deny the
right of an applicant or eligible individual
to a hearing under paragraph (e)
of this section or any other right provided
under this part, including the
right to pursue mediation under paragraph
(d) of this section. If informal
resolution under this paragraph or mediation
under paragraph (d) of this section
is not successful in resolving the
dispute within the time period established
under paragraph (e)(1) of this
section, a formal hearing must be conducted
within that same time period,
unless the parties agree to a specific
extension of time.
(d) Mediation.
(1) The State must establish and implement
procedures, as required under
paragraph (b)(1)(ii) of this section, to
allow an applicant or eligible individual
and the State unit to resolve
disputes involving State unit determinations

that affect the provision of
vocational rehabilitation services
through a mediation process that must
be made available, at a minimum,
whenever an applicant or eligible individual
or, as appropriate, the individual’s
representative requests an impartial
due process hearing under this section.
(2) Mediation procedures established
by the State unit under paragraph (d)
must ensure that—
(i) Participation in the mediation
process is voluntary on the part of the
applicant or eligible individual, as appropriate,
and on the part of the State
unit;
(ii) Use of the mediation process is
not used to deny or delay the applicant’s
or eligible individual’s right to
pursue resolution of the dispute
through an impartial hearing held
within the time period specified in
paragraph (e)(1) of this section or any
other rights provided under this part.
At any point during the mediation
process, either party or the mediator
may elect to terminate the mediation.
In the event mediation is terminated,
either party may pursue resolution
through an impartial hearing;
(iii) The mediation process is conducted
by a qualified and impartial mediator,
as defined in § 361.5(b)(43), who
must be selected from a list of qualified
and impartial mediators maintained
by the State—
(A) On a random basis;
(B) By agreement between the director
of the designated State unit and
the applicant or eligible individual or,
as appropriate, the individual’s representative;
or
(C) In accordance with a procedure
established in the State for assigning
mediators, provided this procedure ensures
the neutrality of the mediator assigned;
and
(iv) Mediation sessions are scheduled
and conducted in a timely manner and
are held in a location and manner that
is convenient to the parties to the dispute.
(3) Discussions that occur during the
mediation process must be kept confidential
and may not be used as evidence
in any subsequent due process
hearings or civil proceedings, and the

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
parties to the mediation process may
be required to sign a confidentiality
pledge prior to the commencement of
the process.
(4) An agreement reached by the parties
to the dispute in the mediation
process must be described in a written
mediation agreement that is developed
by the parties with the assistance of
the qualified and impartial mediator
and signed by both parties. Copies of
the agreement must be sent to both
parties.
(5) The costs of the mediation process
must be paid by the State. The State is
not required to pay for any costs related
to the representation of an applicant
or eligible individual authorized
under paragraph (b)(3)(ii) of this section.
(e) Impartial due process hearings. The
State unit must establish and implement
formal review procedures, as required
under paragraph (b)(1)(i) of this
section, that provide that—
(1) A hearing conducted by an impartial
hearing officer, selected in accordance
with paragraph (f) of this section,
must be held within 60 days of an applicant’s
or eligible individual’s request
for review of a determination made by
personnel of the State unit that affects
the provision of vocational rehabilitation
services to the individual, unless
informal resolution or a mediation
agreement is achieved prior to the 60th
day or the parties agree to a specific
extension of time;
(2) In addition to the rights described
in paragraph (b)(3) of this section, the
applicant or eligible individual or, if
appropriate, the individual’s representative
must be given the opportunity to
present witnesses during the hearing
and to examine all witnesses and other
relevant sources of information and
evidence;
(3) The impartial hearing officer
must—
(i) Make a decision based on the provisions
of the approved State plan, the
Act, Federal vocational rehabilitation
regulations, and State regulations and
policies that are consistent with Federal
requirements; and
(ii) Provide to the individual or, if
appropriate, the individual’s representative

and to the State unit a full written
report of the findings and grounds
for the decision within 30 days of the
completion of the hearing; and
(4) The hearing officer’s decision is
final, except that a party may request
an impartial review under paragraph
(g)(1) of this section if the State has established
procedures for that review,
and a party involved in a hearing may
bring a civil action under paragraph (i)
of this section.
(f) Selection of impartial hearing officers.
The impartial hearing officer for a
particular case must be selected—
(1) From a list of qualified impartial
hearing officers maintained by the
State unit. Impartial hearing officers
included on the list must be—
(i) Identified by the State unit if the
State unit is an independent commission;
or
(ii) Jointly identified by the State
unit and the State Rehabilitation
Council if the State has a Council; and
(2)(i) On a random basis; or
(ii) By agreement between the director
of the designated State unit and
the applicant or eligible individual or,
as appropriate, the individual’s representative.
(g) Administrative review of hearing officer’s
decision. The State may establish
procedures to enable a party who is dissatisfied
with the decision of the impartial
hearing officer to seek an impartial
administrative review of the decision
under paragraph (e)(3) of this
section in accordance with the following
requirements:
(1) A request for administrative review
under paragraph (g) of this section
must be made within 20 days of
the mailing of the impartial hearing
officer’s decision.
(2) Administrative review of the hearing
officer’s decision must be conducted
by—
(i) The chief official of the designated
State agency if the State has established
both a designated State agency
and a designated State unit under
§ 361.13(b); or
(ii) An official from the office of the
Governor.
(3) The reviewing official described in
paragraph (g)(2)(i) of this section—

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(i) Provides both parties with an opportunity
to submit additional evidence
and information relevant to a
final decision concerning the matter
under review;
(ii) May not overturn or modify the
hearing officer’s decision, or any part
of that decision, that supports the position
of the applicant or eligible individual
unless the reviewing official
concludes, based on clear and convincing
evidence, that the decision of
the impartial hearing officer is clearly
erroneous on the basis of being contrary
to the approved State plan, the
Act, Federal vocational rehabilitation
regulations, or State regulations and
policies that are consistent with Federal
requirements;
(iii) Makes an independent, final decision
following a review of the entire
hearing record and provides the decision
in writing, including a full report
of the findings and the statutory, regulatory,
or policy grounds for the decision,
to the applicant or eligible individual
or, as appropriate, the individual’s
representative and to the State
unit within 30 days of the request for
administrative review under paragraph
(g)(1) of this section; and
(iv) May not delegate the responsibility
for making the final decision
under paragraph (g) of this section to
any officer or employee of the designated
State unit.
(4) The reviewing official’s decision
under paragraph (g) of this section is
final unless either party brings a civil
action under paragraph (i) of this section.
(h) Implementation of final decisions. If
a party brings a civil action under
paragraph (h) of this section to challenge
the final decision of a hearing officer
under paragraph (e) of this section
or to challenge the final decision of a
State reviewing official under paragraph
(g) of this section, the final decision
of the hearing officer or State reviewing
official must be implemented
pending review by the court.
(i) Civil action.
(1) Any party who disagrees with the
findings and decision of an impartial
hearing officer under paragraph (e) of
this section in a State that has not established

administrative review procedures
under paragraph (g) of this section
and any party who disagrees with
the findings and decision under paragraph
(g)(3)(iii) of this section have a
right to bring a civil action with respect
to the matter in dispute. The action
may be brought in any State court
of competent jurisdiction or in a district
court of the United States of competent
jurisdiction without regard to
the amount in controversy.
(2) In any action brought under paragraph
(i) of this section, the court—
(i) Receives the records related to the
impartial due process hearing and the
records related to the administrative
review process, if applicable;
(ii) Hears additional evidence at the
request of a party; and
(iii) Basing its decision on the preponderance
of the evidence, grants the
relief that the court determines to be
appropriate.
(j) State fair hearing board. A fair
hearing board as defined in § 361.5(b)(22)
is authorized to carry out the responsibilities
of the impartial hearing officer
under paragraph (e) of this section
in accordance with the following criteria:
(1) The fair hearing board may conduct
due process hearings either collectively
or by assigning responsibility for
conducting the hearing to one or more
members of the fair hearing board.
(2) The final decision issued by the
fair hearing board following a hearing
under paragraph (j)(1) of this section
must be made collectively by, or by a
majority vote of, the fair hearing
board.
(3) The provisions of paragraphs
(b)(1), (2), and (3) of this section that
relate to due process hearings and of
paragraphs (e), (f), (g), and (h) of this
section do not apply to fair hearing
boards under this paragraph (j).
(k) Data collection.
(1) The director of the designated
State unit must collect and submit, at
a minimum, the following data to the
Commissioner of the Rehabilitation
Services Administration (RSA) for inclusion
each year in the annual report
to Congress under section 13 of the Act:
(i) A copy of the standards used by

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
State reviewing officials for reviewing
decisions made by impartial hearing
officers under this section.
(ii) The number of mediations held,
including the number of mediation
agreements reached.
(iii) The number of hearings and reviews
sought from impartial hearing
officers and State reviewing officials,
including the type of complaints and
the issues involved.
(iv) The number of hearing officer decisions
that were not reviewed by administrative
reviewing officials.
(v) The number of hearing decisions
that were reviewed by State reviewing
officials and, based on these reviews,
the number of hearing decisions that
were—
(A) Sustained in favor of an applicant
or eligible individual;
(B) Sustained in favor of the designated
State unit;
(C) Reversed in whole or in part in
favor of the applicant or eligible individual;
and
(D) Reversed in whole or in part in
favor of the State unit.
(2) The State unit director also must
collect and submit to the Commissioner
of RSA copies of all final decisions
issued by impartial hearing officers
under paragraph (e) of this section
and by State review officials under
paragraph (g) of this section.
(3) The confidentiality of records of
applicants and eligible individuals
maintained by the State unit may not
preclude the access of the RSA Commissioner
to those records for the purposes
described in this section.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Section 102(c) of the Act; 29
U.S.C. 722(c))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

Subpart C—Financing of State Vocational
Rehabilitation Programs
§ 361.60 Matching requirements.
(a) Federal share.
(1) General. Except as provided in
paragraph (a)(2) of this section, the

Federal share for expenditures made by
the State under the State plan, including
expenditures for the provision of
vocational rehabilitation services and
the administration of the State plan, is
78.7 percent.
(2) Construction projects. The Federal
share for expenditures made for the
construction of a facility for community
rehabilitation program purposes
may not be more than 50 percent of the
total cost of the project.
(b) Non-Federal share.
(1) General. Except as provided in
paragraph (b)(2) and (3) of this section,
expenditures made under the State
plan to meet the non-Federal share
under this section must be consistent
with the provisions of 34 CFR 80.24.
(2) Third party in-kind contributions.
Third party in-kind contributions specified
in 34 CFR 80.24(a)(2) may not be
used to meet the non-Federal share
under this section.
(3) Contributions by private entities.
Expenditures made from contributions
by private organizations, agencies, or
individuals that are deposited in the
account of the State agency or sole
local agency in accordance with State
law and that are earmarked, under a
condition imposed by the contributor,
may be used as part of the non-Federal
share under this section if the funds
are earmarked for—
(i) Meeting in whole or in part the
State’s share for establishing a community
rehabilitation program or constructing
a particular facility for community
rehabilitation program purposes;
(ii) Particular geographic areas within
the State for any purpose under the
State plan, other than those described
in paragraph (b)(3)(i) of this section, in
accordance with the following criteria:
(A) Before funds that are earmarked
for a particular geographic area may be
used as part of the non-Federal share,
the State must notify the Secretary
that the State cannot provide the full
non-Federal share without using these
funds.
(B) Funds that are earmarked for a
particular geographic area may be used
as part of the non-Federal share without
requesting a waiver of

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
statewideness under § 361.26.
(C) Except as provided in paragraph
(b)(3)(i) of this section, all Federal
funds must be used on a statewide basis
consistent with § 361.25, unless a waiver
of statewideness is obtained under
§ 361.26; and
(iii) Any other purpose under the
State plan, provided the expenditures
do not benefit in any way the donor, an
individual to whom the donor is related
by blood or marriage or with whom the
donor has a close personal relationship,
or an individual, entity, or organization
with whom the donor shares a financial
interest. The Secretary does
not consider a donor’s receipt from the
State unit of a grant, subgrant, or contract
with funds allotted under this
part to be a benefit for the purposes of
this paragraph if the grant, subgrant,
or contract is awarded under the
State’s regular competitive procedures.
(Authority: Sections 7(14), 101(a)(3), 101(a)(4)
and 104 of the Act; 29 U.S.C. 706(14), 721(a)(3),
721(a)(4) and 724))
Example for paragraph (b)(3): Contributions
may be earmarked in accordance with
§ 361.60(b)(3)(iii) for providing particular services
(e.g., rehabilitation technology services);
serving individuals with certain types
of disabilities (e.g., individuals who are
blind), consistent with the State’s order of
selection, if applicable; providing services to
special groups that State or Federal law permits
to be targeted for services (e.g., students
with disabilities who are receiving special
education services), consistent with the
State’s order of selection, if applicable; or
carrying out particular types of administrative
activities permissible under State law.
Contributions also may be restricted to particular
geographic areas to increase services
or expand the scope of services that are
available statewide under the State plan in
accordance with the requirements in
§ 361.60(b)(3)(ii).
(Approved by the Office of Management and
Budget under control number 1820–0500)
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.61 Limitation on use of funds for
construction expenditures.
No more than 10 percent of a State’s

allotment for any fiscal year under section
110 of the Act may be spent on the
construction of facilities for community
rehabilitation program purposes.
(Authority: Section 101(a)(17)(A) of the Act;
29 U.S.C. 721(a)(17)(A))≤

§ 361.62 Maintenance of effort requirements.
(a) General requirements.
(1) The Secretary reduces the amount
otherwise payable to a State for a fiscal
year by the amount by which the
total expenditures from non-Federal
sources under the State plan for the
previous fiscal year were less than the
total of those expenditures for the fiscal
year 2 years prior to the previous
fiscal year.
Example: For fiscal year 2001, a State’s
maintenance of effort level is based on the
amount of its expenditures from non-Federal
sources for fiscal year 1999. Thus, if the
State’s non-Federal expenditures in 2001 are
less than they were in 1999, the State has a
maintenance of effort deficit, and the Secretary
reduces the State’s allotment in 2002
by the amount of that deficit.
(2) If, at the time the Secretary
makes a determination that a State
has failed to meet its maintenance of
effort requirements, it is too late for
the Secretary to make a reduction in
accordance with paragraph (a)(1) of
this section, then the Secretary recovers
the amount of the maintenance of
effort deficit through audit disallowance.
(b) Specific requirements for construction
of facilities. If the State provides
for the construction of a facility for
community rehabilitation program
purposes, the amount of the State’s
share of expenditures for vocational rehabilitation
services under the plan,
other than for the construction of a facility
for community rehabilitation
program purposes or the establishment
of a facility for community rehabilitation
purposes, must be at least equal to
the expenditures for those services for
the second prior fiscal year. If a State
fails to meet the requirements of this
paragraph, the Secretary recovers the
amount of the maintenance of effort
deficit through audit disallowance.
(c) Separate State agency for vocational

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rehabilitation services for individuals who
are blind. If there is a separate part of
the State plan administered by a separate
State agency to provide vocational
rehabilitation services for individuals
who are blind—
(1) Satisfaction of the maintenance
of effort requirements under paragraphs
(a) and (b) of this section are determined
based on the total amount of
a State’s non-Federal expenditures
under both parts of the State plan; and
(2) If a State fails to meet any maintenance
of effort requirement, the Secretary
reduces the amount otherwise
payable to the State for that fiscal
year under each part of the plan in direct
relation to the amount by which
expenditures from non-Federal sources
under each part of the plan in the previous
fiscal year were less than they
were for that part of the plan for the
fiscal year 2 years prior to the previous
fiscal year.
(d) Waiver or modification.
(1) The Secretary may waive or modify
the maintenance of effort requirement
in paragraph (a)(1) of this section
if the Secretary determines that a
waiver or modification is necessary to
permit the State to respond to exceptional
or uncontrollable circumstances,
such as a major natural
disaster or a serious economic downturn,
that—
(i) Cause significant unanticipated
expenditures or reductions in revenue
that result in a general reduction of
programs within the State; or
(ii) Require the State to make substantial
expenditures in the vocational
rehabilitation program for long-term
purposes due to the one-time costs associated
with the construction of a facility
for community rehabilitation
program purposes, the establishment of
a facility for community rehabilitation
program purposes, or the acquisition of
equipment.
(2) The Secretary may waive or modify
the maintenance of effort requirement
in paragraph (b) of this section or
the 10 percent allotment limitation in
§ 361.61 if the Secretary determines that
a waiver or modification is necessary
to permit the State to respond to exceptional

or uncontrollable circumstances,
such as a major natural
disaster, that result in significant destruction
of existing facilities and require
the State to make substantial expenditures
for the construction of a facility
for community rehabilitation
program purposes or the establishment
of a facility for community rehabilitation
program purposes in order to provide
vocational rehabilitation services.
(3) A written request for waiver or
modification, including supporting justification,
must be submitted to the
Secretary as soon as the State determines
that an exceptional or uncontrollable
circumstance will prevent it
from making its required expenditures
from non-Federal sources.
(Approved by the Office of Management and
Budget under control number 1820–0500)
(Authority: Sections 101(a)(17) and 111(a)(2)
of the Act; 29 U.S.C. 721(a)(17) and 731(a)(2))
[66 FR 4382, Jan. 17, 2001, as amended at 66
FR 7253, Jan. 22, 2001]

§ 361.63 Program income.
(a) Definition. For purposes of this
section, program income means gross income
received by the State that is directly
generated by an activity supported
under this part.
(b) Sources. Sources of program income
include, but are not limited to,
payments from the Social Security Administration
for assisting Social Security
beneficiaries and recipients to
achieve employment outcomes, payments
received from workers’ compensation
funds, fees for services to defray
part or all of the costs of services
provided to particular individuals, and
income generated by a State-operated
community rehabilitation program.
(c) Use of program income.
(1) Except as provided in paragraph
(c)(2) of this section, program income,
whenever earned, must be used for the
provision of vocational rehabilitation
services and the administration of the
State plan. Program income is considered
earned when it is received.
(2) Payments provided to a State
from the Social Security Administration
for assisting Social Security beneficiaries

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
and recipients to achieve employment
outcomes may also be used
to carry out programs under part B of
Title I of the Act (client assistance),
part B of Title VI of the Act (supported
employment), and Title VII of the Act
(independent living).
(3) The State is authorized to treat
program income as—
(i) An addition to the grant funds to
be used for additional allowable program
expenditures, in accordance with
34 CFR 80.25(g)(2); or
(ii) A deduction from total allowable
costs, in accordance with 34 CFR
80.25(g)(1).
(4) Program income cannot be used to
meet the non-Federal share requirement
under § 361.60.
(Authority: Section 108 of the Act; 29 U.S.C.
728; 34 CFR 80.25)

each State is computed in accordance
with the requirements of section 110 of
the Act, and payments are made to the
State on a quarterly basis, unless some
other period is established by the Secretary.
(2) If the State plan designates one
State agency to administer, or supervise
the administration of, the part of
the plan under which vocational rehabilitation
services are provided for individuals
who are blind and another
State agency to administer the rest of
the plan, the division of the State’s allotment
is a matter for State determination.
(b) Reallotment.
(1) The Secretary determines not
later than 45 days before the end of a
fiscal year which States, if any, will
not use their full allotment.
(2) As soon as possible, but not later
than the end of the fiscal year, the Secretary
reallots these funds to other
States that can use those additional
funds during the current or subsequent
fiscal year, provided the State can
meet the matching requirement by obligating
the non-Federal share of any
reallotted funds in the fiscal year for
which the funds were appropriated.
(3) Funds reallotted to another State
are considered to be an increase in the
recipient State’s allotment for the fiscal
year for which the funds were appropriated.
(Authority: Sections 110 and 111 of the Act;
29 U.S.C. 730 and 731)

§ 361.64 Obligation of Federal funds and
program income.
(a) Except as provided in paragraph
(b) of this section, any Federal funds,
including reallotted funds, that are appropriated
for a fiscal year to carry out
a program under this part that are not
obligated by the State by the beginning
of the succeeding fiscal year and
any program income received during a
fiscal year that is not obligated by the
State by the beginning of the succeeding
fiscal year remain available for
obligation by the State during that
succeeding fiscal year.
(b) Federal funds appropriated for a
fiscal year remain available for obligation
in the succeeding fiscal year only
to the extent that the State met the
matching requirement for those Federal
funds by obligating, in accordance
with 34 CFR 76.707, the non-Federal
share in the fiscal year for which the
funds were appropriated.
(Authority: Section 19 of the Act; 29 U.S.C.
716)

Subpart D [Reserved]
Subpart E—Evaluation Standards and
Performance Indicators
§ 361.80 Purpose.
The purpose of this subpart is to establish
evaluation standards and performance
indicators for the Program.
(Authority: 29 U.S.C. 726(a))

§ 361.81 Applicable definitions.

§ 361.65 Allotment and payment of Federal
funds for vocational rehabilitation services.
(a) Allotment.
(1) The allotment of Federal funds for
vocational rehabilitation services for

In addition to those definitions in
§ 361.5(b), the following definitions
apply to this subpart:
Average hourly earnings means the average
per hour earnings in the week
prior to exiting the vocational rehabilitation

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(VR) program of an eligible
individual who has achieved a competitive
employment outcome.
Business Enterprise Program (BEP)
means an employment outcome in
which an individual with a significant
disability operates a vending facility
or other small business under the management
and supervision of a designated
State unit (DSU). This term includes
home industry, farming, and
other enterprises.
Exit the VR program means that a
DSU has closed the individual’s record
of VR services in one of the following
categories:
(1) Ineligible for VR services.
(2) Received services under an individualized
plan for employment (IPE)
and achieved an employment outcome.
(3) Received services under an IPE
but did not achieve an employment
outcome.
(4) Eligible for VR services but did
not receive services under an IPE.
General or combined DSU means a
DSU that does not serve exclusively individuals
with visual impairments or
blindness.
Individuals from a minority background
means individuals who report their
race and ethnicity in any of the following
categories: American Indian or
Alaska Native, Asian, Black or African
American, Native Hawaiian or Other
Pacific Islander, or Hispanic or Latino.
Minimum wage means the higher of
the rate specified in section 6(a)(1) of
the Fair Labor Standards Act of 1938,
29 U.S.C. 206(a)(1), (i.e., the Federal
minimum wage) or applicable State
minimum wage law.
Non-minority individuals means individuals
who report themselves exclusively
as White, non-Hispanic.
Performance period is the reporting
period during which a DSU’s performance
is measured. For Evaluation
Standards 1 and 2, performance data
must be aggregated and reported for
each fiscal year beginning with fiscal
year 1999. However, DSUs that exclusively
serve individuals with visual impairments
or blindness must report
each year the aggregated data for the 2
previous years for Performance Indicators

1.1 through 1.6; the second year
must coincide with the performance
period for general or combined DSUs.
Primary indicators means Performance
Indicators 1.3, 1.4, and 1.5, which
are specifically designed to measure—
(1) The achievement of competitive,
self-, or BEP employment with earnings
equivalent to the minimum wage
or higher, particularly by individuals
with significant disabilities; and
(2) The ratio between the average
hourly earnings of individuals who exit
the VR program in competitive, self-,
or BEP employment with earnings
equivalent to the minimum wage or
higher and the State’s average hourly
earnings for all employed individuals.
RSA–911 means the Case Service Report
that is submitted annually by a
DSU as approved by the Office of Management
and Budget (OMB).
Self-employment means an employment
outcome in which the individual
works for profit or fee in his or her own
business, farm, shop, or office, including
sharecroppers.
Service rate means the result obtained
by dividing the number of individuals
who exit the VR program after receiving
one or more services under an IPE
during any reporting period by the
total number of individuals who exit
the VR program (as defined in this section)
during that reporting period.
State’s average hourly earnings means
the average hourly earnings of all persons
in the State in which the DSU is
located.
(Authority: 29 U.S.C. 726(a))

§ 361.82 Evaluation standards.
(a) The Secretary establishes two
evaluation standards to evaluate the
performance of each DSU that receives
funds under this part. The evaluation
standards assist the Secretary and
each DSU to evaluate a DSU’s performance
in serving individuals with disabilities
under the VR program.
(b) A DSU must achieve successful
performance on both evaluation standards
during each performance period.
(c) The evaluation standards for the
VR program are—

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
(1) Evaluation Standard 1—Employment
outcomes. A DSU must assist any eligible
individual, including an individual
with a significant disability, to obtain,
maintain, or regain high-quality employment.
(2) Evaluation Standard 2—Equal access
to services. A DSU must ensure that
individuals from minority backgrounds
have equal access to VR services. (Approved
by the Office of Management
and Budget under control number 1820–
0508.)
(Authority: 29 U.S.C. 726(a))

§ 361.84 Performance indicators.
(a) The performance indicators establish
what constitutes minimum compliance
with the evaluation standards.
(b) The performance indicators require
a DSU to provide information on
a variety of factors to enable the Secretary
to measure compliance with the
evaluation standards.
(c) The performance indicators are as
follows:
(1) Employment outcomes.
(i) Performance Indicator 1.1. The
number of individuals exiting the VR
program who achieved an employment
outcome during the current performance
period compared to the number of
individuals who exit the VR program
after achieving an employment outcome
during the previous performance
period.
(ii) Performance Indicator 1.2. Of all
individuals who exit the VR program
after receiving services, the percentage
who are determined to have achieved
an employment outcome.
(iii) Performance Indicator 1.3. Of all
individuals determined to have
achieved an employment outcome, the
percentage who exit the VR program in
competitive, self-, or BEP employment
with earnings equivalent to at least
the minimum wage.
(iv) Performance Indicator 1.4. Of all
individuals who exit the VR program in
competitive, self-, or BEP employment
with earnings equivalent to at least
the minimum wage, the percentage
who are individuals with significant
disabilities.
(v) Performance Indicator 1.5. The average

hourly earnings of all individuals
who exit the VR program in competitive,
self-, or BEP employment with
earnings levels equivalent to at least
the minimum wage as a ratio to the
State’s average hourly earnings for all
individuals in the State who are employed
(as derived from the Bureau of
Labor Statistics report ‘‘State Average
Annual Pay’’ for the most recent available
year).
(vi) Performance Indicator 1.6. Of all
individuals who exit the VR program in
competitive, self-, or BEP employment
with earnings equivalent to at least
the minimum wage, the difference between
the percentage who report their
own income as the largest single source
of economic support at the time they
exit the VR program and the percentage
who report their own income as the
largest single source of support at the
time they apply for VR services.
(2) Equal access to services.
(i) Performance Indicator 2.1. The service
rate for all individuals with disabilities
from minority backgrounds as a
ratio to the service rate for all non-minority
individuals with disabilities.
(Approved by the Office of Management and
Budget under control number 1820–0508.)
(Authority: 29 U.S.C. 726(a))

§ 361.86 Performance levels.
(a) General.
(1) Paragraph (b) of this section establishes
performance levels for—
(i) General or combined DSUs; and
(ii) DSUs serving exclusively individuals
who are visually impaired or
blind.
(2) The Secretary may establish, by
regulations, new performance levels.
(b) Performance levels for each performance
indicator.
(1)(i) The performance levels for Performance
Indicators 1.1 through 1.6
are—

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
Performance indicator
Performance level by type of DSU
General/Combined Blind
1.1 ..................................................................................
Equal or exceed previous performance period
.............................................................................................
.... Same.
1.2 ..................................................................................
55.8%
.............................................................................................
................................................................... 68.9%.
1.3 ..................................................................................
72.6%
.............................................................................................
................................................................... 35.4%.
1.4 ..................................................................................
62.4%
.............................................................................................
................................................................... 89.0%.
1.5 ..................................................................................
.52 (Ratio)
.............................................................................................
............................................................ .59.
1.6 ..................................................................................
53.0 (Math. Difference)
.............................................................................................
........................................ 30.4.
(ii) To achieve successful performance
on Evaluation Standard 1 (Employment
outcomes), a DSU must meet
or exceed the performance levels established
for four of the six performance
indicators in the evaluation standard,
including meeting or exceeding the
performance levels for two of the three
primary indicators (Performance Indicators
1.3, 1.4, and 1.5).
(2)(i) The performance level for Performance
Indicator 2.1 is—
Performance indicator Performance levels
2.1 ...................................................... .80 (Ratio).
(ii) To achieve successful performance
on Evaluation Standard 2 (Equal
access), DSUs must meet or exceed the
performance level established for Performance
Indicator 2.1 or meet the performance
requirement in paragraph
(2)(iii) of this section.
(iii) If a DSU’s performance does not
meet or exceed the performance level
required for Performance Indicator 2.1,
or if fewer than 100 individuals from a
minority population have exited the
VR program during the reporting period,
the DSU must describe the policies

it has adopted or will adopt and
the steps it has taken or will take to
ensure that individuals with disabilities
from minority backgrounds have
equal access to VR services.
(Authority: 29 U.S.C. 726(a))

§ 361.88 Reporting requirements.
(a) The Secretary requires that each
DSU report within 60 days after the end
of each fiscal year the extent to which
the State is in compliance with the
evaluation standards and performance
indicators and include in this report
the following RSA–911 data:
(1) The number of individuals who
exited the VR program in each closure
category as specified in the definition
of ‘‘Exit the VR program’’ under
§ 361.81.
(2) The number of individuals who
exited the VR program in competitive,
self-, or BEP employment with earnings
at or above the minimum wage.
(3) The number of individuals with
significant disabilities who exited the
VR program in competitive, self-, or
BEP employment with earnings at or
above the minimum wage.
(4) The weekly earnings and hours
worked of individuals who exited the
VR program in competitive, self-, or
BEP employment with earnings at or
above the minimum wage.
(5) The number of individuals who
exited the VR program in competitive,
self-, or BEP employment with earnings
at or above the minimum wage
whose primary source of support at the
time they applied for VR services was
‘‘personal income.’’
(6) The number of individuals who
exited the VR program in competitive,
self-, or BEP employment with earnings
at or above the minimum wage
whose primary source of support at closure
was ‘‘personal income.’’
(7) The number of individuals exiting
the VR program who are individuals
from a minority background.
(8) The number of non-minority individuals
exiting the VR program.
(9) The number of individuals from a
minority background exiting the VR
program after receiving services under

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
an IPE.
(10) The number of non-minority individuals
exiting the VR program after
receiving services under an IPE.
(b) In lieu of the report required in
paragraph (a) of this section, a DSU
may submit its RSA–911 data on tape,
diskette, or any alternative electronic
format that is compatible with RSA’s
capability to process such an alternative,
as long as the tape, diskette, or
alternative electronic format includes
the data that—
(1) Are required by paragraph (a)(1)
through (10) of this section; and
(2) Meet the requirements of paragraph
(c) of this section.
(c) Data reported by a DSU must be
valid, accurate, and in a consistent format.
If a DSU fails to submit data that
are valid, accurate, and in a consistent
format within the 60-day period, the
DSU must develop a program improvement
plan pursuant to § 361.89(a).
(Approved by the Office of Management and
Budget under control number 1820–0508.)
(Authority: 29 U.S.C. 726(b))

§ 361.89 Enforcement procedures.
(a) If a DSU fails to meet the established
performance levels on both evaluation
standards as required by
§ 361.82(b), the Secretary and the DSU
must jointly develop a program improvement
plan that outlines the specific
actions to be taken by the DSU to
improve program performance.
(b) In developing the program improvement
plan, the Secretary considers
all available data and information
related to the DSU’s performance.
(c) When a program improvement
plan is in effect, review of the plan is
conducted on a biannual basis. If necessary,
the Secretary may request that
a DSU make further revisions to the
plan to improve performance. If the
Secretary establishes new performance
levels under § 361.86(a)(2), the Secretary
and the DSU must jointly modify the
program improvement plan based on
the new performance levels. The Secretary
continues reviews and requests
revisions until the DSU sustains satisfactory
performance based on the current

performance levels over a period
of more than 1 year.
(d) If the Secretary determines that a
DSU with less than satisfactory performance
has failed to enter into a program
improvement plan or comply substantially
with the terms and conditions
of the program improvement
plan, the Secretary, consistent with
the procedures specified in § 361.11, reduces
or makes no further payments to
the DSU under this program until the
DSU has met one of these two requirements
or raised its subsequent performance
to meet the current overall
minimum satisfactory level on the
compliance indicators.
(Approved by the Office of Management and
Budget under control number 1820–0508.)
(Authority: 29 U.S.C. 726(b) and (c))

APPENDIX A TO PART 361—QUESTIONS
AND ANSWERS
The following questions and answers provide
a summary of some of the most common
and critical questions that we received regarding
this part 361 and the applicable responses.
As is evident from the responses, we
maintain that redefining the term ‘‘employment
outcome’’ for purposes of the VR program
to mean outcomes that occur in integrated
settings will promote the provision of
opportunities for all VR-eligible individuals
to pursue the types of jobs that generally are
available to the public.
Is Extended Employment Still a Legitimate
Employment Option?
Yes. Employment in a sheltered setting is
a legitimate and valuable employment option
for individuals with disabilities. Implementation
of these regulations will not
change that fact. Individuals still may
choose to pursue long-term extended employment
outside of the VR program, and
these regulations ensure that those individuals’
needs are met by requiring the VR
agency to make the necessary referral to
local extended employment providers.
Do the Regulations Restrict Individual Choice?
No. We interpret the concept of individual
choice in the Act as a choice among the employment
outcomes under the VR program
specified in the statute or by the Secretary
in regulations.
Extended employment (i.e., sheltered or

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Part 361 – STATE VOCATIONAL REHABILITATION SERVICES PROGRAM
non-integrated employment) remains both
an initial step toward achieving integrated
employment under the VR program and a
long-term employment option through
sources of support other than the VR program.
In recognizing that some individuals
with disabilities may wish to work in an extended
employment setting, these regulations
require the VR agency to ensure that
these individuals are afforded the opportunity
to do so by referring them to local extended
employment providers. Those providers
currently support the vast majority of
sheltered workers through non-VR program
resources. Moreover, persons wishing to prepare
for integrated employment by initially
working in an extended employment setting
also may do so. In these cases, the VR agency
cannot discontinue VR services until the
individual transitions to integrated work in
the community.
Can State Agencies Refuse To Serve Those With
the Most Significant Disabilities?
No. Both the Act and regulations guard
against that result. Persons with disabilities
may not be excluded from the VR program
based on an assumption or belief that the individual
is incapable of working in an integrated
setting. Rather, State units are required
to establish clear and convincing evidence
that an individual is incapable of
achieving an employment outcome, for purposes
of the VR program, and must conduct
a trial work assessment of the individual’s
abilities before it can refuse services to any
individual who it initially believes is incapable
of working in an intergrated job setting.
Are Homemaker and Unpaid Family Worker
Considered Employment Outcomes for Purposes
of the VR Program?
Yes. The chief purpose of the regulations is
to ensure that individuals with disabilities
participating in the VR program are able to
pursue the same type of employment opportunities
that are available to the general
public. Extended employment jobs, unlike
homemakers and unpaid family workers, are
primarily reserved for those with disabilities.
Will the Regulations Serve To Close Down
Sheltered Workshops?
No. Sheltered workshops are primarily
supported by other State, local, and private
resources and rely very little on VR program
funds. Persons who prefer to work in extended
employment on a long-term basis are
assured access to local extended employment

programs through the referral requirements
in the regulations. Also, those participants
in the VR program who can best prepare for
integrated employment by working in an extended
employment setting as part of a
training and assessment program are able to
follow that path as well. Thus, extended employment
programs and sheltered workshops
continue to serve essentially the same role
that they currently serve.
[66 FR 7253, Jan. 22, 2001]

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