[Federal Register: May 20, 1998 (Volume 63, Number 97)]
[Page 27805-27809]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

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Part III

Department of Education

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

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RIN 1820-ZA11

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

AGENCY: Office of Special Education and Rehabilitative Services, 
Department of Education.

ACTION: Notice of proposed priority and definitions for fiscal year 
(FY) 1998 and subsequent years.


SUMMARY: The Secretary proposes a priority for fiscal year (FY) 1998 
and subsequent years under section 12(a)(3) of the Rehabilitation Act 
of 1973, as amended (the Act) (29 U.S.C. 762(b)(3)), authorizing the 
conduct of special projects and demonstrations in carrying out the 
purposes of the Act. The priority would support five-year projects to 
expand employment outcomes for individuals with mental or physical 
disabilities, or both, who receive public support. The priority is 
intended to enhance collaboration in existing systems to increase 
competitive employment opportunities for individuals with disabilities 
who are participants in public support programs funded by Federal, 
State, and local agencies.

DATES: Comments must be received by the Department on or before June 
19, 1998.

ADDRESSES: All comments concerning this proposed priority should be 
addressed to Dr. Thomas Finch, U.S. Department of Education, 600 
Independence Avenue, SW., Room 3038, MES Building, Washington, DC. 
20202-2650. Comments may also be sent through the Internet to: 
    You must include the term ``Systems-Change Projects'' in the 
subject line of your electronic message.

FOR FURTHER INFORMATION CONTACT: Pedro Romero, U.S. Department of 
Education, 600 Independence Avenue, SW., Room 3316, MES Building, 
Washington, DC. 20202-2650. Telephone: (202) 205-9797. Individuals who 
use a telecommunications device for the deaf (TDD) may call the Federal 
Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8 
p.m., Eastern time, Monday through Friday.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 

Electronic Access to This Document

    Anyone may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or 
portable document format (pdf) on the World Wide Web at either of the 
following sites:


To use the pdf you must have the Adobe Acrobat Reader Program with 
Search, which is available free at either of the previous sites. If you 
have questions about using the pdf, call the U.S. Government Printing 
Office toll free at 1-888-293-6498.
    Anyone may also view these documents in text copy only on an 
electronic bulletin board of the Department. Telephone: (202) 219-1511 
or, toll free, 1-800-222-4922. The documents are located under option 
G--Files/Announcements, Bulletins and Press Releases.

    Note: The official version of this document is the document 
published in the Federal Register.

Goals 2000: Educate America Act

    The Goals 2000: Educate America Act (Goals 2000) focuses the 
Nation's education reform efforts on the eight National Education Goals 
and provides a framework for meeting them. Goals 2000 promotes new 
partnerships to strengthen schools and expands the Department's 
capacities for helping communities to exchange ideas and obtain 
information needed to achieve the goals.
    This proposed priority would address the National Education Goal 
that every adult American, including individuals with disabilities, 
will possess the knowledge and skills necessary to compete in a global 
economy and exercise the rights and responsibilities of citizenship.
    The Secretary will announce the final priority in a notice in the 
Federal Register. The final priority will be determined by responses to 
this notice, available funds, and other considerations. Funding of 
particular projects depends on the availability of funds, the nature of 
the final priority, and the quality of the applications received. The 
publication of this proposed priority does not preclude the Secretary 
from proposing or funding additional priorities, subject to meeting 
applicable rulemaking requirements.

    Note: This notice of proposed priority does not solicit 
applications. In any year in which the Secretary chooses to use this 
proposed priority, the Secretary invites applications through a 
notice in the Federal Register.



    According to the 1994 Harris Survey of Americans with Disabilities, 
two-thirds of individuals with disabilities between the ages of 16 and 
64 are not working. Many of these individuals receive financial support 
or services through programs funded by Federal, State, and local 
agencies. Examples of these programs include Temporary Aid to Needy 
Families (TANF), Supplemental Security Income (SSI), Social Security 
Disability Income (SSDI), Medicaid (including Medicaid waiver 
programs), Medicare, subsidized housing, and food stamps.
    Statistical data reveal that of the 32 percent of adult recipients 
of Aid to Families with Dependent Children (AFDC) who had a work or 
functional disability, 15 percent were able to work despite their 
functional limitations (National Health Interview Survey on Disability, 
U.S. Department of Health and Human Services, 1994). Studies conducted 
in Kansas and Washington indicate that up to 60 percent of the current 
TANF recipients in those States have some type of disability. At the 
same time, the TANF program requires recipients to work and also limits 
the length of TANF assistance--recent developments that further 
underscore the need to reduce barriers to employment confronted by 
individuals with disabilities on public support.
    In addition, the proportion of individuals with disabilities 
receiving public support through SSI or SSDI continues to increase. 
Over the past decade, the total number of SSI and SSDI beneficiaries 
has doubled, and cash payments for these individuals increased to over 
$55 billion (World Institute on Disability, 1996). Social Security 
recipients often do not work since they would lose their Social 
Security and Medicaid benefits if their earnings increased beyond a 
threshold level. Thus, few individuals leave the Social Security 
system. New adult SSI recipients receive benefits for an average of 10 
years, whereas individuals who receive SSI benefits as children remain 
on the rolls for an average of approximately 27 years (Rupp and Scott, 
    Many individuals participating in public support programs, 
including the programs discussed previously, are unable to obtain the 
services or supports they need to become competitively employed and 
achieve economic independence. Employment training

[[Page 27807]]

programs that serve the general population, as well as employers 
themselves, are often unable to meet the specialized needs of these 
individuals. In addition, individuals with disabilities who are not 
eligible for State vocational rehabilitation services, or who do not 
believe that they need a comprehensive rehabilitation program, are 
still unlikely to receive work-related services from employment 
training programs that serve the general population. Consequently, many 
individuals with disabilities who are capable of working essentially 
``fall between the cracks.'' The Secretary expects that the models 
developed under the proposed priority will demonstrate how employment 
training and other related programs can more effectively coordinate 
services so that individuals with disabilities can obtain employment.
    Seventy-nine percent of unemployed individuals with disabilities 
have indicated that they would prefer to be working (Harris Survey, 
1994). The combination of the high costs associated with living with a 
disability, work-related expenses, and the reduction in public supports 
available to persons once they become employed often dissuade 
individuals with disabilities from pursuing competitive work. Some of 
the specific barriers to the employment that individuals with 
disabilities commonly confront include--
    * Lack of adequate health insurance (e.g., individuals' fear
of losing public health care coverage, inability to obtain private 
medical insurance, or limited access to treatment and prescription 
    * Underutilization of existing work incentives from Social
Security and other State and local agencies (e.g., Plan for Achieving 
Self Support (PASS), and Impairment Related Work Expenses, section 
1619a and b of the Social Security Act);
    * Lack of affordable, accessible housing and transportation;
    * Insufficient education and training services;
    * Lack of child care;
    * Inadequate supports for employees with disabilities (e.g.,
onsite and offsite job accommodations and long-term follow-along 
services); and
    * Inadequate supports for employers (e.g., incentives for
hiring, retaining, and promoting individuals with disabilities and 
technical assistance and follow-along consultation to assist employers 
in addressing the ongoing needs of employees with disabilities and to 
clarify employer misperceptions and misinformation).
    Lack of information and coordination of public support programs can 
cause program-related barriers that inhibit individuals with 
disabilities from effectively using available services. In many 
instances, individuals with disabilities are simply unaware of existing 
employment-related programs, work incentives, or available services. 
Another common barrier is the lack of coordination between separate 
programs with separate eligibility criteria even though the same 
individuals often require services from each program. The Secretary 
expects projects to address these types of program-related barriers, as 
well as any other type of barrier that impedes individuals with 
disabilities from becoming employed and self-sufficient.
    There is a critical need for greater coordination between multiple 
public programs that support individuals with disabilities that would 
foster increased economic self-sufficiency and a more efficient use of 
public resources. In an effort to address this need, the Secretary 
proposes the following priority in order to provide a framework for 
assisting individuals with disabilities to reduce their reliance on 
various public support programs and obtain and maintain employment in 
the competitive labor market.
    The requirements in the priority are designed to facilitate 
systems-change projects that eliminate barriers to employment for 
individuals with disabilities and are based on existing studies and 
reports, the experiences of State vocational rehabilitation agencies in 
working with individuals participating in other public support 
programs, and on information provided by other Federal agencies that 
administer disability-related programs. These Federal agencies were 
particularly helpful in assisting the Secretary to identify the 
employment-related barriers confronted by individuals with disabilities 
that the Secretary proposes to target through this priority and to 
identify the types of State agencies whose participation in the project 
would be most critical to eliminating those barriers. The identified 
State agencies would serve as members of a consortium that the systems-
change project would establish under paragraph (A) of the priority.
    The Secretary emphasizes that the model systems-change projects 
that would be supported under this priority are part of a larger effort 
on the part of the Federal Government to create a coordinated and 
aggressive national policy to reduce the unemployment rate of 
individuals with disabilities and to assist those individuals in 
obtaining competitive jobs. This effort is directly reflected in 
Executive Order 13078, signed on March 13, 1998, entitled ``Increasing 
Employment of Adults With Disabilities'' (63 FR 13111, March 18, 1998). 
For example, Executive Order 13078, in part, calls for an analysis of 
existing programs and policies to determine what modifications and 
innovations may be necessary to remove work-related barriers 
experienced by individuals with disabilities; the development and 
recommendation of options for eliminating barriers to health insurance 
coverage for those with disabilities; and an analysis of work-related 
youth programs and the outcomes of these programs for young people with 
disabilities. The Secretary proposes the following priority as one 
means of addressing the purposes of Executive Order 13078. As other 
Federal agencies design and carry out activities in response to the 
Executive order, it is expected that many of those activities will 
complement the systems-change projects funded under this priority.
    The Secretary also emphasizes the need for projects supported under 
this priority to begin implementing strategies for removing barriers 
early in the project period in order for the project to have a 
measurable effect on the rate by which individuals with disabilities 
become competitively employed. For that reason, the Secretary expects 
project recipients to work with Rehabilitation Services Administration 
staff to ensure that planning steps, including development of 
partnership agreements and, if appropriate, submission of Medicaid 
waiver requests under paragraph (C) of the priority, are promptly 
completed and that projects begin implementing their barrier-removal 
strategies as soon as possible.
    The purpose of the proposed absolute priority is to establish five-
year model demonstration projects that stimulate and advance systems-
change in order to expand employment outcomes for individuals with 
mental or physical disabilities, or both, who are participants in 
Federal, State, and local public support programs (e.g., TANF, SSI, 
SSDI, Medicaid, Medicare, subsidized housing, and food stamps, etc.)

Absolute Priority

    Under 34 CFR 75.105(c)(3) and section 12(a)(3) of the Act, the 
Secretary proposes to give an absolute preference to applications that 
meet the following priority. The Secretary proposes to fund under this 
competition only applications that meet this absolute priority:

[[Page 27808]]

A. General Requirements for Applicants

    Applicants under this priority shall satisfy the following 
    (1) Applicants shall form a consortium of, at a minimum, the State 
vocational rehabilitation agency, the State welfare agency, the State 
educational agency, the State agency responsible for administering the 
Medicaid program, and an agency administering an employment or 
employment training program supported by the U.S. Department of Labor. 
Additional entities (e.g., public and private nonprofit organizations) 
that could effectively assist in removing barriers to employment for 
individuals with disabilities also may be included as part of the 
    (2) The members of the consortium shall either designate one of 
their members to apply for the grant or establish a separate, eligible 
legal entity to apply for the grant. The designated applicant shall 
serve as the grantee and be legally responsible for the use of all 
grant funds, overall fiscal and programmatic oversight of the project, 
and for ensuring that the project is carried out by consortium members 
in accordance with Federal requirements.
    (3) Consortium members shall be substantially involved in the 
development of the application. Each consortium member's advisory 
council, if the member has such a council, shall also participate in 
the development of the application.
    (4) The members of the consortium shall enter into an agreement 
that details the activities that each member plans to perform and that 
binds each member to the statements and assurances included in the 
application. Each member is legally responsible for carrying out the 
activities it agrees to perform and for using the funds that it 
receives under the agreement in accordance with Federal requirements 
that apply to the grant. The agreement must be submitted as part of the 
    (5) The application submitted under this priority also must 
identify the specific locality or region that would be served by the 

B. Project Objectives

    Projects supported under this priority must--
    (1) Identify systemic barriers, including State or local agency 
policies, practices, procedures, or rules that inhibit individuals with 
disabilities who are participants in public support programs from 
becoming employed.
    (2) Develop and implement replicable strategies to remove 
identified barriers, including, at a minimum, strategies for--
    (a) Establishing effective collaborative working relationships 
among project consortium members and their partners as described in 
paragraph (C)(1) of this priority (e.g., providing interagency staff 
training and technical assistance on program requirements and services 
or collaboratively using labor market and job vacancy information);
    (b) Establishing coordinated service delivery systems (e.g., common 
intake and referral procedures, customer databases, and resource 
information) and developing innovative services and service approaches 
that address service gaps (e.g., developing employee and employer 
support networks);
    (c) Improving access to health insurance for individuals with 
disabilities who become employed;
    (d) Increasing the use of existing resources by State and local 
agencies (e.g., Medicaid waivers, Home Community Based Services 
waivers, Job Training Partnership Act income exemptions, and work 
incentive provisions such as Plan for Achieving Self Support);
    (3) Design and implement an internal evaluation plan for which--
    (a) The methods of evaluation are thorough, feasible, and 
appropriate to the goals, objectives, and outcomes of the project;
    (b) The methods of evaluation provide for examining the 
effectiveness of project implementation strategies;
    (c) The methods of evaluation include the use of objective 
performance measures that are clearly related to the intended outcomes 
of the project and will produce quantitative and qualitative data to 
the extent possible;
    (d) The methods of evaluation will provide performance feedback and 
permit periodic assessment of progress toward achieving intended 
outcomes; and
    (e) The evaluation will provide guidance about effective strategies 
suitable for replication or testing in other settings; and
    (4) Disseminate information on effective systems-change approaches 
developed under these projects to Federal, State, and local 
stakeholders and facilitate the use of systems-change models in other 
geographic areas. As examples, consortia may make presentations before 
national, State, or local conferences, consult with and provide 
technical assistance to other States or localities, develop Internet 
web sites, and distribute project publications.

C. Project Requirements

    In carrying out the priority, the projects must--
    (1) Develop partnership agreements, as described under DEFINITIONS, 
with the local district offices of the Social Security Administration; 
the State agency or agencies responsible for mental retardation, 
developmental disabilities, and mental health services; existing 
transportation or paratransit service providers; and appropriate public 
and private sector employers. Partnerships also may be formed with 
other appropriate entities identified by the consortium, including, but 
not limited to, Centers for Independent Living, consumer advocacy 
organizations, economic development councils, Private Industry 
Councils, Governor's committees on the employment of persons with 
disabilities, developmental disabilities councils, mental health 
centers, community rehabilitation programs, Indian Tribes, labor 
unions, and employment and training organizations funded by the U.S. 
Department of Labor;
    (2) Make timely, formal requests for Medicaid waivers if necessary 
for projects to be able to implement developed strategies;
    (3) Implement, in a timely manner, the strategies developed by the 
project to expand employment outcomes for individuals with mental or 
physical disabilities, or both;
    (4) Participate, as appropriate, in meetings of a Federal 
Interagency Employment Initiative Workgroup and inform workgroup 
members of project activities; and
    (5) Participate in, and provide data for, an external evaluation of 
the systems-change projects as directed by the Commissioner of the 
Rehabilitation Services Administration. The evaluation would examine--
(a) The effect of specific innovative systems-change approaches and 
strategies on State or local agency policies, practices, or rules 
affecting the employment of individuals with disabilities; (b) The 
effect of specific innovative systems-change approaches and strategies 
on increasing the number of individuals with disabilities who obtain 
competitive employment, including job retention, promotion, 
satisfaction, and wage growth; and (c) The cost effectiveness of 
employment supports and services implemented by the project.

Proposed Definitions

    Consortium means a group of eligible parties formed by the 
applicant seeking a Federal award under this priority. Members of the 
consortium shall enter

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into an agreement and carry out their responsibilities consistent with 
the requirements in paragraph (A) of the priority. Members of the 
consortium shall also ensure that project partners carry out their 
agreed-upon activities.
    Disability with respect to an individual means a physical or mental 
impairment that substantially limits one or more of the major life 
activities of that individual, having a record of such an impairment, 
or being regarded as having such an impairment.
    Locality means specific geographical areas within a State or 
    Partner means an entity with which the consortium has entered into 
an agreement to carry out specific activities, goals, and objectives of 
the project.
    Partnership agreement means a written arrangement between a 
consortium and its partners to carry out specific activities related to 
the project.
    Public Support means Federal, State, and local public programs that 
provide resources or services to individuals with disabilities. These 
programs include, but are not limited to, Temporary Aid to Needy 
Families (TANF), Supplemental Security Income (SSI), Social Security 
Disability Income (SSDI), Medicaid (including Medicaid waiver 
programs), Medicare, subsidized housing, and food stamps.
    Region means two or more States participating in the project.

Selection Criteria

    In evaluating an application for a new grant under this 
competition, the Secretary uses selection criteria chosen from the 
general selection criteria in Sec. 75.210 of the Education Department 
General Administrative Regulations. The selection criteria to be used 
for this competition will be provided in the application package for 
this competition.

Executive Order 12866

    This proposed priority has been reviewed in accordance with 
Executive Order 12866. Under the terms of the order the Secretary has 
assessed the potential costs and benefits of this regulatory action.
    The Secretary has determined that there are no costs associated 
with this priority. Announcement of the priority would not result in 
costs to State and local governments, recipients of grant funds, or to 
individuals with disabilities and their families. The benefit from this 
priority would be to focus activities and Federal assistance on 
increasing competitive employment outcomes for individuals with 
disabilities who are participants in public support programs through 
enhanced collaboration and coordination.
    The Secretary has also determined that this regulatory action does 
not unduly interfere with State, local, and tribal governments in the 
exercise of their governmental functions.
    To assist the Department in complying with the specific 
requirements of Executive Order 12866, the Secretary invites comment on 
whether there may be opportunities to increase potential benefits 
resulting from this proposed priority without impeding the effective 
and efficient administration of the program.

Intergovernmental Review

    This program is subject to the requirements of Executive Order 
12372 and the regulations in 34 CFR part 79. The objective of the 
Executive order is to foster an intergovernmental partnership and a 
strengthened federalism by relying on processes developed by State and 
local governments for coordination and review of proposed Federal 
financial assistance.
    In accordance with the order, this document is intended to provide 
early notification of the Department's specific plans and actions for 
this program.

Invitation To Comment

    Interested persons are invited to submit comments and 
recommendations regarding this proposed priority. The Secretary is 
particularly interested in receiving comments on the composition of the 
consortium and other consortium requirements. In addition, the 
Secretary invites comment on whether it is appropriate or feasible for 
a consortium to serve more than one State.
    All comments submitted in response to this proposed priority will 
be available for public inspection, during and after the comment 
period, in Room 3038, MES Building, 330 C Street, S.W., Washington, DC, 
between the hours of 8:30 a.m. and 4:00 p.m., Eastern time, Monday 
through Friday of each week except Federal holidays.
    On request the Department supplies an appropriate aid, such as a 
reader or print magnifier, to an individual with a disability who needs 
assistance to review the comments or other documents in the public 
rulemaking docket for this proposed priority. An individual with a 
disability who wants to schedule an appointment for this type of aid 
may call (202) 205-8113 or (202) 260-9895. An individual who uses a TDD 
may call the Federal Information Relay Service at 1-800-877-8339 
between 8 a.m. and 8 p.m., Eastern time, Monday through Friday.

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

(Catalog of Federal Domestic Assistance Number has not been 

    Dated: March 24, 1998.
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 98-13398 Filed 5-19-98; 8:45 am]