[Federal Register Volume 62, Number 25 (Thursday, February 6, 1997)]
[Rules and Regulations]
[Pages 5684-5692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2834]



[[Page 5683]]

_______________________________________________________________________

Part II





Department of Education





_______________________________________________________________________



34 CFR Part 379



Projects With Industry: Final Rule and Fiscal Year 1997 Award 
Applications, Notice

  Federal Register / Vol. 62, No. 25 / Thursday, February 6, 1997 / 
Rules and Regulations  

[[Page 5684]]



DEPARTMENT OF EDUCATION

34 CFR Part 379

RIN 1820-AB33


Projects With Industry

AGENCY: Department of Education.

ACTION: Final regulations.

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SUMMARY: The Secretary amends the regulations governing the Projects 
With Industry (PWI) program to clarify statutory intent, reduce grantee 
burden, address certain implementation problems, and enhance project 
accountability.

EFFECTIVE DATE: These regulations take effect March 10, 1997.

FOR FURTHER INFORMATION CONTACT: Thomas E. Finch, U.S. Department of 
Education, 600 Independence Avenue, SW., Room 3315, Mary E. Switzer 
Building, Washington, DC 20202-2575. Telephone: (202) 205-8292. 
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.

SUPPLEMENTARY INFORMATION: The PWI program is authorized by section 621 
of the Rehabilitation Act of 1973, as amended (the Act). The purpose of 
the PWI program is to create and expand job and career opportunities 
for individuals with disabilities in the competitive labor market by 
establishing partnerships between program grantees and private industry 
to provide job training, job placement, and career advancement 
activities.
    On January 22, 1996, the Secretary published a notice of proposed 
rulemaking (NPRM) for this program in the Federal Register (61 FR 
1672). The major issues related to this program are discussed in 
greater detail in the preamble to the NPRM.
    The significant changes made in these final regulations from the 
NPRM include revision of the definitions of ``placement,'' 
``competitive employment,'' and ``integrated setting,'' as well as an 
additional application content requirement for a description of career 
advancement services. These changes are discussed in detail in the 
analysis of comments section of the preamble to the final regulations.
    The Secretary invited comments on changes needed to improve the 
compliance indicators in the NPRM, but has made no changes to the 
indicators in these final regulations. The comments provided in 
response to the NPRM, as well as the comments provided by interested 
parties in subsequent follow-up meetings held by the Rehabilitation 
Services Administration (RSA), will be used by the Department in 
determining what changes to make to the compliance indicators. The 
Secretary expects to propose specific revisions to the PWI compliance 
indicators in the near future.

Goals 2000: Educate America Act

    The Goals 2000: Educate America Act (Goals 2000) focuses the 
Nation's education reform efforts on the eight National Education Goals 
and provides a framework for meeting them. Goals 2000 promotes new 
partnerships to strengthen schools and expands the Department's 
capacities for helping communities to exchange ideas and obtain 
information needed to achieve the goals.
    These regulations address the National Education Goal that every 
adult American will possess the knowledge and skills necessary to 
compete in a global economy and exercise the rights and 
responsibilities of citizenship.

Executive Order 12866

Assessment of Costs and Benefits

    These final regulations have been reviewed in accordance with 
Executive Order 12866. Under the terms of the order the Secretary has 
assessed the potential costs and benefits of this regulatory action.
    The potential costs associated with the final regulations are those 
resulting from statutory requirements and those determined by the 
Secretary as necessary for administering this program effectively and 
efficiently.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of these final regulations, the Secretary has 
determined that the benefits of the final regulations justify the 
costs.
    The Secretary has also determined that this regulatory action does 
not unduly interfere with State, local, and tribal governments in the 
exercise of their governmental functions.

Summary of Potential Costs and Benefits

    The potential costs and benefits of these final regulations were 
discussed in the preamble to the NPRM under the following headings: 
More Accurate Reflection of Statutory Requirements, Reduction of 
Grantee Burden, and Clarification of Program Requirements (61 FR 1677).

Analysis of Comments and Changes

    In response to the Secretary's invitation in the NPRM, 87 parties 
submitted comments on the proposed regulations. An analysis of the 
comments and of the changes in the regulations since publication of the 
NPRM follows.
    The comments have been grouped according to subject, with 
appropriate references to sections of the regulations. Technical and 
other minor changes--and suggested changes the Secretary is not legally 
authorized to make under the applicable statutory authority--are not 
addressed.

Section 379.3  Eligibility for Services

    Comments: Several commenters recommended alternative procedures for 
determining eligibility for PWI services other than those specified in 
the NPRM. One commenter wanted eligibility to be determined jointly by 
the State vocational rehabilitation (VR) agency, the PWI grantee, and 
the individual seeking PWI services. Another commenter stated that only 
the VR agency or its designee should make eligibility determinations. 
Another commenter wanted PWI grantees to be allowed to determine 
eligibility for PWI services without VR agency review. Another 
commenter wanted the final regulations to clarify that a PWI grantee is 
responsible for making eligibility determinations even if the grant is 
sub-contracted to another organization. A final commenter raised 
concerns that some VR agencies do not respond to initial or preliminary 
determinations of eligibility made by PWI grantees.
    Discussion: Section 621(a)(3) of the Act prescribes the manner in 
which eligibility for PWI services is to be determined. The VR agency 
is initially authorized to make eligibility determinations in this 
program, but if the VR agency fails to act, either by not making a 
determination or failing to disagree within 60 days with a preliminary 
determination of eligibility made by the PWI grantee, then the PWI 
grantee can determine eligibility. There is no legal authority to 
substitute a different eligibility determination process in the 
regulations. Under the Department's grants regulations, grantees are 
held responsible for all aspects of their project operations, even if 
they subcontract project activities. Finally, the regulations address 
concerns that some VR agencies do not respond to preliminary PWI 
eligibility determinations by providing, consistent with the statute, 
that if the VR agency fails to act within 60 days, then the preliminary 
PWI eligibility

[[Page 5685]]

determination becomes a final determination.
    Changes: The Secretary has revised the explanatory material in the 
note following this section to clarify that if the VR agency has 
referred an individual to a PWI project for services, then the VR 
agency has already determined that the individual is eligible for 
project services. In other instances, the PWI grantee makes an initial 
determination of eligibility that becomes final if not countermanded by 
the VR agency within 60 days.

Section 379.5  Definitions

Section 379.5(b)(2)(ii)  Definition of ``Competitive Employment''--
Prevailing Community Wage Requirement
    Comments: Several commenters opposed the requirement in the 
proposed regulations that individuals in competitive employment earn at 
least the prevailing wage for the same or similar work in the local 
community performed by non-disabled individuals. Eight commenters 
believed that it would be unduly burdensome for grantees to ascertain 
the relevant prevailing wage given the potential differences in wages 
provided by employers within the same community. A few commenters 
stated that prevailing community wage rates are sometimes inflated and 
that many job-seekers are unsuccessful in finding employment at the 
prevailing community wage. Several commenters recommended that the 
final regulations require only that the minimum wage be paid and that 
PWI participants be afforded the same terms and benefits provided to 
non-disabled co-workers in similar jobs, consistent with section 621(b) 
(1) and (2) of the Act. Other commenters recommended that the wage 
standard should be one of parity with the wages paid by the same 
employer to non-disabled workers doing the same or similar job.
    Discussion: The Secretary agrees that requiring individuals placed 
by the PWI program into competitive employment to earn at least the 
prevailing wage for the same or similar work in the local community 
performed by non-disabled individuals is unduly restrictive and 
potentially burdensome. The Secretary also agrees that a more 
reasonable wage standard is one that is employer-based rather than 
community-based and that requires equity in wage and terms and benefits 
(e.g., insurance premiums, retirement contributions) with non-disabled 
workers.
    Changes: The Secretary has amended Sec. 379.5(b)(2)(ii) to define 
``competitive work,'' in part, as work for which an individual earns at 
least the minimum wage but not less than the customary or usual wage 
and terms and benefits provided by the same employer to non-disabled 
workers who perform the same or similar work.

Section 379.5(b)(3) Definition of Integrated Setting, as Part of the 
Definition of ``Competitive Employment''

    Comments: Several commenters were concerned that the proposed 
standard for integration in competitive employment (the opportunity for 
interaction with non-disabled individuals at the work site) would 
preclude certain kinds of employment outcomes from the scope of 
competitive employment. Specifically, the commenters identified self-
employment, home-based employment, and various forms of telecommuting 
as examples of employment outcomes that are competitive, but are not 
located in integrated settings. These commenters stated that these 
employment options should be available to individuals with disabilities 
served by the PWI program to the same extent that they are available to 
non-disabled persons. Other commenters stated that individuals in 
competitive employment should be required to interact with non-disabled 
persons only to the extent that non-disabled persons in similar 
positions interact with others.
    Discussion: The Secretary agrees with those commenters who contend 
that the best measure of integration in an employment setting for 
individuals with disabilities is to require parity with the integration 
experienced by non-disabled workers in similar positions. The Secretary 
also believes that interaction between individuals with disabilities 
and non-disabled persons need not be face-to-face in order to meet this 
standard. Individuals with disabilities under the PWI program who are 
self-employed or who telecommute may interact regularly with non-
disabled persons through a variety of mediums (e.g., telephone, 
facsimile, or computer). Self-employment, home-based employment, and 
other forms of employment in which individuals communicate regularly 
from separate locations, therefore, would satisfy the integration 
requirement of competitive employment as long as the individual 
interacts with non-disabled persons, other than service providers, to 
the same extent as a non-disabled person in a comparable job.
    Changes: The Secretary has revised Sec. 379.5(b)(3) to establish a 
standard of integration for individuals in competitive employment that 
is based on ensuring the same level of interaction with non-disabled 
persons as that experienced by a non-disabled worker in the same or 
similar job.

Section 379.5(b)(5) Definition of ``Job Training''

    Comments: One commenter recommended the inclusion of pre-employment 
planning under the definition of job training. Another commenter 
recommended expanding the definition of job training to include social 
preparation for individuals interviewing for jobs. Ten commenters 
recommended deleting the phrase ``provided prior to placement'' because 
the phrase excludes training by employers or other entities after 
placement. Two commenters recommended that attitudinal change training 
be provided for employers under the definition of training. Four 
commenters recommended that training be provided in an integrated 
setting. Other commenters underscored the need for specific input on 
the part of the Business Advisory Committee (BAC) in identifying and 
prescribing training needs. Still other commenters stated that the 
responsibility for defining the parameters of job training should be 
the domain of the BAC. Another commenter stated that the emphasis on 
skills training is contrary to current trends of ``one-stop career 
centers'' and expressed doubts as to whether grantees have adequate 
resources and expertise to provide job skills training.
    Discussion: The Secretary believes that the final regulations give 
projects sufficient flexibility to provide pre-employment planning and 
interview preparation if these services are deemed necessary. However, 
the Secretary believes that these activities fall under the definition 
of job readiness training in Sec. 379.5(b)(4), rather than the 
definition of job training under this section. The Secretary also 
believes that attitudinal change training for employers is an 
authorized activity under the PWI program, but does not believe it 
falls within the scope of job training, as it is defined in this 
section.
    While section 621(a)(2)(B) of the Act requires that training be 
provided in ``realistic work settings,'' the Secretary does not believe 
that this can be interpreted to require projects to provide training in 
an integrated setting. However, the Secretary encourages projects to 
ensure that training is provided in an integrated setting to the extent 
possible.
    The Secretary strongly agrees with the commenters who stated that 
the BAC should take an active role in prescribing training programs and 
notes that this is consistent with section 621(a)(2)(A)(iv)

[[Page 5686]]

of the Act, which states that the BAC shall ``prescribe training 
programs designed to develop appropriate job and career skills.'' The 
Secretary does not believe that the definition of job training in this 
section in any way weakens this statutory requirement.
    The Secretary notes the concern of some commenters that grantees 
may have insufficient resources to provide job training. The use of the 
BAC, other private industry expertise, and active collaboration with 
State VR agencies and other providers can supplement what individual 
projects may lack in terms of resources for job training.
    Changes: None.

Section 379.5(b)(7) Definition of ``Placement''

    Comments: One commenter recommended that the term ``placement'' be 
deleted throughout the regulations and replaced with the term ``PWI 
employment outcome.'' This commenter believed the use of the term 
``placement'' was confusing because the proposed definition includes 
two elements: (1) Attaining competitive employment and (2) maintaining 
it for a certain period.
    Other commenters were concerned about the proposed minimum 
retention period for maintaining competitive employment in order to 
have the employment outcome considered a placement for purposes of 
meeting the program compliance indicators. The NPRM proposed the option 
of using the duration of the employer's normal probationary period or, 
if the employer does not have an established probationary period, for 
at least 90 days. The current regulatory time period for maintaining 
employment is 60 days. These commenters stated that the use of a 
probationary period was problematical for a variety of reasons, such as 
(1) an employer's probationary period could be as short as two weeks, 
and that timeframe would be inadequate; (2) many employers no longer 
use probationary periods, so the option is not meaningful; and (3) if 
some employers have long probationary periods, some projects might be 
disinclined to place individuals with those employers. Some commenters 
argued for a uniform Federal standard in the regulations that would 
avoid variations among employers. Some of these commenters suggested 
that there be no change from the current retention period of 60 days. 
Other commenters recommended 90 days, 120 days, 180 days, or 12 months. 
Some commenters objected to any specific timeframe in the regulations 
and believed the retention period should be individually determined by 
the individual with a disability, the counselor, and the employer.
    Some commenters recommended that the phrase ``who has successfully 
completed training'' be deleted from the definition because the 
regulations recognize that not all persons served by a PWI project may 
need and, therefore, receive job training.
    Discussion: The Secretary does not believe the use of the term 
``placement,'' as defined in the regulations, is confusing. The PWI 
regulations for many years have defined ``placement'' to include a 
required period of time in which a competitive employment outcome must 
be maintained.
    The Secretary agrees with those commenters who believe the use of a 
probationary period option is problematical and that a uniform minimum 
retention period prescribed in the regulations is desirable. The 
Secretary also believes that the retention period should be longer than 
the 60 days required in the current regulations in order to ensure that 
the individual's employment remains stable. The Secretary has 
determined that 90 days is the minimum acceptable standard and that 
this lengthened time period will result in more successful placements. 
At the same time, however, the Secretary recognizes that in some 
instances 90 days may be too short a period to ensure job stability. 
Section 621(a)(2)(E) of the Act requires projects to provide any 
support services that may be required for an individual to maintain 
employment. Therefore, the Secretary encourages projects to make 
individualized determinations of whether to extend the 90-day period to 
conform with an employer's longer probationary period if, at the end of 
the 90 days, it is uncertain whether the individual will be able to 
successfully satisfy the probationary period without support services 
from the project.
    The Secretary also agrees that the phrase ``who has successfully 
completed training'' is inaccurate and should be removed from the 
definition because some project participants may not need job training.
    Changes: The Secretary has amended the definition of ``placement'' 
in the final regulations to provide for a minimum job retention period 
of 90 days and to substitute the phrase ``who has received services'' 
for the phrase ``who has successfully completed training.''

Section 379.10(a) Project Requirements Regarding Job Training and the 
Note to This Section

    Comments: One commenter recommended deletion of the last three 
sentences of the note, which specify that training provided after 
placement (i.e., attaining competitive employment and maintaining it 
for at least 90 days) or job-readiness training do not satisfy the 
requirement that projects provide job training. Another commenter 
suggested revising this requirement to allow projects the option of 
providing only job readiness training. Some commenters suggested that 
individual projects should have the responsibility of assessing each 
participant's training needs and how that training will be provided. 
Some commenters suggested that grantees should be allowed the 
flexibility to work with employers in order to provide training on the 
job. Some commenters questioned whether job training should be provided 
for all participants. Two commenters stated that all grantees should 
have an identifiable training component for individuals who lack job 
skills, but that all program participants should not be required to 
avail themselves of training. Other commenters mentioned the added 
costs of providing job training and asked whether grant awards should 
be increased to cover these costs.
    Discussion: The Secretary disagrees with the commenter who suggests 
deletion of the clarification in the note that training provided after 
placement and job readiness training do not by themselves satisfy the 
requirement in Sec. 379.10(a). In accordance with section 621(a)(2)(B) 
of the Act, projects are required to provide training in order to 
prepare the individuals for employment and career advancement in the 
competitive market. The Secretary, therefore, believes that projects 
should ensure that training, if deemed appropriate to the participant's 
needs, is provided either before the individual begins employment or 
within the first 90 days of employment (i.e., before the individual is 
considered placed in accordance with the definition of ``placement'' in 
Sec. 379.5(b)(7)). On-the-job training would meet the requirements of 
this section if the project ensures its provision and it is provided 
within the first 90 days of employment. The 90-day requirement, of 
course, does not apply to employed individuals who are receiving career 
advancement services from a PWI project.
    The Secretary also believes that the job training requirement is 
not met if a project provides only job readiness

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training. While job readiness training is an authorized activity under 
the PWI program, the Secretary believes that job readiness training 
alone does not meet the statutory requirement that projects provide 
training to prepare individuals for employment in the competitive labor 
market. The final regulations, like the NPRM, therefore contain 
separate definitions of ``job training'' and ``job readiness 
training.'' The Secretary agrees with those commenters who suggested 
that job training need not be provided to every participant. The 
language in this section requires that job training be provided ``if 
appropriate to the needs of each individual served by the project.'' 
However, the Secretary expects that every project will have a job 
training component (whether the training is provided on-site, through 
employers and other entities, or both), since a certain population of 
individuals will enter the program without the job skills necessary to 
be placed and advance in competitive employment.
    The Secretary notes the concern of commenters regarding the costs 
of providing job training. The Secretary believes the regulations give 
projects sufficient flexibility to arrange with employers and other 
entities to provide job training should they find that providing job 
training themselves is too costly or for other reasons is not feasible.
    Changes: The Secretary has added a statement to the note to 
emphasize that if a project arranges for the provision of job training 
by outside entities (e.g., an employer), the project must conduct 
appropriate follow-up measures to ensure that training is provided. The 
note is also amended to clarify that job training must be provided 
either prior to, or within 90 days of, attaining competitive employment 
and that job training provided by the employer after this 90-day 
period, therefore, does not meet the requirement of Sec. 379.10(a).

Section 379.21(a)(1)  Application Content Requirement Regarding Labor 
Market Analysis

    Comments: A number of commenters stated that a labor market 
analysis obligates applicants to predict for five years the training 
needs that will meet the demands of the labor market and that the labor 
market changes too rapidly for this to be accomplished. Other 
commenters recommended deleting the language regarding labor market 
analysis. Other commenters stated that individuals with disabilities 
may not fit appropriately into a market trend and may require 
individualized job matching. A commenter recommended that each 
application describe how existing labor market studies will be used in 
securing employment and validating training needs.
    Discussion: The Secretary does not intend to require the use of a 
particular tool (e.g., a labor market analysis) to identify the needs 
of the local labor market. If an applicant determines that a labor 
market analysis is inappropriate for the type of project being 
proposed, the applicant can choose a different method of identifying 
local labor market needs. The requirement in Sec. 379.21(a)(1) is 
intended to ensure that applicants have assessed labor market needs in 
the geographic area to be served and have designed their projects in 
accordance with the identified needs for people trained for specific 
occupations. Applicants can determine labor market needs by either 
performing their own labor market analyses or needs assessments in 
conjunction with private industry or by using existing current labor 
market analyses or needs assessments. The Secretary understands that 
local labor market needs may change during the five-year duration of 
the project and that these changes may, in some cases, necessitate 
adjustments in the project. However, the Secretary believes that this 
does not diminish the utility of an initial labor market analysis or 
needs assessment. The Secretary also believes that the identification 
of local labor market needs does not contravene the practice of 
individualized job-matching for individuals with disabilities.
    Changes: The Secretary has made minor changes to clarify that the 
applicant may comply with Sec. 379.21(a)(1) either by using an existing 
current labor market analysis or needs assessment or by performing a 
labor market analysis or needs assessment in conjunction with private 
industry.

Section 379.21(a)(4)  Application Content Requirement Concerning 
Unserved or Underserved Areas

    Comments: One commenter recommended that an applicant for a PWI 
grant be required to document geographic need through verification by 
the State VR agency. This commenter wanted to avoid duplication of 
awards and to ensure that services are provided in areas most in need.
    Discussion: The Secretary encourages all applicants to consult with 
the relevant State VR agency to ensure that services are to be provided 
in areas where individuals are unserved or underserved, but does not 
want to require this. It is the responsibility of each applicant to 
explain in its grant application how the geographic area it proposes to 
serve is unserved or underserved by the PWI program and to provide 
whatever justification it considers necessary to support its position.
    Changes: None.

Section 379.21(a)(7)  Requirement Concerning Career Advancement 
Services

    Comments: Some commenters suggested that career advancement 
services be addressed with an application content requirement rather 
than as a compliance indicator.
    Discussion: The 1992 Amendments to the Rehabilitation Act of 1973, 
as amended, added career advancement services to the range of services 
PWI projects are required to provide. In the NPRM, the Secretary 
solicited comments on how best to address the career advancement 
requirement. The Secretary agrees that an application content 
requirement is the best way to implement the career advancement 
services provision.
    Changes: In response to commenters' suggestions, the Secretary has 
added to this section the requirement that a grant application contain 
a description of how career advancement services will be provided to 
project participants.

Section 379.30  Recommendation of New Selection Criterion

    Comments: One commenter recommended that applicants under this 
program be required to include a plan for continuing the project after 
the Federal grant period has ended.
    Discussion: The Secretary finds no statutory basis, as exists for 
the recreation programs authorized under section 316 of the Act, for 
adding a criterion to require applicants to include a plan for 
continuation of the project after the Federal grant period has ended.
    Changes: None.

Section 379.30(a)(1) Selection Criterion: Extent of Need for Project--
Labor Market Analysis

    Comments: A number of commenters suggested alternative language to 
a ``labor market analysis'' and recommended tailoring a needs 
assessment to local communities rather than to the national or regional 
job market as implied by the term. Some commenters recommended that the 
phrase ``labor market analysis'' be deleted.
    Discussion: The Secretary intends, and the NPRM stated, that the 
applicant's labor market analysis or needs assessment be conducted 
``for the geographic area to be served.'' The Secretary does not intend 
by using the

[[Page 5688]]

term ``labor market analysis'' to require the applicant to conduct an 
analysis that is regional or national in scope. While the Secretary 
expects that projects once established should work with local 
businesses and the BAC to identify job opportunities for individuals 
with disabilities, the Secretary does not believe this action 
eliminates the need for an initial survey of local labor market needs. 
An initial labor market analysis or needs assessment demonstrates a 
need for the project and also enables the project to tailor its job 
training and services to the needs of the local labor market.
    Changes: The Secretary has made minor changes to clarify that the 
applicant may satisfy Sec. 379.30(a)(1) either by using an existing 
current labor market analysis or needs assessment or by performing a 
labor market analysis or needs assessment in conjunction with private 
industry.

Section 379.30(a)(2) Selection Criterion: Extent of Need for Project--
Labor Market Analysis

    Comments: None.
    Discussion: The Secretary believes the phrase ``occupations and 
occupational categories'' is more precise than ``industry or 
industries'' because it refers to a type of job or jobs for which 
participants are to be trained (e.g., computer programmer) rather than 
the industries in which they might be placed (e.g., the computer 
industry).
    Changes: The Secretary has amended Sec. 379.30(a)(2) in the final 
regulations to clarify that the job training to be provided must meet 
the identified needs for specific occupations or occupational 
categories in the geographic area to be served.

Section 379.41(a)(f)  Allowable Costs

    Comments: One commenter recommended specifying under this section 
on allowable costs that, if appropriate, grantees may modify facilities 
and equipment of employers. Another commenter recommended the addition 
of job modification and job development as allowable costs.
    Discussion: The Secretary agrees with the commenters that the costs 
of job development and modification and the costs of modifications of 
employer facilities or equipment to be used by PWI program participants 
should be specifically identified in the final regulations as 
permissible expenditures. This is consistent with language in 34 CFR 
379.10(d) (1) and (3), which requires grantees to undertake these 
activities, to the extent appropriate.
    Changes: The Secretary has amended Sec. 379.41(a) to include as 
allowable costs job development and modification and modifications for 
facilities and equipment of employers participating in the program.

Section 379.43 and Sec. 379.54(a)  Annual Evaluation Report and 
Compliance Indicator Data

    Comments: One commenter did not agree with the proposed requirement 
that projects submit annual evaluation report and compliance indicator 
data 60 days after the end of the project year.
    Discussion: The Secretary believes that the 60-day timeline is 
reasonable for submission of project evaluation and compliance 
indicator data in order to ensure timely receipt of project information 
and to increase program accountability. In addition, the Secretary has 
the option to extend this timeline for reasonable cause.
    Changes: None.

Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995, no persons are required 
to respond to a collection of information unless it displays a valid 
OMB control number. The valid OMB control number assigned to the 
collection of information in these final regulations is displayed at 
the end of the affected sections of the regulations.

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.

Assessment of Educational Impact

    In the notice of proposed rulemaking, the Secretary requested 
comments on whether the proposed regulations would require transmission 
of information that is being gathered by or is available from any other 
agency or authority of the United States.
    Based on the response to the proposed regulations and on its own 
review, the Department has determined that the regulations in this 
document do not require transmission of information that is being 
gathered by or is available from any other agency or authority of the 
United States.

List of Subjects in 34 CFR Part 379

    Education, Grant programs--education, Grant programs--social 
programs, Reporting and recordkeeping requirements, vocational 
rehabilitation.

    Dated: October 25, 1996.
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.
(Catalog of Federal Domestic Assistance Number 84.234 Projects With 
Industry)

    The Secretary amends Title 34 of the Code of Federal Regulations as 
follows:
    1. By revising part 379, subparts A through E, by revising the 
heading of subpart F, and by adding a new Sec. 379.54 in subpart F to 
read as follows:

PART 379--PROJECTS WITH INDUSTRY

Subpart A--General

Sec.
379.1  What is the Projects With Industry (PWI) program?
379.2  Who is eligible for a grant award under this program?
379.3  Who is eligible for services under this program?
379.4  What regulations apply?
379.5  What definitions apply?
Subpart B--What Kinds of Activities Does the Department of Education 
Assist Under This Program?
379.10  What types of project activities are required of each 
grantee under this program?
379.11  What additional types of project activities may be 
authorized under this program?

Subpart C--How Does One Apply for an Award?

379.20  How does an eligible entity apply for an award?
379.21  What is the content of an application for an award?

Subpart D--How Does the Secretary Make a Grant?

379.30  What selection criteria does the Secretary use under this 
program?
379.31  What other factors does the Secretary consider in reviewing 
an application?

Subpart E--What Conditions Must Be Met by a Grantee?

379.40  What are the matching requirements?
379.41  What are allowable costs?
379.42  What are the requirements for a continuation award?
379.43  What are the additional reporting requirements?

[[Page 5689]]

Subpart F--What Compliance Indicator Requirements Must a Grantee Meet 
To Receive Continuation Funding?
* * * * *
379.54  What are the reporting requirements for the compliance 
indicators?
* * * * *
    Authority: Sects. 12(c) and 621 of the Act; 29 U.S.C. 711(c) and 
795g, unless otherwise noted.

Subpart A--General


Sec. 379.1  What is the Projects With Industry (PWI) program?

    This program is designed to--
    (a) Create and expand job and career opportunities for individuals 
with disabilities in the competitive labor market by engaging the 
talent and leadership of private industry as partners in the 
rehabilitation process;
    (b) Identify competitive job and career opportunities and the 
skills needed to perform these jobs;
    (c) Create practical settings for job readiness and job training 
programs; and
    (d) Provide job placements and career advancement.

(Authority: Sect. 621(a)(1) of the Act; 29 U.S.C. 795g(a)(1))


Sec. 379.2  Who is eligible for a grant award under this program?

    (a) The Secretary may make a grant under this program to any--
    (1) Community rehabilitation program provider;
    (2) Designated State unit;
    (3) Employer;
    (4) Indian tribe or tribal organization;
    (5) Labor Union;
    (6) Nonprofit agency or organization;
    (7) Trade association; or
    (8) Other agency or organization with the capacity to create and 
expand job and career opportunities for individuals with disabilities.
    (b) New awards may be made only to those eligible entities 
identified in paragraph (a) of this section that propose to serve 
individuals with disabilities in States, portions of States, Indian 
tribes, or tribal organizations that are currently unserved or 
underserved by the PWI program.

(Authority: Section 621(a)(2) and 621(e)(2) of the Act; 29 U.S.C. 
795g(a)(2) and 795g(e)(2))


Sec. 379.3  Who is eligible for services under this program?

    (a) An individual is eligible for services under this program if 
the appropriate State vocational rehabilitation unit determines the 
individual to be an individual with a disability or an individual with 
a severe disability, as defined in sections 7(8)(A) and 7(15)(A), 
respectively, of the Act.
    (b) In making the determination under paragraph (a) of this 
section, the State vocational rehabilitation unit shall rely on the 
determination made by the recipient of the grant under which the 
services are provided, to the extent that the determination is 
appropriate, available, and consistent with the requirements of the 
Act.
    (c) If a State vocational rehabilitation unit does not notify a 
recipient of a grant within 60 days that the determination of the 
recipient is inappropriate, the recipient of the grant may consider the 
individual to be eligible for services.

(Authority: Sect. 621(a)(3) of the Act; 29 U.S.C. 795g(a)(3))

Appendix to Sec. 379.3

    The following guidance is provided regarding the determination 
of eligibility for PWI project services:
    (1) If an individual is referred to the PWI project by the State 
vocational rehabilitation (VR) unit and the individual has been 
determined by the State VR unit to be an ``individual with a 
disability'' under section 102(a)(1)(A) of the Act, then the PWI 
grantee may initiate services to that individual. In these 
instances, the State VR unit should provide documentation of this 
determination to the PWI grantee. If the State VR unit has 
determined that the individual also meets the definition of an 
``individual with a severe disability'' under section 7(15)(A) of 
the Act, the PWI grantee should be advised of that determination and 
provided appropriate documentation of that determination.
    (2) If an individual is not referred to the PWI project by the 
State VR unit, then the PWI grantee makes an initial or preliminary 
determination that the individual is eligible for services because 
the individual meets the definition of an ``individual with a 
disability'' or an ``individual with a severe disability.'' The 
State VR unit has a maximum of 60 days to assess the appropriateness 
of the preliminary determination. If the State VR unit does not 
decide that the preliminary eligibility determination is 
inappropriate within this time period, the eligibility determination 
becomes final.


Sec. 379.4  What regulations apply?

    The following regulations apply to the Projects With Industry 
program:
    (a) The regulations in this part 379; and
    (b) The regulations in 34 CFR part 369, except for the regulations 
in Secs. 369.30 and 369.31.

Authority: Sect. 621 of the Act; 29 U.S.C. 795g)


Sec. 379.5  What definitions apply?

    (a) The definitions in 34 CFR part 369 apply to this program.
    (b) The following definitions also apply to this program:
    (1) Career advancement services mean services that develop specific 
job skills beyond those required by the position currently held by an 
individual with a disability to assist the individual to compete for a 
promotion or achieve an advanced position.
    (2) Competitive employment, as the placement outcome under this 
program, 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 or usual wage and terms and 
benefits provided by the employer for the same or similar work 
performed by individuals who are not disabled.
    (3) Integrated setting, as part of the definition of competitive 
employment, means a setting typically found in the community in which 
individuals with disabilities interact with non-disabled individuals, 
other than non-disabled individuals who are providing services to them, 
to the same extent that non-disabled individuals in comparable 
positions interact with other persons.
    (4) Job readiness training, as used in Sec. 379.41(a), means--
    (i) Training in job-seeking skills;
    (ii) Training in the preparation of resumes or job applications;
    (iii) Training in interviewing skills;
    (iv) Participating in a job club; or
    (v) Other related activities that may assist an individual to 
secure competitive employment.
    (5) Job training, as used in this part, means one or more of the 
following training activities provided prior to placement, as that term 
is defined in Sec. 379.5(b)(7):
    (i) Occupational skills training.
    (ii) On-the-job training.
    (iii) Workplace training combined with related instruction.
    (iv) Job skill upgrading and retraining.
    (v) Training to enhance basic work skills and workplace 
competencies.
    (vi) On-site job coaching.
    (6) Person served means an individual for whom services by a PWI 
project have been initiated with the objective that those services will 
result in a placement in competitive employment.
    (7) Placement means the attainment of competitive employment by a 
person who has received services from a PWI project and has maintained 
employment for a period of at least 90 days.

(Authority: Sects. 12(c) and 621 of the Act; 29 U.S.C. 711(c) and 
795g)

[[Page 5690]]

Subpart B--What Kinds of Activities Does the Department of 
Education Assist Under This Program?


Sec. 379.10  What types of project activities are required of each 
grantee under this program?

    Each grantee under the PWI program shall--
    (a) Arrange for the provision of, or provide individuals with 
disabilities with, job training in a realistic work setting, if 
appropriate to the needs of the individual, in order to prepare 
individuals for employment and career advancement in the competitive 
labor market;
    (b) Provide individuals with disabilities with job placement and 
career advancement services;
    (c) Provide individuals with disabilities with supportive services 
that are necessary to permit them to maintain the employment and career 
advancement for which they have received training under this program;
    (d) To the extent appropriate, provide for--
    (1) The development and modification of jobs and careers to 
accommodate the special needs of the individuals with disabilities 
being trained and employed under this program;
    (2) The purchase and distribution of rehabilitation technology to 
meet the needs of individuals with disabilities at job sites; and
    (3) The modification of any facilities or equipment of the employer 
that are to be used by individuals with disabilities under this 
program; and
    (e) Provide for the establishment of a Business Advisory Council 
(BAC) comprised of representatives of private industry, business 
concerns, organized labor, and individuals with disabilities and their 
representatives who will identify job and career availability within 
the community, the skills necessary to perform those jobs and careers, 
and prescribe appropriate training programs.

Appendix to Sec. 379.10

    A PWI grantee can meet the requirements of Sec. 379.10(a) (1) by 
directly providing job training to project participants, (2) by 
arranging for the provision of this training by other entities and 
taking appropriate follow-up measures to ensure that the training 
is, in fact, provided, or (3) by a combination of both (1) and (2). 
The job training provided must meet the definition of job training 
in Sec. 379.5(b)(5) and must be provided as appropriate to the needs 
of each individual served by the project. Although each individual 
served by the project may not need job training, the Secretary 
expects that each PWI project will have an identifiable job training 
component that is available to those individuals who need it. In 
order to meet the requirements of Sec. 379.10(a), the job training 
must be provided while the individual is participating in the 
project (i.e. prior to, or within 90 days of, attaining competitive 
employment). Therefore, training provided by an employer more than 
90 days after the individual begins competitive employment would not 
meet this requirement. In addition, a project that provides only job 
readiness training, as defined in Sec. 379.5(b)(4), would not meet 
the requirements of Sec. 379.10(a).

(Authority: Sect. 621(a) of the Act; 29 U.S.C. 795g)


Sec. 379.11  What additional types of project activities may be 
authorized under this program?

    The Secretary may include, as part of grant agreements with 
recipients under this program, authority for recipients to provide the 
following types of technical assistance:
    (a) Assisting employers in hiring individuals with disabilities.
    (b) Improving or developing relationships between grant recipients 
or prospective grant recipients and employers or organized labor.
    (c) Assisting employers in understanding and meeting the 
requirements of the Americans with Disabilities Act of 1990 (42 U.S.C 
12101 et seq.) as that Act relates to employment of individuals with 
disabilities.

(Authority: Sect. 621(a) of the Act; 29 U.S.C 795g)

Subpart C--How Does One Apply for an Award?


Sec. 379.20  How does an eligible entity apply for an award?

    In order to apply for a grant, an eligible entity shall submit an 
application to the Secretary in response to an application notice 
published in the Federal Register.

(Approved by the Office of Management and Budget under control 
number 1820-0612.)

(Authority: Sec. 621(e)(1)(B) of the Act; 29 U.S.C. 795g(e)(1)(B))


Sec. 379.21  What is the content of an application for an award?

    (a) The grant application must include a description of--
    (1) The proposed job training to prepare project participants for 
specific jobs in the competitive labor market for which there is a need 
in the geographic area to be served by the project, as identified by an 
existing current labor market analysis or other needs assessment or one 
conducted by the applicant in collaboration with private industry;
    (2) The involvement of private industry in the design of the 
proposed project and the manner in which the project will collaborate 
with private industry in planning, implementing, and evaluating job 
training, job placement, and career advancement activities;
    (3) The responsibilities of the BAC and how it will interact with 
the project in carrying out grant activities;
    (4) The geographic area to be served by the project, including an 
explanation of how the area is currently unserved or underserved by the 
PWI program;
    (5) A plan for evaluating annually the operation of the proposed 
project, which, at a minimum, provides for collecting and submitting to 
the Secretary the following information and any additional data needed 
to determine compliance with the program compliance indicators 
established in subpart F of this part:
    (i) The numbers and types of individuals with disabilities served.
    (ii) The types of services provided.
    (iii) The sources of funding.
    (iv) The percentage of resources committed to each type of service 
provided.
    (v) The extent to which the employment status and earning power of 
individuals with disabilities changed following services.
    (vi) The extent of capacity building activities, including 
collaboration with business and industry and other organizations, 
institutions, and agencies, including the State vocational 
rehabilitation unit.
    (vii) A comparison, if appropriate, of activities in prior years 
with activities in the most recent year.
    (viii) The number of project participants who were terminated from 
project placements and the duration of those placements;
    (6) A description of the manner in which the project will address 
the needs of individuals with disabilities from minority backgrounds, 
as required by 34 CFR 369.21; and
    (7) A description of how career advancement services will be 
provided to project participants.
    (b) The grant application must also include assurances from the 
applicant that--
    (1) The project will carry out all activities required in 
Sec. 379.10;
    (2) Individuals with disabilities who are placed by the project 
will receive compensation at or above the minimum wage, but not less 
than the customary or usual wage paid by the employer for the same or 
similar work performed by individuals who are not disabled;
    (3) Individuals with disabilities who are placed by the project 
will be given

[[Page 5691]]

terms and benefits of employment equal to those that are given to 
similarly situated co-workers and will not be segregated from their co-
workers; and
    (4) The project will maintain any records required by the Secretary 
and make those records available for monitoring and audit purposes.

(Approved by the Office of Management and Budget under control 
number 1820-0612.)

(Authority: Secs. 621(a)(4), 621(a)(5), 621(b), and 621(e)(1)(B) of 
the Act; 29 U.S.C. 795g(a)(4), 795g(a)(5), 795g(b), and 
795g(e)(1)(B))

Subpart D--How Does the Secretary Make a Grant?


Sec. 379.30  What selection criteria does the Secretary use under this 
program?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Extent of need for project (20 points). The Secretary reviews 
each application to determine the extent to which the project meets 
demonstrated needs. The Secretary looks for evidence that--
    (1) The applicant has described an existing current labor market 
analysis or other needs assessment, or one that it has performed in 
collaboration with private industry, that shows, for the geographic 
area to be served, a demand in the competitive labor market for the 
types of jobs for which project participants will be trained; and
    (2) The job training to be provided meets the identified needs for 
personnel in specific occupations or occupational categories in the 
geographic area to be served.
    (b) Partnership with industry (25 points). The Secretary looks for 
information that demonstrates--
    (1) The extent of the project's proposed collaboration with private 
industry in the planning, implementation, and evaluation of job 
training, placement, and career advancement activities; and
    (2) The extent of proposed participation of the BAC in the 
identification of job and career opportunities, the skills necessary to 
perform the jobs and careers identified, and the development of 
training programs designed to develop these skills.
    (c) Project design and plan of operation for achieving competitive 
employment outcomes (25 points). The Secretary reviews each application 
to determine--
    (1) The extent to which the project goals and objectives for 
achieving competitive employment outcomes for individuals with 
disabilities to be served by the project are clearly stated and meet 
the needs identified by the applicant and the purposes of the program;
    (2) The extent to which the project provides for all services and 
activities required under Sec. 379.10;
    (3) The feasibility of proposed strategies and methods for 
achieving project goals and objectives for competitive employment 
outcomes for project participants;
    (4) The extent to which project activities will be coordinated with 
the State vocational rehabilitation unit and with other appropriate 
community resources in order to ensure an adequate number of referrals 
and a maximum use of comparable benefits and services;
    (5) The extent to which the applicant's management plan will ensure 
proper and efficient administration of the project; and
    (6) Whether the applicant has proposed a realistic timeline for the 
implementation of project activities to ensure timely accomplishment of 
proposed goals and objectives to achieve competitive employment 
outcomes for individuals with disabilities to be served by the project.
    (d) Adequacy of resources and quality of key personnel (10 points). 
The Secretary reviews each application to determine--
    (1) The adequacy of the resources (including facilities, equipment, 
and supplies) that the applicant plans to devote to the project;
    (2) The quality of key personnel who will be involved in the 
project, including--
    (i) The qualifications of the project director;
    (ii) The qualifications of each of the other key personnel to be 
used in the project; and
    (iii) The experience and training of key personnel in fields 
related to the objectives and activities of the project; and
    (3) The way the applicant plans to use its resources and personnel 
to achieve the project's goals and objectives, including the time that 
key personnel will commit to the project.
    (e) Budget and cost effectiveness (10 points). The Secretary 
reviews each application to determine the extent to which--
    (1) The budget is adequate to support the project; and
    (2) Costs are reasonable in relation to the objectives of the 
project.
    (f) Project evaluation (10 points). The Secretary reviews each 
application to determine the quality of the proposed evaluation plan 
with respect to--
    (1) Evaluating project operations and outcomes;
    (2) Involving the BAC in evaluating the project's job training, 
placement, and career advancement activities;
    (3) Meeting the annual evaluation reporting requirements in 
Sec. 379.21(a)(5);
    (4) Determining compliance with the indicators; and
    (5) Addressing any deficiencies identified through project 
evaluation.

(Approved by the Office of Management and Budget under control 
number 1820-0612.)

(Authority: Secs. 12(c) and 621 of the Act; 29 U.S.C. 711(c) and 
795g)


Sec. 379.31  What other factors does the Secretary consider in 
reviewing an application?

    In addition to the selection criteria in Sec. 379.30, the 
Secretary, in making awards under this program, considers--
    (a) The equitable distribution of projects among the States; and
    (b) The past performance of the applicant in carrying out a similar 
PWI project under previously awarded grants, as indicated by factors 
such as compliance with grant conditions, soundness of programmatic and 
financial management practices, and meeting the requirements of subpart 
F of this part.

(Authority: Secs. 621(e)(2) and 621(f)(4) of the Act; 29 U.S.C. 
795g(e)(2) and 795g(f)(4))

Subpart E--What Conditions Must Be Met by a Grantee?


Sec. 379.40   What are the matching requirements?

    The Federal share may not be more than 80 percent of the total cost 
of a project under this program.

(Authority: Sec. 621(c) of the Act; 29 U.S.C. 795g(c))

Appendix to Sec. 379.40

    (a) For example, if the total cost of a project is $500,000, the 
Federal share would be no more than $400,000 and the grantee's 
required minimum share (matching contribution) would be $100,000 
(provided in cash or through third party in-kind contributions). The 
matching contribution is based upon the total cost of the project, 
not on the amount of the Federal grant award.
    (b) The matching contribution must comply with the requirements 
of 34 CFR 74.23 (for grantees that are institutions of higher 
education, hospitals, or other nonprofit organizations) or 34 CFR 
80.24 (for grantees that are State, local, or Indian tribal 
governments). The term third party in-kind contributions is defined 
in either 34 CFR 74.2 or 34 CFR 80.3, as applicable to the type of 
grantee.


Sec. 379.41   What are allowable costs?

    In addition to those costs that are allowable in accordance with 34 
CFR 74.27 and 34 CFR 80.22, the following items are allowable costs 
under this program:

[[Page 5692]]

    (a) The costs of job readiness training, as defined in 
Sec. 379.5(b)(4); job training, as defined in Sec. 379.5(b)(5); job 
placement services; job development and modification; and related 
vocational rehabilitation services and supportive rehabilitation 
services.
    (b) Instruction and supervision of trainees.
    (c) Training materials and supplies, including consumable 
materials.
    (d) Instructional aids.
    (e) The purchase or modification of rehabilitation technology to 
meet the needs of individuals with disabilities.
    (f) Alteration and renovation appropriate and necessary to ensure 
access to and use of buildings by persons with disabilities served by 
the project.
    (g) The modification of any facilities or equipment of the employer 
to be used by individuals with disabilities under this program.

(Authority: Secs. 12(c) and 621 of the Act; 29 U.S.C. 711(c) and 
795g))


Sec. 379.42   What are the requirements for a continuation award?

    (a) A grantee that wants to receive a continuation award must--
    (1) Comply with the provisions of 34 CFR 75.253(a), including 
making substantial progress toward meeting the objectives in its 
approved application and submitting all performance and financial 
reports required by 34 CFR 75.118; and
    (2) Submit data in accordance with Sec. 379.54 showing that it has 
met the program compliance indicators established in Subpart F of this 
part.
    (b) In addition to the requirements in paragraph (a) of this 
section, the following other conditions in 34 CFR 75.253(a) must be met 
before the Secretary makes a continuation award:
    (1) Congress must appropriate sufficient funds under the program.
    (2) Continuation of the project must be in the best interest of the 
Federal Government.

(Approved by the Office of Management and Budget under control 
number 1820-0612.)

(Authority: Secs. 12(c) and 621(f)(4) of the Act; 29 U.S.C. 711(c) 
and 795g(f)(4))


Sec. 379.43   What are the additional reporting requirements?

    Each grantee shall submit the data from its annual evaluation of 
project operations required under Sec. 379.21(a)(5) no later than 60 
days after the end of each project year, unless the Secretary 
authorizes a later submission date.

(Approved by the Office of Management and Budget under control 
number 1820-0612.)

(Authority: Secs. 12(c) and 621 of the Act; 29 U.S.C. 711(c) and 
795g)

Subpart F--What Compliance Indicator Requirements Must a Grantee 
Meet To Receive Continuation Funding?


Sec. 379.54   What are the reporting requirements for the compliance 
indicators?

    (a) In order to receive continuation funding for the third or any 
subsequent year of a PWI grant, each grantee must submit data for the 
most recent complete project year no later than 60 days after the end 
of that project year, unless the Secretary authorizes a later 
submission date, in order for the Secretary to determine if the grantee 
has met the program compliance indicators established in this Subpart 
F.
    (b) If the data for the most recent complete project year provided 
under paragraph (a) of this section shows that a grantee has failed to 
achieve the minimum composite score required in Sec. 379.52(f) to meet 
the program compliance indicators, the grantee may, at its option, 
submit data from the first 6 months of the current project year no 
later than 60 days after the end of that 6-month period, unless the 
Secretary authorizes a later submission date, to demonstrate that its 
project performance has improved sufficiently to meet the minimum 
composite score.

(Approved by the Office of Management and Budget under control 
number 1820-0612.)

(Authority: Sec. 621(f)(2) of the Act; 29 U.S.C. 795g(f)(2))

    Note: A grantee receives its second year of funding (or the 
first continuation award) under this program before data from the 
first complete project year is available. Data from the first 
project year, however, must be submitted and is used (unless the 
grantee exercises the option in paragraph (b) of this section) to 
determine eligibility for the third year of funding (or the second 
continuation award).
 * * * * *


Sec. 379.53  [Amended]

    2. Section 379.53 is amended by adding ``(Approved by the Office of 
Management and Budget under control number 1820-0612.)'' before the 
authority citation at the end of the section.

[FR Doc. 97-2834 Filed 2-5-97; 8:45 am]
BILLING CODE 4000-01-P