[Federal Register Volume 63, Number 198 (Wednesday, October 14, 1998)]
[Proposed Rules]
[Pages 55292-55305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27421]



[[Page 55291]]

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Part IV





Department of Education





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34 CFR Part 361



State Vocational Rehabilitation Services Program; Proposed Rule

  Federal Register / Vol. 63, No. 198 / Wednesday, October 14, 1998 / 
Proposed Rules  

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DEPARTMENT OF EDUCATION

34 CFR Part 361

RIN 1820-AB14


The State Vocational Rehabilitation Services Program

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to amend the regulations governing The 
State Vocational Rehabilitation (VR) Services Program. These amendments 
are needed to implement changes in the Rehabilitation Act of 1973, as 
amended (Act). The proposed regulations would establish evaluation 
standards and performance indicators for The State VR Services Program.

DATES: Comments must be received by the Department on or before 
November 30, 1998.

ADDRESSES: All comments concerning these proposed regulations should be 
addressed to Fredric K. Schroeder, Commissioner, Rehabilitation 
Services Administration (RSA), U.S. Department of Education, 600 
Independence Avenue, SW., Room 3028, Mary E. Switzer Building, 
Washington, DC 20202-2531. Comments transmitted by facsimile should be 
sent to (202) 205-9772 or (202) 260-7527. Comments may also be sent 
through the Internet to: [email protected].

    You must include the term ``VR Standards'' in the subject line of 
your electronic message.
    Electronic transmission of comments will facilitate the analysis of 
comments. Also, comments should be specific and identified by proposed 
regulatory citation. RSA is not required to consider comments received 
after the due date for comments noted previously.
    Comments that concern information collection requirements must be 
sent to the Office of Management and Budget (OMB) at the address listed 
in the Paperwork Reduction Act section of this preamble. A copy of 
those comments may also be sent to the Department representative named 
in this section.

FOR FURTHER INFORMATION CONTACT: Beverlee Stafford, Policy, Planning 
and Evaluation Service, Rehabilitation Services Administration, U.S. 
Department of Education, 600 Independence Avenue, SW., Room 3014 Mary 
E. Switzer Building, Washington, DC 20202-2550. Telephone: (202) 205-
8831. Individuals who use a telecommunications device for the deaf 
(TDD) may call the Federal Information Relay Service (FIRS) at 1-800-
877-8339 (in the Washington, DC area, telephone (202) 708-9300) between 
8 a.m. and 8 p.m., Eastern time, Monday through Friday.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.
    For fiscal year (FY) 1996 performance data reports on individual 
DSUs, please contact Harold Kay, Policy, Planning and Evaluation 
Service, Rehabilitation Services Administration, Room 3014 Mary E. 
Switzer Building, 600 Independence Avenue, SW., Washington, DC 20202-
2550. Telephone: (202) 205-9883. Internet: Harold__K[email protected].

SUPPLEMENTARY INFORMATION:

Invitation to Comment:

    Interested persons are invited to submit comments and 
recommendations regarding these proposed regulations. To ensure that 
public comments have maximum effect in developing the final 
regulations, the Department urges commenters to identify clearly the 
specific section or sections of the proposed regulations that each 
comment addresses and to arrange comments in the same order as the 
proposed regulations.
    All comments submitted in response to these proposed regulations 
will be available for public inspection, during and after the comment 
period, in Room 3214, 330 C Street, SW., 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 these proposed regulations. 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.
    To assist the department in complying with the specific 
requirements of Executive Order 12866 and its overall requirement of 
reducing regulatory burden, the Secretary invites comments on whether 
there may be further opportunities to reduce any regulatory burdens 
found in these proposed regulations.

General

    These proposed regulations would amend the regulations in Part 361 
of the Code of Federal Regulations governing The State Vocational 
Rehabilitation Services Program (VR program) by adding a Subpart E to 
implement certain requirements of the Rehabilitation Act Amendments of 
1992 (1992 Amendments), Pub. L. 102-569, and the Rehabilitation Act 
Amendments of 1998 (1998 Amendments), as specified in Title IV of the 
Workforce Investment Act of 1998 (Workforce Act), Pub. L. 105-220, 
August 7, 1998. The 1992 Amendments added section 106 to Part A of 
Title I of the Rehabilitation Act of 1973, as amended, which authorizes 
the VR program. Title IV of the Workforce Act, which contains the 1998 
Amendments, modifies section 106 of the Act to require that, to the 
maximum extent practicable, the VR standards and indicators be 
consistent with the core indicators of performance (Core Indicators) 
established under section 136(b) of the Workforce Act. Section 106 also 
requires, among other things, the following: (1) The Secretary 
establishes and publishes in the Federal Register evaluation standards 
and performance indicators for the VR program. (2) The evaluation 
standards and performance indicators must include outcome and related 
measures of program performance that facilitate and in no way impede 
the accomplishment of the purpose and policy of the program. (3) The 
evaluation standards and performance indicators must be developed with 
input from designated State units (DSUs) for VR, related professional 
and consumer organizations, recipients of VR services, and other 
interested parties. (4) Each DSU shall report to the Secretary after 
the end of each fiscal year the extent to which it is in compliance 
with the evaluation standards and performance indicators. (5) The 
Secretary provides technical assistance to any DSU that performs below 
the established evaluation standards and develops jointly with a DSU a 
program improvement plan outlining specific actions to be taken by a 
DSU to improve program performance. (6) If a DSU that performs below 
the established evaluation standards fails to enter into a program 
improvement plan, or is not complying substantially with the terms and 
conditions of such a program improvement plan, the Secretary reduces or 
makes no further payments to the DSU until the DSU has entered into an 
approved program improvement plan or is complying substantially with 
the terms and conditions of such a

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program improvement plan. (7) RSA provides a report to Congress 
containing an analysis of program performance, including relative State 
performance, based on the evaluation standards and performance 
indicators.
    These proposed regulations would implement those requirements in 
section 106.
    Executive Order 12866 encourages Federal agencies to facilitate 
meaningful participation in the regulatory development process. 
Accordingly, the U.S. Department of Education (Department) has widely 
consulted with the rehabilitation community during the development of 
the current proposed evaluation standards and performance indicators. 
On February 19, 1993, the Department published a notice of intent to 
regulate in the Federal Register (58 FR 9458) to solicit comment on the 
development of the proposed evaluation standards and performance 
indicators. The Department also held a public meeting on September 23, 
1993, to discuss several issues relating to the development of proposed 
evaluation standards and performance indicators. Since that time, the 
Commissioner of RSA has discussed the development of the proposed 
indicators on many occasions with various members of the rehabilitation 
community. These proposed regulations contain proposed evaluation 
standards and performance indicators that reflect the input received 
through these efforts.
    The proposed regulations contain two evaluation standards, each of 
which has at least two or more implementing performance indicators by 
which to measure DSU performance. The proposed regulations also contain 
specific performance levels for each indicator that identify the 
minimum level of performance that a DSU would need to achieve in order 
to pass a given indicator. Under these proposed regulations, a DSU 
would have to pass a minimum of five of the seven performance 
indicators, including at least two of the three primary indicators, for 
Evaluation Standard 1, and both performance indicators for Evaluation 
Standard 2.
    The Secretary plans to propose other evaluation standards in 
addition to the two standards included in these proposed regulations, 
once appropriate data-gathering instruments and methods for measuring 
compliance with the additional standards have been developed and 
tested. The Secretary is considering three additional standards and 
implementing performance indicators. These ``draft proposed standards 
and indicators'' are identified and discussed in a separate section of 
this preamble. The Secretary solicits public comment on issues 
regarding the validity and feasibility of implementing these draft 
proposed evaluation standards and performance indicators. The Secretary 
also requests comments on identifying available data-gathering 
instruments and methods for measuring compliance with the draft 
proposed performance indicators. Based on the public comments received 
and on the results of the data gathering, the Secretary intends to 
revise these draft proposed standards and indicators and publish them 
for comment in a future notice of proposed rulemaking (NPRM).

Proposed Evaluation Standards 1 and 2

Background

    The following is a brief overview of the evaluation standards and 
performance indicators included in these proposed regulations 
(Evaluation Standards 1 and 2; Performance Indicators 1.1 through 1.7 
and 2.1 through 2.2), including a discussion of the role of the 
standards and indicators in the oversight of the VR program.
    Accountability for the VR program is established primarily through 
the Government Performance and Results Act (GPRA), the Title I 
evaluation standards and performance indicators, DSU State Plans, and 
program monitoring. GPRA requires that U.S. Government programs provide 
annual plans that include program outcome indicators. RSA has proposed 
national aggregate outcome indicators to meet GPRA requirements, and 
the Title I evaluation standards and performance indicators are closely 
related to the GPRA indicators. The Title I evaluation standards and 
performance indicators measure performance at the DSU level, while the 
GPRA indicators measure the aggregate performance of all DSUs.
    Each DSU submits a State Plan containing assurances and specific 
information demonstrating compliance with the requirements of section 
101 of the Act. The 1998 Amendments revised section 101(a)(15) of the 
Act to require DSUs to use the results of a comprehensive statewide 
assessment of rehabilitation needs and the Title I evaluation standards 
and performance indicators as bases for developing DSU goals and 
priorities. In addition, under section 107(a)(1) of the Act, RSA 
conducts monitoring to ``determine whether, in the administration of 
the State Plan, a State is complying substantially with the provisions 
of such plan and with evaluation standards and performance indicators 
established under section 106 [of the Act].'' Thus, the Title I 
evaluation standards and performance indicators are considered a 
crucial part of a comprehensive, integrated system of accountability 
for the VR program.
    Proposed Evaluation Standard 1, which measures employment outcomes, 
includes seven performance indicators. Because the Secretary considers 
three of these performance indicators particularly representative of 
the central purposes of the VR program, these three performance 
indicators would be identified as ``primary'' indicators.
    Primary indicators address the areas the Secretary considers most 
significant in evaluating a DSU's success in assisting individuals with 
disabilities, including individuals with significant disabilities, to 
achieve high-quality employment outcomes. The first of these primary 
indicators would measure the percentage of all individuals determined 
to have achieved an employment outcome who exit the VR program into 
competitive, self-, or ``Business Enterprise Program'' (BEP) employment 
with earnings equivalent to at least the minimum wage (Performance 
Indicator 1.3). The second primary indicator would measure individuals 
with significant disabilities as a percentage of all individuals who 
exit the VR program into competitive, self-, or BEP employment with 
earnings equivalent to at least the minimum wage (Performance Indicator 
1.4). The third primary indicator would measure 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) (Performance Indicator 1.5). The four 
remaining performance indicators under Evaluation Standard 1 would 
measure the number of employment outcomes (Performance Indicator 1.1), 
the percentage of cases with employment outcomes (Performance Indicator 
1.2), self-sufficiency resulting from employment (Performance Indicator 
1.6), and employment outcomes with medical insurance plans that cover 
hospitalization (Performance Indicator 1.7). A DSU would have to pass 
two of the three primary indicators and a total of at least five of the 
seven performance indicators to meet the performance requirements for 
Evaluation Standard 1.
    These proposed performance indicators are designed to ensure that 
DSUs assist adequate numbers and proportions of individuals with

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disabilities to obtain employment outcomes, gain access to medical 
insurance plans that cover hospitalization, and become self-sufficient. 
The proposed performance indicators also emphasize high quality 
competitive employment outcomes with adequate earnings, particularly 
for individuals with significant disabilities.
    The Secretary recognizes that high performance on some of these 
proposed performance indicators could result in lower performance on 
others. The performance indicators have been designed to support those 
results in appropriate instances. For example, if a DSU decides to 
focus more of its resources on assisting persons with significant 
disabilities to achieve high-quality competitive employment outcomes 
(which would enhance performance on Performance Indicator 1.4), fewer 
persons with less significant disabilities would be served and the 
total number of persons achieving employment outcomes (Performance 
Indicator 1.1) would likely decline. The proposed regulations, 
therefore, designate Performance Indicator 1.4 (and not Performance 
Indicator 1.1) as primary in recognition of the difficulty in 
satisfying both. Designating Performance Indicator 1.4 as primary is 
also appropriate since it reflects two central purposes of the VR 
program: addressing the needs of individuals with significant 
disabilities and facilitating competitive employment outcomes.
    A DSU would have to pass both of the performance indicators for 
proposed Evaluation Standard 2, which measures equality of access to 
rehabilitation services. The first performance indicator for proposed 
Evaluation Standard 2 would compare service rates for minorities and 
non-minorities. The second indicator for proposed Evaluation Standard 2 
would compare the percentage of minorities with significant 
disabilities who exit the VR program after receiving services under an 
Individualized Plan for Employment (IPE) as a ratio to the percentage 
of minorities in the State who have reported that a disability prevents 
them from working.
    As required by section 106(a)(1)(C) of the Act, the standards and 
indicators developed under the VR program must be consistent, to the 
maximum extent practicable, with the four Core Indicators established 
under section 136(b) of the Workforce Act. Accordingly, the proposed 
performance indicators under proposed Evaluation Standard 1 (Employment 
Outcomes) reflect the first Core Indicator (Core Indicator I--entry 
into unsubsidized employment) established under section 
136(b)(2)(A)(i)(I) of the Workforce Act. In particular, performance 
indicators 1.3 (percentage of individuals obtaining competitive 
employment) and 1.4 (percentage of individuals with significant 
disabilities obtaining competitive employment) are consistent with Core 
Indicator I since performance indicators 1.3 and 1.4 represent the 
proportions of individuals and individuals with significant 
disabilities who obtain competitive employment. ``Competitive 
employment'' is considered equivalent to ``unsubsidized employment,'' 
the term used in the Workforce Act to refer to instances in which an 
individual is self-employed or is paid directly by the individual's 
employer rather than through a separate source or entity that is 
subsidizing the employment. On the other hand, performance indicators 
1.1 and 1.2 measure the extent to which individuals achieve 
``employment outcomes'' generally, which would include both competitive 
employment outcomes and other outcomes that are not considered 
unsubsidized employment (e.g., unpaid homemaker or unpaid family 
worker). Thus, although performance indicators 1.1 and 1.2 are 
necessary to address the full scope of employment outcomes achieved by 
participants in the VR program, those indicators are not entirely 
consistent with Core Indicator I of the Workforce Act. Finally, 
performance indicators 1.5, 1.6, and 1.7 refer to other key factors 
associated with a successful VR program--earnings, employment as the 
main source of support, and employment benefits, respectively--and, 
therefore, are not necessarily aligned with Core Indicator I.
    The core indicators in the Workforce Act do not address equal 
access to services (Evaluation Standard 2 in the proposed regulations), 
consumer satisfaction (draft proposed Evaluation Standard 3 in this 
preamble), or the adequate use of resources (draft proposed Evaluation 
Standard 5 in this preamble). Thus, although the Secretary believes 
these measures are (or in the case of the draft proposed standards, 
could be) important factors to a successful VR program, the performance 
indicators for each of these standards are not based on the Workforce 
Act. Draft proposed Evaluation Standard 3 and its attendant performance 
indicators, however, are related to the customer satisfaction indicator 
in section 136(b)(2)(B) of the Workforce Act since both measure the 
satisfaction of service recipients under applicable programs.
    The draft proposed performance indicators under draft proposed 
Evaluation Standard 4 (retention of employment and earnings), which are 
described in a separate section of this preamble, are consistent with 
Core Indicators II and III under section 136(b)(2)(A)(i)(II) and (III) 
of the Workforce Act. Core Indicators II and III measure retention of 
unsubsidized employment and earnings over a 6-month period, whereas the 
draft proposed performance indicators would measure retention of 
competitive employment outcomes (the equivalent of unsubsidized 
employment), including earnings, over both a 6-and 12-month period in 
order to address the difficulties experienced by individuals with 
disabilities in retaining employment over time. The 12-month review 
under the draft proposed indicator is also based on section 
136(d)(2)(D) of the Workforce Act, which requires States to report on 
participants' retention of employment and earnings received in 
unsubsidized employment 12 months after entry into employment.
    None of the proposed evaluation standards or performance indicators 
reflect Core Indicator IV under section 136(b)(2)(A)(4) of the 
Workforce Act (attainment of a recognized credential relating to 
achievement of educational or occupational skills) since attaining a 
recognized credential for achieving a skill has not been a stated goal 
of the VR program. Performance under the VR program is currently based 
solely on the extent to which individuals achieve and maintain 
employment. However, for some individuals, attainment of appropriate 
credentials is a necessary step in achieving their employment goals. 
Therefore, the Secretary invites comment on the appropriateness of 
including Core Indicator IV as a key measure of success in meeting the 
goals of the VR program. If commenters believe that such an indicator 
would be appropriate, suggestions on how such an indicator might be 
implemented are invited.
    The proposed evaluation standards and performance indicators would 
be implemented beginning in FY 1999, and DSU data would be due at the 
end of FY 1999. The data that are necessary to measure compliance with 
the proposed indicators are currently being collected under existing 
reporting requirements. Specifically, information contained in the Case 
Service Report (RSA-911 report), which DSUs submit annually to RSA, 
will be used to demonstrate performance under proposed Evaluation 
Standard 1 (Employment outcomes) and

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proposed Evaluation Standard 2 (Equal access to services).
    Proposed Subpart E also would require that each DSU report selected 
data to the Secretary after the end of each fiscal year so that the 
Secretary could determine whether the DSU is in compliance with the 
proposed evaluation standards and performance indicators. If the 
performance of any DSU falls below required levels, the Secretary would 
provide technical assistance to the DSU, and the DSU and the Secretary 
would jointly develop a program improvement plan outlining the specific 
actions to be taken by the DSU to improve program performance.
    The Secretary would review a DSU's compliance with its program 
improvement plan on a biannual basis, and, if necessary, the Secretary 
would request that a DSU make further revisions to the plan to improve 
performance. If the Secretary establishes new performance levels while 
a program improvement plan is in effect, the Secretary and the DSU 
would jointly modify the program improvement plan to meet the new 
performance levels. Reviews would continue and requests for revisions 
would be made until the DSU achieved satisfactory performance based on 
current performance levels over a period of more than one year.
    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 such a program 
improvement plan, the Secretary 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.

Section-by-Section Analysis

Section 361.80--Purpose
    Proposed Sec. 361.80 states that the purpose of this new subpart is 
to establish evaluation standards and performance indicators for The 
State VR Services Program.
Section 361.81--Applicable Definitions
    Proposed Sec. 361.81 contains definitions of terms that apply to 
the evaluation standards and performance indicators in this new 
subpart. In addition to the definitions identified in this proposed 
section, the definitions in Sec. 361.5, including the definitions of 
``competitive employment'' and ``employment outcome,'' 
Sec. 361.5(b)(10) and (15), respectively, apply to the proposed 
evaluation standards and performance indicators.
    The proposed term ``average hourly earnings,'' which is used in 
proposed Performance Indicator 1.5, Sec. 361.84(c)(1)(v), under 
Evaluation Standard 1, would be determined by dividing the ``weekly 
earnings at closure'' data element by the ``hours worked at closure'' 
data element from the RSA-911 report. An eligible individual's average 
hourly earnings would be calculated for the week prior to the 
individual's exiting the VR program after achieving a competitive 
employment outcome.
    The term ``Business Enterprise Program (BEP)'' would be defined as 
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 DSU. This definition would apply 
only to the individual operating the enterprise under the management 
and supervision of the DSU and would not apply to wage-earners or other 
employees who work for the business. This term is used in proposed 
Performance Indicators 1.3, 1.4, 1.5, and 1.6, Sec. 361.84(c)(1)(iii), 
(iv), (v), and (vi), respectively, under proposed Evaluation Standard 1 
(Employment outcomes), Sec. 361.82(c)(1).
    The proposed definition of ``exit the VR program'' is based on the 
service record closure categories in the RSA-911 report and would apply 
whenever an individual's record of services is closed because the 
individual was determined ineligible for VR services; achieved an 
employment outcome; received services under an IPE but did not achieve 
an employment outcome; or was determined eligible but did not receive 
services under an IPE. This term is used in all performance indicators 
under proposed Evaluation Standard 1 and in Performance Indicator 2.2, 
Sec. 361.84(c)(2)(ii), under proposed Evaluation Standard 2 (Equal 
access to services), Sec. 361.82(c)(2).
    The proposed definition of ``full-time employment'' is an 
employment outcome in which an eligible individual worked for a minimum 
of 35 hours in the week before closure. This term is used in proposed 
Performance Indicator 1.7, Sec. 361.84(c)(1)(vii), under Evaluation 
Standard 1.
    The proposed definition of ``general or combined DSU'' is a DSU 
that does not exclusively serve individuals with visual impairments or 
blindness. This term is used in proposed Sec. 361.86(b)(1) and (2).
    The proposed definition of ``individuals from a minority 
background'' is derived from RSA-911 reporting categories and is 
consistent with governmentwide classifications of race and ethnicity. 
This term is used in both performance indicators, Sec. 361.84(c)(2)(i) 
and (ii), under proposed Evaluation Standard 2, Sec. 361.82(c)(2).
    The proposed definition of ``minimum wage'' is the Federal or State 
minimum wage, whichever is higher. Pursuant to Sec. 361.5(b)(10), 
``competitive employment'' is employment in an integrated setting, 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 non-disabled individuals. If a State minimum wage is 
higher than the Federal, then employment in that State would not be 
considered competitive if the individual's wage did not equal or exceed 
the State minimum wage. This term is used in proposed Performance 
Indicators 1.3, 1.4, 1.5, and 1.6, Sec. 361.84(c)(1)(iii), (iv), (v), 
and (vi), respectively.
    The proposed definition of ``non-minority individuals'' means those 
individuals who report their race as White. This term is used in 
proposed Performance Indicator 2.1, Sec. 361.84(c)(2)(i).
    The proposed definition of ``performance period'' is the period of 
time for which a DSU's performance is measured. For general and 
combined DSUs, that period would be one year and performance data would 
be aggregated over a one-year period commencing in FY 1999. However, 
the number of individuals in any single year who exit a program 
administered by a DSU that serves only individuals with visual 
impairments or blindness is generally too small to serve as a reliable 
and valid measure of performance. Thus, for DSUs that serve only 
individuals with visual impairments or blindness, the performance 
period would be two years. These DSUs would be required to report two 
consecutive years of performance data; the first report would include 
FY 1998 and FY 1999 data. At the end of FY 2000, the general and 
combined DSUs would report FY 2000 data, and the DSUs that serve only 
individuals with visual impairments or blindness would report 
aggregated FY 1999 and FY 2000 data.
    The proposed definition of ``primary indicator'' is used to 
identify those performance indicators that place particular emphasis on 
the extent to which State VR programs assist individuals, particularly 
individuals with significant disabilities, to achieve competitive, 
self-, or BEP employment with earnings equivalent to the minimum wage 
or higher; and the

[[Page 55296]]

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 relate to the State's average hourly earnings 
for all employed individuals. As discussed previously, the significance 
accorded these indicators is based on the emphasis the Act places on 
competitive employment and on serving individuals with significant 
disabilities.
    In addition, emphasizing achievement of competitive, self-, and BEP 
employment at earnings that are comparable to those achieved by 
individuals without disabilities is intended as a means of addressing 
the high unemployment and poverty levels experienced by individuals 
with disabilities. The Secretary believes achieving these goals would 
foster increased economic independence and integration into the 
workforce for individuals receiving services under the VR program. The 
three proposed ``primary'' indicators are designed to provide an 
accurate measure of how well a State's VR program addresses these 
goals. The term ``primary indicator'' is used in proposed 361.86(b)(1).
    The proposed definition of ``RSA-911'' is the Case Service Report 
that DSUs provide to RSA on each individual exiting the VR program. The 
Case Service Report includes data on employment outcomes, demographic 
characteristics, and services received by individuals eligible for VR 
services. This term is used in proposed Sec. 361.88, ``Reporting 
requirements.''
    The proposed definition of ``self-employment'' is consistent with 
the ``self-employment'' reporting element on the RSA-911 report and is 
used in proposed Performance Indicators 1.3, 1.4, 1.5, and 1.6.
    The proposed definition of ``service rate'' is the number of 
eligible individuals who exit a VR program after receiving one or more 
services under an IPE as a percentage of all individuals exiting the 
program. This term is used in proposed Performance Indicator 2.1.
    The proposed term ``State's Average Hourly Earnings'' means the 
average hourly earnings of all persons in the State in which the DSU is 
located. Average hourly earnings would be derived by dividing the 
State's average annual pay, as reported in the Bureau of Labor 
Statistics report, ``State Average Annual Pay,'' by 2,000--the average 
number of working hours in a year. This term is used in proposed 
Performance Indicator 1.5, Sec. 361.84(c)(1)(v), under Evaluation 
Standard 1.
Section 361.82--Evaluation Standards
    Proposed Sec. 361.82 contains the evaluation standards for the VR 
program. These proposed evaluation standards are based upon the 
requirement in section 106 of the Act that the evaluation standards and 
performance indicators facilitate the accomplishment of the policy and 
purpose of the VR program. Proposed Sec. 361.82(b) would require that a 
DSU achieve successful performance on both Evaluation Standards 1 and 
2.
     Proposed Evaluation Standard 1 (Employment outcomes) 
Proposed Evaluation Standard 1, Sec. 361.82(c)(1), would require a DSU 
to assist eligible individuals with disabilities, including individuals 
with significant disabilities, to obtain, maintain, or regain high 
quality employment outcomes. The quality of an employment outcome is 
based on whether the outcome is consistent with the individual's 
vocational choices; is in competitive, self-, or BEP employment; 
maintains or increases the individual's earnings; and provides medical 
insurance plans covering hospitalization.
    In adopting the 1992 Amendments to the Act, Congress emphasized the 
need for individuals with disabilities, including individuals with 
significant disabilities, to become gainfully employed through work 
that they are both capable of, and interested in, performing. Hence, 
the Act specifies, in a number of instances, that individuals receiving 
support under the Act should be able to pursue employment that is 
consistent with their unique abilities (e.g., sections 100(a)(1)(F) and 
102(b)(3)(A)) and their informed choice (e.g., sections 100(a)(3)(C), 
101(a)(19), and 102(d)). The Act also places particular emphasis on 
competitive employment (e.g., in the definition of ``employment 
outcome'' in section 7(11) and in the annual review of extended 
employment placements required by section 101(a)(14)). The Secretary 
believes that these provisions indicate that the success of the VR 
program is based in large part on the ability of eligible individuals 
with disabilities to become self-sufficient by working in the 
competitive labor market. Thus, proposed Evaluation Standard 1 would 
assess a DSU's success in assisting individuals with disabilities, 
including individuals with significant disabilities, to achieve 
employment outcomes with an emphasis on competitive employment outcomes 
(which includes self-employment and BEP outcomes) in integrated 
settings.
     Proposed Evaluation Standard 2 (Equal access to services). 
Proposed Evaluation Standard 2, Sec. 361.82(c)(2), would require a DSU 
to ensure that individuals from minority backgrounds have equal access 
to VR services. This standard was developed in recognition of 
congressional findings of past inequities between the treatment 
received by minorities and non-minorities under the VR program. In 
addition, the Secretary believes that measuring DSU performance in 
serving minority populations is consistent with the obligation of a DSU 
to demonstrate, pursuant to section 21 of the Act, how it will address 
the needs of individuals with disabilities from minority backgrounds.
Section 361.84--Performance Indicators
    Proposed Sec. 361.84 lists the performance indicators that measure 
minimum compliance with the evaluation standards. There are nine 
performance indicators, three of which (proposed performance indicators 
1.3, 1.4, and 1.5) are primary indicators.
Employment Outcomes
     Proposed Performance Indicator 1.1. Proposed Performance 
Indicator 1.1, Sec. 361.84(c)(1)(i), would compare the total numbers of 
individuals obtaining an employment outcome during the current and 
previous performance periods.
     Proposed Performance Indicator 1.2. Proposed Performance 
Indicator 1.2, Sec. 361.84(c)(1)(ii), would measure the number of 
persons obtaining an employment outcome as a percentage of all persons 
exiting the program after receiving VR services. This percentage would 
indicate the proportion of eligible individuals who obtain an 
employment outcome.
     Proposed Performance Indicator 1.3. Proposed Performance 
Indicator 1.3, Sec. 361.84(c)(1)(iii), would measure the number of 
persons obtaining a competitive, self-, or BEP employment outcome as a 
percentage of all persons obtaining any type of employment outcome. 
This indicator would demonstrate a DSU's success in assisting 
individuals to obtain competitive, self-, and BEP outcomes. These types 
of outcomes generally provide individuals with disabilities far greater 
earnings, economic independence, and social integration into the 
community than do other available outcomes, such as extended 
employment, homemaker, or unpaid family worker. As discussed 
previously, the Secretary recognizes that achieving a high performance 
on this indicator may lower a DSU's performance on other indicators 
(e.g., Performance Indicators 1.1 or 1.2). For that reason,

[[Page 55297]]

and because this indicator reflects the Act's emphasis on competitive 
employment, this indicator would be designated as a primary indicator.
     Proposed Performance Indicator 1.4. Proposed Performance 
Indicator 1.4, Sec. 361.84(c)(1)(iv), would measure the percentage of 
competitively employed individuals who have significant disabilities. 
Given the challenges associated with competitive work, it is generally 
more difficult and expensive for DSUs to assist individuals with 
significant disabilities, as opposed to individuals with non-
significant disabilities, to obtain competitive,
self, or BEP employment. Therefore, Performance Indicator 1.4 also 
would be designated as a primary indicator to account for DSUs that 
make trade-offs in other activities to enhance their performance on 
this indicator.
     Proposed Performance Indicator 1.5. Proposed Performance 
Indicator 1.5, Sec. 361.84(c)(1)(v), would measure 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. This performance 
indicator, also a primary indicator, would reflect the additional time, 
money, and effort required to assist individuals with disabilities to 
obtain earnings that are comparable to the earnings of non-disabled 
persons in the State.
     Proposed Performance Indicator 1.6. Proposed Performance 
Indicator 1.6, Sec. 361.84(c)(1)(vi), would measure the difference 
between the percentage of individuals who exit the VR program in 
competitive, self-, or BEP employment with earnings equivalent to at 
least the minimum wage who report their own income as their largest 
single source of economic support and the percentage of individuals in 
that employment who reported their own income as their largest single 
source of support at the time they applied for VR services. This 
indicator would apply to all persons who obtain competitive, self-, or 
BEP employment at or above the minimum wage and would measure gains in 
self-sufficiency. As an example in applying this indicator, if 10 
percent of competitively employed individuals relied on their own 
income at the time of application for VR services and 70 percent relied 
on their own income at the time of closure, the difference between the 
percentages would be 60 percent. This indicator would demonstrate a 
DSU's success in assisting individuals with disabilities to become more 
economically independent as a result of their employment.
     Proposed Performance Indicator 1.7. Proposed Performance 
Indicator 1.7, Sec. 361.84(c)(1)(vii), would measure the extent to 
which DSUs assist individuals with disabilities to obtain full-time 
competitive employment with medical insurance plans that cover 
hospitalization. Many U.S. employers offer their workers a wide variety 
of medical insurance plans. However, because these plans vary greatly 
among employers, measuring them in a consistent, non-burdensome manner 
is very difficult. Persons who obtain self-or BEP employment or who 
work less than 35 hours per week would not be included in this 
performance indicator because individuals who work for themselves, 
operate a business under the management and supervision of a DSU, or 
work part-time are less likely to secure employer-paid medical 
insurance plans.
    The Secretary invites comment on whether this indicator is a fair 
measure of a DSU's performance in assisting individuals to obtain 
successful employment outcomes.
     Data for Performance Indicators 1.1 through 1.7. The 
employment outcomes covered under Performance Indicator 1.1 and in 
Performance Indicators 1.3 through 1.6 are reported under ``employment 
status at closure'' in the RSA-911 report. The employment outcomes 
covered under Performance Indicator 1.2 are reported under ``type of 
closure'' in the RSA 911. However, competitive, self-, and BEP 
employment outcomes, as used in Performance Indicators 1.3 through 1.6, 
apply only to individuals earning at least the minimum wage. An 
individual's earnings would be determined first by dividing the 
``weekly earnings at closure'' RSA-911 data element by the ``hours 
worked at closure'' RSA-911 data element and then by comparing the 
resultant hourly earnings with the relevant Federal or State minimum 
wage.
    ``Own income as the major source of support'' is currently reported 
in the RSA-911 report as ``personal income,'' which is an element under 
``Primary source of support at application and primary source of 
support at closure.''
    The availability of medical insurance that covers hospitalization 
also is currently reported in the RSA-911 report. Consistent with the 
RSA-911 reporting instructions, a DSU would not be required to 
determine--(a) whether the individual has enrolled or will enroll in 
such a plan; (b) whether the individual has to pay for all, some, or 
none of the plan premiums; or (c) how adequate the plan is for the 
individual's needs. A DSU need only report that such an employment-
based plan exists and that the individual exiting the VR program has 
the option of enrolling in a medical insurance plan that covers 
hospitalization through his or her employer.
Equal Access to Services
     Proposed Performance Indicator 2.1. Proposed Performance 
Indicator 2.1, Sec. 361.84(c)(2)(i), would measure whether individuals 
from minority backgrounds have been provided services at the same rate 
as non-minority individuals. However, if a DSU did not meet the 
performance level for Performance Indicator 2.1, it would satisfy this 
indicator by demonstrating that it had made adequate efforts to ensure 
that individuals from minority backgrounds have equal access to VR 
services. A DSU that did not meet the performance level for Performance 
Indicator 2.1 would have to demonstrate that its procedures, policies, 
and practices, particularly with regard to eligibility determinations 
and service provision, were not discriminatory. This indicator does not 
require DSUs to establish numerical quotas for serving individuals from 
minority backgrounds.
    The Secretary solicits comment on this indicator and seeks examples 
of criteria or methods that might be used to determine whether a DSU's 
policies, practices, or procedures discriminate against minorities.
     Proposed Performance Indicator 2.2. Proposed Performance 
Indicator 2.2, Sec. 361.84(c)(2)(ii), would compare minorities as a 
percentage of individuals with significant disabilities exiting the VR 
program after receiving VR services under an IPE to minorities as a 
percentage of individuals in the State's working age population 
(individuals age 16 to 64) reporting a disability that prevents them 
from working. This indicator would demonstrate a DSU's success in 
providing VR services under an IPE to individuals from minority 
backgrounds in proportion to the population of minorities with 
significant disabilities in the State. However, if a DSU does not meet 
the performance level of Performance Indicator 2.2, it would meet this 
indicator by demonstrating that it has undertaken outreach and 
recruitment activities to ensure that individuals from minority 
backgrounds have equal access to VR services. This indicator does not 
require DSUs to establish numerical quotas for serving individuals from 
minority backgrounds.
     Data for Performance Indicators 2.1 and 2.2. The 
information that is

[[Page 55298]]

necessary for reporting on proposed Evaluation Standard 2 would be 
obtained from the race and ethnicity data element of the RSA-911 
report. The RSA-911 reporting categories for race and ethnicity used 
for Evaluation Standard 2 are compatible with U.S. Census data 
categories and have been approved by OMB. In addition, U.S. Census data 
on the number of minority working age persons in a State who report 
that their disability prevents them from working make it possible to 
identify an in-State comparison group to indicate whether minorities 
with disabilities are underserved in the VR program relative to their 
percentage in a State's general population.
    However, the Secretary notes that the U.S. Bureau of the Census may 
eliminate from the 2000 Census Survey the current census question 
related to individuals possessing a disability that prevents them from 
working. Therefore, the Secretary invites comments identifying 
alternative measures that could be used to determine compliance with 
Performance Indicator 2.2. The Secretary also seeks suggested examples 
of criteria or methods that could be used to evaluate a DSU's outreach 
and recruitment activities related to individuals from minority 
backgrounds.
Section 361.86--Establishment of Performance Levels
    Proposed Sec. 361.86 would establish compliance levels for the 
performance indicators. Many commenters urged the Secretary to 
establish different performance levels for DSUs that serve only 
individuals who are visually impaired or who are blind. Because these 
DSUs serve a particular population of individuals with significant 
disabilities, their level of performance typically differs markedly 
from that of general or combined DSUs. Past performance data from these 
agencies support this conclusion. The Secretary, therefore, agrees that 
separate performance levels for DSUs that serve only individuals who 
are visually impaired or blind, as proposed in Sec. 361.86(b)(1), are 
generally warranted. With regard to Performance Indicator 1.1 (under 
which a DSU has only to equal or exceed previous performance) and 
Performance Indicators 2.1 and 2.2 (under which a DSU has to provide 
equal access to minority and non-minority individuals), however, both 
general and combined DSUs and DSUs that serve only individuals who are 
visually impaired or blind would be required to meet the same 
performance levels.
    Combined DSUs (i.e., those that serve individuals with blindness, 
visual impairments, and other non-visual disabilities) suggested that 
separate performance levels should apply to them as well. However, 
analysis of existing data indicates that the presence of individuals 
who are blind has little impact on the overall performance of combined 
DSUs as compared to the overall performance of general DSUs (i.e., 
those that do not serve the visually impaired). Accordingly, general 
and combined DSUs would be subject to the same performance levels.
    Some DSUs that operate under an order of selection pursuant to 
Sec. 361.36(a)(1)(ii) also suggested that separate performance levels 
be established under Evaluation Standard 1 for those agencies. Again, 
analysis of existing data indicates that an order of selection has 
little impact on the overall performance of DSUs on the performance 
indicators for Evaluation Standard 1. Thus, the NPRM does not include 
separate performance levels for DSUs operating under an order of 
selection.
    Proposed Sec. 361.86(a)(2) would allow the Secretary to establish 
new performance levels through the regulatory process after obtaining 
public comment. The Secretary plans to increase performance levels over 
time based on experience and considers the performance levels proposed 
in Sec. 361.86(b)(1) and (2) as only the first step in ensuring 
improved DSU performance.
    Proposed performance levels for Evaluation Standard 1 are presented 
in Sec. 361.86(b)(1). Each of the proposed levels for the Performance 
Indicators 1.1 through 1.7 identify the minimum level of performance 
necessary to pass a given indicator. The Secretary believes that these 
levels would accurately reflect whether a DSU is successfully assisting 
individuals with disabilities to achieve employment outcomes consistent 
with the Act's purposes. To achieve successful performance on 
Evaluation Standard 1, a DSU would have to meet or exceed the 
performance levels on at least two of the three primary indicators 
(1.3, 1.4 and 1.5) and a total of at least five of the seven 
performance indicators (1.1 through 1.7).
    The proposed levels for each of the proposed performance indicators 
that will be used for determining compliance with the proposed 
evaluation standards were developed in recognition of the fact that 
DSUs typically focus their efforts on certain VR program-related areas 
(e.g., assisting individuals with significant disabilities; maximizing 
competitive employment outcomes). The proposed regulations also would 
require DSUs to concentrate, to some extent, on the proposed ``primary 
indicators'' (indicators 1.3, 1.4, and 1.5), which the Secretary 
considers the most critical measures of a successful VR program. 
Consequently, the Secretary expects that DSUs will greatly exceed many 
of the proposed levels, particularly the levels for those indicators 
that reflect a DSU's priority areas. As a whole, the levels represent 
only the minimum level of performance that the Secretary believes is 
appropriate for each indicator, regardless of whether the DSU focuses 
most of its efforts elsewhere. In other words, although a DSU can, and 
to some extent is required to, focus on the purposes reflected in 
certain indicators (e.g., increasing competitive employment outcomes), 
the DSU should still be able to perform at the proposed level for the 
remaining indicators. The specified performance levels were developed 
following extensive analyses of past DSU performance in each of the 
areas addressed by the indicators. The Secretary believes that DSUs 
that fail to satisfy the proposed levels (for two of the three primary 
indicators or five of the seven indicators total) likely have 
significant systemic deficiencies and are in need of assistance to 
improve their program. The proposed minimum levels are designed 
specifically to identify those DSUs.
    Proposed Sec. 361.86(b)(2) would require each DSU to meet the 
performance level of .80 for both Performance Indicators 2.1 and 2.2, 
or, in the alternative, describe the actions it has taken and policies 
it has implemented to ensure that individuals with disabilities from 
minority backgrounds have equal access to VR services. The Secretary 
proposes the .80 level, as opposed to the 1.0 full parity level, to 
reflect the fact that minor deviations in service rates may not be 
related to any discriminatory policy or practice followed by the DSU. 
On the other hand, the Secretary believes that the proposed level 
represents a significant disparity in service rates for minority and 
non-minority individuals (or in the proportion of minority individuals 
with significant disabilities receiving VR services relative to their 
population) and that the existence of such a disparity should result in 
the DSU's reexamination of its policies and practices to ensure that 
they do not have a discriminatory effect on individuals from minority 
backgrounds.
    Under Sec. 361.86(b)(2)(i), a DSU would have to demonstrate that it 
had adopted policies and taken steps to ensure that individuals with 
disabilities from minority backgrounds have equal access to VR services 
if its performance did not meet the performance level for proposed

[[Page 55299]]

Performance Indicator 2.1. The Secretary proposes to provide this 
alternative to meeting the performance level to clarify that numerical 
quotas are not required. In addition, a DSU would have to make the same 
demonstration if the denominator of a service rate (i.e., individuals 
exiting the VR program) represents less than 100 cases. If fewer than 
100 individuals exit the VR program, slight changes in the number of 
individuals receiving services would have an inordinate effect on the 
service rate and would not permit accurate assessment of the DSU's 
performance.
    Under Sec. 361.86(b)(2)(ii), a DSU would have to demonstrate that 
it had undertaken appropriate actions to ensure, through outreach and 
recruitment activities, that individuals with disabilities from 
minority backgrounds have equal access to VR services if the DSU did 
not meet the performance level for proposed Performance Indicator 2.2. 
This demonstration requirement also would apply if the denominator of 
the calculation in the performance indicator represents less than 100 
cases in order to ensure that only statistically reliable calculations 
are used to measure performance.
Section 361.88--Reporting Requirements
    Proposed Sec. 361.88 contains DSU reporting requirements related to 
the proposed evaluation standards and performance indicators. Proposed 
Sec. 361.88(a) would require each DSU to report, within 60 days after 
the end of each fiscal year, the extent to which it is in compliance 
with the evaluation standards and performance indicators and also 
report the raw performance data (contained in the RSA-911 report) 
specified in Sec. 361.88(a)(1) through (13). Proposed Sec. 361.88(a)(1) 
through (13) describe the performance data DSUs would be required to 
report.
    In lieu of the report required under Sec. 361.88(a), proposed 
Sec. 361.88(b) would permit a DSU to submit its raw RSA-911 performance 
data on tape, diskette, or any alternative electronic format that is 
compatible with RSA's capability to process such an alternative. In 
most instances, a DSU will report raw data to RSA through the RSA-911 
report, which is also due 60 days after the end of each fiscal year. 
RSA will make the appropriate calculations to determine DSU 
performance. RSA also will collect the relevant census and earnings 
data for those performance indicators that rely on that data to 
determine DSU performance. This census and earnings data will be 
available for review upon request.
    Proposed Sec. 361.88(c) would require that the data reported by a 
DSU be valid, accurate, and in a consistent format. A DSU that fails to 
submit data that is valid, accurate, and in a consistent format within 
the 60-day period would be required to develop a program improvement 
plan pursuant to proposed Sec. 361.89(a).
Section 361.89--Enforcement Procedures
    Proposed Sec. 361.89 contains procedures for the enforcement of the 
evaluation standards and performance indicators. The proposed 
enforcement procedures, including reduction in or loss of funding, are 
consistent with section 106(b) and (c) of the Act.
    Under proposed Sec. 361.89(a), a DSU that fails to meet the 
performance level required on both evaluation standards would be 
required to develop jointly with the Secretary a program improvement 
plan outlining the specific actions to be taken by the DSU to improve 
program performance.
    Proposed Sec. 361.89(b) would require that the Secretary examine 
all available, relevant information in connection with the development 
of a program improvement plan.
    Proposed Sec. 361.89(c) would require that program improvement 
plans be reviewed at least biannually to determine whether the desired 
performance improvements have occurred or are likely to occur. If 
necessary, the Secretary would request that the plan be modified to 
improve performance. In addition, a program improvement plan would have 
to be modified by the DSU to address any new performance levels 
established by the Secretary during the time in which the plan is in 
effect. This requirement is intended to ensure that DSUs meet current, 
rather than outdated, performance levels. Reviews would continue and 
requests for revisions would be made until the DSU sustains 
satisfactory performance over a period of more than one year.
    Under proposed Sec. 361.89(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 such a program improvement plan, the Secretary, 
consistent with the procedures specified in Sec. 361.11, would reduce 
or suspend funding to the DSU under the VR 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.

Draft Proposed Standards and Indicators on Which the Secretary 
Seeks Public Comment

Background

    In addition to inviting public comment on each of the proposed 
evaluation standards and performance indicators included in this NPRM, 
the Secretary also seeks public comment on three draft proposed 
evaluation standards and their concomitant draft proposed indicators. 
The Secretary particularly seeks comment on the validity and 
feasibility of implementing these draft proposed evaluation standards 
and draft proposed indicators. Further, the Secretary seeks assistance 
in identifying available instruments and methods that can be used to 
gather the data necessary to measure performance under these draft 
proposed evaluation standards and draft proposed indicators and in 
determining how these data-gathering instruments and methods may be 
developed. These draft proposed evaluation standards would measure a 
DSU's performance in three areas: consumer satisfaction with the VR 
program, retention of employment and earnings by those exiting the VR 
program after achieving an employment outcome, and the adequate use of 
VR program resources to support direct services for individuals with 
disabilities. The Secretary is not proposing to include these draft 
proposed measures as part of the proposed regulations in this NPRM. 
Rather, the Secretary is identifying these measures in the preamble in 
order to obtain public comment on their potential use and 
appropriateness in measuring the success of the VR program. The 
Secretary is in the process of developing valid data collection methods 
and instruments for measuring compliance with the draft proposed 
performance indicators and seeks input from commenters in identifying 
instruments that are accurate, reliable, and the least costly to DSUs. 
Once necessary instruments have been developed, and subsequent tests 
confirm their reliability, the Secretary will address these evaluation 
standards and performance indicators in a future rulemaking. The draft 
proposed evaluation standards and performance indicators are stated and 
discussed below.
     Draft Proposed Evaluation Standard 3 (Consumer 
Satisfaction): A DSU shall ensure a high level of consumer 
satisfaction.
    Draft proposed Evaluation Standard 3 is based on several provisions 
of the Act, including sections 101(a)(21)(A)(ii)(III) and 105(c)(4)of 
the

[[Page 55300]]

Act, which require the use of consumer satisfaction surveys as a way of 
assessing DSU effectiveness. In addition, many individuals in the 
disability community have commented on the need for an evaluation 
standard and related performance indicators that measure consumer 
satisfaction, particularly satisfaction with the level of informed 
choice afforded consumers during the VR process.
     Draft Proposed Evaluation Standard 4 (Retention of 
Employment and Earnings): A DSU shall assist individuals to achieve 
competitive,
self, or BEP employment outcomes that enable them to maintain their 
employment and earnings over time.
    The Secretary believes that a successful employment outcome is one 
in which the individual maintains employment and earnings for at least 
six months after exiting the program. As discussed previously, this 
standard is consistent with Core Indicators II (retention in 
unsubsidized employment six months after entry into employment) and III 
(earnings received in unsubsidized employment six months after entry 
into the employment) under section 136(b) of the Workforce Act. This 
standard is also consistent with the reporting requirements in section 
101(a)(10)(C) (iii) and (iv) of the Act (employment and earnings of 
individuals 6 months and 12 months after ending participation in the VR 
program) and in section 136(d)(2)(D) of the Workforce Act (retention of 
employment and earnings received in unsubsidized employment 12 months 
after entry into employment). Thus, under draft proposed Evaluation 
Standard 4, retention of employment and earnings for individuals who 
achieved an employment outcome with assistance from a DSU would be 
evaluated following periods of 6 and 12 months. The Secretary is 
particularly interested in receiving suggestions on how accurate and 
reliable data could be collected in a consistent format to measure a 
DSU's performance on this draft proposed evaluation standard.
     Draft Proposed Evaluation Standard 5 (Adequate Use of 
Resources): A DSU shall focus its Federal VR and State matching funds 
on direct services for individuals with disabilities.
    Draft proposed Evaluation Standard 5 would measure the extent to 
which a DSU uses its Federal VR and State matching funds to pay for 
direct services (i.e., VR services authorized under Sec. 361.48(a) and 
Sec. 361.49(a), except for the construction of facilities) for 
individuals with disabilities. Section 100(b)(1) of the Act authorizes 
appropriations for the purpose of making grants ``to assist States in 
meeting the costs of vocational rehabilitation services.'' The 
Secretary maintains that the success of the VR program is based on the 
DSU's ability to provide VR services that enable individuals with 
disabilities to work. For that reason, draft proposed Evaluation 
Standard 5 would measure DSU effectiveness in focusing its resources on 
the direct service needs of individuals with disabilities.
Draft Proposed Performance Indicators
    The Secretary plans to propose three performance indicators for 
draft proposed Evaluation Standard 3, two performance indicators for 
draft proposed Evaluation Standard 4, and one performance indicator for 
draft proposed Evaluation Standard 5. Again, data collection methods 
and instruments have yet to be developed and tested for these 
performance indicators. Thus, the Secretary is not proposing to 
establish performance levels for, nor measure compliance with, these 
draft proposed performance indicators at this time.
Consumer Satisfaction
     Draft Proposed Performance Indicator 3.1: Of all 
individuals receiving VR services, the percentage who are satisfied 
with their own level of participation in decision-making throughout the 
development and implementation of their IPE.
    Draft proposed Performance Indicator 3.1 would address the extent 
to which a DSU implements the statutory policy of facilitating informed 
choice. That policy is reflected, for example, in section 100(a)(3)(C) 
of the Act, which states that eligible individuals and applicants 
``must be active and full partners in the vocational rehabilitation 
process, making meaningful and informed choices during assessments * * 
* and in the selection of employment outcomes * * *, services needed to 
achieve the outcomes, entities providing such services, and the methods 
used to secure such services.''
     Draft Proposed Performance Indicator 3.2: Of all 
individuals receiving services, the percentage who are satisfied with--
    (1) The appropriateness, timeliness, quality, and extent of the 
services they received;
    (2) Their interactions with providers of those services; and
    (3) Their interactions with VR counselors and other DSU staff.
    Draft proposed Performance Indicator 3.2 is based on statutory 
requirements that call for consumer satisfaction surveys to be used as 
measures of DSU effectiveness (e.g., section 105(c)(4) of the Act 
requiring that State Rehabilitation Councils survey the satisfaction of 
individuals receiving VR services). Also, section 136(b)(2)(B) of the 
Workforce Act requires an indicator of ``customer satisfaction of * * * 
participants with services received'' to be developed for each State.
     Draft Proposed Performance Indicator 3.3: Of all 
individuals who obtain employment, the percentage who are satisfied 
with their employment.
    Draft proposed Performance Indicator 3.3 is based upon the 
regulatory requirements in Sec. 361.56 that govern whether an 
individual is considered to ``have achieved an employment outcome.'' In 
particular, Sec. 361.56(e) of the regulations requires that ``the 
individual and the rehabilitation counselor or coordinator consider the 
employment outcome to be satisfactory'' as a condition of determining 
that the individual has achieved an employment outcome. The Secretary 
seeks public comment on how this type of consumer satisfaction data 
could be collected reliably and accurately in a manner that is the 
least burdensome and costly to DSUs and invites commenters to submit 
examples of existing State consumer satisfaction surveys and collection 
methods.
Retention of Employment and Earnings
     Draft Proposed Performance Indicator 4.1: Of all 
individuals who have achieved a competitive, self-, or BEP employment 
outcome with earnings equivalent to at least the minimum wage, the 
percentage who have maintained competitive employment, including 
earnings equivalent to at least the minimum wage, 6 months and 12 
months after exiting the VR program.
    Retention of employment is an essential issue for both the 
individual and the VR program that corresponds directly to the 
employment-related purposes of the VR program. Draft proposed 
Performance Indicator 4.1 would measure retention 6 months and 12 
months after exit from the VR program, which the Secretary views as an 
appropriate indicator of whether the individual is likely to maintain 
employment over time.
     Draft Proposed Performance Indicator 4.2: Individuals with 
significant disabilities who have maintained competitive employment, 
including earnings equivalent to at least the minimum wage, 6 months 
and 12 months after exiting the VR program as a percentage of all 
individuals with significant disabilities who achieved a

[[Page 55301]]

competitive, self-, or BEP employment outcome with earnings equivalent 
to at least the minimum wage.
    Draft proposed Performance Indicator 4.2 was developed in 
recognition of the greater barriers to long-term employment retention 
faced by individuals with significant disabilities.
Adequate Use of Resources
     Draft Proposed Performance Indicator 5.1: Of the total 
amount of all Federal VR and State matching funds spent in support of 
activities described in the State Plan under section 101 of the Act, 
the percentage of Federal VR and State matching funds spent on direct 
services to consumers, including services provided directly by the 
staff of a DSU.
    Draft proposed Performance Indicator 5.1 would address a DSU's 
success in operating an effective and efficient VR program. The 
indicator would compare the level of Federal VR and State matching 
funds that a DSU spends directly on services to individuals with 
disabilities as a percentage of all Federal VR and State matching funds 
that it expends for other purposes (e.g., administrative costs). RSA is 
currently examining reliable methods for identifying direct services 
costs that do not impose excessive reporting burdens on DSUs.

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 proposed regulations would address the National Education 
Goal that by the year 2000, 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. These proposed regulations would 
further the objectives of this Goal because the development and 
implementation of evaluation standards and performance indicators will 
enhance the accountability and effectiveness of The State Vocational 
Rehabilitation Services Program, which assists States in operating a 
comprehensive, coordinated, effective, efficient, and accountable 
program for vocational rehabilitation designed to assess, plan, 
develop, and provide vocational rehabilitation services for individuals 
with disabilities so that they may prepare for and engage in gainful 
employment.

Executive Order 12866

1. Potential Costs and Benefits
    These proposed 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 proposed regulations are 
those resulting from statutory requirements and those determined by the 
Secretary to be necessary for administering this program effectively 
and efficiently. Burdens specifically associated with information 
collection requirements are identified and explained elsewhere in this 
preamble under the heading Paperwork Reduction Act of 1995.
    In assessing the potential costs and benefits--both quantitative 
and qualitative--of these proposed regulations, the Secretary has 
determined that the benefits of the proposed 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.
    To assist the Department in complying with the specific 
requirements of Executive Order 12866, the Secretary invites comment on 
whether there may be further opportunities to reduce any potential 
costs or increase potential benefits resulting from these proposed 
regulations without impeding the effective and efficient administration 
of the program.
    The potential costs and benefits of these proposed regulations are 
discussed elsewhere in this preamble under the following headings: 
``Supplementary Information'' and ``Paperwork Reduction Act of 1995.''
2. Clarity of the Regulations
    Executive Order 12866 requires each agency to write regulations 
that are easy to understand.
    The Secretary invites comments on how to make these proposed 
regulations easier to understand, including answers to questions such 
as the following: (1) Are the requirements in the proposed regulations 
clearly stated? (2) Do the regulations contain technical terms or other 
wording that interferes with their clarity? (3) Does the format of the 
proposed regulations (grouping and order of sections, use of headings, 
paragraphing, etc.) aid or reduce their clarity? Would the proposed 
regulations be easier to understand if they were divided into more (but 
shorter) sections? (A ``section'' is preceded by the symbol ``Sec. '' 
and a numbered heading; for example, Sec. 361.81 Applicable 
definitions.) (4) Is the description of the proposed regulations in the 
``Supplementary Information'' section of this preamble helpful in 
understanding the proposed regulations? How could this description be 
more helpful in making the proposed regulations easier to understand? 
(5) What else could the Department do to make the proposed regulations 
easier to understand?
    A copy of any comments that concern how the Department could make 
these proposed regulations easier to understand should be sent to 
Stanley M. Cohen, Regulations Quality Officer, U.S. Department of 
Education, 600 Independence Avenue, SW. (Room 5121, FB-10B), 
Washington, D.C. 20202-2241.

Regulatory Flexibility Act Certification

    The Secretary certifies that these proposed regulations would not 
have a significant economic impact on a substantial number of small 
entities.
    Because these proposed regulations would affect only States and 
State agencies, the regulations would not have an impact on small 
entities. States and State agencies are not defined as ``small 
entities'' in the Regulatory Flexibility Act.

Paperwork Reduction Act of 1995

    Sections 361.82, 361.84, 361.88, and 361.89 contain information 
collection requirements. As required by the Paperwork Reduction Act of 
1995 (44 U.S.C. 3507(d)), the Department of Education has submitted a 
copy of these sections to OMB for its review.
Collection of Information: The State Vocational Rehabilitation Services 
Program
    States are eligible to apply for grants under these proposed 
regulations. The information to be collected includes data reported to 
assess compliance with established evaluation standards and performance 
indicators for the VR program. The Department needs and uses the 
information to comply with the provisions of section 106 of the Act 
that mandates the establishment of evaluation standards and performance 
indicators for the program.
    All information is to be collected and reported annually. Annual 
reporting and recordkeeping burden for this collection of information 
is estimated to average one hour for each response for

[[Page 55302]]

one respondent, including the time for reviewing instructions searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information. Thus, the total 
annual reporting and recordkeeping burden for this collection is 
estimated to be one hour.

    Note: The burden is estimated as one hour because the remaining 
burden hours are accounted for under a separate OMB control number 
1820-0508, which is called the RSA 911 Case Service Report.

    Organizations and individuals desiring to submit comments on the 
information collection requirements should direct them to the Office of 
Information and Regulatory Affairs, OMB, Room 10235, New Executive 
Office Building, Washington, DC. 20503; Attention: Desk Officer for 
U.S. Department of Education.
    The Department considers comments by the public on these proposed 
collections of information in--
     Evaluating whether the proposed collections of information 
are necessary for the proper performance of the functions of the 
Department, including whether the information will have practical use;
     Evaluating the accuracy of the Department's estimate of 
the burden of the proposed collections of information, including the 
validity of the methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology; e.g., permitting 
electronic submission of responses.
    OMB is required to make a decision concerning the collections of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment to the Department on the 
proposed 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

    The Secretary particularly requests comments on whether the 
proposed regulations in this document would require transmission of 
information that is being gathered by or is available from any other 
agency or authority of the United States.

Electronic Access to This Document

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

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

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

List of Subjects in 34 CFR Part 361

    Reporting and recordkeeping requirements, State-administered grant 
program--education, Vocational rehabilitation.

    Dated: June 2, 1998.
Richard W. Riley,
Secretary of Education.

(Catalog of Federal Domestic Assistance Number 84.126--The State 
Vocational Rehabilitation Services Program)

    The Secretary proposes to amend Title 34 of the Code of Federal 
Regulations by adding a new Subpart E to Part 361 to read as follows:

PART 361--THE STATE VOCATIONAL REHABILITATION SERVICES PROGRAM

* * * * *

Subpart E--Evaluation Standards and Performance Indicators

Sec.
361.80  Purpose.
361.81  Applicable definitions.
361.82  Evaluation standards.
361.84  Performance indicators.
361.86  Performance levels.
361.88  Reporting requirements.
361.89 Enforcement procedures.

    Authority: 29 U.S.C. 711(c), unless otherwise noted.
* * * * *

Subpart E--Evaluation Standards and Performance Indicators


Sec. 361.80  Purpose.

    The purpose of this subpart is to establish evaluation standards 
and performance indicators for The State Vocational Rehabilitation (VR) 
Services Program.

(Authority: 29 U.S.C. 726(a))


Sec. 361.81  Applicable definitions.

    In addition to those definitions in Sec. 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 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.
    Full-time employment means an employment outcome in which an 
eligible individual worked for pay for a minimum of 35 hours in the 
week before closure.
    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 or ethnicity as Black,

[[Page 55303]]

American Indian, Alaskan Native, Asian, Pacific Islander, or of 
Hispanic origin.
    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 having ethnicity or race 
reported as White.
    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 commencing 
with fiscal year 1999. However, DSUs that exclusively serve individuals 
with visual impairments or blindness shall report each year aggregated 
data for the two previous years for Performance Indicators 1.1 through 
1.7; 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, including individuals who were determined 
ineligible for services.
    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))


Sec. 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 
State VR Services Program.
    (b) A DSU shall achieve successful performance on both evaluation 
standards during each performance period.
    (c) The evaluation standards for The State VR Services Program 
are--
    (1) Evaluation Standard 1--Employment outcomes. A DSU shall 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 shall 
ensure that individuals from minority backgrounds have equal access to 
VR services.

(Authority: 29 U.S.C. 726(a))


Sec. 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 reported their own income as the largest single source 
of economic support at exit and the percentage who reported their own 
income as the largest single source of support at application.
    (vii) Performance Indicator 1.7. Of all individuals exiting the VR 
program in full-time competitive employment, the percentage exiting the 
VR program in full-time competitive employment who can enroll in a 
medical insurance plan that covers hospitalization and is made 
available through the individual's place of employment.
    (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.
    (ii) Performance Indicator 2.2. The percentage of individuals with 
significant disabilities who exit the VR program after receiving 
services under an IPE who are minorities as a ratio to the percentage 
of individuals in the State's working age population (individuals age 
16 to 64) reporting a disability that prevents them from working (as 
reported in U.S. Bureau of Census, Public Use Microdata System (PUMS), 
1990 Decennial Census) who are minorities.

(Authority: 29 U.S.C. 726(a))


Sec. 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) To 
achieve successful performance on Evaluation Standard 1 (Employment 
outcomes), a DSU must meet or exceed the performance levels established 
for five of the seven performance indicators in the evaluation 
standard, including

[[Page 55304]]

meeting or exceeding the performance levels for two of the three 
primary indicators (Performance Indicators 1.3, 1.4 and 1.5). The 
performance levels for Performance Indicators 1.1 through 1.7 are--

------------------------------------------------------------------------
                                     Performance level by type of DSU
     Performance indicator      ----------------------------------------
                                    General/combined          Blind
------------------------------------------------------------------------
1.1............................  Equal or exceed
                                  previous performance
                                  period.
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.             30.4
                                  difference).
1.7............................  50.6%.................  49.3%
------------------------------------------------------------------------

    (2) 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 (b)(2)(i) of this section. DSUs must also meet 
or exceed the performance level established for Performance Indicator 
2.2 or meet the performance requirement in paragraph (b)(2)(ii) of this 
section. The performance levels for Performance Indicators 2.1 and 2.2 
are--

------------------------------------------------------------------------
                                                             Performance
                   Performance indicator                        levels
------------------------------------------------------------------------
2.1 (Ratio)................................................         .80
2.2 (Ratio)................................................         .80
------------------------------------------------------------------------

    (i) If a DSU's performance does not meet or exceed the performance 
level required for Performance Indicator 2.1, or if a DSU has less than 
100 cases in the denominator of a service rate, the DSU shall describe 
the policies it has adopted and the steps it has taken to ensure that 
individuals with disabilities from minority backgrounds have equal 
access to VR services.
    (ii) If a DSU's performance does not meet or exceed the performance 
level required for Performance Indicator 2.2, or if a DSU has less than 
100 cases in the denominator of the calculation, a DSU shall describe 
the outreach and recruitment activities it has undertaken and the 
policies and other practices it has adopted to ensure that individuals 
with disabilities from minority backgrounds have equal access to VR 
services.

(Authority: 29 U.S.C. 726(a))


Sec. 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 Sec. 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 application 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 in full-time 
competitive employment.
    (8) The number of individuals exiting the VR program in full-time 
competitive employment who have health insurance that covers 
hospitalization available through their job.
    (9) The total number of individuals exiting the VR program who are 
individuals from a minority background.
    (10) The total number of non-minority individuals exiting the VR 
program.
    (11) The total number of individuals from a minority background 
exiting the VR program after receiving services under an IPE.
    (12) The total number of non-minority individuals exiting the VR 
program after receiving services under an IPE.
    (13) The number of individuals from a minority background who are 
individuals with significant disabilities and exit 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 (13) 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. A DSU's failure to submit data that are valid, 
accurate, and in a consistent format within the 60-day period will 
require the DSU to develop a program improvement plan pursuant to 
Sec. 361.89(a).

(Authority: 29 U.S.C. 726(b))


Sec. 361.89  Enforcement procedures.

    (a) If a DSU fails to meet the established performance levels on 
both evaluation standards as required by Sec. 361.82(b), the Secretary 
and the DSU 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 and relevant 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 
requests that a DSU make further revisions to the plan to improve 
performance. If the Secretary establishes new performance levels under 
Sec. 361.86(a)(2), the Secretary and the DSU jointly shall 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

[[Page 55305]]

current performance levels over a period of more than one 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 Sec. 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.

(Authority: 29 U.S.C. 726(b) and 726(c))

[FR Doc. 98-27421 Filed 10-13-98; 8:45 am]
BILLING CODE 4000-01-P