[Federal Register Volume 79, Number 157 (Thursday, August 14, 2014)]
[Rules and Regulations]
[Pages 47575-47579]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-19289]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF EDUCATION

34 CFR Chapter III

[CFDA Number: 84.224D.]


Final Priority; Rehabilitation Services Administration--Assistive 
Technology Alternative Financing Program

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

ACTION: Final priority.

-----------------------------------------------------------------------

SUMMARY: The Assistant Secretary for Special Education and 
Rehabilitative Services announces a priority under the Assistive 
Technology Alternative Financing Program administered by the 
Rehabilitation Services Administration (RSA). The Assistant Secretary 
may use this priority for competitions in fiscal year (FY) 2014 and 
later years. This priority is designed to ensure that the Department 
funds high-quality assistive technology (AT) alternative financing 
programs (AFPs) that meet rigorous standards in order to enable 
individuals with disabilities to access and acquire assistive 
technology devices and services necessary to achieve education, 
community living, and employment goals.

[[Page 47576]]


DATES: Effective Date: This priority is effective September 15, 2014.

FOR FURTHER INFORMATION CONTACT: Robert Groenendaal, U.S. Department of 
Education, 400 Maryland Avenue SW., Room 5025, Potomac Center Plaza 
(PCP), Washington, DC 20202-2800. Telephone: (202) 245-7393 or by 
email: [email protected].
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:
    Purpose of Program: The purpose of the Assistive Technology 
Alternative Financing Program (AFP) is to support programs that provide 
for the purchase of AT devices, such as a low-interest loan fund, an 
interest buy-down program, a revolving loan fund, a loan guarantee, or 
an insurance program. The Consolidated Appropriations Act, 2014 (the 
Act) requires applicants for these grants to provide an assurance that, 
and information describing the manner in which, the AFP will expand and 
emphasize consumer choice and control. It also specifies that State 
agencies and community-based disability organizations that are directed 
by and operated for individuals with disabilities are eligible to 
compete. Language in the Explanatory Statement accompanying the Act 
provides that successful applicants must emphasize consumer choice and 
control and build programs that will provide financing for the full 
array of AT devices and services and ensure that all people with 
disabilities, regardless of type of disability or health condition, 
age, level of income, and residence, have access to the program. In 
addition, the language provides that applicants should incorporate 
credit-building activities in their programs, including financial 
education and information about other possible funding sources.

    Program Authority: Consolidated Appropriations Act, 2014 (Pub. 
L. 113-76).

    We published a notice of proposed priority for this competition in 
the Federal Register on May 13, 2014 (79 FR 27230). That notice 
contained background information and our reasons for proposing this 
particular priority.
    Except for minor editorial and technical revisions, there are no 
differences between the proposed priority and this final priority.
    Public Comment: In response to our invitation in the notice of 
proposed priority, 16 parties submitted comments on the proposed 
priority. Generally, we do not address technical or other minor 
changes.
    Analysis of Comments and Changes: An analysis of the comments and 
of any changes in the priority since publication of the notice of 
proposed priority follows.
    Comment: Two commenters suggested that there should be a provision 
for a multi-State consortium to apply. One commenter, however, 
expressed opposition to multi-State consortia AT loan programs because 
of a concern that these consortia would duplicate State programs. This 
commenter proposed that AFPs should have knowledge of State-specific AT 
resources.
    Discussion: There is nothing in the priority or regulations that 
prevents a multi-State consortium from applying. Under 34 CFR 75.127, 
eligible parties may apply as a group for a grant; and ``consortium'' 
is a term that may be used to refer to a group of eligible parties. We 
will clarify in the notice inviting applications for this competition 
that multi-State groups or consortia are eligible to apply.
    We agree with the commenter that grantees should be knowledgeable 
about State-specific AT resources, and believe that the applicable 
selection criteria address this concern. Specifically, among the 
selection criteria in 34 CFR 75.210(a) that the Secretary may consider 
when determining the need for a proposed project is the magnitude of 
the need for the services to be provided or the activities to be 
carried out and the extent to which specific gaps or weaknesses in 
services, infrastructure, or opportunities have been identified and 
will be addressed by the proposed project, including the nature and 
magnitude of those gaps or weaknesses. We will use the peer review 
process to determine how well an applicant addresses the needs of the 
service area identified in the application.
    Changes: None.
    Comment: Seven commenters expressed opposition to the competitive 
preference points. On the other hand, three commenters supported the 
proposed competitive preference priorities, citing the need for AFPs in 
every State. One commenter suggested that priority points be awarded to 
existing AFPs with a history of successful operation.
    Discussion: Twenty of the States and outlying areas have not 
received funding for AT AFPs. While all States and outlying areas can 
apply, our objective is to establish AFPs in States that have not 
previously received funding from the Federal government for this 
purpose and to expand small or underfunded AFPs that have received less 
than $1 million from competitions under title III of the Assistive 
Technology Act of 1998 (AT Act of 1998) during FYs 2000 through 2006, 
or under the Appropriations Acts for FY 2012 and 2013. By awarding 
competitive preference points to applicants, we intend to address the 
need for the development of AFPs from these unserved or underfunded 
areas so individuals with disabilities across the nation have the 
opportunity to receive services and purchase AT devices through 
alternative loan programs.
    Changes: None.
    Comment: Two commenters suggested that consumers be entitled to 
exercise choice and control with respect to the makeup of the board of 
directors of grantees; and that the boards should include a majority of 
members with disabilities. One of these commenters questioned whether 
family members should be counted toward this majority.
    Discussion: The Act and the priority require that grantees 
emphasize and expand consumer choice and control, including oversight 
of the program. Although we encourage grantees to include individuals 
with disabilities and their family members on their boards of 
directors, the requirement in the Act does not specifically apply to 
the composition of the grantees' boards. It applies to the involvement 
of consumers in the implementation of a program's administration and 
policy decisions. This could be achieved in a number of ways, including 
having a majority of the members of the project's board of directors or 
loan review committee be individuals with disabilities. In addition, 
consumer choice and control applies to consumers who are receiving 
financial loans having choices and control over the selection of 
devices and vendors.
    Each applicant is required to submit an assurance that, and 
information describing the manner in which, the AFP will expand and 
emphasize consumer choice and control. As AFPs must be designed to 
allow individuals with disabilities and their family members, 
guardians, advocates, and authorized representatives to purchase AT 
devices or services, the consumer choice and control requirement 
applies to family members of individuals with disabilities. As such, a 
family member could serve on a board of directors or loan review 
committee. We will use the competitive process to determine the extent 
to which an application proposes to achieve consumer choice and 
control.
    Changes: None.
    Comment: One commenter supported credit-building activities as an 
important component of AFPs. This commenter proposed that grantees be 
required to provide financial education

[[Page 47577]]

and counseling to consumers to improve their financial capability, 
knowledge, and skills and advance their economic stability.
    Discussion: The final priority requires applicants to submit an 
assurance that the AFP will incorporate credit-building activities into 
their programs, including financial education and information about 
other possible funding sources. We will use the competitive process to 
determine the extent to which an applicant proposes to meet this 
requirement.
    Changes: None.
    Comment: One commenter recommended that the Department consider a 
State's size, population, number of people with disabilities, and other 
unique qualities in evaluating a grant application.
    Discussion: Our objectives are to establish AFPs in States and 
outlying areas that have not previously received funding from the 
Federal government for this purpose and to expand small or underfunded 
AFPs that have received less than $1 million from competitions under 
title III of the AT Act of 1998 during FYs 2000 through 2006 or under 
the Appropriations Acts for FYs 2012 and 2013. However, we note that 
the ``Need for Project'' selection criterion in 34 CFR 75.210(a) 
includes ``the magnitude of the need for the services to be provided or 
the activities to be carried out by the proposed project'' and the 
``extent to which specific gaps or weaknesses in services, 
infrastructure, or opportunities have been identified and will be 
addressed by the proposed project.'' We believe that this selection 
criterion addresses the commenter's suggestion that we consider a 
State's size, population, number of people with disabilities, and other 
unique qualities in evaluating a grant application. We encourage 
applicants to address these factors in the ``Need for Project'' section 
of the application. We also note that the State Grant for Assistive 
Technology program, a formula grant program funded under the AT Act of 
1998, as amended, that provides grants to every State and outlying area 
and considers a grantee's size and population in making awards, 
authorizes grantees to develop programs that are similar to the AFPs as 
one of their activities.
    Changes: None.
    Comment: One commenter suggested that the Department support 
existing AFPs that have been effective but have little or no Federal 
funding remaining.
    Discussion: All States and outlying areas are eligible to apply. 
However, we believe that the States and outlying areas that have not 
previously received funding from the Federal government for this 
purpose or that have small or underfunded AFPs that have received less 
than $1 million from competitions under title III of the AT Act of 1998 
during FYs 2000 through 2006 or under the Appropriations Acts for FY 
2012 and 2013 should receive competitive priority.
    Changes: None.
    Comment: One commenter suggested that no new programs be 
established with less than $3 million. According to this commenter, 
without this amount of funding, a State cannot meet the need for loans. 
This commenter also recommended that RSA encourage any State that has 
less than $1 million in loanable funds to freeze the program until 
adequate resources are available.
    Discussion: The Act provided a total of $2 million for the AT AFP 
competition, which is $1 million less than the minimum amount 
recommended by the commenter. We agree that small AFPs should have the 
opportunity to acquire additional funds, and are establishing a 
competitive preference priority for programs that received less than $1 
million in funds from competitions under title III of the AT Act of 
1998 during FYs 2000 through 2006 or under the Appropriations Acts for 
FYs 2012 and 2013. However, we do not agree that an AFP needs a minimum 
of $3 million to be effective or that an AFP with less than $1 million 
in loanable funds should be frozen. Many of the programs that received 
less than $1 million in Federal funding in the past make significant 
numbers of alternative financing loans and have proved themselves to be 
beneficial to individuals with disabilities in their States.
    Changes: None.
    Comment: Two commenters suggested that RSA should support only 
consumer-controlled, non-profit or community-based organizations as 
grantees under this program in FY 2014.
    Discussion: Because the Act states who is eligible for an award, we 
do not have the authority to change the program's eligibility 
requirements. Specifically, the Act states, ``State agencies and 
community-based disability organizations that are directed by and 
operated for individuals with disabilities shall be eligible to 
compete.''
    Changes: None.
    Comment: One commenter expressed support for the 10 percent limit 
on indirect expenses, and suggested that RSA collect fiscal expenditure 
data on an annual basis to ensure compliance.
    Discussion: For each 12-month budget period, grantees must 
recalculate their allowable indirect cost rate, which may not exceed 10 
percent of the portion of the grant award that is used annually for 
program administration related to the AFP. RSA supports the 10 percent 
limit on indirect expenses and will monitor grantees to ensure 
compliance with this requirement.
    Changes: None.
    Final Priority:
    Assistive Technology Alternative Financing Program.
    The Assistant Secretary for Special Education and Rehabilitative 
Services announces a priority to fund one-year grant awards to support 
AFPs that assist individuals with disabilities to obtain financial 
assistance for AT devices and services.
    Under this priority, applicants must establish or expand one or 
more of the following types of AFPs:
    (1) A low-interest loan fund.
    (2) An interest buy-down program.
    (3) A revolving loan fund.
    (4) A loan guarantee or insurance program.
    (5) Another mechanism that is approved by the Secretary.
    AFPs must be designed to allow individuals with disabilities and 
their family members, guardians, advocates, and authorized 
representatives to purchase AT devices or services. If family members, 
guardians, advocates, and authorized representatives (including 
employers who have been designated by an individual with a disability 
as an authorized representative) receive AFP support to purchase AT 
devices or services, the purchase must be solely for the benefit of an 
individual with a disability.
    To be considered for funding, an applicant must identify the type 
or types of AFP(s) to be supported by the grant and submit all of the 
following assurances:
    (1) Permanent Separate Account: An assurance from the applicant 
that--
    (a) All funds that support the AFP, including funds repaid during 
the life of the program, will be deposited in a permanent separate 
account and identified and accounted for separately from any other 
funds;
    (b) If the grantee administering the program invests funds within 
this account, the grantee will invest the funds in low-risk securities 
in which a regulated insurance company may invest under the law of the 
State; and
    (c) The grantee will administer the funds with the same judgment 
and care that a person of prudence, discretion, and intelligence would 
exercise in the management of the financial affairs of that person.

[[Page 47578]]

    (2) Permanence of the Program: An assurance that the AFP will 
continue on a permanent basis.
    An applicant's obligation to implement the AFP consistent with all 
of the requirements, including reporting requirements, continues until 
there are no longer any funds available to operate the AFP and all 
outstanding loans have been repaid. If a grantee decides to terminate 
its AFP while there are still funds available to operate the program, 
the grantee must return the funds remaining in the permanent separate 
account to the U.S. Department of the Treasury except for funds being 
used for grant purposes, such as loan guarantees for outstanding loans. 
However, before closing out its grant, the grantee also must return any 
principal and interest remitted to it on outstanding loans and any 
other funds remaining in the permanent separate account, such as funds 
being used as loan guarantees for those loans.
    (3) Consumer Choice and Control: An assurance that, and information 
describing the manner in which, the AFP will expand and emphasize 
consumer choice and control.
    (4) Supplement-Not-Supplant: An assurance that the funds made 
available through the grant to support the AFP will be used to 
supplement and not supplant other Federal, State, and local public 
funds expended to provide alternative financing mechanisms.
    (5) Use and Control of Funds: An assurance that funds comprised of 
the principal and interest from the account described in paragraph (1) 
Permanent Separate Account of this priority will be available solely to 
support the AFP.
    This assurance regarding the use and control of funds applies to 
all funds derived from the AFP, including the original Federal award, 
AFP funds generated by either interest-bearing accounts or investments, 
and all principal and interest paid by borrowers of the AFP who are 
extended loans from the permanent separate account.
    (6) Indirect Costs: An assurance that the percentage of the funds 
used for indirect costs will not exceed 10 percent of the portion of 
the grant award that is used annually for program administration 
(excluding funds used for loan activity).
    For each 12-month budget period, grantees must recalculate their 
allowable indirect cost rate, which may not exceed 10 percent of the 
portion of the grant award that is used annually for program 
administration related to the AFP.
    (7) Administrative Policies and Procedures: An assurance that the 
applicant receiving a grant under this priority will submit to the 
Secretary for review and approval within the 12-month project period 
the following policies and procedures for administration of the AFP:
    (a) A procedure to review and process in a timely manner requests 
for financial assistance for immediate and potential technology needs, 
including consideration of methods to reduce paperwork and duplication 
of effort, particularly relating to need, eligibility, and 
determination of the specific AT device or service to be financed 
through the program.
    (b) A policy and procedure to ensure that individuals are allowed 
to apply for financing for a full array of AT devices and services 
regardless of type of disability or health condition, age, income 
level, location of residence in the State, or type of AT device or 
service for which financing is requested through the program. It is 
permissible for programs to target individuals with disabilities who 
would have been denied conventional financing as a priority for AFP 
funding.
    (c) A procedure to ensure consumer choice and consumer-controlled 
oversight of the program.
    (d) A sustainability plan, including information on the percentage 
of funds expected to be used for operating expenses and loan capital.
    (8) Data Collection: An assurance that the applicant will collect 
and report data requested by the Secretary in the format, with the 
frequency, and using the method established by the Secretary until 
there are no longer any funds available to operate the AFP and all 
outstanding loans have been repaid.
    (9) Credit Building Activities: An assurance that the AFP will 
incorporate credit-building activities into its programs, including 
financial education and information about other possible funding 
sources.
    Competitive Preference Priorities: Within this priority, we 
announce two competitive preference priorities.
    These priorities are:
    Need to Establish an AFP (10 additional points): This applies to an 
applicant located in a State or outlying area where an AFP grant has 
not been previously awarded under title III of the AT Act of 1998 or 
under the Appropriations Acts for FYs 2012 and 2013.
    Need to Expand an AFP (5 additional points): This applies to an 
applicant located in a State or outlying area where an AFP grant has 
been previously awarded under title III of the AT Act of 1998 or under 
the Appropriations Acts for FYs 2012 and 2013, but the State or 
outlying area has received less than a total of $1 million in Federal 
grant funds for the operation of its AFP under title III of the AT Act 
of 1998 during fiscal years 2000 through 2006 and the appropriations 
Acts for FYs 2012 and 2013.
    Types of Priorities:
    When inviting applications for a competition using one or more 
priorities, we designate the type of each priority as absolute, 
competitive preference, or invitational through a notice in the Federal 
Register.The effect of each type of priority follows:
    Absolute priority: Under an absolute priority, we consider only 
applications that meet the priority (34 CFR 75.105(c)(3)).
    Competitive preference priority: Under a competitive preference 
priority, we give competitive preference to an application by (1) 
awarding additional points, depending on the extent to which the 
application meets the priority (34 CFR 75.105(c)(2)(i)); or (2) 
selecting an application that meets the priority over an application of 
comparable merit that does not meet the priority (34 CFR 
75.105(c)(2)(ii)).
    Invitational priority: Under an invitational priority, we are 
particularly interested in applications that meet the priority. 
However, we do not give an application that meets the priority a 
preference over other applications (34 CFR 75.105(c)(1)).
    This notice does not preclude us from proposing additional 
priorities, requirements, definitions, or selection criteria, subject 
to meeting applicable rulemaking requirements.

    Note: This notice does not solicit applications. In any year in 
which we choose to use this priority, we invite applications through 
a notice in the Federal Register.

Executive Orders 12866 and 13563

Regulatory Impact Analysis

    Under Executive Order 12866, the Secretary must determine whether 
this regulatory action is ``significant'' and, therefore, subject to 
the requirements of the Executive order and subject to review by the 
Office of Management and Budget (OMB). Section 3(f) of Executive Order 
12866 defines a ``significant regulatory action'' as an action likely 
to result in a rule that may--
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect a sector of the economy, productivity, competition, 
jobs, the environment, public health or safety, or State, local, or 
tribal governments or communities in a material way (also referred to 
as an ``economically significant'' rule);

[[Page 47579]]

    (2) Create serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive order.
    This final regulatory action is not a significant regulatory action 
subject to review by OMB under section 3(f) of Executive Order 12866.
    We have also reviewed this final regulatory action under Executive 
Order 13563, which supplements and explicitly reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, Executive Order 
13563 requires that an agency--
    (1) Propose or adopt regulations only upon a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives and taking into 
account--among other things and to the extent practicable--the costs of 
cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance a regulated entity must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including economic incentives--such as user fees or 
marketable permits--to encourage the desired behavior, or provide 
information that enables the public to make choices.
    Executive Order 13563 also requires an agency ``to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible.'' The Office of 
Information and Regulatory Affairs of OMB has emphasized that these 
techniques may include ``identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes.''
    We are issuing this final priority only on a reasoned determination 
that its benefits justify its costs. In choosing among alternative 
regulatory approaches, we selected those approaches that maximize net 
benefits. Based on the analysis that follows, the Department believes 
that this regulatory action is consistent with the principles in 
Executive Order 13563.
    We also have determined that this regulatory action does not unduly 
interfere with State, local, and tribal governments in the exercise of 
their governmental functions.
    In accordance with both Executive orders, the Department has 
assessed the potential costs and benefits, both quantitative and 
qualitative, of this regulatory action. The potential costs are those 
resulting from statutory requirements and those we have determined as 
necessary for administering the Department's programs and activities.
    Intergovernmental Review: This program is subject to Executive 
Order 12372 and the regulations in 34 CFR part 79. One of the 
objectives of the Executive order is to foster an intergovernmental 
partnership and a strengthened federalism. The Executive order relies 
on processes developed by State and local governments for coordination 
and review of proposed Federal financial assistance.
    This document provides early notification of our specific plans and 
actions for this program.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) by contacting the Grants and Contracts 
Services Team, U.S. Department of Education, 400 Maryland Avenue SW., 
Room 5075, PCP, Washington, DC 20202-2550. Telephone: (202) 245-7363. 
If you use a TDD or a TTY, call the FRS, toll free, at 1-800-877-8339.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. Free 
Internet access to the official edition of the Federal Register and the 
Code of Federal Regulations is available via the Federal Digital System 
at: www.gpo.gov/fdsys. At this site you can view this document, as well 
as all other documents of this Department published in the Federal 
Register, in text or Adobe Portable Document Format (PDF). To use PDF 
you must have Adobe Acrobat Reader, which is available free at the 
site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

    Dated: August 11, 2014.
Michael K. Yudin,
Acting Assistant Secretary for Special Education and Rehabilitative 
Services.
[FR Doc. 2014-19289 Filed 8-13-14; 8:45 am]
BILLING CODE 4000-01-P