[Federal Register Volume 81, Number 208 (Thursday, October 27, 2016)]
[Rules and Regulations]
[Pages 74682-74700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25918]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Community Living

45 CFR Part 1329

RIN 0985-AA10


Independent Living Services and Centers for Independent Living

AGENCY: Independent Living Administration, Administration for Community 
Living, HHS.

ACTION: Final rule.

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SUMMARY: This rule implements the Rehabilitation Act as amended by the 
Workforce Innovation and Opportunity Act, which established an 
Independent Living Administration within the Administration for 
Community Living (ACL) of the Department of Health and Human Services 
(HHS). The rule helps implement changes to the administration of 
Independent Living Services and the Centers for Independent Living made 
under the current law in alignment with ACL and HHS policies and 
practices.

DATES: These final regulations are effective November 28, 2016.

FOR FURTHER INFORMATION CONTACT: Molly Burgdorf, Administration for 
Community Living, telephone (202) 795-7317 (Voice). This is not a toll-
free number. This document will be made available in alternative 
formats upon request. Written correspondence can be sent to the 
Administration for Community Living, U.S. Department of Health and 
Human Services, 330 C St. SW., Washington, DC 20201.

SUPPLEMENTARY INFORMATION:

I. Discussion of Final Rule

    The federal Independent Living (IL) program seeks to empower and 
enable individuals with disabilities, particularly individuals with 
significant disabilities, to exercise full choice and control over 
their lives and to live independently in their communities. For over 40 
years, these aims have been advanced through two federal programs: 
Independent Living Services (ILS) and Centers for Independent Living 
(referred to as CILs or Centers). The Workforce Innovation and 
Opportunity Act (WIOA) transferred these Independent Living programs to 
the Administration for Community Living (ACL) and created a new 
Independent Living Administration within the agency, adding section 
701A of the Rehabilitation Act, 29 U.S.C. 796-1. As part of the 
transfer, the Administrator of ACL (Administrator) drafted a Notice of 
Proposed Rule Making (NPRM) that was published on November 16, 2015,to 
implement changes made by WIOA in accordance with Section 12 of the 
Rehabilitation Act, as amended, 29 U.S.C. 709(e), and section 491(f) of 
WIOA, 42 U.S.C. 3515e(f).
    ACL received over 100 comments to the NPRM, most of them expressing 
their support for the provisions in the proposed rule. ACL has read and 
considered each of the comments received. We respond here to the most-
commonly-received comments and to those that we believe require further 
discussion. We have indicated changes made between the NPRM and final 
rule.
    Several comments raised issues that are specific to the commenter. 
Responding to such comments is beyond the scope of the final 
regulation. Nevertheless, we encourage commenters with individualized 
questions to contact the technical and training support center or the 
ILA specialist for their State for assistance with their questions. We 
also made a number of technical changes in the preamble, for example, 
to reflect that the term ``704 Reporting Instruments'' will no longer 
be used for data collection going forward, and to clarify potentially 
confusing references to the ``State.''

Subpart A--General Provisions

    ACL received numerous comments expressing concern about the person-
centered planning language in the NPRM preamble, including the 
statement that person centered planning and consumer control ``are not 
interchangeable terms.''
    ACL affirms that consumer control is a guiding principle in IL. To 
clarify, the NPRM did not intend to conflate person-centeredness and 
consumer control or other key terms in the IL purpose. The proposed 
regulatory language did not include person-centeredness; the language 
was included in the preamble to the NPRM to both highlight this 
requirement in the home and community-based services and supports 
(HCBS) settings context, and offer an opportunity to IL programs and 
stakeholders to help shape person-centered planning and self-direction 
principles in HHS-funded programs and practices that serve people with 
significant disabilities, as they increasingly are embedded in the work 
we do at ACL and across HHS. This language applies in the HCBS settings 
context and does not limit consumer control or anything centers do with 
Title VII funding.
    One commenter suggested that Centers should not be penalized for 
hiring individuals who do not have significant disabilities when 
candidates who have significant disabilities do not apply, or if those 
who do apply are not qualified, and the CIL therefore fails to meet the 
requirement that the majority of staff are individuals with 
disabilities. The majority hiring requirement is beyond the scope of 
this rule; however, the ongoing requirement that a Center ensure that 
the majority of the staff, and individuals in decision-making positions 
are individuals with disabilities is consistent with the consumer 
directed, self-help, and self-advocacy principles in the IL Philosophy.
Definitions (Sec.  1329.4)
New IL Core Services Definitions
    WIOA added a new fifth requirement to the Independent Living Core 
Services, which includes services that--
     Facilitate the transition of individuals with significant 
disabilities from nursing homes and other institutions to home and 
community-based residences, with the requisite supports and services;
     Provide assistance to individuals with significant 
disabilities who are at risk of entering institutions so that the 
individuals may remain in the community; and
     Facilitate the transition of youth who are individuals 
with significant disabilities, who were eligible for individualized 
education programs under section 614(d) of the Individuals with 
Disabilities Education Act (20 U.S.C. 1414(d)), and who have completed 
their secondary education or otherwise left school, to postsecondary 
life.


[[Page 74683]]


(Sec. 7(17)(E) of the Act, 29 U.S.C. 705(17)(E)).

    ACL received many comments expressing concern about being able to 
effectively provide the new IL core services without the allocation of 
additional funding. We cannot address concerns about funding levels for 
IL programs in the final regulation. We also wish to clarify that funds 
for transition services allocated to other agencies are based under 
separate statutory authorities and appropriations.
    ACL will support programs in accomplishing and reporting IL 
services. To add value and help enhance the work CILs are already doing 
in this area, ACL offers technical assistance for state and community-
based aging and disability organizations (CBOs) through national 
partners as well as through learning collaboratives of networks of 
community-based aging and disability organizations, including Centers 
for Independent Living. ACL looks forward to engaging more of the IL 
community in these efforts to support and improve business acumen, 
which has enabled CBOs to garner funding through public-private 
partnerships, contracts with health-care providers and payers, and 
grants from private foundations. ACL's business acumen efforts are one 
way that CILs may enhance their resource development activities. We 
will also work to identify opportunities to collaborate and leverage 
resources for the core IL services, including the new fifth core 
services, across ACL, HHS, and other federal agencies.
    The NPRM sought public comment on whether to include a definition 
of ``institution'' and the suitability of applying Medicare and 
Medicaid definitions of that term in defining the new core independent 
living services.
    We received comments indicating that the Medicare/Medicaid 
definitions are not sufficiently broad to encompass the range of 
entities included in the term ``institution.'' We received numerous 
comments recommending various terms and entities that should be 
included in a definition of ``institution,'' as well as comments 
stating that including a regulatory definition was not necessary or 
could be unnecessarily limiting and could impede effective provision of 
services. As some commenters recommended, a broad, non-prescriptive 
approach allows CILs the most flexibility to determine the types of 
transition services they can offer with the best chance of success for 
individuals receiving the services based on available local resources.
    Some commenters recommended a very broad definition of institution, 
including ``any congregate living arrangement of any size in which 
residents with disabilities are not in control of their own lives,'' a 
parental/guardian controlled home, or ``any situation in which a person 
with a disability is not free to control all aspects of his or her 
life.'' ACL did not incorporate this approach, as we concluded that the 
suggested categories were vague and overbroad. For instance, these 
examples are not limited to adults, and minors are not given authority 
to control all aspects of their lives, including moving from a home 
where the person lives with a parent or guardian. Other commenters 
suggested narrowing the definition and excluding certain settings such 
as correctional facilities.
    ACL has not included a specific definition of the term institution 
here, so that the categories will be sufficiently broad and allow 
flexibility to CILs. Without specifically defining the term, we 
identify the following examples of entities that fall within the 
category of ``institution,'' which includes but is not limited to: 
Hospitals, nursing facilities and skilled nursing facilities, 
Intermediate Care Facilities for Individuals with Intellectual 
Disabilities, and criminal justice facilities, juvenile detention 
facilities, etc.
    In the NPRM, we also requested comment on the need for and proposed 
content of definitions for ``home and community-based residences'' and 
individuals who are ``at risk'' of institutionalization in the new 
independent living core services. We received several comments 
requesting that we define ``home and community-based residences'' for 
the purposes of the fifth core services. Some commenters suggested we 
refer to Medicaid definitions, including the definitions used in the 
``Money Follows the Person'' demonstration program and the rule related 
to Medicaid-funded home and community-based services published on 
January 16, 2014. Many commenters suggested a definition that would 
include any residence ``with fewer than 4 people non-related in which a 
person with a disability is free to control all aspects of his or her 
life.'' Other commenters recommended against including size or 
configuration of living arrangements in the definition, explaining, 
``When maximum number of people in a setting or their familial 
relationship to each other is prescribed, it does not permit those 
groups of totally self-directing individuals who choose to share an 
apartment or house and share attendant services, for example, to be 
included in the service count. The regulations should not preclude 
serving those individuals who, of their own volition, have chosen forms 
of co-housing, cooperatives, or Naturally Occurring Retirement 
Communities (NORCs).''
    As some commenters recommended, ACL considered language in Medicaid 
regulations that define home and community-based settings for certain 
Medicaid programs. ACL encourages IL programs to consult the language 
in the rule defining HCBS settings for Medicaid waivers under section 
1915(c) of the Social Security Act at 42 CFR 441.301(c)(4), for state 
plan HCBS at 42 CFR 441.710(a)(1) and (2) or for Community First Choice 
services at 42 CFR 441.530(a)(1) and (2). These CMS regulations provide 
details on the qualities of home and community-based settings, as 
compared with those that have the qualities of an institutional 
setting. However, we did not import the definition from the CMS HCBS 
rules into this rule. ACL seeks to encourage CILs to assist the 
broadest range of individuals as they transition from an institutional 
to a community-based setting. The Medicaid rules apply to Medicaid 
beneficiaries receiving home and community-based services under 
specific statutory provisions, and while the language is instructive to 
determine qualities integral to a home and community-based setting, IL 
serves a broader range of people and addresses a wider range of 
situations than those covered under the Medicaid rules. For example, 
the needs of the individual in 42 CFR 441.301(c)(4) are determined ``as 
indicated in their person-centered service plan.''
    As some commenters recommended, to preserve wide latitude and to 
support consumer control, we have chosen not to include a definition 
for ``home and community-based residences'' in the final rule.
    We received comments recommending that the individual should 
determine whether or not he or she is at-risk through self-disclosure. 
We received comments that emphasized the importance of the intake and 
goal setting processes for facilitating informed consumer choice 
related to self-identification. If a consumer feels he or she is at 
risk of institutionalization, and self-identifies as being at risk as 
part of the intake or goal-setting process, then he or she should be 
treated as being at risk. CILs in these situations conduct discussions 
around the person's circumstances, possibilities and risks but the 
designation ultimately must be informed by consumer choice. We have 
incorporated that recommendation in

[[Page 74684]]

the regulatory text as part of the definition of the independent living 
core services.
    Some commenters recommended adding a definition of ``transition 
process.'' Since the term ``transition'' is not included in the second 
prong of the fifth core IL services, and the term ``transition'' has a 
different meaning in the third prong, we incorporated the recommended 
definition into the first prong regarding the transition of individuals 
with significant disabilities from nursing homes and other institutions 
to home and community-based residences.
    WIOA defines youth with a disability to mean ``an individual with a 
disability who is not younger than 14 years of age; and is not older 
than 24 years of age.'' In the NPRM, ACL defined the category of 
``youth with a significant disability'' by combining the definition of 
``individual with significant disability'' in section 7(21), 29 U.S.C. 
705(21) and ``youth with a disability'' in section 7(42) of the Act, 29 
U.S.C. 705(42).
    A commenter expressed concern that the rule uses the term ``youth 
with a significant disability,'' (emphasis added) as ``[t]his is 
different than the Independent Living philosophy which is cross 
disability.'' The language is based on WIOA language in the definition 
of independent living core services, 29 U.S.C. 705(17)(E), which covers 
services to ``facilitate the transition of youth who are individuals 
with significant disabilities . . .'' As a cross-disability agency, ACL 
is sensitive to this concern, but does not have the authority to change 
statutory language through the rulemaking process.
    A commenter recommended removing the ``completed their secondary 
education'' provision from this regulation. Other commenters suggested 
the definition was overbroad and should be pared back. We received 
comments that individuals who have reached the age of 18 but are still 
receiving services in accordance with an individual's education program 
developed under the Individuals with Disabilities Education Act (IDEA) 
should not be considered to have ``completed their secondary 
education.'' Because Sec. 7(17)(E)(iii) of the Act, 29 U.S.C. 
705(17)(E)(iii), uses the term ``completed their secondary education,'' 
ACL does not have the authority to remove this phrase from the 
definition of IL core services regarding youth transition. However, we 
are removing from regulatory language: ``has reached age 18, even if he 
or she is still receiving services in accordance with an individualized 
education program developed under the IDEA.'' In agreement with 
comments received, we have added to the definition of independent 
living core services that individuals who have reached the age of 18 
and are still receiving services in accordance with an Individualized 
Education Program (IEP) under IDEA have not ``completed their secondary 
education.''
    Some commenters also questioned the link to eligibility under IDEA/
eligibility for an IEP, or recommended a definition of ``students with 
disabilities'' be defined broadly, such as those receiving services 
under of Section 504 of the Rehabilitation Act (under 504 plans). 
Commenters also requested that the youth transition prong be extended 
to the youngest possible age, for example before vocational 
rehabilitation (VR) begins to provide services in the State. In WIOA, 
Congress established the prong of the new IL service to ``(iii) 
facilitate the transition of youth who are individuals with significant 
disabilities, who were eligible for individualized education programs 
under section 614(d) of the Individuals with Disabilities Education Act 
(20 U.S.C. 1414(d)), and who have completed their secondary education 
or otherwise left school, to postsecondary life.'' 29 U.S.C. 
705(17)(E)(iii). This requirement, defined in the statute, focuses on 
providing independent living services to youth who are transitioning to 
postsecondary life after they have left school. ACL does not have the 
authority to redefine this category through the rulemaking process.
    We acknowledge the importance of transition services for youth 
prior to post-secondary life in order to prepare youth for a successful 
transition to post-secondary life. However, we also want to emphasize 
that some youth transition activities not covered under the fifth core 
services may be included within the other four core services, Sec. 7 
(17)(A-D) of the Act, 29 U.S.C. 705(17)(A-D), as well as within the 
Independent Living Services in Sec. 7(18), 29 U.S.C. 705(18), and CILs 
should continue to report their work in these areas accordingly.
    A commenter raised concerns that broad definitions around the youth 
transition component of the fifth core service could prompt school 
districts to shift responsibility for youth transition to the CILs. 
While we appreciate the concern, how school districts fulfill their 
responsibilities to students with disabilities is beyond the scope of 
this rule. We acknowledge, however, that Centers often participate as 
one of several entities, including schools, with an important role in 
supporting and facilitating youth transitions. As a promising practice, 
ACL recommends continuing successful collaboration, coordination, and 
leveraging of resources.
    Commenters noted that they are already pursing transition work with 
youth that falls outside of the proposed parameters of the fifth core 
services. Programs may and are encouraged to continue to engage in such 
activities, which can be captured and credited under the other core IL 
services or general independent living services under Sec. 7(18), 29 
U.S.C. 705(18).
    Finally, in response to the NPRM, ACL received questions as to 
whether there are minimum levels which must be achieved in order to 
have met the requirements of each component of the new fifth core IL 
services. Each CIL must demonstrate activity under all three prongs of 
the definition, but the minimum levels are not further defined here. 
See the Regulatory Impact Analysis for further discussion. The revised 
data collection system will contain more information when published.

Definitions of Other Terms in Sec.  1329.4

Administrative Support Services
    ACL received comments recommending additional changes to this 
definition, including a request for additional clarity on the 
``services and supports'' provided by the DSE. Others expressed support 
for a broad definition, with flexibility for the DSE. In order to 
preserve flexibility, we made no changes to the definition in the 
proposed rule.
Advocacy
    ACL received a number of comments on the proposed definition. Some 
commenters expressed a concern about a perceived lack of inclusion of 
``systems change'' in the definition, and requested that the language 
in the rule ``revert back to the original language for advocacy that 
includes both self and systems change.'' We note that the proposed 
definition of ``advocacy,'' identical to the prior definition from the 
Department of Education regulation 34 CFR 364.4, includes ``systems 
advocacy.'' Many commenters recommend that the activities described in 
Sec.  1329.10(b)(5) be included in the definition, as they are part of 
systems advocacy. The final rule retains the proposed definition for 
``advocacy.'' The activities described in Sec.  1329.10(b)(5) are 
already required as authorized uses of funds for independent living 
services and including them in the definition of advocacy would be 
redundant. ACL will consider providing further guidance and will 
continue to offer training and

[[Page 74685]]

technical assistance to provide additional clarity on this issue.
Center for Independent Living
    Many commenters expressed support for the proposed definition from 
the NPRM, though several commenters raised questions about 
accountability for CILs that are not recipients of Part C or Part B 
funding. A few commenters recommended the definition be limited to CILs 
that receive Part B or Part C funding. The final rule retains the 
proposed definition of CILs. With respect to compliance and oversight 
issues, the SILCs, pursuant to their duty under Section 705(c)(1)(B) to 
monitor, review, and evaluate implementation of the SPIL, will make the 
determination that entities counted as CILs eligible to sign the SPIL 
comply with the standards in Sections 725 (b) and the assurances in 
Section 725(c). The SPIL must identify 1) the eligible CILs and 2) how 
they were determined to meet the required standards and assurances. We 
will consider including corresponding assurances with some standards of 
evidence of documentation in the indicators of minimum compliance for 
the SILCs.
    We received requests for clarification regarding the phrase 
``regardless of age or income.'' This phrase is based directly on the 
statutory definition, Sec. 702(2) of the Act, 29 U.S.C. 796a(2). The 
phrase means that an agency, in addition to meeting all of the other 
requirements, may not categorically exclude individuals with 
significant disabilities on the basis of age or income. This does not 
preclude prioritizing services by urgency of need, nor does it preclude 
practical distinctions such as age-based legal restrictions.
    We also received questions regarding the use of fee-for-service 
models for the delivery of services. The final rule does not address 
the use of fee-for-service models, though we encourage CILs to consider 
how to ensure that any application of such a model is accomplished in a 
way that is consistent with IL values.
Consumer Control
    In the NPRM we proposed to add the statutory definition of consumer 
control at Section 702(3) of the Act, 29 U.S.C. 796a(3). Commenters 
requested that the definition also include individual consumer control. 
ACL acknowledges the importance of an individual being able to make his 
or her own choices and set his or her own goals, including deciding 
with whom and how to achieve them, and allowing for the dignity of 
risk, which is a critical component of growth and true independence. 
The definition of ``consumer control'' is amended in the final rule to 
include: ``Consumer control, with respect to an individual, means that 
the individual with a disability asserts control over his or her 
personal life choices, and in addition, has control over his or her 
independent living plan (ILP), making informed choices about content, 
goals and implementation.''
    Some commenters also suggested that the definition include the 
requirement that a majority of staff, management and Board positions 
are filled by persons with disabilities. ACL did not make that change, 
as the composition requirements (for the SILC) and assurances (for the 
CILs) at issue are established separately in the statute.
Personal Assistance Services
    The NPRM proposed that personal assistance services mean ``a range 
of services, paid or unpaid, provided by one or more persons, designed 
to assist an individual with a disability to perform daily living 
activities on or off the job that the individual would typically 
perform if the individual did not have a disability. These services 
must be designed to increase the individual's control in life and 
ability to perform everyday activities on or off the job and include 
but are not limited to: Getting up and ready for work or going out into 
the community (including bathing and dressing), cooking, cleaning or 
running errands.'' Commenters indicated that the purpose of personal 
assistance services is not merely to enable a person with a disability 
to get a job, but to perform a myriad of social functions. Commenters 
also raised the point that the concept of personal assistance services 
should be updated to reflect ``the possibilities available today.'' 
Commenters requested additional examples of personal assistance 
services, to help illustrate that such services may support a variety 
of interdependent social functions, such as parenting, engaging in 
civic activities, practicing the individual's preferred religion, 
engaging in a relationship with partner(s) of the individual's choice, 
and more. The final rule incorporates the recommended language. Thus, 
personal assistance services means ``a range of services, paid or 
unpaid, provided by one or more persons, designed to assist an 
individual with a disability to perform daily living activities that 
the individual would typically perform if the individual did not have a 
disability. These services must be designed to increase the 
individual's control in life and ability to perform everyday activities 
including but not limited to: Getting up and ready for work or going 
out into the community (including bathing and dressing), cooking, 
cleaning or running errands, and engaging in social relationships 
including parenting.''
Service Provider
    ACL received comments indicating that the DSE should not be 
included in the definition of ``service provider.'' The commenters 
explained that DSEs should not provide direct services because the DSE 
``is not consumer controlled and does not provide peer support, systems 
advocacy, etc.,'' among other justifications. After consideration of 
the comments on this provision, ACL agrees with the concerns expressed, 
and added the clarification that a DSE is eligible to receive funds to 
provide independent living services only where so specified in the 
SPIL. We have added a corresponding clarification to the preamble 
language in Sec.  1329.17.
Unserved and Underserved
    ACL received numerous comments about the definition of unserved and 
underserved populations. A commenter expressed concerns about the 
elimination of ``sensory impairments'' from the definition. Others 
recommended that the definition should include older people with 
disabilities, or populations with certain types of disabilities, 
including individuals who are low vision, blind, deafblind or deaf, and 
people with traumatic brain injuries (TBI), and post-traumatic stress 
disorder (PTSD). Another commenter asked about other groups, including 
people with limited English proficiency. One commenter expressed a 
concern about a lack of services for black veterans. Others requested a 
definition for ``disadvantaged individuals.''
    ACL notes that the proposed definition includes ``populations such 
as . . .'' and lists a number of possible categories. As stated in the 
NPRM, ``We recognize that unserved and underserved groups or 
populations will vary by service area. For example, in some service 
areas unserved and underserved groups may include people with 
disabilities from the gay, lesbian, bisexual and transgender 
communities.'' The categories included in the definition are examples, 
and not an all-inclusive list. We are not including a definition of 
disadvantaged individuals, as that definition may vary by individuals 
and by community.
    Commenters expressed support for the proposed definition of ``youth 
with a significant disability.''

[[Page 74686]]

    ACL made technical changes to the definitions of ``Center for 
independent living'' and ``Independent living core services'' to 
improve clarity.
Indicators of Minimum Compliance (Sec.  1329.5)
    Commenters requested that the final rule include SILC standards and 
indicators. The statute requires that ACL develop and publish in the 
Federal Register SILC indicators of minimum compliance. As was stated 
in the NPRM, the SILC indicators of minimum compliance are currently 
under development, a process which includes consideration of informal 
stakeholder input. ACL presented the current draft SILC standards of 
minimum compliance at the SILC Congress in January of 2016, and the 
final version will be published in the Federal Register with an 
opportunity for public comment. ACL will continue to collect 
information on CIL compliance indicators based on the statutory 
standards and assurances through the data collection process. We made 
technical changes to the regulatory text of Sec.  1329.5 to clarify the 
current requirements.
    ACL also clarifies that the indicators of minimum compliance and 
data collection instruments are living documents. ACL will periodically 
engage stakeholders to make refinements and improvements.
    Regarding comments expressing concern about the lack of a 
sufficient notice and opportunity for ``substantive public comment,'' 
ACL is committed to continued engagement with stakeholders as we 
develop and publish the required indicators. We also note that the 
Federal Register is the recognized means for notifying the public and 
offering an opportunity to submit comments. Multiple commenters 
requested diverse compliance measures be developed to address specific 
needs for indicators. ACL appreciates this input and will consider 
these suggestions through the established processes.
    Commenters also recommended establishing a rotation for CIL 
reviews. As indicated in the NPRM, the statute eliminated the 
requirement that compliance reviews be conducted on a random basis. ACL 
is actively reviewing options for review criteria, including how CILs 
will be selected for review.
    Commenters expressed concerns about ``targeting'' CILs and 
requesting a neutral process. We decline to incorporate the comment 
that some CILs should not be reviewed more frequently than others. On-
site compliance reviews are no longer required to be conducted on a 
random basis and there may be legitimate reasons why a CIL may require 
more frequent evaluation. ACL agrees that clear, unbiased, and 
legitimate criteria must be established and consistently followed.
    Some commenters expressed concern about the lack of capacity at the 
state and federal levels to conduct the required reviews of CILs. 
Section 711(c), 29 U.S.C. 796d-1(c) includes a requirement that the 
Administrator (rather than the DSE) shall annually conduct onsite 
compliance reviews of at least 15 percent of the centers for 
independent living that receive funds under Section 722 of the Act, 29 
U.S.C. 796f-1 and at least one-third of the designated state units that 
receive funding under Section 723 of the Act. ACL is actively 
evaluating the review processes, to optimize our capacity to conduct 
the required oversight.
Reporting (Sec.  1329.6)
    A commenter objected to proposed Sec.  1329.6(b), stating that the 
requirement that the DSE in each state ``submit a report in a manner 
and at a time described by the Administrator, consistent with section 
704(c)(4) of the Act,'' exceeds statutory authority since the 
referenced statute, Section 704(c)(4), only requires the designated 
state entity to ``submit such additional information or provide such 
assurances as the Administrator may require.'' This commenter noted 
that CILs are explicitly required by statute to ``submit such reports 
with respect to such records as the Administrator determines to be 
appropriate.'' We appreciate the comment, but find that requiring a 
report is fully consistent with and authorized by the statutory 
requirement that the DSE submit such additional information or provide 
assurances that the Administrator may require. We received a comment 
concerning readability and accessibility of forms, materials, and 
links. We appreciate the comment and agree that the instructions, and 
any forms, links, and needed materials must be user-friendly and easily 
accessible. We continue to strive to meet this standard.
Enforcement and Appeals Procedures (Sec.  1329.7)
    Regarding the proposed enforcement and appeals procedures in the 
rule, commenters asked questions about onsite compliance reviews and 
expressed concern about the lack of peer review. To clarify, the 
enforcement and appeals procedures proposed in Sec.  1329.7 are 
separate from a request for technical assistance and separate and in 
addition to the compliance review set forth in Section 706(c)(1). 
Section 706(c)(2)(C), 29 U.S.C. 796d-1(c)(2)(C), requires that, for the 
compliance review, the Administrator must ``. . . ensure that at least 
one of member of a team conducting such a review shall be an individual 
who (i) is not a government employee; and (2) has experience in the 
operation of centers for independent living.'' The proposed regulatory 
text in Sec.  1329.7 does not address or propose changes to the onsite 
compliance review process, including the qualifications of employees 
and others conducting reviews. Instead, Sec.  1329.7 establishes the 
enforcement and appeals process that arises when a grantee receives 
notice of an action that would trigger the additional review process 
available through 45 CFR part 16. These determinations, set forth in 
appendix A, C.a.(1)-(4) are: Disallowance, termination for failure to 
comply with the terms of an award, denial of a noncompeting 
continuation award for failure to comply with the terms of a previous 
award, and voiding (a decision that an award is invalid because it was 
not authorized by statute or regulation or because it was fraudulently 
obtained).
    For example, if after an onsite compliance review, the Director 
determines it necessary to terminate funds because of the grantee's 
failure to comply with the terms of the award, Sec.  1329.7 provides 
the affected CIL or State with the opportunity to seek additional 
review of that decision, consistent with HHS policies and practices. We 
added clarifying language regarding the onsite compliance review 
process as some commenters recommended. We also made technical changes 
to more accurately reflect established HHS processes and incorporate 
correct citations.
    Several commenters interpreted Sec.  1329.7 to mean that ACL would 
immediately terminate funding under certain circumstances, and pointed 
out that WIOA stipulates 90 day notice before Title VII Part C funding 
can be terminated. The NPRM did not propose to move more quickly than 
the 90 day time frame. The process that was outlined for enforcement 
and appeals is designed precisely to afford due process for those CILs 
for which expiration of the 90 day time frame and possible loss of 
funding is imminent. Since nothing in the regulation changes the 
statutory deadlines, no changes to the regulatory text are required.
    With regard to Sec.  1329.7(b), one commenter questioned whether 
the Administrator has the authority to terminate Title VII B funding. 
We refer the commenter to 45 CFR part 75, Uniform Administrative 
Requirements,

[[Page 74687]]

Cost Principles, and Audit Requirements for HHS Awards, which is 
included in Sec.  1329.3, applicability of other regulations. For more 
information regarding remedies for non-compliance and termination, 
please see 45 CFR 75.371 and 75.372, which, address these issues. We 
also remind stakeholders that Section 704(a)(1) requires the submission 
of a SPIL which is approved by the Administrator in order to be 
eligible for funding. Thus, the Administrator has the authority to 
withhold or terminate funding if a SPIL is not submitted in accordance 
with the requirements of Section 704, or if the Administrator does not 
approve a SPIL that is submitted.
    ACL thanks commenters for embracing the opportunity to work with 
ACL on developing sub-regulatory guidance to provide additional detail 
in this area.
    Commenters state that the time frame for notice should be clear and 
specific. The regulation describes that written notice shall be 
provided ``within a timely manner.'' In the absence of a recommendation 
for a specific length of time, we retain the language of the proposed 
rule, with the clarification that the standard is a reasonable 
determination of a ``timely manner.'' We will consider whether to 
designate a specific time period in any sub-regulatory guidance that we 
develop.

Subpart B--Independent Living Services

Authorized Use of Funds for Independent Living Services (Sec.  1329.10)
    Commenters requested a change to Sec.  1329.10(a) to more 
accurately reflect the language and intention of the statute. 
Commenters were correct in stating that the Administrator reserves the 
funds under Section 711A for SILC training and technical assistance, 
before the State receives funding under this part. ACL incorporated the 
requested change, and revised Sec.  1329.10 to include the correction.
DSE Eligibility and Application (Sec.  1329.11)
    Regarding Sec.  1329.11, commenters recommended including language 
that ``[a]ny designated State entity (DSE) identified in the SPIL and 
agreed to by the State is eligible to apply for assistance under this 
part in accordance with Section 704 of the Act, 29 U.S.C. 796c.''
    We decline to make these changes, because, as explained in the FAQs 
that accompanied the DSE Guidance document,\1\ the DSE is a 
governmental State entity that carries out the functions described in 
the statute in Section 704(c) of the Act, 29 U.S.C. 796c(c). ``If the 
DSE does not carry out those functions, the State is legally 
responsible.''
---------------------------------------------------------------------------

    \1\ Guidance: ILA PI-15-01 Selection of the Designated State 
Entity (DSE), rev. Oct. 28, 2015; available at http://www.acl.gov/Programs/AoD/ILA/Index.aspx#dse.
---------------------------------------------------------------------------

    However, in response to these comments, and with the understanding 
that the State plan shall ``designate'' the ``designated State entity'' 
as the agency that, on behalf of the State, shall accomplish the listed 
responsibilities in the law and comply with the specified funding 
limits (and acknowledging that the chairperson of the Statewide 
Independent Living Council and the directors of the CILs in the State, 
after receiving public input from individuals with disabilities and 
other stakeholders throughout the State, develop the State plan) ACL 
modified the proposed definition to clarify the reference to a DSE 
``identified by the State and included in the signed SPIL . . .''
    Commenters also requested that ACL identify the body that is 
responsible to submit the SPIL. Section 1329.17(b)(4) indicates that 
the SPIL ``must be submitted . . . in the time frame and manner 
prescribed by the Administrator.'' For developing the FY 2017-2019 
State Plan for Independent Living (SPIL), ACL refers stakeholders to 
the State Plan for Independent Living (SPIL) instructions, issued on 
February 19, 2016, which specify that the Statewide Independent Living 
Council shall submit the State Plan for Independent Living (SPIL).
Role of the Designated State Entity (Sec.  1329.12)
    Commenters requested additional language to clarify the role of the 
DSE and the allocation of funds in accordance with the approved SPIL. 
ACL incorporated suggested language to make clear in Sec.  
1329.12(a)(2) the DSE's role to provide administrative support services 
for a program under Part B, as directed by the approved SPIL, and for 
relevant CILs under Part C. We also revised the language in Sec.  
1329.12(b) to state that the DSE must also carry out its other 
responsibilities under the Act, including, but not limited to--
     Allocating funds for the delivery of IL services under 
Part B of the Act as directed by the SPIL; and
     Allocating the necessary and sufficient resources needed 
by the SILC to fulfill its statutory duties and authorities under 
section 705(c), consistent with the approved State Plan.
    While the regulatory text in the new Sec.  1329.12(b)(i) focuses on 
the delivery of IL services, Sec. 713(b) of the Act identifies six (6) 
additional activities that remain authorized uses of funding under this 
Section, and are encompassed in the ``including, but not limited to'' 
language in Sec.  1329.12(b).
    Some commenters were concerned that the 5% was not sufficient given 
the scope of the administrative responsibilities of the DSE, and that 
some entities may choose not to serve as a DSE. The 5% is a statutory 
cap and therefore not subject to change in this regulation.
    For the sake of consistency we made formatting changes to Sec.  
1329.12(b).
Allotment of Federal Funds for State Independent Living (IL) Services 
(Sec.  1329.13)
    Many commenters requested that the proposed regulatory language of 
Sec.  1329.13(c) be deleted or amended to permit only a single DSE. A 
few commenters expressed support for a second DSE and stressed the 
importance of certain programs that have been funded by State agencies 
for the blind. Upon consideration of the comments in the context of the 
language in WIOA, we agree that it is consistent with the statute to 
permit only one DSE. Accordingly, in addition to revising the 
regulatory text in Sec.  1329.13(c) to permit only a single DSE, Sec.  
1329.17(e) is deleted.
    Nineteen (19) States have been operating with more than one body 
taking on these responsibilities. One body in those States provides 
services to the general disability population and the other provides 
services to individuals who are blind. Under the language we are 
finalizing, the SPIL must identify one DSE in the State, and that DSE 
will sign the SPIL as discussed above. Specific funding to address the 
needs of consumers in the State who are blind may be allocated through 
the SPIL process.
    Regarding proposed Sec.  1329.13(d), commenters also requested that 
ACL not reserve funds to directly provide training and technical 
assistance to SILCs, and others recommended an increase in funding to 
the current technical assistance provider. ACL retained the language 
from the proposed rule, which is required by section 711A of the Act 
(29 U.S.C. 796e-0).
    Commenters also recommended that the SILCs be involved in the 
process for determining the type of training and technical assistance 
that is offered and how the funding is utilized. We did not add 
additional regulatory language, as the Act requires in Sec. 711A(b) 
that the Administrator conduct surveys of SILCs regarding training and 
technical

[[Page 74688]]

assistance needs in order to determine funding priorities for such 
training and technical assistance.
Establishment of a SILC (Sec.  1329.14)
    Commenters expressed support for the proposed language in the NPRM. 
Some commenters also requested ``direction or guidance on what 
constitutes `autonomous.' '' ACL did not make changes to the language 
of the proposed rule. To better understand what autonomous means, we 
refer commenters to pertinent statutory provisions at Sec. 705 of the 
Act, 29 U.S.C. 796d, including Sec. 705(a) and (b) on the 
establishment, composition and appointments to the SILC. These include 
the requirement at Sec. 705(a) providing that ``The Council shall not 
be established as an entity within a State agency,'' and the conflict 
of interest policy at Sec. 705(e)(3), precluding staff and other 
personnel of the SILC from being assigned duties by the DSE or other 
agencies of the state that would create a conflict. We also note that 
the Council and voting members of the Council are to be comprised of 
members meeting the qualifications under Sec. 705(b)(4), including 
state-wide representation, a broad range of individuals with 
disabilities from diverse backgrounds, knowledge about centers for 
independent living and independent living services, and a majority of 
whom are individuals with disabilities per 29 U.S.C. 705(20)(B) and not 
employed by any State agency or center for independent living. We will 
continue to consult with stakeholders on the need for additional 
guidance, including providing more detail about the SILC standards and 
indicators that are under development.
    Many commenters indicated they could not identify any relevant CIL-
Tribal relationships that met the definition under Section 705 of the 
Act. However, other commenters indicated that there are currently 83 
American Indian Vocational Rehabilitation Services (AIVRS) programs 
located on Federal and State Reservations providing IL-complementary 
services to American Indians/Alaska Natives (AI/ANs) with disabilities. 
Some commenters also expressed support for the effort to ensure that 
American Indians are part of SILC leadership. As a promising practice, 
we recommend that in each State where there are Federal and State-
recognized Tribal Governments, the SILC include a Tribal Representative 
on the SILC, and conduct outreach to the AIVRS program(s) in the State, 
as available, or other relevant organizations to foster Tribal 
participation on the SILC.
Duties of the SILC (Sec.  1329.15)
    Commenters clarified that the SILC resource plan is an integral 
part of the three-year SPIL. We acknowledge that this is the correct 
interpretation. Since the language incorrectly describing the resource 
plan as ``separate from the SPIL'' was preamble language attempting to 
clarify the new requirement regarding the allocation of funds for this 
plan as distinct from the SPIL, no changes to the regulatory text are 
needed.
    Regarding Sec.  1329.15(c)(2) on Innovations and Expansion (I&E) 
funds, commenters recommended revised language consistent with Section 
101(a)(18) of the Act to make clear that resources for SILCs include 
I&E funds consistent with the statute. ACL made the requested change to 
the regulatory text. ACL will work with the Department of Education and 
stakeholders to develop appropriate guidance on this matter.
    Commenters expressed support for the proposed language in Sec.  
1329.15(c)(4) and we have included it without change.
    Commenters requested additional detail on what constitutes 
``necessary and sufficient'' funds to carry out the functions of the 
SILC for the purpose of the SILC resource plan. Other commenters 
indicated that additional information was not needed. In the interest 
of clarity, ACL adopted the recommended additions to Sec.  
1329.15(c)(6), with a final category for other appropriate costs. A 
description of the SILC's resource plan must be included in the State 
plan.
    The plan should include:

 Staff/personnel
 Operating expenses
 Council compensation and expenses
 Meeting expenses, including public hearing expenses, such as 
meeting space, alternate formats, interpreters, and other 
accommodations
 Resources to attend and/or secure training for staff and 
Council members
 Other costs as appropriate.

    A commenter asked ``how will it be determined that the funding 
within the 30% cap for resource planning to carry out SILC functions 
has been well spent.'' As discussed, the resource plan is agreed to as 
part of the SPIL. As noted above, ACL has added some additional 
required elements to the regulatory language. It will be up to the 
entities in the State to determine how the funds are spent, as 
reflected in the resource plan and the SPIL.
    To minimize potential confusion, we removed duplicative 
requirements from Sec.  1329.15(d).
Authorities of the SILC (Sec.  1329.16)
    Commenters requested some additional terms be defined in the final 
rule, such as ``in conjunction with.'' ACL chose not to include several 
of these requested definitions, with the understanding that these words 
and phrases are given their plain meaning.
    A commenter raised concerns about whether the prohibition against 
providing services directly or ``managing'' services would preclude 
SILCs from securing funding to allow CILs to accomplish specific goals. 
We clarify here our interpretation that securing funding is distinct 
from ``managing'' services. Rather, a practice such as applying for and 
receiving grant funding in these circumstances is a legitimate exercise 
of SILCs' newly statutorily authorized resource development authority.
    We received several comments regarding SILCs that were pertinent to 
a particular state. Individual state concerns are beyond the scope of 
the regulations. However, we suggest that SILCs that raised such 
concerns consult with the SILC technical assistance and training center 
and their respective ILA specialist.
    Regarding Sec.  1329.16(b)(3), commenters stated that the proposed 
regulation ``fails to provide a reference to the statute or regulation 
that prohibits lobbying . . .'' along with other listed perceived 
omissions. For information on the relevant prohibition, please consult 
45 CFR part 93--New Restrictions on Lobbying, which was included in 
Sec.  1329.3(i), along with the other provisions on applicability of 
other regulations, that was included in the proposed rule and retained 
in the final rule.
General Requirements for a State Plan (Sec.  1329.17)
    Commenters expressed support for the SPIL development and approval 
process in the NPRM, as required under the changes implemented by WIOA. 
Some commenters discussed the ways successful collaboration is already 
underway, that the new SPIL development process will result in a better 
State Plan; and ultimately have a positive impact for people with 
disabilities. We appreciate this information.
    As discussed in Sec.  1329.4 regarding the definition of ``service 
provider,'' ACL has added a clarification that the DSE may provide IL 
services directly only when so specified in the SPIL. The

[[Page 74689]]

DSE's role as a service provider, where applicable, must be explicitly 
identified as part of the description of how and to whom funds will be 
dispersed under Sec.  1329.17(a).
    In discussing the new requirements of the SPIL in the summary in 
the preamble, with respect to a phrase describing collaboration between 
CILs and other entities performing similar work, ACL received a comment 
requesting that we define ``similar work.'' That term refers to the 
requirement in the statute in Sec. 704(a)(3)(c) that the SPIL address 
working relationships and collaboration between centers for independent 
living and:
     Entities carrying out programs that provide independent 
living services, including those serving older individuals;
     other community-based organizations that provide or 
coordinate the provision of housing, transportation, employment, 
information and referral assistance, services, and supports for 
individuals with significant disabilities; and
     entities carrying out other programs providing services 
for individuals with disabilities.
    The term ``similar work'' is not in the regulatory text, and we did 
not add a definition because the statutory language provides sufficient 
clarity.
    Some commenters requested clarification that Sec.  
1329.17(d)(2)(ii) specify that the signature by the director of the DSE 
signifies agreement to execute the responsibilities of the DSE 
identified in section 704(c) of the Act. ACL incorporated this 
clarification in the final rule.
    Regarding Sec.  1329.17(d)(2), a commenter made the point that 
Centers with service areas (and grants) within multiple states should 
have sign off authority for each SPIL that affects them, where they 
meet the other applicable requirements. ACL agrees, and we have added 
language to so clarify in Sec.  1329.17(d)(2)(iii). ACL also received 
many comments supporting our analysis that the number of CILs be based 
on the number of ``legal entities,'' not the number of grants, and we 
retain that provision from the proposed rule.
    As a technical correction, we renumbered new Sec.  1329.17(e)-(h). 
Regarding proposed Sec.  1329.17(g)(2), commenters indicated that the 
proposed language is not consistent with section 704(a)(2)(A) of the 
Act, which requires that public input be received prior to development 
of the State plan. The proposed provision included an option to provide 
a preliminary draft State plan for comment at the public meetings as an 
option for meeting the requirement for public input. ACL agrees that 
this language, adapted from the previous regulations in 34 CFR 
364.20(g), does not reflect the requirement of the statute that the 
State plan be developed ``after receiving public input from individuals 
with disabilities and other stakeholders throughout the State,'' and we 
have modified the regulatory text of Sec.  1329.17(f)(1) (formerly 
proposed Sec.  1329.17(g)(2)) accordingly. This means that the public 
input requirement may be satisfied by a public meeting to get input 
prior to development of the SPIL, and then an opportunity for public 
comment before the SPIL is submitted, for instance through another 
public meeting where a preliminary draft is provided in advance, or by 
offering some other meaningful and accessible opportunity for the 
public to comment prior to SPIL submission. ACL also made technical 
changes to renumber the section.
Continuation Awards to Entities Eligible for Assistance Under the CIL 
Program (Sec.  1329.21)
    Regarding Sec.  1329.21(g), commenters suggested that the SILCs and 
the CILs, rather than the DSE and SILC, must jointly agree on the order 
of priorities. ACL agrees that SILCs and CILs, rather than the DSE, 
must agree to priorities as set forth in the SPIL as it is jointly 
developed, after receiving public input from individuals with 
significant disabilities and other stakeholders. Section 1329.21, 
however, addresses priority for funding centers in States that receive 
funding under Section 723 of the Act, 29 U.S.C. 796f-2. Currently, only 
two States, Massachusetts and Minnesota, qualify as Section 723 States. 
Under Section 723(e), priorities for funding centers are set by the 
designated State unit \2\ and the SILC. ACL therefore has determined to 
keep the language as proposed in accordance with the statutory language 
in Section 723(e).
---------------------------------------------------------------------------

    \2\ We note that WIOA did not change the term ``designated State 
unit'' in Section 723 to designated State entity, as in other 
sections throughout this Subpart of the Rehabilitation Act. ACL has 
determined to refer to the body as the designated State entity in 
the rule for consistency purposes.
---------------------------------------------------------------------------

Competitive Awards to New Centers for Independent Living (Sec.  
1329.22)
    This section establishes the process for competitive awards to new 
Centers for Independent Living in unserved or underserved regions. We 
received comments requesting the authority to modify existing Part C 
Center service areas if the majority of the Center Directors, the SILC 
Chair, and the Center/s in question agree. While ACL is sensitive to 
the issue raised, we are not addressing that issue in this final 
regulation. We will take under advisement the need to address service 
area adjustments in the future. We made a technical correction to Sec.  
1329.22(b), to read ``location'' rather than ``allocation,'' and 
technical change in Sec.  1329.22(c) to clarify that ``bordering'' 
means ``contiguous.''
Compliance Reviews (Sec.  1329.23)
    ACL received the comment that, regarding ``guidance or guidelines 
as determined by the Administrator,'' ``[i]t is unclear if the guidance 
will include additional requirements and if the public will have an 
opportunity to comment on this guidance and guidelines.'' ACL may issue 
guidance consistent with statutory requirements, and the content and 
process may vary depending on the information conveyed.
    A commenter proposed that ACL consider alternative entities to 
conduct federal reviews of the CILs and suggested longer time periods 
between reviews of a single CIL. WIOA establishes the requirement that 
the Administrator must conduct annual compliance reviews of CILs and 
DSEs in in 29 U.S.C. 796d-1(c)(1), so ACL does not have the authority 
to alter the requirements established in the statute in this 
regulation. However, as noted above, ACL is actively evaluating the 
review processes, to optimize our capacity to conduct the required 
oversight, incorporating alternative approaches where permitted and 
appropriate.
Training and Technical Assistance to Centers for Independent Living 
(Sec.  1329.24)
    Commenters pointed out that WIOA does not authorize ACL to retain 
funds for the direct provision of training and technical assistance to 
CILs. We agree that this is the correct interpretation. Since the 
inconsistent language was included only in the preamble text, no 
changes have been made to the regulatory text.

II. Impact Analysis

A. Executive Order 12866

    Executive Order 12866 requires that regulations be drafted to 
ensure that they are consistent with the priorities and principles set 
forth in Executive Order 12866. The Department has determined that this 
rule is consistent with these priorities and principles. The rule 
implements the Workforce

[[Page 74690]]

Innovation and Opportunity Act of 2014. Executive Order 12866 
encourages agencies, as appropriate, to provide the public with 
meaningful participation in the regulatory process. In developing the 
final rule, we considered input we received from the public, including 
stakeholders.

B. Regulatory Flexibility Analysis

    The Secretary certifies under 5 U.S.C. 605(b), the Regulatory 
Flexibility Act (Pub. L. 96-354), that this regulation will not have a 
significant economic impact on a substantial number of small entities. 
The small entities that would be affected by these proposed regulations 
are States and Centers receiving Federal funds under these programs. 
However, the regulations would not have a significant economic impact 
on States or Centers affected because the regulations would not impose 
excessive regulatory burdens or require unnecessary Federal 
supervision. The final regulations implement statutory changes that 
impose new requirements to ensure the proper expenditure of program 
funds.
    The ILS Program provides formula grants to States for the purpose 
of funding a number of activities, directly and/or through grant or 
contractual arrangements. To be eligible for financial assistance, 
States are required to establish a designated State entity, State 
Independent Living Council and to submit an approvable three-year State 
Plan for Independent Living (SPIL) jointly developed by the chairperson 
of the SILC and the directors of the CILs in the State, after receiving 
public input, and signed by the chairperson of the SILC acting on 
behalf of and at the direction of the Council; not less than 51 percent 
of the directors of the CILs in the State, and the director of the 
designated State entity (DSE). The signature requirement of not less 
than 51 percent of CIL directors is a new requirement under WIOA. While 
this requirement does increase the amount of time a State may need to 
prepare an approvable SPIL, the statute provides no flexibility in 
implementing the new requirement. We are not able to estimate the 
amount of additional time the 51 percent signatory requirement will add 
to the SPIL development and approval process at the State level given 
that this is a new requirement. We solicited comments from affected 
States on this issue, but beyond a few comments touching on general 
difficulty, did not receive any comments that clarify the amount of 
additional time required to meet the 51 percent signatory requirement.
    The CIL program provides grants to consumer-controlled, community-
based, cross disability, nonresidential, private nonprofit agencies for 
the provision of IL services to individuals with significant 
disabilities. WIOA expanded the previous definition of core IL 
services, specified in Section 7(17) of the Act, to include an 
additional, fifth category of core services. Specifically, Centers 
funded by the program must now provide services that facilitate 
transition from nursing homes and other institutions to the community, 
provide assistance to those at risk of entering institutions, and 
facilitate transition of youth to postsecondary life. Currently there 
are 354 CILs that receive federal funding under this program.
    WIOA did not include any additional funding for the provision of 
this new fifth core service, necessitating that CILs would reallocate 
existing grant money to ensure the appropriate provision of all 
services required under Title VII of the Rehabilitation Act. Many 
commenters requested additional funding to carry out program 
responsibilities under the law. A number of commenters recommended that 
``ACL should seek to obtain additional funding for the 5th Core 
Transition Service.'' Commenters also stated that ``HHS should make 
CILs the mandatory receiver of all funding for transition services.''
    Funding issues are beyond the scope of this rule. However, it might 
be useful to note that some resources currently funded by HHS related 
to transition services reside in other agencies within the Department 
and ACL lacks the authority to direct how these transition funds are 
disbursed.
    With those facts in mind, we recommend that interested CILs note 
that ACL offers technical assistance for state and community-based 
aging and disability organizations through national partners as well as 
through learning collaboratives of networks of community-based aging 
and disability organizations, including Centers for Independent Living. 
These networks assist many CILs with leveraging their Federal funds and 
conducting resource development, and with building their business 
capacity for generating sustainable revenue streams for programs and 
services. ACL looks forward to engaging more of the IL community in 
these efforts. ACL will actively endeavor to identify further funding 
opportunities for CILs fifth core services transition work and will 
strive to raise awareness about CILs unique statutory mandate and 
successes with our sister agencies across HHS and the broader federal 
community.
    ACL stated in the NPRM that, since successful transition is a 
process that requires sustained efforts and supports over a long-term 
period, and the CILs were aware of the changes under the law before 
officially tracking these efforts as core services, we do not currently 
have a clear picture of the impact of the changes under WIOA on the 
programs. In developing the NPRM we therefore applied the closest 
applicable data to the estimates in the analysis. For purposes of the 
analysis, we looked at three specific categories of data currently 
captured in the 704 Annual Performance Report that we believe most 
accurately match the three components of the fifth core services.\3\ We 
believe that the ``Relocation from a Nursing Home or Institution'' 
category most closely matches the first component of the new fifth core 
services: Facilitate transitions from nursing homes and other 
institutions to the community. We believe that the ``Community-Based 
Living'' category matches the second component of the new fifth core 
service: Provide assistance to those at risk of entering institutions. 
We believe the ``Youth/Transition Services'' category captures some 
relevant information for the third component of the new fifth core 
service: Facilitate transition of youth to postsecondary life. For FY 
2014, 281 CILs reported nursing home transition goals established for 
at least one consumer, 343 CILS reported community-based living goals 
established for at least one consumer, and 224 CILs reported youth 
transition services provided to at least one consumer under the 
``Youth/Transition Services'' category of the 704 Annual Performance 
Report.
---------------------------------------------------------------------------

    \3\ The current 704 Report was not designed to incorporate the 
fifth core services, so current data roughly corresponds with the 
categories.

[[Page 74691]]



------------------------------------------------------------------------
                                  704 Annual
       5th Core service          performance     Percentage   Number of
                               report category   of CILs *       CILS
------------------------------------------------------------------------
Facilitate Transitions from    Relocation from           83          281
 Nursing Homes and Other        a Nursing Home
 Institutions to the            or Institution.
 Community.
Provide Assistance to Those    Community-Based           99          343
 at Risk of Entering            Living.
 Institutions.
Facilitate Transition of       Youth/                    66          224
 Youth to Postsecondary Life.   Transition
                                Services.
------------------------------------------------------------------------
* Percentage of CILs reporting a goal set for at least one consumer. The
  Youth/Transition Services sub-category represents the percentage of
  CILs reporting service provision to at least one consumer.

    Based on this analysis, we believe that many CILs currently have 
staff capable of providing the new fifth core services. However, due to 
the lack of additional funding, compliance with this statutory change 
may require CILs to re-examine their individual budgets, staffing 
plans, and consumer needs in order to reallocate funding to ensure the 
appropriate provision of services as required by the Rehabilitation 
Act. We estimated that this analysis will require approximately 10-15 
hours of time for each CIL director. We proposed to use the upper end 
of the time estimate (15 hours) for purposes of estimating the total 
impact of this statutory requirement. Therefore, we estimated the 
amount of compliance analysis time for CIL directors to total 5,310 
hours.
    To estimate the average hourly wage for a CIL director, we examined 
data compiled by the IL Net (a collaborative project of Independent 
Living Research Utilization (ILRU), the National Council on Independent 
Living (NCIL), and the Association of Programs for Rural Independent 
Living (APRIL)) and Bureau of Labor Statistics (BLS) data. According to 
a 2003 National Survey of Salaries and Work Experience of Center for 
Independent Living Directors, compiled by IL Net, the most common 
annual salary range for CIL directors in 2002 was between $41,000 and 
$45,000. This equates to an average hourly salary range of $19.71 to 
$21.63. The Bureau of Labor Statistics (BLS) provided more recent 
salary information.
    According to 2012 BLS data, the average hourly wage for a social 
and community manager (a BLS occupational classification for managers 
who coordinate and supervise social service programs) was $28.83. We 
proposed using the more recent BLS data to calculate the total 
estimated impact of this statutory requirement. In order to estimate 
the benefits and overhead associated with this hourly wage, we assume 
that these costs equal 100 percent of pre-tax wages, for a total hourly 
cost of $57.66. Therefore, we estimated the total dollar impact of this 
additional CIL director time to be $306,174.60.
    As noted previously, we have interpreted recent 704 Reports as 
indicating that many CILs currently have staff capable of providing the 
new fifth core services. We received comments that some CILs which 
currently provide fifth core services do so using other sources of 
funding, including Medicaid dollars and contracts with managed care 
organizations. However, as shown in the table above, a substantial 
number of CILs do not yet provide the newly required services and 
therefore would potentially incur costs in order to comply with this 
rule.\4\ We received several comments confirming that some CILs do not 
yet provide the new fifth core services, and doing so may impose a 
burden upon such CILs, particularly a diminution of services provided 
in other areas. These commenters were not able to give us a more 
detailed estimate of calculating the burden other than to ask for a 
substantial increase in funding for CILs. As noted above, increasing 
funding for CILs is beyond the scope of this regulation.
---------------------------------------------------------------------------

    \4\ Costs of new actions are included in a regulatory impact 
analysis even when budgets or grant amounts do not change. If CILs 
are reallocating grant funds to these newly required services, then 
they are doing some other worthwhile activity to a lesser extent, 
and the value of that alternative activity represents the 
opportunity cost of the new requirements.
---------------------------------------------------------------------------

    We also received questions as to whether there are minimum levels 
which must be achieved in order to have met the requirements of each 
component of the new fifth core IL services; the responses to these 
questions relate to and may impact the burden analysis. Each CIL must 
demonstrate activity under all three prongs of the definition, but the 
minimum levels are not further defined in this regulation. The revised 
data collection system will contain more information when it is 
published. We note that we do not establish a minimum number of 
services, beyond that there must be some service (at least one 
activity) accomplished and reported in each category and sub-category, 
for any of the core services, and we do not intend to establish a 
minimum number for the new fifth core services. The amount of services 
provided will depend on the needs of the individuals seeking services, 
the social dynamics of the community served by each CIL, and the 
approach each CIL takes to address the needs of individuals under the 
fifth core service. In addressing the comments related to burden, we 
also note that CILs can fulfill their obligation to provide fifth core 
services in a number of ways that may reduce the burden associated with 
the service. For example, services that CILs already provide may count 
towards this category rather than other core services.
    Nevertheless, we recognize that the addition of the fifth core 
services may place more of a burden on CIL directors to re-examine 
their individual budgets, staffing and strategic plans, and consumer 
needs in order to reallocate funding to ensure the appropriate 
provision of services as required by the Rehabilitation Act. We 
therefore are increasing our initial estimate of 15 hours of time for 
each CIL director to 30 hours of time to account for the additional 
burden. In the final rule we estimate the amount of compliance analysis 
time for CIL directors to total 10,620 hours. We received several 
comments with different estimates. However, the comments did not 
provide sufficient detail or explain how the estimates were calculated. 
They did not include a breakdown of the costs of wages, benefits and 
overhead; nor did they include an estimate of the hours used in the 
calculation. Thus, we continue to assume that the costs of wages, 
benefits and overhead to be a total hourly cost of $57.66, and use that 
figure in determining the dollar impact based on an increased number of 
hours, as discussed above. We increase our estimate in the final rule 
of the total dollar impact of this additional CIL director time to be 
$612,349.20.
    WIOA continues to require annual onsite compliance reviews of at 
least 15 percent of CILs that receive funding under section 722 of the 
Act and at least one-third of designated state units that receive funds 
under section 723 of the Act. The only change made by WIOA was to 
eliminate the requirement that CILs subject to compliance reviews be 
selected randomly. ACL is not proposing any changes to the compliance 
review process in this regulation. We do not anticipate any

[[Page 74692]]

additional burden on grantees as a result of the compliance and review 
process, including the development of additional corrective action 
plans in response to such reviews.
    While the final rule establishes a new appeals process for States, 
we anticipate that the process will be utilized infrequently based on 
past experience of the Independent Living Services programs. The 
process is designed to provide additional protection against the 
termination of funding. We received no specific comments on the burden 
analysis. Therefore, we do not expect that funds will be terminated 
more or less frequently.
    The allocation of 1.8 to 2 percent of Part B funds to training and 
technical assistance for SILCs is a new requirement under WIOA. We have 
limited available data regarding the impact on programs of this 
provision and requested comment on this aspect of the analysis. We 
received no comments related to burden analysis for this provision.
    The 5 percent administrative cap on the DSE is a new statutory 
requirement under WIOA, as is the 30 percent ceiling on the SILC 
resource plan (unless the SPIL specifies that a greater percentage of 
funds is needed for to carry out the functions of the SILC). The rule 
makes final the NPRM's narrow interpretation of the 5 percent 
administrative cap, limiting its application to ``Part B'' funds only, 
rather than applying the 5 percent cap on administrative funds 
allocated to the DSE to all federal funds supporting the Independent 
Living Services. Additional funding sources include Social Security 
reimbursements, Vocational Rehabilitation program funds, and other 
public or private funds.
    The rule avoids a broader application of the cap in an attempt to 
avoid creating too great a disincentive to State agencies to serve as 
DSEs, given the more limited role of the DSEs in decision-making (as 
they no longer have a statutory role in the development of the SPIL). 
Our intent is to effectuate the limitation as required under the law, 
while helping ensure retention of DSEs for the Part B programs. Some 
commenters indicated that the 5 percent administrative cap on the DSE 
may result in reduced funding for independent living services; they did 
not discuss the specific burden associated with implementation of this 
statutory requirement.

C. Alternative Approaches

    Although we believe that the approach of the rule best serves the 
purposes of the law, we considered a regulatory scheme requiring an 
alternative treatment of the Part B State matching funds. In the final 
rule, as in the proposed rule, funds used to meet the required 10 
percent State match are treated the same as funds ``received by the 
State'' under Part B.
    To better understand the implications of this decision, consider 
the five percent administrative cap on the DSE's use of Part B funds 
for administrative purposes in Sec.  1329.12(a)(5). For example, the 
proposed regulatory language mandates that WIOA's 5 percent cap on 
funds for DSE administrative expenses applies only to the Part B funds 
allocated to the State and to the State's required 10 percent Part B 
match. It does not apply to other program funds, including, but not 
limited to, payments provided to a State from the Social Security 
Administration for assisting Social Security beneficiaries and 
recipients to achieve employment outcomes, any other federal funds, or 
to other funds allocated by the State for IL purposes. Treating the 
issue in this way makes more Part B funds available for IL services and 
SPIL activities, while retaining sufficient funds to permit the DSE to 
accomplish its responsibilities and oversight requirements for ILS 
program funds under the law. One key advantage of this approach is 
minimizing disruptions to the ILS program from potential DSE decisions 
to relinquish the program due to insufficient resources to fulfill the 
WIOA-related fiscal oversight/administrative support responsibilities. 
For context, on average, 10-15 percent of DSE funding was spent on 
administrative costs prior to WIOA, though this must be considered 
along with the more limited role the DSE now plays under the law as 
amended.
    A narrower interpretation of this provision would be to apply it to 
Part B funds only, without the State match. Not only would this 
approach severely limit the funds available for fulfillment of DSE 
responsibilities under the law, it would also create some potential 
accounting burdens for programs, as State funds provided as a result of 
the ILS program's State matching requirement have traditionally been 
treated similarly to Federal Part B funds. It would also be 
inconsistent with prior accounting practices regarding the 10% State 
match for Part B funding, which existed prior to WIOA.
    The broadest interpretation would include all federal funds 
supporting the ILS program, including Social Security reimbursements 
and funds from the Title I (Vocational Rehabilitation) program in the 
cap, which would broaden the pot of monies allocated for administrative 
costs of the DSE, which on its face seems counter to the change in the 
law capping the available percentage for these purposes at a relatively 
low amount. Commenters supported this approach.
    We also considered alternative approaches regarding implementation 
of the new fifth core services based on comments regarding lack of 
funding to provide the new services. We have chosen not to establish 
minimum number of services to be provided for any of the core services, 
including the fifth core service, and to allow CILs flexibility in 
determining how to meet the requirements of the act. We believe that 
this approach, discussed above, satisfies the requirements of WIOA that 
CILs provide services in all five core service areas. It also gives 
CILs the greatest amount of flexibility to determine how to use their 
limited federal funds to meet the needs of individuals in their service 
area.

D. Paperwork Reduction Act of 1995

    The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., 
requires certain actions before an agency can adopt or revise a 
collection of information. Under the PRA, we are required to provide 
notice in the Federal Register and solicit public comment before an 
information collection request is submitted to the Office of Management 
and Budget (OMB) for review and approval. In order to fairly evaluate 
whether an information collection should be approved by OMB, Section 
3506(c)(2)(A) of the PRA requires that we solicit comments on new or 
revised information collections, which in the case of this rule, 
includes the new SPIL development requirements. The law is also 
intended to ensure that stakeholders can fully analyze the impact of 
the rule, which includes the associated reporting burden. We are not 
introducing any new information collections in the final rule however, 
it does revise process requirements. As discussed earlier, WIOA changed 
the requirements regarding SPIL development and who must sign the SPIL.
    This final rule makes no revisions to existing 704 reporting 
requirements, the Section 704 Annual Performance Report (Parts I and 
II). ACL is currently convening workgroups to recommend and implement 
changes regarding data collection. These changes will be subject to the 
public comment process under the PRA before they are finalized.

[[Page 74693]]

1. State Plans for Independent Living (SPIL)
    The SPIL encompasses the activities planned to achieve the 
specified independent living objectives and reflects the commitment to 
comply with all applicable statutory and regulatory requirements during 
the three years covered by the plan. A SPIL has already been approved 
in each State through fiscal year 2016. (State Plan for Independent 
Living and Center for Independent Living Programs, OMB Control Number 
1820-0527.) The law remains unchanged that the SPIL continues to govern 
the provision of IL services.
    Any amendments to the SPIL, reflecting either a change based on the 
WIOA amendments or any material change in State law, organization, 
policy, or agency operations that affect the administration of the 
SPIL, must be developed in accordance with Section 704(a)(2) of the 
Rehabilitation Act, as amended. SPIL amendments must be submitted to 
ACL for approval.
    WIOA changed the content of the SPIL to the extent that the SPIL 
must describe how the independent living services will promote full 
access to community life for individuals with significant disabilities 
and describe strategies for providing independent living services on a 
statewide basis, to the greatest extent possible. The SPIL must also 
include a justification for any funding allocation of Part B funds 
above 30% for the SILC's resource plan.
    We anticipate that such changes may, on average, increase the 
amount of time to develop the SPIL by five (5) hours. There are 57 
SPILs, one for each State, the District of Columbia, and the six 
territories. Assuming the same hourly cost of $57.66 discussed in the 
Regulatory Impact Analysis above, we therefore estimate the cost of the 
changes to be $16,433.1 (57 SPILs x $57.66/hour x 5 hours).We did not 
receive any comments on these calculations.
2. 704 Reporting Requirements
    The Section 704 Annual Performance Report (Parts I and II) are the 
Reporting Instruments used to collect information required by the 
Act,\5\ as amended by WIOA, related to the use of Part B and Part C 
funds. This regulation simply transfers the statutorily required annual 
reporting from the Department of Education Regulations to the 
Department of Health and Human Services (HHS) regulations. No 
additional reporting requirements are being added to the current OMB 
approved 704 report at this time. (Section 704 Annual Performance 
Report (Parts I and II), OMB Control Number 1820-0606).
---------------------------------------------------------------------------

    \5\ See Sections 704(c)(3) and (4), 704(m)(4)(D), 706(d), and 
725(c) of the Act.
---------------------------------------------------------------------------

    Prior to WIOA, an effort was underway to make formal changes to the 
704 Reporting Instruments. The passage of WIOA in July 2014 put those 
efforts on hold until late 2014. ACL is currently convening workgroups 
to recommend and implement changes in data collection, and these 
changes will be subject to the public comment process under the PRA 
before they are finalized. Key steps in ACL's current and projected 
timeline on the process include an external workgroup webinar, held 
April 1, 2015, to share the status of data collection efforts and 
invite feedback on specific issues. It is anticipated that additional 
external stakeholder engagement will occur during summer of 2016. The 
SILC indicators of minimum compliance will also be published in the 
Federal Register as part of this process. It is ACL's goal to publish 
the revised data collection proposals for comment in Federal Register 
in September 2016. According to this projected timeline, in October 
2017, programs will begin collecting information for the FY 18 
reporting period using the new data collection system. In December 
2018, the FY18 704 data collection system reflecting the new reporting 
requirements will be due.
    Updating data collection will require changes to include the new 
fifth core services under WIOA. We make final definitions for some of 
the terms in the fifth core services in this rule, and have made 
changes based on comments received. Assuming revised data collection 
requirements will include reporting on the new fifth core services, we 
estimate that providing the information will take approximately 1 hour 
per data report. Based on the total number of 704 Reports filed 
annually in past years,\6\ we estimate that the total number of 
additional hours to be 412.\7\
---------------------------------------------------------------------------

    \6\ See, 79 FR 23960 (April 29, 2014); information collection 
approved June 4, 2014 through June 30, 2017. http://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201404-1820-001.
---------------------------------------------------------------------------

    Assuming the same hourly cost of $57.66 discussed in the regulatory 
impact analysis above, we estimate the cost of the changes to be 
$23,755.92. We received no comments on these estimates. In summary, 
future proposed changes to the Section 704 Annual Performance Report 
(Parts I and II) will be published in the Federal Register with 
opportunity for public comment.
    Section 706 of the Rehabilitation Act continues to require reviews 
of CILs funded under Section 722 and reviews of State entities funded 
under Section 723 of the Rehabilitation Act. Therefore, ACL will 
continue to conduct compliance reviews and make final decisions on any 
proposed corrective actions and/or technical assistance related to 
compliance reviews of a CIL's grants.
    In Section 706(b), 29 U.S.C. 796d-1(b), the Act, as amended by 
WIOA, requires the Administrator to develop and publish in the Federal 
Register new indicators of minimum compliance for Statewide Independent 
Living Councils. The SILC Standards and Indicators of minimum 
compliance are currently under development. ACL shared a draft for 
informal stakeholder review in January 2016 and continues to take 
stakeholder feedback. The CIL indicators of minimum compliance 
(consistent with the standards set forth in Section 725) are awaiting 
the addition of the fifth core services, which requires input in 
response to this proposed rule.
E. Unfunded Mandates Reform Act
    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that a covered agency prepare a budgetary impact statement before 
promulgating a rule that includes any Federal mandate that may result 
in expenditures by State, local, or Tribal governments, in the 
aggregate, or by the private sector, of $100 million, adjusted for 
inflation, or more in any one year.
    If a covered agency must prepare a budgetary impact statement, 
Section 205 further requires that it select the most cost-effective and 
least burdensome alternatives that achieves the objectives of the rule 
and is consistent with the statutory requirements. In addition, Section 
203 requires a plan for informing and advising any small government 
entities that may be significantly or uniquely impacted by a rule.
    ACL has determined that this rulemaking does not result in the 
expenditure by State, local, and Tribal governments in the aggregate, 
or by the private sector of more than $100 million in any one year. The 
total FY 2016 budget for the Independent Living Services and Centers 
for Independent Living programs authorized under Chapter 1, Title VII 
of the Rehabilitation Act of 1973 (Rehabilitation Act or Act), as 
amended by WIOA (Pub. L. 113-128) is $101,183,000. We do not anticipate 
that the rule will impact the majority of the budget for these 
programs.

[[Page 74694]]

F. Congressional Review

    This rule is not a major rule as defined in 5 U.S.C. Section 
804(2).

G. Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal agencies to determine whether a policy or 
regulation may affect family well-being. If the agency's conclusion is 
affirmative, then the agency must prepare an impact assessment 
addressing seven criteria specified in the law. These regulations do 
not have an impact on family well-being as defined in the legislation.

H. Executive Order 13132

    Executive Order 13132 on ``federalism'' was signed August 4, 1999. 
The purposes of the Order are to guarantee the division of governmental 
responsibilities between the national government and the States that 
was intended by the Framers of the Constitution, to ensure that the 
principles of federalism established by the Framers guide the executive 
departments and agencies in the formulation and implementation of 
policies, and to further the policies of the Unfunded Mandates Reform 
Act.
    The Department certifies that this rule does not have a substantial 
direct effect on States, on the relationship between the Federal 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. ACL is not 
aware of any specific State laws that would be preempted by the 
adoption of the regulation in subchapter C of 45 CFR part 1329.

List of Subjects in 45 CFR Part 1329

    Centers for independent living, Compliance, Enforcement and 
appeals, Independent living services, Persons with disabilities, 
Reporting.

    Dated: October 18, 2016.
Edwin Walker,
Acting Administrator, Administration for Community Living.

    Approved: October 19, 2016.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.


0
For the reasons stated in the preamble, the, Administration for 
Community Living, U.S. Department of Health and Human Services, amends 
45 CFR subchapter C by adding part 1329 to read as follows:

PART 1329--STATE INDEPENDENT LIVING SERVICES AND CENTERS FOR 
INDEPENDENT LIVING

Subpart A--General Provisions

Sec.
1329.1 Programs covered.
1329.2 Purpose.
1329.3 Applicability of other regulations.
1329.4 Definitions.
1329.5 Indicators of minimum compliance.
1329.6 Reporting.
1329.7 Enforcement and appeals procedures.
Subpart B--Independent Living Services
1329.10 Authorized use of funds for Independent Living Services.
1329.11 DSE eligibility and application.
1329.12 Role of the designated State entity.
1329.13 Allotment of Federal funds for State independent living (IL) 
services.
1329.14 Establishment of SILC.
1329.15 Duties of the SILC.
1329.16 Authorities of the SILC.
1329.17 General requirements for a State plan.
Subpart C--Centers for Independent Living Program
1329.20 Centers for Independent Living (CIL) program.
1329.21 Continuation awards to entities eligible for assistance 
under the CIL program.
1329.22 Competitive awards to new Centers for Independent Living.
1329.23 Compliance reviews.
1329.24 Training and technical assistance to Centers for Independent 
Living.

    Authority:  29 U.S.C. 709; 42 U.S.C. 3515e.

Subpart A--General Provisions


Sec.  1329.1  Programs covered.

    This part includes general requirements applicable to the conduct 
of the following programs authorized under title VII, chapter 1 of the 
Rehabilitation Act of 1973, as amended:
    (a) Independent Living Services (ILS), title VII, chapter 1, part B 
(29 U.S.C. 796e to 796e-3).
    (b) The Centers for Independent Living (CIL), title VII, chapter 1, 
part C (29 U.S.C. 796f to 796f-6).


Sec.  1329.2  Purpose.

    The purpose of title VII of the Act is to promote a philosophy of 
independent living (IL), including a philosophy of consumer control, 
peer support, self-help, self-determination, equal access, and 
individual and system advocacy, in order to maximize the leadership, 
empowerment, independence, and productivity of individuals with 
disabilities, and to promote the integration and full inclusion of 
individuals with disabilities into the mainstream of American society 
by:
    (a) Providing financial assistance to States for providing, 
expanding, and improving the provision of IL services;
    (b) Providing financial assistance to develop and support statewide 
networks of Centers for Independent Living (Centers or CILs);
    (c) Providing financial assistance to States, with the goal of 
improving the independence of individuals with disabilities, for 
improving working relationships among--
    (1) State Independent Living Services;
    (2) Centers for Independent Living;
    (3) Statewide Independent Living Councils (SILCs or Councils) 
established under section 705 of the Act (29 U.S.C. 796d);
    (4) State vocational rehabilitation (VR) programs receiving 
assistance under Title 1 of the Act (29 U.S.C. 720 et seq.);
    (5) State programs of supported employment services receiving 
assistance under Title VI of the Act (29 U.S.C. 795g et seq.);
    (6) Client assistance programs (CAPs) receiving assistance under 
section 112 of the Act (29 U.S.C. 732);
    (7) Programs funded under other titles of the Act;
    (8) Programs funded under other Federal laws; and
    (9) Programs funded through non-Federal sources with the goal of 
improving the independence of individuals with disabilities.


Sec.  1329.3  Applicability of other regulations.

    Several other regulations apply to all activities under this part. 
These include but are not limited to:
    (a) 45 CFR part 16--Procedures of the Departmental Grant Appeals 
Board.
    (b) 45 CFR part 46--Protection of Human Subjects.
    (c) 45 CFR part 75--Uniform Administrative Requirements, Cost 
Principles, and Audit Requirements for HHS Awards.
    (d) 45 CFR part 80--Nondiscrimination under Programs Receiving 
Federal Assistance through the Department of Health and Human 
Services--Effectuation of title VI of the Civil Rights Act of 1964.
    (e) 45 CFR part 81--Practice and Procedure for Hearings under Part 
80 of this Title.
    (f) 45 CFR part 84--Nondiscrimination on the Basis of Handicap in 
Programs Activities Receiving Federal Financial Assistance.
    (g) 45 CFR part 86--Nondiscrimination on the Basis of Sex in 
Education Programs or Activities Receiving Federal Financial 
Assistance.
    (h) 45 CFR part 91--Nondiscrimination on the Basis of Age in 
Programs or Activities Receiving Federal Financial Assistance from HHS.

[[Page 74695]]

    (i) 45 CFR part 93--New Restrictions on Lobbying.
    (j) 2 CFR part 376--Nonprocurement Debarment and Suspension.
    (k) 2 CFR part 382--Requirements for Drug-Free Workplace (Financial 
Assistance).


Sec.  1329.4  Definitions.

    For the purposes of this part, the following definitions apply:
    Act means the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.), 
as amended. Part B refers to part B of chapter 1 of title VII of the 
Act (29 U.S.C. 796e to 796e-3). Part C refers to part C of chapter 1 of 
title VII, of the Act (29 U.S.C. 796f to 796f-6).
    Administrative support services means services and supports 
provided by the designated State entity under Part B, and to Part C 
CILs administered by the State under section 723 of the Act in support 
of the goals, objectives and related activities under an approved State 
Plan for Independent Living (SPIL). Such support includes any costs 
associated with contracts and subgrants including fiscal and 
programmatic oversight, among other services.
    Administrator means the Administrator of the Administration for 
Community Living (ACL) of the Department of Health and Human Services.
    Advocacy means pleading an individual's cause or speaking or 
writing in support of an individual. To the extent permitted by State 
law or the rules of the agency before which an individual is appearing, 
a non-lawyer may engage in advocacy on behalf of another individual. 
Advocacy may--
    (1) Involve representing an individual--
    (i) Before private entities or organizations, government agencies 
(whether State, local, or Federal), or in a court of law (whether State 
or Federal); or
    (ii) In negotiations or mediation, in formal or informal 
administrative proceedings before government agencies (whether State, 
local, or Federal), or in legal proceedings in a court of law; and
    (2) Be on behalf of--
    (i) A single individual, in which case it is individual advocacy;
    (ii) A group or class of individuals, in which case it is systems 
advocacy; or
    (iii) Oneself, in which case it is self advocacy.
    Attendant care means a personal assistance service provided to an 
individual with significant disabilities in performing a variety of 
tasks required to meet essential personal needs in areas such as 
bathing, communicating, cooking, dressing, eating, homemaking, 
toileting, and transportation.
    Center for independent living (``Center'') means a consumer-
controlled, community-based, cross-disability, nonresidential, private 
nonprofit agency for individuals with significant disabilities 
(regardless of age or income) that--
    (1) Is designed and operated within a local community by 
individuals with disabilities;
    (2) Provides an array of IL services as defined in section 7(18) of 
the Act, including, at a minimum, independent living core services as 
defined in this section; and
    (3) Complies with the standards set out in Section 725(b) and 
provides and complies with the assurances in section 725(c) of the Act 
and Sec.  1329.5.
    Completed their secondary education means, with respect to the 
Independent Living Core Services that facilitate the transition of 
youth who are individuals with significant disabilities in section 
7(17)(e)(iii) of the Act, that an eligible youth has received a 
diploma; has received a certificate of completion for high school or 
other equivalent document marking the completion of participation in 
high school; or has exceeded the age of eligibility for services under 
IDEA.
    Consumer control means, with respect to a Center or eligible 
agency, that the Center or eligible agency vests power and authority in 
individuals with disabilities, including individuals who are or have 
been recipients of IL services, in terms of the management, staffing, 
decision making, operation, and provision of services. Consumer 
control, with respect to an individual, means that the individual with 
a disability asserts control over his or her personal life choices, and 
in addition, has control over his or her independent living plan (ILP), 
making informed choices about content, goals and implementation.
    Cross-disability means, with respect to services provided by a 
Center, that a Center provides services to individuals with all 
different types of significant disabilities, including individuals with 
significant disabilities who are members of unserved or underserved 
populations by programs under Title VII. Eligibility for services shall 
be determined by the Center, and shall not be based on the presence of 
any one or more specific significant disabilities.
    Designated State entity (DSE) is the State agency designated in the 
State Plan for Independent Living (SPIL) that acts on behalf of the 
State to provide the functions described in title VII, chapter 1 of the 
Act.
    Eligible agency means a consumer-controlled, community-based, 
cross-disability, nonresidential, private, nonprofit agency.
    Independent living core services mean, for purposes of services 
that are supported under the ILS or CIL programs--
    (1) Information and referral services;
    (2) Independent Living skills training;
    (3) Peer counseling, including cross-disability peer counseling;
    (4) Individual and systems advocacy;
    (5) Services that:
    (i) Facilitate the transition of individuals with significant 
disabilities from nursing homes and other institutions to home and 
community-based residences, with the requisite supports and services. 
This process may include providing services and supports that a 
consumer identifies are needed to move that person from an 
institutional setting to community based setting, including systems 
advocacy required for the individual to move to a home of his or her 
choosing;
    (ii) Provide assistance to individuals with significant 
disabilities who are at risk of entering institutions so that the 
individuals may remain in the community. A determination of who is at 
risk of entering an institution should include self-identification by 
the individual as part of the intake or goal-setting process; and
    (iii) Facilitate the transition of youth who are individuals with 
significant disabilities, who were eligible for individualized 
education programs under section 614(d) of the Individuals with 
Disabilities Education Act (20 U.S.C. 1414(d)), and who have completed 
their secondary education or otherwise left school, to postsecondary 
life. Individuals who have reached the age of 18 and are still 
receiving services in accordance with an Individualized Education 
Program (IEP) under IDEA have not ``completed their secondary 
education.''
    Independent living service includes the independent living core 
services and such other services as described in section 7(18) of the 
Act.
    Individual with a disability means an individual who--
    (1) Has a physical or mental impairment that substantially limits 
one or more major life activities of such individual;
    (2) Has a record of such an impairment; or
    (3) Is regarded as having such an impairment, as described in 
section 3(3) of the Americans with Disabilities Act of 1990 (42 U.S.C. 
12102(3)).
    Individual with a significant disability means an individual with a 
severe physical or mental impairment whose ability to function 
independently in the

[[Page 74696]]

family or community or whose ability to obtain, maintain, or advance in 
employment is substantially limited and for whom the delivery of 
independent living services will improve the ability to function, 
continue functioning, or move toward functioning independently in the 
family or community or to continue in employment, respectively.
    Majority means more than 50 percent.
    Minority group means American Indian, Alaskan Native, Asian 
American, Black or African American (not of Hispanic origin), Hispanic 
or Latino (including persons of Mexican, Puerto Rican, Cuban, and 
Central or South American origin), and Native Hawaiian or other Pacific 
Islander.
    Nonresidential means, with respect to a Center, that the Center 
does not operate or manage housing or shelter for individuals as an IL 
service on either a temporary or long-term basis unless the housing or 
shelter is--
    (1) Incidental to the overall operation of the Center;
    (2) Necessary so that the individual may receive an IL service; and
    (3) Limited to a period not to exceed eight weeks during any six-
month period.
    Peer relationships mean relationships involving mutual support and 
assistance among individuals with significant disabilities who are 
actively pursuing IL goals.
    Peer role models mean individuals with significant disabilities 
whose achievements can serve as a positive example for other 
individuals with significant disabilities.
    Personal assistance services mean a range of services, paid or 
unpaid, provided by one or more persons, designed to assist an 
individual with a disability to perform daily living activities that 
the individual would typically perform if the individual did not have a 
disability. These services must be designed to increase the 
individual's control in life and ability to perform everyday activities 
and include but are not limited to: Getting up and ready for work or 
going out into the community (including bathing and dressing), cooking, 
cleaning or running errands, engaging in social relationships including 
parenting.
    Service provider means a Center for Independent Living that 
receives financial assistance under Part B or C of chapter 1 of title 
VII of the Act, or any other entity or individual that provides IL 
services under a grant or contract from the DSE pursuant to Section 
704(f) of the Act. A designated State entity (DSE) may directly provide 
IL services to individuals with significant disabilities only as 
specifically authorized in the SPIL.
    State includes, in addition to each of the several States of the 
United States, the District of Columbia, the Commonwealth of Puerto 
Rico, the United States Virgin Islands, Guam, American Samoa, and the 
Commonwealth of the Northern Mariana Islands.
    State plan means the State Plan for Independent Living (SPIL) 
required under Section 704 of the Act.
    Unserved and underserved groups or populations include populations 
such as individuals from racial and ethnic minority backgrounds, 
disadvantaged individuals, individuals with limited English 
proficiency, and individuals from underserved geographic areas (rural 
or urban).
    Youth with a significant disability means an individual with a 
significant disability who--
    (1) Is not younger than 14 years of age; and
    (2) Is not older than 24 years of age.


Sec.  1329.5  Indicators of minimum compliance.

    To be eligible to receive funds under this part, a Center must 
comply with the standards in section 725(b) and assurances in section 
725(c) of the Act, with the indicators of minimum compliance, and the 
requirements contained in the terms and conditions of the grant award.


Sec.  1329.6  Reporting.

    (a) A Center must submit a performance report in a manner and at a 
time described by the Administrator, consistent with section 
704(m)(4)(D) of the Act, 29 U.S.C. 796c(m)(4)(D).
    (b) The DSE must submit a report in a manner and at a time 
described by the Administrator, consistent with section 704(c)(4) of 
the Act, 29 U.S.C. 796c(c)(4).
    (c) The Administrator may require such other reports as deemed 
necessary to carry out the responsibilities set forth in section 706 of 
the Act, 29 U.S.C. 796d-1.


Sec.  1329.7  Enforcement and appeals procedures.

    (a) Process for Centers for Independent Living. (1) If the Director 
of the Independent Living Administration (Director) determines that, as 
the result of the Onsite Compliance Review process defined in section 
706(c)(2), or other review activities, any Center receiving funds under 
this part, other than a Center that is provided Part C funding by the 
State under section 723 of the Act, is not in compliance with the 
standards and assurances in section 725 (b) and (c) of the Act and of 
this part, the Director must provide notice to the Center pursuant to 
guidance determined by the Administrator.
    (2) The Director may offer technical assistance to the Center to 
develop a corrective action plan or to take such other steps as are 
necessary to come into compliance with the standards and assurances.
    (3) The Center may request a preliminary appeal to the Director in 
a form and manner determined by the Administrator. The Director shall 
review the appeal request and provide written notice of the 
determination within a timely manner.
    (4) Where there is a determination that falls within 45 CFR part 
16, appendix A, C.a.(1)-(4), the Center may appeal an unfavorable 
decision by the Director to the Administrator within a time and manner 
established by the Administrator. The Administrator shall review the 
appeal request and provide written notice of the determination within a 
timely manner.
    (5) The Administrator may take steps to enforce a corrective action 
plan or to terminate funding if the Administrator determines that the 
Center remains out of compliance.
    (6) Written notice of the determination by the Administrator shall 
constitute a final determination for purposes of 45 CFR part 16. A 
Center that receives such notice of a determination that falls within 
45 CFR part 16, appendix A, C.a.(1)-(4), may appeal to the Departmental 
Appeals Board pursuant to the provisions of 45 CFR part 16.
    (7) A Center that is administered by the State under Section 723 of 
the Act must first exhaust any State process before going through the 
process described in paragraphs (a)(1) through (6) of this section.
    (b) Process for States. (1) If the Director of the Independent 
Living Administration determines that a State is out of compliance with 
sections 704, 705, 713 or other pertinent sections of the Act, the 
Director must provide notice to the State pursuant to guidance 
determined by the Administrator.
    (2) The Director may offer technical assistance to the State to 
develop a corrective action plan or to take such other steps as are 
necessary to ensure that the State comes in to compliance.
    (3) Where there is a determination that falls within 45 CFR part 
16, appendix A, C.a.(1)-(4), the State may seek an appeal consistent 
with the steps set forth in paragraphs (a)(3) and (4) of this section.

[[Page 74697]]

    (4) The Administrator may take steps to enforce statutory or 
regulatory requirements or to terminate funding if the Administrator 
determines that the State remains out of compliance.
    (5) Written notice of the determination by the Administrator shall 
constitute a final determination for purposes of 45 CFR part 16 with 
regard to the types of determinations set forth in 45 CFR part 16, 
appendix A, C.a.(1)-(4). A State that receives such notice may appeal 
to the Departmental Appeals Board pursuant to the provisions of 45 CFR 
part 16.

Subpart B--Independent Living Services


Sec.  1329.10  Authorized use of funds for Independent Living Services.

    (a) The State:
    (1) May use funds received under this part to support the SILC 
resource plan described in section 705(e) of the Act but may not use 
more than 30 percent of the funds unless an approved SPIL so specifies 
pursuant to Sec.  1329.15(c);
    (2) May retain funds under section 704(c)(5) of the Act; and
    (3) Shall distribute the remainder of the funds received under this 
part in a manner consistent with the approved State plan for the 
activities described in paragraph (b) of this section.
    (b) The State may use the remainder of the funds described in 
paragraph (a)(3) of this section to--
    (1) Provide to individuals with significant disabilities the 
independent living (IL) services required by section 704(e) of the Act, 
particularly those in unserved areas of the State;
    (2) Demonstrate ways to expand and improve IL services;
    (3) Support the operation of Centers for Independent Living 
(Centers) that are in compliance with the standards and assurances in 
section 725 (b) and (c) of the Act;
    (4) Support activities to increase the capacities of public or 
nonprofit agencies and organizations and other entities to develop 
comprehensive approaches or systems for providing IL services;
    (5) Conduct studies and analyses, gather information, develop model 
policies and procedures, and present information, approaches, 
strategies, findings, conclusions, and recommendations to Federal, 
State, and local policy makers in order to enhance IL services for 
individuals with significant disabilities;
    (6) Train individuals with disabilities and individuals providing 
services to individuals with disabilities, and other persons regarding 
the IL philosophy; and
    (7) Provide outreach to populations that are unserved or 
underserved by programs under title VII of the Act, including minority 
groups and urban and rural populations.


Sec.  1329.11  DSE eligibility and application.

    (a) Any designated State entity (DSE) identified by the State and 
included in the signed SPIL pursuant to section 704(c) is eligible to 
apply for assistance under this part in accordance with section 704 of 
the Act, 29 U.S.C. 796c.
    (b) To receive financial assistance under Parts B and C of chapter 
1 of title VII, a State shall submit to the Administrator and obtain 
approval of a State plan that meets the requirements of section 704 of 
the Act, 29 U.S.C. 796c.
    (c) Allotments to states are determined in accordance with section 
711 of the Act, 29 U.S.C. 796e.


Sec.  1329.12  Role of the designated State entity.

    (a) A DSE that applies for and receives assistance must:
    (1) Receive, account for, and disburse funds received by the State 
under Part B and Part C in a State under section 723 of the Act based 
on the State plan;
    (2) Provide administrative support services for a program under 
Part B, as directed by the approved State plan, and for CILs under Part 
C when administered by the State under section 723 of the Act, 29 
U.S.C. 796f-2;
    (3) Keep such records and afford such access to such records as the 
Administrator finds to be necessary with respect to the programs;
    (4) Submit such additional information or provide such assurances 
as the Administrator may require with respect to the programs; and
    (5) Retain not more than 5 percent of the funds received by the 
State for any fiscal year under Part B, for the performance of the 
services outlined in paragraphs (a)(1) through (4) of this section. For 
purposes of these regulations, the 5 percent cap on funds for 
administrative expenses applies only to the Part B funds allocated to 
the State and to the State's required 10 percent Part B match. It does 
not apply to other program income funds, including, but not limited to, 
payments provided to a State from the Social Security Administration 
for assisting Social Security beneficiaries and recipients to achieve 
employment outcomes, any other federal funds, or to other funds 
allocated by the State for IL purposes.
    (b) The DSE must also carry out its other responsibilities under 
the Act, including, but not limited to:
    (1) Allocating funds for the delivery of IL services under Part B 
of the Act as directed by the SPIL; and
    (2) Allocating the necessary and sufficient resources needed by the 
SILC to fulfill its statutory duties and authorities under section 
705(c), consistent with the approved State Plan.
    (c) Fiscal and accounting requirements: The DSE must adopt fiscal 
control and fund accounting procedures as may be necessary to ensure 
the proper disbursement of and accounting for federal funds provided to 
CILs, SILCs, and/or other services providers under the ILS program. The 
DSE must comply with all applicable federal and State laws and 
regulations, including those in 45 CFR part 75.


Sec.  1329.13  Allotment of Federal funds for State independent living 
(IL) services.

    (a) The allotment of Federal funds for State IL services for each 
State is computed in accordance with the requirements of section 
711(a)(1) of the Act.
    (b) Notwithstanding paragraph (a) of this section, the allotment of 
Federal funds for Guam, American Samoa, the United States Virgin 
Islands, and the Commonwealth of the Northern Mariana Islands is 
computed in accordance with section 711(a)(2) of the Act.
    (c) The Administrator shall reserve between 1.8 percent and 2 
percent of appropriated funds to provide, either directly or through 
grants, contracts, or cooperative agreements, training and technical 
assistance to SILCs. Training and technical assistance funds shall be 
administered in accordance with section 711A of the Act.


Sec.  1329.14  Establishment of a SILC.

    (a) To be eligible to receive assistance under this part, each 
State shall establish and maintain a SILC that meets the requirements 
of section 705 of the Act, including composition and appointment of 
members.
    (b) The SILC shall not be established as an entity within a State 
agency, including the DSE. The SILC shall be independent of and 
autonomous from the DSE and all other State agencies.


Sec.  1329.15  Duties of the SILC.

    (a) The duties of the SILC are those set forth in section 705(c), 
(d), and (e) of the Act.
    (1) The SILC shall develop the SPIL in accordance with guidelines 
developed by the Administrator;
    (2) The SILC shall monitor, review and evaluate the implementation 
of the SPIL on a regular basis as determined by the SILC and set forth 
in the SPIL;
    (3) The SILC shall meet regularly, and ensure that such meetings 
are open to

[[Page 74698]]

the public and sufficient advance notice of such meetings is provided;
    (4) The SILC shall submit to the Administrator such periodic 
reports as the Administrator may reasonably request, and keep such 
records, and afford such access to such records, as the Administrator 
finds necessary to verify the information in such reports; and
    (5) The SILC shall, as appropriate, coordinate activities with 
other entities in the State that provide services similar to or 
complementary to independent living services, such as entities that 
facilitate the provision of or provide long-term community-based 
services and supports.
    (b) In carrying out the duties under this section, the SILC may 
provide contact information for the nearest appropriate CIL. Sharing of 
such information shall not constitute the direct provision of 
independent living services as defined in section 705(c)(3) of the Act.
    (c) The SILC, in conjunction with the DSE, shall prepare a plan for 
the provision of resources, including staff and personnel that are 
necessary and sufficient to carry out the functions of the SILC.
    (1) The resource plan amount shall be commensurate, to the extent 
possible, with the estimated costs related to SILC fulfilment of its 
duties and authorities consistent with the approved State Plan.
    (2) Available resources include: Innovation and Expansion (I&E) 
funds authorized by 29 U.S.C. 721(a)(18); Independent Living Part B 
funds; State matching funds; other public funds (such as Social 
Security reimbursement funds); and private sources.
    (3) In accordance with Sec.  1329.10(a)(1), no more than 30 percent 
of the State's allocation of Part B and Part B State matching funds may 
be used to fund the resource plan, unless the approved SPIL provides 
that more than 30 percent is needed and justifies the greater 
percentage.
    (4) No conditions or requirements may be included in the SILC's 
resource plan that may compromise the independence of the SILC.
    (5) The SILC is responsible for the proper expenditure of funds and 
use of resources that it receives under the resource plan.
    (6) A description of the SILC's resource plan must be included in 
the State plan. The plan should include:
    (i) Staff/personnel;
    (ii) Operating expenses;
    (iii) Council compensation and expenses;
    (iv) Meeting expenses, including public hearing expenses, such as 
meeting space, alternate formats, interpreters, and other 
accommodations;
    (v) Resources to attend and/or secure training for staff and 
Council members; and
    (vi) Other costs as appropriate.
    (d) The SILC shall carry out the activities in paragraph (a), to 
better serve individuals with significant disabilities and help achieve 
the purpose of section 701 of the Act.
    (e) The SILC shall, consistent with State law, supervise and 
evaluate its staff and other personnel as may be necessary to carry out 
its functions under this section.


Sec.  1329.16  Authorities of the SILC.

    (a) The SILC may conduct the following discretionary activities, as 
authorized and described in the approved State Plan:
    (1) Work with Centers for Independent Living to coordinate services 
with public and private entities to improve services provided to 
individuals with disabilities;
    (2) Conduct resource development activities to support the 
activities described in the approved SPIL and/or to support the 
provision of independent living services by Centers for Independent 
Living; and
    (3) Perform such other functions, consistent with the purpose of 
this part and comparable to other functions described in section 705(c) 
of the Act, as the Council determines to be appropriate and authorized 
in the approved SPIL.
    (b) In undertaking the foregoing duties and authorities, the SILC 
shall:
    (1) Coordinate with the CILs in order to avoid conflicting or 
overlapping activities within the CILs' established service areas;
    (2) Not engage in activities that constitute the direct provision 
of IL services to individuals, including the IL core services; and
    (3) Comply with Federal prohibitions against lobbying.


Sec.  1329.17  General requirements for a State plan.

    (a) The State may use funds received under Part B to support the 
Independent Living Services program and to meet its obligations under 
the Act, including the section 704(e) requirements that apply to the 
provision of independent living services. The State plan must stipulate 
that the State will provide IL services, directly and/or through grants 
and contracts, with Federal, State or other funds, and must describe 
how and to whom those funds will be disbursed for this purpose.
    (b) In order to receive financial assistance under this part, a 
State shall submit to the Administrator a State plan for independent 
living.
    (1) The State plan must contain, in the form prescribed by the 
Administrator, the information set forth in section 704 of the Act, 
including designation of an Agency to serve as the designated State 
entity, and such other information requested by the Administrator.
    (2) The State plan must contain the assurances set forth in section 
704(m) of the Act.
    (3) The State plan must be signed in accordance with the provisions 
of this section.
    (4) The State plan must be submitted 90 days before the completion 
date of the proceeding plan, and otherwise in the time frame and manner 
prescribed by the Administrator.
    (5) The State plan must be approved by the Administrator.
    (c) The State plan must cover a period of not more than three years 
and must be amended whenever necessary to reflect any material change 
in State law, organization, policy, or agency operations that affects 
the administration of the State plan.
    (d) The State plan must be jointly--
    (1) Developed by the chairperson of the SILC, and the directors of 
the CILs, after receiving public input from individuals with 
disabilities and other stakeholders throughout the State; and
    (2) Signed by the--
    (i) Chairperson of the SILC, acting on behalf of and at the 
direction of the SILC;
    (ii) The director of the DSE, signifying agreement to execute the 
responsibilities of the DSE identified in section 704(c) of the Act; 
and
    (iii) Not less than 51 percent of the directors of the CILs in the 
State. For purposes of this provision, if a legal entity that 
constitutes the ``CIL'' has multiple Part C grants considered as 
separate Centers for all other purposes, for SPIL signature purposes, 
it is only considered as one Center. CILs with service areas in more 
than one State that meet the other applicable requirements are eligible 
to participate in SPIL development and sign the SPIL in each of the 
relevant States.
    (e) The State plan must provide for the review and revision of the 
plan, not less than once every three years, to ensure the existence of 
appropriate planning, financial support and coordination, and other 
assistance to meet the requirements of section 704(a) of the Act.
    (f) The public, including people with disabilities and other 
stakeholders throughout the State, must have an opportunity to comment 
on the State plan prior to its submission to the

[[Page 74699]]

Administrator and on any revisions to the approved State plan. Meeting 
this standard for public input from individuals with disabilities 
requires providing reasonable modifications in policies, practices, or 
procedures; effective communication and appropriate auxiliary aids and 
services for individuals with disabilities, which may include the 
provision of qualified interpreters and information in alternate 
formats, free of charge.
    (1) The requirement for public input in this section may be met by 
holding public meetings before a preliminary draft State plan is 
prepared and by providing a preliminary draft State plan for comment 
prior to submission.
    (2) To meet the public input standard of this section, a public 
meeting requires:
    (i) Accessible, appropriate and sufficient notice provided at least 
30 days prior to the public meeting through various media available to 
the general public, such as Web sites, newspapers and public service 
announcements, and through specific contacts with appropriate 
constituency groups.
    (ii) All notices, including notices published on a Web site, and 
other written materials provided at or prior to public meetings must be 
available upon request in accessible formats.
    (g) The State plan must identify those provisions that are State-
imposed requirements. For purposes of this section, a State-imposed 
requirement includes any State law, regulation, rule, or policy 
relating to the DSE's administration or operation of IL programs under 
Title VII of the Act, including any rule or policy implementing any 
Federal law, regulation, or guideline that is beyond what would be 
required to comply with the regulations in this part.
    (h) The State plan must address how the specific requirements in 
the Act and in paragraph (f) of this section will be met.

Subpart C--Centers for Independent Living Program


Sec.  1329.20  Centers for Independent Living (CIL) program.

    State allotments of Part C, funds shall be based on section 721(c) 
of the Act, and distributed to Centers within the State in accordance 
with the order of priorities in sections 722(e) and 723(e) of the Act.


Sec.  1329.21  Continuation awards to entities eligible for assistance 
under the CIL program.

    (a) In any State in which the Administrator has approved the State 
plan required by section 704 of the Act, an eligible agency funded 
under Part C in fiscal year 2015 may receive a continuation award in FY 
2016 or a succeeding fiscal year if the Center has--
    (1) Complied during the previous project year with the standards 
and assurances in section 725 of the Act and the terms and conditions 
of its grant; and
    (2) Submitted an approvable annual performance report demonstrating 
that the Center meets the indicators of minimum compliance referenced 
in in Sec.  1329.5.
    (b) If an eligible agency administers more than one Part C grant, 
each of the Center grants must meet the requirements of paragraph (a) 
of this section to receive a continuation award.
    (c) A designated State entity (DSE) that operated a Center in 
accordance with section 724(a) of the Act in fiscal year (FY) 2015 is 
eligible to continue receiving assistance under this part in FY 2016 or 
a succeeding fiscal year if, for the fiscal year for which assistance 
is sought--
    (1) No nonprofit private agency submits and obtains approval of an 
acceptable application under section 722 or 723 of the Act to operate a 
Center for that fiscal year before a date specified by the 
Administrator; or
    (2) After funding all applications so submitted and approved, the 
Administrator determines that funds remain available to provide that 
assistance.
    (d) A Center operated by the DSE under section 724(a) of the Act 
must comply with paragraphs (a), (b), and (c) of this section to 
receive continuation funding, except for the requirement that the 
Center be a private nonprofit agency.
    (e) A designated State entity that administered Part C funds and 
awarded grants directly to Centers within the State under section 723 
of the Act in fiscal year (FY) 2015 is eligible to continue receiving 
assistance under section 723 in FY 2016 or a succeeding fiscal year if 
the Administrator determines that the amount of State funding earmarked 
by the State to support the general operation of Centers during the 
preceding fiscal year equaled or exceeded the amount of federal funds 
allotted to the State under section 721(c) of the Act for that fiscal 
year.
    (f) A DSE may apply to administer Part C funds under section 723 in 
the time and in the manner that the Administrator may require, 
consistent with section 723(a)(1)(A) of the Act.
    (g) Grants awarded by the DSE under section 723 of the Act are 
subject to the requirements of paragraphs (a) and (b) of this section 
and the order of priorities in section 723(e) of the Act, unless the 
DSE and the SILC jointly agree on another order of priorities.


Sec.  1329.22  Competitive awards to new Centers for Independent 
Living.

    (a) Subject to the availability of funds and in accordance with the 
order of priorities in section 722(e) of the Act and the State Plan's 
design for the statewide network of Centers, an eligible agency may 
receive Part C funding as a new Center for Independent Living in a 
State, if the eligible agency:
    (1) Submits to the Administrator an application at the time and 
manner required in the funding opportunity announcement (FOA) issued by 
the Administrator which contains the information and meets the 
selection criteria established by the Administrator in accordance with 
section 722(d) of the Act;
    (2) Proposes to serve a geographic area that has been designated as 
a priority unserved or underserved in the State Plan for Independent 
Living and that is not served by an existing Part C-funded Center; and
    (3) Is determined by the Administrator to be the most qualified 
applicant to serve the designated priority area consistent with the 
State plan setting forth the design of the State for establishing a 
statewide network of Centers for independent living.
    (b) An existing Part C-funded Center may apply to serve the 
designated unserved or underserved areas if it proposes the 
establishment of a separate and complete Center (except that the 
governing board of the existing center may serve as the governing board 
of the new Center) at a different geographic location, consistent with 
the requirements in the FOA.
    (c) An eligible agency located in a bordering, contiguous State may 
be eligible for a new CIL award if the Administrator determines, based 
on the submitted application, that the agency:
    (1) Is the most qualified applicant meeting the requirements in 
paragraphs (a) and (b) of this section; and
    (2) Has the expertise and resources necessary to serve individuals 
with significant disabilities who reside in the bordering, contiguous 
State, in accordance with the requirements of the Act and these 
regulations.
    (d) If there are insufficient funds under the State's allotment to 
fund a new Center, the Administrator may--
    (1) Use the excess funds in the State to assist existing Centers 
consistent with the State plan; or
    (2) Reallot these funds in accordance with section 721(d) of the 
Act.

[[Page 74700]]

Sec.  1329.23  Compliance reviews.

    (a) Centers receiving Part C funding shall be subject to periodic 
reviews, including on-site reviews, in accordance with sections 706(c), 
722(g), and 723(g) of the Act and guidance set forth by the 
Administrator, to verify compliance with the standards and assurances 
in section 725(b) and (c) of the Act and the grant terms and 
conditions. The Administrator shall annually conduct reviews of at 
least 15 percent of the Centers.
    (b) A copy of each review under this section shall be provided, in 
the case of section 723(g), by the director of the DSE to the 
Administrator and to the SILC, and in the case of section 722(g), by 
the Administrator to the SILC and the DSE.


Sec.  1329.24  Training and technical assistance to Centers for 
Independent Living.

    The Administrator shall reserve between 1.8% and 2% of appropriated 
funds to provide training and technical assistance to Centers through 
grants, contracts or cooperative agreements, consistent with section 
721(b) of the Act. The training and technical assistance funds shall be 
administered in accordance with section 721(b) of the Act.
[FR Doc. 2016-25918 Filed 10-26-16; 8:45 am]
 BILLING CODE 4150-04-P