B-242109, Jun 7, 1991

B-242109, Jun 7, 1991

DIGEST: 1. State plan for rehabilitation services under Rehabilitation Act of 1973 must include order of selection plan if all eligible handicapped who apply cannot be served, and order of selection plan must be implemented when not all new applicants can be served. 29 U.S.C. Sec. 721(a)(5)(A). Failure to implement the plan would provide basis for Rehabilitation Services Administration to suspend funding, disallow costs, temporarily withhold cash payments, and/or withhold awarding other grants under the program. 29 U.S.C. Sec. 721(c)(1)(B); 34 C.F.R. Sec. 361.4, 80.43 (1990). 2. The Rehabilitation Services Administration (RSA) has authority in both law and regulation to enforce provisions of a state plan for services under the Rehabilitation Act of 1973, including the order of selection plan. See 29 U.S.C. Sec. 721(c)(1)(B); 34 C.F.R. Secs. 80.43, 361.4 (1990). Congress intended RSA to set priorities and guidelines for the states for providing services to their handicapped population. 3. It is not improper for order of selection plan, which is part of state plan for rehabilitative services under the Rehabilitation Act of 1973, to categorically exclude certain groups of handicapped individuals from receiving certain services. The act recognizes that there may be times when a state will be unable to provide services to all eligible individuals and the implicit assumption is that some categories of eligible individuals may go without some or all services for some time.

To: Evaluator-in-Charge, DTRO - Randy DiRosa Thru: Associate General Counsel, OGC/HRD-PEMD - Barry Bedrick Thru: Assistant General Counsel, OGC/HRD-PEMD - Robert Crystal From: Attorney-Advisor, OGC/HRD-PEMD - Mary Reich

Order of Selection provision of the Rehabilitation Act of 1973 (B 242109; Code 104661):

In connection with your review of vocational rehabilitation services offered under the Rehabilitation Act of 1973, you asked several questions about the order of selecting recipients of services. We reviewed the legislative history and documentation you provided regarding the order of selection provision in the act. Your questions and our answers follow.

Question (1): Under the Rehabilitation Act of 1973 must a state plan for rehabilitation services include an order of selection plan for selecting individuals to whom to provide vocational rehabilitation services?

Answer: State plans must include an order of selection plan, if the state is unable to provide services to all eligible individuals who apply. Section 101(a)(5)(A)of the act (29 U.S.C. Sec. 721(a)(5)(A)) explicitly requires that "in the event vocational rehabilitation services cannot be provided to all eligible individuals who apply," state plans for rehabilitation services shall include "the order to be followed in selecting individuals to whom vocational rehabilitation services will be provided." Applicable regulations reiterate that state plans are required to include a justification and description of their order of selection, unless the state provides assurance that it is serving all eligible individuals who apply. 34 C.F.R. Sec. 361.2(b)(2)(iv).

In order to be eligible to receive federal funds for rehabilitation services, a state must have a 3-year plan (referred to as the state plan) for providing vocational rehabilitation services approved by the Rehabilitation Services Administration (RSA). 29 U.S.C. Secs. 721(a), (b). A state plan that neither includes an order of selection provision nor provides assurance that all eligible individuals who apply will be served should not be approved.

Question (2): If a state is unable to serve all eligible handicapped who apply for services, must it implement an order of selection plan?

Answer: A state must implement an order of selection plan if it cannot serve all eligible handicapped who apply. Although the statute (section 101(a)(5)(A) of the Rehabilitation Act, 29 U.S.C. Sec. 721(a)(5)(A)) literally requires only that states have an order of selection plan (not that they must use the plan), it implicitly requires the plan to be put into action when services cannot be provided to all who are eligible. /1/

Moreover, failure to implement a plan when all eligible who apply are not served would be a violation of the terms of the grant and the act. RSA could find the state in non-compliance with the terms of its state plan and suspend funding. (29 U.S.C. Sec. 721(c)(1)(B); 34 C.F.R. Sec. 361.4; see also 34 C.F.R. Sec. 80.43 (1990)).

Question (3): What action may RSA take if an order of selection is not put into use?

Answer: A number of remedies are available to RSA if an order of selection plan is not used. When a state or local government materially fails to comply with "any" term of a grant from an agency of the Department of Education, such as the Rehabilitation Services Administration, the agency may take one or more of the following actions, as appropriate under the circumstances: (1) temporarily withhold cash payments; (2) disallow costs; (3) suspend or terminate the grant; (4)withhold awarding other grants under the program; or (5) take other remedies that may be legally available. 34 C.F.R. Sec. 80.43 (1990). addition to this general authority, the agency can withhold, suspend, or limit payments to the state under the specific authority of the Rehabilitation Act of 1973, 29 U.S.C. Sec. 721(c), when "there is a failure to comply substantially" with the plan.

Implementing an order of selection plan is, as discussed in answer to question (2), above, a requirement of the Rehabilitation Act. Since rehabilitative services grants incorporate by reference the requirements of the Act, implementing an order of selection plan is a grant term. The circumstances under which a failure to implement an order of selection plan would constitute a material failure to comply with this grant term are not defined. There are some circumstances, however, where it seems clear that failure to implement a plan would be a material failure to comply.

An example of a situation where a failure to implement an order of selection clearly would be material is when a state denies services to all newly eligible people who apply. We can think of no better indication than this that a state is unable to serve all eligible individuals, which is precisely when the statute calls for the use of an order of selection plan. RSA has shown that it believes it has enforcement authority under such circumstances. In correspondence with the State of Tennessee, RSA stated that the state's failure to implement an order of selection when it had ceased authorizing services to newly eligible clients, including diagnostic services, was inconsistent with agency and federal rules, and RSA threatened to discontinue federal funding.

Question (4): What kind of enforcement role did Congress envision for the Rehabilitation Services Administration?

Answer: As discussed above, RSA has authority, both in law and regulation, to enforce the order of selection. (See 29 U.S.C. Sec. 721(c)(1)(B); 34 C.F.R. Secs. 80.43, 361.4 (1990).) Congress intended RSA to set priorities and guidelines for the states for providing services to their handicapped population. The legislative history indicates this: "It should be noted that the Committee, in giving RSA greater control over, and therefore accountability for, establishing these priorities, intends the Administration to exert more leadership in assisting the States to aid their handicapped population." S. Rep. No. 318, 93d Cong., 1st Sess. 22 (1973). Whether the language "exert more leadership" contemplates playing an active enforcement role is not clear. However, the act and case law indicate that RSA has the authority to enforce a state plan.

Question (5): Does the Act preclude the type of approach Massachusetts has taken in its order of selection plan?

The Act does not preclude the type of approach Massachusetts has taken. Under the Massachusetts approach, services the state provides on its own (non-purchased services), such as counseling and job placement, are made available to all individuals eligible to receive rehabilitation services. Services for which the state contracts out (purchased services), such as job training, however, are not made available to all eligible individuals. The Massachusetts plan provides that because of financial constraints, purchased services are available only to the severely handicapped, public safety officers injured in the line of duty, and recipients of public assistance. Choosing to serve these categories of eligible individuals is consistent with the terms of the Act and with the guidance provided by the Department of Education in their regulations. (See 29 U.S.C. Sec. 721(c)(5)(A) and 34 C.F.R. Sec. 361.36.) The question is whether it is proper under the law to exclude all other eligible individuals from receiving purchased services.

We find nothing in the Rehabilitation Act or elsewhere to preclude this approach. The act recognizes that there may be times when a state will be unable to provide services to all eligible individuals. It explicitly provides that "in the event that vocational rehabilitation services cannot be provided to all eligible individuals," the state must show and justify "the order to be followed in selecting individuals to whom vocational rehabilitation services will be provided." Rehabilitation Act, Sec. 101(a)(5)(A), 29 U.S.C. Sec. 721(a)(5)(A). The implicit assumption is that some categories of eligible individuals may go without some or all services for some period of time.

Applicable regulations also recognize that some eligible handicapped people may go unserved. The regulations require an order of selection "unless the designated State unit assures that it is serving all eligible individuals with handicaps who apply." 34 C.F.R. Sec. 361.2(a)(2)(iv). If not all can be served, the state must justify and describe the order of selection. Id. Of necessity, this involves establishing categories of handicapped people who will not be served.

Furthermore, the essence of the Massachusetts approach, which is to give priority in receiving services to severely handicapped individuals, is consistent with section 101(a)(5)(A) of the Rehabilitation Act, which requires the order of selection to be determined on the basis of "serving first those individuals with the most severe handicaps."

/1/ There are two legal presumptions in statutory construction that suggest that the order of selection provision must be used by states. These presumptions against ineffectiveness and absurdity presume that Congress intended to impart a meaning to each provision of the act and to prevent people from evading or defeating its purpose.