Rehabilitation Act of 1973: 109th Congress Legislation, FY2006 Budget Request, and FY2006 Appropriations

Rehabilitation Act of 1973: 109th Congress Legislation, FY2006 Budget Request, and FY2006 Appropriations

Order Code RL33249
CRS Report for Congress
Received through the CRS Web
Rehabilitation Act of 1973: 109th Congress
Legislation, FY2006 Budget Request,
and FY2006 Appropriations
January 26, 2006
Scott David Szymendera
Analyst in Social Security
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Rehabilitation Act of 1973: 109th Congress Legislation,
FY2006 Budget Request, and FY2006 Appropriations
Summary
The Rehabilitation Act of 1973 is the nation’s major program to provide
comprehensive vocational rehabilitation (VR) services to help people with physical
and mental disabilities achieve employment goals and full integration into society.
Authorization of appropriations for the Rehabilitation Act expired in FY2003. H.R.
27, the Job Training Improvement Act of 2005, passed by the House on March 2,
2005, and S. 1021, the Workforce Investment Act Amendments of 2005, reported by
the Senate Health, Education, Labor and Pensions (HELP) Committee on September
7, 2005, would reauthorize the act through FY2011. The Rehabilitation Act
amendments are part of bills that would reauthorize programs authorized by the
Workforce Investment Act (WIA). In other action, P.L. 109-82 (H.R. 3864) signed
September 30, 2005, amends the act to provide VR services to assist persons with
disabilities affected by Hurricanes Katrina and Rita.
The President requested $3 billion for the act for FY2006, a 0.1% increase over
FY2005. The budget request would eliminate four programs authorized under the
act (programs for migrant and seasonal farmworkers, recreational activities,
supported employment state grants, and projects with industry (PWI)). The budget
also proposed to allow states to move Title I of the Rehabilitation Act into a
Consolidated Workforce Investment state grant for employment services.
Ultimately, Congress appropriated more than $3.1 billion for the act for
FY2006. This appropriation included funding for the four programs that the
President had sought to eliminate. All appropriations for programs under the act,
with the exception of state VR grants, were later reduced by 1% as part of the across-
the-board funding rescission mandated by the Defense Appropriations Act (P.L. 109-
148).
This report will not be updated.

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
109th Congress Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
VR Program Funds Used to Support the Workforce Investment Act
(WIA) System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Transition of Students with Disabilities From School to Vocational
Rehabilitation Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Appointment of the Commissioner of the Rehabilitation Services
Administration (RSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Coordination of the VR Program with Ticket to Work . . . . . . . . . . . . . . . . . 4
Title I Allotment Formula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FY2006 Budget Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FY2006 Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
List of Tables
Table 1. Vocational Rehabilitation and Related Programs, FY2003-FY2006
Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Rehabilitation Act of 1973: 109th Congress
Legislation, FY2006 Budget Request, and
FY2006 Appropriations
Background
The Rehabilitation Act was originally enacted in 1920 as a means of returning
injured workers to their jobs. The program was expanded in 1943 to help meet the
manpower shortage after the entry of the United States into World War II. The
Rehabilitation Act of 1973 provides comprehensive vocational rehabilitation (VR)
services designed to help individuals with physical and mental disabilities become
employable and achieve independence and integration into society. The act has been
amended six times since 1973.1 Title I, the federal-state VR program, is the primary
federal program assisting individuals with disabilities prepare for, obtain, and retain
employment. Funding for this program represents 87% of total FY2005 federal
funding for the act. Funds are administered by VR agencies designated by each state
and are allocated to states according to a formula that is based on state population
and per capita income. States with lower per capita income receive a comparatively
higher allotment. States are required to match federal funds, and the matching ratio
is 78.7% federal to 21.3% state.2
People are eligible for Title I VR services if they have a physical or mental
impairment that substantially impedes employment. Under the law, all individuals
with disabilities are presumed to have the potential to engage in employment and to
benefit from VR services. The program is required to give priority to people with the
most significant disabilities. There are about 1.2 million individuals with disabilities
in various phases of the vocational rehabilitation process within the VR system. In
FY2003, VR agencies assisted 217,557 persons achieve an employment outcome.3
Other programs authorized under the act include client assistance (Title I);
research and training activities administered by the National Institute on Disability
and Rehabilitation Research (NIDRR) (Title II); training and demonstration programs
(Title III); the National Council on Disability, an independent federal agency whose
purpose is to promote policies, programs, and practices to provide equal opportunity
for all people with disabilities (Title IV); programs to promote the rights of persons
with disabilities (Title V); Projects with Industry and Supported Employment State
1 The Rehabilitation Act was amended in 1974 (P.L. 93-651), 1978 (P.L. 95-602), 1984 (P.L.
98-221), 1986 (P.L. 99-506), 1992 (P.L. 102-569), and 1998 (P.L. 105-220).
2 P.L. 105-220, Title IV, Aug. 7, 1998, 112 Stat, 1102.
3 Rehabilitation Services Administration (911 data base).

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Grants (Title VI); and Independent Living Services and Centers for Independent
Living (Title VII).4
109th Congress Legislation
Authorization of appropriations for the Rehabilitation Act of 1973 expired at
the end of FY2003. However, under provisions of the Rehabilitation Act, Title I of
the act was automatically extended for one additional year through FY2004. Other
programs under the act were extended for one year through FY2004 under provisions
of the General Education Provisions Act (GEPA). For FY2005 and FY2006,
Congress has continued funding for the act through appropriations legislation for the
Departments of Labor, Education, Health and Human Services, and related agencies.
During the 108th Congress, both the House and the Senate approved legislation
to reauthorize the act through FY2009, but no final action was taken. In the 109th
Congress, H.R. 27, passed by the House on March 2, 2005,5 and S. 1021, reported by
the Senate Health, Education, Labor, and Pensions (HELP) Committee,6 would
extend authorization of appropriations for the act through FY2011. The
Rehabilitation Act amendments are part of bills that would also reauthorize programs
authorized by the Workforce Investment Act (WIA). Following are selected
provisions of the 109th Congress bills.
VR Program Funds Used to Support the
Workforce Investment Act (WIA) System
The Workforce Investment Act (WIA), enacted in 1998 (P.L. 105-220), is
intended to consolidate, coordinate, and improve a variety of employment, training,
literacy and VR programs for adults under the oversight of local workforce
investment boards.7 Each board is responsible for developing a one-stop system
intended to provide a coordinated and “seamless” system of employment and training
opportunities for individuals. The law requires partnerships among programs that
provide employment services; the federal-state VR program is a required partner in
the one-stop system, along with other programs such as vocational education and
welfare-to-work programs. Although persons with disabilities may receive services
under the one-stop system, the federal-state VR program is the primary source of VR
services for this group.
4 For a description of all programs authorized under the act, see CRS Report RL31378,
Rehabilitation Act: Programs and Funding, by Sidath Panangala.
5 U.S. Congress, House of Representatives, Committee on Education and Workforce, Job
Training Improvement Act of 2005, H.Rept. 109-9.
6 Senate Committee on Health, Education, Labor and Pensions, Workforce Investment Act
of 2005, S.Rept. 109-134.
7 For background on WIA, see CRS Report 97-536, Job Training Under the Workforce
Investment Act (WIA): An Overview, by Ann Lordeman. For a description of WIA changes
proposed in H.R. 27 and S. 9, see CRS Report RL32778, Workforce Investment Act of 1998:
Reauthorization of Job Training Programs, by Ann Lordeman.

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Under current provisions of WIA and the Rehabilitation Act, there is no
requirement that VR funds must be used to provide support to WIA one-stop
systems; however, each required partner must develop a memorandum of
understanding with a local workforce board to determine how operating costs will be
funded. H.R. 27 would require that each state’s governor determine how much of the
administrative funds of required one-stop partners, including state VR agencies,
could be used to pay part of the infrastructure (i.e., nonpersonnel) costs of one-stop
centers’ operations. This would mean that some of the funds allocated to states for
VR services could, at the option of the governor, be used to contribute toward the
state’s one-stop infrastructure system.
S. 1021would require local WIA boards and one-stop partners to determine how
much local partners must contribute toward the one-stop system. If local areas fail
to reach agreement, the governor would determine an amount to be contributed by
one-stop partners from their administrative funds, subject to a federally prescribed
cap. The cap would apply to all federal funds allotted to a partner program. For the
federal-state VR program, the cap would increase from 0.75 to 1.5% over a five-year
period. (Other caps would apply to other partner programs; for example, for WIA
programs and the employment service, the cap would be 3%, and for other programs,
1.5%.)
Transition of Students with Disabilities From
School to Vocational Rehabilitation Services
Under current law, state VR plans are required to coordinate with state
education officials to facilitate the transition of students with disabilities from school
to receipt of VR services. State VR and education agencies must develop interagency
agreements that, at a minimum, provide for consultation and technical assistance to
assist education agencies to plan for transition of students from school to post-school
activities, describe the financial responsibilities of each agency, determine which
agency will be the lead agency, and provide for student outreach, among other things.
Some policymakers have been concerned that not enough coordination exists
between educational institutions and the VR program, resulting in lack of effective
planning for transition of students with disabilities to post-school employment.
Both H.R. 27 and S. 1021 include provisions to expand student transition
services for students with disabilities. The bills would require that states reserve
from Title I allotments a specific amount of funds for expanded transition services.
The total amount reserved for transition services for all states would be $50 million
in the first year (and subsequent years) when funds appropriated for Title I exceed the
FY2004 level by at least $100 million. S. 1021 would limit administrative costs to
implement transition services to 5% of the funds reserved. Under both bills, state
agencies would be required to use these funds to facilitate student transition from
school to VR services; improve student achievement of post-school goals; provide
them career guidance and exploration and job search assistance; and conduct
outreach activities. S. 1021 also would require that a student’s individualized plan
for employment (IPE) include a description of his/her projected post-school
employment outcome and the specific transition services needed to achieve the
outcome. In both bills, students are defined as those eligible for VR services; eligible

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and receiving services under the Individuals with Disabilities Education Act (IDEA);
or eligible under Section 504 of the Rehabilitation Act;8 H.R. 27 refers to students
age 16-21, and S. 1021, to students age 14-21.
Appointment of the Commissioner of the
Rehabilitation Services Administration (RSA)
Under current law, the Commissioner of the Rehabilitation Services
Administration (RSA) is appointed by the President and approved by the Senate.
H.R. 27 would change this provision to require that the Secretary of Education, rather
than the President, appoint a Director of RSA. The Director would not have to be
approved by the Senate. S. 1021 does not include this proposed change.
Coordination of the VR Program with Ticket to Work
Both Title I of the Rehabilitation Act and the Ticket to Work and Work
Incentives Improvement Act of 1999 (P.L. 106-70) (Ticket Program) provide
rehabilitation services to persons with disabilities. State VR agencies provide
services directly as well as through other providers approved by the state; the Ticket
Program offers vouchers so that individuals may choose rehabilitation services
providers from an approved employment network (EN). S. 1021 includes a number
of provisions to coordinate VR services with services provided through the Ticket
Program. These include requirements that VR agencies inform clients about the
Ticket Program and how to contact ENs established under the program, and that an
individual’s IPE include a list of services the individual is to receive as part of his/her
work plan under the Ticket Program.
S. 1021 also would require the Government Accountability Office (GAO) to
conduct a study on the interaction of the Title I VR program with the Ticket Program,
including the impact of the interaction on beneficiaries, rehabilitation programs and
state VR agencies. The HELP Committee report indicates that the study is intended
to assist Congress resolve challenges that the two programs face as they attempt to
serve similar populations. H.R. 27 does not contain these provisions.
Title I Allotment Formula
Title I VR funds are allocated to states according to a formula that takes into
account state population and per capita income. Data used to calculate a state’s
allotment are updated annually. In addition, the law requires that Title I
appropriations be increased by the annual percentage increase in the CPI. Some
states have been concerned that because data used to calculate each state’s annual
allotment percentage are adjusted to account for population changes from year to
year, they may not receive full benefit of the annual CPI adjustment. That is, even
though a state’s caseload may increase or even remain the same, if it loses population
8 Section 504 prohibits discrimination against individuals with disabilities by any program
or activity that receives federal funding.

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compared to other states whose population is growing, it may not receive the full CPI
increase.
S. 1021 would address this issue in two ways. First, states that did not receive
a full CPI would be given first priority to receive any funds that may be available for
reallotment to other states. Some states have unused federal funds at the end of a
year due to their inability to garner state match for these funds; these funds are,
therefore, available for reallotment to other states. Secondly, the bill would require
GAO to study the relationship between the Title I state allotment formula and the
ability of states to provide VR services in accordance with state plan requirements.
The Senate HELP Committee report indicates that the study will assist Congress to
determine what steps can be taken to help resolve funding inequities among state VR
agencies. H.R. 27 does not contain these provisions.
In other legislation related to reallotted funds, P.L. 109-82 (signed September
30, 2005) provides assistance to people with disabilities in states affected by
Hurricanes Katrina and Rita. The law requires the Commissioner of RSA to give
priority for reallotted funds to affected states. It also allows the Commissioner to
waive the required non-federal match for FY2005 for affected states that receive
reallotted funds, and in the case of Louisiana, that receive federal funds that were
relinquished due to that state’s inability to meet the required non-federal matching
amount. The law also allows affected states to use reallotted funds for VR services
to help people with disabilities work in reconstruction or other disaster assistance
activities and to pay for VR services for people who do not meet the affected states’
order of selection criteria (which specify the states’ priorities for how people will be
served if the state cannot serve all people with disabilities under their VR programs.)
FY2006 Budget Request
The Administration requested $3 billion for Rehabilitation Act programs for
FY2006, an increase of 0.1% over the FY2005 amount (Table 1). The request for
the Title I VR program is $2.7 billion, an increase of 3.1%, which meets the statutory
requirement that the program be increased in accordance with the CPI adjustment.
In addition, as part of its overall job training proposals, the Administration proposed
consolidation of certain job training programs under a Workforce Incentive Plus
Consolidation Grant program. Certain programs would form a base of the
consolidated program and would include adult training, the dislocated worker
program, youth training and the Employment Service. States would be given an
option to consolidate the VR program, along with other programs, under the
Consolidated Grant program. States choosing to consolidate programs would submit
a single state integration plan, but would not be allowed to reduce levels for target
populations, including people with disabilities.
The Administration also proposed to eliminate four programs authorized under
the Rehabilitation Act — programs for migrant and seasonal farmworkers,
recreational activities, supported employment state grants, and projects with industry
(PWI). The Administration maintains that these programs are now an integral part

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of the program, and therefore no longer need separate funding streams to ensure
provision of services.
FY2006 Appropriations
The Departments of Labor, Health and Human Services, and Education, and
Related Agencies Appropriations Act, 2006, P.L. 109-149, was signed by the
President on December 30, 2005. This law appropriates just over $3.13 billion to the
Department of Education for programs and services provided under the
Rehabilitation Act of 1973. This appropriation includes funds for the four programs
that the Administration had proposed eliminating. The appropriation for the
Architectural and Transportation Barriers Compliance Board is contained in the
Transportation, Treasury, Housing, and Urban Development, The Judiciary, The
District of Columbia, and Independent Agencies Appropriations Act, 2006, P.L. 109-
115. This appropriation, combined with the appropriations found in P.L. 109-149,
brings the total FY2006 appropriation for rehabilitation services and disability
research to more than $3.13 billion. Each of these appropriations, with the exception
of those for state VR grants, is subject to a 1% rescission as provided in the
Department of Defense Appropriations Act, 2006, P.L. 109-148.

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Table 1. Vocational Rehabilitation and Related Programs, FY2003-FY2006 Funding
($ in thousands)
FY2003
FY2004
FY2005
FY2006
FY2006 Initial
1% Across the
FY2006 Final
Programs
Actual
Actual
Enacted
Request
Appropriation
Board Rescissiona
Appropriation
Title I — Vocational Rehabilitation (VR) Services
Federal-state VR program
$2,533,492
$2,584,162
$2,635,845
$2,720,192
$2,720,192
$0
$2,720,192
Client assistance program
12,068
11,997
11,901
11,901
11,901
119
11,782
Total
2,545,560
2,596,159
2,647,746
2,732,093
2,732,093
119
2,731,974
Title II — Research and Training
National institute on disability and
109,285
106,652
107,783
107,783
107,783
1,078
106,705
rehabilitation research (NIDRR)
Total
109,285
106,652
107,783
107,783
107,783
1,078
106,705
Title III — Training and Demonstration Projects
Training
39,371
39,139
38,826
38,826
38,826
388
38,438
Demonstration and training programs
20,895
24,286
25,607
6,577
6,577
66
6,511
Migrant and seasonal farmworkers
2,335
2,321
2,302
not requested
2,302
23
2,279
Recreational programs
2,579
2,564
2,543
not requested
2,543
25
2,518
Total
65,180
68,310
69,278
45,403
50,248
502
49,746
Title IV — National Council on Disability
National Council on Disability
2,840
3,021
3,371
2,800
3,144
31
3,113
Total
2,840
3,021
3,371
2,800
3,144
31
3,113
Title V — Rights and Advocacy
Architectural and transportation barriers
5,194
5,401
5,686
5,941
5,941b
59
5,882
compliance board
Protection and advocacy of individual
16,890
16,790
16,656
16,656
16,656
167
16,489
rights (PAIR)
Total
22,084
22,191
22,342
22,597
22,597
226
22,371

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FY2003
FY2004
FY2005
FY2006
FY2006 Initial
1% Across the
FY2006 Final
Programs
Actual
Actual
Enacted
Request
Appropriation
Board Rescissiona
Appropriation
Title VI — Employment Opportunities
Projects with industry
21,928
21,799
21,625
not requested
19,735
197
19,538
Supported employment state grants
37,904
37,680
37,379
not requested
30,000
300
29,700
Total
59,832
59,479
59,004
0
49,735
497
49,238
Title VII — Independent Living Services and Centers for Independent Living
State allotments for independent living
22,151
22,020
22,816
22,816
22,816
228
22,588
services
Centers for independent living
69,545
73,563
75,392
75,392
75,392
754
74,638
Independent living services for the older
27,818
31,811
33,227
33,227
33,227
332
32,895
blind
Total
119,514
127,394
131,435
131,435
131,435
1,314
130,121
Evaluation
994
988
1,488
1,488
1,488
15
1,473
Program improvement activities
894
889
843
843
843
8
835
Total: Programs under the Rehabilitation
2,926,183
2,985,083
3,043,290
3,044,442
3,099,366
3,790
3,095,576
Act
Related Programs
Helen Keller Center
8,660
8,666
10,581
8,597
8,597
86
8,511
Assistive technology
26,824
25,943
25,737
not requested
27,000
270
26,730
Alternative financing program
—
—
4,023
15,000
3,760
38
3,722
Total: Rehabilitation service and disability
2,953,633
3,011,270
3,074,574
3,059,298
3,138,723
4,184
3,134,539
research
Source: U. S. Department of Education, FY2006 Justification of Appropriation Estimates to the Congress; U.S. Department of Education, Fiscal Year 2006 Congressional
Action; P.L. 109-49; and P.L. 109-115.
a. Mandated by P.L. 109-148.
b. This appropriation is contained in P.L. 109-115.