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Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations6361determines that a waiver ormodification is necessary to permit theState to respond to exceptional oruncontrollable circumstances, such as amajor natural disaster, that result insignificant destruction of existingfacilities and require the State to makesubstantial expenditures for theconstruction of a facility for communityrehabilitation program purposes or theestablishment of a facility forcommunity rehabilitation programpurposes in order to provide vocationalrehabilitation services.(3) A written request for waiver ormodification, including supportingjustification, must be submitted to theSecretary as soon as the Statedetermines that an exceptional oruncontrollable circumstance willprevent it from making its requiredexpenditures from non-Federal sources.(Authority: Secs. 101(a)(17) and 111(a)(2) ofthe Act; 29 U.S.C. 721(a)(17) and 731(a)(2))§ 361.63 Program income.(a) Definition. Program income meansgross income received by the State thatis directly generated by an activitysupported under this part.(b) Sources. Sources of programincome include, but are not limited to,payments from the Social SecurityAdministration for rehabilitating SocialSecurity beneficiaries, paymentsreceived from workers’ compensationfunds, fees for services to defray part orall of the costs of services provided toparticular individuals, and incomegenerated by a State-operatedcommunity rehabilitation program.(c) Use of program income. (1) Exceptas provided in paragraph (c)(2) of thissection, program income, wheneverearned, must be used for the provisionof vocational rehabilitation services, theadministration of the State plan, anddeveloping and implementing thestrategic plan. Program income isconsidered earned when it is received.(2) Payments provided to a State fromthe Social Security Administration forrehabilitating Social Securitybeneficiaries may also be used to carryout programs under Part B of Title I ofthe Act (client assistance), Part C ofTitle I of the Act (innovation andexpansion), Part C of Title VI of the Act(supported employment) and Title VII ofthe Act (independent living).(3) The State is authorized to treatprogram income as—(i) An addition to the grant funds tobe used for additional allowableprogram expenditures, in accordancewith 34 CFR 80.25(g)(2); or(ii) A deduction from total allowablecosts, in accordance with 34 CFR80.25(g)(1).(4) Program income may not be usedto meet the non-Federal sharerequirement under § 361.60.(Authority: Sec. 108 of the Act; 29 U.S.C.728; 34 CFR 80.25)§ 361.64 Obligation of Federal funds andprogram income.(a) Except as provided in paragraph(b) of this section, any Federal funds,including reallotted funds, that areappropriated for a fiscal year to carryout a program under this part that arenot obligated by the State unit by thebeginning of the succeeding fiscal yearand any program income receivedduring a fiscal year that is not obligatedby the State unit by the beginning of thesucceeding fiscal year must remainavailable for obligation by the State unitduring that succeeding fiscal year.(b) Federal funds appropriated for afiscal year remain available forobligation in the succeeding fiscal yearonly to the extent that the State unit metthe matching requirement for thoseFederal funds by obligating, inaccordance with 34 CFR 76.707, thenon-Federal share in the fiscal year forwhich the funds were appropriated.(Authority: Sec. 19 of the Act; 29 U.S.C. 718)§ 361.65 Allotment and payment of Federalfunds for vocational rehabilitation services.(a) Allotment. (1) The allotment ofFederal funds for vocationalrehabilitation services for each State iscomputed in accordance with therequirements of section 110 of the Act,and payments are made to the State ona quarterly basis, unless some otherperiod is established by the Secretary.(2) If the State plan designates oneState agency to administer, or supervisethe administration of, the part of theplan under which vocationalrehabilitation services are provided forindividuals who are blind and anotherState agency to administer the rest of theplan, the division of the State’sallotment is a matter for Statedetermination.(b) Reallotment. (1) The Secretarydetermines not later than 45 days beforethe end of a fiscal year which States, ifany, will not use their full allotment.(2) As soon as possible, but not laterthan the end of the fiscal year, theSecretary reallots these funds to otherStates that can use those additionalfunds during the current or subsequentfiscal year, provided the State can meetthe matching requirement by obligatingthe non-Federal share of any reallottedfunds in the fiscal year for which thefunds were appropriated.(3) Funds reallotted to another Stateare considered to be an increase in therecipient State’s allotment for the fiscalyear for which the funds wereappropriated.(Authority: Secs. 110 and 111 of the Act; 29U.S.C. 730 and 731)Subpart D—Strategic Plan forInnovation and Expansion ofVocational Rehabilitation Services§ 361.70 Purpose of the strategic plan.The State shall prepare a statewidestrategic plan, in accordance with§ 361.71, to develop and use innovativeapproaches for achieving long-termsuccess in expanding and improvingvocational rehabilitation services,including supported employmentservices, provided under the State plan,including the supported employmentsupplement to the State plan requiredunder 34 CFR part 363.(Authority: Sec. 120 of the Act; 29 U.S.C.740)§ 361.71 Procedures for developing thestrategic plan.(a) Public input. (1) The State unitshall meet with and receiverecommendations from members of theState Rehabilitation Advisory Council, ifthe State has a Council, and theStatewide Independent Living Councilprior to developing the strategic plan.(2) The State unit shall solicit publicinput on the strategic plan prior to or atthe public meetings on the State plan,in accordance with the requirements of§ 361.20.(3) The State unit shall consider therecommendations received underparagraphs (a)(1) and (a)(2) of thissection and, if the State rejects anyrecommendations, shall include awritten explanation of the reasons forthose rejections in the strategic plan.(4) The State unit shall develop aprocedure to ensure ongoing commentfrom the Council or Councils, ifapplicable, as the plan is beingimplemented.(b) Duration. The strategic plan mustcover a three-year period.(c) Revisions. The State unit shallrevise the strategic plan on an annualbasis to reflect the unit’s actualexperience over the previous year andinput from the State RehabilitationAdvisory Council, if the State has aCouncil, individuals with disabilities,and other interested parties.(d) Dissemination. The State unitshall disseminate widely the strategicplan to individuals with disabilities,disability organizations, rehabilitationprofessionals, and other interestedpersons and shall make the strategicplan available in accessible formats andappropriate modes of communication.