Nondiscrimination on the Basis of Disability in Programs or Activities Receiving Federal Financial Assistance From the Department of the Treasury, 67-80 [2016-31236]

Agencies

• DEPARTMENT OF THE TREASURY

[Federal Register Volume 82, Number 1 (Tuesday, January 3, 2017)]
[Proposed Rules]
[Pages 67-80]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31236]


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DEPARTMENT OF THE TREASURY

31 CFR Part 40

RIN 1505-AC54


Nondiscrimination on the Basis of Disability in Programs or 
Activities Receiving Federal Financial Assistance From the Department 
of the Treasury

AGENCY: Department of the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule would set out the Department of the 
Treasury (Treasury) rules for implementing section 504 of the 
Rehabilitation Act of 1973, as amended (section 504), for Treasury's 
programs offering Federal financial assistance. Section 504 prohibits 
discrimination on the basis of disability in programs or activities 
receiving Federal financial assistance. Section 504 and the section 504 
coordination regulation (coordination regulation) require that all 
agencies that extend Federal financial assistance issue agency-specific 
regulations implementing section 504. Treasury recipients have been 
subject to section 504 since its effective date in 1973. Accordingly, 
today's proposed rule would not substantially change the existing duty 
of recipients of financial assistance from Treasury to refrain from 
discrimination on the basis of disability. This proposed rule fulfills 
the obligation of Treasury to issue agency-specific rules under the 
law, clarifies the responsibilities of recipients of financial 
assistance from Treasury under section 504, and describes the Treasury 
investigation and enforcement procedures to ensure compliance. The 
proposed regulation is consistent with the ADA Amendments Act of 2008 
(ADA Amendments Act), which amended section 504.

DATES: Comments must be received on or before March 6, 2017.

ADDRESSES: Members of the public are invited to submit comments on all 
aspects of this proposed rule. Comments on this proposed rule should be 
sent to Mariam G. Harvey, Director, Office of Civil Rights and 
Diversity (OCRD), Department of Treasury, 1500 Pennsylvania Avenue NW., 
Washington, DC 20220. Comments may be submitted through 
www.regulations.gov. The Department encourages electronic submission of 
comments via www.regulations.gov. Brief comments (maximum five pages) 
may be submitted by facsimile machine (FAX) to (202) 622-0367. Receipt 
of submissions, whether online, by mail or FAX transmittal, will not be 
acknowledged; however, the sender may request confirmation that a 
submission has been received by telephoning OCRD at (202) 622-1160 
(VOICE) or (202) 622-7104 (TTY/TDD).
    In general, comments received will be posted to Regulations.gov 
without change, including any business or personal information 
provided. Please submit only information appropriate for public 
disclosure. Copies of this proposed rule in the alternative formats of 
large print and electronic file on computer disk are available upon 
request. To obtain the proposed rule in an alternative format, contact 
OCRD at the telephone and address listed above.

FOR FURTHER INFORMATION CONTACT: Lydia E. Aponte, Civil Rights Program 
Manager, OCRD, (202) 622-8335 (VOICE) or (202) 622-7104 (TTY/TDD).

SUPPLEMENTARY INFORMATION:

[[Page 68]]

I. Background

    This proposed rule implements section 504 of the Rehabilitation Act 
of 1973 (29 U.S.C. 794), as amended, which provides that no otherwise 
qualified individual with a disability in the United States shall, 
``solely by reason of his or her disability, be excluded from the 
participation in, be denied the benefits of, or be subjected to 
discrimination under any program or activity receiving Federal 
financial assistance or under any program or activity conducted by any 
Executive agency . . . .'' Here, the Department of the Treasury will be 
issuing section 504 federal financial assistance regulations for the 
first time. This proposed rule has been reviewed by DOJ in the exercise 
of its section 504 coordination authority under Executive Order 12250.

II. Overview of Proposed Rule

    This proposed rule is designed to fulfill Treasury's statutory and 
regulatory obligations to issue regulations implementing the federal 
financial assistance requirements of section 504 that conform to and 
are consistent with the coordination regulation found at 28 CFR part 
41. Treasury, as described below, is proposing language to set forth 
the 504 requirements for recipients of federal financial assistance 
that include addressing circumstances unique to Treasury or current 
applicable statutory requirements. The proposed rule sets forth section 
504's prohibitions on discrimination based on disability in programs or 
activities receiving financial assistance from Treasury. It also 
elaborates on investigation, conciliation, and enforcement procedures. 
It clarifies that Treasury enforcement would be conducted by the Office 
of Civil Rights and Diversity (OCRD), part of the Office of the 
Assistant Secretary for Management. OCRD enforces all civil rights laws 
applicable to entities receiving financial assistance from Treasury. 
Treasury invites public comment on all aspects of this proposed rule 
and will take those comments into account before publishing a final 
rule.

Summary of Key Provisions

Subpart A--General
    Subpart A provides the proposed rule's purpose, application, 
definitions, and enforcement mechanisms. The purpose of the proposed 
rule is to effectuate section 504 of the Rehabilitation Act of 1973 to 
prohibit discrimination on the basis of disability in programs or 
activities that receive financial assistance from the Department of the 
Treasury. These regulations will apply to all programs or activities 
that receive financial assistance from Treasury, such as awardees and 
grantees under various Community Development Financial Institution Fund 
programs and recipients of Treasury's Volunteer Income Tax Assistance 
Program.
    Treasury has proposed incorporating by reference DOJ's updated 
regulation on the ADA Amendments Act regarding the meaning and 
interpretation of the definition of disability (see 28 CFR 35.108). The 
ADA Amendments Act of 2008 (the ADA Amendments Act or the Act) was 
signed into law on September 25, 2008, with a statutory effective date 
of January 1, 2009. Public Law 110-325, sec. 8, 122 Stat. 3553, 2559 
(2008). The Act made important changes to the meaning and 
interpretation of the ADA definition of the term ``disability'' in 
order to effectuate the intent of Congress to restore the broad scope 
of the ADA by making it easier for an individual to establish that he 
or she has a disability within the meaning of the statute. The ADA 
Amendments Act also amended the Rehabilitation Act of 1973 to conform 
the section 504 definition of disability, at 29 U.S.C. 705(20)(B), to 
the ADA. Incorporating the changes to the meaning and interpretation of 
the definition of disability introduced by the ADA Amendments Act will 
promote greater consistency among federal agencies' section 504 
regulations and reduce the potential for confusion for entities that 
are covered by section 504 and titles II (nondiscrimination in state or 
local government services) or III (nondiscrimination by public 
accommodations and commercial facilities) of the ADA. In addition, the 
proposed rule incorporates DOJ's Appendix which provides extensive 
guidance interpreting the definition of disability.
    Treasury also incorporates a definition for auxiliary aids and 
services that is consistent with the ADA title II requirements for 
effective communication and includes updated examples of auxiliary aids 
and services from the DOJ title II regulations at 28 CFR part 35. 
Treasury's definitions are intended to promote more clarity and 
consistency with current applicable law and regulations.
    Treasury proposes a substantive non-discrimination provision in 
Sec.  40.4 to include requirements for recipient provision of effective 
communication with applicants, beneficiaries, members of the public, 
and companions with disabilities. This is consistent with the current 
application of section 504 and the DOJ title II regulations.
    Subpart A also includes a provision, at Sec.  40.4(j), requiring 
recipients to provide reasonable accommodations by making changes to 
policies, practices or procedures when necessary to avoid 
discrimination on the basis of disability, unless the covered entity 
can show that the accommodations would result in a fundamental 
alteration in the nature of its service, program, or activity or impose 
undue financial and administrative burdens. The obligation to modify 
policies, practices or procedures was first enunciated by the Supreme 
Court in Southeastern Community College v. Davis, 442 U.S. 397 (1979), 
which held that while section 504 prohibits the exclusion of an 
otherwise qualified individual with a disability from participation in 
a federally funded program solely by reason of the individual's 
disability, that person is not protected by section 504 if, in order to 
meet reasonable eligibility standards, the person needs program or 
policy modifications that would fundamentally alter the nature of the 
provider's program. Because the Davis Court analyzed the case in terms 
of the proper interpretation of the statutory term ``otherwise 
qualified,'' agency section 504 regulations promulgated immediately 
after Davis addressed the obligation to provide reasonable 
accommodations outside of the employment arena by defining ``qualified 
handicapped person,'' as one who meets the essential eligibility 
requirements of the program and who can achieve the purpose of the 
program or activity without modifications in the program or activity 
that the agency can demonstrate would result in a fundamental 
alteration in its nature. See, e.g., 28 CFR 39.103 (the Department of 
Justice's section 504 federally conducted regulation).
    Subsequently, in Alexander v. Choate, 469 U.S. 287 (1985), which 
addressed a section 504 challenge to a state policy reducing the annual 
number of days of inpatient hospital care covered by the state's 
Medicaid program, the Supreme Court implicitly acknowledged that the 
obligation to provide reasonable accommodations could be considered as 
an affirmative obligation, noting, ``the question of who is `otherwise 
qualified' and what actions constitute `discrimination' under the 
section would seem to be two sides of a single coin; the ultimate 
question is the extent to which a grantee is required to make 
reasonable modifications [accommodations] in its programs for the needs 
of the handicapped.'' Alexander, 469 U.S. at 300 n.19.
    Alexander also introduced the concept of undue financial and

[[Page 69]]

administrative burden as a limitation on the reasonable accommodation 
obligation. In responding to the petitioners' contention that any 
durational limitation on inpatient coverage in a state Medicaid plan is 
a violation of section 504, the court stated ``[i]t should be obvious 
that the administrative costs of implementing such a regime would be 
well beyond the accommodations that are required under Davis.'' 
Alexander, 469 U.S. at 308.
    In the past decades, in keeping with these Supreme Court decisions, 
federal courts and federal agencies have regularly acknowledged federal 
agencies' affirmative obligation to ensure that recipients provide 
qualified individuals with disabilities reasonable accommodations in 
programs and activities unless the recipient can demonstrate that 
making these accommodations would fundamentally alter the program or 
activity or result in an undue financial and administrative burden. 
However, traditionally, agencies' section 504 regulations have lacked a 
specific provision implementing this requirement outside of the 
employment arena. The proposed incorporation of a reasonable 
accommodation provision is meant to fill this gap. The proposed rule 
also includes a prohibition on associational discrimination, at Sec.  
40.4(k), to ensure that persons who have a relationship with or are 
otherwise associated with individuals with disabilities are protected 
from discrimination.
    This proposed rule contains requirements that recipients of 
Treasury assistance submit assurance of compliance with these 
regulations at Sec.  40.5; that recipients with more than 50 employees 
designate at least one person to coordinate compliance with these 
regulations at Sec.  40.6; and that recipients with more than 50 
employees take appropriate initial and continuing steps to notify 
participants, beneficiaries, applicants and employees that they do not 
discriminate on the basis of disability in violation of section 504 and 
these proposed regulations at Sec.  40.7.
    Consistent with the requirements in the section 504 coordination 
regulation, Sec.  40.8 of this proposed rule requires recipients to 
conduct self-evaluations, with the assistance of interested persons, 
including individuals with disabilities, of their compliance with 
section 504 within one year of the effective date of this regulation. 
Treasury recognizes the value of a self-evaluation process to obtain 
meaningful feedback from the community affected by this regulation and 
to promote effective and efficient implementation of section 504.
Subpart B--Employment Practices
    Subpart B applies section 504's prohibition of discrimination on 
the basis of disability as it relates to the employment practices of 
recipients of Treasury financial assistance and recipient relationships 
with third parties. In particular, this regulation conforms to the 
Rehabilitation Act Amendments of 1992 (Pub. L. 102-569, sec 506), which 
amended the Rehabilitation Act to make the same employment standards 
set forth in title I of the ADA apply to employment discrimination 
under section 504. The proposed rule references the standards applied 
under title I of the ADA of 1990 (42 U.S.C. 12111 et seq.), and the 
Equal Employment Opportunity Commission's ADA title I regulation at 29 
CFR 1630, as amended.
Subpart C--Program Accessibility
    Subpart C applies section 504's prohibition of discrimination on 
the basis of disability as it relates to both existing facilities and 
newly-constructed facilities of recipients of financial assistance from 
Treasury. Recipients of financial assistance from Treasury must operate 
each service, program or activity so that the service, program, or 
activity, when viewed in its entirety, is readily accessible to and 
usable by individuals with disabilities. The Department has included a 
safe harbor for recipients who have not altered existing facilities on 
or after the effective date of this rule and that comply with the 
corresponding technical and scoping specifications for those elements 
in the Uniform Federal Accessibility Standards (UFAS), Appendix A to 41 
CFR part 101-19.6, 49 FR 31528, app. A (Aug. 7, 1984). These facilities 
are not required to be modified to be brought into compliance with the 
requirements set forth in the 2010 ADA Standards for Accessible Design 
(the 2004 ADAAG (the requirements set forth in appendices B and D to 36 
CFR part 1191 (2009)), and the requirements contained in 28 CFR 
35.151). This will likely apply to recipients who previously complied 
with UFAS on their own or because of other regulatory requirements, 
such as titles II or III of the ADA.
    If construction of a recipient's facility commences after the 
effective date of this regulation, the facility must be designed and 
constructed so that it is readily accessible to and usable by persons 
with disabilities. Generally, new construction and alterations by 
recipients that are private entities in which the last application for 
a building permit or permit extension is certified to be complete one 
year after publication of this rule as final in the Federal Register or 
if no permit is required, if the start of physical construction is one 
year from the publication of the final rule, must comply with the 2010 
Standards as defined in this rule. New construction and alterations by 
recipients that are public entities that commence one year after the 
publication of this rule as final in the Federal Register must comply 
with the 2010 Standards.
Subparts D and E--Compliance, Investigations and Procedure for 
Effecting Compliance; and Hearings and Decisions
    As required by section 504, Subparts D and E describe procedures 
for complaint processing, compliance, investigations, and enforcement 
consistent with the remedies, procedures and rights set forth in Title 
VI of the Civil Rights Act of 1964 (42. U.S. C.A. Sec.  2000d). See 29 
U.S.C. 794a.

III. Procedural Determinations

Executive Order 12067

    The Equal Employment Opportunity Commission has reviewed this 
proposed rule pursuant to Executive Order 12067.

Executive Order 12866

    This regulatory action is not a ``significant regulatory action'' 
under Executive Order 12866, ``Regulatory Planning and Review,'' 58 FR 
51735 (October 4, 1993). Accordingly, this rule is not subject to 
review under the Executive Order by the Office of Information and 
Regulatory Affairs within the Office of Management and Budget.

Executive Order 13175

    In accordance with Executive Order 13175, we have evaluated the 
potential effects of this rule on federally-recognized Indian tribes 
and have determined that the rule does not have substantial direct 
effects on one or more Indian tribes, on the relationship between the 
federal government and Indian tribes, or on the distribution of power 
and responsibilities between the Federal government and Indian tribes.

Unfunded Mandates Reform Act of 1995

    The Department certifies that no actions were deemed necessary 
under the Unfunded Mandates Reform Act of 1995. Furthermore, these 
regulations will not result in the expenditure by state, local, and 
tribal governments, in the aggregate, or by the private sector, of 
$100,000,000 or more in any one year, and they will not significantly 
or uniquely affect small governments.

[[Page 70]]

The Regulatory Flexibility Act

    The Department, in accordance with the Regulatory Flexibility Act, 
5 U.S.C. 601 et seq., has reviewed these regulations and certifies that 
these regulations will not have a significant economic impact on a 
substantial number of small entities. This certification is based on 
the fact that recipients of federal financial assistance have been 
subject to section 504 and the coordination regulation since their 
effective date in 1973. Accordingly, this proposed rule would not 
substantially change the existing duty of recipients of financial 
assistance from Treasury to refrain from discrimination on the basis of 
disability. This proposed rule would merely fulfill the obligation of 
the Department to issue agency-specific rules under the law; the rule 
clarifies the responsibilities of recipients of financial assistance 
from Treasury under section 504 and describes the Department's 
investigation and enforcement procedures to ensure compliance. In 
particular, this rule codifies requirements for a transition plan and 
self-evaluation as outlined in the coordination regulation (28 CFR part 
41). The transition plan and self-evaluation demonstrate an entity's 
compliance with section 504 and are anticipated to have minimal 
economic burden. Further, the rule likely would apply only to entities 
receiving federal financial assistance from the Department, which 
likely would only include a small number of entities in each industry 
and therefore would not be expected have an impact on a substantial 
number of small entities in any industry.
    Notwithstanding this certification, the Department welcomes 
comments on the impacts of this rule on small entities.

Executive Order 13132

    These regulations will not have substantial direct effects on the 
states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with section 6 
of Executive Order 13132, the Department has determined that this rule 
does not have sufficient federalism implications to warrant the 
preparation of a federalism summary impact statement.

Paperwork Reduction Act

    Under the Paperwork Reduction Act (44 U.S.C. chapter 35), an agency 
may not conduct or sponsor and a person is not required to respond to a 
collection of information unless it displays a valid control number 
issued by the Office of Management and Budget (OMB). The information 
collections contained in this proposed rule will be submitted and 
approved by OMB in connection with information collections for the 
applicable programs listed below.
    The information collections contained in this proposed rule are 
found in Sec. Sec.  40.5 (assurances), 40.8 (self-evaluation), 40.203 
(transition plan), and 40.300 (compliance information).
    The OMB control numbers that will be revised include the following:

------------------------------------------------------------------------
                                                          OMB control
          Bureau/Office           Program or activity       numbers
------------------------------------------------------------------------
Departmental Offices, Office of   Community                    1559-0021
 Domestic Finance, Office of       Development
 Financial Institutions.           Financial
                                   Institutions
                                   (CDFI) Fund--
                                   Financial
                                   Component.
Departmental Offices, Office of   Community                    1559-0021
 Domestic Finance, Office of       Development
 Financial Institutions.           Financial
                                   Institutions
                                   (CDFI) Fund--
                                   Technical
                                   Assistance
                                   Component.
Departmental Offices, Office of   Bank Enterprise       1559-0032, 1559-
 Domestic Finance, Office of       Award Program.                   0005
 Financial Institutions.
Departmental Offices, Office of   Native American              1559-0021
 Domestic Finance, Office of       Community
 Financial Institutions.           Development
                                   Financial
                                   Institutions
                                   (CDFI) Assistance
                                   Program, Financial
                                   Assistance (FA)
                                   Awards.
Departmental Offices, Office of   Native American              1559-0021
 Domestic Finance, Office of       Community
 Financial Institutions.           Development
                                   Financial
                                   Institutions
                                   (CDFI) Assistance
                                   (NACA) Program,
                                   Technical
                                   Assistance Grants.
Departmental Offices, Office of   Community                    1559-0043
 Domestic Finance, Office of       Development
 Financial Institutions.           Financial
                                   Institutions Fund,
                                   Capital Magnet
                                   Fund.
Departmental Offices, Office of   State Small                  1505-0227
 Domestic Finance, Office of       Business Credit
 Small Business, Community         Initiative.
 Development, and Housing Policy.
Internal Revenue Service........  Tax Counseling for           1545-2222
                                   the Elderly Grant
                                   Program.
Internal Revenue Service........  Volunteer Income             1545-2222
                                   Tax Assistance
                                   Program.
Internal Revenue Service........  Volunteer Income             1545-2222
                                   Tax Assistance
                                   Grant Program.
Internal Revenue Service........  Low Income Taxpayer          1545-1648
                                   Clinic Grant
                                   Program.
United States Mint..............  U.S. Commemorative                 TBD
                                   Coin Programs.
Departmental Offices, Treasury    Equitable sharing            1505-0152
 Executive Office for Asset        program (transfer
 Forfeiture.                       of forfeited
                                   property to state
                                   and local law
                                   enforcement
                                   agencies).
Departmental Offices, Office of   Grants under the             1505-0250
 the Fiscal Assistant Secretary.   RESTORE Act's
                                   Direct Component
                                   and Centers of
                                   Excellence program.
------------------------------------------------------------------------

    Comments on the collection of information should be sent to the 
Office of Management and Budget, Attention: Desk Officer for the 
Department of Treasury, Office of Information and Regulatory Affairs, 
Washington, DC 20503, or email to OIRA_Submission@OMB.EOP.gov with 
copies to the Department of Treasury at the addresses specified in the 
ADDRESSES section. Comments on the information collection should be 
submitted no later than March 6, 2017. Comments are specifically 
requested concerning:
    (1) Whether the proposed information collection is necessary for 
the proper performance of agency functions, including whether the 
information will have practical utility;
    (2) The accuracy of the estimated burden associated with the 
proposed collection of information, including the validity of the 
methodology and assumptions used (see below);
    (3) How to enhance the quality, utility, and clarity of the 
information required to be maintained; and
    (4) How to minimize the burden of complying with the proposed 
information collection, including the application of automated 
collection techniques or other forms of information technology.

[[Page 71]]

List of Subjects in 31 CFR Part 40

    Civil rights.
    For the reasons stated in the preamble, the Department of the 
Treasury proposes to add part 40 to Title 31 of the Code of Federal 
Regulations to read as follows:

PART 40--NONDISCRIMINATION ON THE BASIS OF DISABILITY IN PROGRAMS 
OR ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE FROM THE 
DEPARTMENT OF THE TREASURY

Subpart A--General Provisions
Sec.
40.1 Purpose, broad coverage and effective date.
40.2 Applicability.
40.3 Definitions.
40.4 Discrimination prohibited.
40.5 Assurances required.
40.6 Designation of responsible employee and adoption of grievance 
procedures.
40.7 Notice of nondiscrimination and accessible services.
40.8 Remedial action, voluntary action, and self-evaluation.
40.9 Effect of state or local law or other requirements.
40.10 Effect of compliance with regulations of other Federal 
agencies.
Subpart B--Employment Practices
40.101 Applicability.
40.102 Discrimination prohibited.
Subpart C--Program Accessibility
40.201 Applicability.
40.202 Discrimination prohibited.
40.203 Existing facilities.
40.204 New construction and alterations.
Subpart D--Compliance, Investigations and Procedure for Effecting 
Compliance
40.300 Compliance information.
40.301 Conduct of investigations.
40.302 Procedure for effecting compliance.
Subpart E--Hearings and Decisions and Notices
40.400 Hearings.
40.401 Decisions and notices.

    Authority: 29 U.S.C. 701-796; 31 U.S.C. 321.

Subpart A--General Provisions


Sec.  40.1  Purpose, broad coverage, and effective date.

    (a) Purpose. The purpose of this part is to implement section 504 
of the Rehabilitation Act of 1973, as amended, which provides that no 
otherwise qualified individual with a disability in the United States 
shall solely by reason of his or her disability be excluded from the 
participation in, be denied the benefits of, or be subjected to 
discrimination under any program or activity receiving Federal 
financial assistance from the Department of the Treasury.
    (b) Broad Coverage. Consistent with the purpose of the ADA 
Amendments Act of 2008 of reinstating a broad scope of protection under 
the Americans with Disabilities Act and section 504, the definition of 
``disability'' applicable to this part shall be construed broadly in 
favor of expansive coverage. The primary object of attention in cases 
brought under this part should be whether entities covered under 
section 504 have complied with their obligations and whether 
discrimination has occurred, not whether the individual meets the 
definition of disability. The question of whether an individual meets 
the definition of disability should not demand extensive analysis.
    (c) Effective date. This part is effective on [30 days after 
publication of the final rule].


Sec.  40.2  Applicability.

    This part applies to all programs or activities that receive 
Federal financial assistance provided by the Department of the Treasury 
after the effective date of this part, whether or not the assistance 
was approved before the effective date and whether or not a recipient's 
grant or award documents reference the obligation to comply with 
section 504.


Sec.  40.3  Definitions.

    2004 ADAAG means the requirements set forth in appendices B and D 
to 36 CFR part 1191 (2009).
    2010 Standards means the 2010 ADA Standards for Accessible Design, 
which consist of the 2004 ADAAG and the requirements contained in 28 
CFR 35.151.
    The Act means the Rehabilitation Act of 1973, Public Law 93-112, 87 
Stat. 390 (1973), as amended. The Act appears at 29 U.S.C. 701-796.
    Applicant means one who submits an application, request, or plan 
required to be approved by the designated Department official or by a 
primary recipient as a condition to becoming a recipient.
    Auxiliary aids and services means services or devices that enable 
persons with sensory, manual, or speech disabilities to have an equal 
opportunity to participate in, and enjoy the benefits of, the 
recipient's programs or activities. Auxiliary aids and services 
include:
    (1) Qualified interpreters on-site or through video remote 
interpreting (VRI) services; note takers; real-time computer-aided 
transcription services; written materials; exchange of written notes; 
telephone handset amplifiers; assistive listening devices; assistive 
listening systems; telephones compatible with hearing aids; closed 
caption decoders; open and closed captioning, including real-time 
captioning; voice, text, and video-based telecommunications products 
and systems, including text telephones (TTYs), videophones, and 
captioned telephones, or equally effective telecommunications devices; 
videotext displays; accessible electronic and information technology; 
or other effective methods of making aurally delivered information 
available to individuals who are deaf or hard of hearing;
    (2) Qualified readers; taped texts; audio recordings; Brailled 
materials and displays; screen reader software; magnification software; 
optical readers; secondary auditory programs (SAP); large print 
materials; accessible electronic and information technology; or other 
effective methods of making visually delivered materials available to 
individuals who are blind or have low vision;
    (3) Acquisition or modification of equipment or devices; and
    (4) Other similar services and actions.
    Current illegal use of drugs means illegal use of drugs that 
occurred recently enough to justify a reasonable belief that a person's 
drug use is current or that continuing use is a real and ongoing 
problem.
    Department means the Department of the Treasury and includes each 
of its operating bureaus and other organizational units.
    Direct threat means a significant risk to the health or safety of 
others that cannot be eliminated by a change to policies, practices or 
procedures, or by the provision of auxiliary aids or services, as 
provided in Sec.  40.4(l) of this part.
    Disability has the same meaning as that given in 28 CFR part 35.
    Drug means a controlled substance as defined in schedules I through 
V of section 202 of the Controlled Substances Act (21 U.S.C. 812).
    Facility means all or any portion of buildings, structures, sites, 
complexes, equipment, roads, walks, passageways, parking lots, rolling 
stock or other conveyances, including the site where the building, 
property, structure, or equipment is located, or other real or personal 
property or interest in such property.
    Federal financial assistance means any grant, contract (other than 
a direct Federal procurement contract or a contract of insurance or 
guaranty), subgrant, contract under a grant, cooperative agreement, 
formula

[[Page 72]]

allocation, loan, or any other arrangement by which the Department 
provides or otherwise makes available assistance in the form of:
    (a) Funds;
    (b) Services of Federal personnel;
    (c) Real and personal property or any interest in such property, 
including:
    (1) A sale, transfer, lease or use (other than on a casual or 
transient basis) of Federal property for less than fair market value, 
for reduced consideration or in recognition of the public nature of the 
recipient's program or activity; or
    (2) Proceeds from a subsequent sale, transfer or lease of Federal 
property if the Federal share of its fair market value is not returned 
to the Federal government; or
    (3) Any other thing of value by way of grant, loan, contract, or 
cooperative grant.
    Historic preservation programs means programs conducted by 
recipients of Federal financial assistance that have preservation of 
historic properties as a primary purpose.
    Historic properties means those buildings or facilities that are 
eligible for listing in the National Register of Historic Places, or 
such properties designated as historic under a statute of the 
appropriate state or local government body.
    Illegal use of drugs means the use of one or more drugs, the 
possession or distribution of which is unlawful under the Controlled 
Substances Act (21 U.S.C. 812). The term illegal use of drugs does not 
include the use of a drug taken under supervision by a licensed health 
care professional, or other uses authorized by the Controlled 
Substances Act or other provisions of Federal law.
    Individual with a disability means any person who has a disability. 
(The term individual with a disability does not include an individual 
who is currently engaging in the illegal use of drugs, when the 
recipient acts on the basis of such use.)
    Primary recipient means any recipient that is authorized or 
required to extend Federal financial assistance to another recipient.
    Program or activity means all of the operations of any entity 
described below, any part of which is extended Federal financial 
assistance:
    (a)(1) A department, agency, special purpose district, or other 
instrumentality of a state or of a local government; or
    (2) The entity of such state or local government that distributes 
Federal financial assistance and each such department or agency (and 
each other state or local government entity) that is the recipient of 
Federal financial assistance, in the case of assistance to a state or 
local government; or
    (b)(1) A college, university, or other postsecondary institution, 
or a public system of higher education; or
    (2) A local educational agency (as defined in 20 U.S.C. 7801), 
system of vocational education, or other school system; or
    (c)(1) An entire corporation, partnership, or other private 
organization, or an entire sole proprietorship if--
    (i) Assistance is extended to such corporation, partnership, 
private organization, or sole proprietorship as a whole; or
    (ii) The corporation, partnership, private organization, or sole 
proprietorship is principally engaged in the business of providing 
education, health care, housing, social services, or parks and 
recreation; or
    (2) The entire plant or other comparable, geographically separate 
physical facility to which Federal financial assistance is extended, in 
the case of any other corporation, partnership, private organization, 
or sole proprietorship that is the recipient of Federal financial 
assistance; or
    (d) Any other entity which is established by two or more of the 
entities described in paragraphs (a), (b) or (c) of this paragraph.
    Qualified individual with a disability means:
    (a) With respect to any aid, benefit, or service, provided under a 
program or activity subject to this part, an individual with a 
disability who, with or without reasonable accommodations in rules, 
policies, or procedures, the removal of architectural, communication, 
or transportation barriers, or the provision of auxiliary aids or 
services, meets the essential eligibility requirements for 
participation in, or receipt from, that aid, benefit, or service; and
    (b) With respect to employment, the definition given that term in 
the Equal Employment Opportunity Commission's regulation at 29 CFR part 
1630, implementing title I of the Americans with Disabilities Act of 
1990, which regulation is made applicable to this part by Sec.  40.101 
and Sec.  40.102.
    Qualified interpreter means an interpreter who, via a video remote 
interpreting (VRI) service or an on-site appearance, is able to 
interpret effectively, accurately, and impartially, both receptively 
and expressively, using any necessary specialized vocabulary. Qualified 
interpreters include, for example, sign language interpreters, oral 
transliterators, and cued-language transliterators.
    Qualified reader means a person who is able to read effectively, 
accurately, and impartially using any necessary specialized vocabulary.
    Recipient means any state or its political subdivision, any 
instrumentality of a state or its political subdivision, any public or 
private agency, institution, organization, or other entity, or any 
person to which Federal financial assistance is extended directly or 
through another recipient, including any successor, assignee, or 
transferee of a recipient, but excluding the ultimate beneficiary of 
the assistance.
    Secretary means the Secretary of the Treasury or any officer or 
employee of the Department to whom the Secretary has delegated or may 
delegate the authority to act under the regulations of this part.
    Section 504 means section 504 of the Act, (Pub. L. 93-112, 87 Stat. 
394 (29 U.S.C. 794), as amended.
    Sub-recipient means an entity to which a primary recipient extends 
Federal financial assistance.
    Ultimate beneficiary is one among a class of persons who are 
entitled to benefit from, or otherwise participate in, a program or 
activity receiving Federal financial assistance and to whom the 
protections of this part extend. The ultimate beneficiary class may be 
the general public or some narrower group of persons.
    Video remote interpreting (VRI) service means an interpreting 
service that uses video conference technology over dedicated lines or 
wireless technology offering high-speed, wide-bandwidth video 
connection that delivers high-quality video images as provided in Sec.  
40.4(i)(4).


Sec.  40.4  Discrimination prohibited.

    (a) General. No qualified individual shall, solely on the basis of 
disability, be excluded from participation in, be denied the benefits 
of, or otherwise be subjected to discrimination under any program or 
activity receiving assistance subject to this part.
    (b) Discriminatory actions prohibited.
    (1) A recipient may not, in providing any program or activity 
subject to this part, discriminate on the basis of disability, directly 
or through contractual, licensing, or other arrangements, on the basis 
of disability:
    (i) Deny a qualified individual with a disability the opportunity 
accorded others to participate in or benefit from the aid, benefit, or 
service.
    (ii) Afford a qualified individual with a disability an opportunity 
to participate in or benefit from the aid, benefit or

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service that is not equal to that afforded to others;
    (iii) Provide a qualified individual with a disability with an aid, 
benefit, or service that is not as effective in affording equal 
opportunity to obtain the same result, to gain the same benefit, or to 
reach the same level of achievement as that provided to others;
    (iv) Deny a qualified individual with a disability an equal 
opportunity to participate in the program or activity by providing 
services to the program;
    (v) Provide different or separate aids, benefits, or services to 
qualified individuals with disabilities or classes of qualified 
individuals with disabilities than is provided to others unless such 
action is necessary to provide qualified individuals with disabilities 
or classes of qualified individuals with disabilities with aids, 
benefits, or services that are as effective as that provided to others;
    (vi) Deny a qualified individual with a disability an opportunity 
to participate as a member of a planning or advisory board;
    (vii) Aid or perpetuate discrimination against a qualified 
individual with a disability by providing assistance to an agency, 
organization, or person that discriminates on the basis of disability 
in providing any aid, benefit, or service to beneficiaries of the 
recipient's program;
    (viii) Permit the participation in the program or activity of 
agencies, organizations or persons which discriminate against 
individuals with disabilities who are beneficiaries in the recipient's 
program.
    (ix) Intimidate or retaliate against any individual, with or 
without a disability, for the purpose of interfering with any right 
secured by section 504 or this part;
    (x) Otherwise limit a qualified individual with a disability in the 
enjoyment of any right, privilege, advantage, or opportunity enjoyed by 
others receiving the aid, benefit, or service;
    (2) A recipient may not deny a qualified individual with a 
disability the opportunity to participate in any programs or activities 
that are not separate or different, despite the existence of 
permissibly separate or different programs or activities.
    (3) A recipient may not, directly or through contractual, 
licensing, or other arrangements, utilize criteria or methods of 
administration that:
    (i) have the effect of subjecting qualified individuals with 
disabilities to discrimination on the basis of disability;
    (ii) have the purpose or effect of defeating or substantially 
impairing accomplishment of the objectives of the recipient's program 
or activity with respect to individuals with disabilities; or
    (iii) perpetuate the discrimination of another recipient if both 
recipients are subject to common administrative control or are agencies 
of the same State.
    (4) A recipient may not, in determining the site or a location of a 
facility, make selections--
    (i) that have the purpose or effect of excluding individuals with 
disabilities from, denying them the benefits of, or otherwise 
subjecting them to discrimination on the basis of disability; or
    (ii) that have the purpose or effect of defeating or substantially 
impairing the accomplishment of the objectives of the program or 
activity with respect to individuals with disabilities.
    (5) A recipient is prohibited from discriminating on the basis of 
disability in aid, benefits, or services in programs or activities 
operating without Federal financial assistance where such action would 
discriminate against individuals with disabilities who are 
beneficiaries or participants in any program or activity of the 
recipient receiving Federal financial assistance from this Department.
    (6) An entity not otherwise receiving Federal financial assistance 
but using a facility provided with the aid of Federal financial 
assistance from this Department after the effective date of this part 
is prohibited from discriminating on the basis of disability.
    (7) A recipient, in the selection of procurement contractors, may 
not use criteria that subject qualified individuals with disabilities 
to discrimination on the basis of disability.
    (8) A recipient may not administer a licensing or certification 
program in a manner that subjects qualified individuals with 
disabilities to discrimination on the basis of disability, nor may a 
recipient establish requirements for the programs or activities of 
licensees or certified entities that subject qualified individuals with 
disabilities to discrimination on the basis of disability. The programs 
or activities of entities that are licensed or certified by a recipient 
are not, themselves, covered by this part unless those entities are 
also recipients of federal financial assistance from this Department.
    (c) The exclusion of individuals without disabilities or specified 
classes of individuals with disabilities from aid, benefits, or 
services limited by Federal statute or executive order to individuals 
with disabilities or a different class of individuals with disabilities 
is not prohibited by this part.
    (d) Nothing in this part prohibits a recipient from providing aid, 
benefits, or services to individuals with disabilities or to a 
particular class of individuals with disabilities beyond those required 
by this part.
    (e) Integrated Setting. Recipients shall administer programs or 
activities in the most integrated setting appropriate to the needs of 
qualified individuals with disabilities.
    (f) Nothing in this part shall be construed to require an 
individual with a disability to accept an accommodation, aid, service, 
opportunity, or benefit provided under section 504 or this part which 
such individual chooses not to accept.
    (g) A recipient may not place a surcharge on a particular 
individual with a disability or any group of individuals with 
disabilities to cover the costs of measures, such as the provision of 
auxiliary aids, reasonable accommodations, or program accessibility, 
that are required to provide that individual or group with the 
nondiscriminatory treatment required by the Act or this part.
    (h) Illegal Use of Drugs.
    (1) General. Except as provided in subparagraph (3) of this 
section, this part does not prohibit discrimination against an 
individual based on that individual's current use of illegal drugs.
    (2) A recipient shall not discriminate on the basis of illegal use 
of drugs against an individual who is not engaging in current illegal 
use of drugs and who--
    (i) Has successfully completed a supervised drug rehabilitation 
program or has otherwise been rehabilitated successfully;
    (ii) Is participating in a supervised rehabilitation program; or
    (iii) Is erroneously regarded as engaging in such use.
    (3) Health and drug rehabilitation services.
    (i) A recipient shall not deny health services, or services 
provided in connection with drug rehabilitation, to an individual on 
the basis of that individual's current illegal use of drugs, if the 
individual is otherwise entitled to such services.
    (ii) A drug rehabilitation or treatment program may deny 
participation to individuals who engage in illegal use of drugs while 
they are in the program.
    (4) Drug testing.
    (i) This part does not prohibit a recipient from adopting or 
administering reasonable policies or procedures, including but not 
limited to drug testing, designed to ensure that an individual who 
formerly engaged in the

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illegal use of drugs is not now engaging in current illegal use of 
drugs.
    (ii) Nothing in paragraph (4) of this section shall be construed to 
encourage, prohibit, restrict, or authorize the conducting of testing 
for the illegal use of drugs.
    (i) Communications.
    (1)(i) A recipient shall take appropriate steps to ensure that 
communications with applicants, participants, beneficiaries, members of 
the public, and companions with disabilities are as effective as 
communications with others.
    (ii) For purposes of this section, ``companion'' means a family 
member, friend, or associate of an individual seeking access to a 
program or activity of a recipient, who, along with such individual, is 
an appropriate person with whom the recipient should communicate.
    (2)(i) A recipient shall furnish appropriate auxiliary aids and 
services where necessary to afford qualified individuals with 
disabilities, an equal opportunity to participate in, and enjoy the 
benefits of, a service, program, or activity of a recipient.
    (ii) The type of auxiliary aid or service necessary to ensure 
effective communication will vary in accordance with the method of 
communication used by the individual; the nature, length, and 
complexity of the communication involved; and the context in which the 
communication is taking place. In determining what types of auxiliary 
aids and services are necessary, a recipient entity shall give primary 
consideration to the requests of individuals with disabilities. In 
order to be effective, auxiliary aids and services must be provided in 
accessible formats, in a timely manner, and in such a way as to protect 
the privacy and independence of the individual with a disability.
    (3)(i) A recipient shall not require an individual with a 
disability to bring another individual to interpret for him or her.
    (ii) A recipient shall not rely on an adult accompanying an 
individual with a disability to interpret or facilitate communication 
except--
    (A) In an emergency involving an imminent threat to the safety or 
welfare of an individual or the public where there is no interpreter 
available; or
    (B) Where the individual with a disability specifically requests 
that the accompanying adult interpret or facilitate communication, the 
accompanying adult agrees to provide such assistance, and reliance on 
that adult for such assistance is appropriate under the circumstances.
    (iii) A recipient shall not rely on a minor child to interpret or 
facilitate communication, except in an emergency involving an imminent 
threat to the safety or welfare of an individual or the public where 
there is no interpreter available.
    (4) Video remote interpreting (VRI) services. A recipient that 
chooses to provide qualified interpreters via VRI services shall ensure 
that it provides--
    (i) Real-time, full-motion video and audio over a dedicated high-
speed, wide-bandwidth video connection or wireless connection that 
delivers high-quality video images that do not produce lags, choppy, 
blurry, or grainy images, or irregular pauses in communication;
    (ii) A sharply delineated image that is large enough to display the 
interpreter's face, arms, hands, and fingers, and the participating 
individual's face, arms, hands, and fingers, and can be seen by the 
participating individual regardless of the individuals' body position.
    (iii) A clear, audible transmission of voices; and
    (iv) Adequate training to users of the technology and other 
involved individuals so that they may quickly and efficiently set up 
and operate the VRI.
    (5) Where a recipient communicates by telephone with applicants, 
participants, beneficiaries and members of the public, text telephones 
(TTYs) or equally effective telecommunications systems shall be used to 
communicate with individuals who are deaf or hard of hearing or have 
speech impairments.
    (6) When a recipient uses an automated-attendant system, including, 
but not limited to, voice mail and messaging, or an interactive voice 
response system, for receiving and directing incoming telephone calls, 
that system must provide effective real-time communication with 
individuals using auxiliary aids and services, including TTYs and all 
forms of FCC-approved telecommunications relay system, including 
Internet-based relay systems.
    (7) A recipient shall respond to telephone calls from a 
telecommunications relay service established under title IV of the ADA 
in the same manner that it responds to other telephone calls.
    (8) This section does not require the recipient to take any action 
that it can demonstrate would result in a fundamental alteration in the 
nature of a program or activity or in undue financial and 
administrative burdens. In those circumstances where the recipient 
believes that the proposed action would fundamentally alter the program 
or activity or would result in undue financial and administrative 
burdens, the recipient has the burden of proving that compliance with 
Sec.  40.4(i) would result in such alteration or burdens. The decision 
that compliance would result in such alteration or burdens must be made 
by the head of the recipient agency or the agency head's designee after 
considering all of the recipient's resources available for use in the 
funding and operation of the conducted program or activity and must be 
accompanied by a written statement of the reasons for reaching that 
conclusion. If an action required to comply with this section would 
result in such an alteration or such burdens, the recipient shall take 
any other action that would not result in such an alteration or such 
burdens but would nevertheless ensure that, to the maximum extent 
possible, individuals with disabilities receive the benefits and 
services of the program or activity.
    (j) Reasonable accommodations. (1) A recipient shall make 
reasonable accommodations in policies, practices, or procedures when 
such accommodations are necessary to avoid discrimination on the basis 
of disability, unless the recipient can demonstrate that making the 
accommodations would fundamentally alter the nature of the service, 
program, or activity or result in an undue financial and administrative 
burden. For purposes of this section, the term reasonable accommodation 
shall be interpreted in a manner consistent with the term ``reasonable 
modifications'' as set forth in the Americans with Disabilities Act 
Title II regulation at 28 CFR 35.130(b)(7), and not as it is defined or 
interpreted for the purposes of employment discrimination under Title I 
of the ADA (42 U.S.C. 12111-12112) and its implementing regulation at 
29 CFR part 1630.
    (2) A recipient is not required to provide a reasonable 
accommodation to an individual who meets the definition of disability 
solely under the ``regarded as'' prong of the definition of disability 
at Sec.  40.3, definition of disability,
    (k) Prohibition on associational discrimination. A recipient shall 
not exclude or otherwise deny aids, benefits, or services of its 
programs or activities to an individual because of that individual's 
relationship or association with an individual with a known disability.
    (l) Direct Threat. (1) This part does not require a recipient to 
permit an individual to participate in or benefit from the services, 
programs, or activities of that recipient when that individual poses a 
direct threat to the health or safety of others.

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    (2) In determining whether an individual poses a direct threat to 
the health or safety of others, a recipient must make an individualized 
assessment, based on reasonable judgment that relies on current medical 
knowledge or on the best available objective evidence, to ascertain: 
The nature, duration, and severity of the risk; the probability that 
the potential injury will actually occur; and whether reasonable 
accommodations in policies, practices, or procedures or the provision 
of auxiliary aids or services will mitigate the risk.
    (m) Claims of no disability. Nothing in this subpart shall provide 
the basis for a claim that an individual without a disability was 
subject to discrimination because of a lack of disability, including a 
claim that an individual with a disability was granted a reasonable 
accommodation that was denied to an individual without a disability.


Sec.  40.5  Assurances required.

    (a) Assurances. Either at the application stage or the award stage, 
an applicant for federal financial assistance to which this part 
applies shall submit an assurance that the program or activity will be 
operated in compliance with this part.
    (b) Duration of obligation. (1) In the case where the Federal 
financial assistance is to provide or is in the form of personal 
property, real property or an interest therein or structures thereon, 
the assurance shall obligate the recipient, or, in the case of a 
subsequent transfer, the transferee, for the period during which the 
property is used for a purpose for which the Federal financial 
assistance is extended or for another purpose involving the provision 
of similar services or benefits, or for as long as the recipient 
retains ownership or possession of the property, whichever is longer. 
In all other cases the assurance shall obligate the recipient for the 
period during which federal financial assistance is extended to the 
program.
    (2) In the case where Federal financial assistance is provided in 
the form of a transfer of real property, structures, or improvements 
thereon, or interest therein, from the Federal government, the 
instrument effecting or recording the transfer shall contain a covenant 
running with the land assuring nondiscrimination for the period during 
which the real property is used for a purpose for which the Federal 
financial assistance is extended or for another purpose involving the 
provision of similar services or benefits. Where no transfer of 
property or interest therein from the Federal government is involved, 
but property is acquired or improved with Federal financial assistance, 
the recipient shall agree to include such covenant in any subsequent 
transfer of such property. When the property is obtained from the 
Federal government, such covenant may also include a condition coupled 
with a right to be reserved by the Department to revert title to the 
property in the event of a breach of the covenant where, in the 
discretion of the designated agency official, such a condition and 
right of reverter is appropriate to the statute under which the real 
property is obtained and to the nature of the grant and the grantee. In 
such event if a transferee of real property proposes to mortgage or 
otherwise encumber the real property as security for financing 
construction of new, or improvement of existing, facilities on such 
property for the purposes for which the property was transferred, the 
designated agency official may agree, upon request of the transferee 
and if necessary to accomplish such financing, and upon such conditions 
as the designated agency official deems appropriate, to subordinate 
such right of reversion to the lien of such mortgage or other 
encumbrance.
    (c) Continuing Federal financial assistance. Every application by a 
state or a state agency for continuing Federal financial assistance to 
which this part applies shall as a condition to its approval and the 
extension of any Federal financial assistance pursuant to the 
application:
    (1) Contain, be accompanied by, or be covered by a statement that 
the program is (or, in the case of a new program, will be) conducted in 
compliance with all requirements imposed by or pursuant to this part; 
and
    (2) Provide, be accompanied by, or be covered by provision for such 
methods of administration for the program as are found by the 
designated agency official to give reasonable guarantee that the 
applicant and all recipients of Federal financial assistance under such 
program will comply with all requirements imposed by or pursuant to 
this part.
    (d) Assurance from institutions. (1) In the case of any application 
for Federal financial assistance to an institution of higher education 
(including assistance for construction, for research, for special 
training projects, for student loans or for any other purpose), the 
assurance required by this section shall extend to admission practices 
and to all other practices relating to the treatment of students.
    (2) The assurance required with respect to an institution of higher 
education, hospital, or any other institution, insofar as the assurance 
relates to the institution's practices with respect to admission or 
other treatment of individuals as students, patients, or clients of the 
institution or to the opportunity to participate in the provision of 
services or other benefits to such individuals, shall be applicable to 
the entire institution.
    (e) Form. (1) The assurances required by paragraph (a) of this 
section, which may be included as part of a document that addresses 
other assurances or obligations, shall include that the applicant or 
recipient will comply with all applicable Federal statutes relating to 
nondiscrimination. This includes but is not limited to: Section 504 of 
the Rehabilitation Act of 1973, as amended.
    (2) The designated agency official will specify the extent to which 
such assurances will be required of the applicant's or recipient's 
subgrantees, contractors, subcontractors, transferees, or successors in 
interest. Any such assurance shall include provisions which give the 
United States a right to seek its judicial enforcement.


Sec.  40.6  Designation of responsible employee and adoption of 
grievance procedures.

    (a) Designation of responsible employee. A recipient that employs 
fifty or more persons shall designate at least one person to coordinate 
compliance with this part.
    (b) Adoption of grievance procedures. A recipient that employs 
fifty or more persons shall adopt grievance procedures that incorporate 
appropriate due process standards (e.g. adequate notice, fair hearing) 
and provide for the prompt and equitable resolution of complaints 
alleging any action prohibited by this part except that such procedures 
need not be established with respect to complaints from applicants for 
employment. Any individual may file a complaint with the Department 
without having first used the recipient's grievance procedures.
    (c) The Secretary may require any recipient with fewer than fifty 
employees to designate a responsible employee, comply with the 
requirements for providing notice of nondiscrimination, and adopt 
grievance procedures when the Secretary finds a violation of this part 
or finds that complying with these administrative requirements will not 
significantly impair the ability of the recipient to provide benefits 
or services.


Sec.  40.7  Notice of nondiscrimination and accessible services.

    (a) A recipient employing fifty or more persons shall take 
appropriate

[[Page 76]]

initial and continuing steps to notify participants, beneficiaries, 
applicants, and employees, including those who are blind or have low 
vision or deaf or hard of hearing, and unions or professional 
organizations holding collective bargaining or professional agreements 
with the recipient that it does not discriminate on the basis of 
disability in violation of section 504 and this part. The notification 
shall state, where appropriate, that the recipient does not 
discriminate in admission or access to, or participation in, or 
employment in, its programs or activities. The recipient shall also 
identify the responsible employee designated pursuant to Sec.  40.6(a), 
where to file section 504 complaints with the Department, and where 
applicable, with the recipient, and identify the existence and location 
of accessible services, activities, and facilities. A recipient shall 
make the initial notification required by this paragraph within 90 days 
of the effective date of this part. Methods of initial and continuing 
notification may include but are not limited to the posting of notices, 
placement of notices in the recipient's publications, publication of 
notices on the recipient's Web site, publication in newspapers or 
magazines, radio announcements, and the use of other visual and aural 
media.
    (b) If a recipient publishes or uses recruitment materials or 
publications containing general information that it makes available to 
participants, beneficiaries, applicants or employees, it shall include 
in those materials or publications a statement of the policy described 
in paragraph (a) of this section. A recipient may meet the requirement 
of this paragraph either by including appropriate inserts in existing 
materials and publications or by revising and reprinting the materials 
and publications.


Sec.  40.8  Remedial action, voluntary action, and self-evaluation.

    (a) Remedial action. (1) If the Secretary finds that a recipient 
has discriminated against individuals on the basis of disability in 
violation of section 504 or this part, the recipient shall take such 
remedial action as the Secretary deems necessary to overcome the 
effects of the discrimination.
    (2) Where a recipient is found to have discriminated against 
individuals on the basis of disability in violation of section 504 or 
this part and where another recipient exercises control over the 
recipient that has discriminated, the Secretary, where appropriate, may 
require either or both recipients to take remedial action.
    (3) The Secretary may, where necessary to overcome the effects of 
discrimination in violation of section 504 or this part, require a 
recipient to take remedial action:
    (i) With respect to individuals with disabilities who are no longer 
participants in the recipient's program or activity but who were 
participants in the program when such discrimination occurred;
    (ii) With respect to individuals with disabilities who would have 
been participants in the program or activity had the discrimination not 
occurred, or;
    (iii) With respect to individuals with disabilities presently in 
the program or activity, but not receiving full benefits or equal and 
integrated treatment within the program.
    (b) Voluntary action. A recipient may take steps, in addition to 
any action that is required by this part, to increase the participation 
of qualified individuals with disabilities in the recipient's program 
or activity.
    (c) Self-evaluation. (1) A recipient shall, within one year of the 
effective date of this part:
    (i) Evaluate, with the assistance of interested persons, including 
individuals with disabilities or organizations representing individuals 
with disabilities, its current policies and practices and the effects 
thereof that do not or may not meet the requirements of this part.
    (ii) Modify, after consultation with interested persons, including 
individuals with disabilities or organizations representing individuals 
with disabilities, any policies and practices that do not meet the 
requirements of this part; and
    (iii) Take, after consultation with interested persons, including 
individuals with disabilities or organizations representing individuals 
with disabilities, appropriate remedial steps to eliminate the effects 
of any discrimination that resulted in adherence to these policies and 
practices.
    (2) A recipient employing fifty or more persons shall, for at least 
three years following completion of the evaluation required under 
paragraph (c)(1) of this section, maintain on file, make available for 
public inspection, and provide to the Secretary upon request:
    (i) A list of the interested persons consulted,
    (ii) A description of areas examined and any problems identified, 
and
    (iii) A description of any modifications made and of any remedial 
steps taken.


Sec.  40.9  Effect of state or local law or other requirements.

    The obligation to comply with this part is not obviated or 
alleviated by the existence of any state or local law or other 
requirement that, on the basis of disability, imposes prohibitions or 
limits upon the eligibility of qualified individuals with disabilities 
to receive services or to participate in any program or activity.


Sec.  40.10  Effect of compliance with regulations of other Federal 
agencies.

    A recipient that has designated a responsible official and 
established a grievance procedure, provided notice, completed a self-
evaluation, or prepared a transition plan in the course of complying 
with regulations issued by other Federal agencies under section 504 or 
title II of the Americans with Disabilities Act will be in compliance 
with Sec. Sec.  40.6, 40.7, 40.8(c), or 40.203(f), respectively, if all 
requirements of those sections have been met in regard to programs or 
activities assisted by this Department.

Subpart B--Employment Practices


Sec.  40.101  Applicability.

    This part applies to all programs or activities that receive 
Federal financial assistance provided by the Department.


Sec.  40.102  Discrimination prohibited.

    (a) General. No qualified individual with a disability shall, on 
the basis of disability, be subjected to discrimination in employment 
under any program or activity to which this part applies.
    (b) Employment discrimination standards. The standards used to 
determine whether paragraph (a) of this section has been violated shall 
be the standards applied under Title I of the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12111 et seq.) and, as such 
sections relate to employment, the provisions of sections 501 through 
504 and 510 of the Americans with Disabilities Act of 1990 (42 U.S.C. 
12201-12204 and 12210), as amended by the ADA Amendments Act of 2008 
(Pub L. 110-325), as such standards are implemented in the Equal 
Employment Opportunity Commission's regulation at 29 CFR pt. 1630, as 
amended. The procedures to be used to determine whether paragraph (a) 
of this section has been violated shall be the procedures set forth in 
Subpart D of this part.

Subpart C--Program Accessibility


Sec.  40.201  Applicability.

    This subpart applies to all programs or activities that receive 
Federal

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financial assistance provided by the Department after the effective 
date of this part.


Sec.  40.202  Discrimination prohibited.

    Recipients shall ensure that no qualified individuals with 
disabilities are denied the benefits of, excluded from participation 
in, or otherwise subjected to discrimination under any program or 
activity receiving assistance from this Department because a 
recipient's facilities are inaccessible to or unusable by individuals 
with disabilities.


Sec.  40.203  Existing facilities.

    (a) Accessibility. A recipient shall operate each service, program 
or activity so that the service, program, or activity, when viewed in 
its entirety, is readily accessible to and usable by individuals with 
disabilities. This paragraph does not--
    (1) Necessarily require a recipient to make each of its existing 
facilities or every part of an existing facility accessible to and 
usable by qualified individuals with disabilities;
    (2) Require a recipient to take any action that would threaten or 
destroy the historically significant features of an historic property; 
or
    (3) Require a recipient to take any action that it can demonstrate 
would result in a fundamental alteration in the nature of a service, 
program, or activity or in undue financial and administrative burdens. 
In those circumstances where personnel of the recipient believe that 
the proposed action would fundamentally alter the service, program, or 
activity or would result in undue financial and administrative burdens, 
a recipient has the burden of proving that compliance with Sec.  
40.203(a) of this part would result in such alteration or burdens. The 
decision that compliance would result in such alteration or burdens 
must be made by the director of the recipient entity or his or her 
designee after considering all resources available for use in the 
funding and operation of the service, program, or activity, and must be 
accompanied by a written statement of the reasons for reaching that 
conclusion. If an action would result in such an alteration or such 
burdens, a recipient shall take any other action that would not result 
in such an alteration or such burdens but would nevertheless ensure 
that individuals with disabilities receive the benefits or services 
provided by the recipient.
    (b) Methods.
    (1) A recipient may comply with the requirements of paragraph (a) 
of this section through such means as redesign of equipment, 
reassignment of classes or other services to accessible buildings, 
assignment of aides to beneficiaries, home visits, delivery of services 
at alternate accessible sites, alteration of existing facilities and 
construction of new facilities in conformance with the requirements of 
Sec.  40.204, use of accessible rolling stock or other conveyances, or 
any other methods that result in making its services, programs or 
activities readily accessible to and usable by qualified individuals 
with a disabilities. A recipient is not required to make structural 
changes in existing facilities where other methods are effective in 
achieving compliance with paragraph (a) of this section. A recipient, 
in making alterations to existing buildings, shall meet the 
accessibility requirements of Sec.  40.204. In choosing among available 
methods for meeting the requirements of paragraph (a) of this section, 
a recipient shall give priority to those methods that offer services, 
programs, and activities to qualified individuals with disabilities in 
the most integrated setting appropriate.
    (2) Safe harbor. For the purposes of complying with this section, 
elements that have not been altered in existing facilities on or after 
[Effective date of the final rule], and that comply with the 
corresponding technical and scoping specifications for those elements 
in the Uniform Federal Accessibility Standards (UFAS), Appendix A to 41 
CFR part 101-19.6, 49 FR 31528, app. A (Aug. 7, 1984) are not required 
to be modified to be brought into compliance with the requirements set 
forth in the 2010 Standards.
    (c) Small providers. If a recipient with fewer than fifteen 
employees finds, after consultation with an individual with a 
disability seeking its services, that there is no method of complying 
with paragraph (a) of this section other than by making a significant 
alteration in its existing facilities, the recipient may, as an 
alternative, refer the individual with a disability to other providers 
of those services that are accessible at an equivalent cost to the 
beneficiary.
    (d) Historic preservation programs. In meeting the requirements of 
Sec.  40.203(a) in historic preservation programs, a recipient shall 
give priority to methods that provide physical access to individuals 
with disabilities. In cases where a physical alteration to a historic 
property is not required because of paragraph (a)(2) or (a)(3) of this 
section, alternative methods of achieving program accessibility 
include--
    (1) Using audio-visual materials and devices to depict those 
portions of a historic property that cannot otherwise be made 
accessible;
    (2) Assigning persons to guide individuals with disabilities into 
or through portions of historic properties that cannot otherwise be 
made accessible; or
    (3) Adopting other innovative methods.
    (e) Time period. A recipient shall comply with the requirements of 
paragraph (a) of this section within ninety days of the effective date 
of this part except that, where structural changes in facilities are 
necessary, such changes shall be made as expeditiously as possible and 
no later than within three years of the effective date of this part.
    (f) Transition plan. In the event that structural changes to 
facilities are necessary to meet the requirement of paragraph (a) of 
this section, a recipient shall develop, within six months of the 
effective date of this part, a transition plan setting forth the steps 
necessary to complete such changes. The plan shall be developed with 
the assistance of interested persons, including individuals with 
disabilities or organizations representing individuals with 
disabilities. A copy of the transition plan shall be made available for 
public inspection. The plan shall, at a minimum:
    (1) Identify physical obstacles in the recipient's facilities that 
limit the accessibility of its program or activity to individuals with 
disabilities;
    (2) Describe in detail the methods that will be used to make the 
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve 
full accessibility under paragraph (a) of this section and if the time 
period of the transition plan is longer than one year, identify steps 
that will be taken during each year of the transition period; and
    (4) Identify the person responsible for implementation of the plan.
    (g) Notice of location of accessible facilities.
    (1) General. The recipient shall adopt and implement procedures to 
ensure that interested persons with disabilities, including persons 
with an intellectual disability, a learning disability, a vision or 
hearing disability or other disabilities, can obtain information as to 
the existence and location of services, activities, and facilities that 
are accessible to and usable by individuals with disabilities.
    (2) Signs at primary entrances. The recipient shall provide signs 
at a primary entrance to each of its inaccessible facilities, directing 
users to an accessible facility or a location at

[[Page 78]]

which they can obtain information about accessible facilities. The 
international symbol for accessibility shall be used at each accessible 
entrance of a facility.


Sec.  40.204  New construction and alterations.

    (a) Design and construction. Each new facility or part of a 
facility constructed by, on behalf of, or for the use of a recipient 
shall be designed and constructed in such manner that the facility or 
part of the facility is readily accessible to and usable by individuals 
with disabilities, if the construction is commenced after the effective 
date of this part.
    (b) Alteration. Each facility or part of a facility which is 
altered by, on behalf of, or for the use of a recipient after the 
effective date of this part in a manner that affects or could affect 
the usability of the facility or part of the facility shall to the 
maximum extent feasible be altered in such manner that the altered 
portion of the facility is readily accessible to and usable by 
individuals with disabilities.
    (c) Accessibility standards and compliance dates.
    (1) Applicable Accessibility Standard.
    (i) New construction and alterations on or after the compliance 
dates specified in paragraph (2) must comply with the 2010 Standards.
    (ii) New construction and alterations of buildings or facilities 
undertaken in compliance with the 2010 Standards shall comply with the 
scoping and technical requirements for a ``public building or 
facility'' in the 2010 Standards regardless of whether the recipient is 
a public or private entity.
    (iii) Departures from particular requirements of the Standards by 
the use of other methods shall be permitted when it is clearly evident 
that equivalent access to the facility or part of the facility is 
thereby provided.
    (2) Compliance Dates.
    (i) New construction and alterations by recipients that are private 
entities. New construction and alterations in which the last 
application for a building permit or permit extension for such 
construction or alterations is certified to be complete by a state, 
county, or local government (or, in those jurisdictions where the 
government does not certify completion of applications, if the date 
when the last application for a building permit or permit extension is 
received by the state, county, or local government) is on or after 
[DATE ONE YEAR AFTER PUBLICATION OF THE FINAL RULE IN THE Federal 
Register], or if no permit is required, if the start of physical 
construction or alterations occurs on or after [DATE ONE YEAR FROM THE 
PUBLICATION OF THE FINAL RULE IN THE Federal Register], then such new 
construction and alterations shall comply with the 2010 Standards as 
defined in paragraph (1) of this section.
    (ii) New construction and alterations by recipients that are public 
entities. If physical construction or alterations commence on or after 
[DATE ONE YEAR AFTER PUBLICATION OF THE FINAL RULE IN THE Federal 
Register], then such new construction and alterations shall comply with 
the 2010 Standards.
    (3) For the purposes of this section, ceremonial groundbreaking or 
razing of structures prior to site preparation will not be considered 
to commence or start physical construction or alterations.
    (4) Compliance with the Architectural Barriers Act of 1968. Nothing 
in this section or Sec.  40.203 relieves recipients whose facilities 
are covered by the Architectural Barriers Act of 1968, as amended (42 
U.S.C. 4151-4157), from their responsibility of complying with the 
requirements of that Act and any implementing regulations.
    (5) This section does not require recipients to make building 
alterations that have little likelihood of being accomplished without 
removing or altering a load-bearing structural member.

Subpart D--Compliance, Investigations and Procedure for Effecting 
Compliance


Sec.  40.300  Compliance information.

    (a) Cooperation and assistance. The Secretary shall to the fullest 
extent practicable seek the cooperation of recipients in obtaining 
compliance with this part and shall provide assistance and guidance to 
recipients to help them comply voluntarily with this part.
    (b) Compliance reports. Each recipient shall keep such records and 
submit to the Secretary timely, complete, and accurate compliance 
reports at such times, and in such form and containing such 
information, as the Secretary may determine to be necessary to enable 
the Secretary to ascertain whether the recipient has complied or is 
complying with this part. In the case in which a primary recipient 
extends Federal financial assistance to any other recipient, such other 
recipient shall also submit such compliance reports to the primary 
recipient as may be necessary to enable the primary recipient to carry 
out its obligations under this part. In general, recipients should have 
available for the Secretary data showing the extent to which 
individuals with disabilities are beneficiaries of programs receiving 
Federal financial assistance.
    (c) Access to sources of information. Each recipient shall permit 
access by the Secretary, during normal business hours, to such of its 
books, records, accounts, and other sources of information and its 
facilities as may be pertinent to ascertain compliance with this part. 
Where any information required of a recipient is in the exclusive 
possession of any other agency, institution, or person and this agency, 
institution, or person fails or refuses to furnish this information, 
the recipient shall so certify in its report and shall set forth what 
efforts it has made to obtain the information.
    (d) Information to beneficiaries and participants. Each recipient 
shall make available to participants, beneficiaries, and other 
interested persons such information regarding the provisions of this 
part and its applicability to the program for which the recipient 
receives Federal financial assistance and make such information 
available to them in such manner as the Secretary finds necessary to 
apprise such persons of the protections against discrimination assured 
them by section 504 and this part.


Sec.  40.301  Conduct of investigations.

    (a) Periodic compliance reviews. The Secretary shall from time to 
time review the practices of recipients to determine whether they are 
complying with this part.
    (b) Complaints. Any person who believes that he or she, or any 
specific class of persons, has been subjected to discrimination 
prohibited by this part may by himself or herself, or by a 
representative, file with the Secretary a written complaint. A 
complaint must be filed not later than 180 days after the date of the 
alleged discrimination, unless the time for filing is extended by the 
Secretary.
    (c) Investigations. The Secretary will make a prompt investigation 
whenever a compliance review, report, complaint, or any other 
information indicates a possible failure to comply with this part. The 
investigation will include, where appropriate, a review of the 
pertinent practices and policies of the recipient, the circumstances 
under which the possible noncompliance with this part occurred, and 
other factors relevant to a determination as to whether the recipient 
has failed to comply with this part.
    (d) Resolution of matters.
    (1) If an investigation pursuant to paragraph (c) of this section 
indicates a failure to comply with this part, the Secretary will so 
inform the recipient

[[Page 79]]

and the matter will be resolved by informal means whenever possible. If 
it has been determined that the matter cannot be resolved by informal 
means, action will be taken as provided for in Sec.  40.302.
    (2) If an investigation does not warrant action pursuant to 
paragraph (d)(1) of this section, the Secretary will so inform the 
recipient and the complainant, if any, in writing.
    (e) Intimidatory or retaliatory acts prohibited. No recipient or 
other person shall intimidate, threaten, coerce, or discriminate 
against any individual for the purpose of interfering with any right or 
privilege secured by section 504 or this part, or because the 
individual has made a complaint, testified, assisted, or participated 
in any manner in an investigation, proceeding, or hearing under this 
part. The identity of complainants shall be kept confidential except to 
the extent necessary to carry out the purposes of this part, including 
the conduct of any investigation, hearing, or judicial proceeding 
arising thereunder.


Sec.  40.302  Procedure for effecting compliance.

    (a) General. If there appears to be a failure or threatened failure 
to comply with this part, and if the noncompliance or threatened 
noncompliance cannot be corrected by informal means, compliance with 
this part may be effected by the suspension or termination of or 
refusal to grant or to continue Federal financial assistance or by any 
other means authorized by law. Such other means may include, but are 
not limited to: (1) A referral to the Department of Justice with a 
recommendation that appropriate proceedings be brought to enforce any 
rights of the United States under any law of the United States, or any 
assurance or other contractual undertaking, and (2) Any applicable 
proceeding under state or local law.
    (b) Noncompliance with Sec.  40.5. If an applicant fails or refuses 
to furnish an assurance required under Sec.  40.5 or otherwise fails or 
refuses to comply with a requirement imposed by or pursuant to that 
section, Federal financial assistance may be refused in accordance with 
the procedures of paragraph (c) of this section. The Department shall 
not be required to provide assistance in such a case during the 
pendency of the administrative proceedings under such paragraph. 
However, the Department shall continue assistance during the pendency 
of such proceedings where such assistance is due and payable pursuant 
to an application approved prior to the effective date of this part.
    (c) Termination of or refusal to grant or to continue Federal 
financial assistance.
    (1) No order suspending, terminating, or refusing to grant or 
continue Federal financial assistance shall become effective until:
    (i) The Secretary has advised the applicant or recipient of the 
applicant's or recipient's failure to comply and has determined that 
compliance cannot be secured by voluntary means;
    (ii) There has been an express finding on the record, after 
opportunity for hearing, of a failure by the applicant or recipient to 
comply with a requirement imposed by or pursuant to this part;
    (iii) The action has been approved by the Secretary pursuant to 
Sec.  40.401(e); and
    (iv) The expiration of 30 days after the Secretary has filed with 
the committee of the House and the committee of the Senate having 
legislative jurisdiction over the program involved, a full written 
report of the circumstances and the grounds for such action.
    (2) Any action to suspend or terminate or to refuse to grant or to 
continue Federal financial assistance shall be limited to the 
particular political entity, or part thereof, or other applicant or 
recipient as to whom such a finding has been made and shall be limited 
in its effect to the particular program, or part thereof, in which such 
noncompliance has been so found.
    (d) Other means authorized by law. No action to effect compliance 
with section 504 by any other means authorized by law shall be taken by 
the Department until:
    (1) The Secretary has determined that compliance cannot be secured 
by voluntary means;
    (2) The recipient or other person has been notified of its failure 
to comply and of the action to be taken to effect compliance; and
    (3) The expiration of at least 10 days from the mailing of such 
notice to the recipient or other person. During this period of at least 
10 days, additional efforts shall be made to persuade the recipient or 
other person to comply with the regulation and to take such corrective 
action as may be appropriate.

Subpart E--Hearings and Decisions and Notices


Sec.  40.400  Hearings.

    (a) Opportunity for hearing. Whenever an opportunity for a hearing 
is required by Sec.  40.302(c), reasonable notice shall be given by 
registered or certified mail, return receipt requested, to the affected 
applicant or recipient. This notice shall advise the applicant or 
recipient of the action proposed to be taken, the specific provision 
under which the proposed action against it is to be taken, and the 
matters of fact or law asserted as the basis for this action, and 
either:
    (1) Fix a date not less than 20 days after the date of such notice 
within which the applicant or recipient may request of the Secretary 
that the matter be scheduled for hearing; or
    (2) Advise the applicant or recipient that the matter in question 
has been set down for hearing at a stated place and time. The time and 
place so fixed shall be reasonable and shall be subject to change for 
cause. The complainant, if any, shall be advised of the time and place 
of the hearing. An applicant or recipient may waive a hearing and 
submit written information and argument for the record. The failure of 
an applicant or recipient to request a hearing under this paragraph or 
to appear at a hearing for which a date has been set shall be deemed to 
be a waiver of the right to a hearing under Sec.  40.301(c) and consent 
to the making of a decision on the basis of such information as is 
available.
    (b) Time and place of hearing. Hearings shall be held at the 
offices of the Department component administering the program, at a 
time fixed by the Secretary, unless he or she determines that the 
convenience of the applicant or recipient or of the Department requires 
that another place be selected. Hearings shall be held before the 
Secretary, or at the Secretary's discretion, before a hearing examiner 
appointed in accordance with section 3105 of title 5, United States 
Code, or detailed under section 3344 of title 5, United States Code.
    (c) Right to counsel. In all proceedings under this section, the 
applicant or recipient and the Department shall have the right to be 
represented by counsel.
    (d) Procedures, evidence, and record. (1) The hearing, decision, 
and any administrative review thereof shall be conducted in conformity 
with sections 554 through 557 of title 5, United States Code, and in 
accordance with such rules of procedure as are proper (and not 
inconsistent with this section) relating to the conduct of the hearing, 
giving of notices subsequent to those provided for in paragraph (a) of 
this section, taking of testimony, exhibits, arguments and briefs, 
requests for findings, and other related matters. Both the Secretary 
and the applicant or recipient shall be entitled to introduce all 
relevant evidence on the issues as stated in the notice for hearing or 
as determined by

[[Page 80]]

the officer conducting the hearing at the outset of or during the 
hearing.
    (2) Technical rules of evidence do not apply to hearings conducted 
pursuant to this part, but rules or principles designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination shall be applied where 
determined reasonably necessary by the officer conducting the hearing. 
The hearing officer may exclude irrelevant, immaterial, or unduly 
repetitious evidence. All documents and other evidence offered or taken 
for the record shall be open to examination by the parties and 
opportunity shall be given to refute facts and arguments advanced on 
either side of the issues. A transcript shall be made of the oral 
evidence except to the extent the substance thereof is stipulated for 
the record. All decisions shall be based upon the hearing record and 
written findings shall be made.
    (e) Consolidated or joint hearings. In cases in which the same or 
related facts are asserted to constitute noncompliance with this part 
with respect to two or more Federal statutes, authorities, or other 
means by which Federal financial assistance is extended and to which 
this part applies, or noncompliance with this part and the regulations 
of one or more other Federal departments or agencies issued under 
section 504, the Secretary may, by agreement with such other 
departments or agencies, where applicable, provide for the conduct of 
consolidated or joint hearings, and for the application to such 
hearings of rules or procedures not inconsistent with this part. Final 
decisions in such cases, insofar as this regulation is concerned, shall 
be made in accordance with Sec.  40.401.


Sec.  40.401   Decisions and notices.

    (a) Procedure on decisions by hearing examiner. If the hearing is 
held by a hearing examiner, the hearing examiner shall either make an 
initial decision, if so authorized, or certify the entire record 
including his recommended findings and proposed decision to the 
Secretary for a final decision, and a copy of such initial decision or 
certification shall be mailed to the applicant or recipient. Where the 
initial decision is made by the hearing examiner the applicant or 
recipient may, within 30 days after the mailing of such notice of 
initial decision, file with the Secretary the applicant's or 
recipient's exceptions to the initial decision, with the reasons 
therefore. In the absence of exceptions, the Secretary may, on his or 
her own motion, within 45 days after the initial decision, serve on the 
applicant or recipient a notice that he or she will review the 
decision. Upon the filing of such exceptions or of notice of review, 
the Secretary shall review the initial decision and issue his or her 
own decision thereon including the reasons therefore. In the absence of 
either exceptions or a notice of review, the initial decision shall, 
subject to paragraph (e) of this section, constitute the final decision 
of the Secretary.
    (b) Decisions on record or review by the Secretary. Whenever a 
record is certified to the Secretary for decision or he or she reviews 
the decision of a hearing examiner pursuant to paragraph (a) of this 
section, or whenever the Secretary conducts the hearing, the applicant 
or recipient shall be given reasonable opportunity to file with the 
Secretary briefs or other written statements of its contentions, and a 
written copy of the final decision of the Secretary shall be sent to 
the applicant or recipient and to the complainant, if any.
    (c) Decisions on record where a hearing is waived. Whenever a 
hearing is waived pursuant to Sec.  40.400, a decision shall be made by 
the Secretary on the record and a written copy of such decision shall 
be sent to the applicant or recipient, and to the complainant, if any.
    (d) Rulings required. Each decision of a hearing examiner or the 
Secretary shall set forth his or her ruling on each finding, 
conclusion, or exception presented, and shall identify the requirement 
or requirements imposed by or pursuant to this part with which it is 
found that the applicant or recipient has failed to comply.
    (e) Approval by the Secretary. Any final decision by an official of 
the Department, other than the Secretary personally, which provides for 
the suspension or termination of, or the refusal to grant or continue 
Federal financial assistance, or the imposition of any other sanction 
available under this part or section 504, shall promptly be transmitted 
to the Secretary personally, who may approve such decision, may vacate 
it, or remit or mitigate any sanction imposed.
    (f) Content of orders. The final decision may provide for 
suspension or termination of, or refusal to grant or continue Federal 
financial assistance, in whole or in part, to which this regulation 
applies, and may contain such terms, conditions, and other provisions 
as are consistent with and will effectuate the purposes of section 504 
and this part, including provisions designed to assure that no Federal 
financial assistance to which this regulation applies will thereafter 
be extended to the applicant or recipient determined by such decision 
to be in default in its performance of an assurance given by it 
pursuant to this part, or to have otherwise failed to comply with this 
part, unless and until it corrects its noncompliance and satisfies the 
Secretary that it will fully comply with this part.
    (g) Post termination proceedings. (1) An applicant or recipient 
adversely affected by an order issued under paragraph (f) of this 
section shall be restored to full eligibility to receive Federal 
financial assistance if it satisfies the terms and conditions of that 
order for such eligibility or if it brings itself into compliance with 
this part and provides reasonable assurance that it will fully comply 
with this part.
    (2) Any applicant or recipient adversely affected by an order 
entered pursuant to paragraph (f) of this section may at any time 
request the Secretary to restore fully its eligibility to receive 
Federal financial assistance. Any such request shall be supported by 
information showing that the applicant or recipient has met the 
requirements of paragraph (g)(1) of this section. If the Secretary 
determines that those requirements have been satisfied, he or she shall 
restore such eligibility.
    (3) If the Secretary denies any such request, the applicant or 
recipient may submit a request for a hearing in writing, specifying why 
it believes such official to have been in error. It shall thereupon be 
given an expeditious hearing, with a decision on the record in 
accordance with rules or procedures issued by the Secretary. The 
applicant or recipient will be restored to such eligibility if it 
proves at such a hearing that it satisfied the requirements of 
paragraph (g)(1) of this section. While proceedings under this 
paragraph are pending, the sanctions imposed by the order issued under 
paragraph (f) of this section shall remain in effect.

Kody Kinsley,
Assistant Secretary for Management.
[FR Doc. 2016-31236 Filed 12-30-16; 8:45 am]
 BILLING CODE 4810-25-P