Part

601.5

Applicability of the regulations in this part.

Plan materials.

Content of plan materials; form, sub-
mission and amendments.

601.6
601.7
601.8 Selection of locations.
601.9

Content of plan materials; coverage.
In-service training.

Selection of types of business enter-
prises.

601.10 Selection of operators.

601.11 Vending stands in Federal buildings. 601.12 Supervision of operator. 601.13 Management, control and operation of the program.

601.14 Use of program proceeds. 601.15

Utilization of services of public agencies or private nonprofit corporations serving the blind. 601.16 Limitation on amount of Federal reimbursement.

601.17 Expenditures for which Federal reimbursement is unavailable. 601.18 State's interest in vending stands and other equipment.

601.19 Disposition of vending stand and other equipment.

Maintenance of accounts.
Maintenance of inventories.

601.20

601.21

Sec.

601.26 District of Columbia. 601.27

Continued operations of programs under plans submitted previous to the issuance of the regulations in this part.

AUTHORITY: §§ 601.1 to 601.27, inclusive, issued under Pub. Law 549, 79th Cong., 60 Stat. 689.

SOURCE: §§ 601.1 to 601.27, inclusive, contained in Regulations, Acting Federal Security Administrator, July 8, 1947, 12 F.R. 4644.

§ 601.1 Purpose and scope. The Business Enterprises Program includes vending stands, and any type of small business the operation of which will be improved through management and supervision by the State Agency controlling the program. Its purpose is to create and preserve employment opportunities for the successive use of qualified blind persons.

§ 601.2 Terms. Unless otherwise herein specifically indicated, the terms listed below are defined as follows:

(a) "Act" means Title II, subheading "Office of Vocational Rehabilitation," of Public Law 165, approved July 8, 1947, known officially as the "Labor-Federal Security Appropriation Act, 1948."

(b) "Vocational Rehabilitation Act" means Public Law 236, 66th Congress, approved June 2, 1920, as amended by Public Law 113, 78th Congress, 1st Session, approved July 6, 1943.

(c) "State plan" means a State plan of vocational rehabilitation approved under the provisions of the Vocational Rehabilitation Act.

(d) "Administrator" means the Federal Security Administrator.

(e) "Director" means the officer in the Federal Security Agency, acting under the immediate supervision of the Commissioner for Special Services to whom the Administrator has delegated the primary responsibility for carrying out the Vocational Rehabilitation Act under section 7 (c) thereof, other than that which involves the rule making power and the making of annual reports and recommendations to the Congress.

(f) "State" means the several States, Puerto Rico, and the Territories of Alaska and Hawaii.

(g) "State Agency" means State Board or Agency for the Blind as hereinafter defined.

(h) "State Board" means the State Board of Vocational Education. (The term includes a Rehabilitation Commission in existence prior to the date of the act operating under an agreement with the Board approved by the Administrator.)

(i) "Agency for the Blind" means the State Blind Commission or other agency administering that part of the Plan under which vocational rehabilitation is provided the blind.

(j) "Vending stands" includes such counters, shelving, display and wall cases, refrigerating apparatus, and other appropriate auxiliary equipment, as are necessary in order to establish suitable retail business enterprises for the benefit of blind persons.

(k) "Other equipment" includes such implements, apparatus, fixtures and appliances determined to be necessary for the establishment, for the benefit of blind persons, of appropriate business enterprises other than vending stands. The business enterprises established shall include only such manufacturing, servicing, selling, and agricultural activities as are best adapted to the most effective utilization of the skills and aptitudes of blind persons and shall be limited to such types of business enterprises as are set forth in the approved plan materials.

(1) "Cost of acquisition of vending stands and other equipment" means costs of vending stands and other equipment

as well as costs of construction, delivery, and installation thereof.

(m) "Controlled by the State Agency" means a system under which the vending stands, and other equipment are owned, directly or indirectly, by the State Agency and the operations of the business enterprises, established by the State Agency through the use of vending stands and other equipment, are managed, regulated, and supervised, directly or indirectly, by the State Agency.

(n) "Program" means the establishment, maintenance, and operation for the benefit of blind persons of vending stands and other business enterprises controlled by the State Agency, where Federal reimbursement under the act is claimed for any portion of the expenditures for the acquisition of the vending stands or other equipment used or where funds are used which are derived in whole or in part from the operation of such vending stands or other business enterprises.

(o) "Private nonprofit corporation serving the blind" means any corporation organized for the promotion of the social and economic welfare of disabled persons, no part of the net earnings of which inures to the benefit of any shareholder or individual and which performs any functions in connection with the Business Enterprises Program under the direction and control of the State Agency.

(p) "Operator" means the blind individual selected by the State Agency to conduct the daily operations of a particular vending stand or other business enterprise in the program.

(q) "Randolph-Sheppard Act" means Public Law 732, approved June 20, 1936, enacted by the 74th Congress.

(r) "Designated State Licensing Agency" means a State Commission for the blind or other public agency designated under the provisions of the RandolphSheppard Act to issue licenses to blind persons for the operation of vending stands in Federal buildings in the State.

§ 601.3 Applicability of the regulations in this part. Regulations in this part are applicable only to those State Agencies administering State plans, or parts thereof, providing for the vocational rehabilitation of blind persons and desiring to claim Federal reimbursement, under this act, for one-half the necessary expenditures for the acquisi

tion of vending stands and other equipment for the program.

§ 601.4 Plan materials. Federal reimbursement, in accordance with the act and regulations in this part, shall be available only to the extent that such expenditures are made pursuant to the provisions of plan materials approved by the Director, who shall approve plan materials which are found by him to comply with the requirements set forth in the act and regulations in this part and which are determined by him to be feasible and to contain no provisions substantially increasing the costs or impairing the effectiveness of the program.

§ 601.5 Content of plan materials; form, submission and amendments. Plan materials shall follow the main outlines as to form and content indicated in the guide for the submission of plan materials relating to controlled vending stands and business enterprises for the blind, which will be released pursuant to the regulations in this part. The plan materials shall be transmitted over the signature of the duly authorized officer of the State Board and also over the signature of the duly authorized officer of the Agency for the Blind, where the program is administered by such Agency for the Blind, and shall indicate the date of adoption, the effective date, and the fulfillment of any necessary conditions precedent. Amendments shall be similarly submitted as frequently as may be necessary to reflect actual or, where Federal requirements are involved, contemplated changes in any material phase of the program.

§ 601.6 Content of plan materials; coverage. The plan materials shall include descriptions of the material phases of the management, control and operation of the program, including the following:

(a) Pertinent legal provisions relating to the operations of the program and to the authority of the State Agency for its administration.

(b) The organizational structure of the unit of the State Agency and of any public agency or private non-profit corporation serving the blind, utilized by the State Agency for providing necessary ministerial services in connection with the operating phases of the program, including a description of the functions of such unit and of such agency or corporation (together with

copies of the charter and bylaws thereof), and the relationships of such unit to such agency or corporation and to other units of the State Agency.

(c) The standards of personnel administration applicable to all State Agency personnel engaged in the management or control of the program, including job classification and compensation schedules, examination, selection and appointment procedures, and all applicable rules and standards.

(d) The policies, procedures and standards employed in the selection of suitable locations for vending stands and other business enterprises for the program.

(e) The policies, procedures and standards governing the relationship of the State Agency to the operators, including selection, duties, supervision, transfer, financial participation, entitlement to health retirement and other benefits, and training designed to improve their proficiency.

(f) The arrangements made or contemplated for the utilization of the services of public agencies or private nonprofit corporations serving the blind, the agreements with such agencies or corporations and the services to be provided, the procedures for the supervision and control of the services provided by the public agency or corporation and methods used in evaluating services received, the basis for remuneration to such agencies or corporations, and the fiscal controls and accounting procedures.

(g) The policies, procedures and standards for the management, control and operation of the program, including the scope and areas of assistance to and supervision of the operators, the design and purchase of the vending stands and other equipment for the program and the purchase of the stock, merchandise, materials and supplies used, sold or manufactured in the program.

(h) The policies, procedures and standards with respect to the fiscal, statistical and reporting aspects of the program, including sources of funds, procedures and policies relating to the collection, custody, safeguarding and disbursement of the funds used in and derived from the operations of the program, and the accounting, budgeting, auditing and statistical methods employed.

§ 601.7 In-service training. The plan materials shall provide for the establishment of such a system of inservice training for State Agency personnel engaged in the management and control of the program as is necessary to provide such personnel with adequate working knowledge of subjects essential to the efficient fulfillment of their duties.

§ 601.8 Selection of locations. The plan materials shall provide that locations for vending stands and other business enterprises in the program shall be selected in accordance with such standards as are necessary to assure the most productive utilization of the Federal funds granted and the maximum development of economic opportunities for the blind.

§ 601.9 Selection of types of business enterprises. The plan materials shall provide that the types of business enterprises selected for the program shall be such as are determined to be suitable for the most effective utilization of the skills and aptitudes of blind persons in the program and as are set forth in the approved plan materials. They shall also set forth the bases for the selection of enterprises.

§ 601.10 Selection of operators. The plan materials shall provide that the State Agency will select the operators for the program in accordance with such standards and in such manner as may be necessary to assure the operation of the program by blind persons who are in need of such economic opportunities and who are qualified therefor through vocational rehabilitation.

§ 601.11 Vending stands in Federal buildings. The plan materials shall provide that vending stands in Federal buildings shall be established under the program only where the operators thereof have been licensed by the Designated State Licensing Agency and shall be managed, controlled and operated by the State Agency only in accordance with the provisions of the Randolph-Sheppard Act, the regulations promulgated thereunder and the regulations in this part.

§ 601.12 Supervision of operator. The plan materials shall set forth such policies and procedures as are necessary to assure the establishment and maintenance of working relations by the State Agency and the operators to insure sound business practices and designed to protect and foster their economic and social welfare.

§ 601.13 Management, control and operation of the program. The plan materials shall provide that the program shall be managed, operated and controlled by the State Agency in accordance with such sound business principles and practices as are determined to be necessary for the successful operation of each type of enterprise in order to safeguard the social and economic welfare of all blind persons under the program.

§ 601.14 Use of program proceeds. The plan materials shall provide that any program proceeds derived directly or indirectly by the State Agency from the operations of the program shall be retained by or for the benefit of the State Agency in a separate, continuing account. The funds of this account shall be subject to disbursement, under the control and at the direction of the State Agency, for such purposes and only in such manner as may be set forth in the approved plan material. These purposes may include the payment of a pro rata share of the necessary managerial, supervisory and operating expenses, the establishment of a fair minimum return for all operators, the expansion of the program, the preservation and replacement of program assets, and the provision of retirement and other benefits to the operators.

§ 601.15 Utilization of services of public agencies or private nonprofit corporations serving the blind. The plan materials shall provide that if, in the operation of any phase of the program, the State Agency utilizes the services of a public agency or private nonprofit corporation serving the blind, the terms of the agreement between the State Agency and such agency or corporation shall comply with such standards and contain such provisions as are determined to be necessary to insure the retention by the State Agency of full responsibility for the management, control, and operation of all phases of the program and to protect the interests of the operators. The plan materials shall also provide that the State Agency will not enter into any agreement or arrangement with any public or private agency or corporation which will in any way, either directly or indirectly, prejudice, impair, or limit the authority of the State Agency to take any action deemed by it necessary for the proper and efficient management, control, and operation of the program, including all

actions with respect to the selection, placement, and financial participation of the operators and the purchase, utilization, and disposition of program assets.

§ 601.16 Limitation on amount of Federal reimbursement. Federal reimbursement under the act and the regulations in this part shall not exceed one-half the necessary cost of acquisition of vending stands or other equipment for the program: Provided, That such Federal reimbursement shall not exceed $600.00 for any one vending stand or for any one business enterprise irrespective of the number of operators placed in such vending stand or business enterprise.

§ 601.17 Expenditures for which Federal reimbursement is unavailable. Federal funds under the act are available only as set forth in § 601.16 and are not available for reimbursement, directly or indirectly, for the following types of expenditures: The purchase, erection, rental or repair of any building or buildings; the purchase or rental of any land; the payment of any costs incurred in the management, control or operation of the program; the purchase of stock, livestock, materials, merchandise, supplies, heat, light or power; expenditures for the acquisition of vending stands or other equipment for the blind purchased with State funds prior to the submission of approvable plan materials under the regulations in this part, or for payments to individuals for vending stands or other equipment where such individuals will participate in the program.

§ 601.18 State's interest in vending stands and other equipment. The plan materials shall provide that the right and title to and interest in the vending stands and other equipment used in the program will be vested, in accordance with the laws of the State, in the State Agency for use and disposition for program purposes only; Provided, That subject to the provisions of the regulations in this part such right, title and interest may be vested, in accordance with the laws of the State, in a public agency or a private non-profit corporation serving the blind where such corporation or agency has been designated by the State Agency as its nominee to hold such right, title and interest only for program purposes subject to the paramount right of the State Agency to direct and control

the use, transfer and disposition of such vending stands and other equipment.

§ 601.19 Disposition of vending stand and other equipment. With respect to the disposition of vending stand or other equipment used in the program, the plan materials shall provide as follows:

(a) All sales of vending stands and other equipment used in the program shall be made in accordance with applicable State laws, regulations, and standards governing the sale of State-owned equipment. In the absence or inapplicability of State laws, regulations, and standards the plan materials shall provide that the State Agency will secure bids from individuals or dealers in sufficient number to insure receiving the highest possible returns for the articles sold.

(b) When old or obsolete vending stand or other equipment is exchanged as part payment for new equipment, the trade-in allowance accepted by the State Agency for the equipment so exchanged shall be in accordance with applicable State laws, regulations, and standards. In the absence or inapplicability of such State laws, regulations, and standards, the trade-in allowance accepted by the State Agency will be comparable to the allowance customarily made for articles of like character in like condition.

(c) Upon the disposition or use of the vending stand or other equipment for other than program purposes, any proceeds of such disposition or the fair value of vending stand or other equipment which is used for other than program purposes shall be credited to the Federal account in proportion to the Federal participation in the original expenditure for such vending stand or other equipment.

§ 601.20 Maintenance of accounts. The plan materials shall provide for the maintenance by the State Agency of such accounts and supporting documents as (a) will permit an accurate and expeditious determination to be made at any time both of the status of the Federal funds granted for the purposes of the act and of the operation of the program and (b) will provide for each individual operating location at least the minimum of data as indicated in the Accounts Guide released to accompany the regulations in this part.

§ 601.21 Maintenance of inventories. The plan materials shall provide that the