The below response was prepared by TCDD Public Policy Specialist Linda Logan who is cc’d on this email.

In general the strategy has been to try a variety of approaches at the same time: first, the easiest reach—the few employers in the State Use Program that are being given preferential state contracts yet still paying workers less than minimum wage, i.e., the state cannot be a part of this very obvious inequity; second, the whole state’s involvement in 14(c) programs, involving but largely outside the State Use Program; and third, focusing on youth in keeping with WIOA and a more progressive approach to transition.

Because of family resistance to risking displacement of loved ones from settings that they are used to and provide some opportunity for socialization, even if being paid only pennies on the dollar, it appears to be counterproductive to frame efforts in terms of “getting rid of sheltered workshops.” Instead, the focus has been on wage itself as being inadequate, not a living wage, inequitable, etc., and building a clearer picture of how this change does not mean a loss but an opportunity.

Legislators here are especially inflamed by the comparison of the total dollar value of contracts ($135 million in total, with $7.5 million of that going to the contractor managing the program in 2013, and more than $11 million in 2016) with the parsing out of pennies to people with disabilities.

Some of the events that have converged to be favorable to move forward:

· Employment First and Committee. In 2013 the Texas Legislature adopted the Employment First law and policy and created an advisory committee to help implement it (see attachment, Texas Government Code Sections 531.02447 and 531.02448). The committee expires September 1, 2017, and current proposed legislation would continue it until 2021. The committee’s most recent report recommends phasing out subminimum wages. See https://hhs.texas.gov/sites/hhs/files/employment-first-task-force-biennial-report.pdf

· State Use Program Transfer and Committee. In 2015 the Texas Sunset Advisory Commission recommended sunsetting the Texas Council on Purchasing from People with Disabilities, which was devoted exclusively to administering the State Use Program and staffed by one person. Responsibility for the State Use Program was transferred to the Texas Workforce Commission, responsible for vocational rehabilitation and implementing the Workforce Innovation and Opportunity Act (WIOA). It replaced the council with a committee to advise the workforce commission. In brief,  the Sunset Review Commission found that under the advisory council, the State Use program was not effectively serving people with disabilities. Management of the program was contracted out. Growth in revenues were consistent year over year but the number of opportunities for people with disabilities were actually decreasing. See report to the Texas Legislature at https://www.sunset.texas.gov/public/uploads/files/reports/TCPPD%20Agency%20Section.pdf and final recommendations at https://www.sunset.texas.gov/public/uploads/files/reports/Disability%20Agencies%20Staff%20Report%20with%20Final%20Results_1.pdf

· WIOA Section 511.  In the summer of 2016 Section 511 of the WIOA took effect, with corresponding rules developed by DOE. The required use of at least 15% of the vocational rehabilitation allocation for transition services made new requirements (i.e., pre-employment services and constraints around sheltered workshop subminimum wage settings) within reach. WIOA also helped bring into focus the need for agencies for human services, workforce, and education to work together.

· ACICIEID Final Report. In September 2016 the Advisory Committee on Increasing Competitive Employment (created under WIOA) delivered recommendations that included phasing out 14(c) programs. https://www.dol.gov/odep/topics/pdf/ACICIEID_Final_Report_9-8-16.pdf

· HCBS Settings Rule. During this same general period of time the implementation of the HCBS settings rule put increasing pressure on agency programs to focus on person-centered planning and community integration. Isolated settings offering subminimum wages are not consistent with these goals.

· DOJ settlements. The experiences of Rhode Island and Oregon help to make the case that paying people with disabilities subminimum wages in isolated work settings are a thing of the past.

· Living on a Dime and Left Behind. Disability Rights Texas conducted an investigation in subminimum wage settings which brought the reality of 14(c) programs home. Its report can be found here http://www.disabilityrightstx.org/uploads/Submin_Wage_Sheltered_Workshop_WHITE_PAPER_07_12_16_FINAL.pdf

· 85^th Texas Legislature. Currently only a small number (8) of the 112 programs in the State Use Program pay a total of 410 people subminimum wages (out of approximately 6,000 total in the program). That does not take into account the other 6,000 people being paid subminimum wages in settings that are not part of the State Use Program. So the approach to legislation is tiered.

During this session Texas has three bills to address subminimum wages (see attachments):

o HB2409 focuses on the State Use Program only and the 410 individuals who are being paid subminimum wages pursuant to state contracts.

o HB2732 - The comprehensive bill would phase out all 14(c) programs by September 1, 2024. This bill is based on the bill that passed in Maryland in spring of 2016. It also requires a study of the numbers and circumstances of people with disabilities who are paid at least minimum wage but who are not being paid the prevailing wage for the services performed. This is a second tier of concern that also needs to be addressed.

o SB 2177 – This bill is directed at improving transition services for students in special education also has sections that require the workforce commission and education agency to develop an MOU and to observe the WIOA Section 511 constraints on placing students and any other person in subminimum wage settings.

Thanks,

********

Jessica A. Ramos, MSSW

Public Policy Director

Texas Council for Developmental Disabilities

6201 East Oltorf, Suite 600 | Austin, Texas 78741

P: 512.437.5417 | C: 512.423.7050

xxxxxx@tcdd.texas.gov | www.tcdd.texas.gov