Reported are the rules which the Office for Civil Rights of the Department of Health, Education, and Welfare proposes with regard to nondiscrimination on the basis of handicap in programs and activities receiving or benefiting from federal financial assistance. The proposed rules in Part 84, which effectuates section 504 of the Rehabilitation Act of 1973 as amended by section 111 (a) of the Rehabilitation Act Amendments of 1974, are divided into six major subparts. Subparts A (General Provisions), B (Employment Practices), and C (Program Accessibility) apply to all programs benefiting from federal financial assistance; while the remaining subparts contain more specific requirements and prohibitions applicable to three major types of programs: preschool, elementary, and adult education programs (Subpart D); postsecondary education programs (Subpart E); and health and social service programs (Subpart F). Explained is the fact that the practices of other recipients of funds are subject to the general nondiscrimination provisions. A discussion of the public response to the issues is included, with particular attention given to the comments on the inclusion of mentally restored persons and rehabilitated addicts as beneficiaries of the regulation. (IM)