Complex Discovery Legal And Regulatory Aspect Of E Health (Eu)
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Complex Discovery Legal And Regulatory Aspect Of E Health (Eu) Complex Discovery Legal And Regulatory Aspect Of E Health (Eu) Document Transcript

  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45545 EPA APPROVED REGULATIONS IN THE TEXAS SIP—Continued State ap- State citation Title/subject proval/sub- EPA approval date Explanation mittal date * * * * * * * Subchapter C—Vehicle Inspection and Maintenance; Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program; and Early Action Compact Counties Division 3: Early Action Compact Counties Section 114.80 ...... Applicability ................................... 11/17/04 8/8/05 [Insert FR page number where document begins]. Section 114.81 ...... Vehicle Emissions Inspection Re- 11/17/04 8/8/05 [Insert FR page number quirements. where document begins]. Section 114.82 ...... Control Requirements ................... 11/17/04 8/8/05 [Insert FR page number Subsection 114.82(b) is NOT part where document begins]. of the approved SIP. Section 114.83 ...... Waivers and Extensions ............... 11/17/04 8/8/05 [Insert FR page number where document begins]. Section 114.84 ...... Prohibitions ................................... 11/17/04 8/8/05 [Insert FR page number where document begins]. Section 114.85 ...... Equipment Evaluation Procedures 11/17/04 8/8/05 [Insert FR page number for Vehicle Exhaust Gas Ana- where document begins]. lyzers. Section 114.86 ...... Low Income Repair Assistance 11/17/04 8/8/05 [Insert FR page number Program (LIRAP) for Partici- where document begins]. pating Early Action Compact Counties. Section 114.87 ...... Inspection and Maintenance Fees 11/17/04 8/8/05 [Insert FR page number where document begins]. * * * * * * * [FR Doc. 05–15607 Filed 8–5–05; 8:45 am] SUPPLEMENTARY INFORMATION: Section Part 1611 (67 FR 70376).1 Futher action BILLING CODE 6560–50–P 1007(a) of the Legal Services on the rulemaking was suspended, in Corporation Act requires LSC to deference to a request by Representative establish guidelines, including setting James Sensenbrenner, Chairman of the LEGAL SERVICES CORPORATION maximum income levels, for the U.S. House of Representatives Judiciary determination of applicants’ financial Committee, that LSC suspend action on 45 CFR Part 1611 eligibility for LSC-funded legal the rulemaking pending the assistance. Part 1611 implements this confirmation of new LSC Board of Financial Eligibility Directors members appointed by provision, setting forth the requirements AGENCY: Legal Services Corporation. President Bush. relating to determination and After the confirmation of nine new ACTION: Final rule. documentation of client financial board members and the appointment of eligibility. Part 1611 also sets forth a new LSC President, the reconstituted SUMMARY: The Legal Services requirements related to client retainer Operations and Regulations Committee Corporation (‘‘LSC’’ or ‘‘Corporation’’) is amending its regulations relating to agreements. resumed consideration of the Part 1611 financial eligibility for LSC-funded legal Procedural Background rulemaking in early 2004. At the services and client retainer agreements. meeting of the full Board of Directors on The revisions are intended to reorganize On June 30, 2001, LSC initiated a April 30, 2005, the Board approved the the regulation to make it easier to read Negotiated Rulemaking and appointed a republication of a revised NPRM for and follow; simplify and streamline the Working Group comprised of public comment. That NPRM was requirements of the rule to ease representatives of LSC (including the published on May 24, 2005 (70 FR administrative burdens faced by LSC Office of Inspector General), the 29695). recipients in implementing the National Legal Aid and Defenders LSC received thirteen (13) comments regulation and to aid LSC in Association, the Center for Law and on the NPRM, including nine comments enforcement of the regulation; and to from individual LSC grant recipients, Social Policy, the American Bar clarify the focus of the regulation on the one comment from a senior attorney Association’s Standing Committee on financial eligibility of applicants for with a recipient commenting in his Legal Aid and Indigent Defendants and personal capacity, one comment from a LSC-funded legal services. a number of individual LSC recipient DATES: This final rule is effective member of the public, and comments programs. The Negotiated Rulemaking from the Center for Law and Social September 7, 2005. Working Group met three times Policy on behalf of the National Legal FOR FURTHER INFORMATION CONTACT: throughout 2002 and developed a Draft Aid and Defenders Association, and the Mattie C. Condray, Senior Assistant Notice of Proposed Rulemaking (NPRM) American Bar Association’s Standing General Counsel, Office of Legal Affairs, which was the basis for the NPRM Committee on Legal Aid and Indigent Legal Services Corporation, 3333 K. St., published by LSC on November 22, NW., Washington, DC 20007–3522; 2002 proposing significant revisions to 1 For additional discussion of the Negotiated (202) 295–1624 (phone); (202) 337–6519 Rulemaking Working Group, see 67 FR 70376 (fax); mcondray@lsc.gov. (e-mail). (November 22, 2002). VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 45546 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations Defendants. With minor exceptions merely a threshold question and the that this Part also sets forth financial (discussed in greater detail below), the issue of whether any otherwise eligible standards for groups seeking legal commenters strongly supported the applicant will be provided with legal assistance supported by LSC funds. proposed revisions. Upon receipt of the assistance is a matter for the recipient to Finally, LSC is adding a reference to the comments, LSC prepared a Draft Final determine with reference to its priorities retainer agreement requirement in the Rule discussing the comments and and resources. In addition, this part purpose section to provide a notice at making permanent the proposed does not address eligibility based on the beginning of the regulation that this revisions. The Draft Final Rule was citizenship or alienage status; those subject is included in Part 1611. LSC considered by the Operations and eligibility requirements are set forth in received several comments specifically Regulations Committee of the Board of Part 1626 of LSC’s regulations, supporting and no comments objecting Directors at its meeting of July 28, 2005, Restrictions on Legal Assistance to to these changes. LSC adopts the and the Final Rule was adopted by the Aliens. Finally, LSC received one revisions as proposed. Board of Directors at its meeting of July comment suggesting that because this Section 1611.2—Definitions 30, 2005. Part contains LSC’s requirements pertaining to when and how recipients LSC is adding definitions for several Revisions to Part 1611 terms and amending the definitions for must execute retainer agreements with While specific revisions are discussed clients (a subject not directly related to each of the existing terms currently in greater detail in the Section-by- financial eligibility determinations), that defined in the regulation. LSC believes Section analysis below, it should be the title of this Part should refer to that the new definitions and the noted that the revisions reflect several retainer agreements. While the amended definitions will help to make overall goals of the original Negotiated requirements for retainer agreements are the regulation more easily Rulemaking Working Group: included in this Part, it primarily comprehensible. Reorganization of the regulation to make addresses financial eligibility and LSC Section 1611.2(a)—Advice and Counsel it easier to read and follow; disagrees that retainer agreements simplification and streamlining of the LSC is adding a definition of the term should be specifically included in the requirements of the rule to ease ‘‘advice and counsel’’ as that term title of this Part. administrative burdens faced by LSC appears in proposed section 1611.9, recipients in implementing the Section-by-Section Analysis Retainer Agreements. Under the new regulation, facilitate compliance and aid definition, ‘‘advice and counsel’’ is Section 1611.1—Purpose LSC in enforcement of the regulation; defined as limited legal assistance that and clarification of the focus of the LSC is revising this section to make involves the review of information regulation on the financial eligibility of clear that the standards of this part relevant to the client’s legal problem(s) applicants for LSC-funded legal services concern only the financial eligibility of and counseling the client on the as an issue separate from decisions on persons seeking LSC-funded legal relevant law or action(s) to take to whether to accept a particular client for assistance and that a finding of financial address the legal problem(s). Advice service. In particular, LSC is eligibility under Part 1611 does not and counsel does not encompass significantly reorganizing and create an entitlement to service. In drafting of documents or making third- simplifing the sections of the rule which addition, LSC is removing the language party contacts on behalf of the client. set forth the various requirements in the current regulation referring to Thus, for example, advising a client of relating to establishment of recipient giving preferences to ‘‘those least able to what notice a landlord is required to annual income and asset ceilings, obtain legal assistance.’’ Although the provide to a tenant before evicting the authorized exceptions and original LSC Act contained language tenant would fall under ‘‘advice and determinations of eligibility. These indicating that recipients should counsel,’’ but making a phone call to a changes are intended to clarify the provide preferences in service to the landlord to prevent the landlord from regulation and include substantive poorest among applicants, that language evicting a tenant would not be changes to make intake simpler and less was deleted when the Act was considered ‘‘advice and counsel.’’ burdensome and render basic financial reauthorized in 1977 and has remained Several commenters specifically eligibility determinations easier for out of the legislation ever since. supported this proposed definition, and recipients to make. LSC is also moving Moreover, section 504(a)(9) of the FY no commenters opposed the proposed the existing provisions on group 1996 appropriations act, Public Law definition. Accordingly, LSC adopts the representation, with some amendment, 104–134 (incorporated by reference in definition as proposed. to a separate section of the regulation. the current appropriations act and Three of the commenters who Finally, LSC is simplifying and implemented by regulation at 45 CFR specifically supported this proposed clarifying the retainer agreement Part 1620) provides that recipients are to definition did express a concern, requirement. make service determinations in however, about the statement in the accordance with written priorities, preamble to the NPRM in which LSC Title of Part 1611 which take into account factors other stated that LSC anticipates that advice LSC is changing the title of Part 1611 than the relative poverty among and counsel will generally be from ‘‘Eligibility’’ to ‘‘Financial applicants. Thus, as there is no statutory characterized by a one-time or very Eligibility.’’ This change is intended, basis for a preference for those least able short term relationship between the first, to make clear that with respect to to afford assistance and because LSC attorney and the client. These individuals seeking LSC-funded legal believes that the regulation should focus commenters noted that there are any assistance, the standards of this part on financial eligibility determinations number of situations in which a deal only with the financial eligibility of without reference to issues relating to recipient attorney has to do some such persons. LSC believes this change determinations by a recipient to provide research in order to properly advise a will help clarify that a finding of services to a particular applicant, LSC client or in which the attorney provides financial eligibility under Part 1611 has determined that such language advice and counsel to a client on a does not create an entitlement to should be removed from the regulation. limited number of occasions, but over a service. Rather, financial eligibility is LSC is also adding language specifying somewhat extended period of time. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45547 These commenters suggested deleting the financial eligibility of persons the terms ‘‘liquid’’ and ‘‘non-liquid’’ any reference to an anticipated time seeking legal assistance supported with should be eliminated and that the period in relation to the intended LSC funds, LSC has decided to use the regulation should focus instead on the meaning of ‘‘advice and counsel.’’ term ‘‘applicant’’ throughout the ready convertibility of the asset to cash. The use of the word ‘‘generally’’ in regulation to emphasize the distinction The other key concept in the the sentence the commenters objected to between applicants, clients, and persons definition of asset is the availability of was intended to convey that LSC is seeking or receiving assistance the resource to the applicant. Although aware that there are circumstances in supported by other than LSC funds. the current regulation notes that the which a case would qualify as ‘‘advice Accordingly, LSC is adding a definition recipient’s asset guidelines ‘‘shall take and counsel’’ notwithstanding that the of applicant providing that an applicant into account impediments to an advice and counsel may be provided is an individual seeking legal assistance individual’s access to assets of the over a somewhat extended time period. supported with LSC funds. Groups, family unit or household,’’ the Working Nonetheless, it is the case that many, if corporations and associations are Group was of the opinion that this not most, advice and counsel cases specifically excluded from this principle could be more clearly involve a short-term relationship definition, as the eligibility of groups is articulated. LSC believes that the between the attorney and the client. addressed wholly within section 1611.6. proposed language accomplishes that Even if the attorney must do some Recipients currently may provide purpose. research prior to providing advice, LSC legal assistance without regard to a LSC received numerous comments does not expect that the need to do person’s financial eligibility under Part specifically supporting the proposed research will create a relationship 1611 when the assistance is supported definition of assets. LSC, however, also which extends for a significant period of wholly by non-LSC funds. LSC is not received one comment expressing time in most cases. Indeed, part of the changing this (in fact, this principle is concern that defining assets as resources justification for exempting advice and restated in section 1611.4(a)) and ‘‘readily convertible to cash’’ could counsel cases from the retainer believes that the use of the term preclude recipients from deeming all agreement requirement has been the fact applicant as adopted herein will help to non-primary residence real estate as an that such relationships are of generally clarify the application of the rule. asset and require a more lengthy inquiry short duration, such that requiring the LSC received no comments objecting into the property’s ready convertibility recipient to ensure an executed retainer to these changes and adopts the to cash. LSC notes at the outset that agreement is obtained may take longer revisions as proposed. under the current rules, recipients are than the time it takes for the attorney to already required to ‘‘take into account Section 1611.2(d)—Assets provide the advice and counsel to the impediments’’ to access to the client. If, instead, it was the case that LSC is adding a definition of the term resources. Thus, to the extent that the advice and counsel cases typically last assets to the regulation. The new monetary value of a particular for a long time, the opportunity to definition, ‘‘cash or other resources that applicant’s real property is not available obtain retainer agreements would not be are readily convertible to cash, which to an applicant, recipients should lacking. Thus, LSC continues to are currently and actually available to already be taking that inaccessibility anticipate that in most cases ‘‘advice the applicant,’’ is intended to provide into account in reviewing the and counsel’’ will be characterized by a some guidance to recipients as to what applicant’s resources. Nonetheless, LSC one-time or short term relationship is meant by the term assets, yet provide believes that recipients currently have between the attorney and the client, but considerable latitude to recipients in sufficient discretion to establish a recognizes that this may not always be developing a description of assets that rebuttable presumption that an the case. Whether a particular case addresses local concerns and applicant’s non-primary residence real meets the definition of ‘‘advice and conditions. The key concepts intended property is a resource readily counsel’’ or not will continue to be in this definition are (1) ready convertible to cash and countable determined on a case-by-case basis, convertibility to cash; and (2) toward the recipient’s asset ceiling and considering the facts and circumstances. availability of the resource to the also to determine that a particular piece applicant. of property is not readily convertible to Section 1611.2(b)—Applicable Rules of Although the term is not defined in cash and, as such, should not be Professional Responsibility the regulation, current section 1611.6(c) considered a resource available to the LSC is adding a definition of the term states that ‘‘assets considered shall applicant for the purpose of the asset ‘‘applicable rules of professional include all liquid and non-liquid assets ceiling. Nothing in the rule being responsibility’’ as that term appears in * * *’’ The intent of this requirement is adopted today disturbs that discretion. proposed sections 1611.8, Change in that recipients are supposed to consider Accordingly, LSC adopts the definition Financial Eligibility Status and 1611.9, all assets upon which the applicant as proposed. Retainer Agreements. This definition is could draw in obtaining private legal assistance. While there was no intent to Section 1611.2(e)—Brief Services intended to make clear that the references in the regulation refer to the change the underlying requirement, in LSC is adding a definition of the term rules of ethics and professional discussing the issues of assets and asset ‘‘brief services’’ as it is used in section responsibility applicable to attorneys in ceilings in the Working Group it became 1611.9, Retainer Agreements. LSC notes the jurisdiction where the recipient apparent that the terms ‘‘liquid’’ and that brief services is legal assistance either provides legal services or ‘‘non-liquid’’ were obscuring characterized primarily by being maintains its records. LSC received no understanding of the regulation. To distinguishable from both extended comments objecting to this definition some, the term ‘‘non-liquid’’ implied service and advice and counsel. Under and adopts the definition as proposed. something not readily convertible to the new definition, brief service is the cash, while to others the term implied performance of a discrete task (or tasks) Section 1611.2(c)—Applicant an asset that was simply something which are not incident to continuous Consistent with the intention to keep other than cash, without regard to the representation in a case but which the focus of the regulation on the ease of converting the asset to cash. involve more than the mere provision of standards and criteria for determining Thus, the Working Group agreed that advice and counsel. Examples of brief VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1 View slide
  • 45548 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations services include activities such as the Section 1611.2(g)—Governmental LSC received one comment drafting of documents or personalized Program for Persons With Disabilities specifically supporting the change from assistance with the completion of LSC is adding a definition of the term ‘‘household or family unit’’ to pleadings being prepared and filed by ‘‘governmental program for persons ‘‘household.’’ This commenter pro se litigants, and making limited with disabilities.’’ LSC is including in suggested that the change would third-party contacts on behalf of a client the authorized exceptions to the annual provide ‘‘more flexibility’’ to recipients. over, in most instances, a short time income ceilings an exception relating to LSC notes that the change in the period. applicants seeking to obtain or maintain terminology used in the regulation in govermental benefits for persons with this instance is not creating any LSC received two comments substantive change. As noted above, specifically supporting the proposed disabilities. Accordingly, it is appropriate to include a definition for recipients already have considerable definition. LSC received one comment discretion and flexibility to determine noting that the proposed definition does this term. The definition, ‘‘any Federal, State or local program that provides the scope of an applicant’s household; not address the relative simplicity or the change in terminology being brevity of documents which may be benefits of any kind to persons whose eligibility is determined on the basis of adopted with this final rule neither drafted by a recipient within the scope increases nor decreases that discretion of brief service. This commenter was mental and/or physical disability,’’ is intended to be similar in structure and and flexibility. LSC adopts the change concerned that the definition was in terminology as proposed. application to the definition of the term contrary to the Case Service Reporting Throughout the course of the ‘‘governmental program for low income (CSR) definition of ‘‘brief services.’’ This individuals and families.’’ LSC received rulemaking field representatives have commenter suggested changing the no comments objecting to the proposed suggested deleting the words ‘‘before definition or adding a statement that the definition and adopts the definition as taxes’’ from the definition of income. definition in the regulation should not proposed. Five commenters reiterated this position apply to the CSR. LSC notes that this in comments on the NPRM, while one definition of ‘‘brief services’’ is, while Section 1611.2(h)—Income commenter specifically opposed not identical, specifically intended to be LSC is revising the current definition deleting ‘‘before taxes’’ from the fully consistent with the definition of of income to refer to the total cash definition of income. Such a change is ‘‘brief services’’ in the CSR. As such, receipts of a ‘‘household,’’ instead of a desirable, the proponents contend, LSC disagrees that the definitions are ‘‘family unit’’ and to make clear that because automatically deducted taxes inconsistent and LSC adopts the recipients have the discretion to define are not available for an applicant’s use definition as proposed. the term household in any reasonable and the failure to take current taxes into manner. Currently, the definition of account in determining income has an Section 1611.2(f)—Extended Service income refers to ‘‘family unit,’’ while adverse impact on the working poor. the phrase ‘‘household or family unit’’ While it is undoubtedly true that LSC is adding a definition of the term automatically deducted taxes are not ‘‘extended service’’ as that term is used appears in the section on asset ceilings. It appears that there is no difference available to an applicant, LSC agrees in section 1611.9, Retainer Agreements. with the other commenter that the intended by the use of different terms in As defined, extended service means definition of income is not the these sections and LSC believes that it legal assistance characterized by the appropriate place in the regulation to is appropriate to simplify the regulation performance of multiple tasks incident to use the same single term in each deal with this issue. to continuous representation in which provision, without creating a Taking the phrase ‘‘before taxes’’ out the recipient undertakes responsibility substantive change in the meaning of of the definition of income would for protecting or advancing the client’s either term. LSC has decided to use effectively change the meaning of interests beyond advice and counsel or ‘‘household’’ instead of ‘‘family unit’’ income from gross income to net income brief services. Examples of extended because it is a simpler, more after taxes. The term income has meant service include representation of a understandable term. gross income since the original adoption client in litigation, administrative As noted above, LSC does not intend of the financial eligibility regulation in adjudicative proceeding, alternate the use of the term ‘‘household’’ to have 1976. See 41 FR 51604, at 51606, dispute resolution proceeding, or a different meaning from the current November 23, 1976. The maximum extended negotiations with a third term ‘‘family unit.’’ Under current income guidelines are based on the party. LSC received no comments guidance from the LSC Office of Legal Department of Health and Human objecting to the proposed definition and Affairs, recipients have considerable Services (DHHS) Federal Poverty adopts the definition as proposed. latitude in defining the term ‘‘family Guidelines amounts. DHHS’’ Federal unit.’’ Specifically, OLA External Poverty Guidelines are, by law, based on Section 1611.2(f)—Governmental Opinion No. EX–2000–1011 states: the Census Bureau’s Federal Poverty Program for Low Income Individuals or Thresholds, which are calculated using Neither the LSC Act nor the LSC Families gross income before taxes. 42 U.S.C. regulations define ‘‘family unit’’ for client eligibility purposes. The Corporation will 9902(2); Office of Management and LSC is changing the term that is used Budget Directive No. 14 (May 1978). defer to recipient determinations on this in the regulation from ‘‘governmental issue, within reason. Recipients may Changing the definition of income program for the poor’’ to ‘‘governmental consider living arrangements, familial effectively from gross to net after taxes program for low income individuals and relationships, legal responsibility, financial would introduce two different uses of families.’’ This change is not intended responsibility or family unit definitions used the term income into the regulations to create any substantive change in the by government benefits agencies, amongst (one use in the income guidelines current definition, but merely reflect other factors, in making such decisions. published annually by LSC in Appendix preferred nomenclature. LSC received LSC intends that this standard would A to Part 1611 and another use in the no comments objecting to this change also apply to definitions of ‘‘household’’ text of the regulation). This is and adopts the revision as proposed. and the definition makes this clear. problematic in two ways. 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  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45549 First, with respect to the annual None of the comments supporting Indian trusts from being considered income ceiling limits, unilaterally removal of ‘‘before taxes’’ from the income for the purpose of determining changing the standard from gross to net definition of income addressed the financial eligibility of Native American income after taxes would arguably problems discussed above. Moreover, applicants for service, and that such exceed LSC’s authority. LSC is required LSC believes that the practical problem funds or interests of individual Native by the LSC Act to set its maximum (that taxes, indeed, are funds Americans in trust or restricted lands income guidelines in consultation with unavailable to the applicant), is better should not be considered as a resource the Office of Management and Budget addressed by treating taxes as a separate for the purpose of LSC financial and the Governors of the states. 42 factor which can be considered by the eligibility. See LSC Office of Legal U.S.C. 2996f(a)(2)(A). The annual recipient in making financial eligibility Affairs External Opinion 99–17, August income ceiling agreed to by LSC, OMB determinations. (This matter is 27, 1999. and the Governors (set at 125% of the presented in greater detail in the As noted in External Opinion 99–17, Federal Poverty Guidelines amounts) discussion of section 1611.5, below.) the exclusion applies only to funds and was arrived at based on gross income; Further, although LSC does not consider other interests held in trust by the changing to a net income after taxes defining income as gross income (rather federal government and investment standard would effectively increase the than net after taxes) as presenting any income accrued therefrom. The annual ceiling amounts beyond what ‘‘apparent preference’’ for non-working following have been found to qualify for was agreed. LSC is concerned that it applicants, permitting current taxes to the exclusion from income in could only undertake such an action in be a factor to be considered by the determining eligibility for various consultation with OMB and the recipient in making financial eligibility government benefits: income from the Governors, which consultation has not determinations eliminates any such sale of timber from land held in trust; happened. apparent preference that may be income derived from farming and Second, adopting a net income after perceived as existing. Accordingly, LSC ranching operations on reservation land taxes standard would, as one declines to remove the words ‘‘before held in trust by the federal government; commenter noted, increase the upper taxes’’ from the definition of income. income derived from rentals, royalties, income limit as well. This would have In addition, LSC is moving the and sales proceeds from natural the effect of further increasing the information on what is encompassed by resources of land held in trust; sales potential eligible applicant pool. the term ‘‘total cash receipts’’ into the proceeds from crops grown on land held Although LSC believes that the slight definition of income. LSC believes that in trust; and use of land held in trust for increase in the eligible applicant pool having this information in the definition grazing purposes. On the other hand, which will result from increasing the of income, rather than in a separate per capita distributions of revenues upper income limit from 187.5% to definition will make the regulation from gaming activity on tribal trust 200% of the Federal Poverty Guidelines easier to understand, particularly as the property are not protected because such amounts is justifiable (see discussion of term ‘‘total cash receipts’’ is used only funds are not held in trust by the federal section 1611.5, below), LSC is in the definition of income. In government. Thus, such distributions concerned that an additional increase in incorporating the language on ‘‘total are considered to be income for the eligible applicant pool is not cash receipts,’’ LSC is retaining the purposes of determining LSC financial necessary to effectively deal with the current definition of the term without eligibility. practical problem that taxes, indeed, any substantive amendment, but Total Cash Receipts represent funds unavailable to the reorganizing it to make it easier to applicant. understand. Specifically, LSC is LSC is deleting the definition of ‘‘total It was suggested in several comments separating the definition into two cash reciepts,’’ currently at section that adopting a net income after taxes sentences, one of which sets forth those 1611.2(h), as a separately defined term standard is preferable because it would things which are included in total cash in the regulation. Rather, LSC has be easier for recipients as they would receipts and one which sets forth those reorganized the information contained only have to consider ‘‘take home pay’’ things which are specifically excluded in the definition and moved it directly in computing income at intake. from the definition of total cash into the definition of ‘‘income.’’ As However, as one commenter noted, take receipts. It is worth noting that the list noted above, the only place the term home pay is often not simply pay net of of items included is not intended to be ‘‘total cash reciepts’’ is used is in the taxes; there are other deductions from exhaustive, while the list of items to be defintion of ‘‘income’’ and LSC believes gross pay which an applicant could excluded is intended to be exhaustive. that having a separate definition for have (e.g., 401(k) deductions, medical LSC received no comments objecting to ‘‘total cash reciepts’’ is cumbersome and savings account deductions, insurance these changes and adopts the revisions unnecessary. LSC received no premium deductions, child support, as proposed. comments objecting to this change and garnishments). In such cases, the Finally, LSC wishes to restate in this adopts the revision as proposed. recipient would not be able to simply preamble guidance on the treatment of determine that income equaled take Indian trust fund monies in making Section 1611.3—Financial Eligibility home pay, but would have to identify income determinations. Several Policies and add amounts for such deductions provisions of Federal law regulate LSC is creating a new section 1611.3, from gross pay back in when whether or not income or interests in Financial Eligibility Policies, based on determining the applicant’s income. In Indian trusts are taxable or should be requirements currently found in addition, some, but not all, of such other considered as resources or income for sections 1611.5(a), 1611.3(a)–(c) and deductions from pay could qualify as federal benefits. See 25 U.S.C. 1407– 1611.6. The comments generally factors under the allowable exceptions 1408; 25 U.S.C. 117a–117c. Under the supported these revisions, although LSC to the annual income ceiling amounts. terms of those laws, LSC has determined received a few comments suggesting LSC is concerned that this would add that recipients may disregard up to some changes to what was proposed. confusion in the income determination $2000 per year of funds received by LSC adopts the revisions as proposed, process, contrary to the intent of this individual Native Americans that are with certain amendments, as discussed rulemaking. derived from income or interests in below. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00027 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 45550 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations The new section 1611.3 addresses in respect to assets of domestic violence the Working Group discussions and in one section recipients’ responsibilities victims jointly held with their abusers, comments to the November 2002 NPRM, for adopting and implementing financial this requirement applies when the that the list of excludable assets should eligibility policies. Under the new applicant has made the recipient aware be illustrative, rather than exhaustive. section, the current requirement that that he or she is a victim of domestic The commenters argue that having an recipients’ governing bodies have to violence. illustrative rather than an exhaustive list adopt policies for determining financial In addition, this section permits will provide recipients with greater eligibility is retained. However, LSC is recipients to adopt financial eligibility flexibility in developing asset policies changing the current requirement for an policies which provide for authorized and note that many recipients already annual review of these policies and exceptions to the annual income ceiling exclude certain other assets. instead will now require recipients’ pursuant to section 1611.5 and for Commenters alternatively suggested governing bodies to conduct triennial waiver of the asset ceiling for an some specific assets be added to the list, reviews of policies. The Working Group applicant in a particular case under such as household furnishings, agreed that an annual review was unusual circumstances and when computers, and such assets which are unnecessary and has tended to result in approved by the Executive Director or excluded from other governmental rather pro forma reviews of policies. his/her designee. Finally, LSC will benefit programs for which the LSC believes that a triennial review permit recipients to adopt financial applicant is eligible. A few comments requirement will be sufficient to ensure eligibility policies which permit also specifically suggested that the that financial eligibility policies remain financial eligibility to be established by exclusion for vehicles should not be relevant and will encourage a more reference to an applicant’s receipt of limited to vehicles needed for work. thorough and thoughtful review when benefits from a governmental program One of these commenters noted that the such review is undertaken. The section for low-income individuals or families Social Security Administration has also adds an express requirement that consistent with section 1611.4(b). recently changed its rules on eligibility recipients adopt implementing These provisions are, with two for Supplemental Security Income (SSI) procedures. While this is already exceptions, based directly on current to exclude from an SSI applicant’s implicit in the current regulation, LSC requirements with a few substantive assets one vehicle used for believes it is preferable for this changes. First among the changes, transportation, without specific regard requirement to be expressly stated. Such recipients will no longer be required to to the particular transportation use (as implementing procedures may be routinely submit their asset ceilings to was previously the case), provided it is adopted either by a recipient’s LSC. This requirement appears to serve not strictly a recreational vehicle such governing body or by the recipient’s little or no purpose, as compliance with as a dune buggy. See 70 FR 6340, at this requirement has been spotty and 6342–43 (February 7, 2005). management. LSC received several LSC has taken no action to obtain the LSC believes that some of the comments supporting these changes and information from recipients which have comments indicate that LSC was not no comments objecting to them. not automatically submitted it. clear in the NPRM about the Accordingly, LSC adopts the revisions Moreover, the information collected is relationship between the asset ceiling as proposed. not being put to any routine use. In adopted by a recipient and the list of Section 1611.3 also contains certain addition, LSC has not had a parallel excludable items. Under the current minimum requirements for the content requirement for the submission of regulation recipients are required to of recipient’s financial eligibility income ceilings. LSC has determined adopt asset ceilings based on the policies. Specifically, LSC is requiring that this requirement can be eliminated economy and the relative cost of living that the recipient’s financial eligibility without any adverse effect on program in the service area. Recipients are also policy must: compliance with or Corporation to take into account special needs of the • Specify that only applicants for enforcement of the regulation. LSC elderly, institutionalized and persons service determined to be financially received several comments supporting with disabilities, along with the eligible under the policy may be further this change and no comments objecting reasonable equity value in work-related considered for LSC-funded service; to it. Accordingly, LSC adopts the equipment used to provide income. • Establish annual income ceilings of revision as proposed. Implicit in the requirement is the no more than 125% of the current Another substantive change is that expectation that the recipient will set its DHHS Federal Poverty Guidelines recipients will be permitted to provide ceiling at a level as to cover the value amounts; in their financial eligibility policies for of such things as household furnishings, • Establish asset ceilings; and the exclusion of (in addition to a clothing and other personal affects of • Specify that, notwithstanding any primary residence, as provided for in applicant (and members of applicant’s other provisions of the regulation or the the existing regulation) vehicles used for households) and other such assets as recipient’s financial eligibility policies, transportation, assets used in producing applicants may reasonably be expected in assessing the financial eligibility of income (such as a farmer’s tractor or a to have without liquidating in the an individual known to be a victim of carpenter’s tools) and other assets attempt to secure legal assistance. Once domestic violence, the recipient shall excluded from attachment under State the asset ceiling has been set, the consider only the income and assets of or Federal law from the calculation of recipient is expected to consider all of the applicant and shall not consider any assets. In identifying other assets the applicant’s assets against that assets jointly held with the abuser. excluded from attachment under State ceiling, except for the value of a In establishing income and asset or Federal law, LSC has in mind assets principle residence. The exclusion of a ceilings, the recipient will have to that are excluded from bankruptcy principle residence is intended to consider the cost of living in the proceedings or other assets that may not ensure that homeowners do not exceed locality; the number of clients who can be attached for the satisfaction of a debt, the asset ceiling just on the value of the be served by the resources of recipient; etc. home. the potentially eligible population at Most of the comments received With the NPRM, LSC proposed to various ceilings; and the availability of reiterated the position that field allow recipients to exclude from the other sources of legal assistance. With representatives had expressed during asset computation a limited number of VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00028 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45551 additional assets which would be likely assets excludable under all benefits Part 1611. Nevertheless, this provision to cause an applicant to exceed the program for low-income individuals, the of law applies regardless of whether it applicable asset ceiling without relative national consistency which LSC appears in the regulation. However, liquidation of that or other significant believes is important would be incorporating this language into the household assets. As such, LSC impeded. As noted above, LSC believes regulation is appropriate, particularly in continues to prefer to retain the that the revised language does afford light of the goal of this rulemaking to approach in the current regulation in recipients sufficient additional clarify the requirements relating to which the list of excludable assets is set flexibility in developing asset ceiling financial eligibility determinations.2 forth in toto. LSC believes that this policies. LSC received one comment asking approach emphasizes the policy that As noted above, LSC is changing the whether this proposal means that the most assets are to be considered and asset ceiling waiver standard slightly. financial eligibility of an applicant who maintains a basic level of consistency The current regulation permits waiver is the victim of domestic violence is to nationally with respect to this issue. in ‘‘unusual or extremely meritorious be determined solely on the basis of the LSC continues to expect that recipients situations;’’ the new rule permits waiver applicant’s income and assets, without will set asset ceilings and asset ceiling in ‘‘unusual circumstances.’’ The regard to the income and assets of other waiver policies so as to permit Working Group determined that the members of the household (beyond the applicants to have reasonable amounts current language is unnecessarily alleged perpetrator of the domestic of assets which will not count against stringent and that it is unclear what the violence). LSC intended that the income them in eligibility determinations and difference is intended to be between of the alleged perpetrator and assets believes that the new language does ‘‘unusual’’ and ‘‘extremely meritorious.’’ jointly held by the applicant with the afford recipients some additional It was suggested in the Working Group alleged perpetrator must be disregarded flexibility in developing asset ceilings, that the standard should be ‘‘where in assessing the financial eligibility of consistent with the policy articulated appropriate.’’ LSC, however, felt that the the applicant, but that income and above particularly in light of the regulation should continue to reflect the assets not jointly held with the alleged amendment to the asset ceiling waiver policy that waivers of the asset ceilings perpetrator of other members of the standard discussed below. should only be granted sparingly and household (as defined by the recipient) Turning to comments on the specific not as a matter of course. The Working would have to be considered in the proposed excludable assets, LSC agrees Group agreed that the revised language financial eligibility assessment. LSC that it is neither necessary nor desirable accomplishes this goal, while providing acknowledges that the language of the to restrict the exclusion for vehicles to some additional appropriate discretion statute (and LSC’s originally proposed those used for work only. There are to recipients. In addition, where the implementation thereof) could be read many situations in which a vehicle is an current rule requires all waiver so as to suggest that only the applicant’s applicant’s only reliable, accessible decisions to be made by the Executive individual income and assets may be method of transportation for vital life Director, LSC proposed to permit those counted. However, LSC believes that activities other than work, such as decisions to be made by the Executive such a reading would require a education and training activities, Director or his/her designee. LSC substantive change to the financial reaching medical appointments, grocery believes it is important that a person in eligibility requirements that Congress shopping, transporting children to significant authority be involved in did not intend. school or activities, etc. As such, it is making asset ceiling waiver decisions, At the time of adoption of section 506, reasonable to consider such vehicles as but recognizes that, especially as more the regulation permitted recipients to among the significant assets that a recipients have consolidated and now take into account an applicant’s ability recipient should be able to own and not serve larger areas, it is important for to access certain assets (including assets have counted towards the applicant’s recipients to have the discretion to of alleged perpetrators of domestic applicable asset ceiling. Accordingly, delegate certain authority to regional or violence) and permitted recipients to LSC is amending the language in branch office managers or directors to consider the applicant’s lack of access to proposed 1611.2(d)(1) which read increase administrative efficiency. LSC the alleged perpetrator’s income as an ‘‘vehicles required for work’’ and received several comments supporting ‘‘other significant factor related to the adopting instead the language ‘‘vehicles this change and no comments objecting inability to afford legal assistance.’’ 45 required for transportation.’’ Under this to it. Accordingly, LSC adopts the CFR 1611.6(d); 1611.5(b)(1)(E). formulation, the value of vehicles which revision as proposed. However, in some cases, the victim’s are not used for transportation, such as The first totally new element is the household income including the income vehicles used purely for recreational language regarding victims of domestic of the alleged perpetrator was above the activities (e.g., dune buggies, golf carts, violence. This new language upper income limit, such that the go-karts, and the like) would have to be implements LSC’s FY 1998 recipient was not able to even apply the included in determining whether an appropriations law. Specifically, section ‘‘significant other factors’’ factor to applicant’s assets exceed the recipient’s 506 of that act provides: make a determination of eligibility and applicable asset ceiling. in some cases there was a problem In establishing the income or assets of an LSC declines, however, to expand the individual who is a victim of domestic related to the extent to which the victim list to include the exclusion of any violence, under section 1007(a)(2) of the could access household assets over assets excluded under benefits programs Legal Services Corporation Act (42 U.S.C. for low income persons for which the 2996f(a)(2)), to determine if the individual is 2 This point is demonstrated by the fact that LSC applicant is eligible. There are myriad eligible for legal assistance, a recipient received one comment specifically supporting the described in such section shall consider only implementation of section 506 into Part 1611 on the benefit programs with a widely varying basis that the new language in 1611 would provide range of excludable assets. Some the assets and income of the individual and recipients with enhanced ability to provide legal programs have relatively low asset shall not include any jointly held assets. assistance to victims of domestic violence. Rather, ceilings, but exclude more assets from Public Law 105–119, 111 Stat. 2440 the incorporation of this statutory mandate into the regulation at this time does not create any the calculation, while other programs (November 26, 1997). Although this law substantive change in the authority and exclude fewer assets, but have higher has been in effect since 1997, it has responsibility recipients have had with respect to asset ceilings. If LSC were to include all never been formally incorporated into this issue since 1997. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00029 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 45552 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations which the alleged perpetrator had joint domestic violence or involves the This section further provides that a control. Thus, the practical problem perpetrator as an adverse party. Neither recipient may find an applicant to be addressed by section 506 is that in many the statute (nor the accompanying report financially eligible if the applicant’s cases a victim of domestic violence language) specify that the request for assets are at or below the recipient’s cannot draw upon the income or assets legal assistance must relate to applicable asset ceiling level (or the of the alleged perpetrator (including alleviating the domestic violence or ceiling has been properly waived) and jointly held assets) as a source of funds require the perpetrator to be an adverse the applicant’s income is at or below the with which to obtain private legal party. As such, as noted above, the recipient’s applicable income ceiling, or assistance. special rule applies at any time when if one or more of the authorized As the report language accompanying the applicant has made the recipient exceptions to the ceiling applies. These Public Law 105–119 notes, Congress aware that he or she is a victim of provisions are based on existing was ‘‘aware that the current statute and domestic violence. LSC does not find it provisions found in sections 1611.3, regulations * * * already provide for likely that applicants who are victims of 1611.4 and 1611.6. As revised, the new such determinations to be made’’ but domestic violence identify themselves provisions do not represent a ‘‘given concerns regarding access to the as such in seeking legal assistance in substantive change, but LSC believes legal system for victims of domestic matters wholly unrelated to the having the basic statements as to who violence, the conferees have included domestic violence. However, if an may be found to be financially eligible this provision to provide greater clarity applicant seeking assistance with an for assistance in one section makes the regarding this matter.’’ H. Rpt. 105–405, unrelated matter self-identifies as a regulation much clearer. In addition, p. 186. This indicates that Congress did victim, LSC believes that this would where the existing regulation uses a not intend to require significant changes likely be done as a way of explaining construction that speaks to when a to LSC’s regulations on financial why certain income and/or assets are recipient may provide legal assistance, eligibility, but rather only that Congress, unavailable for use in obtaining private the new language emphasizes the point in adopting section 506, wanted to legal assistance. As such, the rationale that the requirements speak only to ensure that the income and assets of the of the special rule would appear to be determinations of financial eligibility alleged perpetrator (which are generally satisfied and recipients should have the and not to decisions regarding whether under the control of the perpetrator and ability to disregard the perpetrator’s or not to actually provide legal which the victim cannot readily access) income and assets (including jointly assistance. LSC received several not render the victim financially held assets) in such situations. LSC does comments supporting these changes and ineligible for legal assistance. As the not believe the risk that an applicant no comments opposing these changes. regulation did not then provide for would self-identify as a domestic Accordingly, LSC adopts the revisions disregarding the income and assets of violence victim in order to circumvent as proposed. other members of the victim’s the financial eligibility requirements is LSC is also incorporating into this household not jointly held with the significant and is confident a recipient section a significant substantive change alleged perpetrator in the assessment of would explore the situation further if to the regulation. Consistent with the victim’s financial eligibility, LSC the recipient suspected the claims of the applicant were specious. section 1611.3 as discussed above the does not believe Congress was Finally, LSC has decided to permit regulation will now permit recipients to attempting to change the general recipients to adopt financial eligibility determine an applicant to be financially requirement that LSC consider the policies which permit financial eligible because the applicant’s income income and assets of other members of eligibility to be established by reference is derived solely from a governmental the victim’s household in making to an applicant’s receipt of benefits from program for low-income individuals or financial eligibility determinations as a governmental program for low-income families, provided that the recipient’s long as they are available to the victim. In light of the foregoing, LSC is individuals or families consistent with governing body has determined that the amending section 1611.3(e) to make this section 1611.4(b). This issue is income standards of the governmental clearer by revising it to read: discussed in greater detail below. program are at or below 125% of the Federal Poverty Guidelines amounts. Notwithstanding any other provision of Section 1611.4—Financial Eligibility for For many recipients, a significant this Part, or other provision of the recipient’s Legal Assistance proportion of applicants rely on financial eligibility policies, every recipient shall specify as part of its financial eligibility This section sets forth the basic governmental benefits for low-income policies that in assessing the income or assets requirement that recipients may provide individuals and families as their sole of an applicant who is a victim of domestic legal assistance supported with LSC source of income. In order to qualify for violence, the recipient shall consider only funds only to those individuals whom these benefits, such persons have the assets and income of the applicant and the recipient has determined are already been screened by the agency members of the applicant’s household other financially eligible for such assistance providing the benefits (using an than those of the alleged perpetrator of the pursuant to their policies, consistent eligibility determination process that is domestic violence and shall not include any assets held by the alleged perpetrator of the with this Part. This section also contains at least as strict as the one required domestic violence, jointly held by the a statement that nothing in Part 1611 under LSC regulations) and determined applicant with the alleged perpetrator of the prohibits a recipient from providing to be financially eligible for those domestic violence, or assets jointly held by legal assistance to an individual without benefits. In Working Group discussions, any member of the applicant’s household regard to that individual’s income and many representatives of the field noted with the alleged perpetrator of the domestic assets if the legal assistance is supported that if they could rely on the violence. wholly by funds from a source other determinations made by these agencies LSC also received a comment than LSC (regardless of whether LSC without having to otherwise make an requesting clarification of whether the funds were used as a match to obtain independent inquiry into financial special rule applies in all cases such other funds, as is the case with eligibility, it would substantially ease involving a victim of domestic violence Title III or VOCA grant funds) and the the administrative burden involved in or only in cases in which the request for assistance is otherwise permissible making financial eligibility assistance is related to alleviating the under applicable law and regulation. determinations. 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  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45553 The Working Group also noted that Understanding Supplemental Security Section 1611.5—Authorized Exceptions current LSC practice permits recipients Income, Social Security Administration to the Annual Income Ceiling to determine that an applicant’s assets Web site, http://www.ssa.gov/notices/ This section provides for authorized are within the recipient’s asset ceiling supplemental-security-income/text- exceptions to the annual income ceiling. level without additional review if the income-ussi.htm. With the streamlined The language, like the current language applicant is receiving govermental financial eligibility determination of sections 1611.4 and 1611.5, on which benefits for low-income individuals and requirements LSC is adopting, LSC it is based, is permissive. A recipient is families, eligibility for which includes believes that performing a full financial at liberty to include some, none, or all an asset test. Key to this practice is that eligibility screen on persons having of the authorized exceptions discussed the recipient’s governing body has to income derived from sources in below in its financial eligibility policies. take some identifiable action to addition to governmental benefits for Thus, to the extent a recipient chooses recognize the asset test of the low income persons does not present an to avail itself of the authority provided governmental benefit program being undue administrative burden and is in this section, a recipient is permitted relied upon. This ensures that the necessary to ensure that only those who to determine a particular applicant is eligibility standards of the governmental meet the recipient’s financial eligibility financially eligible for assistance, program have been carefully considered criteria (based on applicable LSC laws notwithstanding that the applicant’s and are incorporated into the overall and regulations) are determined to be income is in excess of the recipient’s financial eligibility policies adopted and financially eligible for LSC-funded legal applicable income ceiling, if the regularly reviewed by the recipient’s assistance. Accordingly, LSC declines to applicant’s situation fits within one or governing body. As this practice has expand the scope of § 1611.4(c) and more of the authorized exceptions. In proved efficient and effective, it was adopts the revisions as proposed. making such determinations, however, determined that a parallel process could LSC received one additional comment the recipient will also have to detemine also be adopted for income screening about the basic financial eligibility that the applicant’s assets are at or and that these practices should be criteria for LSC-funded legal assistance. below the recipient’s applicable asset expressly included in the regulations. It This commenter suggested that the ceiling (or the ceiling would have had is important to note that this provision determination of an applicant’s to have been waived). This requirement would only apply to applicants whose financial eligibility be conditioned is consistent with the current regulation, sole source of income is derived from somehow upon the financial but is affirmatively stated for greater such benefits. Applicants who also have circumstances of the adverse party(ies) clarity. LSC received one comment income derived from other sources with whom the applicant has the specifically supporting this clarification would be subject to an independent problem for which the legal assistance and LSC adopts the language as inquiry and assessment of financial is sought. LSC’s financial eligibility proposed. eligibility. requirements are based upon the Under the revised section, there are statutory mandate that the eligibility of two situations in which an applicant’s LSC received several comments clients be based upon the assets and income could exceed the recipient’s supporting these changes and one income of the applicant, the fixed debts, income ceiling without an absolute comment suggesting expanding this medical expenses and other factors upper limit: (1) Where the applicant is authority to permit recipients to make a which affect the applicant’s ability to seeking to maintain governmental determination that an applicant is afford legal assistance, and the cost of benefits for low-income individuals and financially eligible on the basis of living in the locality. See 42 U.S.C. families; and (2) where the executive receipt of governmental benefits for low 2996f(a)(2)(B). With the exception of the director (or his/her designee) income persons even when the cost of living in the locality, all of the determines, on the basis of applicant has another source of income, criteria set forth in the LSC Act relate to documentation received by the provided that the applicant’s additional the ability of the applicant to afford recipient, that the applicant’s income is income was counted in determining legal assistance. There is no suggestion primarily committed to medical or eligibility for a governmental benefit in either the Act itself or in its nursing home expenses and, in program for low income persons (such legislative history, that the financial considering only that portion of the as supplemental security income (SSI), circumstances of adverse parties are at applicant’s income which is not so in which the benefit is decreased as an all relevant to the determination of an committed, the applicant would offset to the other income). LSC is financial eligibility of the applicant. otherwise be financially eligible. concerned that in such situations it Moreover, LSC believes that The first instance represents a new cannot be guaranteed that an applicant’s conditioning a determination of addition to the regulation. Currently, an income would of necessity remain financial eligibility upon the financial applicant seeking to obtain below the recipient’s applicable income situation of adverse parties would governmental benefits for low income ceiling. The SSI program, for example, unfairly discriminate against some persons may be deemed financially does not offset all other income dollar eligible if the applicant’s income does persons who are otherwise unable to for dollar. Thus, an individual living not exceed 150% of the LSC national afford private legal assistance and alone whose income is solely derived eligibility level. The existing regulation, would be inconsistent with LSC from SSI will have an income of $579/ however, does not specifically address statutory mission of fostering equal month, while an individual living alone applicants seeking to maintain such access to justice. See 42 U.S.C. 2996. receiving Social Security income of $99 benefits. Thus, under the current Accordingly, LSC declines to add as a will receive an SSI payment of $500/ regulation, an applicant whose income criteria for determining financial month, for a total income of $599/ eligibility an assessment of the financial month, and an individual living alone, costs expended by all parties (including hours and situation of potential or actual adverse with a monthly earned income of $317 costs for attorney time) during the course of a parties.3 and a state governmental benefit recipient’s representation of a client. This payment of $15/month, will receive an suggestion does not address financial eligibility 3 This commenter also suggested that LSC adopt determinations or the retainer agreement SSI benefit of $463/month, for a total requirements relating to the regular sharing among requirements. As such, it is outside the scope of this monthly income of $795/month. See, the various parties to a case of information about rulemaking and is not further addressed. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00031 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 45554 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations is over the income ceiling but under afford recipients greater administrative income limit for an applicant with a 150% of the LSC national eligibility flexibility in making financial eligibility three member household is $30,170; level may be deemed financially eligible determinations. The existing rule, under the new rule the maximum for assistance in obtaining benefits, but however, does requires that the income limit for that household will be not for assistance in maintaining them. Executive Director make determinations $32,180.) This action will slightly Thus, the applicant seeking assistance regarding whether an applicant’s increase the pool of potential applicants to maintain benefits would have to be income is primarily committed to for service. However, LSC believes that turned down, but that same applicant medical or nursing home expenses. LSC this slight increase in the eligible could then be found financially eligible believes it is important to continue this applicant pool will not have a negative for assistance to re-obtain such benefits requirement in this instance because a impact on the quantity or quality of once the benefits were lost. recipient is making a determination of services delivered. Rather, this change Accordingly, LSC is addressing this financial eligibility for an applicant recognizes the changing demographic of problem in the regulation. However, whose income exceeds the otherwise the legal services client base, which unlike the situation in obtaining the absolute upper limit of the income now increasingly includes the working benefits, in seeking to maintain benefits ceiling, and such a determination poor. Moreover, amending the rule to LSC considers an upper limit on income should be made by a person in increase the upper limit to 200% of the unnecessary since in such cases the significant authority.4 This is similar to Federal Poverty Guidelines amounts applicant’s income will necessarily be the LSC view regarding decisions to will further simplify the regulation, rather limited (for the applicant to have waive the asset ceiling. LSC does which will aid grantees and their staff been eligible in the first place for the understand, however, that it is in making financial eligibility benefits he or she is seeking to important for recipients to have the determinations. LSC received several maintain). LSC received several discretion to delegate certain authority comments strongly supporting this comments supporting these changes and to regional or branch office managers or change, including one comment which no comments opposing them. directors to increase administrative noted that the change will allow for Accordingly, LSC adopts the revisions efficiency. This is why LSC proposed significant improvement in facilitating as proposed. broadening the existing rule to permit service collaboration and referrals The second instance is taken from the Executive Director to designate a among LSC and non-LSC service section 1611.5(b)(1)(B) of the current responsible individual to make such providers in many states because 200% regulation addressing instances in determinations. LSC believes that this of the Federal Poverty Guidelines which the applicant’s income is approach provides additional amounts is used as an upper limit for primarily devoted to medical or nursing administrative flexibility to recipients income eligibility for a wide variety of home expenses and does not represent yet is consistent with the underlying programs providing services to low a substantive change in the current policy. Accordingly, LSC adopts the income persons. LSC received no regulation. LSC is now specifying in the revision as proposed. comments opposing this change. LSC regulation, however, that in such cases LSC is also permitting exceptions for accordingly adopts this revision as the recipient is required to make a certain situations in which the proposed. determination of financial eligibility applicant’s income is in excess of the Turning to the exceptions, LSC is with regard to the applicant’s remaining recipient’s applicable income ceiling, retaining the current exception for income. The existing regulation could but does not exceed 200% of the individuals seeking to obtain be read to permit an applicant with an governmental benefits for low-income applicable Federal Poverty Guidelines income of $300,000 to be deemed individuals and families. Second, LSC is amount. At the outset, LSC notes that financially eligible if $250,000 of the adding an exception for individuals this section changes the current upper income is devoted to nursing home seeking to obtain or maintain income limit of 150% of the LSC expenses, notwithstanding that the governmental benefits for persons with national income guidelines amount, applicant’s remaining income is mental and/or physical disabilties. which is 150% of 125% of the Federal $50,000—substantially in excess of the Many disability benefit programs Poverty Guidelines amounts, or 187.5% income ceiling. This situation is not provide only subsistance support and of the Federal Poverty Guidelines intended, and, indeed, LSC has no those individuals should be treated the amounts. Under the new regulation, the reason to believe recipients are serving same way as those seeking to obtain such persons. However, consistent with maximum upper limit increases to benefits available on the basis of the overall goal of clarifying the 200% of the Federal Poverty Guidelines financial need. However, many persons regulation, LSC believes that a amounts. Consequently, recipients will with disabilties who are eligible for requirement that an applicant must be be able to consider applicants having disability benefits may not be otherwise financially eligible slightly higher incomes than was particularly economically considering only that portion of the previously possible. (For example, the disadvantaged and should not be applicant’s income which is not devoted 2005 LSC income guideline for a eligible for legal assistance simply by to medical or nursing home expenses applicant in a three member household virtue of eligibility for such disability should be clearly set forth in the in the 48 contiguous states and the benefits. Therefore, those applicants regulation. District of Columbia is $20,113. Under must have incomes below 200% of the LSC received several comments the existing rule, the maximum upper applicable poverty level in order to be generally supporting this change (and considered financially eligible for LSC- 4 This situation is distinguishable from the other none opposing it) but asking LSC to funded services. LSC received several exception to the absolute income limit relating to delete the requirement that the applicants seeking to maintain governmental comments supporting these provisions determination that the applicant’s benefits for low income persons. As noted above, and no comments opposing them. income is primarily committed to in those instances, the applicant’s income will Accordingly, LSC adopts these medical or nursing home expenses be already be rather limited, even if exceeding the exceptions as proposed. absolute income ceiling. In the medical/nursing made by the Executive Director or his/ home expenses situation, this may not be the case Finally, the revised regulation her designee. These commenters argued and the applicant’s income may be considerably in maintains the current authorized that removing this requirement would excess of the ceiling. exceptions found in the factors listed in VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45555 current section 1611.5. Specifically, the it encompasses debts fixed as to both circumstances, utility bills could be recipient will be permitted to determine time and amount. See Letter of considered an ‘‘other significant factor’’ an applicant whose income is below November 1, 1993 from J. Kelly Martin, affecting an applicant’s ability to afford 200% of the applicable Federal Poverty LSC Assistant General Counsel, to legal assistance. LSC does not intend Guidelines amount to be financially Stephen St. Hilaire, Executive Director, that section 1611.5(a)(vii) be used to eligible for legal assistance supported Camden Regional Legal Services, Inc. routinely consider applicants’ utility with LSC funds based on one or more Examples of such ‘‘fixed debts and costs. This is true even if utility costs enumerated factors that affect the obligations’’ would include mortgage are typically high for an applicant applicant’s ability to afford legal payments, rent, child support, alimony, because, for example, the applicant lives assistance. As in the current regulation, business equipment loan payments, and in a very hot or very cold area of the recipients will not be required to apply unpaid taxes from prior years. LSC country. However, there may be these factors in a ‘‘spend down’’ intends that this term also include rent circumstances in which an area of the fashion. That is, although recipients are in addition to mortgage payments. country suffers a period of unusually permitted to do so, they are not required Previous OLA opinions have addressed hot or cold weather, or perhaps a to determine that, after deducting the mortgage payments but not rent and rent discreet time period in which heating allowable expenses, the applicant’s has, heretofore, not been considered a oil or gas prices are significantly higher income is below the applicable income fixed debt. LSC now sees no rational than the normal range of prevailing ceiling before determining the applicant distinction between the two for the prices. In addition, an individual to be financially eligible. The regulation purposes of this regulation; in addition, applicant may have unusually high is also amended to clarify that the LSC received several comments factors apply to the applicant and supporting the inclusion of rent as a utility bills because of a malfunctioning members of the applicant’s household. fixed debt or obligation and no furnace or some other problem with The factors proposed are identical to the comments opposed. Therefore LSC will their home that they cannot get their ones in the current regulation, with the treat rent and mortgage expenses in a landlord to fix or that they cannot afford following exceptions: similar manner. to fix themselves. In such unusual • The factor relating to medical The term ‘‘fixed debts and circumstances, it could be appropriate expenses is restated to make clear that obligations,’’ however, is not without for a recipient to take into account the it refers only to unreimbursed medical limit. It is not intended to include extra amount of utility costs incurred by expenses, but that medical insurance expenses, such as food costs, utilities, an applicant as an ‘‘other significant premiums are included; credit card debt, etc. These types of factor’’ in making a financial eligibility • The factor relating to employment debts are usually not fixed as to time determination. expenses is reorganized for clarity and and amount. The Working Group As noted above, another issue is would expressly include expenses considered whether there were whether to include current taxes within related to job training or educational additional factors which should be the scope of the term ‘‘fixed debts and activities in preparation for enumerated in this section and several obligations.’’ Prior to 1983, Part 1611 employment; members of the Working Group included current taxes along with past • The factor relating to expenses proposed adding other factors, such as due unpaid taxes as a fixed debt. When associated with age or disability no utilities, to the list. Several commenters the regulation was changed in 1983, the longer refers to resident members of the supported adding utilities to the overall reference to taxes was amended to refer family as a reference to the applicant or list of factors. Although, as the only to unpaid prior year taxes. This members of the applicant’s household commenters note, applicants must pay change was justified on the basis that has been incorporated elsewhere in this for some measure of utilities, the same the 1611.5 factors were intended to section of the regulation; can be said for clothing and food, which account only for ‘‘special • The factor relating to fixed debts are also certainly basic necessary circumstances’’ affecting the ability to and obligations is amended to read only expenses. However, these sorts of costs afford legal assistance. See 48 FR 54201 ‘‘fixed debts and obligations;’’ have never been covered by the types of • A new factor, ‘‘current taxes’’ is at 54203 (November 30, 1983). However, expenses which recipients are generally added to the list. given that other types of expenses permitted to consider in determining With regard to ‘‘fixed debts and included in the list do not seem to be the ability of an applicant to afford legal obligations,’’ the current regulation assistance. With the exception of particularly ‘‘special’’ (e.g., mortgage provides little guidance as to what is housing expenses (which fall under the payments; child care expenses), LSC no meant by this term, except to heading of fixed debts and obligations, longer finds this explanation persuasive. specifically include unpaid taxes from a category which does not generally Rather, LSC believes that the exclusion prior years. LSC has decided to simply include utilities because utility bills are of current taxes, but not prior unpaid use the term ‘‘fixed debts and not typically fixed as to time and taxes, from the list of factors which obligations,’’ while providing guidance amount), the other factors represent recipients’ may consider under in the preamble as to what is expenses for items which may not be exceptions to the income ceiling has the encompassed by the term. LSC believes particularly extraordinary, but which effect of punishing those persons who that this approach will provide are for things other than the most basic are in compliance with the law in favor recipients with flexibility in applying necessities. Accordingly, LSC declines of persons who are delinquent in their the rule, while providing more guidance to add utilities to the list of fixed debts legal responsibility to pay taxes. than could easily be contained in and obligations. Moreover, as noted above, applicants for regulatory text. Related to the treatment of utilities, legal services are increasingly the Prior guidance from the LSC Office of two commenters supported the idea LSC working poor. Excluding current taxes Legal Affairs has stated that, ‘‘in the clarify that recipients have the has a disproportionate effect on absence of any regulatory definition or flexibility to consider unusually high applicants who work versus applicants guidance as to the meaning of ‘fixed utility costs as an ‘‘other significant who do not work. Consequently, in the debts and obligations,’ the common factor’’ under section 1611.5(a)(vii). LSC November 2002 NPRM, LSC proposed meaning of the term applies’’ and that agrees that, under certain unusual including current taxes within scope of VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 45556 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations the term ‘‘fixed debts and obligations’’ Thus, LSC intends that ‘‘current taxes’’ group would have to provide (as they had been prior to 1983). should include local, State and Federal information showing that it lacks and When the Operations and Regulations income and employment taxes, Social has no means of obtaining the funds to Committee once again addressed this Security and Medicare taxes, and local retain private counsel, so that the rule issue, field representatives reiterated property taxes (including special would not permit representation of well their recommendation that the term property tax assessments) but not sales funded groups. ‘‘income’’ should be defined as income taxes or excise fees, such as airline The LSC representatives were after taxes. LSC continues to believe, as ticket fees, hotel occupancy taxes, gas concerned that allowing the use of LSC noted above, that effectively defining taxes, cigarette taxes, etc. Past tax debts, funds to support the representation of income as net income, while the LSC having become fixed debts owing, groups not composed primarily of income guidelines (and the underlying remain a fixed debt or obligation which eligible clients would be problematic. In DHHS Federal Poverty Guidelines recipients may consider under that the examples given, the ‘‘primary amounts on which the LSC guidelines factor. function’’ of the group is easily are based) are calculated on the basis of discernable. It may be, however, that gross income would make the regulation Section 1611.6—Representation of there is or can be a wide variety of internally inconsistent. Rather, LSC Groups opinion on what the ‘‘primary function’’ believes that considering taxes as a The eligibility of groups for legal of any group is and on what is ‘‘in the factor which can be considered by the assistance supported with LSC funds interests’’ of the eligible client recipient in making financial eligibility was a subject of extensive discussion community. The LSC representatives determinations addresses the practical among both the members of the Working were concerned that the risk and effort problem raised by the commenters. Group and at the 2004 and 2005 related to articulating and enforcing a However, the Committee considered meetings of the current Operations and necessarily subjective standard would current taxes as a fundamentally Regulations Committee. Prior to 1983, be inappropriate. Rather, LSC different kind of expense than the other the regulation permitted representation representatives were of the opinion that expenses falling within the scope of of groups that were either primarily already scarce legal services resources ‘‘fixed debts or obligations.’’ Instead, the composed of eligible persons, or which would be better devoted to providing Committee recommended, and the had as their primary purpose the assistance to eligible individuals or Board agreed, that current taxes should furtherance of the interests of persons in groups of eligible individuals. In the be a separate category of authorized the community unable to afford legal end, the Working Group did not achieve exception to the annual income ceiling. assistance. In 1983, the regulation was consensus on this issue and the Draft Accordingly, LSC proposed adding a amended to preclude the use of LSC NPRM did not propose to permit the new subsection (iv) to section funds for the representation of groups representation of groups other than 1611.5(a)(4) and specifically invited unless they were composed primarily of those primarily composed of eligible comment on the proposed addition of individuals financially eligible for individuals. an authorized exception for current service. In its deliberations on the Draft taxes and on the appropriate scope and During the Working Group meetings, NPRM, the prior Board’s Operations and specific terminology which LSC should representatives from the field proposed Regulations Committee acknowledged use to describe and define this proposed that LSC revise the regulation to once the legitimacy of the concerns of the exception. again permit the representation of LSC representatives, but determined LSC received numerous comments groups which, although not primarily that the value of permitting the reiterating the position that ‘‘income’’ composed of eligible persons, have as a representation of groups having a should be defined as net after taxes, but primary function the delivery of primary function of providing services that in the alternative (should LSC services to, or furtherance of the to, or furthering the interests of, those retain income as gross income) interests of, persons in the community who would be financially eligible supported the proposal to include unable to afford legal assistance. outweighed any risks attendant upon current taxes as a separate factor which Examples of such a group might be a such representation. In approving the recipients may consider as an food bank or a rural community recommendation of the Committee, the authorized exception to the income development corporation working to Board directed that the Draft NPRM be ceiling. The one comment LSC received develop affordable housing in an amended to propose permitting such supporting LSC’s proposal to retain the isolated community. Field representation (including any phrase ‘‘before taxes’’ in the definition representatives noted that in such cases, conforming amendments necessary) of income expressly supported also there may not be local counsel willing prior to publication of the NPRM for treating current taxes as a separate factor to provide pro bono representation and comment. The NPRM published in which recipients may consider as an that the group might not otherwise be November 2002 reflected this direction. authorized exception to the income able to afford private counsel. Further, When the new Operations and ceiling. All of these commenters also the field representatives noted that Regulations Committee considered this supported including a discussion in the restricting recipients to representing issue, field representatives once again preamble of what taxes should be with LSC funds only those groups supported changing the regulation to included in the scope of the term primarily composed of eligible permit the representation of groups ‘‘current taxes’’ rather than specifying a individuals prevents them from having as their primary function the particular list in the text of the providing legal assistance in the most provision of services to, or furthering regulation. LSC agrees that such an efficient manner possible as other the interests of, those who would be approach is preferable. LSC believes groups may be better able to accomplish financially eligible (providing the group that permitting some flexibility in the results benefitting more members of the could demonstrate its inability to afford scope of the term ‘‘current taxes’’ is eligible community than would to retain private counsel), while LSC appropriate and in keeping with the representation of eligible individuals or Management initially once again intent of this rulemaking, although LSC groups composed primarily of such supported permitting only the also believes that the term ‘‘current individuals. Field representatives also representation of groups primarily taxes’’ should not be without limits. noted that the rule requires that the composed of eligible individuals. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45557 However, upon further reflection and although there are many instances in include helping a domestic violence consideration of the arguments made by which no such pro bono private counsel shelter keep its residents’ information the field and the comments made by is available. LSC understands that confidential and providing legal members of the Operations and recipients currently take into account assistance in the creation of an indigent Regulation Committee, LSC the availability of pro bono private health care plan providing free medical Management ultimately recommended counsel when determining whether to services to low income persons. that the regulation could be broadened accept an eligible group as a client. LSC Although the Office of Inspector to permit the representation, in addition expects that this practice will continue. General (OIG) did not file separate to groups primarly composed of eligible Proposed subsection (1) above, comments on the NPRM, the OIG has individuals, groups which have as a relating to the eligibility and previously raised a question as to primary activity the delivery of services representation of groups composed whether permitting the representation of to persons who would be eligible. primarily of eligible individuals, groups not comprised of eligible clients Management continued to recommend represents the practice under the is problematic because, in its view, that the regulation not permit the current section 1611.5(c). The new rule neither the LSC Act itself nor the representation of groups whose primary is intended to have the same legislative history endorse the premise activity is the ‘‘furtherance of the interpretation of ‘‘primarily composed’’ that LSC may permit the representation interests of’’ persons who would be that has developed and been adopted in of groups that are not composed of eligible. practice over the years since 1983. In eligible clients. Although LSC The Board agreed that permitting LSC the case of membership groups, at least appreciates the OIG’s comments, LSC recipients to use LSC funds for the a majority of the members would have believes that the proposed regulatory representation of groups which provide to be individuals who would be requirements are consistent with the services to low income persons is financially eligible; in the case of non- applicable laws. The LSC Act, on its consistent with the LSC mission and membership groups, at least a majority face, does not prohibit the could be an efficient use of LSC of members of the governing body representation of groups other than resources, provided that the legal would have to be individuals who those composed of otherwise eligible assistance is related to the services the would be financially eligible. LSC individuals. The Act only speaks to group provides. The Board also agreed received no comments opposing this ‘‘eligible clients’’ and there is nothing in that extending the permissible use of proposal and adopts it as proposed. the text of the Act which suggests that LSC funds for the representation of The latter instance (proposed a group which has as its principal groups whose primary activity is the subsection (2), above) represents a activity the provision of services to ‘‘furtherance of the interests of’’ low variation on one of the situations persons who would be eligible for LSC- income persons would not be permitted by the pre-1983 rule, although funded legal assistance is necessarily appropriate because of the necessarily the language has been revised to focus excluded from the scope of the term subjective nature of determining what is on ‘‘principal activity’’ rather than ‘‘eligible clients.’’ In addition, LSC in the ‘‘furtherance of the interests of’’ ‘‘primary purpose’’ (or ‘‘primary believes that the legislative history of low income persons. activity’’) and the rule permits only the the Act and the 1977 LSC Act Accordingly, LSC proposed to permit representation of groups which have as amendments is not dispositive on the a recipient to provide legal assistance a principal activity the delivery of issue of whether the statute was supported with LSC funds to a group, services to low income persons. intended to prohibit the representation corporation, association or other entity Limiting permissible representation to of groups other than those comprised of if the recipient has determined that the groups which have as a ‘‘principal eligible individuals. Rather, support for group, corporation, association or other activity’’ the provision of services to low the notion that Congress contemplated entity lacks and has no practical means income persons and the exclusion of the provision of legal assistance to of obtaining private counsel in the groups which act in the ‘‘furtherance of groups providing services to eligible matter for which representation is the interest of the poor’’ are intended to clients can be seen in the comments sought and either: make the analysis required in Senator Riegle made in discussing an (1) The group, or for a non- determining the permissibility of the amendment relating to the prohibition membership group, the organizing or representation more objective. by recipients on organizing: operating body of the group, is primarily All but one of the comments strongly A similar clarification is made in section composed of individuals who would be supported the addition of groups having 9(c) [of the Senate Reauthorization Bill] financially eligible for legal assistance as a principal activity the delivery of regarding the prohibition on organizing under the Act; or services to those persons in the activities. Legal Services should not directly (2) The group has as a principal community who would be financially organize groups. However, it should provide activity the delivery of services to those eligible for legal assistance.5 The full representation, education and outreach persons in the community who would commenters stated that this change, if to those organized groups who are made up be financially eligible for LSC-funded of or which represent eligible clients. adopted, will provide recipients with legal assistance and the legal assistance much needed flexibility to address Congressional Record of October 10, sought relates to such activity. pressing legal needs of low income 1977, p. S 16804. (emphasis added). Under the proposal, any group persons in their communities. One Accordingly, LSC is adopting the seeking LSC-funded legal assistance comment noted in particular that proposal to permit recipients to provide would have to lack, and have no providing legal assistance to human legal assistance to groups having as a practical means of obtaining, the funds services organizations results in positive principal activity the delivery of to obtain private counsel. LSC received benefits to thousands of low income services to those persons who would be no comments opposing this proposal individuals and is generally very much eligible for LSC-funded legal assistance. and adopts it as proposed. LSC notes supported by local communities. In addition, LSC is adopting the that there are instances in which a Examples cited by the commenter proposed further limitation that the group without funds to pay for private legal assistance must be related to the legal counsel may, nonetheless, be able 5 The remaining comment did not address this services delivered by the group. One to obtain pro bono private counsel, aspect of the proposed rule. commenter objected to this limitation. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 45558 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations This commenter stated that legal such group eligibility. Although LSC information that ‘‘reasonably assistance in an unrelated matter could believes that the November 2002 demonstrates’’ that the group meets the have a significant impact on an proposed financial eligibility standards eligibility criteria. organization’s ability to provide its for groups effectuated the principal As discussed above, LSC believes that services. LSC notes that although there criterion in the Act that those seeking it is important that the regulation may be instances in which an unrelated LSC-funded legal assistance must be specify what information recipients legal matter could ultimately have an financially unable to afford legal must consider in order to make impact on the group’s delivery of assistance and were in no way determinations that the eligibility services, LSC believes that this inconsistent with the LSC Act, LSC does criteria are met. In the case of individual limitation is important. LSC believes agree with the OIG that the standards for applicants, the eligibility criteria are that this limitation, along with the determining the eligibility of groups can that applicants must have income and limitation relating to the group’s and should be more specific than those assets valued at below the set levels and ‘‘principal activity,’’ will avoid creating set forth in the November 2002 NPRM. the regulation expressly requires a potential situation whereby recipients Accordingly, in assessing the recipients specifically consider the might feel free to undertake broad based eligibility of a group, LSC proposed to applicant’s income and assets. social change activities, but will permit require recipients to consider the Similarly, since the group eligibility recipients to provide legal assistance resources available to the group, such as criteria include that the group or the that will enable a group to pursue its the group’s income and income persons served by the group must be goals of service to the eligible client prospects, assets and obligations. LSC those who would be financially eligible, community. LSC believes that these also proposed that for a group primarily it is appropriate for the regulation to limitations will help ensure that LSC composed of individuals who would be expressly require that recipients funds will be used to provide financially eligible for LSC-funded legal consider whether the group or the financially eligible groups with the day- assistance under the Act, the recipient persons served by the group are those to-day legal services which are the would also have to consider whether the who would be financially eligible. hallmark of LSC-funded legal assistance. characteristics of the persons primarily In discussions during the Operations Finally, LSC notes that if a recipient composing the group are consistent with and Regulations committee meetings on wishes to provide legal assistance to a financial eligibility under the Act. LSC this subject, it was noted that the group whose principal activity is the further proposed that for a group having November 2002 NPRM standards for delivery of services to low income as a principal activity the delivery of services to those persons in the determining the eligibility of a group persons in a legal matter not related to community who would be financially (which the commenters essentially that service, the recipient may provide eligible for LSC-funded legal assistance suggest LSC adopt) were intended to that legal assistance with non-LSC under the Act, the recipient would also reflect the current, unwritten practice funds, provided the legal assistance is have to consider whether the with regard to determinations of otherwise permissible under applicable characteristics of the persons served by eligibility of groups primarily composed law and regulations. LSC is adding a provision to the the group are consistent with financial of eligible individuals. The information regulation specifying the manner of eligibility under the Act and whether adduced during those discussions determining the eligibility of groups. the legal assistance sought relates to the indicated that recipients generally Although the practice has been that principal activity of the group. Finally, consider the nature and financial and recipients must collect information that LSC proposed to require a recipient to other socioeconomic characteristics of reasonably demonstrates that the group document group eligibility the group in making group eligibility meets the eligibility requirements set determinations by collecting determinations, particularly in cases in forth in the regulation, standards for information that reasonably which the group is sufficiently large as determining and documenting the demonstrates that the group meets the to make individualized screening a eligibility of groups has not previously eligibility criteria set forth in the rule. majority of the members of the group been specifically addressed in the All but one of the commenters impracticable. LSC believed (and still regulation. LSC Management does not supported the proposal to require believes) that the standard set forth in believe that recipients are representing recipients to consider the resources the proposed rule fairly reflects the ineligible groups, but the Working available to the group, such as the current practice. Contrary to the concern Group was nevertheless in agreement group’s income and income prospects, expressed by the commenters, this that it is important and appropriate for assets and obligations.6 Several of the practice has not proved to be the regulation to expressly state the commenters, however, opposed the problematic to date, nor is there any Corporation’s expectations in this area. proposed requirement that the recipient suggestion in the comments that LSC is The November 2002 NPRM would have must determine whether the currently ‘‘second guessing’’ recipients’ required a recipient to collect characteristics of the group (or the determinations of group eligibility. LSC information reasonably demonstrating characteristics of the persons receiving does not anticipate that incorporating that the group meets the eligibility the services of the group) are consistent the currently unwritten standard into requirements set forth in the regulation. with financial eligibility for LSC-funded the regulation will change this situation. In written comments filed in response legal assistance. These commenters LSC is, however, slightly modifying the to the November 2002 NPRM, and again suggested that these proposals were not language in the final rule to specify that in the course of the new Operations and clear and could lead to disputes it is the financial and other Regulation Committee’s 2004 and 2005 between LSC and recipients over socioeconomic characteristics of the deliberations, the OIG expressed whether the articulated standard was group (or the persons being served by concern that the proposed rule should met. These commenters suggested that it the group) which recipients must provide eligibility criteria sufficient to would be sufficient only to require that consider in making eligibility ensure that groups seeking LSC-funded recipients consider and collect determinations and that those particular legal assistance qualify for such legal characteristics must be consisent with assistance and should require grantees 6 The other comment did not address the proposal those of persons who are financially to retain adequate documentation of regarding group eligibility. eligible for LSC-funded legal asssitance. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45559 The following are examples of how Example 3: Group which has as a principal the legal assistance being sought relates to the new rule on group eligibility will activity the provision of services to those the principal activity. In this case, the tort apply: who would be financially eligible under the claim is unlikely to be related to the primary Act. activity of the shelter and, as such, the Example 1: Group primarily composed of A community group runs a food bank recipient would not be able to provide LSC- eligible individuals which distributes food to low-income funded legal assistance to the shelter. A public housing tenants’ association seeks persons in the community. The community representation to require the landlord to In addition, the revised rule retains group is a 501(c)(3) organization which is run provide required maintenance services to the by a volunteer board of directors who are not and restates the current provision of the buildings and grounds. To make a personally financially eligible for LSC- rule that these requirements apply only determination of eligibility, the recipient funded legal assistance. The food bank to a recipient providing legal assistance would have to review the resources available warehouse occupies rented space. The group supported by LSC funds, provided that to the group (such as any assets and is seeking legal assistance to renegotiate its regardless of the source of funds used, liabilities of the tenants’ association, i.e., lease to obtain favorable long-term lease any legal assistance provided to a group dues or other monetary donations to the terms to allow it to remain in the warehouse must be otherwise permissible under association; outstanding bills or obligations space. To make a determination of eligibility, applicable law and regulation. of the association) and make a determination the recipient would have to review the LSC notes that, as with other aspects that the association lacks the financial resources available to the group (i.e., how resources with which to hire private counsel. much the group takes in donations, what the of this rule, section 1611.6 does not In addition, the recipient would have to group’s expenses are) and make a speak to eligibility of groups for legal determine that a majority of the association determination based on that information that assistance under other applicable law (or the association’s organizing body) are the group lacks the financial resources with and regulation. For example, the persons who would be financially eligible which to hire private counsel. In addition, eligibility of a group under proposed under the Act by considering whether the the recipient would have to determine that section 1611.6 does not address issues group’s financial and other socioeconomic the group has as a principal activity the related to the eligibility of the group characteristics are consistent with those of provision of services to those would would under Part 1626 of LSC’s regulations, persons who are financially eligible under be financially eligible for LSC-funded legal concerning citizenship and alien status the Act. The recipient could perform a assistance. In this case, the recipient could standard eligibility screen on the members of consider such financial and other eligibility. Similarly, the fact that a the tenants’ association (or its organizing socioeconomic characteristics of the group recipient may determine a group to be body) or could make a determination that the being served such as homeless status, eligible for legal assistance under this requirement is met on the basis that financial eligibility for the services offered, etc. The Part, does not address other questions eligibility for residency in the public housing recipient would also have to consider the relating to permissibility of the complex in the recipient’s area is consistent relative significance of the food bank in representation (i.e., this Part does not with the recipient’s financial eligibility comparison to the other activities of the confer authority for the representation policies. The recipient would have to be able community group and to determine that the of a group on restricted matters, such as to support its determination of eligibility by legal assistance sought related to that service. class action lawsuits or redistricting collecting and maintaining such information In this case, renegotiation of the lease as reasonably demonstrates that the tenants’ appears related to the provision of the matters, etc.) association had met the eligibility criteria. service. The recipient would have to be able Finally, LSC notes that in the Example 2: Group primarily composed of to support its determination of eligibility by November 2002 NPRM, this section was eligible individuals collecting and maintaining such information numbered 1611.8 and placed at the end Five women who are currently on public as reasonably demonstrates that the of that proposed regulation. LSC is now assistance have come together as a group to community group had met the eligibility placing this section before the sections open and operate a daycare center. The group criteria. on Manner of Determining Financial has a grant from the state social services Example 4: Group which has as a principal Eligibility, Change in Financial agency which permits the grant to be used of activity the provision of services to persons Eligibility Status and Retainer obtaining legal assistance and a line of credit who would be financially eligible under the Agreements as those sections are secured by the Small Business Act Administration to create and operate this A non-profit organization runs a shelter for applicable to both groups and business. The group seeks legal assistance in homeless families. The Board of the shelter individual applicants and clients. obtaining the necessary permits and is comprised of persons who would not be Section 1611.7—Manner of Determining negotiating a lease for space for the center. financially eligible for assistance under the Financial Eligibility To make a determination of eligibility, the Act. The shelter seeks legal assistance in recipient would have to review the resources defending itself against a claim for damages LSC is making several revisions to available to the group (such as the grant, line filed by a person who came to the shelter this section. First, LSC is including a of credit, other funds available, as well as uninvited to distribute a menu for a local requirement that in making financial liabilities, such as costs for obtaining take out restaurant and slipped and fell on eligibility determinations a recipient licenses, space rental, etc) to see if the group ice on the shelter’s stairs. To make a shall make reasonable inquiry regarding lacks the financial resources with which to determination of eligibility, the recipient sources of the applicant’s income, hire private counsel. In addition, the would have to review the resources available recipient would have to determine that a to the group (i.e., how much the shelter income prospects and assets and shall majority of the women are persons who receives in donations, the shelter’s expenses, record income and asset information in would be financially eligible under the Act etc.) and make a determination based on that the manner specified for determining by considering the financial and other information that the group lacks the financial financial eligibility in section 1611.4. socioeconomic characteristics of the women. resources with which to hire private counsel. This requirement replaces the process In this case, although the women (being In addition, the recipient would have to currently required by section 1611.5, recipients of public assistance) are likely determine that the group has as a principal whereby a recipient is effectively persons who would be eligible for legal activity the provision of services to those required to conduct a lengthy and often assistance under the Act, the group’s grant would be financially eligible for LSC-funded cumbersome inquiry as to the and line of credit may provide enough legal assistance. In this case, the recipient resources to the group so as to enable the would consider the financial and other applicant’s income, assets and income group to obtain private legal assistance. If the socioeconomic characteristics of the group prospects, including inquiry into a recipient determines that this is the case, the being served (homeless status, financial detailed list of factors relating to an recipient would not be able to provide the eligibility for access to the shelter, etc.). The applicant’s specific financial situation group LSC-funded legal assistance. recipient would also have to assess whether and ability to afford private counsel. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 45560 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations The Working Group discussed this issue LSC is also adding a provision to the intends to make no change in the at length and representatives of the field regulation making clear that a recipient regulation on this point. noted that conducting such a detailed agreeing to extend legal assistance to a In addition, LSC is changing the name inquiry in most cases is a task which is client referred from another recipient of this section from ‘‘change in often difficult to accomplish efficiently may rely upon the referring recipient’s circumstances’’ to ‘‘change in financial at the point of intake, especially as determination of financial eligibility, eligibility status’’ to reflect the addition much of intake is performed by provided that the referring recipient of the later discovered information volunteers, interns or receptionists. provides and the receiving recipient provision. Rather, many recipients, in practice, retains a copy of the eligibility form LSC received several comments conduct a somewhat abbreviated documenting the financial eligibility of supporting these changes and no version of the otherwise required the client. This is the currently accepted comments opposing them. LSC process, inquiring into current income, practice, but is addressed nowhere in accordingly adopts the revisions as assets, income prospects and probing for the existing regulation. proposed. additional information based on the LSC received several comments Section 1611.9—Retainer Agreements responses provided, the requirements of supporting these changes and no The retainer agreement requirement, the regulation and their knowledge of comments opposing them. Accordingly, found at section 1611.8 of the existing local circumstances. This approach, the LSC adopts the revisions as proposed. regulation, was the subject of significant field representatives noted, is less prone Section 1611.8—Change in Financial discussion in the Working Group. to error and assists in fostering an Eligibility Status Representatives of the field agreed with appropriate attorney-client relationship the LSC representatives that a retainer with individuals accepted as clients. As LSC is adding language to this section agreement may be appropriate under LSC is not finding widespread instances to provide that if a recipient later learns certain circumstances, but argued that of service being provided to financially of information which indicates that a this regulatory requirement is not ineligible persons, it was agreed that the client never was, in fact, financially required by statute, is not justified process required by the existing eligible, the recipient must discontinue under applicable rules of professional regulation is unduly complicated and the representation consistent with the responsibility, may be unnecessarily that the simplified requirement applicable rules of professional burdensome in some instances and is proposed would be adequate to ensure responsibility. This addition is being not related to financial eligibility that recipients are making sufficient adopted because sometimes, after an determinations. They contended that, inquiry into applicants’ financial applicant or group has been accepted as barring a statutory mandate, decisions situations to determine financial a client, the recipient discovers or the about the use of retainer agreements, eligibility status under the regulation client discloses information that like those involving many other matters while being less administratively indicates that the client was not, in fact, relating to the best manner of providing burdensome for recipients and more financially eligible for service. This high quality legal assistance, should be conducive to the development of the situation is not covered by the existing determined by a recipient’s Board, attorney-client relationship. LSC also regulation because the client may not management and staff, with guidance believes that adoption of the have experienced a change in from LSC. They urged LSC to delete this streamlined financial eligibility circumstance but rather, the recipient requirement. The LSC representatives, determination process will aid the has discovered new pertinent however, were of the opinion that the Corporation in conducting compliance information about the client. LSC notes existing provision in the regulations reviews. that the new language, like the current requiring the execution of retainer As noted above, LSC originally regulation, is not intended to require a agreements is professionally desirable, proposed in the November 2002 NPRM, recipient to make affirmative inquiry authorized in accordance with LSC’s to include this provision in proposed after accepting an applicant or group as mandate under Section 1007(a)(1) of the section 1611.4, Financial Eligibility for a client for information that would Act to assure the maintenance of the Legal Assistance. Upon reflection, LSC indicate a change in circumstance or the highest quality of service and believes that as this requirement is presence of additional information professional standards, and appropriate really a requirement as to how financial regarding the client’s financial to assure that there are no eligibility determinations are to be eligibility. misunderstandings as to what services made, it is better included in this The regulation requires that when a are to be rendered to a particular client. section on the manner of determining client is found to be no longer Retainer agreements protect the attorney financial eligibility. LSC believes that financially eligible on the basis of later and recipient in cases of an unfounded this will improve the organization and discovered information, the recipient malpractice claim and protect the client clarity of the regulation. shall discontinue representation if the attorney and the recipient should Second, LSC is deleting the supported with LSC funds, if fail to provide legal assistance requirement in existing paragraph (a) of discontinuing the representation is not measuring up to professional standards. this section that LSC eligibility forms inconsistent with applicable rules of In the end, the Working Group was and procedures must be approved by professional responsibility. This unable to reach consensus on this issue the Corporation. It has been LSC’s language is parallel to the current and the Draft NPRM retained a experience that receiving the forms has requirement regarding discontinuation provision generally requiring the not enhanced its ability to conduct of representation upon a change in execution of retainer agreements, along oversight of recipients. These circumstance. LSC wishes to note that, with proposing requirements for client documents are readily available to LSC to the extent that discontinuation of service notices and PAI referral notices from recipients when needed. This representation is not possible because of in lieu of retainer agreements under requirement appears only to create professional responsibility reasons, a certain circumstances. unnecessary work for recipients and recipient may continue to provide After deliberations on the Draft LSC staff without serving any policy representation supported by LSC funds. NPRM, the Board determined to propose purpose. 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  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45561 requirement altogether and the section 1611.8(b) a recipient is not and helpful change from the current November 2002 NPRM published by required to execute a retainer agreement requirement. In particular, several LSC reflected this determination. With ‘‘when the only service to be provided comments supported proposals to the exception of the comments of the is brief advice and consultation.’’ exclude PAI attorneys from the scope of LSC OIG, all of the comments LSC Although the plain language of this the requirement and to delete the received on the November 2002 NPRM provision would seem to encompass requirement for LSC prior approval of supported the elimination of the situations in which the attorney is retainer agreement forms. retainer agreement requirement. providing only some information and After considering all of the various With the appointment of the new guidance on a suggested course of action arguments on this matter in LSC has members of the Board of Directors and to the client, it has over the years, come determined that, on balance, written the new LSC President, LSC had the to include brief services such as drafting communications in brief services cases opportunity to reconsider this proposal. simple documents or making limited represents a ‘‘best practice’’ and, for the Field representatives reiterated their contacts (by phone or in writing) with purposes of a regulatory requirement, support for elimination of the retainer third parties, such as a landlord, an the current practice by which retainer agreement requirement from the employer or a government benefits agreements are only required when the regulation, while LSC Management agency, on behalf of the client. LSC has recipient is providing extended service reiterated its support for retention of a determined that the discrepancy to the client is appropriate. Accordingly, retainer agreement requirement for between the plain language and the LSC is adopting the revisions as extended service in the regulation, with practical meaning of the exception must proposed. Under the new rule, certain amendments intended to clarify be corrected. recipients will only be required to and streamline the requirement. The During the public deliberations on execute retainer agreements when Board agrees with Management. LSC is this matter in the 2004 and 2005 providing extended services to clients. committed to keeping a retainer Operations and Regulations Committee Extended service is characterized by the agreement requirement in the meetings, LSC considered different performance of multiple tasks incident regulations. LSC considers the practice approaches to resolving the discrepancy to continuous representation in a case. of providing retainer agreements to be between the regulation as written and Examples of extended service include professionally desirable and in the prevailing practice. Field representation of a client in litigation, accordance with its mandate under representatives suggested in the event an administrative adjudicative Section 1007(a)(1) of the Act to assure that a retainer agreement requirement proceeding, alternative dispute the maintenance of the highest quality remains in the rule (although still resolution proceeding, and more than of service and professional standards preferring the elimination of any such brief representation of a client in and to assure that there are no requirement) that the language of the negotiations with a third party. In misunderstandings as to what services exception should reflect the current addition, LSC is retaining the provision are to be rendered to a particular client. practice by expressly including brief in the current regulation that the Retainer agreements protect the attorney service type activities along with advice retainer agreement must be executed and recipient in cases of an unfounded and counsel. They asserted that the when representation commences or as malpractice claim and protect the client proposed rule should add no new soon thereafter as is practicable. if the attorney and the recipient should administrative or regulatory burdens on To further clarify the regulation, LSC fail to provide legal assistance recipients. While recognizing the value is including express language specifying measuring up to professional standards. of retainer agreements in some that recipients are not required to LSC agrees, however, that there are circumstances, the field representatives execute retainer agreements if the only changes that can be made in the retainer also argued that the rules of professional services being provided are advice and agreement requirement to clarify the responsibility in most jurisdictions do counsel or brief service. Advice and application of the requirement and to not require that a retainer agreement be counsel is characterized by a limited lessen the burden on recipients, without executed or that any other form of relationship between the attorney and interfering with the underlying goals of notice be provided in the brief service the client in which the attorney does no the requirements. First, LSC believes context. Although LSC Management more than review information and that it is not necessary for LSC to expressed the belief that while some provide information and guidance to the approve retainer agreements and form of written communication between client. Advice and counsel does not proposes to remove the requirement at the attorney and the client in brief encompass drafting of documents or current section 1611.8(a) that retainer services cases about the nature of the making third-party contacts on behalf of agreements be in a form approved by relationship and a clear understanding the client. LSC notes also that it LSC. Instead, LSC is requiring the as to what services are to be rendered proposes to use the term ‘‘advice and retainer agreements must be in a form is important to achieving the highest counsel’’ instead of ‘‘advice and consistent with the local rules of quality of legal service and professional consultation’’ because the term ‘‘advice professional responsibility and must standards, it ultimately recommended and counsel’’ is a widely understood contain statements identifying the legal against requiring grantees to provide case reporting term throughout the legal problem for which representation is specific written communications to services community and LSC believe being provided and the nature of the clients when only brief services are that use of the standard term will be legal services to be provided. LSC being provided. simpler and clearer. Brief service is the believes that this simplification will Most of the comments LSC received performance of a discrete task (or tasks) eliminate possible sources of confusion on the NPRM reiterated the arguments which are not incident to continuous for recipients in drafting retainer previously made by field representation in a case but which agreements, yet will continue to foster representatives. At the same time, involve more than the mere provision of the essential communication between however, the commenters noted that if advice and counsel. Examples of brief the recipient and the client. LSC was going to remain committed to service include activities, such as the Second, LSC is clarifying the maintaining a retainer agreement drafting of documents such as a contract circumstances in which retainer requirement in the regulation, that the or a will for a client or the making of agreements are required. 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  • 45562 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations behalf of a client in a narrow time extended services. Although this change § 1611.1 Purpose. period. In advice and counsel and brief to the language alone could arguably be This part sets forth requirements service cases, the interaction between sufficient to remove the necessity of relating to the financial eligibility of the recipient and the client is generally applying the retainer agreement individual applicants for legal limited in nature and duration so that requirement to cases being handled by assistance supported with LSC funds executing a retainer agreement is PAI attorneys, LSC believes the text of and recipients’ responsibilities in administratively burdensome. In these the regulation should be further making financial eligibility situations it may take more time and clarified to explicitly so state. determinations. This part is not effort for the recipient to prepare the intended to and does not create any Other retainer and ensure that the client has entitlement to service for persons signed and returned an executed copy of LSC received numerous comments deemed financially eligible. This part the retainer agreement to the recipient supporting LSC’s decision not to also seeks to ensure that financial than it takes for the recipient to provide incorporate the requirements of section eligibility is determined in a manner the service to the client. At that point, 509(h) of LSC’s FY 1996 appropriations conducive to development of an the benefit of having the executed act. Public Law 104–134, 110 Stat. 1321 effective attorney-client relationship. In retainer agreement is outweighed by the (carried forward in each successive addition, this part sets forth standards effort required to comply with the appropriation, including the current relating to the eligibility of groups for requirement. appropriation, Public Law 108–447, 118 legal assistance supported with LSC Finally, LSC is adding a statement to Stat. 2809) with respect to records funds. Finally, this part sets forth the regulation providing that no written covered by this Part. Section 509(h) requirements relating to recipients’ retainer agreement is required for legal provides that, among other records, responsibilities in executing retainer services provided to the client by a eligibility records ‘‘shall be made agreements with clients. private attorney pursuant to 45 CFR Part available to any auditor or monitor of 1614. Until now, LSC has consistently the recipient * * * except for such § 1611.2 Definitions. interpreted the retainer agreement records subject to the attorney-client (a) ‘‘Advice and counsel’’ means legal requirement as applying to cases privilege.’’ During the prior stages of assistance that is limited to the review handled by private attorneys pursuant this rulemaking, there had been some of information relevant to the client’s to a recipient’s PAI program and OLA discussion and consideration of having legal problem(s) and counseling the has advised recipients that the best this language expressly incorporated client on the relevant law and/or course of action is to have the client into Part 1611. LSC continues to believe suggested course of action. Advice and execute retainer agreements with both that, as 509(h) covers significantly more counsel does not encompass drafting of the recipient and with the private than eligibility records, having a full documents or making third-party attorney (OLA Opinion 99–03, August 9, discussion of the meaning of 509(h) in contacts on behalf of the client. 1999). Recipients have reported that the context of 1611, which addresses (b) ‘‘Applicable rules of professional entering into retainer agreements with only financial eligibility issues, is not responsibility’’ means the rules of ethics clients with whom it does not have on- appropriate. LSC is making final its and professional responsibility going direct relationships does not decision not to address 509(h) generally applicable to attorneys in the further the goal of the retainer requirements in this rule. For a fuller jurisdiction where the recipient agreement requirement and that discussion of this issue, see the provides legal services. ensuring that retainer agreements be preamble to the November 22, 2002 (c) ‘‘Applicant’’ means an individual executed between clients and private NPRM, 67 FR 70376. who is seeking legal assistance attorneys is unduly administratively supported with LSC funds from a burdensome. LSC agrees. List of Subjects in 45 CFR Part 1611 recipient. The term does not include a The application of the retainer Legal services. group, corporation or association. agreement requirement comes from the (d) ‘‘Assets’’ means cash or other I For reasons set forth in the preamble, current structure of the text of the resources of the applicant or members of LSC revises 45 CFR part 1611 to read as regulation. Under the current regulation, the applicant’s household that are follows: a recipient is required to execute a readily convertible to cash, which are retainer agreement (unless otherwise PART 1611—FINANCIAL ELIGIBILITY currently and actually available to the excepted) ‘‘with each client who applicant. receives legal services from the Sec. (e) ‘‘Brief services’’ means legal recipient.’’ Cases referred to private 1611.1 Purpose. assistance in which the recipient attorneys pursuant to a recipient’s PAI 1611.2 Definitions. undertakes to provide a discrete and 1611.3 Financial eligibility policies. program remain cases of the recipient 1611.4 Financial eligibility for legal time-limited service to a client beyond and the clients in those cases remain assistance. advice and consultation, including but clients of the recipient and the client is 1611.5 Authorized exceptions to the not limited to activities, such as the considered to be receiving some legal recipient’s annual income ceiling. drafting of documents or making limited services from the recipient. However, by 1611.6 Representation of groups. third party contacts on behalf of a client. amending the language of the text of the 1611.7 Manner of determining financial (f) ‘‘Extended service’’ means legal regulation to say that the recipient is eligibility. assistance characterized by the only required to execute a retainer 1611.8 Changes in financial eligibility performance of multiple tasks incident status. agreement ‘‘when the recipient is 1611.9 Retainer agreements. to continuous representation. Examples providing extended service to the Appendix A to Part 1611—Legal Services of extended service would include client’’ the necessity of applying the Corporation Poverty Guidelines representation of a client in litigation, requirement to PAI cases is removed. In an administrative adjudicative Authority: 42 U.S.C. 2996e(b)(1), cases handled by PAI attorneys, 2996e(b)(3), 2996f(a)(1), 2996f(a)(2); Section proceeding, alternative dispute although the client can be said to be 509(h) of Pub. L. 104–134, 110 Stat. 1321 resolution proceeding, extended receiving some legal services from the (1996); Pub. L. 105–119, 111 Stat. 2512 negotiations with a third party, or other recipient, the recipient is not providing (1998). legal representation in which the VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00040 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45563 recipient undertakes responsibility for that only individuals and groups established by reference to an protecting or advancing a client’s determined to be financially eligible applicant’s receipt of benefits from a interest beyond advice and counsel or under the recipient’s financial eligibility governmental program for low-income brief services. policies and LSC regulations may individuals or families consistent with (g) ‘‘Governmental program for low receive legal assistance supported with § 1611.4(c). income individuals or families’’ means LSC funds. (g) Before establishing its financial any Federal, State or local program that (c)(1) As part of its financial eligibility eligibility policies, a recipient shall provides benefits of any kind to persons policies, every recipient shall establish consider the cost of living in the service whose eligibility is determined on the annual income ceilings for individuals area or locality and other relevant basis of financial need. and households, which may not exceed factors, including but not limited to: (h) ‘‘Governmental program for one hundred and twenty five percent (1) The number of clients who can be persons with disabilities’’ means any (125%) of the current official Federal served by the resources of the recipient; Federal, State or local program that Poverty Guidelines amounts. The (2) The population that would be provides benefits of any kind to persons Corporation shall annually calculate eligible at and below alternative income whose eligibility is determined on the 125% of the Federal Poverty Guidelines and asset ceilings; and basis of mental and/or physical amounts and publish such calculations (3) The availability and cost of legal disability. in the Federal Register as a revision to services provided by the private bar and (i) ‘‘Income’’ means actual current Appendix A to this part. other free or low cost legal services annual total cash receipts before taxes of (2) As part of its financial eligibility providers in the area. all persons who are resident members policies, a recipient may adopt and contribute to the support of an authorized exceptions to its annual § 1611.4 Financial eligibility for legal applicant’s household, as that term is income ceilings consistent with assistance. defined by the recipient. Total cash § 1611.5. (a) A recipient may provide legal receipts include, but are not limited to, (d)(1) As part of its financial assistance supported with LSC funds wages and salaries before any eligibility policies, every recipient shall only to individuals whom the recipient deduction; income from self- establish reasonable asset ceilings for has determined to be financially eligible employment after deductions for individuals and households. In for such assistance. Nothing in this part, business or farm expenses; regular establishing asset ceilings, the recipient however, prohibits a recipient from payments from governmental programs may exclude consideration of a providing legal assistance to an for low income persons or persons with household’s principal residence, individual without regard to that disabilities; social security payments; vehicles used for transportation, assets individual’s income and assets if the unemployment and worker’s used in producing income, and other legal assistance is wholly supported by compensation payments; strike benefits assets which are exempt from funds from a source other than LSC, and from union funds; veterans benefits; attachment under State or Federal law. is otherwise permissible under training stipends; alimony; child (2) The recipient’s policies may applicable law and regulation. support payments; military family provide authority for waiver of its asset (b) Consistent with the recipient’s allotments; public or private employee ceilings for specific applicants under financial eligibility policies and this pension benefits; regular insurance or unusual circumstances and when part, the recipient may determine an annuity payments; income from approved by the recipient’s Executive applicant to be financially eligible for dividends, interest, rents, royalties or Director, or his/her designee. When the legal assistance if the applicant’s assets from estates and trusts; and other asset ceiling is waived, the recipient do not exceed the recipient’s applicable regular or recurring sources of financial shall record the reasons for such waiver asset ceiling established pursuant to support that are currently and actually and shall keep such records as are § 1611.3(d)(1), or the applicable asset available to the applicant. Total cash necessary to inform the Corporation of ceiling has been waived pursuant receipts do not include the value of food the reasons for such waiver. § 1611.3(d)(2), and: or rent received by the applicant in lieu (e) Notwithstanding any other (1) The applicant’s income is at or of wages; money withdrawn from a provision of this part, or other provision below the recipient’s applicable annual bank; tax refunds; gifts; compensation of the recipient’s financial eligibility income ceiling; or and/or one-time insurance payments for policies, every recipient shall specify as (2) The applicant’s income exceeds injuries sustained; non-cash benefits; part of its financial eligibility policies the recipient’s applicable annual and up to $2,000 per year of funds that in assessing the income or assets of income ceiling but one or more of the received by individual Native an applicant who is a victim of domestic authorized exceptions to the annual Americans that is derived from Indian violence, the recipient shall consider income ceilings, as provided in trust income or other distributions only the assets and income of the § 1611.5, applies. exempt by statute. applicant and members of the (c) Consistent with the recipient’s applicant’s household other than those policies, a recipient may determine an § 1611.3 Financial eligibility policies. of the alleged perpetrator of the applicant to be financially eligible (a) The governing body of a recipient domestic violence and shall not include without making an independent shall adopt policies consistent with this any assets held by the alleged determination of income or assets, if the part for determining the financial perpetrator of the domestic violence, applicant’s income is derived solely eligibility of applicants and groups. The jointly held by the applicant with the from a governmental program for low- governing body shall review its alleged perpetrator of the domestic income individuals or families, financial eligibility policies at least once violence, or assets jointly held by any provided that the recipient’s governing every three years and make adjustments member of the applicant’s household body has determined that the income as necessary. The recipient shall with the alleged perpetrator of the standards of the governmental program implement procedures consistent with domestic violence. are at or below 125% of the Federal its policies. (f) As part of its financial eligibility Poverty Guidelines amounts and that (b) As part of its financial eligibility policies, a recipient may adopt policies the governmental program has eligibility policies, every recipient shall specify that permit financial eligibility to be standards which include an assets test. 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  • 45564 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations § 1611.5 Authorized exceptions to the financially eligible pursuant to this LSC, provided that any legal assistance annual income ceiling. section and is provided legal assistance, provided by a recipient, regardless of (a) Consistent with the recipient’s the recipient shall document the basis the source of funds supporting the policies and this Part, a recipient may for the financial eligibility assistance, must be otherwise determine an applicant whose income determination. The recipient shall keep permissible under applicable law and exceeds the recipient’s applicable such records as may be necessary to regulation. annual income ceiling to be financially inform the Corporation of the specific eligible if the applicant’s assets do not facts and factors relied on to make such § 1611.7 Manner of determining financial eligibility. exceed the recipient’s applicable asset determination. ceiling established pursuant to (a)(1) In making financial eligibility § 1611.3(d), or the asset ceiling has been § 1611.6 Representation of groups. determinations regarding individual waived pursuant to § 1611.3(d)(2), and: (a) A recipient may provide legal applicants, a recipient shall make (1) The applicant is seeking legal assistance to a group, corporation, reasonable inquiry regarding sources of assistance to maintain benefits provided association or other entity if it provides the applicant’s income, income by a governmental program for low information showing that it lacks, and prospects and assets. The recipient shall income individuals or families; or has no practical means of obtaining, record income and asset information in (2) The Executive Director of the funds to retain private counsel and the manner specified in this section. recipient, or his/her designee, has either: (2) In making financial eligibility determined on the basis of (1) The group, or for a non- determinations regarding groups seeking documentation received by the membership group the organizing or LSC-supported legal assistance, a recipient, that the applicant’s income is operating body of the group, is primarily recipient shall follow the requirements primarily committed to medical or composed of individuals who would be set forth in § 1611.6(b) of this part. nursing home expenses and that, financially eligible for LSC-funded legal (b) A recipient shall adopt simple excluding such portion of the assistance; or intake forms and procedures to obtain applicant’s income which is committed (2) The group has as a principal information from applicants and groups to medical or nursing home expenses, activity the delivery of services to those to determine financial eligibility in a the applicant would otherwise be persons in the community who would manner that promotes the development financially eligible for service; or be financially eligible for LSC-funded of trust between attorney and client. The (3) The applicant’s income does not legal assistance and the legal assistance forms shall be preserved by the exceed 200% of the applicable Federal sought relates to such activity. recipient. Poverty Guidelines amount and: (b)(1) In order to make a (c) If there is substantial reason to (i) The applicant is seeking legal determination that a group, corporation, doubt the accuracy of the financial assistance to obtain governmental association or other entity is eligible for eligibility information provided by an benefits for low income individuals and legal services as required by paragraph applicant or group, a recipient shall families; or (a) of this section, a recipient shall make appropriate inquiry to verify the (ii) The applicant is seeking legal consider the resources available to the information, in a manner consistent assistance to obtain or maintain group, such as the group’s income and with the attorney-client relationship. governmental benefits for persons with income prospects, assets and obligations (d) When one recipient has disabilities; or and either: determined that a client is financially (4) The applicant’s income does not (i) For a group primarily composed of eligible for service in a particular case exceed 200% of the applicable Federal individuals who would be financially or matter, that recipient may request Poverty Guidelines amount and the eligible for LSC-funded legal assistance, another recipient to extend legal recipient has determined that the whether the financial or other assistance or undertake representation applicant should be considered socioeconomic characteristics of the on behalf of that client in the same case financially eligible based on persons comprising the group are or matter in reliance upon the initial consideration of one or more of the consistent with those of persons who financial eligibility determination. In following factors as applicable to the are financially eligible for LSC-funded such cases, the receiving recipient is not applicant or members of the applicant’s legal assistance; or required to review or redetermine the household: (ii) For a group having as a principal client’s financial eligibility unless there (i) Current income prospects, taking activity the delivery of services to those is a change in financial eligibility status into account seasonal variations in persons in the community who would as described in § 1611.8 or there is income; be financially eligible for LSC-funded substantial reason to doubt the validity (ii) Unreimbursed medical expenses legal assistance, whether the financial or of the original determination, provided and medical insurance premiums; other socioeconomic characteristics of that the referring recipient provides and (iii) Fixed debts and obligations; the persons served by the group are the receiving recipient retains a copy of (iv) Expenses such as dependent care, consistent with those of persons who the intake form documenting the transportation, clothing and equipment are financially eligible for LSC-funded financial eligibility of the client. expenses necessary for employment, job legal assistance and the assistance training, or educational activities in sought relates to such activity of the § 1611.8 Change in financial eligibility preparation for employment; group. status. (v) Non-medical expenses associated (2) A recipient shall collect (a) If, after making a determination of with age or disability; information that reasonably financial eligibility and accepting a (vi) Current taxes; or demonstrates that the group, client for service, the recipient becomes (vii) Other significant factors that the corporation, association or other entity aware that a client has become recipient has determined affect the meets the eligibility criteria set forth financially ineligible through a change applicant’s ability to afford legal herein. in circumstances, a recipient shall assistance. (c) The eligibility requirements set discontinue representation supported (b) In the event that a recipient forth herein apply only to legal with LSC funds if the change in determines that an applicant is assistance supported by funds from circumstances is sufficient, and is likely VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00042 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations 45565 ii For family units with more than eight mem- to continue, to enable the client to to as ‘‘foreign manufacturers’’) to afford private legal assistance, and bers, add $5,100 for each additional member designate an agent for service of process in a family. discontinuation is not inconsistent with iii For family units with more than eight mem- in the United States. Over time, NHTSA applicable rules of professional bers, add $4,688 for each additional member has found that many foreign responsibility. in a family. manufacturers have submitted (b) If, after making a determination of incomplete designation documents financial eligibility and accepting a Victor M. Fortuno, containing common errors and client for service, the recipient later Vice President & General Counsel. omissions. Often NHTSA receives determines that the client is financially [FR Doc. 05–15553 Filed 8–5–05; 8:45 am] designation documents not properly ineligible on the basis of later BILLING CODE 7050–01–P dated or signed, or otherwise lacking discovered or disclosed information, a information necessary to effect a valid recipient shall discontinue designation or replacement of agent representation supported with LSC DEPARTMENT OF TRANSPORTATION funds if the discontinuation is not under the regulation. NHTSA has found inconsistent with applicable rules of National Highway Traffic Safety also that foreign manufacturers often fail professional responsibility. Administration to provide adequate notice to NHTSA of changes in company name, address and § 1611.9 Retainer agreements. 49 CFR Part 551 product names or trademarks. (a) When a recipient provides This document clarifies existing extended service to a client, the [Docket No. NHTSA–2005–21972] regulatory requirements by rephrasing recipient shall execute a written retainer RIN 2127–AJ69 49 CFR part 551, subpart D in a plain agreement with the client. The retainer Service of Process on Foreign language, question and answer format agreement shall be executed when Manufacturers and Importers and inserting an appendix containing a representation commences or as soon suggested designation form for use by thereafter as is practicable. Such AGENCY: National Highway Traffic retainer agreement must be in a form foreign manufacturers and their agents. Safety Administration (NHTSA), It also will enhance communications consistent with the applicable rules of Department of Transportation (DOT). professional responsibility and between foreign manufacturers and the ACTION: Final rule. agency by spelling out requirements for prevailing practices in the recipient’s service area and shall include, at a providing notice to NHTSA of changes SUMMARY: This final rule amends minimum, a statement identifying the NHTSA’s regulation on service of in company name, address and product legal problem for which representation process on foreign manufacturers and names, marks, or other designations of is sought, and the nature of the legal importers to clarify existing regulatory origin. Finally, it changes the NHTSA services to be provided. requirements by rephrasing the office to which foreign manufacturers (b) No written retainer agreement is regulation in a plain language, question must submit documents, as a result of required for advice and counsel or brief and answer format and inserting an organizational changes that have service provided by the recipient to the appendix containing a suggested occurred in the agency since the client or for legal services provided to designation form for use by foreign regulation was adopted. the client by a private attorney pursuant manufacturers and their agents. It also The purpose of the amendments is to to 45 CFR part 1614. will enhance communications between (c) The recipient shall maintain make clearer the requirements of 49 CFR foreign manufacturers and the agency by part 551, subpart D and improve copies of all retainer agreements spelling out existing requirements for generated in accordance with this communications between the agency providing notice to NHTSA of changes and foreign manufacturers, thereby section. in company name, address and product reducing the burdens associated with Appendix A to Part 1611 names, and changing the office to which repeated filings to correct common foreign manufacturers must submit errors. Since they are technical LEGAL SERVICES CORPORATION 2005 designation and related documents to amendments only and make no POVERTY GUIDELINES * reflect organizational changes occurring substantive changes to the regulation, since the regulation was adopted. pursuant to 5 U.S.C. 553(b)(3)(B) prior 48 Contig- EFFECTIVE DATE: This final rule becomes uous notice and comment are not required. Size of effective October 7, 2005. States Alaska ii Hawaii iii Petitions: Any petitions for family Statutory Basis for the Final Rule and the unit reconsideration of today’s final rule District of Columbia i must be received by NHTSA not later Section 110(e) of the National Traffic than September 22, 2005. and Motor Vehicle Safety Act of 1966 1 ......... $11,963 $14,938 $13,763 (49 U.S.C. 30164) requires a foreign FOR FURTHER INFORMATION CONTACT: Ms. 2 ......... 16,038 20,038 18,450 manufacturer offering a motor vehicle or 3 ......... 20,113 25,138 23,138 Dana Sade, Office of the Chief Counsel, 4 ......... 24,188 30,238 27,825 at (202) 366–1834, facsimile (202) 366– motor vehicle equipment for 5 ......... 28,263 35,338 32,513 3820. You may send mail to Ms. Sade importation into the United States to 6 ......... 32,338 40,438 37,200 at the National Highway Traffic Safety designate a permanent resident of the 7 ......... 36,413 45,538 41,888 Administration, 400 Seventh Street, United States as its agent upon whom 8 ......... 40,488 50,638 46,575 SW., Washington, DC 20590. service of notices and processes may be * The figures in this table represent 125% of SUPPLEMENTARY INFORMATION: NHTSA made in administrative and judicial the poverty guidelines by family size as deter- published a rule on December 25, 1968 proceedings. This final rule revises a mined by the Department of Health and that established a procedure for foreign regulation that implements that Human Services. i For family units with more than eight mem- manufacturers, assemblers and statutory requirement at 49 CFR Part bers, add $4,075 for each additional member importers of motor vehicles and motor 551, Subpart D. in a family. vehicle equipment (hereinafter referred VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00043 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1