Proposed Rule Legal Assistance Eligibility; Maximum Income
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Proposed Rule Legal Assistance Eligibility; Maximum Income Proposed Rule Legal Assistance Eligibility; Maximum Income Document Transcript

  • 29695 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules eligibility in the NFIP. No regulatory 12612, Federalism, dated October 26, PART 67—[AMENDED] 1987. flexibility analysis has been prepared. 1. The authority citation for part 67 Executive Order 12778, Civil Justice Regulatory Classification continues to read as follows: Reform This proposed rule is not a significant Authority: 42 U.S.C. 4001 et seq.; This proposed rule meets the regulatory action under the criteria of Reorganization Plan No. 3 of 1978, 3 CFR, applicable standards of Section 2(b)(2) Section 3(f) of Executive Order 12866 of 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, of Executive Order 12778. September 30, 1993, Regulatory 3 CFR, 1979 Comp., p. 376. List of Subjects in 44 CFR Part 67 Planning and Review, 58 FR 51735. § 67.4 [Amended] Administrative practice and Executive Order 12612, Federalism procedure, flood insurance, reporting 2. The tables published under the and recordkeeping requirements. authority of § 67.4 are proposed to be This proposed rule involves no policies that have federalism Accordingly, 44 CFR part 67 is amended as follows: implications under Executive Order proposed to be amended as follows: # Depth in feet above ground Elevation in State City/town/county Source of flooding Location feet ((NAVD) Existing Modified Iowa ............... West Des Moines (City) Jordan Creek ............... Approximately 3,210 feet downstream of 68th None ........ 924. Polk and Dallas Street. Counties. Approximately 1,950 feet upstream of E.P. True None ........ 970. Parkway. Raccoon River ............. Approximately 75 feet downstream of South 814 .......... 816. First Street. Approximately 1.7 miles upstream of U.S. Inter- 832 .......... 833. state 35. Maps are available for inspection at City Hall, 4200 Mills Civic Parkway, West Des Moines, Iowa. Send comments to The Honorable Eugene Meyer, Mayor, City of West Des Moines, 4200 Mills Civic Parkway, West Des Moines, Iowa 50265. (Catalog of Federal Domestic Assistance No. clarify the focus of the regulation on the Procedural Background 83.100, ‘‘Flood Insurance.’’) financial eligibility of applicants for On June 30, 2001, LSC initiated a Dated: May 18, 2005. LSC-funded legal services. Negotiated Rulemaking and appointed a David I. Maurstad, Working Group comprised of Comments must be submitted on DATES: Acting Director, Mitigation Division, representatives of LSC (including the or before June 23, 2005. Emergency Preparedness and Response Office of Inspector General), the Comments must be ADDRESSES: Directorate. National Legal Aid and Defenders submitted in writing and may be sent by [FR Doc. 05–10299 Filed 5–23–05; 8:45 am] Association, the Center for Law and regular mail, or may be transmitted by Social Policy, the American Bar BILLING CODE 9110–12–P fax or email to: Mattie C. Condray, Association’s Standing Committee on Senior Assistant General Counsel, Office Legal Aid and Indigent Defendants and of Legal Affairs, Legal Services a number of individual LSC recipient LEGAL SERVICES CORPORATION Corporation, 3333 K. St., NW., programs. The Negotiated Rulemaking Washington, DC 20007–3522; (202) 337– Working Group met three times 45 CFR Part 1611 6519 (fax); mcondray@lsc.gov (e-mail). throughout 2002 and developed a Draft Financial Eligibility Notice of Proposed Rulemaking (NPRM) FOR FURTHER INFORMATION CONTACT: which was the basis for the NPRM Mattie C. Condray, Senior Assistant Legal Services Corporation. AGENCY: published by LSC on November 22, General Counsel, Office of Legal Affairs, Notice of proposed rulemaking. ACTION: 2002 proposing significant revisions to Legal Services Corporation, 3333 K. St., to Part 1611 (67 FR 70376). LSC NW., Washington, DC 20007–3522; SUMMARY: The Legal Services received 15 comments on that NPRM. (202) 295–1624 (phone); (202) 337–6519 Corporation (‘‘LSC’’ or ‘‘Corporation’’) is Except as specifically noted in the (fax); mcondray@lsc.gov (e-mail). republishing for additional comment Section-by-Section analysis below, the previously proposed amendments (with Section SUPPLEMENTARY INFORMATION: comments LSC received either certain additional revisions) to its 1007(a) of the Legal Services affirmatively supported or raised no regulations relating to financial Corporation Act requires LSC to objection to the proposals in the eligibility for LSC-funded legal services. establish guidelines, including setting November 2002 NPRM.1 The proposed revisions are intended to maximum income levels, for the Upon receipt of the comments, LSC reorganize the regulation to make it determination of applicants’ financial staff prepared a Draft Final Rule easier to read and follow; simplify and eligibility for LSC-funded legal discussing the comments and making streamline the requirements of the rule assistance. Part 1611 implements this permanent the proposed revisions. to ease administrative burdens faced by provision, setting forth the requirements LSC recipients in implementing the relating to determination and 1 For additional discussion of the Negotiated regulation and to aid LSC in documentation of client financial Rulemaking Working Group, see 67 FR 70376 enforcement of the regulation; and to eligibility. (November 22, 2002). VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00038 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29696 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules However, on the eve of the January implementing the regulation, facilitate entitlement to service. Rather, financial 31–February 1, 2003 Board of Directors compliance and aid LSC in enforcement eligibility is merely a threshold question meeting at which the Draft Final Rule of the regulation; and clarification of the and the issue of whether any otherwise was scheduled to be considered, LSC focus of the regulation on the financial eligible applicant will be provided with received a request from Representative eligibility of applicants for LSC-funded legal assistance is a matter for the James Sensenbrenner, Chairman of the legal services as an issue separate from recipient to determine with reference to U.S. House of Representatives Judiciary decisions on whether to accept a its priorities and resources. In addition, Committee, to suspend action on the particular client for service. In this part does not address eligibility rulemaking pending the confirmation of particular, LSC is proposing to based on citizenship or alienage status; new LSC Board of Directors members significantly reorganize and simplify the those eligibility requirements are set appointed by President Bush. The then- sections of the rule which set forth the forth in Part 1626 of LSC’s regulations, LSC Operations and Regulations various requirements relating to Restrictions on Legal Assistance to Committee deferred to Chairman establishment of recipient annual Aliens. Sensenbrenner’s request. After the income and asset ceilings, authorized Section-by-Section Analysis confirmation of the nine newly exceptions and determinations of appointed Board members, the eligibility. These changes are intended Section 1611.1—Purpose reconsitituted Operations and to clarify the regulation and include LSC is proposing to revise this section Regulations Committee further deferred substantive changes to make intake to make clear that the standards of this action on the rulemaking pending the simpler and less burdensome and part concern only the financial appointment of a new LSC President. render basic financial eligibility eligibility of persons seeking LSC- After the arrival of the new LSC determinations easier for recipients to funded legal assistance and that a President in January 2004, the make. LSC is also proposing to move the finding of financial eligibility under Part reconstituted Operations and existing provisions on group 1611 does not create an entitlement to Regulations Committee resumed representation, with some amendment, service. In addition, LSC proposes to consideration of the Part 1611 to a separate section of the regulation. remove the language in the current rulemaking. Finally, LSC is proposing simplification regulation referring to giving At its meetings of May 1, 2004, June and clarification of the retainer preferences to ‘‘those least able to obtain 5, 2004 and September 11, 2004, the agreement requirement. legal assistance.’’ Although the original Operations and Regulations Committee One other general issue merits LSC Act contained language indicating discussed and provided policy direction discussion. Section 509(h) of the FY that recipients should provide to staff on the two aspects of the 1996 LSC appropriations act, Public preferences in service to the poorest proposed changes to the regulations Law 104–134, provides that, among among applicants, that language was about which LSC and the field had other records, eligibility records ‘‘shall deleted when the Act was reauthorized failed to achieve consensus during the be made available to any auditor or in 1977 and has remained out of the Working Group meetings—retainer monitor of the recipient * * * except legislation ever since. Moreover, section agreements and group representation. for such records subject to the attorney- 504(a)(9) of the FY 1996 appropriations The Committee reviewed these client privilege.’’ This provision has act, Public Law 104–134 (incorporated proposals and the remainder of the been retained in each subsequent by reference in the current proposed revisions to Part 1611 at its appropriations measure and continues appropriations act and implemented by meeting of April 1, 2005. At the meeting to be in force. During the prior stages of regulation at 45 CFR part 1620) provides of the full Board of Directors on April this rulemaking, there had been some that recipients are to make service 30, 2005, upon the recommendation of discussion and consideration of having determinations in accordance with the Committee, the Board determined this language expressly incorporated written priorities, which take into that because two years has passed since into Part 1611. LSC continues to believe account factors other than the relative the publication of the November 2002 that, as 509(h) covers significantly more poverty among applicants. Thus, as NPRM, rather than adopting a final rule than eligibility records, having a full there is no statutory basis for a amending Part 1611, the most prudent discussion of the meaning of 509(h) in preference for those least able to afford course of action would be to republish the context of 1611, which addresses assistance and because LSC believes a revised NPRM for public comment. only financial eligibility issues, is not that the regulation should focus on Accordingly, except for the retainer appropriate. Accordingly, LSC does not financial eligibility determinations agreement and group eligibility sections, propose to include regulatory language without reference to issues relating to LSC is proposing the same revisions implementing 509(h) with respect to determinations by a recipient to provide (with only a few, non-substantive records covered by this Part. For a fuller services to a particular applicant, such differences) as LSC proposed in discussion of this issue, see the language should be removed from the November 2002 and requests public preamble to the November 22, 2002 regulation. LSC also proposes to add comment thereon. NPRM, 67 FR 70376. language specifying that this Part also Proposed Revisions to Part 1611 Title of Part 1611 sets forth financial standards for groups While specific proposed revisions are LSC proposes to change the title of seeking legal assistance supported by discussed in greater detail in the Part 1611 from ‘‘Eligibility’’ to LSC funds. Finally, LSC proposes to Section-by-Section analysis below, it ‘‘Financial Eligibility.’’ This proposed include a reference to the retainer should be noted that the proposed change is intended, first, to make clear agreement requirement in the purpose revisions reflect several overall goals of that with respect to individuals seeking section to provide a notice at the the Working Group: reorganization of LSC-funded legal assistance, the beginning of the regulation that this the regulation to make it easier to read standards of this part deal only with the subject is included in Part 1611. and follow; simplification and financial eligibility of such persons. LSC Section 1611.2—Definitions streamlining of the requirements of the believes this change will help clarify rule to ease administrative burdens that a finding of financial eligibility LSC proposes to add definitions for faced by LSC recipients in under Part 1611 does not create an several terms and to amend the VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00039 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29697 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules definitions for each of the existing terms excluded from this definition, as the proposed language accomplishes that currently defined in the regulation. LSC eligibility of groups would be addressed purpose. believes that the new definitions and wholly within proposed section 1611.6. Section 1611.2(e)—Brief Services Recipients currently may provide the amended definitions will help to LSC proposes to add a definition of legal assistance without regard to a make the regulation more easily the term ‘‘brief services’’ as it is used in person’s financial eligibility under Part comprehensible. proposed section 1611.9, Retainer 1611 when the assistance is supported Section 1611.2(a)—Advice and Counsel Agreements. LSC notes that brief wholly by non-LSC funds. LSC does not LSC proposes to add a definition of services is legal assistance characterized propose to change this (in fact, LSC the term ‘‘advice and counsel’’ as that primarily by being distinguishable from proposes to restate this principle in term appears in proposed section both extended service and advice and proposed section 1611.4(a)) and believes 1611.9, Retainer Agreements. Under the counsel. Under the proposed defintion, that the use of the term applicant as proposed definition, ‘‘advice and brief service is the performance of a proposed herein will help to clarify the counsel’’ would be defined as limited application of the rule. discrete task (or tasks) which are not legal assistance that involves the review incident to continuous representation in Section 1611.2(d)—Assets of information relevant to the client’s a case but which involve more than the LSC proposes to add a definition of legal problem(s) and counseling the mere provision of advice and counsel. the term assets to the regulation. The client on the relevant law or action(s) to Examples of brief services would proposed definition, ‘‘cash or other take to address the legal problem(s). LSC include activities such as the drafting of resources that are readily convertible to anticipates that advice and counsel documents or personalized assistance cash, which are currently and actually would generally be characterized by a with the completion of pleadings being available to the applicant,’’ is intended one-time or very short term relationship prepared and filed by pro se litigants, to provide some guidance to recipients between the attorney and the client. and making limited third-party contacts as to what is meant by the term assets, Advice and counsel does not encompass on behalf of a client in a short time yet provide considerable latitude to drafting of documents or making third- period. recipients in developing a description of party contacts on behalf of the client. Section 1611.2(f)—Extended Service assets that addresses local concerns and Thus, for example, advising a client of conditions. The key concepts intended what notice a landlord is required to LSC proposes to add a definition of in this definition are (1) ready provide to a tenant before evicting the the term ‘‘extended service’’ as that term convertibility to cash; and (2) tenant would fall under ‘‘advice and is used in proposed section 1611.9, availability of the resource to the counsel,’’ but making a phone call to a Retainer Agreements. As defined, applicant. landlord to prevent the landlord from extended service would mean legal Although the term is not defined in evicting a tenant would not be assistance characterized by the the regulation, current section 1611.6(c) considered ‘‘advice and counsel.’’ performance of multiple tasks incident states that ‘‘assets considered shall to continuous representation in which Section 1611.2(b)—Applicable Rules of include all liquid and non-liquid assets. the recipient undertakes responsibility Professional Responsibility * * *’’ The intent of this requirement is for protecting or advancing the client’s that recipients are supposed to consider LSC proposes to add a definition of interests beyond advice and counsel or all assets upon which the applicant the term ‘‘applicable rules of brief services. Examples of extended could draw in obtaining private legal professional responsibility’’ as that term service would include representation of assistance. While there was no intent to appears in proposed sections 1611.8, a client in litigation, administrative change the underlying requirement, in Change in Financial Eligibility Status adjudicative proceeding, alternate discussing the issues of assets and asset and 1611.9, Retainer Agreements. This dispute resolution proceeding, or ceilings in the Working Group it became definition is intended to make clear that extended negotiations with a third apparent that the terms ‘‘liquid’’ and the references in the regulation refer to party. ‘‘non-liquid’’ were obscuring the rules of ethics and professional Section 1611.2(f)—Governmental understanding of the regulation. To responsibility applicable to attorneys in Program for Low Income Individuals or some, the term ‘‘non-liquid’’ implied the jursidiction where the recipient Families something not readily convertible to either provides legal services or cash, while to others the term implied maintains its records. LSC proposes to change the term that an asset that was simply something is used in the regulation from Section 1611.2(c)—Applicant other than cash, without regard to the ‘‘governmental program for the poor’’ to Consistent with the intention ease of converting the asset to cash. ‘‘governmental program for low income throughout to keep the focus of the Thus, the Working Group decided that individuals and families.’’ This change regulation on the standards and criteria the terms ‘‘liquid’’ and ‘‘non-liquid’’ is not intended to create any substantive for determining the financial eligibility should be eliminated and that the change in the current definition, but of persons seeking legal assistance regulation should focus instead on the merely reflect preferred nomenclature. supported with LSC funds, LSC ready convertibility of the asset to cash. Section 1611.2(g)—Governmental proposes to use the term ‘‘applicant’’ The other key concept in the Program for Persons With Disabilities throughout the regulation to emphasize definition of asset is the availability of the distinction between applicants, the resource to the applicant. Although LSC is proposing to add a definition clients, and persons seeking or receiving the current regulation notes that the of the term ‘‘governmental program for assistance supported by other than LSC recipient’s asset guidelines ‘‘shall take persons with disabilities.’’ LSC proposes funds. Accordingly, LSC proposes to into account impediments to an to include in the authorized exceptions add a definition of applicant providing individual’s access to assets of the to the annual income ceilings an that an applicant is an individual family unit or household,’’ the Working exception relating to applicants seeking seeking legal assistance supported with Group was of the opinion that this to obtain or maintain govermental LSC funds. Groups, corporations and principle could be more clearly benefits for persons with disabilities. associations would be specifically articulated. LSC believes that the Accordingly, it is appropriate to include VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00040 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29698 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules a proposed definition for this term. The applicant, LSC does not believe that the from the definition of total cash definition of income is the appropriate receipts. It is worth noting that the list proposed definition, ‘‘any Federal, State place in the regulation to deal with this of items included is not intended to be or local program that provides benefits issue. exhaustive, while the list of items to be of any kind to persons whose eligibility Taking the phrase ‘‘before taxes’’ out excluded is intended to be exhaustive. is determined on the basis of mental of the definition of income would Finally, LSC wishes to restate in this and/or physical disability,’’ is intended effectively change the meaning of preamble guidance on the treatment of to be similar in structure and income from gross income to net Indian trust fund monies in making application to the definition of the term income. The term income has meant income determinations. Several ‘‘governmental program for low income gross income since the original adoption provisions of Federal law regulate individuals and families.’’ of the financial eligibility regulation in whether or not income or interests in Section 1611.2(h)—Income 1976. See 41 FR 51604, at 51606, Indian trusts are taxable or should be LSC proposes to revise the current November 23, 1976. The maximum considered as resources or income for definition of income to refer to the total income guidelines are based on the Federal benefits. See 25 U.S.C. 1407– Department of Health and Human 1408; 25 U.S.C. 117a–117c. Under the cash receipts of a ‘‘household,’’ instead Services (DHHS) Federal Poverty terms of those laws, LSC has determined of a ‘‘family unit’’ and to make clear that Guidelines amounts. DHHS’ Federal that recipients may disregard up to recipients have the discretion to define Poverty Guidelines are, by law, based on $2000 per year of funds received by the term household in any reasonable the Census Bureau’s Federal Poverty individual Native Americans that are manner. Currently, the definition of Thresholds, which are calculated using derived from income or interests in income refers to ‘‘family unit,’’ while gross income before taxes. 42 U.S.C. Indian trusts from being considered the phrase ‘‘household or family unit’’ 9902(2); Office of Management and income for the purpose of determining appears in the section on asset ceilings. Budget Directive No. 14 (May 1978). financial eligibility of Native American It appears that there is no difference Changing the definition of income applicants for service, and that such intended by the use of different terms in effectively from gross to net would funds or interests of individual Native these sections and LSC believes that it introduce two different uses of the term Americans in trust or restricted lands is appropriate to simplify the regulation income into the regulations (one use in should not be considered as a resource to use the same single term in each the income guidelines published for the purpose of LSC financial provision, without creating a annually by LSC in Appendix A to Part eligibility. See LSC Office of Legal substantive change in the meaning of 1611 and another use in the text of the Affairs External Opinion 99–17, August either term. LSC proposes to use regulation). This would have significant 27, 1999. ‘‘household’’ instead of ‘‘family unit’’ As noted in External Opinion 99–17, repercussions in the application of the because it is a simpler, more the exclusion applies only to funds and regulation. LSC believes that this action understandable term. other interests held in trust by the would cause greater confusion. None of As noted above, LSC does not intend Federal government and investment the comments previously received the use of the term ‘‘household’’ to have income accrued therefrom. The supporting removal of ‘‘before taxes’’ a different meaning from the current following have been found to qualify for from the definition of income address term ‘‘family unit.’’ Under current the exclusion from income in this issue. Moreover, LSC believes that guidance from the LSC Office of Legal determining eligibility for various the practical problem (that taxes, Affairs, recipients have considerable government benefits: income from the indeed, are funds unavailable to the latitude in defining the term ‘‘family sale of timber from land held in trust; applicant), is better addressed by unit.’’ Specifically, OLA External income derived from farming and considering taxes as a separate factor Opinion No. EX–2000–1011 states: ranching operations on reservation land which can be considered by the Neither the LSC Act nor the LSC held in trust by the Federal government; recipient in making financial eligibility regulations define ‘‘family unit’’ for client income derived from rentals, royalties, determinations. LSC invites comment eligibility purposes. The Corporation will and sales proceeds from natural on this issue. This matter is presented defer to recipient determinations on this resources of land held in trust; sales in greater detail in the discussion of issue, within reason. Recipients may proceeds from crops grown on land held proposed section 1611.5, below. consider living arrangements, familial relationships, legal responsibility, financial In addition, LSC proposes to move the in trust; and use of land held in trust for responsibility or family unit definitions used information on what is encompassed by grazing purposes. On the other hand, by government benefits agencies, amongst the term ‘‘total cash receipts’’ into the per capita distributions of revenues other factors, in making such decisions. definition of income. LSC believes that from gaming activity on tribal trust LSC intends that this standard would having this information in the definition property are not protected because such also apply to definitions of ‘‘household’’ of income, rather than in a separate funds are not held in trust by the and the proposed definition would definition will make the regulation Federal government. Thus, such make this clear. easier to understand, particularly as the distributions are considered to be Field representatives on the Working term ‘‘total cash receipts’’ is used only income for purposes of determining LSC Group and several comments on the in the definition of income. In financial eligibility. November 2002 NPRM also suggested incorporating the language on ‘‘total Total Cash Receipts deleting the words ‘‘before taxes’’ from cash receipts,’’ LSC proposes to take the the definition of income. Such a change LSC proposes to delete the definition current definition of the term without is desirable, they contend, because of ‘‘total cash reciepts,’’ currently at any substantive amendment, but automatically deducted taxes are not section 1611.2(h), as a separately reorganized to make it easier to available for an applicant’s use and the defined term in the regulation. Rather, understand. Specifically, LSC proposes failure to take current taxes into account LSC proposes to reorganize the to separate the definition into two in determining income has an adverse information contained in the definition sentences, one of which sets forth those impact on the working poor. While it is things which are included in total cash and move it directly into the definition undoubtedly true that automatically receipts and one which sets forth those of ‘‘income.’’ As noted above, the only deducted taxes are not available to an things which are specifically excluded place the term ‘‘total cash reciepts’’ is VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00041 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29699 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules used is in the defintion of ‘‘income’’ and In establishing income and asset or other assets that may not be attached LSC believes that having a separate ceilings, the recipient would have to for the satisfaction of a debt, etc. There was discussion within the definition for ‘‘total cash reciepts’’ is consider the cost of living in the Working Group about the appropriate cumbersome and unnecessary. locality; the number of clients who can scope of this provision. Field be served by the resources of the Section 1611.3—Financial Eligibility representatives suggested that the list of recipient; the potentially eligible Policies exclusions should be illustrative, and population at various ceilings; and the LSC proposes to create a new section not exhaustive, allowing recipients availability of other sources of legal 1611.3, Financial Eligibility Policies, greater discretion in developing asset assistance. With respect to assets of based on requirements currently found ceilings. Four of the comments LSC domestic violence victims jointly held in sections 1611.5(a), 1611.3(a)–(c) and received on the November 2002 NPRM with their abusers, this requirement 1611.6. The new section 1611.3 would agreed with the suggestion that the list applies when the applicant has made address in one section recipients’ should be illustrative rather than the recipient aware that he or she is a responsibilities for adopting and exhaustive. LSC, however, prefers to victim of domestic violence. implementing financial eligibility In addition, LSC proposes to permit retain the approach in the current policies. Under the proposed new recipients to adopt financial eligibility regulation in which the list of section, the current requirement that policies which provide for authorized excludable assets is set forth in toto. recipients’ governing bodies have to exceptions to the annual income ceiling LSC believes that this approach adopt policies for determining financial pursuant to proposed section 1611.5 emphasizes the policy that most assets eligibility would be retained. LSC and for waiver of the asset ceiling for an are to be considered and maintains a proposes, however, to change the applicant in a particular case under basic level of consistency nationally current requirement for an annual unusual circumstances and when with respect to this issue. However, LSC review of these policies and instead approved by the Executive Director or does agree that the regulation could require recipients’ governing bodies to his/her designee. Finally, LSC proposes afford recipients some additional conduct triennial reviews of policies. to permit recipients to adopt financial flexibility in developing asset ceilings, The Working Group agreed that an eligibility policies which permit consistent with the policy articulated annual review was unnecessary and has financial eligibility to be established by above. The Working Group believes that tended to result in rather pro forma reference to an applicant’s receipt of the proposed language meets those reviews of policies. In contrast, a benefits from a governmental program objectives, particularly in light of the triennial review requirement would be for low-income individuals or families proposed amendment to the asset sufficient to ensure that financial consistent with proposed section ceiling waiver standard discussed eligibility policies remain relevant and 1611.4(b). below. LSC invites comment on whether These proposed provisions are, with would encourage a more thorough and the list should be illustrative or two exceptions, based directly on thoughtful review when such review is exhaustive. LSC also invites comment current requirements with a few on whether additional specific assets undertaken. The section would also add substantive changes. First among the should be included in the list of an express requirement that recipients changes, recipients would no longer be excludable assets and, if so, what items adopt implementing procedures. While required to routinely submit their asset might be appropriate. this is already implicit in the current ceilings to LSC. This requirement LSC is also proposing to change the regulation, LSC believes it would be appears to serve little or no purpose, as asset ceiling waiver standard slightly. better for this requirement to be compliance with this requirement has The current regulation permits waiver expressly stated. Such implementing been spotty and LSC has taken no action in ‘‘unusual or extremely meritorious procedures could be adopted either by to obtain the information from situations;’’ the proposed rule would a recipient’s governing body or by the recipients which have not automatically permit waiver in ‘‘unusual recipient’s management. submitted it. Moreover, the information circumstances.’’ The Working Group Proposed section 1611.3 would also collected is not being put to any routine determined that the current language is contain certain minimum requirements use. In addition, LSC has not had a unnecessarily stringent and that it is for the content of recipient’s financial parallel requirement for the submission unclear what the difference is intended eligibility policies. Specifically, LSC of income ceilings. The Working Group to be between ‘‘unusual’’ and proposes that the recipient’s financial determined that this requirement could ‘‘extremely meritorious.’’ It was eligibility policy must: • Specify that only applicants for be eliminated without any adverse effect suggested in the Working Group that the on program compliance with or standard should be ‘‘where service determined to be financially Corporation enforcement of the appropriate.’’ LSC, however, felt that the eligible under the policy may be further regulation. regulation should continue to reflect the considered for LSC-funded service; • Establish annual income ceilings of Another substantive change is that policy that waivers of the asset ceilings recipients would be permitted to should only be granted sparingly and no more than 125% of the current provide in their financial eligibility not as a matter of course. The Working DHHS Federal Poverty Guidelines policies for the exclusion of (in addition Group agreed that the revised language amounts; • Establish asset ceilings; and to a primary residence, as provided for accomplishes this goal, while providing • Specify that, notwithstanding any in the existing regulation) vehicles, some additional appropriate discretion other provisions of the regulation or the assets used in producing income (such to recipients. In addition, where the recipient’s financial eligibility policies, as a farmer’s tractor or a carpenter’s current rule requires all waiver in assessing the financial eligibility of tools) and other assets excluded from decisions to be made by the Executive an individual known to be a victim of attachment under State or Federal law Director, LSC proposes to permit those domestic violence, the recipient shall from the calculation of assets. In decisions to be made by the Executive consider only the income and assets of identifying other assets excluded from Director or his/her designee. LSC the individual applicant and shall not attachment under State or Federal law, believes it is important that a person in consider any assets jointly held with the LSC has in mind assets that are significant authority be involved in abuser. excluded from bankruptcy proceedings making asset ceiling waiver decisions, VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00042 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29700 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules but recognizes that, especially as more applicant to be financially eligible if the benefits for low-income individuals and recipients have consolidated and now applicant’s assets are at or below the families, eligibility for which includes serve larger areas, it is important for recipient’s applicable asset ceiling level an asset test. Key to this practice is that recipients to have the discretion to (or the ceiling has been properly the recipient’s governing body has to delegate certain authority to regional or waived) and the applicant’s income is at take some identifiable action to branch office managers or directors to or below the recipient’s applicable recognize the asset test of the increase administrative efficiency. income ceiling, or if one or more of the governmental benefit program being The first totally new element is the authorized exceptions to the ceiling relied upon. This ensures that the proposed language regarding victims of applies. These provisions are based on eligibility standards of the govermental domestic violence. This proposal existing provisions found in sections program have been carefully considered implements LSC’s FY 1998 1611.3, 1611.4 and 1611.6. As revised, and are incorporated into the overall appropriations law. Specifically, section the new provisions do not represent a financial eligibility policies adopted and 506 of that act provides: substantive change, but LSC believes regularly reviewed by the recipient’s having the basic statements as to who governing body. As this practice has In establishing the income or assets of an may be found to be financially eligible proved efficient and effective, it was individual who is a victim of domestic for assistance in one section makes the violence, under section 1007(a)(2) of the determined that a parallel process could Legal Services Corporation Act (42 U.S.C. regulation much clearer. In addition, also be adopted for income screening 2996f(a)(2)), to determine if the individual is where the existing regulation uses a and that these practices should be eligible for legal assistance, a recipient construction that speaks to when a expressly included in the regulations. It described in such section shall consider only recipient may provide legal assistance, is important to note that this provision the assets and income of the individual and the proposed new language emphasizes would only apply to applicants whose shall not include any jointly held assets. the point that the requirements speak sole source of income is derived from Although this law has been in effect only to determinations of financial such benefits. Applicants who also have since 1997, it has never been formally eligibility and not to decisions regarding income derived from other sources incorporated into Part 1611. This whether or not to actually provide legal would be subject to an independent provision of law applies regardless of assistance. inquiry and assessment of financial whether it appears in the regulation. LSC also proposes to incorporate into eligibility. However, incorporating this language this section a significant substantive Finally, in the November 2002 NPRM, into the regulation is appropriate, change to the regulation. Consistent LSC proposed to include in this section particularly in light of the goal of this with proposed section 1611.3 as a provision requiring recipients to make rulemaking to clarify the requirements discussed above, if adopted, the reasonable inquiry into an applicant’s relating to financial eligibility regulation would permit recipients to financial status in making financial determinations. determine an applicant to be financially eligibility determinations. Upon Finally, the proposal to permit eligible because the applicant’s income reflection, LSC believes that this recipients to adopt financial eligibility is derived solely from a governmental requirement is better included in policies which permit financial program for low-income individuals or proposed section 1611.7, Manner of eligibility to be established by reference families, provided that the recipient’s Determining Financial Eligibility and to an applicant’s receipt of benefits from governing body has determined that the has moved this proposal to that section. a governmental program for low-income income standards of the governmental For a detailed discussion of this issue, individuals or families consistent with program are at or below 125% of the see the discussion of proposed section proposed section 1611.4(b) is also new. Federal Poverty Guidelines amounts. 1611.7, below. This proposal is discussed in greater For many recipients, a significant detail below. proportion of applicants rely on Section 1611.5—Authorized Exceptions governmental benefits for low-income to the Annual Income Ceiling Section 1611.4—Financial Eligibility for individuals and families as their sole Legal Assistance This proposed section provides for source of income. In order to qualify for This proposed section would set forth authorized exceptions to the annual these benefits, such persons have the basic requirement that recipients income ceiling. The proposed language, already been screened by the agency may provide legal assistance supported like the current language of sections providing the benefits (using an with LSC funds only to those 1611.4 and 1611.5, on which it is based, eligibility determination process that is individuals whom the recipient has is permissive. A recipient would be at stricter than the one required under LSC determined are financially eligible for liberty to include some, none, or all of regulations) and determined to be such assistance pursuant to their the authorized exceptions discussed financially eligible for those benefits. In policies, consistent with this Part. This below in its financial eligibility policies. Working Group discussions, many section also contains a proposed Thus, to the extent a recipient would representatives of the field noted that if statement that nothing in Part 1611 choose to avail itself of the authority they could rely on the determinations prohibits a recipient from providing provided in this proposed section, a made by these agencies without having legal assistance to an individual without recipient would be permitted to to otherwise make an independent regard to that individual’s income and determine an applicant to be financially inquiry into financial eligibility, it assets if the legal assistance is supported eligible for assistance, notwithstanding would substantially ease the wholly by funds from a source other that the applicant’s income is in excess administrative burden involved in than LSC (regardless of whether LSC of the recipient’s applicable income making financial eligibility funds were used as a match to obtain ceiling. In making such determinations, determinations. such other funds, as is the case with however, the recipient would have to The Working Group also noted that Title III or VOCA grant funds) and the detemine that the applicant’s assets current LSC practice permits recipients assistance is otherwise permissible were at or below the recipient’s to determine that an applicant’s assets under applicable law and regulation. are within the recipient’s asset ceiling applicable asset ceiling (or the ceiling This proposed section would further level without additional review if the would have had to have been waived). provide that a recipient may find an applicant is receiving governmental This requirement is consistent with the VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00043 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29701 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules current regulation, but would be be deemed financially eligible if the Executive Director to designate a affirmatively stated for greater clarity. responsible individual to make such $250,000 of the income is devoted to Under the proposed section, there determinations. LSC believes that this nursing home expenses, would be two situations in which an approach provides additional notwithstanding that the applicant’s applicant’s income could exceed the administrative flexibility to recipients, remaining income is $50,000— recipient’s income ceiling without an yet is consistent with the underlying substantially in excess of the income absolute upper limit: (1) Where the policy. ceiling. This situation is not intended, applicant is seeking to maintain LSC also proposes to permit and, indeed, LSC has no reason to governmental benefits for low-income exceptions for certain situations in believe recipients are serving such individuals and families; and (2) where which the applicant’s income is in persons. However, consistent with the the executive director (or his/her excess of the recipient’s applicable overall goal of clarifying the regulation, designee) determines, on the basis of income ceiling, but does not exceed LSC believes that a requirement that an documentation received by the 200% of the applicable Federal Poverty applicant must be otherwise financially recipient, that the applicant’s income is Guidelines amount. At the outset, LSC eligible considering only that portion of primarily committed to medical or notes that this section also proposes to the applicant’s income which is not nursing home expenses and, in change the current upper income limit devoted to medical or nursing home considering only that portion of the of 150% of the LSC national income expenses should be clearly set forth in applicant’s income which is not so guidelines amount, which is 150% of the regulation. committed, the applicant would 125% of the Federal Poverty Guidelines LSC received two comments on the otherwise be financially eligible. amounts, or 187.5% of the Federal November 2002 NPRM regarding this The first instance would be a new Poverty Guidelines amounts. Under the proposed revision. Both comments addition to the regulation. Currently, an proposed new regulation, the upper asked LSC to remove the requirement applicant seeking to obtain limit would increase to 200% of the that the determination that the governmental benefits for low income Federal Poverty Guidelines amounts. applicant’s income is primarily persons may be deemed financially This change is being proposed to further committed to medical or nursing home eligible if the applicant’s income does simplify the language of the regulation expenses be made by the Executive not exceed 150% of the LSC national and to recognize the changing Director or his/her designee. These eligibility level. The existing regulation, demographic of the legal services client commenters argued that removing this however, does not specifically address base, which now increasingly includes requirement would afford recipients applicants seeking to maintain such the working poor. The Working Group greater administrative flexibility in benefits. Thus, under the current discussed the fact that this action would making financial eligibility regulation, an applicant whose income slightly increase the pool of potential determinations. One comment also is over the income ceiling but under applicants for service but was of the argued that such a change is justified 150% of the LSC national eligibility opinion that this would not have a because other sections of the rule do not level may be deemed financially eligible negative impact on the quantity or require determinations made by the for assistance in obtaining benefits, but quality of services delivered. Executive Director (or designee). The not for assistance in maintaining them. Turning to the exceptions, LSC existing rule, however, does require that Thus, the applicant seeking assistance proposes to retain the current exception the Executive Director make to maintain benefits would have to be for individuals seeking to obtain determinations regarding whether an turned down, but that same applicant governmental benefits for low-income applicant’s income is primarily could then be found financially eligible individuals and families. Second, LSC committed to medical or nursing home for assistance to re-obtain such benefits proposes to add an exception for expenses. LSC believes it is important to once the benefits were lost. individuals seeking to obtain or continue this requirement in this Accordingly, LSC proposes to address maintain governmental benefits for instance because a recipient is making this problem in the regulation. However, persons with mental and/or physical a determination of financial eligibility unlike the situation in obtaining the disabilities. Many disability benefit for an applicant whose income exceeds benefits, in seeking to maintain benefits programs provide only subsistence the otherwise absolute upper limit of LSC considers an upper limit on income support and those individuals should be the income ceiling, that such a unnecessary since in such cases the treated the same way as those seeking to determination be made by a person in applicant’s income will necessarily be obtain benefits available on the basis of significant authority.2 This is similar to rather limited (for the applicant to have financial need. However, many persons the LSC view regarding decisions to been eligible in the first place for the with disabilities who are eligible for waive the asset ceiling. LSC does benefits he or she is seeking to disability benefits may not be understand, however, that it is maintain). particularly economically important for recipients to have the The second instance is taken from disadvantaged and should not be discretion to delegate certain authority section 1611.5(b)(1)(B) of the current eligible for legal assistance simply by to regional or branch office managers or regulation addressing instances in virtue of eligibility for such disability directors to increase administrative which the applicant’s income is benefits. Therefore, those applicants efficiency. This is why LSC proposes primarily devoted to medical or nursing must have incomes below 200% of the broadening the existing rule to permit home expenses and does not represent applicable poverty level in order to be a substantive change in the current considered financially eligible for LSC- 2 This situation is distinguishable from the other regulation. LSC does propose to specify funded services. exception to the absolute income limit relating to in the regulation, however, that in such Finally, the proposed regulation applicants seeking to maintain governmental cases the recipient is still required to maintains the current authorized benefits for low income persons. As noted above, make a determination of financial exceptions found in the factors listed in in those instances, the applicant’s income will already be rather limited, even if exceeding the eligibility with regard to the applicant’s current section 1611.5. Specifically, the absolute income ceiling. In the medical/nursing remaining income. The existing recipient would be permitted to home expenses situation, this may not be the case regulation could be read to permit an determine an applicant whose income is and the applicant’s income may be considerably in applicant with an income of $300,000 to below 200% of the applicable Federal excess of the ceiling. 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  • 29702 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules Poverty Guidelines amount to be LSC Assistant General Counsel, to circumstances’’ affecting the ability to financially eligible for legal assistance Stephen St. Hilaire, Executive Director, afford legal assistance. See 48 FR 54201 supported with LSC funds based on one Camden Regional Legal Services, Inc. at 54203 (November 30, 1983). However, or more enumerated factors that affect Examples of such ‘‘fixed debts and given that other types of expenses the applicant’s ability to afford legal obligations’’ would include mortgage included in the list do not seem to be assistance. As in the current regulation, payments, child support, alimony, and particularly ‘‘special’’ (e.g., mortgage recipients would not be required to business equipment loan payments. LSC payments; child care expenses), LSC no apply these factors in a ‘‘spend down’’ intends that this term should also longer finds this explanation fashion. That is, although recipients include rent in addition to mortgage pursuasive. Rather, LSC believes that would be permitted to do so, they payments. Previous OLA opinions have the exclusion of current taxes, but not would not be required to determine that, addressed mortgage payments but not prior unpaid taxes, from the list of after deducting the allowable expenses, rent and rent has, heretofore, not been factors which recipients’ may consider the applicant’s income is below the considered a fixed debt. LSC now sees under exceptions to the income ceiling applicable income ceiling before no rational distinction between the two has the effect of punishing those determining the applicant to be for the purposes of this regulation and persons who are in compliance with the financially eligible. The regulation therefore proposes to treat these law in favor of persons who are would also be amended to clarify that expenses in a similar manner. delinquent in their legal responsibility The term ‘‘fixed debts and the factors apply to the applicant and to pay taxes. Moreover, as noted above, obligations,’’ however, is not without members of the applicant’s household. applicants for legal services are limit. It is not intended to include The factors proposed are identical to the increasingly the working poor. expenses, such as food costs, utilities, ones in the current regulation, with the Excluding current taxes has a credit card debt, etc. These types of following exceptions: disproportionate effect on applicants • The factor relating to medical debts are usually not fixed as to time who work versus applicants who do not expenses would be restated to make and amount. The Working Group work. Consequently, in the November clear that it refers only to unreimbused considered whether there were 2002 NPRM, LSC proposed including medical expenses, but that medical additional factors which should be current taxes within scope of the term enumerated in this section and several insurance premiums are included; ‘‘fixed debts and obligations’’ (as they • The factor relating to employment members of the Working Group had been prior to 1983). expenses would be reorganized for proposed adding other factors, such as When the Operations and Regulations clarity and would expressly include utilities, to the list. Three of the Committee once again addressed this expenses related to job training or comments LSC received on the issue, field representatives reiterated educational activities in preparation for November 2002 NPRM proposed adding their recommendation that the term employment; utilities to the overall list of factors. income should be defined as income • The factor relating to expenses Although, as the commenters note, after taxes. LSC continues to believe, as associated with age or disability would applicants must pay for some measure noted above, that effectively defining no longer refer to resident members of of utilities, the same can be said for income as net income, while the LSC the family as a reference to the applicant clothing and food, which are also income guidelines (and the underlying or members of the applicant’s certainly basic necessary expenses. DHHS Federal Poverty Guidelines household is proposed to be However, these sorts of costs have never amounts on which the LSC guidelines incorporated elsewhere in this section been covered by the types of expenses are based) are calculated on the basis of of the regulation; which recipients are generally permitted gross income would make the regulation • The factor relating to fixed debts to consider in determining the ability of internally inconsistent. Rather, LSC and obligations would be amended to an applicant to afford legal assistance. believes that considering taxes a factor read only ‘‘fixed debts and obligations;’’ With the exception of housing expenses which can be considered by the • A new factor, ‘‘current taxes’’ (which fall under the heading of fixed recipient in making financial eligibility would be added to the list. debts and obligations, a category which determinations addresses the practical With regard to ‘‘fixed debts and does not generally include utilities problem raised by the commenters. obligations,’’ the current regulation because utility bills are not typically However, the Committee considered provides little guidance as to what is fixed as to time and amount), the other current taxes as fundamentally a meant by this term, except to factors represent expenses for items different kind of expense than the other specifically include unpaid taxes from which may not be particularly expenses falling within the scope of prior years. LSC proposes to simply use extraordinary, but which are for things ‘‘fixed debts or obligations.’’ Instead, the the term ‘‘fixed debts and obligations,’’ other than the most basic necessities. Committee recommended, and the while providing guidance in the Although LSC is not proposing adding Board agreed, that current taxes should preamble as to what is encompassed by any additional factors, LSC specifically be a separate category of authorized the term. LSC believes that this invites comment on this matter. exception to the annual income ceiling. approach will provide recipients with Another issue which was raised in the Accordingly, LSC proposes to add a new flexibility in applying the rule, while Working Group in the context of subsection (iv) to section 1611.5(a)(4). providing more guidance than could consideration of the scope of the term LSC invites comment on the proposed ‘‘fixed debts and obligations’’ was the easily be contained in regulatory text. addition of the authorized exception for Prior guidance from the LSC Office of inclusion of current taxes. Prior to 1983, current taxes and on the appropriate Legal Affairs has stated that, ‘‘in the Part 1611 included current taxes along scope and specific terminology which absence of any regulatory definition or with past due unpaid taxes as a fixed LSC should use to describe and define guidance as to the meaning of ‘‘fixed debt. When the regulation was changed this proposed exception. debts and obligations,’’ the common in 1983, the reference to taxes was Section 1611.6—Representation of meaning of the term applies’’ and that amended to refer only to unpaid prior Groups it encompasses debts fixed as to both year taxes. This change was justified on time and amount. See Letter of the basis that the 1611.5 factors were The eligibility of groups for legal November 1, 1993 from J. Kelly Martin, intended to account only for ‘‘special assistance supported with LSC funds VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00045 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29703 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules was a subject of extensive discussion there is or can be a wide variety of representation of groups whose primary among both the members of the Working opinion on what the ‘‘primary function’’ activity is the ‘‘furtherance of the Group and at the 2004 and 2005 of any group is and on what is ‘‘in the interests of’’ persons who would be meetings of the current Operations and interests’’ of the eligible client eligible. Regulations Committee. Prior to 1983, community. The LSC representatives The Board agreed that permitting LSC the regulation permitted representation were concerned that the risk and effort recipients to use LSC funds for the of groups that were either primarily related to articulating and enforcing a representation of groups which provide composed of eligible persons, or which necessarily subjective standard would services to low income persons is had as their primary purpose the be inappropriate. Rather, LSC consistent with the LSC mission and furtherance of the interests of persons in representatives were of the opinion that could be an efficient use of LSC the community unable to afford legal already scarce legal services resources resources, provided that the legal assistance. In 1983, the regulation was would be better devoted to providing assistance is related to the services the amended to preclude the use of LSC assistance to eligible individuals or group provides. The Board also agreed funds for the representation of groups groups of eligible individuals. In the that extending the permissible use of unless they were composed primarily of end, the Working Group did not achieve LSC funds for the representation of individuals financially eligible for consensus on this issue and the Draft groups whose primary activity is the service and to add a requirement that NPRM did not propose to permit the ‘‘furtherance of the interests of’’ low any group seeking representation representation of groups other than income persons would not be demonstrate that it lacks the funds or those primarily composed of eligible appropriate because of the necessarily the means to obtain the funds to retain individuals. subjective nature of determining what is In its deliberations on the Draft private counsel. in the ‘‘furtherance of the interests of’’ During the Working Group meetings, NPRM, the Operations and Regulations low income persons. representatives from the field proposed Committee acknowledged the legitimacy Accordingly, the proposed rule would that LSC revise the regulation to once of the concerns of the LSC permit a recipient to provide legal again permit the representation of representatives, but determined that the assistance supported with LSC funds to groups which, although not primarily value of permitting the representation of a group, corporation, association or composed of eligible persons, have as a groups having a primary function of other entity if the recipient has primary function the delivery of providing services to, or furthering the determined that the group, corporation, services to, or furtherance of the interests of, those who would be association or other entity lacks and has interests of, persons in the community financially eligible outweighed any risks no practical means of obtaining private unable to afford legal assistance. attendant upon such representation. In counsel in the matter for which Examples of such a group might be a approving the recommendation of the representation is sought and either: food bank or a rural community Committee, the Board directed that the (1) The group, or for a non- development corporation working to Draft NPRM be amended to propose membership group, the organizing or develop affordable housing in an permitting such representation operating body of the group, is primarily isolated community. Field (including any conforming amendments composed of individuals who would be representatives noted that in such cases, necessary) prior to publication of the financially eligible for legal assistance there may not be local counsel willing NPRM for comment. The NPRM under the Act; or to provide pro bono representation and published in November 2002 reflected (2) The group has as a principal that the group might not otherwise be this direction. activity the delivery of services to those When the new Operations and able to afford private counsel. Further, persons in the community who would Regulations Committee considered this the field representatives noted that be financially eligible for LSC-funded issue, field representatives once again restricting recipients to representing legal assistance and the legal assistance supported changing the regulation to with LSC funds only those groups sought relates to such activity. permit the representation of groups primarily composed of eligible The first instance, relating to the having as their primary function the individuals prevents them from eligibility and representation of groups provision of services to, or furthering providing legal assistance in the most composed primarily of eligible the interests of, those who would be efficient manner possible as other individuals, represents the current financially eligible (providing the group groups may be better able to accomplish practice permitted by current section could demonstrate its inability to afford results benefitting more members of the 1611.5(c). The proposed rule is intended to retain private counsel), while LSC eligible community than would to have the same interpretation of Management initially once again representation of eligible individuals or ‘‘primarily composed’’ that has supported permitting only the groups composed primarily of such developed and been adopted in practice representation of groups primarily individuals. Field representatives also over the years since 1983. In the case of composed of eligible individuals. noted that the rule requires that the membership groups, at least 51% of the However, upon further reflection and group would have to provide members would have to be individuals consideration of the arguments made by information showing that it lacks and who would be financially eligible; in the the field and the comments made by has no means of obtaining the funds to case of non-membership groups, at least members of the Operations and retain private counsel, so that the rule 51% of members of the governing body Regulation Committee, LSC would not permit representation of well would have to be individuals who Management ultimately recommended funded groups. would be financially eligible. The latter The LSC representatives were that the regulation could be broadened instance represents a variation on one of concerned that allowing the use of LSC to permit the representation, in addition the situations permitted by the pre-1983 funds to support the representation of to groups primarly composed of eligible rule, although the language would be groups not composed primarily of individuals, groups which have as a revised to focus on ‘‘principal activity’’ eligible clients would be problematic. In primary activity the delivery of services the examples given, the ‘‘primary to persons who would be eligible. rather than ‘‘primary purpose’’ and the function’’ of the group is easily Management continued to recommend rule would only permit the discernable. It may be, however, that that the regulation not permit the representation of groups which have as VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00046 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29704 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules regarding the prohibition on organizing a principal activity the delivery of having as a primary activity the delivery activities. Legal Services should not directly of services to those persons in the services to low income persons. organize groups. However, it should provide community who would be financially Limiting permissible represention to full representation, education and outreach eligible for LSC-funded legal assistance groups who have as a ‘‘principal to those organized groups who are made up under the Act, the recipient would have activity’’ the provision of services to low of or which represent eligible clients. also to consider whether the income persons and the exclusion of Congressional Record of October 10, 1977, p. characteristics of the persons served by ‘‘furtherance of the interest of the poor’’ S 16804. (emphasis added). the group are consistent with financial groups are intended to make the LSC proposes to add a provision to eligibility under the Act and whether analysis required in determining the the regulation specifying the manner of the legal assistance sought relates to the permissibility of the representation determining the eligibility of groups. the primary activity of the group. more objective. In addition, LSC Although the practice has been that Finally, LSC proposes to require a proposes that the regulation specify that recipients must collect information that recipeint to document group eligibility the legal assistance must be related to reasonably demonstrates that the group determinations by collecting the services delivered by the group. meets the eligibility requirements set information that reasonably These limitations are intended to avoid forth in the regulation, standards for demonstrates that the group meets the creating a potential situation whereby determining and documenting the eligibility criteria set forth herein. recipients might feel free to undertake eligibility of groups has not previously LSC notes that the proposed rule broad based, systemic social change been specifically addressed in the would, essentially, codify the current activities. Rather, LSC believes that regulation. LSC Management does not practice relating to both making these limitations will help ensure that believe that recipients are representing financial eligibility determinations and LSC funds will be used to provide ineligible groups, but the Working documentation of financial eligibility financially eligible groups with the day- Group was nevertheless in agreement determinatons related to groups to-day legal services which are the that it is important and appropriate for primarily composed of eligible hallmark of LSC-funded legal assistance. the regulation to expressly state the individuals. In LSC’s experience, the The Office of Inspector General (OIG) Corporation’s expectations in this area. practical standards which LSC proposes has expressed concerns with the The November 2002 NPRM would to memorialize has not proven to be proposed provisions permitting the have required a recipient to collect problematic. Morevover, LSC does not representation of groups. First, the OIG information reasonably demonstrating see why they would prove any more has raised a question as to whether that the group meets the eligibility problematic for demonstrating or permitting the representation of groups requirements set forth in the regulation. documenting the financial eligibility of not comprised of eligible clients is In written comments filed in response to groups which have as a primary activity problematic because, in its view, neither the November 2002 NPRM, and again in the delivery of services to those who the LSC Act itself nor the legislative the course of the new Operations and would be financially eligible for legal history endorse the premise that LSC Regulation Committee’s 2004 and 2005 assistance. may permit the representation of groups deliberations, the OIG expressed In addition, the proposed rule would that are not composed of eligible clients. concern that the proposed rule should retain and restate the current provision Although LSC appreciates the OIG’s provide eligibility criteria sufficient to of the rule that these requirements apply comments, LSC believes that the ensure that groups seeking LSC-funded only to a recipient providing legal proposed regulatory requirements are legal assistance qualify for such legal assistance supported by LSC funds, consistent with the applicable laws. The assistance and should require grantees provided that regardless of the source of LSC Act, on its face, does not prohibit to retain adequate documentation of funds used, any legal assistance the representation of groups other than such group eligibility. Although LSC provided to a group must be otherwise those composed of otherwise eligible believes that the November 2002 permissible under applicable law and individuals. The Act only speaks to proposed financial eligibility standards regulation. ‘‘eligible clients’’ and there is nothing in for groups effectuated the principal LSC notes that, as with other aspects the text of the Act which suggests that criterion in the Act that those seeking of this rule, proposed section 1611.6 a group which has as its primary LSC-funded legal assistance must be does not speak to eligibility of groups activity the provision of services to financially unable to afford legal for legal assistance under other persons who would be eligible for LSC- assistance and were in no way applicable law and regulation. For funded legal assistance is necessarily inconsistent with the LSC Act, LSC does example, the eligibility of a group under excluded from the scope of the term agree with the OIG that the standards for proposed section 1611.8 does not ‘‘eligible clients.’’ In addition, LSC determining the eligibility of groups can address issues related to the eligibility believes that the legislative history of and should be more specific than those of the group under Part 1626 of LSC’s the Act and the 1977 LSC Act set forth in the November 2002 NPRM. regulations, concerning citizenship and amendments is not dispositive on the Accordingly, in assessing the alien status eligibility. Similarly, the issue of whether the statute was eligibility of a group, LSC proposes to fact that a recipient may determine a intended to prohibit the representation require recipients to consider the group to be eligible for legal assistance of groups other than thos comprised of resources available to the group, such as under this Part, does not address other eligible individuals. Rather, support for the group’s income and income questions relating to permissibility of the notion that Congress contemplated prospects, assets and obligations. For a the representation (i.e., this Part does the provision of legal assistance to group primarily composed of not confer authority for the groups providing services to eligible individuals who would be financially representation of a group on restricted clients can be seen in the comments eligible for LSC-funded legal assistance matters, such as class action lawsuits or Senator Riegle made in discussing an under the Act, would also have to redistricting matters, etc.) amendment relating to the prohibition consider whether the characteristics of Finally, LSC notes that in the by recipients on organizing: the persons primarily comprising the November 2002 NPRM, this proposed group are consistent with financial section was numbered 1611.8 and A similar clarification is made in section eligibility under the Act. 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  • 29705 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules regulation. LSC is now proposing to Corporation in conducting compliance require a recipient to make affirmative place this section before the sections on reviews. inquiry after accepting an applicant as As noted above, LSC originally Manner of Determining Financial a client for information that would proposed in the November 2002 NPRM, Eligibility and Change in Financial indicate a change in circumstance or the to include this provision in proposed Eligibility Status as both of those presence of additional information section 1611.4, Financial Eligibility for sections are applicable to both groups regarding the client’s financial Legal Assistance. Upon reflection, LSC and individual applicants and clients. eligibility. believes that as this requirement is The proposed regulation would Section 1611.7—Manner of Determining really a requirement as to how financial require that when a client is found to be Financial Eligibility eligibility determinations are to be no longer financially eligible on the LSC proposes several revisions to this made, it is better included in this basis of later discovered information, section. First, LSC proposes to include proposed section on the manner of the recipient shall discontinue a requirement that, in making financial determining financial eligibility. LSC representation supported with LSC eligibility determinations, a recipient believes that this will improve the funds, if discontinuing the shall make reasonable inquiry regarding organization and clarity of the representation is not inconsistent with sources of the applicant’s income, regulation. applicable rules of professional income prospects and assets and shall Second, LSC proposes to delete the responsibility. This proposed language record income and asset information in requirement in existing paragraph (a) of is parallel to the current requirement the manner specified for determining this section that LSC eligibililty forms regarding discontinuation of financial eligibility in proposed section and procedures must be approved by representation upon a change in 1611.6. This requirement would replace the Corporation. It has been LSC’s circumstance. LSC wishes to note that, the process currently required by experience that receiving the forms has to the extent that discontinuation of section 1611.5, whereby a recipient is not enhanced its ability to conduct representation is not possible because of effectively required to conduct a lengthy oversight of recipients. These professional responsibility reasons, a and often cumbersome inquiry as to the documents are readily available to LSC recipient may continue to provide applicant’s income, assets and income from recipients when needed. This representation supported by LSC funds. prospects, including inquiry into a requirement appears only to create This is currently the case and LSC detailed list of factors relating to an unnecessary work for recipients and intends to make no change in the applicant’s specific financial situation LSC staff without serving any policy regulation on this point. and ability to afford private counsel. purpose. In addition, LSC proposes to change LSC also proposes to add a provision The Working Group discussed this issue the name of this section from ‘‘change to the regulation making clear that a at length and representatives of the field in circumstances’’ to ‘‘change in recipient agreeing to extend legal noted that conducting such a detailed financial eligibility status’’ to reflect the assistance to a client referred from inquiry in most cases is a task which is addition of the later discovered another recipient may rely upon the often difficult to accomplish efficiently information provision. referring recipient’s determination of at the point of intake, especially as Section 1611.9—Retainer Agreements financial eligibility, provided that the much of intake is performed by The retainer agreement requirement, referring recipient provides and the volunteers, interns or receptionists. found at section 1611.8 of the existing receiving recipient retains a copy of the Rather, many recipients, in practice, regulation, was the subject of significant eligibility form documenting the conduct a somewhat abbreviated discussion in the Working Group. financial eligibility of the client. This is version of the otherwise required Representatives of the field agreed with the currently accepted practice, but is process, inquiring into current income, the LSC representatives that a retainer addressed nowhere in the existing assets, income prospects and probing for agreement may be appropriate under additional information based on the regulation. certain circumstances, but argued that responses provided, the requirements of Section 1611.8—Change in Financial this regulatory requirement is not the regulation and their knowledge of Eligibility Status required by statute, is not justified local circumstances. This approach, the LSC proposes to add language to this under applicable rules of professional field representatives noted, is less prone section to provide that if a recipient responsibility, may be unnecessarily to error and assists in fostering an later learns of information which burdensome in some instances and is appropriate attorney-client relationship indicates that a client never was, in fact, not related to financial eligibility with individuals accepted as clients. As financially eligible, the recipient must determinations. They contended that, LSC is not finding widespread instances discontinue the representation barring a statutory mandate, decisions of service being provided to financially consistent with the applicable rules of about the use of retainer agreements, ineligible persons, it was agreed that professional responsibility. This like those involving many other matters that the process required by the existing addition is being proposed because relating to the best manner of providing regulation is unduly complicated and sometimes, after an applicant has been high quality legal assistance, should be that the simplified requirement accepted as a client, the recipient determined by a recipient’s Board, proposed would be adequate to ensure discovers or the client discloses management and staff, with guidance that recipients are making sufficient information that indicates that the client from LSC. They urged LSC to delete this inquiry into applicants’ financial was not, in fact, financially eligible for requirement. The LSC representatives, situations to determine financial service. This situation is not covered by however, were of the opinion that the eligibility status under the regulation the existing regulation because the existing provision in the regulations while being less adminstratively burdensome for recipients and more client may not have experienced a requiring the execution of retainer conducive to the development of the change in circumstance but rather, the agreements is professionally desirable, attorney-client relationship. LSC also recipient has discovered new pertinent authorized in accordance with LSC’s believes that adoption of the proposed information about the client. LSC notes mandate under Section 1007(a)(1) of the streamlined financial eligibility that the proposed language, like the Act to assure the maintenance of the determination process will aid the current regulation, is not intended to highest quality of service and VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00048 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29706 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules professional standards, and appropriate necessary for LSC to approve retainer the attorney and the client in brief to assure that there are no agreements and proposes to remove the services cases about the nature of the misunderstandings as to what services requirement at current section 1611.8(a) relationship and a clear understanding are to be rendered to a particular client. that retainer agreements be in a form as to what services are to be rendered Retainer agreements protect the attorney approved by LSC. Instead, LSC proposes is important to achieving the highest and recipient in cases of an unfounded to require the retainer agreements must quality of legal service and professional malpractice claim and protect the client be in a form consistent with the local standards, it ultimately recommended if the attorney and the recipient should rules of professional responsibility and against requiring grantees to provide fail to provide legal assistance must contain statements identifying the specific written communications to measuring up to professional standards. legal problem for which representation clients when only brief services are In the end, the Working Group was is being provided and the nature of the being provided. After considering all of unable to reach consensus on this issue legal services to be provided. LSC the various arguments on this matter in and the Draft NPRM retained a believes that this simplification will LSC has determined that, on balance, provision generally requiring the eliminate possible sources of confusion written communications in brief execution of retainer agreements, along for recipients in drafting retainer services cases represents a ‘‘best with proposing requirements for client agreements, yet will continue to foster practice’’ and, for the purposes of a service notices and PAI referral notices the essential communication between regulatory requirement, the current in lieu of retainer agreements under the recipient and the client. practice by which retainer agreements Second, LSC proposes to clarify the certain circumstances. are only required when the recipient is After deliberations on the Draft circumstances in which retainer providing extended service to the client NPRM, the Board determined to propose agreements are required. Under current is appropriate. elimination of the retainer agreement section 1611.8(b) a recipient is not Accordingly, LSC proposes to require requirement altogether and the required to execute a retainer agreement that recipients must execute retainer November 2002 NPRM published by ‘‘when the only service to be provided agreements when providing extended LSC reflected this determination. With is brief advice and consultation.’’ services to clients. Extended service is the exception of the comments of the Although the plain language of this characterized by the performance of LSC OIG, all of the comments LSC provision would seem to encompass multiple tasks incident to continuous received supported the elimination of situations in which the attorney is representation in a case. Examples of the retainer agreement requirement. providing only some information and extended service would include With the appointment of the new guidance on a suggested course of action representation of a client in litigation, members of the Board of Directors and to the client, it has over the years, come an administrative adjudicative the new LSC President, LSC had the to include brief services such as drafting proceeding, alternative dispute opportunity to reconsider this proposal. simple documents or making limited resolution proceeding, and more than Field representatives reiterated their contacts (by phone or in writing) with brief representation of a client in support for elimination of the retainer third parties, such as a landlord, an negotiations with a third party. In agreement requirement from the employer or a government benefits addition, LSC proposes to retain the regulation, while LSC Management agency, on behalf of the client. The provision in the current regulation that reiterated its support for retention of a discrepancy between the plain language the retainer agreement must be executed retainer agreement requirement for and the practical meaning of the when representation commences or as extended service in the regulation, with exception should be corrected. soon thereafter as is practicable. certain amendments intended to clarify During the public deliberations on To further clarify the regulation, LSC and streamline the requirement. The this matter in the 2004 and 2005 proposes to include express langauge Board agrees with Management. LSC is Operations and Regulations Committee specifying that recipients are not committed to keeping a retainer meetings, LSC considered different required to execute retainer agreements agreement requirement in the approaches to resolving the discrepancy if the only services being provided are regulations. LSC considers the practice between the regulation as written and advice and counsel or brief service. of providing retainer agreements to be the prevailing practice. Field Advice and counsel is characterized by professionally desirable and in representatives suggested in the event a limited relationship between the accordance with its mandate under that a retainer agreement requirement attorney and the client in which the Section 1007(a)(1) of the Act to assure remains in the rule (although still attorney does no more than review the maintenance of the highest quality preferring the elimination of any such information and provide information of service and professional standards requirement) that the language of the and guidance to the client. Advice and and to assure that there are no exception should reflect the current counsel does not encompass drafting of misunderstandings as to what services practice by expressly including brief documents or making third-party are to be rendered to a particular client. service type activities along with advice contacts on behalf of the client. LSC Retainer agreements protect the attorney and counsel. They asserted that the notes also that it proposes to use the and recipient in cases of an unfounded proposed rule should add no new term ‘‘advice and counsel’’ instead of malpractice claim and protect the client administrative or regulatory burdens on ‘‘advice and consultation’’ because the if the attorney and the recipient should recipients. While recognizing the value term ‘‘advice and counsel’’ is a widely of retainer agreements in some understood case reporting term fail to provide legal assistance circumstances, the field representatives throughout the legal services measuring up to professional standards. LSC agrees, however, that that there also argued that the rules of professional community and LSC believe that use of are changes that can be made in the responsibility in most jurisdictions do the standard term will be simpler and retainer agreement requirement to not require that a retainer agreement be clearer. Brief service is the performance clarify the application of the executed or that any other form of of a discrete task (or tasks) which are requirement and to lessen the burden on notice be provided in the brief service not incident to continuous recipients, without interfering with the context. Although LSC Management representation in a case but which underlying goals of the requirements. expressed the belief that while some involve more than the mere provision of First, LSC believes that it is not form of written communication between advice and counsel. Examples of brief VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00049 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29707 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules § 1611.2 Definitions. service would include activities, such as client’’ the necessity of applying the the drafting of documents such as a requirement to PAI cases is removed. In (a) ‘‘Advice and counsel’’ means legal contract or a will for a client or the cases handled by PAI attorneys, assistance that is limited to the review making of one or a few third-party although the client can be said to be of information relevant to the client’s contacts on behalf of a client in a receiving some legal services from the legal problem(s) and counseling the narrow time period. In advice and recipient, the recipient is not providing client on the relevant law and/or counsel and brief service cases, the suggested course of action. Advice and extended services. Although this change interaction between the recipient and counsel does not encompass drafting of to the language alone could arguably be the client is generally limited in nature documents or making third-party sufficient to remove the necessity of and duration so that executing a retainer contacts on behalf of the client. applying the retainer agreement (b) ‘‘Applicable rules of professional agreement is administratively requirement to cases being handled by responsibility’’ means the rules of ethics burdensome. In these situations it may PAI attorneys, LSC believes the text of and professional responsibility take more time and effort for the the regulation should be further generally applicable to attorneys in the recipient to prepare the retainer and clarified to explicitly so state. jurisdiction where the recipient ensure that the client has signed and Accordingly, LSC proposes to add a provides legal services. returned an executed copy of the statement to the regulation providing (c) ‘‘Applicant’’ means an individual retainer agreement to the recipient than that no written retainer agreement who is seeking legal assistance it takes for the recipient to provide the would be required for legal services supported with LSC funds from a service to the client. At that point, the provided to the client by a private recipient. The term does not include a benefit of having the executed retainer attorney pursuant to 45 CFR part 1614. group, corporation or association. agreement is outweighed by the effort List of Subjects in 45 CFR Part 1611 (d) ‘‘Assets’’ means cash or other required to comply with the resources of the applicant or members of requirement. Legal services. the applicant’s household that are Another issue raised in the Working For reasons set forth in the preamble, readily convertible to cash, which are Group discussions was the application LSC proposes to revise 45 CFR part 1611 currently and actually available to the of the retainer agreement requirement to to read as follows: applicant. the cases handled by private attorneys (e) ‘‘Brief services’’ means legal pursuant to a recipient’s private PART 1611—FINANCIAL ELIGIBILITY assistance in which the recipient attorney involvement (PAI) program Sec. undertakes to provide a discrete and under 45 CFR part 1614. LSC has 1611.1 Purpose. time-limited service to a client beyond consistently interpreted the retainer 1611.2 Definitions. advice and consultation, including but agreement requirement as applying to 1611.3 Financial eligibility policies. not limited to activities, such as the cases handled by private attorneys 1611.4 Financial eligibility for legal drafting of documents or making limited pursuant to a recipient’s PAI program assistance. third party contacts on behalf of a client. and OLA has advised recipients that the 1611.5 Authorized exceptions to the (f) ‘‘Extended service’’ means legal recipient’s annual income ceiling. best course of action is to have the client 1611.6 Representation of groups. assistance characterized by the execute retainer agreements with both 1611.7 Manner of determining financial performance of multiple tasks incident the recipient and with the private eligibility. to continuous representation. Examples attorney (OLA Opinion 99–03, August 9, 1611.8 Changes in financial eligibility of extended service would include 1999). Recipients have reported that status. representation of a client in litigation, entering into retainer agreements with 1611.9 Retainer agreements. an administrative adjudicative clients with whom it does not have on- Authority: 42 U.S.C. 2996e(b)(1), proceeding, alternative dispute going direct relationships does not 2996e(b)(3), 2996f(a)(1), 2996f(a)(2); Section resolution proceeding, extended further the goal of the retainer 509(h) of Pub. L. 104–134, 110 Stat. 1321 negotiations with a third party, or other agreement requirement and that (1996); Pub. L. 105–119, 111 Stat. 2512 legal representation in which the ensuring that retainer agreements be (1998). recipient undertakes responsibility for executed between clients and private § 1611.1 Purpose. protecting or advancing a client’s attorneys is unduly administratively This Part sets forth requirements interest beyond advice and counsel or burdensome. LSC agrees. relating to the financial eligibility of The application of the retainer brief services. individual applicants for legal agreement requirement comes from the (g) ‘‘Governmental program for low assistance supported with LSC funds current structure of the text of the income individuals or families’’ means and recipients’ responsibilities in regulation. Under the current regulation, any Federal, State or local program that making financial eligibility a recipient is required to execute a provides benefits of any kind to persons determinations. This Part is not retainer agreement (unless otherwise whose eligibility is determined on the intended to and does not create any excepted) ‘‘with each client who basis of financial need. entitlement to service for persons (h) ‘‘Governmental program for receives legal services from the deemed financially eligible. This Part persons with disabilities’’ means any recipient.’’ Cases referred to private also seeks to ensure that financial attorneys pursuant to a recipient’s PAI Federal, State or local program that eligibility is determined in a manner program remain cases of the recipient provides benefits of any kind to persons conducive to development of an and the clients in those cases remain whose eligibility is determined on the effective attorney-client relationship. In clients of the recipient and the client is basis of mental and/or physical addition, this Part sets forth standards considered to be receiving some legal disability. relating to the eligibility of groups for (i) ‘‘Income’’ means actual current services from the recipient. However, by legal assistance supported with LSC annual total cash receipts before taxes of amending the language of the text of the funds. Finally, this Part sets forth all persons who are resident members regulation to say that the recipient is only required to execute a retainer requirements relating to recipients’ and contribute to the support of an agreement ‘‘when the recipient is responsibilities in executing retainer applicant’s household, as that term is providing extended service to the agreements with clients. defined by the recipient. Total cash VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00050 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29708 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules receipts include, but are not limited to, (d)(1) As part of its financial funds from a source other than LSC, and money, wages and salaries before any eligibility policies, every recipient shall is otherwise permissible under deduction; income from self- establish reasonable asset ceilings for applicable law and regulation. (b) Consistent with the recipient’s employment after deductions for individuals and households. In financial eligibility policies and this business or farm expenses; regular establishing asset ceilings, the recipient Part, the recipient may determine an payments from governmental programs may exclude consideration of a applicant to be financially eligible for for low income persons or persons with household’s principal residence, disabilities; social security payments; legal assistance if the applicant’s assets vehicles required for work, assets used unemployment and worker’s do not exceed the recipient’s applicable in producing income, and other assets compensation payments; strike benefits asset ceiling established pursuant to which are exempt from attachment from union funds; veterans benefits; § 1611.3(d)(1), or the applicable asset under State or Federal law. training stipends; alimony; child (2) The recipient’s policies may ceiling has been waived pursuant support payments; military family provide authority for waiver of its asset § 1611.3(d)(2), and: (1) The applicant’s income is at or allotments; public or private employee ceilings for specific applicants under pension benefits; regular insurance or below the recipient’s applicable annual unusual circumstances and when annuity payments; income from income ceiling; or approved by the recipient’s Executive (2) The applicant’s income exceeds dividends, interest, rents, royalties or Director, or his/her designee. When the the recipient’s applicable annual from estates and trusts; and other asset ceiling is waived, the recipient income ceiling but one or more of the regular or recurring sources of financial shall record the reasons for such waiver authorized exceptions to the annual support that are currently and actually and shall keep such records as are available to the applicant. Total cash income ceilings, as provided in necessary to inform the Corporation of receipts do not include the value of food § 1611.5, applies. the reasons for such waiver. (c) Consistent with the recipient’s or rent received by the applicant in lieu (e) Notwithstanding any other policies, a recipient may determine an of wages; money withdrawn from a provision of this Part or the recipient’s applicant to be financially eligible bank; tax refunds; gifts; compensation financial eligibility policies, as part of without making an independent and/or one-time insurance payments for its financial eligibility policies, every injuries sustained; non-cash benefits; determination of income or assets, if the recipient shall specify that in assessing and up to $2,000 per year of funds applicant’s income is derived solely the income or assets of an individual received by individual Native from a governmental program for low- applicant who is a victim of domestic Americans that is derived from Indian income individuals or families, violence, the recipient shall consider trust income or other distributions provided that the recipient’s governing only the assets and income of the exempt by statute. body has determined that the income individual applicant and shall not standards of the governmental program include any assets jointly held with the § 1611.3 Financial eligibility policies. are at or below 125% of the Federal perpetrator of the domestic violence. (a) The governing body of a recipient Poverty Guidelines amounts and that (f) As part of its financial eligibility shall adopt policies consistent with this the governmental program has eligibility policies, a recipient may adopt policies part for determining the financial standards which include an assets test. that permit financial eligibility to be eligibility of applicants and groups. The established by reference to an § 1611.5 Authorized Exceptions to the governing body shall review its applicant’s receipt of benefits from a Annual Income Ceiling financial eligibility policies at least once governmental program for low-income (a) Consistent with the recipient’s every three years and make adjustments individuals or families consistent with policies and this Part, a recipient may as necessary. The recipient shall § 1611.4(c). determine an applicant whose income implement procedures consistent with (g) Before establishing its financial exceeds the recipient’s applicable its policies. eligibility policies, a recipient shall (b) As part of its financial eligibility annual income ceiling to be financially consider the cost of living in the service policies, every recipient shall specify eligible if the applicant’s assets do not area or locality and other relevant that only individuals and groups exceed the recipient’s applicable asset factors, including but not limited to: determined to be financially eligible ceiling established pursuant to (1) the number of clients who can be under the recipient’s financial eligibility § 1611.3(d), or the asset ceiling has been served by the resources of the recipient; policies and LSC regulations may waived pursuant to § 1611.3(d)(2), and: (2) the population that would be (1) The applicant is seeking legal receive legal assistance supported with eligible at and below alternative income assistance to maintain benefits provided LSC funds. and asset ceilings; and (c)(1) As part of its financial eligibility by a governmental program for low (3) the availability and cost of legal policies, every recipient shall establish income individuals or families; or services provided by the private bar and (2) The Executive Director of the annual income ceilings for individuals other free or low cost legal services recipient, or his/her designee, has and households, which may not exceed providers in the area. determined on the basis of one hundred and twenty five percent § 1611.4 Financial eligibility for legal documentation received by the (125%) of the current official Federal assistance. recipient, that the applicant’s income is Poverty Guidelines amounts. The (a) A recipient may provide legal primarily committed to medical or Corporation shall annually calculate assistance supported with LSC funds nursing home expenses and that, 125% of the Federal Poverty Guidelines only to individuals whom the recipient excluding such portion of the amounts and publish such calculations has determined to be financially eligible applicant’s income which is committed in the Federal Register as a revision to for such assistance. Nothing in this Part, to medical or nursing home expenses, Appendix A to this part. (2) As part of its financial eligibility however, prohibits a recipient from the applicant would otherwise be policies, a recipient may adopt providing legal assistance to an financially eligible for service; or authorized exceptions to its annual individual without regard to that (3) The applicant’s income does not income ceilings consistent with individual’s income and assets if the exceed 200% of the applicable Federal § 1611.5. legal assistance is wholly supported by Poverty Guidelines amount and: VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00051 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29709 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules (i) The applicant is seeking legal association or other entity is eligible for information, in a manner consistent assistance to obtain governmental legal services as required by paragraph with the attorney-client relationship. benefits for low income individuals and (a) of this section, a recipient shall (d) When one recipient has families; or consider the resources available to the determined that a client is financially (ii) The applicant is seeking legal group, such as the group’s income and eligible for service in a particular case assistance to obtain or maintain income prospects, assets and obligations or matter, that recipient may request governmental benefits for persons with and either: another recipient to extend legal disabilities; or (i) For a group primarily composed of assistance or undertake representation (4) The applicant’s income does not individuals who would be financially on behalf of that client in the same case exceed 200% of the applicable Federal eligible for LSC-funded legal assistance or matter in reliance upon the initial Poverty Guidelines amount and the under the Act, whether the financial eligibility determination. In recipient has determined that the characteristics of the persons such cases, the receiving recipient is not applicant should be considered comprising the group are consistent required to review or redetermine the financially eligible based on with financial eligibility under the Act; client’s financial eligibility unless there consideration of one or more of the or is a change in financial eligibility status following factors as applicable to the (ii) For a group having as a principal as described in § 1611.8 or there is applicant or members of the applicant’s activity the delivery of services to those substantial reason to doubt the validity household: persons in the community who would of the original determination, provided (i) Current income prospects, taking be financially eligible for LSC-funded that the referring recipient provides and into account seasonal variations in legal assistance under the Act whether the receiving recipient retains a copy of income; the characteristics of the persons served the intake form documenting the (ii) Unreimbursed medical expenses by the group are consistent with financial eligibility of the client. and medical insurance premiums; financial eligibility under the Act and (iii) Fixed debts and obligations; whether the legal assistance sought § 1611.8 Change in financial eligibility (iv) Expenses such as dependent care, status. relates to such activity of the group. transportation, clothing and equipment (2) A recipient shall collect (a) If, after making a determination of expenses necessary for employment, job information that reasonably financial eligibility and accepting a training, or educational activities in demonstrates that the group, client for service, the recipient becomes preparation for employment; corporation, association or other entity aware that a client has become (v) Non-medical expenses associated meets the eligibility criteria set forth financially ineligible through a change with age or disability; herein. in circumstances, a recipient shall (vi) Current taxes; or (c) The eligibility requirements set (vii) Other significant factors that the discontinue representation supported forth herein apply only to legal recipient has determined affect the with LSC funds if the change in assistance supported by funds from applicant’s ability to afford legal circumstances is sufficient, and is likely LSC, provided that any legal assistance assistance. to continue, to enable the client to provided by a recipient, regardless of (b) In the event that a recipient afford private legal assistance, and the source of funds supporting the determines that an applicant is discontinuation is not inconsistent with assistance, must be otherwise financially eligible pursuant to this applicable rules of professional permissible under applicable law and section and is provided legal assistance, responsibility. regulation. the recipient shall document the basis (b) If, after making a determination of for the financial eligibility financial eligibility and accepting a § 1611.7 Manner of determining financial determination. The recipient shall keep client for service, the recipient later eligibility. such records as may be necessary to determines that the client is financially (a)(1) In making financial eligibility inform the Corporation of the specific ineligible on the basis of later determinations regarding individual facts and factors relied on to make such discovered or disclosed information, a applicants, a recipient shall make determination. recipient shall discontinue reasonable inquiry regarding sources of representation supported with LSC the applicant’s income, income § 1611.6 Representation of groups. funds if the discontinuation is not prospects and assets. The recipient shall (a) A recipient may provide legal inconsistent with applicable rules of record income and asset information in assistance to a group, corporation, professional responsibility. the manner specified in this section. association or other entity if it provides (2) In making financial eligibility information showing that it lacks, and § 1611.9 Retainer agreements. determinations regarding groups seeking has no practical means of obtaining, (a) When a recipient provides LSC-supported legal assistance, a funds to retain private counsel and extended service to a client, the recipient shall follow the requirements either: recipient shall execute a written retainer set forth in § 1611.6(b) of this Part. (1) The group, or for a non- agreement with the client. The retainer (b) A recipient shall adopt simple membership group, the organizing or agreement shall be executed when intake forms and procedures to obtain operating body of the group, is primarily representation commences or as soon information from applicants and groups composed of individuals, who would be thereafter as is practicable. Such to determine financial eligibility in a financially eligible for legal assistance retainer agreement must be in a form manner that promotes the development under the Act; or consistent with the applicable rules of of trust between attorney and client. The (2) The group has as a principal professional responsibility and forms shall be preserved by the activity the delivery of services to those prevailing practices in the recipient’s recipient. persons in the community who would (c) If there is substantial reason to service area and shall include, at a be financially eligible for LSC-funded doubt the accuracy of the financial minimum, a statement identifying the legal assistance and the legal assistance eligibility information provided by an legal problem for which representation sought relates to such activity. (b)(1) In order to make a applicant or group, a recipient shall is sought, and the nature of the legal determination that a group, corporation, make appropriate inquiry to verify the services to be provided. VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00052 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 29710 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules (b) No written retainer agreement is Æ Mail: Defense Acquisition Flexibility Act, 5 U.S.C. 601, et seq., required for advice and counsel or brief Regulations Council, Attn: Ms. Deborah because the rule makes no significant service provided by the recipient to the Tronic, OUSD (AT&L) DPAP (DAR), change to DoD contracting policy. client or for legal services provided to IMD 3C132, 3062 Defense Pentagon, Therefore, DoD has not performed an the client by a private attorney pursuant Washington, DC 20301–3062. initial regulatory flexibility analysis. Æ Hand Delivery/Courier: Defense to 45 CFR part 1614. DoD invites comments from small Acquisition Regulations Council, (c) The recipient shall maintain businesses and other interested parties. Crystal Square 4, Suite 200A, 241 18th copies of all retainer agreements DoD also will consider comments from Street, Arlington, VA 22202–3402. generated in accordance with this small entities concerning the affected All comments received will be posted section. DFARS subparts in accordance with 5 to http://emissary.acq.osd.mil/dar/ U.S.C. 610. Such comments should be Appendix A—Legal Services dfars.nsf. submitted separately and should cite Corporation Poverty Guidelines DFARS Case 2003–D027. Ms. FOR FURTHER INFORMATION CONTACT: Deborah Tronic, (703) 602–0289. Note: Appendix A: The Corporation is not C. Paperwork Reduction Act requesting comments on the current SUPPLEMENTARY INFORMATION: The Paperwork Reduction Act does Appendix. The Appendix is revised not apply because the rule does not A. Background annually, after the Department of Health and impose any information collection Human Services issues the new Federal DFARS Transformation is a major Poverty Guidelines for that year. requirements that require the approval DoD initiative to dramatically change of the Office of Management and Budget the purpose and content of the DFARS. Victor M. Fortuno, under 44 U.S.C. 3501, et seq. The objective is to improve the General Counsel and Vice President for Legal List of Subjects in 48 CFR Part 246 efficiency and effectiveness of the Affairs. acquisition process, while allowing the Government procurement. [FR Doc. 05–10061 Filed 5–23–05; 8:45 am] acquisition workforce the flexibility to BILLING CODE 7050–01–P Michele P. Peterson, innovate. The transformed DFARS will contain only requirements of law, DoD- Editor, Defense Acquisition Regulations System. wide policies, delegations of FAR DEPARTMENT OF DEFENSE authorities, deviations from FAR Therefore, DoD proposes to amend 48 requirements, and policies/procedures CFR part 246 as follows: 48 CFR Part 246 that have a significant effect beyond the 1. The authority citation for 48 CFR internal operating procedures of DoD or [DFARS Case 2003–D027] part 246 continues to read as follows: a significant cost or administrative Authority: 41 U.S.C. 421 and 48 CFR Defense Federal Acquisition impact on contractors or offerors. Chapter 1. Regulation Supplement; Quality Additional information on the DFARS Assurance Transformation initiative is available at PART 246—QUALITY ASSURANCE http://www.acq.osd.mil/dpap/dfars/ Department of Defense (DoD). AGENCY: transf.htm. 246.101 [Removed] ACTION: Proposed rule with request for This proposed rule is a result of the 2. Section 246.101 is removed. comments. DFARS Transformation initiative. The 3. Section 246.102 is amended by proposed DFARS changes— revising paragraph (1) to read as follows: SUMMARY: DoD is proposing to amend Æ Update and clarify requirements for the Defense Federal Acquisition 246.102 Policy. Government contract quality assurance Regulation Supplement (DFARS) to * * * * * and use of warranties; update text pertaining to Government (1) Develop and manage a systematic, Æ Delete unnecessary definitions and contract quality assurance requirements. cost-effective Government contract unnecessary text on technical This proposed rule is a result of a quality assurance program to ensure that requirements matters, responsibilities of transformation initiative undertaken by contract performance conforms to contract administration offices, and DoD to dramatically change the purpose specified requirements. Apply material inspection and receiving and content of the DFARS. Government quality assurance to all reports; and DATES: Comments on the proposed rule Æ Delete text on preparation of contracts for services and products should be submitted in writing to the quality assurance instructions, use of designed, developed, purchased, address shown below on or before July quality inspection approval stamps, and produced, stored, distributed, operated, 25, 2005, to be considered in the information on types of quality maintained, or disposed of by formation of the final rule. evaluation data. This text will be contractors. ADDRESSES: You may submit comments, relocated to the new DFARS companion * * * * * identified by DFARS Case 2003–D027, resource, Procedures, Guidance, and 4. Section 246.103 is revised to read using any of the following methods: Information (PGI), available at http:// as follows: Æ Federal eRulemaking Portal: http:// www.acq.osd.mil/dpap/dars/pgi. www.regulations.gov. Follow the 246.103 Contracting office This rule was not subject to Office of responsibilities. instructions for submitting comments. Management and Budget review under Æ Defense Acquisition Regulations (1) The contracting office must Executive Order 12866, dated Web site: http://emissary.acq.osd.mil/ coordinate with the quality assurance September 30, 1993. dar/dfars.nsf/pubcomm. Follow the activity before changing any quality B. Regulatory Flexibility Act instructions for submitting comments. requirement. Æ E-mail: dfars@osd.mil. Include DoD does not expect this rule to have (2) The activity responsible for DFARS Case 2003–D027 in the subject a significant economic impact on a technical requirements may prepare line of the message. substantial number of small entities instructions covering the type and Æ Fax: (703) 602–0350. within the meaning of the Regulatory extent of Government inspections for VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00053 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1