Your SlideShare is downloading. ×
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Proposed Rule Legal Assistance Eligibility; Maximum Income Guidelines

497

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
497
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. 45545 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations EPA APPROVED REGULATIONS IN THE TEXAS SIP—Continued State ap- State citation Title/subject proval/sub- EPA approval date Explanation mittal date * * * * * * * Subchapter C—Vehicle Inspection and Maintenance; Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program; and Early Action Compact Counties Division 3: Early Action Compact Counties Section 114.80 ...... Applicability ................................... 11/17/04 8/8/05 [Insert FR page number where document begins]. Section 114.81 ...... Vehicle Emissions Inspection Re- 11/17/04 8/8/05 [Insert FR page number quirements. where document begins]. Section 114.82 ...... Control Requirements ................... 11/17/04 8/8/05 [Insert FR page number Subsection 114.82(b) is NOT part where document begins]. of the approved SIP. Section 114.83 ...... Waivers and Extensions ............... 11/17/04 8/8/05 [Insert FR page number where document begins]. Section 114.84 ...... Prohibitions ................................... 11/17/04 8/8/05 [Insert FR page number where document begins]. Section 114.85 ...... Equipment Evaluation Procedures 11/17/04 8/8/05 [Insert FR page number for Vehicle Exhaust Gas Ana- where document begins]. lyzers. Section 114.86 ...... Low Income Repair Assistance 11/17/04 8/8/05 [Insert FR page number Program (LIRAP) for Partici- where document begins]. pating Early Action Compact Counties. Section 114.87 ...... Inspection and Maintenance Fees 11/17/04 8/8/05 [Insert FR page number where document begins]. * * * * * * * Section Part 1611 (67 FR 70376).1 Futher action SUPPLEMENTARY INFORMATION: [FR Doc. 05–15607 Filed 8–5–05; 8:45 am] on the rulemaking was suspended, in 1007(a) of the Legal Services BILLING CODE 6560–50–P deference to a request by Representative Corporation Act requires LSC to James Sensenbrenner, Chairman of the establish guidelines, including setting U.S. House of Representatives Judiciary maximum income levels, for the LEGAL SERVICES CORPORATION Committee, that LSC suspend action on determination of applicants’ financial the rulemaking pending the 45 CFR Part 1611 eligibility for LSC-funded legal confirmation of new LSC Board of assistance. Part 1611 implements this Financial Eligibility Directors members appointed by provision, setting forth the requirements President Bush. Legal Services Corporation. AGENCY: relating to determination and After the confirmation of nine new Final rule. ACTION: documentation of client financial board members and the appointment of eligibility. Part 1611 also sets forth a new LSC President, the reconstituted SUMMARY: The Legal Services requirements related to client retainer Operations and Regulations Committee Corporation (‘‘LSC’’ or ‘‘Corporation’’) is agreements. resumed consideration of the Part 1611 amending its regulations relating to rulemaking in early 2004. At the financial eligibility for LSC-funded legal Procedural Background meeting of the full Board of Directors on services and client retainer agreements. April 30, 2005, the Board approved the On June 30, 2001, LSC initiated a The revisions are intended to reorganize republication of a revised NPRM for Negotiated Rulemaking and appointed a the regulation to make it easier to read public comment. That NPRM was Working Group comprised of and follow; simplify and streamline the published on May 24, 2005 (70 FR requirements of the rule to ease representatives of LSC (including the 29695). administrative burdens faced by LSC Office of Inspector General), the LSC received thirteen (13) comments recipients in implementing the National Legal Aid and Defenders on the NPRM, including nine comments regulation and to aid LSC in Association, the Center for Law and from individual LSC grant recipients, enforcement of the regulation; and to Social Policy, the American Bar one comment from a senior attorney clarify the focus of the regulation on the Association’s Standing Committee on with a recipient commenting in his financial eligibility of applicants for Legal Aid and Indigent Defendants and personal capacity, one comment from a LSC-funded legal services. a number of individual LSC recipient member of the public, and comments DATES: This final rule is effective programs. The Negotiated Rulemaking from the Center for Law and Social September 7, 2005. Working Group met three times Policy on behalf of the National Legal FOR FURTHER INFORMATION CONTACT: throughout 2002 and developed a Draft Aid and Defenders Association, and the Mattie C. Condray, Senior Assistant Notice of Proposed Rulemaking (NPRM) American Bar Association’s Standing General Counsel, Office of Legal Affairs, which was the basis for the NPRM Committee on Legal Aid and Indigent Legal Services Corporation, 3333 K. St., published by LSC on November 22, NW., Washington, DC 20007–3522; 2002 proposing significant revisions to 1 For additional discussion of the Negotiated (202) 295–1624 (phone); (202) 337–6519 Rulemaking Working Group, see 67 FR 70376 (fax); mcondray@lsc.gov. (e-mail). (November 22, 2002). VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 2. 45546 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations that this Part also sets forth financial merely a threshold question and the Defendants. With minor exceptions standards for groups seeking legal issue of whether any otherwise eligible (discussed in greater detail below), the assistance supported by LSC funds. applicant will be provided with legal commenters strongly supported the Finally, LSC is adding a reference to the assistance is a matter for the recipient to proposed revisions. Upon receipt of the retainer agreement requirement in the determine with reference to its priorities comments, LSC prepared a Draft Final purpose section to provide a notice at and resources. In addition, this part Rule discussing the comments and the beginning of the regulation that this does not address eligibility based on making permanent the proposed subject is included in Part 1611. LSC citizenship or alienage status; those revisions. The Draft Final Rule was received several comments specifically eligibility requirements are set forth in considered by the Operations and supporting and no comments objecting Regulations Committee of the Board of Part 1626 of LSC’s regulations, to these changes. LSC adopts the Directors at its meeting of July 28, 2005, Restrictions on Legal Assistance to revisions as proposed. and the Final Rule was adopted by the Aliens. Finally, LSC received one Board of Directors at its meeting of July comment suggesting that because this Section 1611.2—Definitions 30, 2005. Part contains LSC’s requirements LSC is adding definitions for several pertaining to when and how recipients Revisions to Part 1611 terms and amending the definitions for must execute retainer agreements with each of the existing terms currently While specific revisions are discussed clients (a subject not directly related to defined in the regulation. LSC believes in greater detail in the Section-by- financial eligibility determinations), that that the new definitions and the Section analysis below, it should be the title of this Part should refer to amended definitions will help to make noted that the revisions reflect several retainer agreements. While the the regulation more easily overall goals of the original Negotiated requirements for retainer agreements are comprehensible. Rulemaking Working Group: included in this Part, it primarily Reorganization of the regulation to make addresses financial eligibility and LSC Section 1611.2(a)—Advice and Counsel it easier to read and follow; disagrees that retainer agreements LSC is adding a definition of the term simplification and streamlining of the should be specifically included in the ‘‘advice and counsel’’ as that term requirements of the rule to ease title of this Part. appears in proposed section 1611.9, administrative burdens faced by LSC Retainer Agreements. Under the new Section-by-Section Analysis recipients in implementing the definition, ‘‘advice and counsel’’ is regulation, facilitate compliance and aid Section 1611.1—Purpose defined as limited legal assistance that LSC in enforcement of the regulation; LSC is revising this section to make involves the review of information and clarification of the focus of the clear that the standards of this part relevant to the client’s legal problem(s) regulation on the financial eligibility of concern only the financial eligibility of and counseling the client on the applicants for LSC-funded legal services persons seeking LSC-funded legal relevant law or action(s) to take to as an issue separate from decisions on assistance and that a finding of financial address the legal problem(s). Advice whether to accept a particular client for eligibility under Part 1611 does not and counsel does not encompass service. In particular, LSC is create an entitlement to service. In drafting of documents or making third- significantly reorganizing and addition, LSC is removing the language party contacts on behalf of the client. simplifing the sections of the rule which in the current regulation referring to Thus, for example, advising a client of set forth the various requirements giving preferences to ‘‘those least able to what notice a landlord is required to relating to establishment of recipient obtain legal assistance.’’ Although the provide to a tenant before evicting the annual income and asset ceilings, original LSC Act contained language tenant would fall under ‘‘advice and authorized exceptions and indicating that recipients should counsel,’’ but making a phone call to a determinations of eligibility. These provide preferences in service to the landlord to prevent the landlord from changes are intended to clarify the poorest among applicants, that language evicting a tenant would not be regulation and include substantive was deleted when the Act was considered ‘‘advice and counsel.’’ changes to make intake simpler and less reauthorized in 1977 and has remained Several commenters specifically burdensome and render basic financial out of the legislation ever since. supported this proposed definition, and eligibility determinations easier for Moreover, section 504(a)(9) of the FY no commenters opposed the proposed recipients to make. LSC is also moving 1996 appropriations act, Public Law definition. Accordingly, LSC adopts the the existing provisions on group 104–134 (incorporated by reference in definition as proposed. representation, with some amendment, Three of the commenters who the current appropriations act and to a separate section of the regulation. specifically supported this proposed implemented by regulation at 45 CFR Finally, LSC is simplifying and definition did express a concern, Part 1620) provides that recipients are to clarifying the retainer agreement however, about the statement in the make service determinations in requirement. preamble to the NPRM in which LSC accordance with written priorities, Title of Part 1611 stated that LSC anticipates that advice which take into account factors other and counsel will generally be than the relative poverty among LSC is changing the title of Part 1611 characterized by a one-time or very applicants. Thus, as there is no statutory from ‘‘Eligibility’’ to ‘‘Financial short term relationship between the basis for a preference for those least able Eligibility.’’ This change is intended, attorney and the client. These to afford assistance and because LSC first, to make clear that with respect to commenters noted that there are any believes that the regulation should focus individuals seeking LSC-funded legal number of situations in which a on financial eligibility determinations assistance, the standards of this part recipient attorney has to do some without reference to issues relating to deal only with the financial eligibility of research in order to properly advise a determinations by a recipient to provide such persons. LSC believes this change client or in which the attorney provides services to a particular applicant, LSC will help clarify that a finding of advice and counsel to a client on a has determined that such language financial eligibility under Part 1611 limited number of occasions, but over a should be removed from the regulation. does not create an entitlement to somewhat extended period of time. LSC is also adding language specifying service. Rather, financial eligibility is VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 3. 45547 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations the terms ‘‘liquid’’ and ‘‘non-liquid’’ the financial eligibility of persons These commenters suggested deleting should be eliminated and that the seeking legal assistance supported with any reference to an anticipated time regulation should focus instead on the LSC funds, LSC has decided to use the period in relation to the intended ready convertibility of the asset to cash. term ‘‘applicant’’ throughout the meaning of ‘‘advice and counsel.’’ The other key concept in the The use of the word ‘‘generally’’ in regulation to emphasize the distinction definition of asset is the availability of the sentence the commenters objected to between applicants, clients, and persons the resource to the applicant. Although was intended to convey that LSC is seeking or receiving assistance the current regulation notes that the aware that there are circumstances in supported by other than LSC funds. recipient’s asset guidelines ‘‘shall take which a case would qualify as ‘‘advice Accordingly, LSC is adding a definition into account impediments to an and counsel’’ notwithstanding that the of applicant providing that an applicant individual’s access to assets of the advice and counsel may be provided is an individual seeking legal assistance family unit or household,’’ the Working over a somewhat extended time period. supported with LSC funds. Groups, Group was of the opinion that this Nonetheless, it is the case that many, if corporations and associations are principle could be more clearly not most, advice and counsel cases specifically excluded from this articulated. LSC believes that the involve a short-term relationship definition, as the eligibility of groups is proposed language accomplishes that between the attorney and the client. addressed wholly within section 1611.6. purpose. Recipients currently may provide Even if the attorney must do some LSC received numerous comments legal assistance without regard to a research prior to providing advice, LSC specifically supporting the proposed person’s financial eligibility under Part does not expect that the need to do definition of assets. LSC, however, also 1611 when the assistance is supported research will create a relationship received one comment expressing wholly by non-LSC funds. LSC is not which extends for a significant period of concern that defining assets as resources changing this (in fact, this principle is time in most cases. Indeed, part of the ‘‘readily convertible to cash’’ could restated in section 1611.4(a)) and justification for exempting advice and preclude recipients from deeming all believes that the use of the term counsel cases from the retainer non-primary residence real estate as an applicant as adopted herein will help to agreement requirement has been the fact asset and require a more lengthy inquiry clarify the application of the rule. that such relationships are of generally into the property’s ready convertibility LSC received no comments objecting short duration, such that requiring the to cash. LSC notes at the outset that to these changes and adopts the recipient to ensure an executed retainer under the current rules, recipients are revisions as proposed. agreement is obtained may take longer already required to ‘‘take into account than the time it takes for the attorney to Section 1611.2(d)—Assets impediments’’ to access to the provide the advice and counsel to the LSC is adding a definition of the term resources. Thus, to the extent that the client. If, instead, it was the case that assets to the regulation. The new monetary value of a particular advice and counsel cases typically last definition, ‘‘cash or other resources that applicant’s real property is not available for a long time, the opportunity to are readily convertible to cash, which to an applicant, recipients should obtain retainer agreements would not be are currently and actually available to already be taking that inaccessibility lacking. Thus, LSC continues to the applicant,’’ is intended to provide into account in reviewing the anticipate that in most cases ‘‘advice some guidance to recipients as to what applicant’s resources. Nonetheless, LSC and counsel’’ will be characterized by a is meant by the term assets, yet provide believes that recipients currently have one-time or short term relationship considerable latitude to recipients in sufficient discretion to establish a between the attorney and the client, but developing a description of assets that rebuttable presumption that an recognizes that this may not always be addresses local concerns and applicant’s non-primary residence real the case. Whether a particular case conditions. The key concepts intended property is a resource readily meets the definition of ‘‘advice and in this definition are (1) ready convertible to cash and countable counsel’’ or not will continue to be convertibility to cash; and (2) toward the recipient’s asset ceiling and determined on a case-by-case basis, availability of the resource to the also to determine that a particular piece considering the facts and circumstances. applicant. of property is not readily convertible to Section 1611.2(b)—Applicable Rules of Although the term is not defined in cash and, as such, should not be Professional Responsibility the regulation, current section 1611.6(c) considered a resource available to the states that ‘‘assets considered shall applicant for the purpose of the asset LSC is adding a definition of the term include all liquid and non-liquid assets ceiling. Nothing in the rule being ‘‘applicable rules of professional * * *’’ The intent of this requirement is adopted today disturbs that discretion. responsibility’’ as that term appears in that recipients are supposed to consider Accordingly, LSC adopts the definition proposed sections 1611.8, Change in all assets upon which the applicant as proposed. Financial Eligibility Status and 1611.9, could draw in obtaining private legal Retainer Agreements. This definition is Section 1611.2(e)—Brief Services assistance. While there was no intent to intended to make clear that the LSC is adding a definition of the term change the underlying requirement, in references in the regulation refer to the ‘‘brief services’’ as it is used in section discussing the issues of assets and asset rules of ethics and professional 1611.9, Retainer Agreements. LSC notes ceilings in the Working Group it became responsibility applicable to attorneys in that brief services is legal assistance apparent that the terms ‘‘liquid’’ and the jurisdiction where the recipient characterized primarily by being ‘‘non-liquid’’ were obscuring either provides legal services or distinguishable from both extended understanding of the regulation. To maintains its records. LSC received no service and advice and counsel. Under some, the term ‘‘non-liquid’’ implied comments objecting to this definition the new definition, brief service is the something not readily convertible to and adopts the definition as proposed. performance of a discrete task (or tasks) cash, while to others the term implied Section 1611.2(c)—Applicant which are not incident to continuous an asset that was simply something representation in a case but which other than cash, without regard to the Consistent with the intention to keep involve more than the mere provision of ease of converting the asset to cash. the focus of the regulation on the advice and counsel. Examples of brief Thus, the Working Group agreed that standards and criteria for determining VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 4. 45548 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations services include activities such as the LSC received one comment Section 1611.2(g)—Governmental specifically supporting the change from Program for Persons With Disabilities drafting of documents or personalized ‘‘household or family unit’’ to assistance with the completion of LSC is adding a definition of the term ‘‘household.’’ This commenter pleadings being prepared and filed by ‘‘governmental program for persons suggested that the change would pro se litigants, and making limited with disabilities.’’ LSC is including in provide ‘‘more flexibility’’ to recipients. third-party contacts on behalf of a client the authorized exceptions to the annual LSC notes that the change in the over, in most instances, a short time income ceilings an exception relating to terminology used in the regulation in period. applicants seeking to obtain or maintain this instance is not creating any govermental benefits for persons with LSC received two comments substantive change. As noted above, disabilities. Accordingly, it is specifically supporting the proposed recipients already have considerable appropriate to include a definition for definition. LSC received one comment discretion and flexibility to determine this term. The definition, ‘‘any Federal, noting that the proposed definition does the scope of an applicant’s household; State or local program that provides not address the relative simplicity or the change in terminology being benefits of any kind to persons whose brevity of documents which may be adopted with this final rule neither eligibility is determined on the basis of drafted by a recipient within the scope increases nor decreases that discretion mental and/or physical disability,’’ is of brief service. This commenter was and flexibility. LSC adopts the change intended to be similar in structure and concerned that the definition was in terminology as proposed. application to the definition of the term contrary to the Case Service Reporting Throughout the course of the ‘‘governmental program for low income (CSR) definition of ‘‘brief services.’’ This rulemaking field representatives have individuals and families.’’ LSC received commenter suggested changing the suggested deleting the words ‘‘before no comments objecting to the proposed definition or adding a statement that the taxes’’ from the definition of income. definition and adopts the definition as Five commenters reiterated this position definition in the regulation should not proposed. in comments on the NPRM, while one apply to the CSR. LSC notes that this Section 1611.2(h)—Income commenter specifically opposed definition of ‘‘brief services’’ is, while deleting ‘‘before taxes’’ from the not identical, specifically intended to be LSC is revising the current definition definition of income. Such a change is fully consistent with the definition of of income to refer to the total cash desirable, the proponents contend, ‘‘brief services’’ in the CSR. As such, receipts of a ‘‘household,’’ instead of a because automatically deducted taxes LSC disagrees that the definitions are ‘‘family unit’’ and to make clear that are not available for an applicant’s use recipients have the discretion to define inconsistent and LSC adopts the and the failure to take current taxes into the term household in any reasonable definition as proposed. account in determining income has an manner. Currently, the definition of Section 1611.2(f)—Extended Service adverse impact on the working poor. income refers to ‘‘family unit,’’ while While it is undoubtedly true that the phrase ‘‘household or family unit’’ LSC is adding a definition of the term automatically deducted taxes are not appears in the section on asset ceilings. ‘‘extended service’’ as that term is used available to an applicant, LSC agrees It appears that there is no difference in section 1611.9, Retainer Agreements. with the other commenter that the intended by the use of different terms in As defined, extended service means definition of income is not the these sections and LSC believes that it legal assistance characterized by the appropriate place in the regulation to is appropriate to simplify the regulation performance of multiple tasks incident deal with this issue. to use the same single term in each to continuous representation in which Taking the phrase ‘‘before taxes’’ out provision, without creating a the recipient undertakes responsibility of the definition of income would substantive change in the meaning of for protecting or advancing the client’s effectively change the meaning of either term. LSC has decided to use interests beyond advice and counsel or income from gross income to net income ‘‘household’’ instead of ‘‘family unit’’ brief services. Examples of extended after taxes. The term income has meant because it is a simpler, more service include representation of a gross income since the original adoption understandable term. of the financial eligibility regulation in client in litigation, administrative As noted above, LSC does not intend 1976. See 41 FR 51604, at 51606, adjudicative proceeding, alternate the use of the term ‘‘household’’ to have November 23, 1976. The maximum dispute resolution proceeding, or a different meaning from the current income guidelines are based on the extended negotiations with a third term ‘‘family unit.’’ Under current Department of Health and Human party. LSC received no comments guidance from the LSC Office of Legal Services (DHHS) Federal Poverty Affairs, recipients have considerable objecting to the proposed definition and Guidelines amounts. DHHS’’ Federal latitude in defining the term ‘‘family adopts the definition as proposed. Poverty Guidelines are, by law, based on unit.’’ Specifically, OLA External Section 1611.2(f)—Governmental the Census Bureau’s Federal Poverty Opinion No. EX–2000–1011 states: Program for Low Income Individuals or Thresholds, which are calculated using Neither the LSC Act nor the LSC Families gross income before taxes. 42 U.S.C. regulations define ‘‘family unit’’ for client 9902(2); Office of Management and eligibility purposes. The Corporation will LSC is changing the term that is used Budget Directive No. 14 (May 1978). defer to recipient determinations on this in the regulation from ‘‘governmental Changing the definition of income issue, within reason. Recipients may program for the poor’’ to ‘‘governmental effectively from gross to net after taxes consider living arrangements, familial program for low income individuals and relationships, legal responsibility, financial would introduce two different uses of families.’’ This change is not intended responsibility or family unit definitions used the term income into the regulations by government benefits agencies, amongst to create any substantive change in the (one use in the income guidelines other factors, in making such decisions. current definition, but merely reflect published annually by LSC in Appendix preferred nomenclature. LSC received A to Part 1611 and another use in the LSC intends that this standard would no comments objecting to this change text of the regulation). This is also apply to definitions of ‘‘household’’ problematic in two ways. and the definition makes this clear. and adopts the revision as proposed. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00026 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 5. 45549 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations Indian trusts from being considered None of the comments supporting First, with respect to the annual income for the purpose of determining removal of ‘‘before taxes’’ from the income ceiling limits, unilaterally financial eligibility of Native American definition of income addressed the changing the standard from gross to net applicants for service, and that such problems discussed above. Moreover, income after taxes would arguably funds or interests of individual Native LSC believes that the practical problem exceed LSC’s authority. LSC is required Americans in trust or restricted lands (that taxes, indeed, are funds by the LSC Act to set its maximum should not be considered as a resource unavailable to the applicant), is better income guidelines in consultation with for the purpose of LSC financial addressed by treating taxes as a separate the Office of Management and Budget eligibility. See LSC Office of Legal factor which can be considered by the and the Governors of the states. 42 Affairs External Opinion 99–17, August recipient in making financial eligibility U.S.C. 2996f(a)(2)(A). The annual 27, 1999. determinations. (This matter is income ceiling agreed to by LSC, OMB As noted in External Opinion 99–17, presented in greater detail in the and the Governors (set at 125% of the the exclusion applies only to funds and discussion of section 1611.5, below.) Federal Poverty Guidelines amounts) other interests held in trust by the Further, although LSC does not consider was arrived at based on gross income; federal government and investment defining income as gross income (rather changing to a net income after taxes income accrued therefrom. The than net after taxes) as presenting any standard would effectively increase the following have been found to qualify for ‘‘apparent preference’’ for non-working annual ceiling amounts beyond what the exclusion from income in applicants, permitting current taxes to was agreed. LSC is concerned that it determining eligibility for various be a factor to be considered by the could only undertake such an action in government benefits: income from the recipient in making financial eligibility consultation with OMB and the sale of timber from land held in trust; determinations eliminates any such Governors, which consultation has not income derived from farming and apparent preference that may be happened. ranching operations on reservation land Second, adopting a net income after perceived as existing. Accordingly, LSC held in trust by the federal government; taxes standard would, as one declines to remove the words ‘‘before income derived from rentals, royalties, commenter noted, increase the upper taxes’’ from the definition of income. and sales proceeds from natural In addition, LSC is moving the income limit as well. This would have resources of land held in trust; sales information on what is encompassed by the effect of further increasing the proceeds from crops grown on land held the term ‘‘total cash receipts’’ into the potential eligible applicant pool. in trust; and use of land held in trust for definition of income. LSC believes that Although LSC believes that the slight grazing purposes. On the other hand, having this information in the definition increase in the eligible applicant pool per capita distributions of revenues of income, rather than in a separate which will result from increasing the from gaming activity on tribal trust definition will make the regulation upper income limit from 187.5% to property are not protected because such easier to understand, particularly as the 200% of the Federal Poverty Guidelines funds are not held in trust by the federal term ‘‘total cash receipts’’ is used only amounts is justifiable (see discussion of in the definition of income. In section 1611.5, below), LSC is government. Thus, such distributions incorporating the language on ‘‘total concerned that an additional increase in are considered to be income for cash receipts,’’ LSC is retaining the the eligible applicant pool is not purposes of determining LSC financial current definition of the term without necessary to effectively deal with the eligibility. any substantive amendment, but practical problem that taxes, indeed, Total Cash Receipts reorganizing it to make it easier to represent funds unavailable to the LSC is deleting the definition of ‘‘total understand. Specifically, LSC is applicant. cash reciepts,’’ currently at section It was suggested in several comments separating the definition into two 1611.2(h), as a separately defined term that adopting a net income after taxes sentences, one of which sets forth those in the regulation. Rather, LSC has standard is preferable because it would things which are included in total cash reorganized the information contained be easier for recipients as they would receipts and one which sets forth those in the definition and moved it directly only have to consider ‘‘take home pay’’ things which are specifically excluded into the definition of ‘‘income.’’ As in computing income at intake. from the definition of total cash However, as one commenter noted, take noted above, the only place the term receipts. It is worth noting that the list home pay is often not simply pay net of ‘‘total cash reciepts’’ is used is in the of items included is not intended to be taxes; there are other deductions from defintion of ‘‘income’’ and LSC believes exhaustive, while the list of items to be gross pay which an applicant could that having a separate definition for excluded is intended to be exhaustive. have (e.g., 401(k) deductions, medical ‘‘total cash reciepts’’ is cumbersome and LSC received no comments objecting to savings account deductions, insurance unnecessary. LSC received no these changes and adopts the revisions premium deductions, child support, comments objecting to this change and as proposed. Finally, LSC wishes to restate in this garnishments). In such cases, the adopts the revision as proposed. preamble guidance on the treatment of recipient would not be able to simply Section 1611.3—Financial Eligibility Indian trust fund monies in making determine that income equaled take Policies income determinations. Several home pay, but would have to identify LSC is creating a new section 1611.3, provisions of Federal law regulate and add amounts for such deductions Financial Eligibility Policies, based on whether or not income or interests in from gross pay back in when requirements currently found in Indian trusts are taxable or should be determining the applicant’s income. In sections 1611.5(a), 1611.3(a)–(c) and considered as resources or income for addition, some, but not all, of such other 1611.6. The comments generally federal benefits. See 25 U.S.C. 1407– deductions from pay could qualify as supported these revisions, although LSC 1408; 25 U.S.C. 117a–117c. Under the factors under the allowable exceptions received a few comments suggesting terms of those laws, LSC has determined to the annual income ceiling amounts. some changes to what was proposed. that recipients may disregard up to LSC is concerned that this would add LSC adopts the revisions as proposed, $2000 per year of funds received by confusion in the income determination with certain amendments, as discussed individual Native Americans that are process, contrary to the intent of this below. derived from income or interests in rulemaking. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00027 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 6. 45550 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations the Working Group discussions and in respect to assets of domestic violence The new section 1611.3 addresses in comments to the November 2002 NPRM, victims jointly held with their abusers, one section recipients’ responsibilities that the list of excludable assets should this requirement applies when the for adopting and implementing financial be illustrative, rather than exhaustive. applicant has made the recipient aware eligibility policies. Under the new The commenters argue that having an that he or she is a victim of domestic section, the current requirement that illustrative rather than an exhaustive list violence. recipients’ governing bodies have to In addition, this section permits will provide recipients with greater adopt policies for determining financial recipients to adopt financial eligibility flexibility in developing asset policies eligibility is retained. However, LSC is policies which provide for authorized and note that many recipients already changing the current requirement for an exceptions to the annual income ceiling exclude certain other assets. annual review of these policies and pursuant to section 1611.5 and for Commenters alternatively suggested instead will now require recipients’ waiver of the asset ceiling for an some specific assets be added to the list, governing bodies to conduct triennial applicant in a particular case under such as household furnishings, reviews of policies. The Working Group unusual circumstances and when computers, and such assets which are agreed that an annual review was approved by the Executive Director or excluded from other governmental unnecessary and has tended to result in his/her designee. Finally, LSC will benefit programs for which the rather pro forma reviews of policies. permit recipients to adopt financial applicant is eligible. A few comments LSC believes that a triennial review eligibility policies which permit also specifically suggested that the requirement will be sufficient to ensure financial eligibility to be established by exclusion for vehicles should not be that financial eligibility policies remain reference to an applicant’s receipt of limited to vehicles needed for work. relevant and will encourage a more benefits from a governmental program One of these commenters noted that the thorough and thoughtful review when for low-income individuals or families Social Security Administration has such review is undertaken. The section consistent with section 1611.4(b). recently changed its rules on eligibility also adds an express requirement that These provisions are, with two for Supplemental Security Income (SSI) recipients adopt implementing exceptions, based directly on current to exclude from an SSI applicant’s procedures. While this is already requirements with a few substantive assets one vehicle used for implicit in the current regulation, LSC changes. First among the changes, transportation, without specific regard believes it is preferable for this recipients will no longer be required to to the particular transportation use (as requirement to be expressly stated. Such routinely submit their asset ceilings to was previously the case), provided it is implementing procedures may be LSC. This requirement appears to serve not strictly a recreational vehicle such adopted either by a recipient’s little or no purpose, as compliance with as a dune buggy. See 70 FR 6340, at governing body or by the recipient’s this requirement has been spotty and 6342–43 (February 7, 2005). management. LSC received several LSC has taken no action to obtain the LSC believes that some of the comments supporting these changes and information from recipients which have comments indicate that LSC was not no comments objecting to them. not automatically submitted it. clear in the NPRM about the Accordingly, LSC adopts the revisions Moreover, the information collected is relationship between the asset ceiling as proposed. not being put to any routine use. In adopted by a recipient and the list of Section 1611.3 also contains certain addition, LSC has not had a parallel excludable items. Under the current minimum requirements for the content requirement for the submission of regulation recipients are required to of recipient’s financial eligibility income ceilings. LSC has determined adopt asset ceilings based on the policies. Specifically, LSC is requiring that this requirement can be eliminated economy and the relative cost of living that the recipient’s financial eligibility without any adverse effect on program in the service area. Recipients are also policy must: compliance with or Corporation to take into account special needs of the • Specify that only applicants for enforcement of the regulation. LSC elderly, institutionalized and persons service determined to be financially received several comments supporting with disabilities, along with the eligible under the policy may be further this change and no comments objecting reasonable equity value in work-related considered for LSC-funded service; to it. Accordingly, LSC adopts the equipment used to provide income. • Establish annual income ceilings of revision as proposed. Implicit in the requirement is the no more than 125% of the current Another substantive change is that expectation that the recipient will set its DHHS Federal Poverty Guidelines recipients will be permitted to provide ceiling at a level as to cover the value amounts; in their financial eligibility policies for of such things as household furnishings, • Establish asset ceilings; and the exclusion of (in addition to a clothing and other personal affects of • Specify that, notwithstanding any primary residence, as provided for in applicant (and members of applicant’s other provisions of the regulation or the the existing regulation) vehicles used for households) and other such assets as recipient’s financial eligibility policies, transportation, assets used in producing applicants may reasonably be expected in assessing the financial eligibility of income (such as a farmer’s tractor or a to have without liquidating in the an individual known to be a victim of carpenter’s tools) and other assets attempt to secure legal assistance. Once domestic violence, the recipient shall excluded from attachment under State the asset ceiling has been set, the consider only the income and assets of or Federal law from the calculation of recipient is expected to consider all of the applicant and shall not consider any assets. In identifying other assets the applicant’s assets against that assets jointly held with the abuser. excluded from attachment under State ceiling, except for the value of a In establishing income and asset or Federal law, LSC has in mind assets principle residence. The exclusion of a ceilings, the recipient will have to that are excluded from bankruptcy principle residence is intended to consider the cost of living in the proceedings or other assets that may not ensure that homeowners do not exceed locality; the number of clients who can be attached for the satisfaction of a debt, the asset ceiling just on the value of the be served by the resources of recipient; home. etc. With the NPRM, LSC proposed to Most of the comments received the potentially eligible population at allow recipients to exclude from the reiterated the position that field various ceilings; and the availability of asset computation a limited number of representatives had expressed during other sources of legal assistance. With VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00028 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 7. 45551 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations assets excludable under all benefits Part 1611. Nevertheless, this provision additional assets which would be likely program for low-income individuals, the of law applies regardless of whether it to cause an applicant to exceed the relative national consistency which LSC appears in the regulation. However, applicable asset ceiling without believes is important would be incorporating this language into the liquidation of that or other significant impeded. As noted above, LSC believes regulation is appropriate, particularly in household assets. As such, LSC that the revised language does afford light of the goal of this rulemaking to continues to prefer to retain the recipients sufficient additional clarify the requirements relating to approach in the current regulation in flexibility in developing asset ceiling financial eligibility determinations.2 which the list of excludable assets is set LSC received one comment asking policies. forth in toto. LSC believes that this As noted above, LSC is changing the whether this proposal means that the approach emphasizes the policy that asset ceiling waiver standard slightly. financial eligibility of an applicant who most assets are to be considered and The current regulation permits waiver is the victim of domestic violence is to maintains a basic level of consistency in ‘‘unusual or extremely meritorious be determined solely on the basis of the nationally with respect to this issue. situations;’’ the new rule permits waiver applicant’s income and assets, without LSC continues to expect that recipients in ‘‘unusual circumstances.’’ The regard to the income and assets of other will set asset ceilings and asset ceiling Working Group determined that the members of the household (beyond the waiver policies so as to permit current language is unnecessarily alleged perpetrator of the domestic applicants to have reasonable amounts stringent and that it is unclear what the violence). LSC intended that the income of assets which will not count against difference is intended to be between of the alleged perpetrator and assets them in eligibility determinations and ‘‘unusual’’ and ‘‘extremely meritorious.’’ jointly held by the applicant with the believes that the new language does It was suggested in the Working Group alleged perpetrator must be disregarded afford recipients some additional that the standard should be ‘‘where in assessing the financial eligibility of flexibility in developing asset ceilings, appropriate.’’ LSC, however, felt that the the applicant, but that income and consistent with the policy articulated regulation should continue to reflect the assets not jointly held with the alleged above particularly in light of the policy that waivers of the asset ceilings perpetrator of other members of the amendment to the asset ceiling waiver should only be granted sparingly and household (as defined by the recipient) standard discussed below. not as a matter of course. The Working Turning to comments on the specific would have to be considered in the Group agreed that the revised language proposed excludable assets, LSC agrees financial eligibility assessment. LSC accomplishes this goal, while providing that it is neither necessary nor desirable acknowledges that the language of the some additional appropriate discretion to restrict the exclusion for vehicles to statute (and LSC’s originally proposed those used for work only. There are implementation thereof) could be read to recipients. In addition, where the many situations in which a vehicle is an so as to suggest that only the applicant’s current rule requires all waiver applicant’s only reliable, accessible individual income and assets may be decisions to be made by the Executive method of transportation for vital life counted. However, LSC believes that Director, LSC proposed to permit those activities other than work, such as such a reading would require a decisions to be made by the Executive education and training activities, substantive change to the financial Director or his/her designee. LSC reaching medical appointments, grocery eligibility requirements that Congress believes it is important that a person in shopping, transporting children to did not intend. significant authority be involved in At the time of adoption of section 506, school or activities, etc. As such, it is making asset ceiling waiver decisions, the regulation permitted recipients to reasonable to consider such vehicles as but recognizes that, especially as more take into account an applicant’s ability among the significant assets that a recipients have consolidated and now to access certain assets (including assets recipient should be able to own and not serve larger areas, it is important for of alleged perpetrators of domestic have counted towards the applicant’s recipients to have the discretion to violence) and permitted recipients to applicable asset ceiling. Accordingly, delegate certain authority to regional or consider the applicant’s lack of access to LSC is amending the language in branch office managers or directors to the alleged perpetrator’s income as an proposed 1611.2(d)(1) which read increase administrative efficiency. LSC ‘‘other significant factor related to the ‘‘vehicles required for work’’ and received several comments supporting inability to afford legal assistance.’’ 45 adopting instead the language ‘‘vehicles this change and no comments objecting CFR 1611.6(d); 1611.5(b)(1)(E). required for transportation.’’ Under this to it. Accordingly, LSC adopts the However, in some cases, the victim’s formulation, the value of vehicles which revision as proposed. household income including the income are not used for transportation, such as The first totally new element is the of the alleged perpetrator was above the vehicles used purely for recreational language regarding victims of domestic upper income limit, such that the activities (e.g., dune buggies, golf carts, violence. This new language recipient was not able to even apply the go-karts, and the like) would have to be implements LSC’s FY 1998 ‘‘significant other factors’’ factor to included in determining whether an appropriations law. Specifically, section make a determination of eligibility and applicant’s assets exceed the recipient’s 506 of that act provides: in some cases there was a problem applicable asset ceiling. In establishing the income or assets of an LSC declines, however, to expand the related to the extent to which the victim individual who is a victim of domestic list to include the exclusion of any could access household assets over violence, under section 1007(a)(2) of the assets excluded under benefits programs Legal Services Corporation Act (42 U.S.C. for low income persons for which the 2 This point is demonstrated by the fact that LSC 2996f(a)(2)), to determine if the individual is received one comment specifically supporting the applicant is eligible. There are myriad eligible for legal assistance, a recipient implementation of section 506 into Part 1611 on the described in such section shall consider only benefit programs with a widely varying basis that the new language in 1611 would provide the assets and income of the individual and range of excludable assets. Some recipients with enhanced ability to provide legal shall not include any jointly held assets. programs have relatively low asset assistance to victims of domestic violence. Rather, the incorporation of this statutory mandate into the Public Law 105–119, 111 Stat. 2440 ceilings, but exclude more assets from regulation at this time does not create any the calculation, while other programs (November 26, 1997). Although this law substantive change in the authority and exclude fewer assets, but have higher has been in effect since 1997, it has responsibility recipients have had with respect to asset ceilings. If LSC were to include all never been formally incorporated into this issue since 1997. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00029 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 8. 45552 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations This section further provides that a domestic violence or involves the which the alleged perpetrator had joint perpetrator as an adverse party. Neither control. Thus, the practical problem recipient may find an applicant to be the statute (nor the accompanying report addressed by section 506 is that in many financially eligible if the applicant’s language) specify that the request for cases a victim of domestic violence assets are at or below the recipient’s legal assistance must relate to cannot draw upon the income or assets applicable asset ceiling level (or the alleviating the domestic violence or of the alleged perpetrator (including ceiling has been properly waived) and require the perpetrator to be an adverse jointly held assets) as a source of funds the applicant’s income is at or below the party. As such, as noted above, the with which to obtain private legal recipient’s applicable income ceiling, or special rule applies at any time when assistance. if one or more of the authorized As the report language accompanying the applicant has made the recipient exceptions to the ceiling applies. These Public Law 105–119 notes, Congress aware that he or she is a victim of provisions are based on existing was ‘‘aware that the current statute and domestic violence. LSC does not find it provisions found in sections 1611.3, regulations * * * already provide for likely that applicants who are victims of 1611.4 and 1611.6. As revised, the new such determinations to be made’’ but domestic violence identify themselves provisions do not represent a ‘‘given concerns regarding access to the as such in seeking legal assistance in substantive change, but LSC believes legal system for victims of domestic matters wholly unrelated to the having the basic statements as to who violence, the conferees have included domestic violence. However, if an may be found to be financially eligible this provision to provide greater clarity applicant seeking assistance with an for assistance in one section makes the regarding this matter.’’ H. Rpt. 105–405, unrelated matter self-identifies as a regulation much clearer. In addition, p. 186. This indicates that Congress did victim, LSC believes that this would where the existing regulation uses a not intend to require significant changes likely be done as a way of explaining construction that speaks to when a to LSC’s regulations on financial why certain income and/or assets are recipient may provide legal assistance, eligibility, but rather only that Congress, unavailable for use in obtaining private the new language emphasizes the point in adopting section 506, wanted to legal assistance. As such, the rationale that the requirements speak only to ensure that the income and assets of the of the special rule would appear to be determinations of financial eligibility alleged perpetrator (which are generally satisfied and recipients should have the and not to decisions regarding whether under the control of the perpetrator and ability to disregard the perpetrator’s or not to actually provide legal which the victim cannot readily access) income and assets (including jointly assistance. LSC received several not render the victim financially held assets) in such situations. LSC does comments supporting these changes and not believe the risk that an applicant ineligible for legal assistance. As the no comments opposing these changes. would self-identify as a domestic regulation did not then provide for Accordingly, LSC adopts the revisions violence victim in order to circumvent disregarding the income and assets of as proposed. the financial eligibility requirements is other members of the victim’s LSC is also incorporating into this significant and is confident a recipient household not jointly held with the section a significant substantive change would explore the situation further if alleged perpetrator in the assessment of to the regulation. Consistent with the recipient suspected the claims of the the victim’s financial eligibility, LSC section 1611.3 as discussed above the applicant were specious. does not believe Congress was regulation will now permit recipients to Finally, LSC has decided to permit attempting to change the general determine an applicant to be financially recipients to adopt financial eligibility requirement that LSC consider the eligible because the applicant’s income policies which permit financial income and assets of other members of is derived solely from a governmental eligibility to be established by reference the victim’s household in making program for low-income individuals or to an applicant’s receipt of benefits from financial eligibility determinations as families, provided that the recipient’s a governmental program for low-income long as they are available to the victim. governing body has determined that the individuals or families consistent with In light of the foregoing, LSC is income standards of the governmental section 1611.4(b). This issue is amending section 1611.3(e) to make this program are at or below 125% of the discussed in greater detail below. clearer by revising it to read: Federal Poverty Guidelines amounts. Section 1611.4—Financial Eligibility for Notwithstanding any other provision of For many recipients, a significant this Part, or other provision of the recipient’s Legal Assistance proportion of applicants rely on financial eligibility policies, every recipient governmental benefits for low-income This section sets forth the basic shall specify as part of its financial eligibility individuals and families as their sole requirement that recipients may provide policies that in assessing the income or assets source of income. In order to qualify for legal assistance supported with LSC of an applicant who is a victim of domestic these benefits, such persons have funds only to those individuals whom violence, the recipient shall consider only the assets and income of the applicant and already been screened by the agency the recipient has determined are members of the applicant’s household other providing the benefits (using an financially eligible for such assistance than those of the alleged perpetrator of the eligibility determination process that is pursuant to their policies, consistent domestic violence and shall not include any at least as strict as the one required with this Part. This section also contains assets held by the alleged perpetrator of the under LSC regulations) and determined a statement that nothing in Part 1611 domestic violence, jointly held by the to be financially eligible for those prohibits a recipient from providing applicant with the alleged perpetrator of the benefits. In Working Group discussions, legal assistance to an individual without domestic violence, or assets jointly held by any member of the applicant’s household many representatives of the field noted regard to that individual’s income and with the alleged perpetrator of the domestic that if they could rely on the assets if the legal assistance is supported violence. determinations made by these agencies wholly by funds from a source other without having to otherwise make an than LSC (regardless of whether LSC LSC also received a comment independent inquiry into financial funds were used as a match to obtain requesting clarification of whether the eligibility, it would substantially ease such other funds, as is the case with special rule applies in all cases the administrative burden involved in Title III or VOCA grant funds) and the involving a victim of domestic violence making financial eligibility assistance is otherwise permissible or only in cases in which the request for determinations. under applicable law and regulation. assistance is related to alleviating the VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00030 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 9. 45553 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations Understanding Supplemental Security The Working Group also noted that Section 1611.5—Authorized Exceptions Income, Social Security Administration to the Annual Income Ceiling current LSC practice permits recipients Web site, http://www.ssa.gov/notices/ to determine that an applicant’s assets This section provides for authorized supplemental-security-income/text- are within the recipient’s asset ceiling exceptions to the annual income ceiling. income-ussi.htm. With the streamlined level without additional review if the The language, like the current language financial eligibility determination applicant is receiving govermental of sections 1611.4 and 1611.5, on which requirements LSC is adopting, LSC benefits for low-income individuals and it is based, is permissive. A recipient is believes that performing a full financial families, eligibility for which includes at liberty to include some, none, or all eligibility screen on persons having an asset test. Key to this practice is that of the authorized exceptions discussed income derived from sources in the recipient’s governing body has to below in its financial eligibility policies. addition to governmental benefits for take some identifiable action to Thus, to the extent a recipient chooses low income persons does not present an recognize the asset test of the to avail itself of the authority provided undue administrative burden and is governmental benefit program being in this section, a recipient is permitted necessary to ensure that only those who relied upon. This ensures that the to determine a particular applicant is meet the recipient’s financial eligibility eligibility standards of the governmental financially eligible for assistance, criteria (based on applicable LSC laws program have been carefully considered notwithstanding that the applicant’s and regulations) are determined to be and are incorporated into the overall income is in excess of the recipient’s financially eligible for LSC-funded legal financial eligibility policies adopted and applicable income ceiling, if the assistance. Accordingly, LSC declines to regularly reviewed by the recipient’s applicant’s situation fits within one or expand the scope of § 1611.4(c) and governing body. As this practice has more of the authorized exceptions. In adopts the revisions as proposed. proved efficient and effective, it was making such determinations, however, LSC received one additional comment determined that a parallel process could the recipient will also have to detemine about the basic financial eligibility also be adopted for income screening that the applicant’s assets are at or criteria for LSC-funded legal assistance. and that these practices should be below the recipient’s applicable asset This commenter suggested that the expressly included in the regulations. It ceiling (or the ceiling would have had determination of an applicant’s is important to note that this provision to have been waived). This requirement financial eligibility be conditioned would only apply to applicants whose is consistent with the current regulation, somehow upon the financial sole source of income is derived from but is affirmatively stated for greater circumstances of the adverse party(ies) such benefits. Applicants who also have clarity. LSC received one comment with whom the applicant has the income derived from other sources specifically supporting this clarification problem for which the legal assistance would be subject to an independent and LSC adopts the language as is sought. LSC’s financial eligibility inquiry and assessment of financial proposed. requirements are based upon the Under the revised section, there are eligibility. statutory mandate that the eligibility of two situations in which an applicant’s LSC received several comments clients be based upon the assets and income could exceed the recipient’s supporting these changes and one income of the applicant, the fixed debts, income ceiling without an absolute comment suggesting expanding this medical expenses and other factors upper limit: (1) Where the applicant is authority to permit recipients to make a which affect the applicant’s ability to seeking to maintain governmental determination that an applicant is afford legal assistance, and the cost of benefits for low-income individuals and financially eligible on the basis of living in the locality. See 42 U.S.C. families; and (2) where the executive receipt of governmental benefits for low 2996f(a)(2)(B). With the exception of the director (or his/her designee) income persons even when the cost of living in the locality, all of the determines, on the basis of applicant has another source of income, criteria set forth in the LSC Act relate to documentation received by the provided that the applicant’s additional the ability of the applicant to afford recipient, that the applicant’s income is income was counted in determining legal assistance. There is no suggestion primarily committed to medical or eligibility for a governmental benefit in either the Act itself or in its nursing home expenses and, in program for low income persons (such legislative history, that the financial considering only that portion of the as supplemental security income (SSI), circumstances of adverse parties are at applicant’s income which is not so in which the benefit is decreased as an all relevant to the determination of an committed, the applicant would offset to the other income). LSC is financial eligibility of the applicant. otherwise be financially eligible. concerned that in such situations it The first instance represents a new Moreover, LSC believes that cannot be guaranteed that an applicant’s addition to the regulation. Currently, an conditioning a determination of income would of necessity remain applicant seeking to obtain financial eligibility upon the financial below the recipient’s applicable income governmental benefits for low income situation of adverse parties would ceiling. The SSI program, for example, persons may be deemed financially unfairly discriminate against some does not offset all other income dollar eligible if the applicant’s income does persons who are otherwise unable to for dollar. Thus, an individual living not exceed 150% of the LSC national afford private legal assistance and alone whose income is solely derived eligibility level. The existing regulation, would be inconsistent with LSC from SSI will have an income of $579/ however, does not specifically address statutory mission of fostering equal month, while an individual living alone applicants seeking to maintain such access to justice. See 42 U.S.C. 2996. receiving Social Security income of $99 benefits. Thus, under the current Accordingly, LSC declines to add as a will receive an SSI payment of $500/ regulation, an applicant whose income criteria for determining financial month, for a total income of $599/ eligibility an assessment of the financial month, and an individual living alone, costs expended by all parties (including hours and situation of potential or actual adverse with a monthly earned income of $317 costs for attorney time) during the course of a parties.3 and a state governmental benefit recipient’s representation of a client. This suggestion does not address financial eligibility payment of $15/month, will receive an 3 This commenter also suggested that LSC adopt determinations or the retainer agreement SSI benefit of $463/month, for a total requirements relating to the regular sharing among requirements. As such, it is outside the scope of this monthly income of $795/month. See, the various parties to a case of information about rulemaking and is not further addressed. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00031 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 10. 45554 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations income limit for an applicant with a afford recipients greater administrative is over the income ceiling but under three member household is $30,170; 150% of the LSC national eligibility flexibility in making financial eligibility under the new rule the maximum level may be deemed financially eligible determinations. The existing rule, income limit for that household will be for assistance in obtaining benefits, but however, does requires that the $32,180.) This action will slightly not for assistance in maintaining them. Executive Director make determinations increase the pool of potential applicants Thus, the applicant seeking assistance regarding whether an applicant’s for service. However, LSC believes that to maintain benefits would have to be income is primarily committed to this slight increase in the eligible turned down, but that same applicant medical or nursing home expenses. LSC applicant pool will not have a negative could then be found financially eligible believes it is important to continue this impact on the quantity or quality of for assistance to re-obtain such benefits requirement in this instance because a services delivered. Rather, this change once the benefits were lost. recipient is making a determination of recognizes the changing demographic of Accordingly, LSC is addressing this financial eligibility for an applicant the legal services client base, which problem in the regulation. However, whose income exceeds the otherwise now increasingly includes the working unlike the situation in obtaining the absolute upper limit of the income poor. Moreover, amending the rule to benefits, in seeking to maintain benefits ceiling, and such a determination increase the upper limit to 200% of the LSC considers an upper limit on income should be made by a person in Federal Poverty Guidelines amounts unnecessary since in such cases the significant authority.4 This is similar to will further simplify the regulation, applicant’s income will necessarily be the LSC view regarding decisions to which will aid grantees and their staff rather limited (for the applicant to have waive the asset ceiling. LSC does in making financial eligibility been eligible in the first place for the understand, however, that it is determinations. LSC received several benefits he or she is seeking to important for recipients to have the comments strongly supporting this maintain). LSC received several discretion to delegate certain authority change, including one comment which comments supporting these changes and to regional or branch office managers or noted that the change will allow for no comments opposing them. directors to increase administrative significant improvement in facilitating Accordingly, LSC adopts the revisions efficiency. This is why LSC proposed service collaboration and referrals as proposed. broadening the existing rule to permit The second instance is taken from among LSC and non-LSC service the Executive Director to designate a section 1611.5(b)(1)(B) of the current providers in many states because 200% responsible individual to make such regulation addressing instances in of the Federal Poverty Guidelines determinations. LSC believes that this which the applicant’s income is amounts is used as an upper limit for approach provides additional primarily devoted to medical or nursing income eligibility for a wide variety of administrative flexibility to recipients home expenses and does not represent programs providing services to low yet is consistent with the underlying a substantive change in the current income persons. LSC received no policy. Accordingly, LSC adopts the regulation. LSC is now specifying in the comments opposing this change. LSC revision as proposed. regulation, however, that in such cases accordingly adopts this revision as LSC is also permitting exceptions for the recipient is required to make a proposed. certain situations in which the Turning to the exceptions, LSC is determination of financial eligibility applicant’s income is in excess of the retaining the current exception for with regard to the applicant’s remaining recipient’s applicable income ceiling, individuals seeking to obtain income. The existing regulation could but does not exceed 200% of the governmental benefits for low-income be read to permit an applicant with an applicable Federal Poverty Guidelines individuals and families. Second, LSC is income of $300,000 to be deemed amount. At the outset, LSC notes that adding an exception for individuals financially eligible if $250,000 of the this section changes the current upper seeking to obtain or maintain income is devoted to nursing home income limit of 150% of the LSC governmental benefits for persons with expenses, notwithstanding that the national income guidelines amount, mental and/or physical disabilties. applicant’s remaining income is which is 150% of 125% of the Federal Many disability benefit programs $50,000—substantially in excess of the Poverty Guidelines amounts, or 187.5% provide only subsistance support and income ceiling. This situation is not of the Federal Poverty Guidelines those individuals should be treated the intended, and, indeed, LSC has no amounts. Under the new regulation, the same way as those seeking to obtain reason to believe recipients are serving maximum upper limit increases to benefits available on the basis of such persons. However, consistent with 200% of the Federal Poverty Guidelines financial need. However, many persons the overall goal of clarifying the amounts. Consequently, recipients will with disabilties who are eligible for regulation, LSC believes that a be able to consider applicants having disability benefits may not be requirement that an applicant must be slightly higher incomes than was particularly economically otherwise financially eligible previously possible. (For example, the disadvantaged and should not be considering only that portion of the 2005 LSC income guideline for a eligible for legal assistance simply by applicant’s income which is not devoted applicant in a three member household virtue of eligibility for such disability to medical or nursing home expenses in the 48 contiguous states and the benefits. Therefore, those applicants should be clearly set forth in the District of Columbia is $20,113. Under must have incomes below 200% of the regulation. the existing rule, the maximum upper LSC received several comments applicable poverty level in order to be generally supporting this change (and considered financially eligible for LSC- 4 This situation is distinguishable from the other none opposing it) but asking LSC to funded services. LSC received several exception to the absolute income limit relating to delete the requirement that the comments supporting these provisions applicants seeking to maintain governmental determination that the applicant’s and no comments opposing them. benefits for low income persons. As noted above, income is primarily committed to Accordingly, LSC adopts these in those instances, the applicant’s income will already be rather limited, even if exceeding the medical or nursing home expenses be exceptions as proposed. absolute income ceiling. In the medical/nursing Finally, the revised regulation made by the Executive Director or his/ home expenses situation, this may not be the case maintains the current authorized her designee. These commenters argued and the applicant’s income may be considerably in exceptions found in the factors listed in that removing this requirement would excess of the ceiling. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 11. 45555 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations circumstances, utility bills could be it encompasses debts fixed as to both current section 1611.5. Specifically, the time and amount. See Letter of recipient will be permitted to determine considered an ‘‘other significant factor’’ November 1, 1993 from J. Kelly Martin, an applicant whose income is below affecting an applicant’s ability to afford LSC Assistant General Counsel, to 200% of the applicable Federal Poverty legal assistance. LSC does not intend Stephen St. Hilaire, Executive Director, Guidelines amount to be financially that section 1611.5(a)(vii) be used to Camden Regional Legal Services, Inc. eligible for legal assistance supported routinely consider applicants’ utility Examples of such ‘‘fixed debts and with LSC funds based on one or more costs. This is true even if utility costs obligations’’ would include mortgage enumerated factors that affect the are typically high for an applicant payments, rent, child support, alimony, applicant’s ability to afford legal because, for example, the applicant lives business equipment loan payments, and assistance. As in the current regulation, in a very hot or very cold area of the unpaid taxes from prior years. LSC recipients will not be required to apply country. However, there may be intends that this term also include rent these factors in a ‘‘spend down’’ circumstances in which an area of the in addition to mortgage payments. fashion. That is, although recipients are country suffers a period of unusually Previous OLA opinions have addressed permitted to do so, they are not required hot or cold weather, or perhaps a mortgage payments but not rent and rent to determine that, after deducting the discreet time period in which heating has, heretofore, not been considered a allowable expenses, the applicant’s oil or gas prices are significantly higher fixed debt. LSC now sees no rational income is below the applicable income than the normal range of prevailing distinction between the two for the ceiling before determining the applicant prices. In addition, an individual purposes of this regulation; in addition, to be financially eligible. The regulation applicant may have unusually high LSC received several comments is also amended to clarify that the utility bills because of a malfunctioning supporting the inclusion of rent as a factors apply to the applicant and furnace or some other problem with fixed debt or obligation and no members of the applicant’s household. their home that they cannot get their comments opposed. Therefore LSC will The factors proposed are identical to the landlord to fix or that they cannot afford treat rent and mortgage expenses in a ones in the current regulation, with the to fix themselves. In such unusual similar manner. following exceptions: circumstances, it could be appropriate • The factor relating to medical The term ‘‘fixed debts and for a recipient to take into account the obligations,’’ however, is not without expenses is restated to make clear that extra amount of utility costs incurred by limit. It is not intended to include it refers only to unreimbursed medical an applicant as an ‘‘other significant expenses, such as food costs, utilities, expenses, but that medical insurance factor’’ in making a financial eligibility credit card debt, etc. These types of premiums are included; • The factor relating to employment determination. debts are usually not fixed as to time expenses is reorganized for clarity and and amount. The Working Group As noted above, another issue is would expressly include expenses considered whether there were whether to include current taxes within additional factors which should be related to job training or educational the scope of the term ‘‘fixed debts and enumerated in this section and several activities in preparation for obligations.’’ Prior to 1983, Part 1611 members of the Working Group employment; included current taxes along with past • The factor relating to expenses proposed adding other factors, such as due unpaid taxes as a fixed debt. When associated with age or disability no utilities, to the list. Several commenters the regulation was changed in 1983, the longer refers to resident members of the supported adding utilities to the overall reference to taxes was amended to refer family as a reference to the applicant or list of factors. Although, as the only to unpaid prior year taxes. This members of the applicant’s household commenters note, applicants must pay change was justified on the basis that for some measure of utilities, the same has been incorporated elsewhere in this the 1611.5 factors were intended to can be said for clothing and food, which section of the regulation; account only for ‘‘special • The factor relating to fixed debts are also certainly basic necessary circumstances’’ affecting the ability to and obligations is amended to read only expenses. However, these sorts of costs afford legal assistance. See 48 FR 54201 ‘‘fixed debts and obligations;’’ have never been covered by the types of at 54203 (November 30, 1983). However, • A new factor, ‘‘current taxes’’ is expenses which recipients are generally given that other types of expenses added to the list. permitted to consider in determining included in the list do not seem to be With regard to ‘‘fixed debts and the ability of an applicant to afford legal particularly ‘‘special’’ (e.g., mortgage obligations,’’ the current regulation assistance. With the exception of payments; child care expenses), LSC no provides little guidance as to what is housing expenses (which fall under the longer finds this explanation persuasive. meant by this term, except to heading of fixed debts and obligations, Rather, LSC believes that the exclusion specifically include unpaid taxes from a category which does not generally of current taxes, but not prior unpaid prior years. LSC has decided to simply include utilities because utility bills are taxes, from the list of factors which use the term ‘‘fixed debts and not typically fixed as to time and recipients’ may consider under obligations,’’ while providing guidance amount), the other factors represent exceptions to the income ceiling has the in the preamble as to what is expenses for items which may not be effect of punishing those persons who encompassed by the term. LSC believes particularly extraordinary, but which are in compliance with the law in favor that this approach will provide are for things other than the most basic of persons who are delinquent in their recipients with flexibility in applying necessities. Accordingly, LSC declines legal responsibility to pay taxes. the rule, while providing more guidance to add utilities to the list of fixed debts Moreover, as noted above, applicants for than could easily be contained in and obligations. legal services are increasingly the Related to the treatment of utilities, regulatory text. working poor. Excluding current taxes Prior guidance from the LSC Office of two commenters supported the idea LSC has a disproportionate effect on Legal Affairs has stated that, ‘‘in the clarify that recipients have the applicants who work versus applicants absence of any regulatory definition or flexibility to consider unusually high who do not work. Consequently, in the utility costs as an ‘‘other significant guidance as to the meaning of ‘fixed November 2002 NPRM, LSC proposed factor’’ under section 1611.5(a)(vii). LSC debts and obligations,’ the common including current taxes within scope of agrees that, under certain unusual meaning of the term applies’’ and that VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 12. 45556 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations group would have to provide Thus, LSC intends that ‘‘current taxes’’ the term ‘‘fixed debts and obligations’’ information showing that it lacks and should include local, State and Federal (as they had been prior to 1983). When the Operations and Regulations has no means of obtaining the funds to income and employment taxes, Social Committee once again addressed this retain private counsel, so that the rule Security and Medicare taxes, and local issue, field representatives reiterated would not permit representation of well property taxes (including special their recommendation that the term funded groups. property tax assessments) but not sales The LSC representatives were ‘‘income’’ should be defined as income taxes or excise fees, such as airline concerned that allowing the use of LSC after taxes. LSC continues to believe, as ticket fees, hotel occupancy taxes, gas funds to support the representation of noted above, that effectively defining taxes, cigarette taxes, etc. Past tax debts, groups not composed primarily of income as net income, while the LSC having become fixed debts owing, eligible clients would be problematic. In income guidelines (and the underlying remain a fixed debt or obligation which the examples given, the ‘‘primary DHHS Federal Poverty Guidelines recipients may consider under that function’’ of the group is easily amounts on which the LSC guidelines factor. discernable. It may be, however, that are based) are calculated on the basis of Section 1611.6—Representation of there is or can be a wide variety of gross income would make the regulation Groups opinion on what the ‘‘primary function’’ internally inconsistent. Rather, LSC The eligibility of groups for legal of any group is and on what is ‘‘in the believes that considering taxes as a assistance supported with LSC funds interests’’ of the eligible client factor which can be considered by the was a subject of extensive discussion community. The LSC representatives recipient in making financial eligibility among both the members of the Working were concerned that the risk and effort determinations addresses the practical Group and at the 2004 and 2005 related to articulating and enforcing a problem raised by the commenters. meetings of the current Operations and necessarily subjective standard would However, the Committee considered Regulations Committee. Prior to 1983, be inappropriate. Rather, LSC current taxes as a fundamentally the regulation permitted representation representatives were of the opinion that different kind of expense than the other of groups that were either primarily already scarce legal services resources expenses falling within the scope of composed of eligible persons, or which would be better devoted to providing ‘‘fixed debts or obligations.’’ Instead, the had as their primary purpose the assistance to eligible individuals or Committee recommended, and the furtherance of the interests of persons in groups of eligible individuals. In the Board agreed, that current taxes should the community unable to afford legal end, the Working Group did not achieve be a separate category of authorized assistance. In 1983, the regulation was consensus on this issue and the Draft exception to the annual income ceiling. amended to preclude the use of LSC NPRM did not propose to permit the Accordingly, LSC proposed adding a funds for the representation of groups representation of groups other than new subsection (iv) to section unless they were composed primarily of those primarily composed of eligible 1611.5(a)(4) and specifically invited individuals financially eligible for individuals. comment on the proposed addition of service. In its deliberations on the Draft an authorized exception for current During the Working Group meetings, NPRM, the prior Board’s Operations and taxes and on the appropriate scope and representatives from the field proposed Regulations Committee acknowledged specific terminology which LSC should that LSC revise the regulation to once the legitimacy of the concerns of the use to describe and define this proposed again permit the representation of LSC representatives, but determined exception. groups which, although not primarily that the value of permitting the LSC received numerous comments composed of eligible persons, have as a representation of groups having a reiterating the position that ‘‘income’’ primary function the delivery of primary function of providing services should be defined as net after taxes, but services to, or furtherance of the to, or furthering the interests of, those that in the alternative (should LSC interests of, persons in the community who would be financially eligible retain income as gross income) unable to afford legal assistance. outweighed any risks attendant upon supported the proposal to include Examples of such a group might be a such representation. In approving the current taxes as a separate factor which food bank or a rural community recommendation of the Committee, the recipients may consider as an development corporation working to Board directed that the Draft NPRM be authorized exception to the income develop affordable housing in an amended to propose permitting such ceiling. The one comment LSC received isolated community. Field representation (including any supporting LSC’s proposal to retain the representatives noted that in such cases, conforming amendments necessary) phrase ‘‘before taxes’’ in the definition there may not be local counsel willing prior to publication of the NPRM for of income expressly supported also to provide pro bono representation and comment. The NPRM published in treating current taxes as a separate factor that the group might not otherwise be November 2002 reflected this direction. which recipients may consider as an able to afford private counsel. Further, When the new Operations and authorized exception to the income the field representatives noted that Regulations Committee considered this ceiling. All of these commenters also restricting recipients to representing issue, field representatives once again supported including a discussion in the with LSC funds only those groups supported changing the regulation to preamble of what taxes should be primarily composed of eligible permit the representation of groups included in the scope of the term having as their primary function the individuals prevents them from ‘‘current taxes’’ rather than specifying a provision of services to, or furthering providing legal assistance in the most particular list in the text of the the interests of, those who would be efficient manner possible as other regulation. LSC agrees that such an financially eligible (providing the group groups may be better able to accomplish approach is preferable. LSC believes could demonstrate its inability to afford results benefitting more members of the that permitting some flexibility in the to retain private counsel), while LSC eligible community than would scope of the term ‘‘current taxes’’ is Management initially once again representation of eligible individuals or appropriate and in keeping with the supported permitting only the groups composed primarily of such intent of this rulemaking, although LSC representation of groups primarily individuals. Field representatives also also believes that the term ‘‘current composed of eligible individuals. noted that the rule requires that the taxes’’ should not be without limits. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 13. 45557 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations although there are many instances in include helping a domestic violence However, upon further reflection and which no such pro bono private counsel shelter keep its residents’ information consideration of the arguments made by is available. LSC understands that confidential and providing legal the field and the comments made by recipients currently take into account assistance in the creation of an indigent members of the Operations and the availability of pro bono private health care plan providing free medical Regulation Committee, LSC counsel when determining whether to services to low income persons. Management ultimately recommended Although the Office of Inspector accept an eligible group as a client. LSC that the regulation could be broadened General (OIG) did not file separate expects that this practice will continue. to permit the representation, in addition Proposed subsection (1) above, comments on the NPRM, the OIG has to groups primarly composed of eligible relating to the eligibility and previously raised a question as to individuals, groups which have as a representation of groups composed whether permitting the representation of primary activity the delivery of services primarily of eligible individuals, groups not comprised of eligible clients to persons who would be eligible. represents the practice under the is problematic because, in its view, Management continued to recommend current section 1611.5(c). The new rule neither the LSC Act itself nor the that the regulation not permit the is intended to have the same legislative history endorse the premise representation of groups whose primary interpretation of ‘‘primarily composed’’ that LSC may permit the representation activity is the ‘‘furtherance of the that has developed and been adopted in of groups that are not composed of interests of’’ persons who would be practice over the years since 1983. In eligible clients. Although LSC eligible. the case of membership groups, at least appreciates the OIG’s comments, LSC The Board agreed that permitting LSC a majority of the members would have believes that the proposed regulatory recipients to use LSC funds for the to be individuals who would be requirements are consistent with the representation of groups which provide financially eligible; in the case of non- applicable laws. The LSC Act, on its services to low income persons is membership groups, at least a majority face, does not prohibit the consistent with the LSC mission and of members of the governing body representation of groups other than could be an efficient use of LSC would have to be individuals who those composed of otherwise eligible resources, provided that the legal would be financially eligible. LSC individuals. The Act only speaks to assistance is related to the services the received no comments opposing this ‘‘eligible clients’’ and there is nothing in group provides. The Board also agreed proposal and adopts it as proposed. the text of the Act which suggests that that extending the permissible use of The latter instance (proposed a group which has as its principal LSC funds for the representation of subsection (2), above) represents a activity the provision of services to groups whose primary activity is the variation on one of the situations persons who would be eligible for LSC- ‘‘furtherance of the interests of’’ low permitted by the pre-1983 rule, although funded legal assistance is necessarily income persons would not be the language has been revised to focus excluded from the scope of the term appropriate because of the necessarily on ‘‘principal activity’’ rather than ‘‘eligible clients.’’ In addition, LSC subjective nature of determining what is ‘‘primary purpose’’ (or ‘‘primary believes that the legislative history of in the ‘‘furtherance of the interests of’’ activity’’) and the rule permits only the the Act and the 1977 LSC Act low income persons. Accordingly, LSC proposed to permit representation of groups which have as amendments is not dispositive on the a recipient to provide legal assistance a principal activity the delivery of issue of whether the statute was supported with LSC funds to a group, services to low income persons. intended to prohibit the representation corporation, association or other entity Limiting permissible representation to of groups other than those comprised of if the recipient has determined that the groups which have as a ‘‘principal eligible individuals. Rather, support for group, corporation, association or other the notion that Congress contemplated activity’’ the provision of services to low entity lacks and has no practical means the provision of legal assistance to income persons and the exclusion of of obtaining private counsel in the groups providing services to eligible groups which act in the ‘‘furtherance of matter for which representation is clients can be seen in the comments the interest of the poor’’ are intended to sought and either: Senator Riegle made in discussing an make the analysis required in (1) The group, or for a non- amendment relating to the prohibition determining the permissibility of the membership group, the organizing or by recipients on organizing: representation more objective. operating body of the group, is primarily All but one of the comments strongly A similar clarification is made in section composed of individuals who would be supported the addition of groups having 9(c) [of the Senate Reauthorization Bill] financially eligible for legal assistance as a principal activity the delivery of regarding the prohibition on organizing under the Act; or services to those persons in the activities. Legal Services should not directly (2) The group has as a principal organize groups. However, it should provide community who would be financially full representation, education and outreach activity the delivery of services to those eligible for legal assistance.5 The to those organized groups who are made up persons in the community who would commenters stated that this change, if of or which represent eligible clients. be financially eligible for LSC-funded adopted, will provide recipients with legal assistance and the legal assistance Congressional Record of October 10, much needed flexibility to address sought relates to such activity. 1977, p. S 16804. (emphasis added). pressing legal needs of low income Under the proposal, any group Accordingly, LSC is adopting the persons in their communities. One seeking LSC-funded legal assistance proposal to permit recipients to provide comment noted in particular that would have to lack, and have no legal assistance to groups having as a providing legal assistance to human practical means of obtaining, the funds principal activity the delivery of services organizations results in positive to obtain private counsel. LSC received services to those persons who would be benefits to thousands of low income no comments opposing this proposal eligible for LSC-funded legal assistance. individuals and is generally very much and adopts it as proposed. LSC notes In addition, LSC is adopting the supported by local communities. that there are instances in which a proposed further limitation that the Examples cited by the commenter group without funds to pay for private legal assistance must be related to the legal counsel may, nonetheless, be able services delivered by the group. One 5 The remaining comment did not address this to obtain pro bono private counsel, commenter objected to this limitation. aspect of the proposed rule. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 14. 45558 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations information that ‘‘reasonably such group eligibility. Although LSC This commenter stated that legal believes that the November 2002 assistance in an unrelated matter could demonstrates’’ that the group meets the proposed financial eligibility standards have a significant impact on an eligibility criteria. for groups effectuated the principal organization’s ability to provide its As discussed above, LSC believes that criterion in the Act that those seeking services. LSC notes that although there it is important that the regulation LSC-funded legal assistance must be may be instances in which an unrelated specify what information recipients financially unable to afford legal legal matter could ultimately have an must consider in order to make assistance and were in no way impact on the group’s delivery of determinations that the eligibility inconsistent with the LSC Act, LSC does services, LSC believes that this criteria are met. In the case of individual agree with the OIG that the standards for limitation is important. LSC believes applicants, the eligibility criteria are determining the eligibility of groups can that this limitation, along with the that applicants must have income and and should be more specific than those limitation relating to the group’s assets valued at below the set levels and set forth in the November 2002 NPRM. ‘‘principal activity,’’ will avoid creating the regulation expressly requires Accordingly, in assessing the a potential situation whereby recipients recipients specifically consider the eligibility of a group, LSC proposed to might feel free to undertake broad based applicant’s income and assets. require recipients to consider the social change activities, but will permit Similarly, since the group eligibility resources available to the group, such as recipients to provide legal assistance criteria include that the group or the the group’s income and income that will enable a group to pursue its persons served by the group must be prospects, assets and obligations. LSC goals of service to the eligible client those who would be financially eligible, also proposed that for a group primarily community. LSC believes that these it is appropriate for the regulation to composed of individuals who would be limitations will help ensure that LSC expressly require that recipients financially eligible for LSC-funded legal funds will be used to provide consider whether the group or the assistance under the Act, the recipient financially eligible groups with the day- persons served by the group are those would also have to consider whether the to-day legal services which are the who would be financially eligible. characteristics of the persons primarily hallmark of LSC-funded legal assistance. In discussions during the Operations composing the group are consistent with Finally, LSC notes that if a recipient and Regulations committee meetings on financial eligibility under the Act. LSC wishes to provide legal assistance to a this subject, it was noted that the further proposed that for a group having group whose principal activity is the November 2002 NPRM standards for as a principal activity the delivery of delivery of services to low income determining the eligibility of a group services to those persons in the persons in a legal matter not related to (which the commenters essentially community who would be financially that service, the recipient may provide suggest LSC adopt) were intended to eligible for LSC-funded legal assistance that legal assistance with non-LSC reflect the current, unwritten practice under the Act, the recipient would also funds, provided the legal assistance is with regard to determinations of have to consider whether the otherwise permissible under applicable eligibility of groups primarily composed characteristics of the persons served by law and regulations. of eligible individuals. The information the group are consistent with financial LSC is adding a provision to the adduced during those discussions eligibility under the Act and whether regulation specifying the manner of indicated that recipients generally the legal assistance sought relates to the determining the eligibility of groups. consider the nature and financial and principal activity of the group. Finally, Although the practice has been that other socioeconomic characteristics of LSC proposed to require a recipient to recipients must collect information that the group in making group eligibility document group eligibility reasonably demonstrates that the group determinations, particularly in cases in meets the eligibility requirements set determinations by collecting which the group is sufficiently large as forth in the regulation, standards for information that reasonably to make individualized screening a determining and documenting the demonstrates that the group meets the majority of the members of the group eligibility of groups has not previously eligibility criteria set forth in the rule. impracticable. LSC believed (and still All but one of the commenters been specifically addressed in the believes) that the standard set forth in supported the proposal to require regulation. LSC Management does not the proposed rule fairly reflects the recipients to consider the resources believe that recipients are representing current practice. Contrary to the concern available to the group, such as the ineligible groups, but the Working expressed by the commenters, this Group was nevertheless in agreement group’s income and income prospects, practice has not proved to be that it is important and appropriate for assets and obligations.6 Several of the problematic to date, nor is there any the regulation to expressly state the commenters, however, opposed the suggestion in the comments that LSC is Corporation’s expectations in this area. proposed requirement that the recipient currently ‘‘second guessing’’ recipients’ The November 2002 NPRM would have must determine whether the determinations of group eligibility. LSC required a recipient to collect characteristics of the group (or the does not anticipate that incorporating information reasonably demonstrating characteristics of the persons receiving the currently unwritten standard into that the group meets the eligibility the services of the group) are consistent the regulation will change this situation. requirements set forth in the regulation. with financial eligibility for LSC-funded LSC is, however, slightly modifying the In written comments filed in response legal assistance. These commenters language in the final rule to specify that to the November 2002 NPRM, and again suggested that these proposals were not it is the financial and other in the course of the new Operations and clear and could lead to disputes socioeconomic characteristics of the Regulation Committee’s 2004 and 2005 between LSC and recipients over group (or the persons being served by deliberations, the OIG expressed whether the articulated standard was the group) which recipients must concern that the proposed rule should met. These commenters suggested that it consider in making eligibility provide eligibility criteria sufficient to would be sufficient only to require that determinations and that those particular ensure that groups seeking LSC-funded recipients consider and collect characteristics must be consisent with legal assistance qualify for such legal those of persons who are financially assistance and should require grantees 6 The other comment did not address the proposal eligible for LSC-funded legal asssitance. to retain adequate documentation of regarding group eligibility. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 15. 45559 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations Example 3: Group which has as a principal the legal assistance being sought relates to The following are examples of how the principal activity. In this case, the tort activity the provision of services to those the new rule on group eligibility will claim is unlikely to be related to the primary who would be financially eligible under the apply: activity of the shelter and, as such, the Act. Example 1: Group primarily composed of recipient would not be able to provide LSC- A community group runs a food bank eligible individuals funded legal assistance to the shelter. which distributes food to low-income A public housing tenants’ association seeks persons in the community. The community In addition, the revised rule retains representation to require the landlord to group is a 501(c)(3) organization which is run and restates the current provision of the provide required maintenance services to the by a volunteer board of directors who are not rule that these requirements apply only buildings and grounds. To make a personally financially eligible for LSC- to a recipient providing legal assistance determination of eligibility, the recipient funded legal assistance. The food bank supported by LSC funds, provided that would have to review the resources available warehouse occupies rented space. The group regardless of the source of funds used, to the group (such as any assets and is seeking legal assistance to renegotiate its liabilities of the tenants’ association, i.e., lease to obtain favorable long-term lease any legal assistance provided to a group dues or other monetary donations to the terms to allow it to remain in the warehouse must be otherwise permissible under association; outstanding bills or obligations space. To make a determination of eligibility, applicable law and regulation. of the association) and make a determination the recipient would have to review the LSC notes that, as with other aspects that the association lacks the financial resources available to the group (i.e., how of this rule, section 1611.6 does not resources with which to hire private counsel. much the group takes in donations, what the speak to eligibility of groups for legal In addition, the recipient would have to group’s expenses are) and make a assistance under other applicable law determine that a majority of the association determination based on that information that and regulation. For example, the (or the association’s organizing body) are the group lacks the financial resources with eligibility of a group under proposed persons who would be financially eligible which to hire private counsel. In addition, under the Act by considering whether the the recipient would have to determine that section 1611.6 does not address issues group’s financial and other socioeconomic the group has as a principal activity the related to the eligibility of the group characteristics are consistent with those of provision of services to those would would under Part 1626 of LSC’s regulations, persons who are financially eligible under be financially eligible for LSC-funded legal concerning citizenship and alien status the Act. The recipient could perform a assistance. In this case, the recipient could eligibility. Similarly, the fact that a standard eligibility screen on the members of consider such financial and other recipient may determine a group to be the tenants’ association (or its organizing socioeconomic characteristics of the group eligible for legal assistance under this body) or could make a determination that the being served such as homeless status, Part, does not address other questions requirement is met on the basis that financial eligibility for the services offered, etc. The relating to permissibility of the eligibility for residency in the public housing recipient would also have to consider the complex in the recipient’s area is consistent relative significance of the food bank in representation (i.e., this Part does not with the recipient’s financial eligibility comparison to the other activities of the confer authority for the representation policies. The recipient would have to be able community group and to determine that the of a group on restricted matters, such as to support its determination of eligibility by legal assistance sought related to that service. class action lawsuits or redistricting collecting and maintaining such information In this case, renegotiation of the lease matters, etc.) as reasonably demonstrates that the tenants’ appears related to the provision of the Finally, LSC notes that in the association had met the eligibility criteria. service. The recipient would have to be able November 2002 NPRM, this section was Example 2: Group primarily composed of to support its determination of eligibility by numbered 1611.8 and placed at the end eligible individuals collecting and maintaining such information of that proposed regulation. LSC is now Five women who are currently on public as reasonably demonstrates that the placing this section before the sections assistance have come together as a group to community group had met the eligibility open and operate a daycare center. The group criteria. on Manner of Determining Financial has a grant from the state social services Example 4: Group which has as a principal Eligibility, Change in Financial agency which permits the grant to be used of activity the provision of services to persons Eligibility Status and Retainer obtaining legal assistance and a line of credit who would be financially eligible under the Agreements as those sections are secured by the Small Business Act applicable to both groups and Administration to create and operate this A non-profit organization runs a shelter for individual applicants and clients. business. The group seeks legal assistance in homeless families. The Board of the shelter obtaining the necessary permits and is comprised of persons who would not be Section 1611.7—Manner of Determining negotiating a lease for space for the center. financially eligible for assistance under the Financial Eligibility To make a determination of eligibility, the Act. The shelter seeks legal assistance in LSC is making several revisions to recipient would have to review the resources defending itself against a claim for damages this section. First, LSC is including a available to the group (such as the grant, line filed by a person who came to the shelter of credit, other funds available, as well as uninvited to distribute a menu for a local requirement that in making financial liabilities, such as costs for obtaining take out restaurant and slipped and fell on eligibility determinations a recipient licenses, space rental, etc) to see if the group ice on the shelter’s stairs. To make a shall make reasonable inquiry regarding lacks the financial resources with which to determination of eligibility, the recipient sources of the applicant’s income, hire private counsel. In addition, the would have to review the resources available income prospects and assets and shall recipient would have to determine that a to the group (i.e., how much the shelter record income and asset information in majority of the women are persons who receives in donations, the shelter’s expenses, the manner specified for determining would be financially eligible under the Act etc.) and make a determination based on that financial eligibility in section 1611.4. by considering the financial and other information that the group lacks the financial This requirement replaces the process socioeconomic characteristics of the women. resources with which to hire private counsel. In this case, although the women (being In addition, the recipient would have to currently required by section 1611.5, recipients of public assistance) are likely determine that the group has as a principal whereby a recipient is effectively persons who would be eligible for legal activity the provision of services to those required to conduct a lengthy and often assistance under the Act, the group’s grant would be financially eligible for LSC-funded cumbersome inquiry as to the and line of credit may provide enough legal assistance. In this case, the recipient applicant’s income, assets and income resources to the group so as to enable the would consider the financial and other prospects, including inquiry into a group to obtain private legal assistance. If the socioeconomic characteristics of the group detailed list of factors relating to an recipient determines that this is the case, the being served (homeless status, financial applicant’s specific financial situation recipient would not be able to provide the eligibility for access to the shelter, etc.). The and ability to afford private counsel. group LSC-funded legal assistance. recipient would also have to assess whether VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 16. 45560 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations intends to make no change in the LSC is also adding a provision to the The Working Group discussed this issue regulation on this point. regulation making clear that a recipient at length and representatives of the field In addition, LSC is changing the name agreeing to extend legal assistance to a noted that conducting such a detailed of this section from ‘‘change in client referred from another recipient inquiry in most cases is a task which is circumstances’’ to ‘‘change in financial may rely upon the referring recipient’s often difficult to accomplish efficiently eligibility status’’ to reflect the addition determination of financial eligibility, at the point of intake, especially as of the later discovered information provided that the referring recipient much of intake is performed by provision. provides and the receiving recipient volunteers, interns or receptionists. LSC received several comments retains a copy of the eligibility form Rather, many recipients, in practice, supporting these changes and no documenting the financial eligibility of conduct a somewhat abbreviated comments opposing them. LSC the client. This is the currently accepted version of the otherwise required accordingly adopts the revisions as practice, but is addressed nowhere in process, inquiring into current income, proposed. the existing regulation. assets, income prospects and probing for additional information based on the LSC received several comments Section 1611.9—Retainer Agreements responses provided, the requirements of supporting these changes and no The retainer agreement requirement, the regulation and their knowledge of comments opposing them. Accordingly, found at section 1611.8 of the existing local circumstances. This approach, the LSC adopts the revisions as proposed. regulation, was the subject of significant field representatives noted, is less prone discussion in the Working Group. Section 1611.8—Change in Financial to error and assists in fostering an Representatives of the field agreed with Eligibility Status appropriate attorney-client relationship the LSC representatives that a retainer with individuals accepted as clients. As LSC is adding language to this section agreement may be appropriate under LSC is not finding widespread instances to provide that if a recipient later learns certain circumstances, but argued that of service being provided to financially of information which indicates that a this regulatory requirement is not ineligible persons, it was agreed that the client never was, in fact, financially required by statute, is not justified process required by the existing eligible, the recipient must discontinue under applicable rules of professional regulation is unduly complicated and the representation consistent with the responsibility, may be unnecessarily that the simplified requirement applicable rules of professional burdensome in some instances and is proposed would be adequate to ensure responsibility. This addition is being not related to financial eligibility that recipients are making sufficient adopted because sometimes, after an determinations. They contended that, inquiry into applicants’ financial applicant or group has been accepted as barring a statutory mandate, decisions situations to determine financial a client, the recipient discovers or the about the use of retainer agreements, eligibility status under the regulation client discloses information that like those involving many other matters while being less administratively indicates that the client was not, in fact, relating to the best manner of providing burdensome for recipients and more financially eligible for service. This high quality legal assistance, should be conducive to the development of the situation is not covered by the existing determined by a recipient’s Board, attorney-client relationship. LSC also regulation because the client may not management and staff, with guidance believes that adoption of the have experienced a change in from LSC. They urged LSC to delete this streamlined financial eligibility circumstance but rather, the recipient requirement. The LSC representatives, determination process will aid the has discovered new pertinent however, were of the opinion that the Corporation in conducting compliance information about the client. LSC notes existing provision in the regulations reviews. that the new language, like the current requiring the execution of retainer regulation, is not intended to require a As noted above, LSC originally agreements is professionally desirable, recipient to make affirmative inquiry proposed in the November 2002 NPRM, authorized in accordance with LSC’s after accepting an applicant or group as to include this provision in proposed mandate under Section 1007(a)(1) of the a client for information that would section 1611.4, Financial Eligibility for Act to assure the maintenance of the indicate a change in circumstance or the Legal Assistance. Upon reflection, LSC highest quality of service and presence of additional information believes that as this requirement is professional standards, and appropriate regarding the client’s financial really a requirement as to how financial to assure that there are no eligibility. eligibility determinations are to be misunderstandings as to what services made, it is better included in this The regulation requires that when a are to be rendered to a particular client. section on the manner of determining client is found to be no longer Retainer agreements protect the attorney financial eligibility. LSC believes that financially eligible on the basis of later and recipient in cases of an unfounded this will improve the organization and discovered information, the recipient malpractice claim and protect the client clarity of the regulation. shall discontinue representation if the attorney and the recipient should supported with LSC funds, if Second, LSC is deleting the fail to provide legal assistance discontinuing the representation is not requirement in existing paragraph (a) of measuring up to professional standards. inconsistent with applicable rules of this section that LSC eligibility forms In the end, the Working Group was professional responsibility. This and procedures must be approved by unable to reach consensus on this issue language is parallel to the current the Corporation. It has been LSC’s and the Draft NPRM retained a requirement regarding discontinuation experience that receiving the forms has provision generally requiring the of representation upon a change in not enhanced its ability to conduct execution of retainer agreements, along circumstance. LSC wishes to note that, oversight of recipients. These with proposing requirements for client to the extent that discontinuation of documents are readily available to LSC service notices and PAI referral notices representation is not possible because of from recipients when needed. This in lieu of retainer agreements under professional responsibility reasons, a requirement appears only to create certain circumstances. After deliberations on the Draft recipient may continue to provide unnecessary work for recipients and NPRM, the Board determined to propose representation supported by LSC funds. LSC staff without serving any policy elimination of the retainer agreement This is currently the case and LSC purpose. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00038 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 17. 45561 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations and helpful change from the current section 1611.8(b) a recipient is not requirement altogether and the requirement. In particular, several required to execute a retainer agreement November 2002 NPRM published by comments supported proposals to ‘‘when the only service to be provided LSC reflected this determination. With exclude PAI attorneys from the scope of is brief advice and consultation.’’ the exception of the comments of the the requirement and to delete the Although the plain language of this LSC OIG, all of the comments LSC requirement for LSC prior approval of provision would seem to encompass received on the November 2002 NPRM retainer agreement forms. situations in which the attorney is supported the elimination of the After considering all of the various providing only some information and retainer agreement requirement. arguments on this matter in LSC has With the appointment of the new guidance on a suggested course of action determined that, on balance, written members of the Board of Directors and to the client, it has over the years, come communications in brief services cases the new LSC President, LSC had the to include brief services such as drafting represents a ‘‘best practice’’ and, for the opportunity to reconsider this proposal. simple documents or making limited purposes of a regulatory requirement, Field representatives reiterated their contacts (by phone or in writing) with the current practice by which retainer support for elimination of the retainer third parties, such as a landlord, an agreements are only required when the agreement requirement from the employer or a government benefits recipient is providing extended service regulation, while LSC Management agency, on behalf of the client. LSC has to the client is appropriate. Accordingly, reiterated its support for retention of a determined that the discrepancy LSC is adopting the revisions as retainer agreement requirement for between the plain language and the proposed. Under the new rule, extended service in the regulation, with practical meaning of the exception must recipients will only be required to certain amendments intended to clarify be corrected. execute retainer agreements when During the public deliberations on and streamline the requirement. The providing extended services to clients. this matter in the 2004 and 2005 Board agrees with Management. LSC is Extended service is characterized by the Operations and Regulations Committee committed to keeping a retainer performance of multiple tasks incident meetings, LSC considered different agreement requirement in the to continuous representation in a case. approaches to resolving the discrepancy regulations. LSC considers the practice Examples of extended service include between the regulation as written and of providing retainer agreements to be representation of a client in litigation, the prevailing practice. Field professionally desirable and in an administrative adjudicative representatives suggested in the event accordance with its mandate under proceeding, alternative dispute that a retainer agreement requirement Section 1007(a)(1) of the Act to assure resolution proceeding, and more than remains in the rule (although still the maintenance of the highest quality brief representation of a client in preferring the elimination of any such of service and professional standards negotiations with a third party. In requirement) that the language of the and to assure that there are no addition, LSC is retaining the provision exception should reflect the current misunderstandings as to what services in the current regulation that the practice by expressly including brief are to be rendered to a particular client. retainer agreement must be executed service type activities along with advice Retainer agreements protect the attorney when representation commences or as and counsel. They asserted that the and recipient in cases of an unfounded soon thereafter as is practicable. proposed rule should add no new malpractice claim and protect the client To further clarify the regulation, LSC administrative or regulatory burdens on if the attorney and the recipient should is including express language specifying recipients. While recognizing the value fail to provide legal assistance that recipients are not required to of retainer agreements in some measuring up to professional standards. execute retainer agreements if the only LSC agrees, however, that there are circumstances, the field representatives services being provided are advice and changes that can be made in the retainer also argued that the rules of professional counsel or brief service. Advice and agreement requirement to clarify the responsibility in most jurisdictions do counsel is characterized by a limited application of the requirement and to not require that a retainer agreement be relationship between the attorney and lessen the burden on recipients, without executed or that any other form of the client in which the attorney does no interfering with the underlying goals of notice be provided in the brief service more than review information and the requirements. First, LSC believes context. Although LSC Management provide information and guidance to the that it is not necessary for LSC to expressed the belief that while some client. Advice and counsel does not approve retainer agreements and form of written communication between encompass drafting of documents or proposes to remove the requirement at the attorney and the client in brief making third-party contacts on behalf of current section 1611.8(a) that retainer services cases about the nature of the the client. LSC notes also that it agreements be in a form approved by relationship and a clear understanding proposes to use the term ‘‘advice and LSC. Instead, LSC is requiring the as to what services are to be rendered counsel’’ instead of ‘‘advice and retainer agreements must be in a form is important to achieving the highest consultation’’ because the term ‘‘advice consistent with the local rules of quality of legal service and professional and counsel’’ is a widely understood professional responsibility and must standards, it ultimately recommended case reporting term throughout the legal contain statements identifying the legal against requiring grantees to provide services community and LSC believe problem for which representation is specific written communications to that use of the standard term will be being provided and the nature of the clients when only brief services are simpler and clearer. Brief service is the legal services to be provided. LSC being provided. performance of a discrete task (or tasks) Most of the comments LSC received believes that this simplification will which are not incident to continuous on the NPRM reiterated the arguments eliminate possible sources of confusion representation in a case but which previously made by field for recipients in drafting retainer involve more than the mere provision of representatives. At the same time, agreements, yet will continue to foster advice and counsel. Examples of brief however, the commenters noted that if the essential communication between service include activities, such as the LSC was going to remain committed to the recipient and the client. drafting of documents such as a contract maintaining a retainer agreement Second, LSC is clarifying the or a will for a client or the making of requirement in the regulation, that the circumstances in which retainer one or a few third-party contacts on proposed revisions were an appropriate agreements are required. Under current VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00039 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 18. 45562 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations § 1611.1 Purpose. extended services. Although this change behalf of a client in a narrow time to the language alone could arguably be period. In advice and counsel and brief This part sets forth requirements sufficient to remove the necessity of service cases, the interaction between relating to the financial eligibility of applying the retainer agreement the recipient and the client is generally individual applicants for legal requirement to cases being handled by limited in nature and duration so that assistance supported with LSC funds PAI attorneys, LSC believes the text of executing a retainer agreement is and recipients’ responsibilities in the regulation should be further administratively burdensome. In these making financial eligibility clarified to explicitly so state. situations it may take more time and determinations. This part is not effort for the recipient to prepare the intended to and does not create any Other retainer and ensure that the client has entitlement to service for persons LSC received numerous comments signed and returned an executed copy of deemed financially eligible. This part supporting LSC’s decision not to the retainer agreement to the recipient also seeks to ensure that financial incorporate the requirements of section than it takes for the recipient to provide eligibility is determined in a manner 509(h) of LSC’s FY 1996 appropriations the service to the client. At that point, conducive to development of an act. Public Law 104–134, 110 Stat. 1321 the benefit of having the executed effective attorney-client relationship. In (carried forward in each successive retainer agreement is outweighed by the addition, this part sets forth standards appropriation, including the current effort required to comply with the relating to the eligibility of groups for appropriation, Public Law 108–447, 118 requirement. legal assistance supported with LSC Stat. 2809) with respect to records Finally, LSC is adding a statement to funds. Finally, this part sets forth covered by this Part. Section 509(h) the regulation providing that no written requirements relating to recipients’ provides that, among other records, retainer agreement is required for legal responsibilities in executing retainer eligibility records ‘‘shall be made services provided to the client by a agreements with clients. private attorney pursuant to 45 CFR Part available to any auditor or monitor of § 1611.2 Definitions. 1614. Until now, LSC has consistently the recipient * * * except for such (a) ‘‘Advice and counsel’’ means legal interpreted the retainer agreement records subject to the attorney-client assistance that is limited to the review requirement as applying to cases privilege.’’ During the prior stages of of information relevant to the client’s handled by private attorneys pursuant this rulemaking, there had been some legal problem(s) and counseling the to a recipient’s PAI program and OLA discussion and consideration of having client on the relevant law and/or has advised recipients that the best this language expressly incorporated suggested course of action. Advice and course of action is to have the client into Part 1611. LSC continues to believe counsel does not encompass drafting of execute retainer agreements with both that, as 509(h) covers significantly more documents or making third-party the recipient and with the private than eligibility records, having a full contacts on behalf of the client. attorney (OLA Opinion 99–03, August 9, discussion of the meaning of 509(h) in (b) ‘‘Applicable rules of professional 1999). Recipients have reported that the context of 1611, which addresses responsibility’’ means the rules of ethics entering into retainer agreements with only financial eligibility issues, is not and professional responsibility clients with whom it does not have on- appropriate. LSC is making final its generally applicable to attorneys in the going direct relationships does not decision not to address 509(h) jurisdiction where the recipient further the goal of the retainer requirements in this rule. For a fuller provides legal services. agreement requirement and that discussion of this issue, see the (c) ‘‘Applicant’’ means an individual ensuring that retainer agreements be preamble to the November 22, 2002 who is seeking legal assistance executed between clients and private NPRM, 67 FR 70376. supported with LSC funds from a attorneys is unduly administratively List of Subjects in 45 CFR Part 1611 recipient. The term does not include a burdensome. LSC agrees. The application of the retainer group, corporation or association. Legal services. (d) ‘‘Assets’’ means cash or other agreement requirement comes from the I For reasons set forth in the preamble, resources of the applicant or members of current structure of the text of the LSC revises 45 CFR part 1611 to read as the applicant’s household that are regulation. Under the current regulation, follows: readily convertible to cash, which are a recipient is required to execute a currently and actually available to the retainer agreement (unless otherwise PART 1611—FINANCIAL ELIGIBILITY applicant. excepted) ‘‘with each client who Sec. (e) ‘‘Brief services’’ means legal receives legal services from the 1611.1 Purpose. assistance in which the recipient recipient.’’ Cases referred to private 1611.2 Definitions. undertakes to provide a discrete and attorneys pursuant to a recipient’s PAI 1611.3 Financial eligibility policies. time-limited service to a client beyond program remain cases of the recipient 1611.4 Financial eligibility for legal advice and consultation, including but and the clients in those cases remain assistance. not limited to activities, such as the clients of the recipient and the client is 1611.5 Authorized exceptions to the drafting of documents or making limited considered to be receiving some legal recipient’s annual income ceiling. third party contacts on behalf of a client. services from the recipient. However, by 1611.6 Representation of groups. 1611.7 Manner of determining financial (f) ‘‘Extended service’’ means legal amending the language of the text of the eligibility. assistance characterized by the regulation to say that the recipient is 1611.8 Changes in financial eligibility performance of multiple tasks incident only required to execute a retainer status. to continuous representation. Examples agreement ‘‘when the recipient is 1611.9 Retainer agreements. of extended service would include providing extended service to the Appendix A to Part 1611—Legal Services representation of a client in litigation, client’’ the necessity of applying the Corporation Poverty Guidelines an administrative adjudicative requirement to PAI cases is removed. In Authority: 42 U.S.C. 2996e(b)(1), proceeding, alternative dispute cases handled by PAI attorneys, 2996e(b)(3), 2996f(a)(1), 2996f(a)(2); Section resolution proceeding, extended although the client can be said to be 509(h) of Pub. L. 104–134, 110 Stat. 1321 negotiations with a third party, or other receiving some legal services from the (1996); Pub. L. 105–119, 111 Stat. 2512 legal representation in which the recipient, the recipient is not providing (1998). VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00040 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 19. 45563 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations established by reference to an that only individuals and groups recipient undertakes responsibility for determined to be financially eligible protecting or advancing a client’s applicant’s receipt of benefits from a under the recipient’s financial eligibility interest beyond advice and counsel or governmental program for low-income policies and LSC regulations may brief services. individuals or families consistent with (g) ‘‘Governmental program for low receive legal assistance supported with § 1611.4(c). income individuals or families’’ means (g) Before establishing its financial LSC funds. (c)(1) As part of its financial eligibility any Federal, State or local program that eligibility policies, a recipient shall policies, every recipient shall establish provides benefits of any kind to persons consider the cost of living in the service annual income ceilings for individuals whose eligibility is determined on the area or locality and other relevant and households, which may not exceed basis of financial need. factors, including but not limited to: (h) ‘‘Governmental program for one hundred and twenty five percent (1) The number of clients who can be persons with disabilities’’ means any (125%) of the current official Federal served by the resources of the recipient; Federal, State or local program that Poverty Guidelines amounts. The (2) The population that would be provides benefits of any kind to persons Corporation shall annually calculate eligible at and below alternative income whose eligibility is determined on the 125% of the Federal Poverty Guidelines and asset ceilings; and basis of mental and/or physical (3) The availability and cost of legal amounts and publish such calculations disability. services provided by the private bar and in the Federal Register as a revision to (i) ‘‘Income’’ means actual current other free or low cost legal services Appendix A to this part. annual total cash receipts before taxes of (2) As part of its financial eligibility providers in the area. all persons who are resident members policies, a recipient may adopt § 1611.4 Financial eligibility for legal and contribute to the support of an authorized exceptions to its annual assistance. applicant’s household, as that term is income ceilings consistent with (a) A recipient may provide legal defined by the recipient. Total cash § 1611.5. assistance supported with LSC funds (d)(1) As part of its financial receipts include, but are not limited to, only to individuals whom the recipient eligibility policies, every recipient shall wages and salaries before any has determined to be financially eligible establish reasonable asset ceilings for deduction; income from self- for such assistance. Nothing in this part, individuals and households. In employment after deductions for however, prohibits a recipient from establishing asset ceilings, the recipient business or farm expenses; regular providing legal assistance to an may exclude consideration of a payments from governmental programs individual without regard to that household’s principal residence, for low income persons or persons with individual’s income and assets if the vehicles used for transportation, assets disabilities; social security payments; legal assistance is wholly supported by used in producing income, and other unemployment and worker’s funds from a source other than LSC, and assets which are exempt from compensation payments; strike benefits is otherwise permissible under attachment under State or Federal law. from union funds; veterans benefits; (2) The recipient’s policies may applicable law and regulation. training stipends; alimony; child (b) Consistent with the recipient’s provide authority for waiver of its asset support payments; military family financial eligibility policies and this ceilings for specific applicants under allotments; public or private employee part, the recipient may determine an unusual circumstances and when pension benefits; regular insurance or applicant to be financially eligible for approved by the recipient’s Executive annuity payments; income from legal assistance if the applicant’s assets Director, or his/her designee. When the dividends, interest, rents, royalties or do not exceed the recipient’s applicable asset ceiling is waived, the recipient from estates and trusts; and other asset ceiling established pursuant to shall record the reasons for such waiver regular or recurring sources of financial § 1611.3(d)(1), or the applicable asset and shall keep such records as are support that are currently and actually ceiling has been waived pursuant necessary to inform the Corporation of available to the applicant. Total cash § 1611.3(d)(2), and: the reasons for such waiver. receipts do not include the value of food (e) Notwithstanding any other (1) The applicant’s income is at or or rent received by the applicant in lieu provision of this part, or other provision below the recipient’s applicable annual of wages; money withdrawn from a of the recipient’s financial eligibility income ceiling; or bank; tax refunds; gifts; compensation (2) The applicant’s income exceeds policies, every recipient shall specify as and/or one-time insurance payments for the recipient’s applicable annual part of its financial eligibility policies injuries sustained; non-cash benefits; income ceiling but one or more of the that in assessing the income or assets of and up to $2,000 per year of funds authorized exceptions to the annual an applicant who is a victim of domestic received by individual Native income ceilings, as provided in violence, the recipient shall consider Americans that is derived from Indian § 1611.5, applies. only the assets and income of the trust income or other distributions (c) Consistent with the recipient’s applicant and members of the exempt by statute. policies, a recipient may determine an applicant’s household other than those applicant to be financially eligible § 1611.3 Financial eligibility policies. of the alleged perpetrator of the without making an independent domestic violence and shall not include (a) The governing body of a recipient determination of income or assets, if the any assets held by the alleged shall adopt policies consistent with this applicant’s income is derived solely perpetrator of the domestic violence, part for determining the financial from a governmental program for low- jointly held by the applicant with the eligibility of applicants and groups. The income individuals or families, alleged perpetrator of the domestic governing body shall review its provided that the recipient’s governing violence, or assets jointly held by any financial eligibility policies at least once body has determined that the income member of the applicant’s household every three years and make adjustments standards of the governmental program with the alleged perpetrator of the as necessary. The recipient shall are at or below 125% of the Federal domestic violence. implement procedures consistent with (f) As part of its financial eligibility Poverty Guidelines amounts and that its policies. policies, a recipient may adopt policies the governmental program has eligibility (b) As part of its financial eligibility that permit financial eligibility to be standards which include an assets test. policies, every recipient shall specify VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00041 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 20. 45564 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations § 1611.5 Authorized exceptions to the LSC, provided that any legal assistance financially eligible pursuant to this annual income ceiling. provided by a recipient, regardless of section and is provided legal assistance, (a) Consistent with the recipient’s the source of funds supporting the the recipient shall document the basis policies and this Part, a recipient may assistance, must be otherwise for the financial eligibility determine an applicant whose income permissible under applicable law and determination. The recipient shall keep exceeds the recipient’s applicable regulation. such records as may be necessary to annual income ceiling to be financially inform the Corporation of the specific § 1611.7 Manner of determining financial eligible if the applicant’s assets do not facts and factors relied on to make such eligibility. exceed the recipient’s applicable asset determination. (a)(1) In making financial eligibility ceiling established pursuant to determinations regarding individual § 1611.6 Representation of groups. § 1611.3(d), or the asset ceiling has been applicants, a recipient shall make (a) A recipient may provide legal waived pursuant to § 1611.3(d)(2), and: reasonable inquiry regarding sources of assistance to a group, corporation, (1) The applicant is seeking legal the applicant’s income, income association or other entity if it provides assistance to maintain benefits provided prospects and assets. The recipient shall information showing that it lacks, and by a governmental program for low record income and asset information in has no practical means of obtaining, income individuals or families; or the manner specified in this section. funds to retain private counsel and (2) The Executive Director of the (2) In making financial eligibility either: recipient, or his/her designee, has determinations regarding groups seeking (1) The group, or for a non- determined on the basis of LSC-supported legal assistance, a membership group the organizing or documentation received by the recipient shall follow the requirements operating body of the group, is primarily recipient, that the applicant’s income is set forth in § 1611.6(b) of this part. composed of individuals who would be primarily committed to medical or (b) A recipient shall adopt simple financially eligible for LSC-funded legal nursing home expenses and that, intake forms and procedures to obtain assistance; or excluding such portion of the (2) The group has as a principal information from applicants and groups applicant’s income which is committed activity the delivery of services to those to determine financial eligibility in a to medical or nursing home expenses, persons in the community who would manner that promotes the development the applicant would otherwise be be financially eligible for LSC-funded of trust between attorney and client. The financially eligible for service; or legal assistance and the legal assistance forms shall be preserved by the (3) The applicant’s income does not sought relates to such activity. recipient. exceed 200% of the applicable Federal (b)(1) In order to make a (c) If there is substantial reason to Poverty Guidelines amount and: determination that a group, corporation, doubt the accuracy of the financial (i) The applicant is seeking legal association or other entity is eligible for eligibility information provided by an assistance to obtain governmental legal services as required by paragraph applicant or group, a recipient shall benefits for low income individuals and (a) of this section, a recipient shall make appropriate inquiry to verify the families; or consider the resources available to the information, in a manner consistent (ii) The applicant is seeking legal group, such as the group’s income and with the attorney-client relationship. assistance to obtain or maintain income prospects, assets and obligations (d) When one recipient has governmental benefits for persons with and either: determined that a client is financially disabilities; or (i) For a group primarily composed of eligible for service in a particular case (4) The applicant’s income does not individuals who would be financially or matter, that recipient may request exceed 200% of the applicable Federal eligible for LSC-funded legal assistance, another recipient to extend legal Poverty Guidelines amount and the whether the financial or other assistance or undertake representation recipient has determined that the socioeconomic characteristics of the on behalf of that client in the same case applicant should be considered persons comprising the group are or matter in reliance upon the initial financially eligible based on consistent with those of persons who financial eligibility determination. In consideration of one or more of the are financially eligible for LSC-funded such cases, the receiving recipient is not following factors as applicable to the legal assistance; or required to review or redetermine the applicant or members of the applicant’s (ii) For a group having as a principal client’s financial eligibility unless there household: activity the delivery of services to those is a change in financial eligibility status (i) Current income prospects, taking persons in the community who would as described in § 1611.8 or there is into account seasonal variations in be financially eligible for LSC-funded substantial reason to doubt the validity income; legal assistance, whether the financial or (ii) Unreimbursed medical expenses of the original determination, provided other socioeconomic characteristics of and medical insurance premiums; that the referring recipient provides and the persons served by the group are (iii) Fixed debts and obligations; the receiving recipient retains a copy of consistent with those of persons who (iv) Expenses such as dependent care, the intake form documenting the are financially eligible for LSC-funded transportation, clothing and equipment financial eligibility of the client. legal assistance and the assistance expenses necessary for employment, job § 1611.8 Change in financial eligibility sought relates to such activity of the training, or educational activities in status. group. preparation for employment; (a) If, after making a determination of (2) A recipient shall collect (v) Non-medical expenses associated financial eligibility and accepting a information that reasonably with age or disability; client for service, the recipient becomes demonstrates that the group, (vi) Current taxes; or aware that a client has become (vii) Other significant factors that the corporation, association or other entity financially ineligible through a change recipient has determined affect the meets the eligibility criteria set forth in circumstances, a recipient shall applicant’s ability to afford legal herein. (c) The eligibility requirements set discontinue representation supported assistance. forth herein apply only to legal (b) In the event that a recipient with LSC funds if the change in assistance supported by funds from determines that an applicant is circumstances is sufficient, and is likely VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00042 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1
  • 21. 45565 Federal Register / Vol. 70, No. 151 / Monday, August 8, 2005 / Rules and Regulations ii For family units with more than eight mem- to as ‘‘foreign manufacturers’’) to to continue, to enable the client to bers, add $5,100 for each additional member afford private legal assistance, and designate an agent for service of process in a family. discontinuation is not inconsistent with in the United States. Over time, NHTSA iii For family units with more than eight mem- applicable rules of professional has found that many foreign bers, add $4,688 for each additional member in a family. responsibility. manufacturers have submitted (b) If, after making a determination of incomplete designation documents Victor M. Fortuno, financial eligibility and accepting a containing common errors and Vice President & General Counsel. client for service, the recipient later omissions. Often NHTSA receives [FR Doc. 05–15553 Filed 8–5–05; 8:45 am] determines that the client is financially designation documents not properly ineligible on the basis of later BILLING CODE 7050–01–P dated or signed, or otherwise lacking discovered or disclosed information, a information necessary to effect a valid recipient shall discontinue designation or replacement of agent representation supported with LSC DEPARTMENT OF TRANSPORTATION under the regulation. NHTSA has found funds if the discontinuation is not also that foreign manufacturers often fail National Highway Traffic Safety inconsistent with applicable rules of to provide adequate notice to NHTSA of Administration professional responsibility. changes in company name, address and § 1611.9 Retainer agreements. product names or trademarks. 49 CFR Part 551 (a) When a recipient provides This document clarifies existing [Docket No. NHTSA–2005–21972] extended service to a client, the regulatory requirements by rephrasing recipient shall execute a written retainer RIN 2127–AJ69 49 CFR part 551, subpart D in a plain agreement with the client. The retainer language, question and answer format Service of Process on Foreign agreement shall be executed when and inserting an appendix containing a Manufacturers and Importers representation commences or as soon suggested designation form for use by thereafter as is practicable. Such National Highway Traffic AGENCY: foreign manufacturers and their agents. retainer agreement must be in a form Safety Administration (NHTSA), It also will enhance communications consistent with the applicable rules of Department of Transportation (DOT). between foreign manufacturers and the professional responsibility and ACTION: Final rule. agency by spelling out requirements for prevailing practices in the recipient’s providing notice to NHTSA of changes service area and shall include, at a SUMMARY: This final rule amends in company name, address and product minimum, a statement identifying the NHTSA’s regulation on service of names, marks, or other designations of legal problem for which representation process on foreign manufacturers and origin. Finally, it changes the NHTSA is sought, and the nature of the legal importers to clarify existing regulatory office to which foreign manufacturers services to be provided. requirements by rephrasing the (b) No written retainer agreement is must submit documents, as a result of regulation in a plain language, question required for advice and counsel or brief organizational changes that have and answer format and inserting an service provided by the recipient to the occurred in the agency since the appendix containing a suggested client or for legal services provided to regulation was adopted. designation form for use by foreign the client by a private attorney pursuant manufacturers and their agents. It also The purpose of the amendments is to to 45 CFR part 1614. will enhance communications between make clearer the requirements of 49 CFR (c) The recipient shall maintain foreign manufacturers and the agency by part 551, subpart D and improve copies of all retainer agreements spelling out existing requirements for communications between the agency generated in accordance with this providing notice to NHTSA of changes and foreign manufacturers, thereby section. in company name, address and product reducing the burdens associated with names, and changing the office to which Appendix A to Part 1611 repeated filings to correct common foreign manufacturers must submit errors. Since they are technical designation and related documents to LEGAL SERVICES CORPORATION 2005 amendments only and make no reflect organizational changes occurring POVERTY GUIDELINES * substantive changes to the regulation, since the regulation was adopted. pursuant to 5 U.S.C. 553(b)(3)(B) prior EFFECTIVE DATE: This final rule becomes 48 Contig- notice and comment are not required. uous effective October 7, 2005. Size of States Petitions: Any petitions for Alaska ii Hawaii iii family Statutory Basis for the Final Rule and the unit reconsideration of today’s final rule District of Section 110(e) of the National Traffic must be received by NHTSA not later Columbia i and Motor Vehicle Safety Act of 1966 than September 22, 2005. 1 ......... $11,963 $14,938 $13,763 (49 U.S.C. 30164) requires a foreign FOR FURTHER INFORMATION CONTACT: Ms. 2 ......... 16,038 20,038 18,450 manufacturer offering a motor vehicle or Dana Sade, Office of the Chief Counsel, 3 ......... 20,113 25,138 23,138 motor vehicle equipment for at (202) 366–1834, facsimile (202) 366– 4 ......... 24,188 30,238 27,825 importation into the United States to 3820. You may send mail to Ms. Sade 5 ......... 28,263 35,338 32,513 designate a permanent resident of the at the National Highway Traffic Safety 6 ......... 32,338 40,438 37,200 United States as its agent upon whom Administration, 400 Seventh Street, 7 ......... 36,413 45,538 41,888 8 ......... 40,488 50,638 46,575 SW., Washington, DC 20590. service of notices and processes may be made in administrative and judicial SUPPLEMENTARY INFORMATION: NHTSA * The figures in this table represent 125% of proceedings. This final rule revises a published a rule on December 25, 1968 the poverty guidelines by family size as deter- mined by the Department of Health and regulation that implements that that established a procedure for foreign Human Services. manufacturers, assemblers and statutory requirement at 49 CFR Part i For family units with more than eight mem- importers of motor vehicles and motor 551, Subpart D. bers, add $4,075 for each additional member vehicle equipment (hereinafter referred in a family. VerDate jul<14>2003 18:56 Aug 05, 2005 Jkt 205001 PO 00000 Frm 00043 Fmt 4700 Sfmt 4700 E:FRFM08AUR1.SGM 08AUR1

×