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

  • 1. 29695 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules 12612, Federalism, dated October 26, eligibility in the NFIP. No regulatory PART 67—[AMENDED] 1987. flexibility analysis has been prepared. 1. The authority citation for part 67 Executive Order 12778, Civil Justice Regulatory Classification continues to read as follows: Reform This proposed rule is not a significant Authority: 42 U.S.C. 4001 et seq.; This proposed rule meets the regulatory action under the criteria of Reorganization Plan No. 3 of 1978, 3 CFR, applicable standards of Section 2(b)(2) Section 3(f) of Executive Order 12866 of 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, of Executive Order 12778. September 30, 1993, Regulatory 3 CFR, 1979 Comp., p. 376. List of Subjects in 44 CFR Part 67 Planning and Review, 58 FR 51735. § 67.4 [Amended] Administrative practice and Executive Order 12612, Federalism procedure, flood insurance, reporting 2. The tables published under the and recordkeeping requirements. authority of § 67.4 are proposed to be This proposed rule involves no Accordingly, 44 CFR part 67 is policies that have federalism amended as follows: proposed to be amended as follows: implications under Executive Order # Depth in feet above ground Elevation in State City/town/county Source of flooding Location feet ((NAVD) Existing Modified Iowa ............... West Des Moines (City) Jordan Creek ............... Approximately 3,210 feet downstream of 68th None ........ 924. Polk and Dallas Street. Counties. Approximately 1,950 feet upstream of E.P. True None ........ 970. Parkway. Raccoon River ............. Approximately 75 feet downstream of South 814 .......... 816. First Street. Approximately 1.7 miles upstream of U.S. Inter- 832 .......... 833. state 35. Maps are available for inspection at City Hall, 4200 Mills Civic Parkway, West Des Moines, Iowa. Send comments to The Honorable Eugene Meyer, Mayor, City of West Des Moines, 4200 Mills Civic Parkway, West Des Moines, Iowa 50265. (Catalog of Federal Domestic Assistance No. clarify the focus of the regulation on the Procedural Background 83.100, ‘‘Flood Insurance.’’) financial eligibility of applicants for On June 30, 2001, LSC initiated a Dated: May 18, 2005. LSC-funded legal services. Negotiated Rulemaking and appointed a David I. Maurstad, Working Group comprised of Comments must be submitted on DATES: Acting Director, Mitigation Division, representatives of LSC (including the or before June 23, 2005. Emergency Preparedness and Response Office of Inspector General), the Comments must be ADDRESSES: Directorate. National Legal Aid and Defenders submitted in writing and may be sent by [FR Doc. 05–10299 Filed 5–23–05; 8:45 am] Association, the Center for Law and regular mail, or may be transmitted by Social Policy, the American Bar BILLING CODE 9110–12–P fax or email to: Mattie C. Condray, Association’s Standing Committee on Senior Assistant General Counsel, Office Legal Aid and Indigent Defendants and of Legal Affairs, Legal Services a number of individual LSC recipient LEGAL SERVICES CORPORATION Corporation, 3333 K. St., NW., programs. The Negotiated Rulemaking Washington, DC 20007–3522; (202) 337– Working Group met three times 45 CFR Part 1611 6519 (fax); (e-mail). throughout 2002 and developed a Draft Financial Eligibility Notice of Proposed Rulemaking (NPRM) FOR FURTHER INFORMATION CONTACT: which was the basis for the NPRM Mattie C. Condray, Senior Assistant Legal Services Corporation. AGENCY: published by LSC on November 22, General Counsel, Office of Legal Affairs, Notice of proposed rulemaking. ACTION: 2002 proposing significant revisions to Legal Services Corporation, 3333 K. St., to Part 1611 (67 FR 70376). LSC NW., Washington, DC 20007–3522; SUMMARY: The Legal Services received 15 comments on that NPRM. (202) 295–1624 (phone); (202) 337–6519 Corporation (‘‘LSC’’ or ‘‘Corporation’’) is Except as specifically noted in the (fax); (e-mail). republishing for additional comment Section-by-Section analysis below, the previously proposed amendments (with Section SUPPLEMENTARY INFORMATION: comments LSC received either certain additional revisions) to its 1007(a) of the Legal Services affirmatively supported or raised no regulations relating to financial Corporation Act requires LSC to objection to the proposals in the eligibility for LSC-funded legal services. establish guidelines, including setting November 2002 NPRM.1 The proposed revisions are intended to maximum income levels, for the Upon receipt of the comments, LSC reorganize the regulation to make it determination of applicants’ financial staff prepared a Draft Final Rule easier to read and follow; simplify and eligibility for LSC-funded legal discussing the comments and making streamline the requirements of the rule assistance. Part 1611 implements this permanent the proposed revisions. to ease administrative burdens faced by provision, setting forth the requirements LSC recipients in implementing the relating to determination and 1 For additional discussion of the Negotiated regulation and to aid LSC in documentation of client financial Rulemaking Working Group, see 67 FR 70376 enforcement of the regulation; and to eligibility. (November 22, 2002). VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00038 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 2. 29696 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules entitlement to service. Rather, financial implementing the regulation, facilitate However, on the eve of the January compliance and aid LSC in enforcement 31–February 1, 2003 Board of Directors eligibility is merely a threshold question of the regulation; and clarification of the meeting at which the Draft Final Rule and the issue of whether any otherwise focus of the regulation on the financial was scheduled to be considered, LSC eligible applicant will be provided with eligibility of applicants for LSC-funded received a request from Representative legal assistance is a matter for the legal services as an issue separate from James Sensenbrenner, Chairman of the recipient to determine with reference to decisions on whether to accept a U.S. House of Representatives Judiciary its priorities and resources. In addition, particular client for service. In Committee, to suspend action on the this part does not address eligibility particular, LSC is proposing to rulemaking pending the confirmation of based on citizenship or alienage status; significantly reorganize and simplify the new LSC Board of Directors members those eligibility requirements are set sections of the rule which set forth the appointed by President Bush. The then- forth in Part 1626 of LSC’s regulations, various requirements relating to LSC Operations and Regulations Restrictions on Legal Assistance to establishment of recipient annual Committee deferred to Chairman Aliens. income and asset ceilings, authorized Sensenbrenner’s request. After the Section-by-Section Analysis exceptions and determinations of confirmation of the nine newly eligibility. These changes are intended appointed Board members, the Section 1611.1—Purpose to clarify the regulation and include reconsitituted Operations and LSC is proposing to revise this section substantive changes to make intake Regulations Committee further deferred to make clear that the standards of this simpler and less burdensome and action on the rulemaking pending the part concern only the financial render basic financial eligibility appointment of a new LSC President. eligibility of persons seeking LSC- determinations easier for recipients to After the arrival of the new LSC funded legal assistance and that a make. LSC is also proposing to move the President in January 2004, the finding of financial eligibility under Part existing provisions on group reconstituted Operations and 1611 does not create an entitlement to representation, with some amendment, Regulations Committee resumed service. In addition, LSC proposes to to a separate section of the regulation. consideration of the Part 1611 remove the language in the current Finally, LSC is proposing simplification rulemaking. regulation referring to giving At its meetings of May 1, 2004, June and clarification of the retainer preferences to ‘‘those least able to obtain 5, 2004 and September 11, 2004, the agreement requirement. legal assistance.’’ Although the original One other general issue merits Operations and Regulations Committee LSC Act contained language indicating discussion. Section 509(h) of the FY discussed and provided policy direction that recipients should provide 1996 LSC appropriations act, Public to staff on the two aspects of the preferences in service to the poorest Law 104–134, provides that, among proposed changes to the regulations among applicants, that language was other records, eligibility records ‘‘shall about which LSC and the field had deleted when the Act was reauthorized be made available to any auditor or failed to achieve consensus during the in 1977 and has remained out of the monitor of the recipient * * * except Working Group meetings—retainer legislation ever since. Moreover, section for such records subject to the attorney- agreements and group representation. 504(a)(9) of the FY 1996 appropriations client privilege.’’ This provision has The Committee reviewed these act, Public Law 104–134 (incorporated been retained in each subsequent proposals and the remainder of the by reference in the current appropriations measure and continues proposed revisions to Part 1611 at its appropriations act and implemented by to be in force. During the prior stages of meeting of April 1, 2005. At the meeting regulation at 45 CFR part 1620) provides this rulemaking, there had been some of the full Board of Directors on April that recipients are to make service discussion and consideration of having 30, 2005, upon the recommendation of determinations in accordance with this language expressly incorporated the Committee, the Board determined written priorities, which take into into Part 1611. LSC continues to believe that because two years has passed since account factors other than the relative that, as 509(h) covers significantly more the publication of the November 2002 poverty among applicants. Thus, as than eligibility records, having a full NPRM, rather than adopting a final rule there is no statutory basis for a discussion of the meaning of 509(h) in amending Part 1611, the most prudent preference for those least able to afford the context of 1611, which addresses course of action would be to republish assistance and because LSC believes only financial eligibility issues, is not a revised NPRM for public comment. that the regulation should focus on appropriate. Accordingly, LSC does not Accordingly, except for the retainer financial eligibility determinations propose to include regulatory language agreement and group eligibility sections, without reference to issues relating to implementing 509(h) with respect to LSC is proposing the same revisions determinations by a recipient to provide records covered by this Part. For a fuller (with only a few, non-substantive services to a particular applicant, such discussion of this issue, see the differences) as LSC proposed in language should be removed from the preamble to the November 22, 2002 November 2002 and requests public regulation. LSC also proposes to add NPRM, 67 FR 70376. comment thereon. language specifying that this Part also Title of Part 1611 Proposed Revisions to Part 1611 sets forth financial standards for groups LSC proposes to change the title of While specific proposed revisions are seeking legal assistance supported by Part 1611 from ‘‘Eligibility’’ to discussed in greater detail in the LSC funds. Finally, LSC proposes to ‘‘Financial Eligibility.’’ This proposed Section-by-Section analysis below, it include a reference to the retainer change is intended, first, to make clear should be noted that the proposed agreement requirement in the purpose that with respect to individuals seeking revisions reflect several overall goals of section to provide a notice at the LSC-funded legal assistance, the the Working Group: reorganization of beginning of the regulation that this standards of this part deal only with the the regulation to make it easier to read subject is included in Part 1611. financial eligibility of such persons. LSC and follow; simplification and Section 1611.2—Definitions believes this change will help clarify streamlining of the requirements of the LSC proposes to add definitions for that a finding of financial eligibility rule to ease administrative burdens several terms and to amend the under Part 1611 does not create an faced by LSC recipients in VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00039 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 3. 29697 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules proposed language accomplishes that excluded from this definition, as the definitions for each of the existing terms eligibility of groups would be addressed currently defined in the regulation. LSC purpose. wholly within proposed section 1611.6. believes that the new definitions and Section 1611.2(e)—Brief Services Recipients currently may provide the amended definitions will help to LSC proposes to add a definition of legal assistance without regard to a make the regulation more easily the term ‘‘brief services’’ as it is used in person’s financial eligibility under Part comprehensible. proposed section 1611.9, Retainer 1611 when the assistance is supported Section 1611.2(a)—Advice and Counsel Agreements. LSC notes that brief wholly by non-LSC funds. LSC does not LSC proposes to add a definition of services is legal assistance characterized propose to change this (in fact, LSC the term ‘‘advice and counsel’’ as that primarily by being distinguishable from proposes to restate this principle in term appears in proposed section both extended service and advice and proposed section 1611.4(a)) and believes 1611.9, Retainer Agreements. Under the counsel. Under the proposed defintion, that the use of the term applicant as proposed definition, ‘‘advice and brief service is the performance of a proposed herein will help to clarify the counsel’’ would be defined as limited discrete task (or tasks) which are not application of the rule. legal assistance that involves the review incident to continuous representation in Section 1611.2(d)—Assets of information relevant to the client’s a case but which involve more than the LSC proposes to add a definition of legal problem(s) and counseling the mere provision of advice and counsel. the term assets to the regulation. The client on the relevant law or action(s) to Examples of brief services would proposed definition, ‘‘cash or other take to address the legal problem(s). LSC include activities such as the drafting of resources that are readily convertible to anticipates that advice and counsel documents or personalized assistance cash, which are currently and actually would generally be characterized by a with the completion of pleadings being available to the applicant,’’ is intended one-time or very short term relationship prepared and filed by pro se litigants, to provide some guidance to recipients between the attorney and the client. and making limited third-party contacts as to what is meant by the term assets, Advice and counsel does not encompass on behalf of a client in a short time yet provide considerable latitude to drafting of documents or making third- period. recipients in developing a description of party contacts on behalf of the client. Section 1611.2(f)—Extended Service assets that addresses local concerns and Thus, for example, advising a client of conditions. The key concepts intended LSC proposes to add a definition of what notice a landlord is required to in this definition are (1) ready the term ‘‘extended service’’ as that term provide to a tenant before evicting the convertibility to cash; and (2) is used in proposed section 1611.9, tenant would fall under ‘‘advice and availability of the resource to the Retainer Agreements. As defined, counsel,’’ but making a phone call to a applicant. extended service would mean legal landlord to prevent the landlord from Although the term is not defined in assistance characterized by the evicting a tenant would not be the regulation, current section 1611.6(c) performance of multiple tasks incident considered ‘‘advice and counsel.’’ states that ‘‘assets considered shall to continuous representation in which Section 1611.2(b)—Applicable Rules of include all liquid and non-liquid assets. the recipient undertakes responsibility Professional Responsibility * * *’’ The intent of this requirement is for protecting or advancing the client’s that recipients are supposed to consider LSC proposes to add a definition of interests beyond advice and counsel or all assets upon which the applicant the term ‘‘applicable rules of brief services. Examples of extended could draw in obtaining private legal professional responsibility’’ as that term service would include representation of assistance. While there was no intent to appears in proposed sections 1611.8, a client in litigation, administrative change the underlying requirement, in Change in Financial Eligibility Status adjudicative proceeding, alternate discussing the issues of assets and asset and 1611.9, Retainer Agreements. This dispute resolution proceeding, or ceilings in the Working Group it became definition is intended to make clear that extended negotiations with a third apparent that the terms ‘‘liquid’’ and the references in the regulation refer to party. ‘‘non-liquid’’ were obscuring the rules of ethics and professional Section 1611.2(f)—Governmental understanding of the regulation. To responsibility applicable to attorneys in Program for Low Income Individuals or some, the term ‘‘non-liquid’’ implied the jursidiction where the recipient Families something not readily convertible to either provides legal services or cash, while to others the term implied LSC proposes to change the term that maintains its records. an asset that was simply something is used in the regulation from Section 1611.2(c)—Applicant other than cash, without regard to the ‘‘governmental program for the poor’’ to Consistent with the intention ease of converting the asset to cash. ‘‘governmental program for low income throughout to keep the focus of the Thus, the Working Group decided that individuals and families.’’ This change regulation on the standards and criteria the terms ‘‘liquid’’ and ‘‘non-liquid’’ is not intended to create any substantive for determining the financial eligibility should be eliminated and that the change in the current definition, but of persons seeking legal assistance regulation should focus instead on the merely reflect preferred nomenclature. supported with LSC funds, LSC ready convertibility of the asset to cash. Section 1611.2(g)—Governmental The other key concept in the proposes to use the term ‘‘applicant’’ Program for Persons With Disabilities definition of asset is the availability of throughout the regulation to emphasize LSC is proposing to add a definition the resource to the applicant. Although the distinction between applicants, of the term ‘‘governmental program for the current regulation notes that the clients, and persons seeking or receiving persons with disabilities.’’ LSC proposes recipient’s asset guidelines ‘‘shall take assistance supported by other than LSC to include in the authorized exceptions into account impediments to an funds. Accordingly, LSC proposes to to the annual income ceilings an individual’s access to assets of the add a definition of applicant providing exception relating to applicants seeking family unit or household,’’ the Working that an applicant is an individual to obtain or maintain govermental Group was of the opinion that this seeking legal assistance supported with benefits for persons with disabilities. principle could be more clearly LSC funds. Groups, corporations and Accordingly, it is appropriate to include articulated. LSC believes that the associations would be specifically VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00040 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 4. 29698 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules from the definition of total cash applicant, LSC does not believe that the a proposed definition for this term. The receipts. It is worth noting that the list definition of income is the appropriate proposed definition, ‘‘any Federal, State of items included is not intended to be place in the regulation to deal with this or local program that provides benefits exhaustive, while the list of items to be issue. of any kind to persons whose eligibility Taking the phrase ‘‘before taxes’’ out excluded is intended to be exhaustive. is determined on the basis of mental Finally, LSC wishes to restate in this of the definition of income would and/or physical disability,’’ is intended preamble guidance on the treatment of effectively change the meaning of to be similar in structure and Indian trust fund monies in making income from gross income to net application to the definition of the term income determinations. Several income. The term income has meant ‘‘governmental program for low income provisions of Federal law regulate gross income since the original adoption individuals and families.’’ whether or not income or interests in of the financial eligibility regulation in Section 1611.2(h)—Income Indian trusts are taxable or should be 1976. See 41 FR 51604, at 51606, LSC proposes to revise the current considered as resources or income for November 23, 1976. The maximum Federal benefits. See 25 U.S.C. 1407– income guidelines are based on the definition of income to refer to the total 1408; 25 U.S.C. 117a–117c. Under the Department of Health and Human cash receipts of a ‘‘household,’’ instead terms of those laws, LSC has determined Services (DHHS) Federal Poverty of a ‘‘family unit’’ and to make clear that that recipients may disregard up to Guidelines amounts. DHHS’ Federal recipients have the discretion to define $2000 per year of funds received by Poverty Guidelines are, by law, based on the term household in any reasonable individual Native Americans that are the Census Bureau’s Federal Poverty manner. Currently, the definition of derived from income or interests in Thresholds, which are calculated using income refers to ‘‘family unit,’’ while Indian trusts from being considered gross income before taxes. 42 U.S.C. the phrase ‘‘household or family unit’’ income for the purpose of determining 9902(2); Office of Management and appears in the section on asset ceilings. financial eligibility of Native American Budget Directive No. 14 (May 1978). It appears that there is no difference applicants for service, and that such Changing the definition of income intended by the use of different terms in funds or interests of individual Native effectively from gross to net would these sections and LSC believes that it Americans in trust or restricted lands introduce two different uses of the term is appropriate to simplify the regulation should not be considered as a resource income into the regulations (one use in to use the same single term in each for the purpose of LSC financial the income guidelines published provision, without creating a eligibility. See LSC Office of Legal annually by LSC in Appendix A to Part substantive change in the meaning of Affairs External Opinion 99–17, August 1611 and another use in the text of the either term. LSC proposes to use 27, 1999. regulation). This would have significant ‘‘household’’ instead of ‘‘family unit’’ As noted in External Opinion 99–17, repercussions in the application of the because it is a simpler, more the exclusion applies only to funds and regulation. LSC believes that this action understandable term. other interests held in trust by the would cause greater confusion. None of As noted above, LSC does not intend Federal government and investment the comments previously received the use of the term ‘‘household’’ to have income accrued therefrom. The supporting removal of ‘‘before taxes’’ a different meaning from the current following have been found to qualify for from the definition of income address term ‘‘family unit.’’ Under current the exclusion from income in this issue. Moreover, LSC believes that guidance from the LSC Office of Legal determining eligibility for various the practical problem (that taxes, Affairs, recipients have considerable government benefits: income from the indeed, are funds unavailable to the latitude in defining the term ‘‘family sale of timber from land held in trust; applicant), is better addressed by unit.’’ Specifically, OLA External income derived from farming and considering taxes as a separate factor Opinion No. EX–2000–1011 states: ranching operations on reservation land which can be considered by the Neither the LSC Act nor the LSC held in trust by the Federal government; recipient in making financial eligibility regulations define ‘‘family unit’’ for client income derived from rentals, royalties, determinations. LSC invites comment eligibility purposes. The Corporation will and sales proceeds from natural on this issue. This matter is presented defer to recipient determinations on this resources of land held in trust; sales in greater detail in the discussion of issue, within reason. Recipients may proceeds from crops grown on land held proposed section 1611.5, below. consider living arrangements, familial relationships, legal responsibility, financial In addition, LSC proposes to move the in trust; and use of land held in trust for responsibility or family unit definitions used information on what is encompassed by grazing purposes. On the other hand, by government benefits agencies, amongst the term ‘‘total cash receipts’’ into the per capita distributions of revenues other factors, in making such decisions. definition of income. LSC believes that from gaming activity on tribal trust LSC intends that this standard would having this information in the definition property are not protected because such also apply to definitions of ‘‘household’’ of income, rather than in a separate funds are not held in trust by the and the proposed definition would definition will make the regulation Federal government. Thus, such make this clear. easier to understand, particularly as the distributions are considered to be Field representatives on the Working term ‘‘total cash receipts’’ is used only income for purposes of determining LSC Group and several comments on the in the definition of income. In financial eligibility. November 2002 NPRM also suggested incorporating the language on ‘‘total Total Cash Receipts deleting the words ‘‘before taxes’’ from cash receipts,’’ LSC proposes to take the LSC proposes to delete the definition the definition of income. Such a change current definition of the term without of ‘‘total cash reciepts,’’ currently at is desirable, they contend, because any substantive amendment, but section 1611.2(h), as a separately automatically deducted taxes are not reorganized to make it easier to defined term in the regulation. Rather, available for an applicant’s use and the understand. Specifically, LSC proposes LSC proposes to reorganize the failure to take current taxes into account to separate the definition into two information contained in the definition in determining income has an adverse sentences, one of which sets forth those and move it directly into the definition impact on the working poor. While it is things which are included in total cash of ‘‘income.’’ As noted above, the only undoubtedly true that automatically receipts and one which sets forth those place the term ‘‘total cash reciepts’’ is deducted taxes are not available to an things which are specifically excluded VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00041 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 5. 29699 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules or other assets that may not be attached In establishing income and asset used is in the defintion of ‘‘income’’ and for the satisfaction of a debt, etc. ceilings, the recipient would have to LSC believes that having a separate There was discussion within the consider the cost of living in the definition for ‘‘total cash reciepts’’ is Working Group about the appropriate locality; the number of clients who can cumbersome and unnecessary. scope of this provision. Field be served by the resources of the Section 1611.3—Financial Eligibility representatives suggested that the list of recipient; the potentially eligible Policies exclusions should be illustrative, and population at various ceilings; and the LSC proposes to create a new section not exhaustive, allowing recipients availability of other sources of legal 1611.3, Financial Eligibility Policies, greater discretion in developing asset assistance. With respect to assets of based on requirements currently found ceilings. Four of the comments LSC domestic violence victims jointly held in sections 1611.5(a), 1611.3(a)–(c) and received on the November 2002 NPRM with their abusers, this requirement 1611.6. The new section 1611.3 would agreed with the suggestion that the list applies when the applicant has made address in one section recipients’ should be illustrative rather than the recipient aware that he or she is a responsibilities for adopting and exhaustive. LSC, however, prefers to victim of domestic violence. implementing financial eligibility retain the approach in the current In addition, LSC proposes to permit policies. Under the proposed new regulation in which the list of recipients to adopt financial eligibility section, the current requirement that excludable assets is set forth in toto. policies which provide for authorized recipients’ governing bodies have to LSC believes that this approach exceptions to the annual income ceiling adopt policies for determining financial emphasizes the policy that most assets pursuant to proposed section 1611.5 eligibility would be retained. LSC are to be considered and maintains a and for waiver of the asset ceiling for an proposes, however, to change the basic level of consistency nationally applicant in a particular case under current requirement for an annual with respect to this issue. However, LSC unusual circumstances and when review of these policies and instead does agree that the regulation could approved by the Executive Director or require recipients’ governing bodies to afford recipients some additional his/her designee. Finally, LSC proposes conduct triennial reviews of policies. flexibility in developing asset ceilings, to permit recipients to adopt financial The Working Group agreed that an consistent with the policy articulated eligibility policies which permit annual review was unnecessary and has above. The Working Group believes that financial eligibility to be established by tended to result in rather pro forma the proposed language meets those reference to an applicant’s receipt of reviews of policies. In contrast, a objectives, particularly in light of the benefits from a governmental program triennial review requirement would be proposed amendment to the asset for low-income individuals or families sufficient to ensure that financial ceiling waiver standard discussed consistent with proposed section eligibility policies remain relevant and below. LSC invites comment on whether 1611.4(b). These proposed provisions are, with would encourage a more thorough and the list should be illustrative or two exceptions, based directly on exhaustive. LSC also invites comment thoughtful review when such review is current requirements with a few on whether additional specific assets undertaken. The section would also add substantive changes. First among the should be included in the list of an express requirement that recipients changes, recipients would no longer be excludable assets and, if so, what items adopt implementing procedures. While required to routinely submit their asset might be appropriate. this is already implicit in the current LSC is also proposing to change the ceilings to LSC. This requirement regulation, LSC believes it would be asset ceiling waiver standard slightly. appears to serve little or no purpose, as better for this requirement to be The current regulation permits waiver compliance with this requirement has expressly stated. Such implementing in ‘‘unusual or extremely meritorious been spotty and LSC has taken no action procedures could be adopted either by situations;’’ the proposed rule would to obtain the information from a recipient’s governing body or by the permit waiver in ‘‘unusual recipients which have not automatically recipient’s management. circumstances.’’ The Working Group submitted it. Moreover, the information Proposed section 1611.3 would also determined that the current language is collected is not being put to any routine contain certain minimum requirements unnecessarily stringent and that it is use. In addition, LSC has not had a for the content of recipient’s financial unclear what the difference is intended parallel requirement for the submission eligibility policies. Specifically, LSC to be between ‘‘unusual’’ and of income ceilings. The Working Group proposes that the recipient’s financial ‘‘extremely meritorious.’’ It was determined that this requirement could eligibility policy must: • Specify that only applicants for suggested in the Working Group that the be eliminated without any adverse effect standard should be ‘‘where on program compliance with or service determined to be financially appropriate.’’ LSC, however, felt that the Corporation enforcement of the eligible under the policy may be further regulation should continue to reflect the regulation. considered for LSC-funded service; • Establish annual income ceilings of Another substantive change is that policy that waivers of the asset ceilings recipients would be permitted to should only be granted sparingly and no more than 125% of the current provide in their financial eligibility not as a matter of course. The Working DHHS Federal Poverty Guidelines policies for the exclusion of (in addition Group agreed that the revised language amounts; • Establish asset ceilings; and to a primary residence, as provided for accomplishes this goal, while providing • Specify that, notwithstanding any in the existing regulation) vehicles, some additional appropriate discretion assets used in producing income (such other provisions of the regulation or the to recipients. In addition, where the as a farmer’s tractor or a carpenter’s recipient’s financial eligibility policies, current rule requires all waiver tools) and other assets excluded from in assessing the financial eligibility of decisions to be made by the Executive attachment under State or Federal law an individual known to be a victim of Director, LSC proposes to permit those from the calculation of assets. In domestic violence, the recipient shall decisions to be made by the Executive identifying other assets excluded from consider only the income and assets of Director or his/her designee. LSC believes it is important that a person in attachment under State or Federal law, the individual applicant and shall not significant authority be involved in LSC has in mind assets that are consider any assets jointly held with the making asset ceiling waiver decisions, excluded from bankruptcy proceedings abuser. VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00042 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 6. 29700 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules benefits for low-income individuals and applicant to be financially eligible if the but recognizes that, especially as more applicant’s assets are at or below the recipients have consolidated and now families, eligibility for which includes recipient’s applicable asset ceiling level serve larger areas, it is important for an asset test. Key to this practice is that (or the ceiling has been properly recipients to have the discretion to the recipient’s governing body has to waived) and the applicant’s income is at delegate certain authority to regional or take some identifiable action to or below the recipient’s applicable branch office managers or directors to recognize the asset test of the income ceiling, or if one or more of the increase administrative efficiency. governmental benefit program being The first totally new element is the authorized exceptions to the ceiling relied upon. This ensures that the proposed language regarding victims of applies. These provisions are based on eligibility standards of the govermental domestic violence. This proposal existing provisions found in sections program have been carefully considered implements LSC’s FY 1998 1611.3, 1611.4 and 1611.6. As revised, and are incorporated into the overall appropriations law. Specifically, section the new provisions do not represent a financial eligibility policies adopted and 506 of that act provides: substantive change, but LSC believes regularly reviewed by the recipient’s having the basic statements as to who governing body. As this practice has In establishing the income or assets of an may be found to be financially eligible proved efficient and effective, it was individual who is a victim of domestic for assistance in one section makes the violence, under section 1007(a)(2) of the determined that a parallel process could Legal Services Corporation Act (42 U.S.C. regulation much clearer. In addition, also be adopted for income screening 2996f(a)(2)), to determine if the individual is where the existing regulation uses a and that these practices should be eligible for legal assistance, a recipient construction that speaks to when a expressly included in the regulations. It described in such section shall consider only recipient may provide legal assistance, is important to note that this provision the assets and income of the individual and the proposed new language emphasizes would only apply to applicants whose shall not include any jointly held assets. the point that the requirements speak sole source of income is derived from Although this law has been in effect only to determinations of financial such benefits. Applicants who also have since 1997, it has never been formally eligibility and not to decisions regarding income derived from other sources incorporated into Part 1611. This whether or not to actually provide legal would be subject to an independent provision of law applies regardless of assistance. inquiry and assessment of financial whether it appears in the regulation. LSC also proposes to incorporate into eligibility. However, incorporating this language this section a significant substantive Finally, in the November 2002 NPRM, into the regulation is appropriate, change to the regulation. Consistent LSC proposed to include in this section particularly in light of the goal of this with proposed section 1611.3 as a provision requiring recipients to make rulemaking to clarify the requirements discussed above, if adopted, the reasonable inquiry into an applicant’s relating to financial eligibility regulation would permit recipients to financial status in making financial determinations. determine an applicant to be financially eligibility determinations. Upon Finally, the proposal to permit eligible because the applicant’s income reflection, LSC believes that this recipients to adopt financial eligibility is derived solely from a governmental requirement is better included in policies which permit financial program for low-income individuals or proposed section 1611.7, Manner of eligibility to be established by reference families, provided that the recipient’s Determining Financial Eligibility and to an applicant’s receipt of benefits from governing body has determined that the has moved this proposal to that section. a governmental program for low-income income standards of the governmental For a detailed discussion of this issue, individuals or families consistent with program are at or below 125% of the see the discussion of proposed section proposed section 1611.4(b) is also new. Federal Poverty Guidelines amounts. 1611.7, below. This proposal is discussed in greater For many recipients, a significant detail below. proportion of applicants rely on Section 1611.5—Authorized Exceptions governmental benefits for low-income to the Annual Income Ceiling Section 1611.4—Financial Eligibility for individuals and families as their sole Legal Assistance This proposed section provides for source of income. In order to qualify for authorized exceptions to the annual This proposed section would set forth these benefits, such persons have income ceiling. The proposed language, the basic requirement that recipients already been screened by the agency like the current language of sections may provide legal assistance supported providing the benefits (using an 1611.4 and 1611.5, on which it is based, with LSC funds only to those eligibility determination process that is is permissive. A recipient would be at individuals whom the recipient has stricter than the one required under LSC liberty to include some, none, or all of determined are financially eligible for regulations) and determined to be the authorized exceptions discussed such assistance pursuant to their financially eligible for those benefits. In below in its financial eligibility policies. policies, consistent with this Part. This Working Group discussions, many Thus, to the extent a recipient would section also contains a proposed representatives of the field noted that if choose to avail itself of the authority statement that nothing in Part 1611 they could rely on the determinations provided in this proposed section, a prohibits a recipient from providing made by these agencies without having recipient would be permitted to legal assistance to an individual without to otherwise make an independent determine an applicant to be financially regard to that individual’s income and inquiry into financial eligibility, it eligible for assistance, notwithstanding assets if the legal assistance is supported would substantially ease the that the applicant’s income is in excess wholly by funds from a source other administrative burden involved in of the recipient’s applicable income than LSC (regardless of whether LSC making financial eligibility ceiling. In making such determinations, funds were used as a match to obtain determinations. however, the recipient would have to such other funds, as is the case with The Working Group also noted that detemine that the applicant’s assets Title III or VOCA grant funds) and the current LSC practice permits recipients were at or below the recipient’s assistance is otherwise permissible to determine that an applicant’s assets applicable asset ceiling (or the ceiling are within the recipient’s asset ceiling under applicable law and regulation. would have had to have been waived). level without additional review if the This proposed section would further This requirement is consistent with the applicant is receiving governmental provide that a recipient may find an VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00043 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 7. 29701 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules be deemed financially eligible if the Executive Director to designate a current regulation, but would be responsible individual to make such affirmatively stated for greater clarity. $250,000 of the income is devoted to Under the proposed section, there determinations. LSC believes that this nursing home expenses, would be two situations in which an approach provides additional notwithstanding that the applicant’s applicant’s income could exceed the administrative flexibility to recipients, remaining income is $50,000— recipient’s income ceiling without an yet is consistent with the underlying substantially in excess of the income absolute upper limit: (1) Where the policy. ceiling. This situation is not intended, LSC also proposes to permit applicant is seeking to maintain and, indeed, LSC has no reason to exceptions for certain situations in governmental benefits for low-income believe recipients are serving such which the applicant’s income is in individuals and families; and (2) where persons. However, consistent with the excess of the recipient’s applicable the executive director (or his/her overall goal of clarifying the regulation, income ceiling, but does not exceed designee) determines, on the basis of LSC believes that a requirement that an 200% of the applicable Federal Poverty documentation received by the applicant must be otherwise financially Guidelines amount. At the outset, LSC recipient, that the applicant’s income is eligible considering only that portion of notes that this section also proposes to primarily committed to medical or the applicant’s income which is not change the current upper income limit nursing home expenses and, in devoted to medical or nursing home of 150% of the LSC national income considering only that portion of the expenses should be clearly set forth in guidelines amount, which is 150% of applicant’s income which is not so the regulation. 125% of the Federal Poverty Guidelines committed, the applicant would LSC received two comments on the amounts, or 187.5% of the Federal otherwise be financially eligible. November 2002 NPRM regarding this The first instance would be a new Poverty Guidelines amounts. Under the proposed revision. Both comments addition to the regulation. Currently, an proposed new regulation, the upper asked LSC to remove the requirement applicant seeking to obtain limit would increase to 200% of the that the determination that the governmental benefits for low income Federal Poverty Guidelines amounts. applicant’s income is primarily persons may be deemed financially This change is being proposed to further committed to medical or nursing home eligible if the applicant’s income does simplify the language of the regulation expenses be made by the Executive not exceed 150% of the LSC national and to recognize the changing Director or his/her designee. These eligibility level. The existing regulation, demographic of the legal services client commenters argued that removing this however, does not specifically address base, which now increasingly includes requirement would afford recipients applicants seeking to maintain such the working poor. The Working Group greater administrative flexibility in benefits. Thus, under the current discussed the fact that this action would making financial eligibility regulation, an applicant whose income slightly increase the pool of potential determinations. One comment also is over the income ceiling but under applicants for service but was of the argued that such a change is justified 150% of the LSC national eligibility opinion that this would not have a because other sections of the rule do not level may be deemed financially eligible negative impact on the quantity or require determinations made by the for assistance in obtaining benefits, but quality of services delivered. Executive Director (or designee). The Turning to the exceptions, LSC not for assistance in maintaining them. existing rule, however, does require that proposes to retain the current exception Thus, the applicant seeking assistance the Executive Director make for individuals seeking to obtain to maintain benefits would have to be determinations regarding whether an governmental benefits for low-income turned down, but that same applicant applicant’s income is primarily individuals and families. Second, LSC could then be found financially eligible committed to medical or nursing home proposes to add an exception for for assistance to re-obtain such benefits expenses. LSC believes it is important to individuals seeking to obtain or once the benefits were lost. continue this requirement in this maintain governmental benefits for Accordingly, LSC proposes to address instance because a recipient is making persons with mental and/or physical this problem in the regulation. However, a determination of financial eligibility disabilities. Many disability benefit unlike the situation in obtaining the for an applicant whose income exceeds programs provide only subsistence benefits, in seeking to maintain benefits the otherwise absolute upper limit of support and those individuals should be LSC considers an upper limit on income the income ceiling, that such a treated the same way as those seeking to unnecessary since in such cases the determination be made by a person in obtain benefits available on the basis of applicant’s income will necessarily be significant authority.2 This is similar to financial need. However, many persons rather limited (for the applicant to have the LSC view regarding decisions to with disabilities who are eligible for been eligible in the first place for the waive the asset ceiling. LSC does disability benefits may not be benefits he or she is seeking to understand, however, that it is particularly economically maintain). important for recipients to have the The second instance is taken from disadvantaged and should not be discretion to delegate certain authority section 1611.5(b)(1)(B) of the current eligible for legal assistance simply by to regional or branch office managers or regulation addressing instances in virtue of eligibility for such disability directors to increase administrative which the applicant’s income is benefits. Therefore, those applicants efficiency. This is why LSC proposes primarily devoted to medical or nursing must have incomes below 200% of the broadening the existing rule to permit home expenses and does not represent applicable poverty level in order to be a substantive change in the current considered financially eligible for LSC- 2 This situation is distinguishable from the other regulation. LSC does propose to specify funded services. exception to the absolute income limit relating to Finally, the proposed regulation in the regulation, however, that in such applicants seeking to maintain governmental maintains the current authorized cases the recipient is still required to benefits for low income persons. As noted above, exceptions found in the factors listed in make a determination of financial in those instances, the applicant’s income will already be rather limited, even if exceeding the current section 1611.5. Specifically, the eligibility with regard to the applicant’s absolute income ceiling. In the medical/nursing recipient would be permitted to remaining income. The existing home expenses situation, this may not be the case determine an applicant whose income is regulation could be read to permit an and the applicant’s income may be considerably in below 200% of the applicable Federal applicant with an income of $300,000 to excess of the ceiling. 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  • 8. 29702 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules circumstances’’ affecting the ability to LSC Assistant General Counsel, to Poverty Guidelines amount to be afford legal assistance. See 48 FR 54201 Stephen St. Hilaire, Executive Director, financially eligible for legal assistance at 54203 (November 30, 1983). However, Camden Regional Legal Services, Inc. supported with LSC funds based on one given that other types of expenses Examples of such ‘‘fixed debts and or more enumerated factors that affect included in the list do not seem to be obligations’’ would include mortgage the applicant’s ability to afford legal particularly ‘‘special’’ (e.g., mortgage payments, child support, alimony, and assistance. As in the current regulation, payments; child care expenses), LSC no business equipment loan payments. LSC recipients would not be required to longer finds this explanation intends that this term should also apply these factors in a ‘‘spend down’’ pursuasive. Rather, LSC believes that include rent in addition to mortgage fashion. That is, although recipients the exclusion of current taxes, but not payments. Previous OLA opinions have would be permitted to do so, they prior unpaid taxes, from the list of addressed mortgage payments but not would not be required to determine that, factors which recipients’ may consider rent and rent has, heretofore, not been after deducting the allowable expenses, under exceptions to the income ceiling considered a fixed debt. LSC now sees the applicant’s income is below the has the effect of punishing those no rational distinction between the two applicable income ceiling before persons who are in compliance with the for the purposes of this regulation and determining the applicant to be law in favor of persons who are therefore proposes to treat these financially eligible. The regulation delinquent in their legal responsibility expenses in a similar manner. would also be amended to clarify that The term ‘‘fixed debts and to pay taxes. Moreover, as noted above, the factors apply to the applicant and obligations,’’ however, is not without applicants for legal services are members of the applicant’s household. limit. It is not intended to include increasingly the working poor. The factors proposed are identical to the expenses, such as food costs, utilities, Excluding current taxes has a ones in the current regulation, with the credit card debt, etc. These types of disproportionate effect on applicants following exceptions: • The factor relating to medical debts are usually not fixed as to time who work versus applicants who do not and amount. The Working Group expenses would be restated to make work. Consequently, in the November considered whether there were clear that it refers only to unreimbused 2002 NPRM, LSC proposed including additional factors which should be medical expenses, but that medical current taxes within scope of the term enumerated in this section and several insurance premiums are included; ‘‘fixed debts and obligations’’ (as they • The factor relating to employment members of the Working Group had been prior to 1983). expenses would be reorganized for When the Operations and Regulations proposed adding other factors, such as clarity and would expressly include Committee once again addressed this utilities, to the list. Three of the expenses related to job training or issue, field representatives reiterated comments LSC received on the educational activities in preparation for their recommendation that the term November 2002 NPRM proposed adding employment; income should be defined as income utilities to the overall list of factors. • The factor relating to expenses after taxes. LSC continues to believe, as Although, as the commenters note, associated with age or disability would noted above, that effectively defining applicants must pay for some measure no longer refer to resident members of income as net income, while the LSC of utilities, the same can be said for the family as a reference to the applicant income guidelines (and the underlying clothing and food, which are also or members of the applicant’s DHHS Federal Poverty Guidelines certainly basic necessary expenses. household is proposed to be amounts on which the LSC guidelines However, these sorts of costs have never incorporated elsewhere in this section are based) are calculated on the basis of been covered by the types of expenses of the regulation; gross income would make the regulation which recipients are generally permitted • The factor relating to fixed debts internally inconsistent. Rather, LSC to consider in determining the ability of and obligations would be amended to believes that considering taxes a factor an applicant to afford legal assistance. read only ‘‘fixed debts and obligations;’’ which can be considered by the With the exception of housing expenses • A new factor, ‘‘current taxes’’ recipient in making financial eligibility (which fall under the heading of fixed would be added to the list. determinations addresses the practical debts and obligations, a category which With regard to ‘‘fixed debts and problem raised by the commenters. does not generally include utilities obligations,’’ the current regulation However, the Committee considered because utility bills are not typically provides little guidance as to what is current taxes as fundamentally a fixed as to time and amount), the other meant by this term, except to different kind of expense than the other factors represent expenses for items specifically include unpaid taxes from expenses falling within the scope of which may not be particularly prior years. LSC proposes to simply use ‘‘fixed debts or obligations.’’ Instead, the extraordinary, but which are for things the term ‘‘fixed debts and obligations,’’ Committee recommended, and the other than the most basic necessities. while providing guidance in the Board agreed, that current taxes should Although LSC is not proposing adding preamble as to what is encompassed by any additional factors, LSC specifically be a separate category of authorized the term. LSC believes that this invites comment on this matter. exception to the annual income ceiling. approach will provide recipients with Another issue which was raised in the Accordingly, LSC proposes to add a new flexibility in applying the rule, while Working Group in the context of subsection (iv) to section 1611.5(a)(4). consideration of the scope of the term providing more guidance than could LSC invites comment on the proposed ‘‘fixed debts and obligations’’ was the easily be contained in regulatory text. addition of the authorized exception for Prior guidance from the LSC Office of inclusion of current taxes. Prior to 1983, current taxes and on the appropriate Legal Affairs has stated that, ‘‘in the Part 1611 included current taxes along scope and specific terminology which absence of any regulatory definition or with past due unpaid taxes as a fixed LSC should use to describe and define guidance as to the meaning of ‘‘fixed debt. When the regulation was changed this proposed exception. debts and obligations,’’ the common in 1983, the reference to taxes was Section 1611.6—Representation of meaning of the term applies’’ and that amended to refer only to unpaid prior Groups year taxes. This change was justified on it encompasses debts fixed as to both The eligibility of groups for legal the basis that the 1611.5 factors were time and amount. See Letter of assistance supported with LSC funds intended to account only for ‘‘special November 1, 1993 from J. Kelly Martin, VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00045 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 9. 29703 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules representation of groups whose primary there is or can be a wide variety of was a subject of extensive discussion opinion on what the ‘‘primary function’’ among both the members of the Working activity is the ‘‘furtherance of the of any group is and on what is ‘‘in the Group and at the 2004 and 2005 interests of’’ persons who would be interests’’ of the eligible client meetings of the current Operations and eligible. community. The LSC representatives Regulations Committee. Prior to 1983, The Board agreed that permitting LSC were concerned that the risk and effort the regulation permitted representation recipients to use LSC funds for the related to articulating and enforcing a of groups that were either primarily representation of groups which provide necessarily subjective standard would composed of eligible persons, or which services to low income persons is be inappropriate. Rather, LSC had as their primary purpose the consistent with the LSC mission and representatives were of the opinion that furtherance of the interests of persons in could be an efficient use of LSC already scarce legal services resources the community unable to afford legal resources, provided that the legal would be better devoted to providing assistance. In 1983, the regulation was assistance is related to the services the assistance to eligible individuals or amended to preclude the use of LSC group provides. The Board also agreed groups of eligible individuals. In the funds for the representation of groups that extending the permissible use of end, the Working Group did not achieve unless they were composed primarily of LSC funds for the representation of consensus on this issue and the Draft individuals financially eligible for groups whose primary activity is the NPRM did not propose to permit the service and to add a requirement that ‘‘furtherance of the interests of’’ low representation of groups other than any group seeking representation income persons would not be those primarily composed of eligible demonstrate that it lacks the funds or appropriate because of the necessarily individuals. the means to obtain the funds to retain subjective nature of determining what is In its deliberations on the Draft private counsel. in the ‘‘furtherance of the interests of’’ NPRM, the Operations and Regulations During the Working Group meetings, low income persons. Committee acknowledged the legitimacy representatives from the field proposed Accordingly, the proposed rule would of the concerns of the LSC that LSC revise the regulation to once permit a recipient to provide legal representatives, but determined that the again permit the representation of assistance supported with LSC funds to value of permitting the representation of groups which, although not primarily a group, corporation, association or groups having a primary function of composed of eligible persons, have as a other entity if the recipient has providing services to, or furthering the primary function the delivery of determined that the group, corporation, interests of, those who would be services to, or furtherance of the association or other entity lacks and has financially eligible outweighed any risks interests of, persons in the community no practical means of obtaining private attendant upon such representation. In unable to afford legal assistance. counsel in the matter for which approving the recommendation of the Examples of such a group might be a representation is sought and either: Committee, the Board directed that the food bank or a rural community (1) The group, or for a non- Draft NPRM be amended to propose development corporation working to membership group, the organizing or permitting such representation develop affordable housing in an operating body of the group, is primarily (including any conforming amendments isolated community. Field composed of individuals who would be necessary) prior to publication of the representatives noted that in such cases, financially eligible for legal assistance NPRM for comment. The NPRM there may not be local counsel willing under the Act; or published in November 2002 reflected to provide pro bono representation and (2) The group has as a principal this direction. that the group might not otherwise be activity the delivery of services to those When the new Operations and able to afford private counsel. Further, persons in the community who would Regulations Committee considered this the field representatives noted that be financially eligible for LSC-funded issue, field representatives once again restricting recipients to representing legal assistance and the legal assistance supported changing the regulation to with LSC funds only those groups sought relates to such activity. permit the representation of groups primarily composed of eligible The first instance, relating to the having as their primary function the individuals prevents them from eligibility and representation of groups provision of services to, or furthering providing legal assistance in the most composed primarily of eligible the interests of, those who would be efficient manner possible as other individuals, represents the current financially eligible (providing the group groups may be better able to accomplish practice permitted by current section could demonstrate its inability to afford results benefitting more members of the 1611.5(c). The proposed rule is intended to retain private counsel), while LSC eligible community than would to have the same interpretation of Management initially once again representation of eligible individuals or ‘‘primarily composed’’ that has supported permitting only the groups composed primarily of such developed and been adopted in practice representation of groups primarily individuals. Field representatives also over the years since 1983. In the case of composed of eligible individuals. noted that the rule requires that the membership groups, at least 51% of the However, upon further reflection and group would have to provide members would have to be individuals consideration of the arguments made by information showing that it lacks and who would be financially eligible; in the the field and the comments made by has no means of obtaining the funds to case of non-membership groups, at least members of the Operations and retain private counsel, so that the rule 51% of members of the governing body Regulation Committee, LSC would not permit representation of well would have to be individuals who Management ultimately recommended funded groups. would be financially eligible. The latter that the regulation could be broadened The LSC representatives were instance represents a variation on one of to permit the representation, in addition concerned that allowing the use of LSC the situations permitted by the pre-1983 to groups primarly composed of eligible funds to support the representation of rule, although the language would be individuals, groups which have as a groups not composed primarily of revised to focus on ‘‘principal activity’’ primary activity the delivery of services eligible clients would be problematic. In rather than ‘‘primary purpose’’ and the to persons who would be eligible. the examples given, the ‘‘primary rule would only permit the Management continued to recommend function’’ of the group is easily representation of groups which have as that the regulation not permit the discernable. It may be, however, that VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00046 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 10. 29704 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules regarding the prohibition on organizing having as a primary activity the delivery a principal activity the delivery of activities. Legal Services should not directly of services to those persons in the services to low income persons. organize groups. However, it should provide community who would be financially Limiting permissible represention to full representation, education and outreach eligible for LSC-funded legal assistance groups who have as a ‘‘principal to those organized groups who are made up under the Act, the recipient would have activity’’ the provision of services to low of or which represent eligible clients. also to consider whether the income persons and the exclusion of Congressional Record of October 10, 1977, p. characteristics of the persons served by ‘‘furtherance of the interest of the poor’’ S 16804. (emphasis added). the group are consistent with financial groups are intended to make the LSC proposes to add a provision to eligibility under the Act and whether analysis required in determining the the regulation specifying the manner of the legal assistance sought relates to the permissibility of the representation determining the eligibility of groups. the primary activity of the group. more objective. In addition, LSC Although the practice has been that Finally, LSC proposes to require a proposes that the regulation specify that recipients must collect information that recipeint to document group eligibility the legal assistance must be related to reasonably demonstrates that the group determinations by collecting the services delivered by the group. meets the eligibility requirements set information that reasonably These limitations are intended to avoid forth in the regulation, standards for demonstrates that the group meets the creating a potential situation whereby determining and documenting the eligibility criteria set forth herein. recipients might feel free to undertake eligibility of groups has not previously LSC notes that the proposed rule broad based, systemic social change been specifically addressed in the would, essentially, codify the current activities. Rather, LSC believes that regulation. LSC Management does not practice relating to both making these limitations will help ensure that believe that recipients are representing financial eligibility determinations and LSC funds will be used to provide ineligible groups, but the Working documentation of financial eligibility financially eligible groups with the day- Group was nevertheless in agreement determinatons related to groups to-day legal services which are the that it is important and appropriate for primarily composed of eligible hallmark of LSC-funded legal assistance. the regulation to expressly state the individuals. In LSC’s experience, the The Office of Inspector General (OIG) Corporation’s expectations in this area. practical standards which LSC proposes has expressed concerns with the The November 2002 NPRM would to memorialize has not proven to be proposed provisions permitting the have required a recipient to collect problematic. Morevover, LSC does not representation of groups. First, the OIG information reasonably demonstrating see why they would prove any more has raised a question as to whether that the group meets the eligibility problematic for demonstrating or permitting the representation of groups requirements set forth in the regulation. documenting the financial eligibility of not comprised of eligible clients is In written comments filed in response to groups which have as a primary activity problematic because, in its view, neither the November 2002 NPRM, and again in the delivery of services to those who the LSC Act itself nor the legislative the course of the new Operations and would be financially eligible for legal history endorse the premise that LSC Regulation Committee’s 2004 and 2005 assistance. may permit the representation of groups deliberations, the OIG expressed In addition, the proposed rule would that are not composed of eligible clients. concern that the proposed rule should retain and restate the current provision Although LSC appreciates the OIG’s provide eligibility criteria sufficient to of the rule that these requirements apply comments, LSC believes that the ensure that groups seeking LSC-funded only to a recipient providing legal proposed regulatory requirements are legal assistance qualify for such legal assistance supported by LSC funds, consistent with the applicable laws. The assistance and should require grantees provided that regardless of the source of LSC Act, on its face, does not prohibit to retain adequate documentation of funds used, any legal assistance the representation of groups other than such group eligibility. Although LSC provided to a group must be otherwise those composed of otherwise eligible believes that the November 2002 permissible under applicable law and individuals. The Act only speaks to proposed financial eligibility standards regulation. ‘‘eligible clients’’ and there is nothing in for groups effectuated the principal LSC notes that, as with other aspects the text of the Act which suggests that criterion in the Act that those seeking of this rule, proposed section 1611.6 a group which has as its primary LSC-funded legal assistance must be does not speak to eligibility of groups activity the provision of services to financially unable to afford legal for legal assistance under other persons who would be eligible for LSC- assistance and were in no way applicable law and regulation. For funded legal assistance is necessarily inconsistent with the LSC Act, LSC does example, the eligibility of a group under excluded from the scope of the term proposed section 1611.8 does not agree with the OIG that the standards for ‘‘eligible clients.’’ In addition, LSC address issues related to the eligibility determining the eligibility of groups can believes that the legislative history of of the group under Part 1626 of LSC’s and should be more specific than those the Act and the 1977 LSC Act regulations, concerning citizenship and set forth in the November 2002 NPRM. amendments is not dispositive on the Accordingly, in assessing the alien status eligibility. Similarly, the issue of whether the statute was eligibility of a group, LSC proposes to fact that a recipient may determine a intended to prohibit the representation require recipients to consider the group to be eligible for legal assistance of groups other than thos comprised of resources available to the group, such as under this Part, does not address other eligible individuals. Rather, support for the group’s income and income questions relating to permissibility of the notion that Congress contemplated prospects, assets and obligations. For a the representation (i.e., this Part does the provision of legal assistance to group primarily composed of not confer authority for the groups providing services to eligible individuals who would be financially representation of a group on restricted clients can be seen in the comments eligible for LSC-funded legal assistance matters, such as class action lawsuits or Senator Riegle made in discussing an under the Act, would also have to redistricting matters, etc.) amendment relating to the prohibition Finally, LSC notes that in the consider whether the characteristics of by recipients on organizing: November 2002 NPRM, this proposed the persons primarily comprising the section was numbered 1611.8 and group are consistent with financial A similar clarification is made in section placed at the end of the proposed eligibility under the Act. 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  • 11. 29705 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules require a recipient to make affirmative Corporation in conducting compliance regulation. LSC is now proposing to inquiry after accepting an applicant as reviews. place this section before the sections on As noted above, LSC originally a client for information that would Manner of Determining Financial proposed in the November 2002 NPRM, indicate a change in circumstance or the Eligibility and Change in Financial to include this provision in proposed presence of additional information Eligibility Status as both of those section 1611.4, Financial Eligibility for regarding the client’s financial sections are applicable to both groups Legal Assistance. Upon reflection, LSC eligibility. and individual applicants and clients. The proposed regulation would believes that as this requirement is Section 1611.7—Manner of Determining require that when a client is found to be really a requirement as to how financial Financial Eligibility no longer financially eligible on the eligibility determinations are to be LSC proposes several revisions to this basis of later discovered information, made, it is better included in this section. First, LSC proposes to include the recipient shall discontinue proposed section on the manner of a requirement that, in making financial representation supported with LSC determining financial eligibility. LSC eligibility determinations, a recipient funds, if discontinuing the believes that this will improve the shall make reasonable inquiry regarding representation is not inconsistent with organization and clarity of the sources of the applicant’s income, applicable rules of professional regulation. income prospects and assets and shall Second, LSC proposes to delete the responsibility. This proposed language record income and asset information in requirement in existing paragraph (a) of is parallel to the current requirement the manner specified for determining this section that LSC eligibililty forms regarding discontinuation of financial eligibility in proposed section and procedures must be approved by representation upon a change in 1611.6. This requirement would replace the Corporation. It has been LSC’s circumstance. LSC wishes to note that, the process currently required by experience that receiving the forms has to the extent that discontinuation of section 1611.5, whereby a recipient is not enhanced its ability to conduct representation is not possible because of effectively required to conduct a lengthy oversight of recipients. These professional responsibility reasons, a and often cumbersome inquiry as to the documents are readily available to LSC recipient may continue to provide applicant’s income, assets and income from recipients when needed. This representation supported by LSC funds. prospects, including inquiry into a requirement appears only to create This is currently the case and LSC detailed list of factors relating to an unnecessary work for recipients and intends to make no change in the applicant’s specific financial situation LSC staff without serving any policy regulation on this point. and ability to afford private counsel. In addition, LSC proposes to change purpose. LSC also proposes to add a provision The Working Group discussed this issue the name of this section from ‘‘change to the regulation making clear that a at length and representatives of the field in circumstances’’ to ‘‘change in recipient agreeing to extend legal noted that conducting such a detailed financial eligibility status’’ to reflect the assistance to a client referred from inquiry in most cases is a task which is addition of the later discovered another recipient may rely upon the often difficult to accomplish efficiently information provision. referring recipient’s determination of at the point of intake, especially as Section 1611.9—Retainer Agreements financial eligibility, provided that the much of intake is performed by The retainer agreement requirement, referring recipient provides and the volunteers, interns or receptionists. found at section 1611.8 of the existing receiving recipient retains a copy of the Rather, many recipients, in practice, regulation, was the subject of significant eligibility form documenting the conduct a somewhat abbreviated discussion in the Working Group. financial eligibility of the client. This is version of the otherwise required Representatives of the field agreed with the currently accepted practice, but is process, inquiring into current income, the LSC representatives that a retainer addressed nowhere in the existing assets, income prospects and probing for agreement may be appropriate under regulation. additional information based on the certain circumstances, but argued that responses provided, the requirements of Section 1611.8—Change in Financial this regulatory requirement is not the regulation and their knowledge of Eligibility Status required by statute, is not justified local circumstances. This approach, the LSC proposes to add language to this under applicable rules of professional field representatives noted, is less prone section to provide that if a recipient responsibility, may be unnecessarily to error and assists in fostering an burdensome in some instances and is later learns of information which appropriate attorney-client relationship not related to financial eligibility indicates that a client never was, in fact, with individuals accepted as clients. As determinations. They contended that, financially eligible, the recipient must LSC is not finding widespread instances barring a statutory mandate, decisions discontinue the representation of service being provided to financially about the use of retainer agreements, consistent with the applicable rules of ineligible persons, it was agreed that like those involving many other matters professional responsibility. This that the process required by the existing relating to the best manner of providing addition is being proposed because regulation is unduly complicated and high quality legal assistance, should be sometimes, after an applicant has been that the simplified requirement determined by a recipient’s Board, accepted as a client, the recipient proposed would be adequate to ensure management and staff, with guidance discovers or the client discloses that recipients are making sufficient from LSC. They urged LSC to delete this information that indicates that the client inquiry into applicants’ financial requirement. The LSC representatives, was not, in fact, financially eligible for situations to determine financial however, were of the opinion that the service. This situation is not covered by eligibility status under the regulation existing provision in the regulations the existing regulation because the while being less adminstratively requiring the execution of retainer client may not have experienced a burdensome for recipients and more agreements is professionally desirable, change in circumstance but rather, the conducive to the development of the authorized in accordance with LSC’s recipient has discovered new pertinent attorney-client relationship. LSC also mandate under Section 1007(a)(1) of the information about the client. LSC notes believes that adoption of the proposed Act to assure the maintenance of the that the proposed language, like the streamlined financial eligibility highest quality of service and current regulation, is not intended to determination process will aid the VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00048 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 12. 29706 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules the attorney and the client in brief necessary for LSC to approve retainer professional standards, and appropriate services cases about the nature of the agreements and proposes to remove the to assure that there are no relationship and a clear understanding requirement at current section 1611.8(a) misunderstandings as to what services as to what services are to be rendered that retainer agreements be in a form are to be rendered to a particular client. is important to achieving the highest approved by LSC. Instead, LSC proposes Retainer agreements protect the attorney quality of legal service and professional to require the retainer agreements must and recipient in cases of an unfounded standards, it ultimately recommended be in a form consistent with the local malpractice claim and protect the client against requiring grantees to provide rules of professional responsibility and if the attorney and the recipient should specific written communications to must contain statements identifying the fail to provide legal assistance clients when only brief services are legal problem for which representation measuring up to professional standards. being provided. After considering all of is being provided and the nature of the In the end, the Working Group was the various arguments on this matter in legal services to be provided. LSC unable to reach consensus on this issue LSC has determined that, on balance, believes that this simplification will and the Draft NPRM retained a written communications in brief eliminate possible sources of confusion provision generally requiring the services cases represents a ‘‘best for recipients in drafting retainer execution of retainer agreements, along practice’’ and, for the purposes of a agreements, yet will continue to foster with proposing requirements for client regulatory requirement, the current the essential communication between service notices and PAI referral notices practice by which retainer agreements the recipient and the client. in lieu of retainer agreements under Second, LSC proposes to clarify the are only required when the recipient is certain circumstances. circumstances in which retainer After deliberations on the Draft providing extended service to the client agreements are required. Under current NPRM, the Board determined to propose is appropriate. Accordingly, LSC proposes to require section 1611.8(b) a recipient is not elimination of the retainer agreement that recipients must execute retainer required to execute a retainer agreement requirement altogether and the agreements when providing extended ‘‘when the only service to be provided November 2002 NPRM published by services to clients. Extended service is is brief advice and consultation.’’ LSC reflected this determination. With characterized by the performance of Although the plain language of this the exception of the comments of the multiple tasks incident to continuous provision would seem to encompass LSC OIG, all of the comments LSC representation in a case. Examples of situations in which the attorney is received supported the elimination of extended service would include providing only some information and the retainer agreement requirement. With the appointment of the new representation of a client in litigation, guidance on a suggested course of action members of the Board of Directors and an administrative adjudicative to the client, it has over the years, come the new LSC President, LSC had the proceeding, alternative dispute to include brief services such as drafting opportunity to reconsider this proposal. resolution proceeding, and more than simple documents or making limited Field representatives reiterated their brief representation of a client in contacts (by phone or in writing) with support for elimination of the retainer negotiations with a third party. In third parties, such as a landlord, an agreement requirement from the addition, LSC proposes to retain the employer or a government benefits regulation, while LSC Management provision in the current regulation that agency, on behalf of the client. The reiterated its support for retention of a the retainer agreement must be executed discrepancy between the plain language retainer agreement requirement for when representation commences or as and the practical meaning of the extended service in the regulation, with soon thereafter as is practicable. exception should be corrected. To further clarify the regulation, LSC During the public deliberations on certain amendments intended to clarify proposes to include express langauge this matter in the 2004 and 2005 and streamline the requirement. The specifying that recipients are not Operations and Regulations Committee Board agrees with Management. LSC is required to execute retainer agreements meetings, LSC considered different committed to keeping a retainer if the only services being provided are approaches to resolving the discrepancy agreement requirement in the advice and counsel or brief service. between the regulation as written and regulations. LSC considers the practice Advice and counsel is characterized by the prevailing practice. Field of providing retainer agreements to be a limited relationship between the representatives suggested in the event professionally desirable and in attorney and the client in which the that a retainer agreement requirement accordance with its mandate under attorney does no more than review remains in the rule (although still Section 1007(a)(1) of the Act to assure information and provide information preferring the elimination of any such the maintenance of the highest quality and guidance to the client. Advice and requirement) that the language of the of service and professional standards counsel does not encompass drafting of exception should reflect the current and to assure that there are no documents or making third-party practice by expressly including brief misunderstandings as to what services contacts on behalf of the client. LSC service type activities along with advice are to be rendered to a particular client. notes also that it proposes to use the and counsel. They asserted that the Retainer agreements protect the attorney term ‘‘advice and counsel’’ instead of proposed rule should add no new and recipient in cases of an unfounded ‘‘advice and consultation’’ because the administrative or regulatory burdens on malpractice claim and protect the client term ‘‘advice and counsel’’ is a widely recipients. While recognizing the value if the attorney and the recipient should understood case reporting term of retainer agreements in some fail to provide legal assistance throughout the legal services circumstances, the field representatives measuring up to professional standards. LSC agrees, however, that that there community and LSC believe that use of also argued that the rules of professional are changes that can be made in the the standard term will be simpler and responsibility in most jurisdictions do retainer agreement requirement to clearer. Brief service is the performance not require that a retainer agreement be clarify the application of the of a discrete task (or tasks) which are executed or that any other form of requirement and to lessen the burden on not incident to continuous notice be provided in the brief service representation in a case but which context. Although LSC Management recipients, without interfering with the involve more than the mere provision of expressed the belief that while some underlying goals of the requirements. advice and counsel. Examples of brief form of written communication between First, LSC believes that it is not VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00049 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 13. 29707 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules § 1611.2 Definitions. client’’ the necessity of applying the service would include activities, such as requirement to PAI cases is removed. In the drafting of documents such as a (a) ‘‘Advice and counsel’’ means legal cases handled by PAI attorneys, contract or a will for a client or the assistance that is limited to the review making of one or a few third-party although the client can be said to be of information relevant to the client’s contacts on behalf of a client in a receiving some legal services from the legal problem(s) and counseling the narrow time period. In advice and recipient, the recipient is not providing client on the relevant law and/or counsel and brief service cases, the suggested course of action. Advice and extended services. Although this change interaction between the recipient and counsel does not encompass drafting of to the language alone could arguably be the client is generally limited in nature documents or making third-party sufficient to remove the necessity of and duration so that executing a retainer contacts on behalf of the client. applying the retainer agreement (b) ‘‘Applicable rules of professional agreement is administratively requirement to cases being handled by responsibility’’ means the rules of ethics burdensome. In these situations it may PAI attorneys, LSC believes the text of and professional responsibility take more time and effort for the the regulation should be further generally applicable to attorneys in the recipient to prepare the retainer and clarified to explicitly so state. jurisdiction where the recipient ensure that the client has signed and Accordingly, LSC proposes to add a provides legal services. returned an executed copy of the statement to the regulation providing (c) ‘‘Applicant’’ means an individual retainer agreement to the recipient than that no written retainer agreement who is seeking legal assistance it takes for the recipient to provide the would be required for legal services supported with LSC funds from a service to the client. At that point, the provided to the client by a private recipient. The term does not include a benefit of having the executed retainer attorney pursuant to 45 CFR part 1614. group, corporation or association. agreement is outweighed by the effort List of Subjects in 45 CFR Part 1611 (d) ‘‘Assets’’ means cash or other required to comply with the resources of the applicant or members of Legal services. requirement. the applicant’s household that are Another issue raised in the Working For reasons set forth in the preamble, readily convertible to cash, which are Group discussions was the application LSC proposes to revise 45 CFR part 1611 currently and actually available to the of the retainer agreement requirement to to read as follows: applicant. the cases handled by private attorneys (e) ‘‘Brief services’’ means legal pursuant to a recipient’s private PART 1611—FINANCIAL ELIGIBILITY assistance in which the recipient attorney involvement (PAI) program Sec. undertakes to provide a discrete and under 45 CFR part 1614. LSC has 1611.1 Purpose. time-limited service to a client beyond consistently interpreted the retainer 1611.2 Definitions. advice and consultation, including but agreement requirement as applying to 1611.3 Financial eligibility policies. not limited to activities, such as the cases handled by private attorneys 1611.4 Financial eligibility for legal drafting of documents or making limited pursuant to a recipient’s PAI program assistance. third party contacts on behalf of a client. and OLA has advised recipients that the 1611.5 Authorized exceptions to the (f) ‘‘Extended service’’ means legal recipient’s annual income ceiling. best course of action is to have the client 1611.6 Representation of groups. assistance characterized by the execute retainer agreements with both 1611.7 Manner of determining financial performance of multiple tasks incident the recipient and with the private eligibility. to continuous representation. Examples attorney (OLA Opinion 99–03, August 9, 1611.8 Changes in financial eligibility of extended service would include 1999). Recipients have reported that status. representation of a client in litigation, entering into retainer agreements with 1611.9 Retainer agreements. an administrative adjudicative clients with whom it does not have on- Authority: 42 U.S.C. 2996e(b)(1), proceeding, alternative dispute going direct relationships does not 2996e(b)(3), 2996f(a)(1), 2996f(a)(2); Section resolution proceeding, extended further the goal of the retainer 509(h) of Pub. L. 104–134, 110 Stat. 1321 negotiations with a third party, or other agreement requirement and that (1996); Pub. L. 105–119, 111 Stat. 2512 legal representation in which the ensuring that retainer agreements be (1998). recipient undertakes responsibility for executed between clients and private § 1611.1 Purpose. protecting or advancing a client’s attorneys is unduly administratively This Part sets forth requirements interest beyond advice and counsel or burdensome. LSC agrees. relating to the financial eligibility of The application of the retainer brief services. individual applicants for legal (g) ‘‘Governmental program for low agreement requirement comes from the assistance supported with LSC funds current structure of the text of the income individuals or families’’ means and recipients’ responsibilities in regulation. Under the current regulation, any Federal, State or local program that making financial eligibility a recipient is required to execute a provides benefits of any kind to persons determinations. This Part is not retainer agreement (unless otherwise whose eligibility is determined on the intended to and does not create any excepted) ‘‘with each client who basis of financial need. entitlement to service for persons (h) ‘‘Governmental program for receives legal services from the deemed financially eligible. This Part persons with disabilities’’ means any recipient.’’ Cases referred to private also seeks to ensure that financial Federal, State or local program that attorneys pursuant to a recipient’s PAI eligibility is determined in a manner program remain cases of the recipient provides benefits of any kind to persons conducive to development of an and the clients in those cases remain whose eligibility is determined on the effective attorney-client relationship. In clients of the recipient and the client is basis of mental and/or physical addition, this Part sets forth standards considered to be receiving some legal disability. (i) ‘‘Income’’ means actual current relating to the eligibility of groups for services from the recipient. However, by annual total cash receipts before taxes of legal assistance supported with LSC amending the language of the text of the all persons who are resident members funds. Finally, this Part sets forth regulation to say that the recipient is and contribute to the support of an requirements relating to recipients’ only required to execute a retainer applicant’s household, as that term is responsibilities in executing retainer agreement ‘‘when the recipient is defined by the recipient. Total cash agreements with clients. providing extended service to the VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00050 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 14. 29708 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules (d)(1) As part of its financial funds from a source other than LSC, and receipts include, but are not limited to, money, wages and salaries before any eligibility policies, every recipient shall is otherwise permissible under deduction; income from self- establish reasonable asset ceilings for applicable law and regulation. (b) Consistent with the recipient’s employment after deductions for individuals and households. In financial eligibility policies and this business or farm expenses; regular establishing asset ceilings, the recipient Part, the recipient may determine an payments from governmental programs may exclude consideration of a applicant to be financially eligible for for low income persons or persons with household’s principal residence, legal assistance if the applicant’s assets disabilities; social security payments; vehicles required for work, assets used unemployment and worker’s do not exceed the recipient’s applicable in producing income, and other assets compensation payments; strike benefits asset ceiling established pursuant to which are exempt from attachment from union funds; veterans benefits; § 1611.3(d)(1), or the applicable asset under State or Federal law. training stipends; alimony; child (2) The recipient’s policies may ceiling has been waived pursuant support payments; military family provide authority for waiver of its asset § 1611.3(d)(2), and: (1) The applicant’s income is at or allotments; public or private employee ceilings for specific applicants under below the recipient’s applicable annual pension benefits; regular insurance or unusual circumstances and when annuity payments; income from income ceiling; or approved by the recipient’s Executive (2) The applicant’s income exceeds dividends, interest, rents, royalties or Director, or his/her designee. When the the recipient’s applicable annual from estates and trusts; and other asset ceiling is waived, the recipient income ceiling but one or more of the regular or recurring sources of financial shall record the reasons for such waiver authorized exceptions to the annual support that are currently and actually and shall keep such records as are income ceilings, as provided in available to the applicant. Total cash necessary to inform the Corporation of receipts do not include the value of food § 1611.5, applies. the reasons for such waiver. (c) Consistent with the recipient’s or rent received by the applicant in lieu (e) Notwithstanding any other policies, a recipient may determine an of wages; money withdrawn from a provision of this Part or the recipient’s applicant to be financially eligible bank; tax refunds; gifts; compensation financial eligibility policies, as part of without making an independent and/or one-time insurance payments for its financial eligibility policies, every determination of income or assets, if the injuries sustained; non-cash benefits; recipient shall specify that in assessing applicant’s income is derived solely and up to $2,000 per year of funds the income or assets of an individual from a governmental program for low- received by individual Native applicant who is a victim of domestic income individuals or families, Americans that is derived from Indian violence, the recipient shall consider provided that the recipient’s governing trust income or other distributions only the assets and income of the body has determined that the income exempt by statute. individual applicant and shall not standards of the governmental program include any assets jointly held with the § 1611.3 Financial eligibility policies. are at or below 125% of the Federal perpetrator of the domestic violence. (a) The governing body of a recipient Poverty Guidelines amounts and that (f) As part of its financial eligibility shall adopt policies consistent with this the governmental program has eligibility policies, a recipient may adopt policies part for determining the financial standards which include an assets test. that permit financial eligibility to be eligibility of applicants and groups. The established by reference to an § 1611.5 Authorized Exceptions to the governing body shall review its applicant’s receipt of benefits from a Annual Income Ceiling financial eligibility policies at least once governmental program for low-income (a) Consistent with the recipient’s every three years and make adjustments individuals or families consistent with policies and this Part, a recipient may as necessary. The recipient shall § 1611.4(c). determine an applicant whose income implement procedures consistent with (g) Before establishing its financial exceeds the recipient’s applicable its policies. eligibility policies, a recipient shall (b) As part of its financial eligibility annual income ceiling to be financially consider the cost of living in the service policies, every recipient shall specify eligible if the applicant’s assets do not area or locality and other relevant that only individuals and groups exceed the recipient’s applicable asset factors, including but not limited to: determined to be financially eligible ceiling established pursuant to (1) the number of clients who can be under the recipient’s financial eligibility § 1611.3(d), or the asset ceiling has been served by the resources of the recipient; policies and LSC regulations may waived pursuant to § 1611.3(d)(2), and: (2) the population that would be (1) The applicant is seeking legal receive legal assistance supported with eligible at and below alternative income assistance to maintain benefits provided LSC funds. and asset ceilings; and (c)(1) As part of its financial eligibility by a governmental program for low (3) the availability and cost of legal policies, every recipient shall establish income individuals or families; or services provided by the private bar and (2) The Executive Director of the annual income ceilings for individuals other free or low cost legal services recipient, or his/her designee, has and households, which may not exceed providers in the area. determined on the basis of one hundred and twenty five percent § 1611.4 Financial eligibility for legal documentation received by the (125%) of the current official Federal assistance. recipient, that the applicant’s income is Poverty Guidelines amounts. The (a) A recipient may provide legal primarily committed to medical or Corporation shall annually calculate assistance supported with LSC funds nursing home expenses and that, 125% of the Federal Poverty Guidelines only to individuals whom the recipient excluding such portion of the amounts and publish such calculations has determined to be financially eligible applicant’s income which is committed in the Federal Register as a revision to for such assistance. Nothing in this Part, to medical or nursing home expenses, Appendix A to this part. (2) As part of its financial eligibility however, prohibits a recipient from the applicant would otherwise be policies, a recipient may adopt providing legal assistance to an financially eligible for service; or (3) The applicant’s income does not authorized exceptions to its annual individual without regard to that exceed 200% of the applicable Federal income ceilings consistent with individual’s income and assets if the Poverty Guidelines amount and: § 1611.5. legal assistance is wholly supported by VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00051 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 15. 29709 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules information, in a manner consistent association or other entity is eligible for (i) The applicant is seeking legal assistance to obtain governmental with the attorney-client relationship. legal services as required by paragraph benefits for low income individuals and (a) of this section, a recipient shall (d) When one recipient has families; or consider the resources available to the determined that a client is financially (ii) The applicant is seeking legal group, such as the group’s income and eligible for service in a particular case assistance to obtain or maintain income prospects, assets and obligations or matter, that recipient may request governmental benefits for persons with and either: another recipient to extend legal disabilities; or (i) For a group primarily composed of assistance or undertake representation (4) The applicant’s income does not individuals who would be financially on behalf of that client in the same case exceed 200% of the applicable Federal eligible for LSC-funded legal assistance or matter in reliance upon the initial Poverty Guidelines amount and the under the Act, whether the financial eligibility determination. In recipient has determined that the characteristics of the persons such cases, the receiving recipient is not applicant should be considered comprising the group are consistent required to review or redetermine the financially eligible based on with financial eligibility under the Act; client’s financial eligibility unless there consideration of one or more of the or is a change in financial eligibility status following factors as applicable to the (ii) For a group having as a principal as described in § 1611.8 or there is applicant or members of the applicant’s activity the delivery of services to those substantial reason to doubt the validity household: persons in the community who would of the original determination, provided (i) Current income prospects, taking be financially eligible for LSC-funded that the referring recipient provides and into account seasonal variations in legal assistance under the Act whether the receiving recipient retains a copy of income; the characteristics of the persons served the intake form documenting the (ii) Unreimbursed medical expenses by the group are consistent with financial eligibility of the client. and medical insurance premiums; financial eligibility under the Act and (iii) Fixed debts and obligations; whether the legal assistance sought § 1611.8 Change in financial eligibility (iv) Expenses such as dependent care, status. relates to such activity of the group. transportation, clothing and equipment (2) A recipient shall collect (a) If, after making a determination of expenses necessary for employment, job information that reasonably financial eligibility and accepting a training, or educational activities in demonstrates that the group, client for service, the recipient becomes preparation for employment; corporation, association or other entity aware that a client has become (v) Non-medical expenses associated meets the eligibility criteria set forth financially ineligible through a change with age or disability; herein. in circumstances, a recipient shall (vi) Current taxes; or (c) The eligibility requirements set (vii) Other significant factors that the discontinue representation supported forth herein apply only to legal recipient has determined affect the with LSC funds if the change in assistance supported by funds from applicant’s ability to afford legal circumstances is sufficient, and is likely LSC, provided that any legal assistance assistance. to continue, to enable the client to provided by a recipient, regardless of (b) In the event that a recipient afford private legal assistance, and the source of funds supporting the determines that an applicant is discontinuation is not inconsistent with assistance, must be otherwise financially eligible pursuant to this applicable rules of professional permissible under applicable law and section and is provided legal assistance, responsibility. regulation. the recipient shall document the basis (b) If, after making a determination of for the financial eligibility financial eligibility and accepting a § 1611.7 Manner of determining financial determination. The recipient shall keep client for service, the recipient later eligibility. such records as may be necessary to determines that the client is financially (a)(1) In making financial eligibility inform the Corporation of the specific ineligible on the basis of later determinations regarding individual facts and factors relied on to make such discovered or disclosed information, a applicants, a recipient shall make determination. recipient shall discontinue reasonable inquiry regarding sources of representation supported with LSC the applicant’s income, income § 1611.6 Representation of groups. funds if the discontinuation is not prospects and assets. The recipient shall (a) A recipient may provide legal inconsistent with applicable rules of record income and asset information in assistance to a group, corporation, professional responsibility. the manner specified in this section. association or other entity if it provides (2) In making financial eligibility information showing that it lacks, and § 1611.9 Retainer agreements. determinations regarding groups seeking has no practical means of obtaining, (a) When a recipient provides LSC-supported legal assistance, a funds to retain private counsel and extended service to a client, the recipient shall follow the requirements either: recipient shall execute a written retainer set forth in § 1611.6(b) of this Part. (1) The group, or for a non- agreement with the client. The retainer (b) A recipient shall adopt simple membership group, the organizing or agreement shall be executed when intake forms and procedures to obtain operating body of the group, is primarily representation commences or as soon information from applicants and groups composed of individuals, who would be thereafter as is practicable. Such to determine financial eligibility in a financially eligible for legal assistance retainer agreement must be in a form manner that promotes the development under the Act; or consistent with the applicable rules of of trust between attorney and client. The (2) The group has as a principal professional responsibility and forms shall be preserved by the activity the delivery of services to those prevailing practices in the recipient’s recipient. persons in the community who would (c) If there is substantial reason to service area and shall include, at a be financially eligible for LSC-funded doubt the accuracy of the financial minimum, a statement identifying the legal assistance and the legal assistance eligibility information provided by an legal problem for which representation sought relates to such activity. applicant or group, a recipient shall is sought, and the nature of the legal (b)(1) In order to make a make appropriate inquiry to verify the services to be provided. determination that a group, corporation, VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00052 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1
  • 16. 29710 Federal Register / Vol. 70, No. 99 / Tuesday, May 24, 2005 / Proposed Rules Flexibility Act, 5 U.S.C. 601, et seq., Æ Mail: Defense Acquisition (b) No written retainer agreement is because the rule makes no significant Regulations Council, Attn: Ms. Deborah required for advice and counsel or brief change to DoD contracting policy. Tronic, OUSD (AT&L) DPAP (DAR), service provided by the recipient to the Therefore, DoD has not performed an IMD 3C132, 3062 Defense Pentagon, client or for legal services provided to initial regulatory flexibility analysis. Washington, DC 20301–3062. the client by a private attorney pursuant Æ Hand Delivery/Courier: Defense DoD invites comments from small to 45 CFR part 1614. Acquisition Regulations Council, businesses and other interested parties. (c) The recipient shall maintain Crystal Square 4, Suite 200A, 241 18th DoD also will consider comments from copies of all retainer agreements Street, Arlington, VA 22202–3402. small entities concerning the affected generated in accordance with this All comments received will be posted DFARS subparts in accordance with 5 section. to U.S.C. 610. Such comments should be Appendix A—Legal Services dfars.nsf. submitted separately and should cite Corporation Poverty Guidelines DFARS Case 2003–D027. Ms. FOR FURTHER INFORMATION CONTACT: Deborah Tronic, (703) 602–0289. Note: Appendix A: The Corporation is not C. Paperwork Reduction Act requesting comments on the current SUPPLEMENTARY INFORMATION: The Paperwork Reduction Act does Appendix. The Appendix is revised not apply because the rule does not A. Background annually, after the Department of Health and impose any information collection Human Services issues the new Federal DFARS Transformation is a major Poverty Guidelines for that year. requirements that require the approval DoD initiative to dramatically change of the Office of Management and Budget the purpose and content of the DFARS. Victor M. Fortuno, under 44 U.S.C. 3501, et seq. The objective is to improve the General Counsel and Vice President for Legal List of Subjects in 48 CFR Part 246 efficiency and effectiveness of the Affairs. acquisition process, while allowing the Government procurement. [FR Doc. 05–10061 Filed 5–23–05; 8:45 am] acquisition workforce the flexibility to BILLING CODE 7050–01–P Michele P. Peterson, innovate. The transformed DFARS will contain only requirements of law, DoD- Editor, Defense Acquisition Regulations System. wide policies, delegations of FAR DEPARTMENT OF DEFENSE authorities, deviations from FAR Therefore, DoD proposes to amend 48 requirements, and policies/procedures CFR part 246 as follows: 48 CFR Part 246 that have a significant effect beyond the 1. The authority citation for 48 CFR internal operating procedures of DoD or [DFARS Case 2003–D027] part 246 continues to read as follows: a significant cost or administrative Authority: 41 U.S.C. 421 and 48 CFR Defense Federal Acquisition impact on contractors or offerors. Chapter 1. Regulation Supplement; Quality Additional information on the DFARS Assurance Transformation initiative is available at PART 246—QUALITY ASSURANCE Department of Defense (DoD). AGENCY: transf.htm. 246.101 [Removed] ACTION: Proposed rule with request for This proposed rule is a result of the 2. Section 246.101 is removed. comments. DFARS Transformation initiative. The 3. Section 246.102 is amended by proposed DFARS changes— revising paragraph (1) to read as follows: SUMMARY: DoD is proposing to amend Æ Update and clarify requirements for the Defense Federal Acquisition 246.102 Policy. Government contract quality assurance Regulation Supplement (DFARS) to * * * * * and use of warranties; update text pertaining to Government (1) Develop and manage a systematic, Æ Delete unnecessary definitions and contract quality assurance requirements. cost-effective Government contract unnecessary text on technical This proposed rule is a result of a quality assurance program to ensure that requirements matters, responsibilities of transformation initiative undertaken by contract performance conforms to contract administration offices, and DoD to dramatically change the purpose specified requirements. Apply material inspection and receiving and content of the DFARS. Government quality assurance to all reports; and DATES: Comments on the proposed rule Æ Delete text on preparation of contracts for services and products should be submitted in writing to the quality assurance instructions, use of designed, developed, purchased, address shown below on or before July quality inspection approval stamps, and produced, stored, distributed, operated, 25, 2005, to be considered in the information on types of quality maintained, or disposed of by formation of the final rule. evaluation data. This text will be contractors. ADDRESSES: You may submit comments, relocated to the new DFARS companion * * * * * identified by DFARS Case 2003–D027, resource, Procedures, Guidance, and 4. Section 246.103 is revised to read using any of the following methods: Information (PGI), available at http:// as follows: Æ Federal eRulemaking Portal: http:// Follow the 246.103 Contracting office This rule was not subject to Office of responsibilities. instructions for submitting comments. Management and Budget review under Æ Defense Acquisition Regulations (1) The contracting office must Executive Order 12866, dated Web site: coordinate with the quality assurance September 30, 1993. dar/dfars.nsf/pubcomm. Follow the activity before changing any quality B. Regulatory Flexibility Act instructions for submitting comments. requirement. DoD does not expect this rule to have Æ E-mail: Include (2) The activity responsible for a significant economic impact on a DFARS Case 2003–D027 in the subject technical requirements may prepare substantial number of small entities line of the message. instructions covering the type and within the meaning of the Regulatory Æ Fax: (703) 602–0350. extent of Government inspections for VerDate jul<14>2003 15:14 May 23, 2005 Jkt 205001 PO 00000 Frm 00053 Fmt 4702 Sfmt 4702 E:FRFM24MYP1.SGM 24MYP1