[Federal Register Volume 60, Number 12 (Thursday, January 19, 1995)]
[Proposed Rules]
[Pages 3798-3807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1071]
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LEGAL SERVICES CORPORATION
45 CFR Part 1611
Eligibility
AGENCY: Legal Services Corporation.
ACTION: Proposed rule.
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SUMMARY: The Legal Services Corporation (``LSC'' or ``Corporation'')
proposes to amend regulations relating to eligibility for LSC-funded
legal services. This regulation has been substantially revised and
reordered, in part to simplify the regulation and clarify current
Corporation policy and in part to revise Corporation policy,
particularly with respect to access by LSC to client records.
DATES: Comments may be submitted on or before March 20, 1995.
ADDRESSES: Comments may be submitted to the Office of General Counsel,
Legal Services Corporation, 750 First St., NE., 11th Floor, Washington,
DC 20002-4250.
FOR FURTHER INFORMATION CONTACT: Victor Fortuno, General Counsel, (202)
336-8810.
SUPPLEMENTARY INFORMATION: The Operations and Regulations Committee of
the LSC Board (``Committee'') held public hearings on June 20, 1994,
and September 17, 1994, in Washington, DC, to consider a draft of
proposed revisions to 45 CFR part 1611, LSC's regulations on
eligibility for LSC-funded legal assistance. At a meeting in
Washington, DC, on October 28, 1994, the Committee approved a draft to
be published in the Federal Register as a proposed rule for public
comment.
Under this proposal, part 1611 has been substantially revised and
reordered to make the regulation less complex and easier for recipients
to apply. While there are numerous proposals for substantive change,
the majority of the revisions reflect the Committee's desire to make
this rule more comprehensible and less subject to confusion and
misinterpretation than is the current regulation. Throughout the rule,
there are slight changes in language to clarify the rule or to make it
consistent with
[[Page 3799]]
prior interpretations. Unless noted below, these minor revisions do not
make any substantive change in the rule and are not described in
detail.
The Committee recognizes that Congress may consider legislation
that would amend the LSC Act and reauthorize appropriations for the
Corporation. Whenever Congress does pass a new LSC Act, the
Corporation's regulations will be revisited and revised accordingly.
The Corporation is extending the customary 30-day comment period to
60 days.
Section Analysis
Authority
This section has been revised to include a reference to Sec.
1006(b)(3) of the LSC Act, 42 U.S.C. 2996e(b)(3). This provision states
that the Corporation shall not interfere with any attorney in carrying
out the attorney's professional responsibilities to a client or
abrogate the authority of a State or other jurisdiction to enforce the
standards of professional responsibility applicable to attorneys in
that jurisdiction.
Section 1611.1 Purpose
The purpose section was revised to clarify that it is intended to
deal with financial and other factors that may be used to determine
eligibility for LSC-funded legal services. In addition, the Committee
removed the language in the current regulation that gives preference to
those least able to obtain legal assistance. Although the original LSC
Act contained language indicating some priority for those who were
poorest, that language was deleted when the Act was reauthorized in
1977. There is nothing in the current Act that requires a program to
give preference to those ``least able to obtain legal assistance'' and
the Committee felt that it should not be a part of the statement of
purpose for the regulation.
Section 1611.2 Definitions
Section 1611.2(a) ``Applicable Rules of Professional Responsibility''
This new definition was added to make it clear that the references
in the regulation are intended to refer to the rules of ethics and
professional responsibility applicable to attorneys in the jurisdiction
where the recipient either provides legal services or maintains its
records. If more than one jurisdiction is involved and there is a
difference in the rules of disclosure between the jurisdictions, the
Committee wished the Commentary to make clear that, in the
Corporation's view, the rule that was more protective of client
confidentiality should govern the disclosure of information to the
Corporation. It recognized, however, that the applicable law governing
conflict of laws may differ from that view and would control. The
Corporation seeks comments regarding any conflict of laws issues that
might arise. The new definition is consistent with section 1006(b)(3)
of the Act that states that LSC cannot abrogate the authority of the
pertinent jurisdiction to enforce the applicable rules.
Section 1611.2(b) ``Assets''
This new definition was intended to give programs some guidance as
to what needs to be included in a program's consideration of an
applicant's assets, but leaves substantial discretion to the recipient
to come up with a description of assets that meets local concerns and
conditions. This is a minimal definition that includes only liquid
resources, but local programs may include non-liquid assets, as are
included under the current requirement, if they decide that inclusion
is appropriate. LSC added the regulatory requirement for consideration
of non-liquid assets when it revised part 1611 in 1983, but the LSC
Act, section 1007(a)(2)(B)(i), only requires that recipients take into
account liquid assets.
The proposed definition requires inclusion of only those liquid
assets or other resources that are ``readily convertible to cash, which
are currently and actually available to the applicant and which could
be used to hire private counsel.'' Thus, assets that are in the
applicant's name, but are being held in trust until the applicant
reaches a certain age or status need not be considered. Similarly,
assets that are controlled by a guardian or conservator need not be
considered, although income from the trust that is distributed by the
guardian or conservator to the applicant should be included in total
cash receipts. A recipient could make a case-by-case determination of
whether resources that could be sold, pawned or mortgaged should be
considered to be resources that are ``readily convertible to cash'' or
whether an individual should be required to borrow against a pension or
other asset.
Section 1611.2(c) ``Governmental program for low-income individuals or
families''
The Committee changed the term that is used in the regulation from
``governmental program for the poor'' although the definition remains
unchanged.
Section 1611.2(d) ``Income''
The Committee revised this definition to include total cash
receipts of a ``household'' as an alternative to ``family unit,'' and
to permit programs to choose to use whichever term is more appropriate
for the individual or local circumstances. Income is reviewed on an
annual basis, rather than at a particular point in time because the
Federal Poverty Guidelines, upon which the maximum income levels are
based, are stated in terms of annual income. Thus, if an applicant for
services currently has a low-wage job, but was unemployed with no other
income for several months, income should be adjusted to take account of
overall income over the prior year. Similarly, if an applicant's income
is sporadic, as with temporary or day workers, income should be
estimated on an annual basis, rather than on income for the current
week or month. The Committee requests comments from the public on any
additional guidance that may be needed by field programs in applying
this definition.
Section 1611.2(e) ``Total Cash Receipts''
The Committee revised this definition by removing much of the
detailed information contained in the current definition and adding
general language that describes the kind of resources that should be
considered as part of income. The Committee felt that by including the
detail in the regulation itself, the language could be viewed as a
rigid framework for compliance that did not permit consideration of
other possible income sources or the particular circumstances of the
individual applicant. The new definition makes it clear that ``total
cash receipts'' means money received by and currently available to an
applicant for services. Thus, it would not include food or rent in lieu
of wages, rent subsidies, food stamps, health insurance premiums paid
by an employer, Medicaid payments to a health care provider, or other
non-cash benefits or payments made to a third party on behalf of the
applicant, over which the applicant has no control. The revised
language refers to ``net income from self-employment'' rather than
specifying the deductions. Finally, the revised language refers to
``other regular or recurring sources of financial support that are
actually available to the applicant.'' These would include such things
as social security, public or private pension payments; regular
insurance or annuity payments; unemployment or worker's compensation
payments; strike benefits
[[Page 3800]]
from union funds; veterans benefits; alimony, child support, military
family allotments or other regular support from an absent family member
or some other third party not living in the household; or income from
dividends, interest, rents, royalties, estates or trusts that are
available to or used for the benefit of the applicant for service.
Total cash receipts would not include the income of an absent, non-
contributing spouse, nor would it include such one-time items as money
withdrawn from a bank, tax refunds, gifts, insurance payments or cash
settlements for injuries sustained unless paid out over time on a
regular basis. These one-time items, however, should be considered by
the recipients when reviewing an applicant's assets before determining
eligibility. The question of how to treat income taxes that are
withheld from salary or paid periodically is dealt with in a later
section. The current regulation includes ``training stipends'' as part
of ``income.'' A recipient should be able to decide whether a
particular training stipend, fellowship, scholarship or similar payment
constitutes income to the applicant. That determination may depend on
whether the payment is paid to the applicant or directly to an
educational or training institution; whether the payment is intended to
cover tuition or living expenses; and other similar considerations.
Finally, a recipient should be able to determine whether money is
actually and currently available to the applicant. For example, money
paid in trust to an applicant, but not available until the applicant
reaches a particular age or status, may not be income.
Section 1611.3 Eligibility Policies or Guidelines
Section 1611.3(a)
This subsection is based on language that appears in Sec. 1611.5(a)
of the current part 1611, but it is substantially revised and
relocated. The provision does not simply refer to the annual income
ceiling, which is dealt with in the next section. Rather, it refers to
the overall set of policies or guidelines that a recipient follows to
establish eligibility for LSC-funded services, including both financial
and non-financial considerations. While the Committee agreed that a
recipient ought to review its annual income ceilings annually in light
of revisions to appendix A, the Committee felt that the eligibility
guidelines themselves needed to be reviewed less frequently. An annual
review requirement, such as that under the current regulation, often
encourages a mere pro forma review. The Committee felt that a less
frequent review would encourage more thoughtful analysis.
Section 1611.3(b)
This subsection is based on Sec. 1611.5(b)(2)(D) of the current
regulation, but the provision has been moved up in the proposal to
guide the recipient through the process of determining financial
eligibility in a more logical manner. It makes it clear that under the
LSC Act recipients must consider an applicant's assets before
determining that the applicant is financially eligible.
Section 1611.3(c)
This subsection is based on the remaining factors listed in
Sec. 1611.5(b) of the current regulation. It discusses those additional
factors that a recipient may consider before determining that an
applicant who might be financially eligible on the basis of income
alone should be served. While these are factors that the recipient
would generally use to disqualify an otherwise financially eligible
applicant, the Committee recognized that they might also be weighed
against one another to permit a recipient to determine that a
particular applicant should be served. For example, a recipient might
interview an applicant for services whose current income is below the
recipient's income ceiling, but who anticipates a significant increase
in income because he or she has been promised a job that is scheduled
to start in several weeks. Looking only at income and income prospects,
the recipient might determine not to provide service to that applicant.
If, however, the applicant is seeking emergency legal assistance to
prevent the loss of the family's home, the recipient could weigh the
severity of the consequences for the individual if legal assistance is
denied and decide that, on balance, it should undertake the
representation. However, if, during the course of the representation,
the promised job materializes, the recipient would have to determine
whether the change in circumstances requires that assistance be
discontinued, pursuant to Sec. 1611.10.
The Committee added language regarding the recipient's priorities,
as well as other case acceptance criteria to make it clear that
financial eligibility based on income and assets does not create an
entitlement to legal services. Financial eligibility is only one piece
in the puzzle that determines whether a recipient will actually
represent any particular applicant for service. A recipient should look
to its own priorities as well as any other case acceptance criteria
that it has adopted to manage its caseload, including conflicts
considerations and factors used in determining whether a case has
sufficient merit to justify expenditure of scarce resources.
Section 1611.4 Annual Income Ceilings
The Committee changed the name of this section, which is found in
Sec. 1611.3 in the current regulation, from ``maximum income level'' to
``annual income ceilings.'' The term ``maximum'' is used twice in this
section of the current regulation with respect to two different sets of
numbers and is confusing and misleading. Under the current rule, LSC is
required to set a ``maximum'' income level, currently 125% of the
Federal Poverty Income Guidelines, but recipients can set their own
ceilings (or maximum) on income at any level at or below the LSC
``maximum.'' In addition, the current regulation permits recipients to
make exceptions to the ``maximum'' income level to take account of
factors that limit an applicant's ability to afford legal services, so
the recipient's income level may not really represent a maximum. The
Committee felt that the use of the term ``annual income ceilings'' was
more appropriate to describe how the section was to be applied, and it
is consistent with the term ``asset ceilings'' that is used later in
the regulation.
Section 1611.4(a)
The Committee added language to emphasize that the recipient's
annual income ceiling is applicable only to legal assistance supported
by LSC funds. Other funders may set their own income eligibility
levels, and many have done so or have based eligibility for services on
some other basis, such as age or status. Some funders have chosen to
adopt LSC financial eligibility guidelines to determine eligibility for
services supported with their funds. This additional language does not
represent any substantive change from current law, but does emphasize
what was not always clear under the current regulation, i.e., that
other funders are not bound by LSC eligibility guidelines and
recipients may use whatever eligibility standards the non-LSC funder
prescribes.
The Committee also added language to make it clear that both income
and assets are to be used to determine financial eligibility, but that
financial eligibility does not entitle a particular applicant to
receive legal services, since a recipient may also consider other
[[Page 3801]]
factors in making a determination of whether or not to provide
services.
Section 1611.4(b)
The language of this section was revised to clarify its meaning,
but no substantive changes are intended. The Committee felt that while
the recipient's annual income ceiling did need to be reviewed annually
to insure that the program had considered the current figures in
appendix A, programs should not be required to raise their income
levels consistent with the changes in Appendix A.
The Committee discussed whether it should consider raising the LSC
maximum for income ceilings from the current 125% of the Federal
Poverty Guidelines to take account of the reality that those guidelines
have not kept up with the cost of living nationally and that people
need substantially more than 125% of those guidelines to live above
poverty. At the same time, the Committee acknowledged that limited
resources prevent recipients from serving most of the applicants for
service who are eligible at 125% of the official poverty level. They
also discussed whether they should revisit the issue of including some
differential to take account of urban and rural differences in the cost
of living. Section 1007(a)(2)(A) of the LSC Act requires LSC to take
account of family size, rural and urban differences as well as
substantial cost-of-living variations. At present there are different
levels depending on family size, and there are higher income levels to
take account of the acknowledged higher cost of living in Alaska and
Hawaii, but there is no differential for urban versus rural poverty.
The Committee decided that it would recommend no change for purposes of
revising part 1611, but recommended that the Board look into the issue
and decide whether it wished to make any changes. The Committee
welcomes comments on these issues.
Section 1611.4(c)
This section was revised to reflect the fact that the ``cost of
living'' factor is the only factor listed in this provision that is
specifically required by the Act to be considered by recipients in
setting the annual income ceiling. Other factors that are relevant to a
particular recipient must also be considered but it will be up to the
recipient to determine which other factors are relevant to its service
area.
Section 1611.4(d)
This subsection is based on Sec. 1611.3(d) of the current rule.
Additional language was added to emphasize that the recipient's annual
income ceiling is applicable only to legal assistance supported by LSC
funds. Legal assistance supported in whole by non-LSC funds may be
provided to applicants for service who do not meet LSC income
guidelines. Other funders may set their own income eligibility levels.
Nevertheless, to the extent that LSC funds are used to support the
legal assistance, only financially eligible clients may be served.
The Committee wanted the Commentary to make clear that this section
does not prevent a recipient from using LSC funds to support its intake
system, even though some applicants for service will clearly be
ineligible. Performing intake to determine eligibility is not the same
as providing legal assistance. Nor does the section prohibit recipients
from providing some limited service to applicants who are financially
ineligible. For example, if after completing intake, a recipient finds
an applicant to be ineligible, the recipient may provide the applicant
with referrals to other sources of legal or other assistance that could
be helpful, may provide pamphlets or other written materials that are
available to assist the applicant, or may provide some simple, basic
advice that would enable the applicant to handle his or her own problem
without legal assistance.
Deletion of Current Sec. 1611.5 Determination of Eligibility
The provisions of this section have been incorporated into other
sections of the proposal to simplify the regulation and give it a more
logical and easy-to-follow structure.
Section 1611.5 Authorized Exceptions to the Recipient's Annual Income
Ceilings
This section includes subsections from Secs. 1611.4 and 1611.5 of
the current regulation, but they have been reordered and revised. These
factors, which may be considered here, should be viewed as limitations
on an applicant's use of his/her income that would permit a recipient
to deem the applicant as falling below the income ceiling.
Section 1611.5(a)
The changes were designed principally to simplify the language of
the regulation, although the revisions contained in the introductory
language to the section do provide recipients with slightly more
flexibility in deciding which applicants for service whose unadjusted
income exceeds 125% of the official poverty line nevertheless may be
deemed to be financially eligible. The current regulation permits
consideration of applicants for service whose unadjusted income is
below 150% of the national LSC eligibility level, or 187.5% of the
official poverty line. This proposal simplifies the calculation and
raises the outside limit for unadjusted income to 200% of the official
poverty line. The introduction also makes it clear that the applicant
must still meet the asset limit test in Sec. 1611.3(b) and that the
recipient should still consider the factors in Sec. 1611.3(c) before
deciding whether to serve any particular person.
Section 1611.5(a)(1)
The language of this subsection was revised to make it clear that
recipients could serve persons up to 200% of poverty if the person was
seeking to maintain benefits as well as to secure them in the first
instance.
Section 1611.5(a)(2)
This new subsection was added to permit recipients to serve persons
with incomes up to 200% of poverty to secure or maintain disability
benefits, but only if without those benefits the person would be
otherwise eligible. The Committee felt that for many disabled persons,
disability benefit programs provided only subsistence support and those
individuals should be treated in the same way as those seeking to
secure or maintain benefits available on the basis of financial need.
The Committee also recognized, however, that many disabled individuals
who are eligible for disability benefits may not be particularly
economically disadvantaged, and should not be eligible for legal
assistance simply by virtue of their eligibility for those benefits.
Section 1611.5(a)(3)
This subsection lists those factors that a recipient should
consider in making a determination that a particular applicant for
service whose income is between 125% and 200% of poverty should be
deemed eligible for LSC-funded services. The factors are, with several
changes discussed below, the same as those factors that appear in
Sec. 1611.5 (b) of the current regulation.
Paragraph (B) has been revised to make it clear that if a person's
medical expenses are reimbursed, through insurance or a government
program such as Medicare or Medicaid, those reimbursed expenses cannot
be deducted in determining eligibility; if, however, if a person has
paid bills and is awaiting future reimbursement, those expenses could
be deduced. In that case, when the actual reimbursement is
[[Page 3802]]
received, there would be an increase in assets and a potential change
in circumstances, see Sec. 1611.10. In addition, the language has been
changed so that it is clear that a person whose income is devoted
primarily to payment of medical expenses may be considered eligible for
LSC services without regard to income, but only if the applicant's
income does not exceed the recipient's annual income ceiling after
unreimbursed expenses are deducted.
Paragraph (C) has been revised in several respects. First, the
proposal removes the discrimination against the working poor that is
inherent in the existing rule, which does not exclude current taxes
from the calculation of available income. Second, since alimony and/or
child support payments made to a current or former spouse or custodial
parent are included in the current definition of income for those who
receive them, the Committee agreed that they should also be deducted
from income for those who pay them. Another issue that has arisen from
time to time is the treatment of rent versus mortgage payments under
this provision. In general, rent for housing has not been included as a
fixed obligation under this section, but several General Counsel's
opinions have treated mortgage payments as fixed debts, creating a
discrimination against renters in favor of homeowners. In order not to
discriminate against renters, both rent and mortgage payments should be
treated the same way. The Committee seeks comments on whether both rent
and mortgage payments should be permitted as factors. The Committee
also seeks comments on any other types of fixed debts or obligations
that should be specifically included in the language of the rule or in
the Commentary.
Paragraph (D) has been revised to provide explicitly that
educational or job training expenses necessary to prepare a person for
work should be treated the same as expenses related to actual
employment.
Paragraph (E) has been revised to make it clear that not all
expenses that can reasonably be attributable to age or disability are
deductible, but only those that are unusual. Programs can make that
determination on a case-by-case basis.
Paragraph (F) has been revised to make it clear that the recipient
has discretion to consider other factors to deem a particular applicant
eligible for services, even though the applicant is over the program's
annual income ceiling, but below 200% of poverty.
Section 1611.5(b)
The Committee proposes to revise the provision in the current
regulation that requires recipients to maintain specific documentation
relating to decisions to provide representation to individuals whose
income is between 125% and 187.5% of poverty. The Committee believes
that requiring the recipient to keep this information in the client's
file, as is the case under the current regulation, could interfere with
LSC's ability to have access to the information that it needs without
going into the client case files and possibly compromising
confidentiality. Thus, the record that the recipient keeps to meet the
requirement of this section for purposes of informing LSC about the
exceptions should be maintained separate from any client case files.
The Committee also believes that the current provision does not contain
sufficient protection to insure that LSC would not have access to any
client information that should be protected under applicable rules of
professional responsibility, and has incorporated a reference to
Sec. 1611.8(d) that delineates the parameters of LSC's access to such
information. The Committee noted that, under the proposed regulation,
the applicable rules were those of the jurisdiction where the records
were kept or where the services were provided, whichever were more
protective of the client's privacy. However, the Corporation seeks
comments on any conflict of laws questions that would be raised by the
proposed provision.
Section 1611.6 Asset Ceilings
Section 1611.6(a)
The requirement for annual establishment of asset ceilings and
transmittal to LSC has been deleted in keeping with the Committee's
effort to eliminate unnecessary reporting requirements. Compliance with
the asset ceiling guideline requirement can be assured through periodic
monitoring, self-assessments, or other compliance processes. The
proposed revised subsection requires that recipients review their asset
ceilings as part of the overall review of eligibility policies or
guidelines that must be done at least once every three years under
Sec. 1611.3(a) of this proposed regulation. In addition, language has
been added to make it clear that asset guidelines must be considered in
determining eligibility for service, whether the applicant's income is
below 125% of poverty or below 200% of poverty. Finally, the Committee
deleted the language that required recipients to consider non-liquid
assets. The LSC Act, section 1007(a)(2)(B)(i), only requires that LSC
guidelines ensure that recipients take into account liquid assets; it
does not mention non-liquid assets. When part 1611 was amended in 1983,
LSC added the requirement for consideration of non-liquid assets. When
read with the definition of assets contained in Sec. 1611.2, this
proposal goes back to the original treatment of assets in the first
regulation and in the LSC Act.
Section 1611.6(b)
The Committee deleted the specific items that the current
regulation requires be considered in establishing asset guidelines and
those that the current regulation permits to be exempted from the asset
guidelines. The Committee felt that this level of detail was not
required by the Act and was inappropriate to include in the regulation,
and that recipients should be able to establish asset guidelines based
on their determination of local conditions, with flexibility to
consider the circumstances of a particular applicant for service as
well as local economic conditions and other local concerns. In
addition, the Committee felt that it was appropriate to explicitly
permit recipients to look to other existing federal or state asset
exemption schemes for guidance in setting their own guidelines.
Section 1611.6(c)
The language of this subsection has been revised to correct a
reference in the current regulation to ``minimum'', rather than
``maximum'' asset ceilings. In addition, the subsection was revised to
make it clear that the director of a recipient could designate another
staff member to make the determination to waive the asset ceilings in
unusual situations, and to remove the requirement that documentation
for such waivers be maintained in the individual client's file. This
was done to protect materials in the case file from inadvertent and
improper disclosure to LSC.
Section 1611.6(d)
This documentation provision has been revised to refer to
Sec. 1611.8(d) to describe the general limitations on LSC's access to
records and information.
Section 1611.7 Group Eligibility
This proposed section deals with the issue of group eligibility
that is addressed in Sec. 1611.5(b)(2)(C) of the current regulation.
The Committee decided to treat this issue in a separate section to make
it clear that different criteria apply to the consideration of whether
or not a group is eligible for
[[Page 3803]]
LSC-funded legal assistance. This proposal incorporates a number of
revisions to the current language. This new language is based on the
original group representation provision that was in effect from 1976
until 1983. While the new proposal is based on the 1976 provision,
there are several changes. In order to clarify the provision, the order
was changed and some of the language was revised.
Section 1611.7(a)
The Committee added a reference to ``financial'' eligibility of
group members in paragraph (1) To make it clear that group members had
only to be financially eligible for services, not that they would
actually receive services for a particular matter. Paragraph (2) which
includes the ``primary purpose'' provision, was revised to make it
clear that a group could be served as long as its main function or
activity is the furtherance of the interests that benefit people in the
community who would be eligible for legal assistance under the Act, and
the representation relates to such a function or activity.
Section 1611.7(b)
This new provision was added to emphasize that recipients may use
non-LSC funds to provide legal assistance to groups that do not meet
the criteria of this section.
The Committee discussed whether the group representation provisions
were sufficient to take account of the uniqueness of Indian tribes and
raised the issue of whether the regulation should include special
treatment for tribes under this section. While the Committee did not
propose adding any specific language to the proposal, it would welcome
comments from members of the Native American community and others on
the degree to which the proposed language meets the concerns of that
community.
Section 1611.8 Manner of Determining Financial Eligibility.
Section 1611.8(a)
Many of the revisions in this section are intended to simply
clarify the language. The principal changes relate to the role of LSC
in reviewing intake forms and financial information provided to
recipients by applicants for services. Under the current regulation,
the Corporation has authority to approve both the forms and procedures
that a recipient uses to determine eligibility. That authority is no
longer contained in this proposal. In addition, the proposed
Sec. 1611.8(a) refers to Sec. 1611.8(d) regarding LSC's access to
client information.
Section 1611.8(b)
The revisions to this provision are intended to clarify the
language of the provision, but no substantive changes are intended.
Section 1611.8(c)
This new provision was added to make it clear that national and
state support centers can provide assistance to local field programs or
co-counsel with them in cases without making independent eligibility
determinations for clients referred by field programs. The support
center should, of course, be able to satisfy itself that such a
determination was actually made by the field program. The Committee
wished to make clear that a support center was free to review a
client's eligibility before undertaking representation, if it so chose,
but it was not required to do so if satisfied by the actions taken by
the original recipient.
Section 1611.8(d)
This subsection has been substantially revised in the proposed new
regulation. The Committee believes that the provisions on access to
client eligibility information contained in the current regulation may
have been applied in a manner that was inconsistent with the applicable
rules of professional responsibility and section 1006(b)(3) of the LSC
Act that prohibits LSC from abrogating the authority of states and
local jurisdictions to enforce those rules. The ABA's Standing
Committee on Legal Aid and Indigent Defendants (``SCLAID'') expressed
great concern about the protection of client confidences, secrets, and
other information gained in the course of representation. SCLAID urged
the Committee to adopt rules that would permit LSC to have access to
information only in a manner consistent with the applicable rules of
professional responsibility. The Committee proposal makes it clear that
information disclosed by a client or applicant for service in order to
establish eligibility for services should not be disclosed to LSC or to
any third party without the express written permission of the client or
applicant, unless disclosure is permitted by and would not violate the
attorney-client privilege and the applicable rules of professional
responsibility. The Committee recognized that such a provision might
mean that LSC could be subject to somewhat different rules in each
jurisdiction, but agreed that Congress, in enacting section 1006(b)(3)
of the Act, clearly intended that the state or local rules would
govern. The Committee noted that LSC would have to discharge its
responsibilities for ensuring that LSC funds were used to serve only
financially eligible clients and in a manner consistent with the
disclosure requirements of each jurisdiction. LSC is working to develop
general procedures to permit it to fulfill its obligations in this
regard. The Committee welcomes comments that would assist the
Corporation in designing such procedures.
Finally, the Committee proposal noted that recipients may reveal to
third parties information provided by a client or applicant to
establish eligibility when the disclosure of the information is
implicitly authorized in order to carry out the representation, as
permitted by Rule 1.6(a) of the ABA's Model Rules of Professional
Conduct, subject to any variations in the rules adopted by various
states or local jurisdiction. There are many situations where the
client either wants such disclosures made or where it can be assumed
that the client wants disclosure made in order to advance the task the
lawyer has been asked to carry out on behalf of the client. Examples
include sharing financial information about a client with the court or
counsel for the opposing party in a divorce action where necessary to
establish appropriate alimony or child support payments or with an
administrative agency that has cut off welfare benefits based on the
alleged existence of other income. Clearly, by seeking representation
in these cases, a client has implicitly authorized the limited sharing
of information needed for full representation, but has not authorized
the disclosure of that information for other purposes not directly
related to the case or matter.
The Committee discussed the possible need for LSC to develop a
records retention policy to ensure that recipients maintained records
relating to eligibility for a sufficient period to guarantee
accountability. The Committee did not recommend any particular policy,
but would like to receive comments on whether such a policy would be
desirable and what should be included in such a policy.
Section 1611.9 Retainer Agreement
Section 1611.9(a)
While keeping the requirement for recipients to execute written
retainer agreements with all clients who are represented by the
recipient, the Committee decided to delete the requirement that LSC
approve or reject
[[Page 3804]]
the particular form of a recipient's agreement. The language makes it
clear that retainers are needed only when the recipient actually
undertakes representation. Some forms of legal assistance, such as pro
se clinics or community legal education, do not require the recipient
to obtain retainer agreements from everyone who attends. The proposal
acknowledges that many jurisdictions have their own rules or practices
regarding retainer agreements, and that recipients should make sure
their retainers are consistent with those rules, as well as with local
practice, where applicable. Nothing in the current LSC Act requires
retainer agreements, although all of the current LSC reauthorization
bills would include such a requirement, and the Committee acknowledged
that it is good practice in most instances to have a written retainer.
Section 1611.9(b)
The Committee decided to remove the language relating to
emergencies, in recognition of the fact that there may be numerous
circumstances when a recipient could not immediately execute a retainer
before taking action on behalf of a client. The Committee also decided
to delete the specific information that needed to be included in a
retainer agreement, recognizing that such requirements could be
inconsistent with requirements governing retainer agreements in state
rules of professional responsibility.
Section 1611.9(c)
This provision was revised in response to a concern that, if the
retainer was required to be included in the client's file and was
subject to examination by LSC during monitoring, it might give LSC an
opportunity to review the whole file, which could violate the
restrictions on LSC access to client information, even though the
current rule suggests that client identity is protected. As with
eligibility information, this section requires that disclosure of
information be consistent with the attorney-client privilege and the
applicable rules of professional responsibility. The Committee
recognized that in most instances, the recipient could simply redact
the names and other identifying information from the retainer agreement
to meet the standard set out in this section. However, there might be
instances where a particular retainer agreement includes more
information about the actual representation than would a financial
intake sheet. The retainer agreement, for example, might reveal so much
information about the client or case that it would be impossible to
protect client identity by redacting only client identifying
information such as name and address. In such a case, all additional
information that could indirectly reveal client identity would have to
be redacted as well.
In cases where the identity of the client is already known, review
of a retainer agreement could reveal substantial information that
relates to representation. SCLAID reiterated its concern about
protection of client information. Clearly, the Corporation would need
to devise procedures that would balance its need to ensure that
retainer agreements are being properly executed and maintained, while
appropriately protecting client information. The Committee welcomes
comments on such procedures.
Section 1611.9(d)
The Committee adopted additional language in its revision of this
provision to expand the explanation of the circumstances under which a
retainer agreement was not necessary, such as when the service was of
brief duration or very limited in scope. This provision would be
particularly important for programs that operate telephone hotlines,
where, in many instances, the services consist of limited advice or
consultation and the only contact with the client is via telephone. The
issue is where to strike the balance between protecting the interests
involved and limiting the administrative burdens on recipients. The
Committee invites public comment on this issue.
Section 1611.9(e)
This provision was added to deal with the situation where a state
or national support center has joined a case brought by a local
recipient as co-counsel. This provision makes it clear that the client
must have notice that another program is assisting in the
representation, and the original retainer agreement must be broad
enough in scope to encompass the new services that are being provided.
The Committee wanted to distinguish the co-counselling situation from
the case where a local field program turned the representation over to
a support center or other recipient, with the original recipient no
longer serving as counsel in the case. The Committee felt that a new
retainer agreement should be required in that situation, but invites
comments on the issue. Nothing in this provision would prevent a
support center from executing a new retainer agreement with a client,
even when the relationship is clearly one where the support center is
only a co-counsel in the case, and there may be situations where it
would be necessary or prudent for it to do so.
The Committee also wished the Commentary to make clear that this
provision was not applicable to situations where a recipient does
intake and financial eligibility screening for an applicant for service
and then refers the applicant to another attorney who has agreed to
represent the applicant on a pro bono basis, either through the
recipient's PAI program or on some other basis. In that instance, the
private attorney, not the recipient, is representing the client, and
any retainer agreement should be made between the client and the
private attorney, subject to any appropriate standards governing pro
bono practice. The Committee invites additional comments on this or
other situations that may arise where other attorneys are involved in
the representation of eligible clients.
Section 1611.10 Change in Circumstances
The Committee proposes two revisions to the current language. The
first changes the phrase ``is sufficiently likely to continue'' to ``is
sufficient and is likely to continue,'' in order to clarify what is
meant by the phrase. The second revision expands the language regarding
professional responsibilities. The recipient may have obligations to
the client beyond those of the individual attorney and ethical concerns
might be broader than professional responsibilities. In addition, the
Committee invites comments from the public as to whether this provision
is adequate to deal with the issue of when a change in a client's
circumstances would require discontinuation of representation by the
recipient and what procedures a recipient should follow to effect such
discontinuation.
List of Subjects in 45 CFR Part 1611
Legal services.
For reasons set forth in the preamble, LSC proposes to revise 45
CFR part 1611 to read as follows:
PART 1611--ELIGIBILITY
Sec.
1611.1 Purpose.
1611.2 Definitions.
1611.3 Eligibility policies or guidelines.
1611.4 Annual income ceilings.
1611.5 Authorized exceptions to the recipient's annual income
ceiling.
1611.6 Asset ceilings.
1611.7 Group eligibility.
1611.8 Manner of determining financial eligibility.
1611.9 Retainer agreement.
1611.10 Change in circumstances.
[[Page 3805]]
Appendix A--Legal Services Corporation Poverty Guideline
Note: Appendix A: The Corporation is not requesting comments on
the current Appendix. The Appendix is revised annually, after the
Corporation receives the new Federal Poverty Guidelines.
Accordingly, the Appendix will be revised for 1995 at a later date.
Authority: 42 U.S.C. 2996e(b)(1), 2996e(b)(3), 2996f(a)(1),
2996f(a)(2).
Sec. 1611.1 Purpose.
This part is designed to ensure that a recipient will determine
eligibility for legal assistance according to financial and other
criteria that take account of factors that influence an individual's or
group's ability to obtain legal assistance, and to afford sufficient
latitude for a recipient to consider local circumstances and its own
resource limitations. This part also seeks to insure that eligibility
is determined in a manner conducive to development of an effective
attorney-client relationship.
Sec. 1611.2 Definitions.
(a) Applicable rules of professional responsibility means the rules
of ethics and professional responsibility generally applicable to
attorneys in the jurisdiction where the recipient either provides legal
services or maintains its files.
(b) Assets means, at a minimum, cash or other liquid assets or
resources that are readily convertible to cash, which are currently and
actually available to the applicant and which could be used to retain
private counsel.
(c) Governmental program for low income individuals or families
means any Federal, State or local program that provides benefits of any
kind to persons whose eligibility is determined on the basis of
financial need.
(d) Income means actual current annual total cash receipts before
taxes of all persons who are resident members of, and contribute to the
support of a household or family unit.
(e) Total cash receipts include, but are not limited to, money,
wages and salaries before any deduction; net income from self-
employment; regular cash payments from public assistance and other
benefit programs; and other regular or recurring sources of financial
support that are currently and actually available to the applicant for
service.
Sec. 1611.3 Eligibility policies or guidelines.
(a) The governing body of a recipient shall adopt eligibility
policies or guidelines, consistent with this part, for determining the
eligibility of persons and groups seeking legal assistance under the
Act. The governing body shall review its eligibility policies or
guidelines at least once every three years and make adjustments if
necessary.
(b) In addition to consideration of income under Secs. 1611.4 and
1611.5, the recipient's eligibility policies or guidelines shall
provide that, before undertaking representation or providing services
to an applicant, the recipient shall consider the existence of assets
available to the applicant, and shall disqualify any applicant for
service whose assets are in excess of the asset ceiling set by the
recipient pursuant to Sec. 1611.6, unless a waiver is granted pursuant
to Sec. 1611.6(c).
(c) The recipient's eligibility policies or guidelines may also
provide for consideration of the following factors which may be used by
the recipient to determine whether or not to provide services to a
particular financially eligible applicant for service:
(1) The applicant's current income prospects, taking into account
seasonal variations in income;
(2) The availability of private or other legal representation at
low or no cost with respect to the particular matter in which
assistance is sought;
(3) The consequences for the individual or group if legal
assistance is denied;
(4) Other significant factors that affect an individual's financial
inability to afford legal assistance, which may include evidence of a
prior administrative or judicial determination that a person's present
lack of income results from refusal or unwillingness, without good
cause, to seek or accept suitable employment; and
(5) Any other case acceptance criteria, in addition to the
recipient's priorities established under Part 1620 of these
regulations, that the recipient may utilize to determine which cases to
accept from among cases of financially eligible persons or groups. Such
criteria shall include, but are not limited to, consideration of the
merits of the applicant's claim and any conflicts of interest that may
exist.
Sec. 1611.4 Annual income ceilings.
(a) Every recipient shall establish an annual income ceiling.
Unless disqualified on the basis of assets under Sec. 1611.3(b),
applicants for services whose income falls below the recipient's annual
income ceiling will be considered financially eligible to receive legal
assistance supported with funds provided under the Act, subject to the
recipient's consideration of the factors described in Sec. 1611.3(c).
(b) Unless specifically authorized by the Corporation, a recipient
shall not establish an annual income ceiling that exceeds a maximum of
one hundred and twenty-five percent (125%) of the current official
Federal Poverty Guidelines. The calculations of 125% of the current
Federal Poverty Guidelines are set forth in Appendix A to this part as
revised annually. The recipient's governing body shall review the
recipient's annual income ceiling annually and consider any changes
made in Appendix A to this part.
(c) Before establishing its annual income ceiling, a recipient
shall consider cost of living in the service area. The recipient shall
also consider other factors that it determines are relevant. These
factors may include, but are not limited to:
(1) The number of clients who can be served by the resources of the
recipient;
(2) The population who would be eligible at and below alternative
income ceilings; and
(3) The availability and cost of legal services provided by the
private bar in the area.
(d) Unless authorized by Sec. 1611.5, no person whose income
exceeds the annual income ceiling established by a recipient shall be
eligible for legal assistance supported with funds provided under the
Act, but this part does not prohibit a recipient from providing legal
assistance to an applicant for service whose annual income exceeds the
annual income ceiling established by the recipient, if the legal
assistance provided to the person is supported in whole by funds from a
source other than the Corporation.
Sec. 1611.5 Authorized exceptions to the recipient's annual income
ceiling.
(a) Subject to the recipient's consideration of the factors
described in Sec. 1611.3(c), an applicant for service whose income
exceeds the annual income ceiling established by a recipient, but does
not exceed 200% of the Federal Poverty Guidelines, may be provided
legal assistance supported by funds provided under the Act if the
applicant would not be disqualified on the basis of assets under
Sec. 1611.3(b), above; and
(1) The applicant is seeking legal assistance to secure or maintain
benefits provided by a governmental program for low income individuals
or families;
(2) The applicant is seeking legal assistance to secure or maintain
benefits provided by a governmental program for the disabled, but only
if without those benefits the applicant's income would not exceed the
recipient's annual income ceiling; or
[[Page 3806]]
(3) The recipient determines that the applicant should be deemed to
be eligible for services on the basis of one or more of the following
factors that restrict the applicant's financial ability to afford
private legal assistance:
(i) The applicant's current income prospects, taking into account
seasonal variations in income;
(ii) Unreimbursed medical or nursing home expenses, but if an
applicant's income is primarily committed to medical or nursing home
expenses, the applicant may be served if his or her income is over 200
percent of the Federal Poverty Income Guidelines but does not exceed
the recipient's annual income ceiling after such expenses are deducted;
(iii) Fixed debts and obligations, including but not limited to,
current Federal, state or local taxes withheld from salary or paid
periodically, unpaid Federal, state or local taxes from prior years,
child support or alimony payments made to a current or former spouse,
custodial parent, guardian or other custodian of a dependent minor
child;
(iv) Child care, transportation, and other expenses necessary for
employment, job training or educational activities in preparation for
employment;
(v) Unusual expenses associated with age or disability of a
resident family member; or
(vi) Other significant factors that the recipient finds are related
to the applicant's financial ability to afford private legal
assistance.
(b) In the event that a recipient determines that it will provide
legal assistance pursuant to Sec. 1611.5(a), the recipient shall
document the specific factor(s) relied on to make the determination.
The recipient shall keep such records as are necessary to inform the
Corporation as to the number of such cases and the specific factors
relied on to make such determinations, consistent with the restrictions
on disclosure contained in Sec. 1611.8(d).
Sec. 1611.6 Asset ceilings.
(a) The governing body of the recipient shall establish guidelines
incorporating reasonable asset ceilings to be utilized in determining
eligibility for services under Secs. 1611.3(b), 1611.4 and 1611.5. As
part of the review required under Sec. 1611.3(a), the recipient shall
review its asset ceiling guidelines at least once every three years and
adjust them as necessary.
(b) In establishing such guidelines, the recipient may consider
asset exemptions which may be available under State or Federal law.
(c) The asset ceiling guidelines may provide authority for the
director of the recipient or the director's designee to waive the
ceilings on maximum allowable assets in unusual situations.
(d) In the event such a waiver is granted, the recipient shall
document the factors considered in granting the waiver. The recipient
shall keep such records as are necessary to inform the Corporation as
to the number and the specific factors considered in granting such
waivers, consistent with the restrictions on disclosure contained in
Sec. 1611.8(d).
Sec. 1611.7 Group eligibility.
(a) A recipient may provide legal assistance to a group,
corporation, association or other entity if such group or entity
provides information showing that it lacks, and has no practical means
of obtaining, funds to enable it to obtain private counsel in the
matter on which representation is sought, and that it:
(1) Is primarily composed of persons who are financially eligible
for legal assistance under the Act and this part; or
(2) Has as its principal function or activity the furtherance of
interests that benefit those persons in the community who would be
financially eligible for legal assistance under the Act and this part,
and the representation sought relates to such a function or activity.
(b) This part does not prohibit a recipient from providing legal
assistance to a group or entity that does not meet the requirements of
this section if the legal assistance is supported in whole by funds
from a source other than the Corporation.
Sec. 1611.8 Manner of determining eligibility.
(a) A recipient shall adopt simple intake forms and procedures to
obtain financial and other information from individuals and groups to
determine eligibility in a manner that promotes the development of
trust between attorney and client. The forms shall be preserved by the
recipient and information contained in the forms may be disclosed only
in a manner that is consistent with Sec. 1611.8(d).
(b) If there is substantial reason to doubt the accuracy of the
financial or other eligibility information provided by an individual or
group client or applicant for service, a recipient shall make
appropriate inquiry to verify the information, in a manner consistent
with the attorney-client relationship.
(c) When one recipient has determined that a client is eligible for
service in a particular case or matter, that recipient may request
another recipient to extend legal assistance or undertake
representation on behalf of that client in the same case or matter in
reliance upon the initial eligibility determination. The subsequent
recipient is not required to review or redetermine the client's
eligibility unless there is a change of circumstances as described in
Sec. 1611.10 or there is substantial reason to doubt the validity of
the original determination.
(d) Information furnished to a recipient by a client or an
applicant for service to establish eligibility shall not be disclosed
to the Corporation or to any third party who is neither employed nor
retained by the recipient, nor associated with the recipient as co-
counsel in the representation of the client, without the express
written consent of the client or applicant except as such disclosure
may be permitted without violation of the attorney-client privilege or
applicable rules of professional responsibility. Nothing in this
paragraph would prohibit an attorney from revealing information
provided by a client that is implicitly authorized to be revealed in
order to carry out the representation.
Sec. 1611.9 Retainer agreement.
(a) A recipient shall execute a written retainer agreement with
each individual or group client or named class representative who is
represented by the recipient, in a form consistent with the applicable
rules of professional responsibility and prevailing practices in the
recipient's service area.
(b) The retainer agreement shall be executed when representation
commences or as soon thereafter as is practicable.
(c) The recipient shall retain the executed retainer agreement and
shall make the agreement available for review by the Corporation in a
manner that protects from disclosure any information protected by the
attorney-client privilege or the applicable rules of professional
responsibility.
(d) A recipient is not required to execute a written retainer
agreement when only providing limited advice, consultation, or brief
service.
(e) When one recipient has executed a retainer agreement with a
client, another recipient acting as co-counsel may extend legal
assistance or undertake representation on behalf of that client in the
same case or matter at the request of the original recipient without
executing a separate retainer agreement, as long as--
(1) The additional legal assistance or representation is within the
scope of the original retainer agreement; and
(2) the client has received written notification that another
recipient is
[[Page 3807]]
providing additional legal assistance or representation in the matter.
Sec. 1611.10 Change in circumstances.
If an eligible client becomes ineligible through a change in
circumstances, a recipient shall discontinue representation if the
change in circumstances is sufficient, and is likely to continue, to
enable the client to afford private legal assistance, and
discontinuation is not inconsistent with applicable rules of
professional responsibilities.
Dated: January 10, 1995.
Victor M. Fortuno,
General Counsel.
[FR Doc. 95-1071 Filed 1-18-95; 8:45 am]
BILLING CODE 7050-01-P
