[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1221 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                S. 1221

To authorize appropriations for the Legal Services Corporation Act and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            September 7 (legislative day, September 5), 1995

Mrs. Kassebaum (for herself and Mr. Jeffords) introduced the following 
 bill; which was read twice and referred to the Committee on Labor and 
                            Human Resources

_______________________________________________________________________

                                 A BILL


 
To authorize appropriations for the Legal Services Corporation Act and 
                          for other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS; REFERENCE.

     (a) Short Title.--This Act may be cited as the ``Legal Services 
Reform Act of 1995''.
     (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title; table of contents, reference.
Sec. 2. Findings.
Sec. 3. Authorization of appropriations.
Sec. 4. Prohibition on redistricting activity.
Sec. 5. Protection against theft and fraud.
Sec. 6. Solicitation.
Sec. 7. Procedural safeguards for litigation.
Sec. 8. Lobbying and rulemaking.
Sec. 9. Timekeeping.
Sec. 10. Authority of local governing boards.
Sec. 11. Regulation of nonpublic resources.
Sec. 12. Certain eviction proceedings.
Sec. 13. Implementation of competition.
Sec. 14. Research and attorneys' fees.
Sec. 15. Abortion.
Sec. 16. Class actions.
Sec. 17. Aliens.
Sec. 18. Training.
Sec. 19. Copayments.
Sec. 20. Fee-generating cases.
Sec. 21. Welfare reform.
Sec. 22. Prisoner litigation.
Sec. 23. Appointment of Corporation president.
Sec. 24. Evasion.
Sec. 25. Pay for officers and employees of the Corporation.
Sec. 26. Location of principal office.
Sec. 27. Definition.
     (c) Reference.--Whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to or repeal of a section or other 
provision, the reference shall be considered to be made to section or 
other provision of the Legal Services Corporation Act (42 U.S.C. 2996 
and following).

SEC. 2. FINDINGS.

    Section 1001 (42 U.S.C. 2996) is amended to read as follows:

                               ``findings

    ``Sec. 1001. The Congress finds the following:
            ``(1) There is a need to encourage equal access to the 
        system of justice in the United States for individuals seeking 
        redress of grievances.
            ``(2) There is a need to encourage the provision of high 
        quality legal assistance for those who would otherwise be 
        unable to afford legal counsel.
            ``(3) Encouraging the provision of legal assistance to 
        those who face an economic barrier to legal counsel will serve 
        the ends of justice consistent with the purposes of the Legal 
        Services Corporation Act.
            ``(4) It is not the purpose of the Legal Services 
        Corporation Act to meet all the legal needs of all potentially 
        eligible clients, but instead to be a catalyst to encourage the 
        legal profession and others to meet their responsibilities to 
        the poor and to maximize access of the poor to justice.
            ``(5) For many citizens the availability of legal services 
        has reaffirmed faith in our government of laws.
            ``(6) To preserve its strength, the legal services program 
        must be made completely free from the influence of political 
        pressures and completely free of lobbying and political 
        activity.
            ``(7) There are over 2,000 non-profit organizations 
        advocating on behalf of the poor throughout the United States 
        and it is not appropriate for funds regulated under the Legal 
        Services Corporation Act to be expended lobbying for or against 
        positions taken by those groups.
            ``(8) Attorneys providing legal assistance must protect the 
        best interests of their clients in keeping with the Code of 
        Professional Responsibility, the Canon of Ethics, and the high 
        standards of the legal profession.''.

SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

    Subsection (a) of section 1010 (42 U.S.C. 2996i) is amended to read 
as follows:
    ``(a) There are authorized to be appropriated for the purposes of 
carrying out the activities of the Corporation--
            ``(1) $278,000,000 for fiscal year 1996,
            ``(2) $278,000,000 for fiscal year 1997,
            ``(3) $278,000,000 for fiscal year 1998,
            ``(4) $278,000,000 for fiscal year 1999, and
            ``(5) $278,000,000 for fiscal year 2000.''.

SEC. 4. PROHIBITION ON REDISTRICTING ACTIVITY.

    Section 1007(b) (42 U.S.C. 2996f(b)) is amended--
            (1) in paragraph (9), by striking ``or'' after the 
        semicolon;
            (2) in paragraph (10), by striking the period and inserting 
        ``; or''; and
            (3) by adding at the end the following:
            ``(11) to--
                    ``(A) advocate or oppose, or contribute or make 
                available any funds, personnel, or equipment for use in 
                advocating or opposing, any plan or proposal, or
                    ``(B) represent any party or participate in any 
                other way in litigation,
        that is intended to or has the effect of altering, revising, or 
        reapportioning a legislative, judicial, or elective district at 
        any level of government, including influencing the timing or 
        manner of the taking of a census.''.

SEC. 5. PROTECTION AGAINST THEFT AND FRAUD.

    Section 1005 (42 U.S.C. 2996d) is amended by adding at the end the 
following:
    ``(h) For purposes of sections 286, 287, 641, 1001, and 1002 of 
title 18, United States Code, the Corporation shall be considered to be 
a department or agency of the United States Government.
    ``(i) For purposes of sections 3729 through 3733 of title 31, 
United States Code, the term ``United States Government'' shall include 
the Corporation, except that actions that are authorized by section 
3730(b) of such title to be brought by persons may not be brought 
against the Corporation, any recipient, subrecipient, grantee, or 
contractor of the Corporation, or any employee thereof.
    ``(j) For purposes of section 1516 of title 18, United States 
Code--
            ``(1) the term `Federal auditor' shall include any auditor 
        employed or retained on a contractual basis by the Corporation,
            ``(2) the term `contract' shall include any grant or 
        contract made by the Corporation, and
            ``(3) the term `person', as used in subsection (a) of such 
        section, shall include any grantee or contractor receiving 
        financial assistance under section 1006(a)(1).
    ``(k) Funds provided by the Corporation under section 1006 shall be 
deemed to be Federal appropriations when used by a contractor, grantee, 
subcontractor, or subgrantee of the Corporation.
    ``(l) For purposes of section 666 of title 18, United States Code, 
funds provided by the Corporation shall be deemed to be benefits under 
a Federal program involving a grant or contract.''.

SEC. 6. SOLICITATION.

    Section 1007 (42 U.S.C. 2996f) is amended by adding at the end the 
following:
    ``(i) Any recipient, and any employee of a recipient, who has given 
in-person unsolicited advice to a nonattorney that such nonattorney 
should obtain counsel or take legal action shall not accept employment 
resulting from that advice, or refer that nonattorney to another 
recipient or employee of a recipient, except that--
            ``(1) an attorney may accept employment by a close friend, 
        relative, former client (if the advice given is germane to the 
        previous employment by the client), or person whom the attorney 
        reasonably believes to be a client because the attorney is 
        currently handling an active legal matter or case for that 
        specific person;
            ``(2) an attorney may accept employment that results from 
        the attorney's participation in activities designed to educate 
        nonattorneys to recognize legal problems, to make intelligent 
        selection of counsel, or to utilize available legal services if 
        such activities are conducted or sponsored by a qualified legal 
        assistance organization;
            ``(3) without affecting that attorney's right to accept 
        employment, an attorney may speak publicly or write for 
        publication on legal topics so long as such attorney does not 
        emphasize the attorney's own professional experience or 
        reputation and does not
         undertake to give individual advice in such speech or 
publication; and
            ``(4) if success in asserting rights or defenses of a 
        client in litigation in the nature of class action is dependent 
        upon the joinder of others, an attorney may accept, but shall 
        not seek, employment from those contacted for the purpose of 
        obtaining that joinder.''.

SEC. 7. PROCEDURAL SAFEGUARDS FOR LITIGATION.

    Section 1007 (42 U.S.C. 2996f), as amended by section 6 of this 
Act, is further amended by adding at the end the following:
    ``(j)(1) No recipient or employee of a recipient may file a 
complaint or otherwise pursue litigation against a defendant unless--
            ``(A) all plaintiffs have been specifically identified, by 
        name, in any complaint filed for purposes of litigation, except 
        to the extent that a court of competent jurisdiction has 
        granted leave to protect the identity of any plaintiff; and
            ``(B) a statement or statements of facts written in English 
        and, if necessary, in a language which the plaintiffs 
        understand, which enumerate the particular facts known to the 
        plaintiffs on which the complaint is based, have been signed by 
        the plaintiffs (including named plaintiffs in a class action), 
        are kept on file by the recipient, and are made available to 
        any Federal department or agency that is auditing the 
        activities of the Corporation or any recipient, and to any 
        auditor receiving Federal funds to conduct such auditing, 
        including any auditor or monitor of the Corporation.
Other parties shall have access to the statement of facts referred to 
in subparagraph (B) only through the discovery process after litigation 
has begun.
    ``(2) No recipient or employee of a recipient may engage in 
precomplaint settlement negotiations with a prospective defendant 
unless--
            ``(A) all plaintiffs have been specifically identified, 
        except to the extent that a court of competent jurisdiction has 
        granted leave to protect the identity of any plaintiff; and
            ``(B) a statement or statements of facts written in English 
        and, if necessary, in a language which the plaintiffs 
        understand, which enumerate the particular facts known to the 
        plaintiffs on which the complaint will be based if such 
        negotiations fail, have been signed by all plaintiffs 
        (including named plaintiffs in a class action), are kept on 
        file by the recipient, and are made available to all 
        prospective defendants or such defendants' counsel, to any 
        Federal department or agency that is auditing the activities of 
        the Corporation or any such recipient, and to any auditor 
        receiving Federal funds to conduct such auditing, including any 
        auditor or monitor of the Corporation.
    ``(3)(A) Subject to subparagraph (B), any Federal district court of 
competent jurisdiction, after notice to potential parties to litigation 
referred to in paragraph (1) or to negotiations described in paragraph 
(2) and after an opportunity for a hearing, may enjoin the disclosure 
of the identity of any potential plaintiff pending the out-come of such 
litigation or negotiations, upon the establishment of reasonable cause 
to believe that such an injunction is necessary to prevent probable, 
serious harm to such potential plaintiff.
    ``(B) Notwithstanding subparagraph (A), the court shall, in a case 
in which subparagraph (A) applies, order the disclosure of the identity 
of any potential plaintiff to counsel for potential defendants upon the 
condition that counsel for potential defendants not disclose the 
identity of such potential plaintiff (other than to investigators or 
paralegals hired by such counsel), unless authorized in writing by such 
potential plaintiff's counsel or the court.
    ``(C) In a case in which paragraph (1) applies, counsel for 
potential defendants and the recipient or employee counsel of the 
recipient may execute an agreement, in lieu of seeking a court order 
under subparagraph (A), governing disclosure of the identity of any 
potential plaintiff.
    ``(D) The court may punish as a contempt of court any violation of 
an order of the court under subparagraph (A) or (B) or of an agreement 
under subparagraph (C).
    ``(4) Any funds received from a defendant by a recipient on behalf 
of a class of eligible clients shall be placed in an escrow account 
until the funds may be paid to such clients. Any such funds which are 
not disbursed to clients within one year of the date on which such 
funds were received shall be returned to the defendant.''.

SEC. 8. LOBBYING.

    Section 1007(a)(5) (42 U.S.C. 2996f(a)(5)) is amended to read as 
follows:
            ``(5) ensure that no funds made available to recipients are 
        used at any time, directly or indirectly--
                    ``(A) to influence the issuance, amendment, or 
                revocation of any executive order or similar 
                promulgation by any Federal, State, or local agency, or 
                to undertake to influence the passage or defeat of any 
                legislation by the Congress of the United States, or by 
                any State or local legislative body, or State proposals 
                made by initiative petition or referendum, except to 
                the extent that a governmental agency, a legislative 
                body, a committee, or a member thereof is considering a 
                measure directly affecting the recipient or the 
                Corporation;
                    ``(B) to pay for any publicity or propaganda 
                intended or designed to support or defeat legislation 
                pending before the Congress or State or local 
                legislative bodies or intended or designed to influence 
                any decision by a Federal, State, or local agency;
                    ``(C) to pay for any personal service, 
                advertisement, telegram, telephone communication, 
                letter, printed or written matter, or other device, 
                intended or designed to influence any decision by a 
                Federal, State, or local agency, except when legal 
                assistance is provided by an employee of a recipient to 
                an eligible client on a particular application, claim, 
                or case, which directly involves the client's legal 
                rights or responsibilities and which does not involve 
                the issuance, amendment, or revocation of any agency 
                promulgation described in subparagraph (A);
                    ``(D) to pay for any personal service, 
                advertisement, telegram, telephone communication, 
                letter, printed or written matter, or any other device 
                intended or designed to influence any Member of 
                Congress or any other Federal, State, or local elected 
                official--
                            ``(i) to favor or oppose any referendum, 
                        initiative, constitutional amendment, or any 
                        similar procedures of the Congress, any State 
                        legislature, any local council, or any similar 
                        governing body acting in a legislative 
                        capacity,
                            ``(ii) to favor or oppose an authorization 
                        or appropriation directly affecting the 
                        authority, function, or funding of the 
                        recipient or the Corporation, or
                            ``(iii) to influence the conduct of 
                        oversight proceedings of a recipient or the 
                        Corporation; or
                    ``(E) to pay for any personal service, 
                advertisement, telegram, telephone communication, 
                letter, printed or written matter, or any other device 
                intended or designed to influence any Member of 
                Congress or any other Federal, State, or local elected 
                official to favor or oppose any Act, bill, resolution, 
                or similar legislation;
        and ensure that no funds made available to recipients are used 
        to pay for any administrative or related costs associated with 
        an activity prohibited in subparagraph (A), (B), (C), (D), or 
        (E);''.

SEC. 9. TIMEKEEPING.

    Section 1008(b) (42 U.S.C. 2996g(b)) is amended--
            (1) by inserting ``(1)'' after ``(b)''; and
            (2) by adding at the end the following:
    ``(2) The Corporation shall require each recipient to maintain 
records of time spent on the cases or matters with respect to which 
that recipient is engaged in activities. Pursuant to such requirements, 
each employee of such recipient who is an attorney or paralegal shall 
record, by the name of the case or matter, at the time such employee 
engages in an activity regarding such case or matter, the type (as 
defined by the Corporation) of case or matter, the time spent on the 
activity, and the source of funds to be charged for the activity.''.

SEC. 10. AUTHORITY OF LOCAL GOVERNING BOARDS.

    Section 1007(c) (42 U.S.C. 2996f(c)) is amended--
            (1) by striking ``(1)'' and ``(2)'' and inserting ``(A)'' 
        and ``(B)'', respectively;
            (2) by inserting ``(1)'' after ``(c)''; and
            (3) by adding at the end the following:
    ``(2) The board of directors of any nonprofit organization that 
is--
            ``(A) chartered under the laws of one of the States, a 
        purpose of which is furnishing legal assistance to eligible 
        clients, and
            ``(B) receiving funds made available by or through the 
        Corporation,
shall set specific priorities pursuant to section 1007(a)(2)(C) for the 
types of matters and cases to which the staff of the nonprofit 
organization shall devote its time and resources. The staff of such 
organization shall not undertake cases or matters other than in 
accordance with the specific priorities set by its board of directors, 
except in emergency situations defined by such board. The staff of such 
organization shall report, to the board of directors of the 
organization on a quarterly basis and to the Corporation on an annual 
basis, all cases undertaken other than in accordance with such 
priorities. The Corporation shall promulgate a suggested list of 
priorities which boards of directors may use in setting priorities 
under the paragraph.''.

SEC. 11. REGULATION OF NONPUBLIC RESOURCES.

    Section 1010(c) (42 U.S.C. 2996i(c)) is amended to read as follows:
    ``(c)(1) Any non-Federal funds received by the Corporation, and any 
funds received by any recipient from any source other than the 
Corporation, shall be accounted for and reported as receipts and 
disbursements separate and distinct from Corporation funds. Any funds 
so received, including funds derived from Interest on Lawyers Trust 
Accounts, may not be expended by recipients for any purpose prohibited 
by this title or the Legal Services Reform Act of 1995. The Corporation 
shall not accept any non-Federal funds, and any recipient shall not 
accept funds from any source other than the Corporation, unless the 
Corporation or the recipient, as the case may be, notifies in writing 
the source of such funds that the funds may not be expended for any 
purpose prohibited by this title or the Legal Services Reform Act of 
1995.
    ``(2) Paragraph (1) shall not prevent recipients from--
            ``(A) receiving Indian tribal funds (including funds from 
        private nonprofit organizations for the benefit of Indians or 
        Indian tribes) and expending them in accordance with the 
        specific purposes for which they are provided; or
            ``(B) using funds received from a source other than the 
        Corporation to provide legal assistance to a client who is not 
        an eligible client if such funds are used for the specific 
        purposes for which such funds were received, except that such 
        funds may not be expended by recipients for any purpose 
        prohibited by this title or the Legal Services Reform Act of 
        1995 (other than any requirement regarding the eligibility of 
        clients).''.

SEC. 12. CERTAIN EVICTION PROCEEDINGS.

    Section 1007 (42 U.S.C. 2996f), as amended by sections 6 and 7 of 
this Act, is further amended by adding at the end the following:
    ``(k)(1) No funds made available by or through the Corporation may 
be used for defending a person in a proceeding to evict that person 
from a public housing project if the person has been charged with the 
illegal sale or distribution of a controlled substance and if the 
eviction proceeding is brought by a public housing agency because the 
illegal drug activity of that person threatens the health or safety of 
other tenants residing in the public housing project or employees of 
the public housing agency.
    ``(2) As used in this subsection--
            ``(A) the term `controlled substance' has the meaning given 
        that term in section 102 of the Controlled Substances Act (21 
        U.S.C. 802); and
            ``(B) the terms `public housing project' and `public 
        housing agency' have the meanings given
         those terms in section 3 of the United States Housing Act of 
1937 (42 U.S.C. 1437a).''.

SEC. 13. IMPLEMENTATION OF COMPETITION.

    (a) In General.--Section 1007 (42 U.S.C. 2996f), as amended by 
sections 6, 7, and 12 of this Act, is further amended by adding at the 
end the following:
    ``(l)(1) All grants and contracts awarded by the Corporation for 
the provision or support of legal assistance to eligible clients under 
this title shall be awarded under a competitive bidding system.
    ``(2) Rights under sections 1007(a)(9) and 1011 shall not apply to 
the termination or denial of financial assistance under this title as a 
result of the competitive award of any grant or contract under 
paragraph (1), and the expiration of any grant or contract under this 
title as a result of such competitive award shall not be treated as a 
termination or denial of refunding under section 1007(a)(9) or 1011.
    ``(3) For purposes of this subsection, the term `competitive 
bidding' means a system established by regulations issued by the 
Corporation which provide for the award of grants and contracts on the 
basis of merit to persons, organizations, and entities described in 
section 1006(a) who apply for such awards in competition with others 
under promulgated criteria. The Corporation shall ensure that the 
system incorporates the following:
            ``(A) The competitive bidding system shall commence no 
        later than one year after the date of enactment of this 
        provision and all previously awarded grants and contracts shall 
        be set aside and subjected to this system within one year 
        thereafter.
            ``(B) All awards of grants and contracts made under this 
        system shall be subject to periodic review and renewed with the 
        opportunity for others to compete for the award, and in no 
        event shall any award be granted for a period longer than 5 
        years.
            ``(C) Timely notice for the submission of applications for 
        awards shall be published in periodicals of local and State bar 
        associations and in at least one daily newspaper of general 
        circulation in the area to be served by the award recipient.
            ``(D) The selection criteria shall include but not be 
        limited to the demonstration of a full understanding of the 
        basic legal needs of the eligible clients to be served and a 
        demonstration of the capability of serving those needs; the 
        reputations of the principals of the applicant; the quality, 
        feasibility, and cost effectiveness of plans submitted by the 
        applicant for the delivery of legal assistance to the eligible 
        clients to be served; a demonstration of willingness to abide 
        by the restrictions placed on those awarded grants and 
        contracts by the Corporation; and, if an applicant has 
        previously received an award from the Corporation, the 
        experiences of the Corporation with the applicant.
            ``(E) No previous recipient of an award of a grant or 
        contract may be given any preference.
    ``(m)(1) The Corporation shall define service areas and funds 
available for each service area shall be on a per capita basis pursuant 
to the number of poor people determined by the Bureau of the Census to 
be within that area. Funds for a service area may be distributed by the 
Corporation to one or more recipients as defined in section 1006(a).
    ``(2) The amount of the grants from the Corporation and of the 
contracts entered into by the Corporation under section 1006(a)(1) 
shall be an equal figure per poor person for all geographic areas, 
based on the most recent decennial census of population conducted 
pursuant to section 141 of title 13, United States Code, regardless of 
the level of funding for any such geographic area before the enactment 
of the Legal Services Reform Act of 1995.
    ``(3) Beginning with the fiscal year beginning after the results of 
the most recent decennial census have been
 reported to the President under section 141(b) of title 13, United 
States Code, funding of geographic areas served by recipients shall be 
redetermined, in accordance with paragraph (2), based on the per capita 
poverty population in each such geographic area under that decennial 
census.''.
    (b) Requirements of Recipients.--Section 1007(c) (42 U.S.C. 
2996f(c)), as amended by section 10 of this Act, is further amended by 
adding at the end the following:
    ``(3) Funds appropriated for the Corporation may not be used by the 
Corporation in making grants or entering into contracts for legal 
assistance unless the Corporation ensures that the recipient is 
either--
            ``(A) a private attorney or attorneys,
            ``(B) State and local governments or substate regional 
        planning and coordination agencies which are composed of 
        substate areas whose governing board is controlled by locally 
        elected officials, or
            ``(C) a qualified nonprofit organization chartered under 
        the laws of one of the States--
                    ``(i) a purpose of which is furnishing legal 
                assistance to eligible clients, and
                    ``(ii) the majority of the board of directors or 
                other governing body of which is comprised of attorneys 
                who are admitted to practice in one of the States and 
                are approved to serve on such board or body by the 
                governing bodies of State, county, or municipal bar 
                associations the membership of which represents a 
                majority of the attorneys practicing law in the 
                locality in which the organization is to provide legal 
                assistance.
The approval described in subparagraph (B)(ii) may be given to more 
than one group of directors.''.

SEC. 14. POWERS, RESEARCH, AND ATTORNEYS' FEES.

    (a) Powers.--Section 1006(a)(1)(A)(ii) is amended to read as 
follows:
                    ``(ii) State and local governments or substate 
                regional planning and coordination agencies which are 
                composed of substate areas whose governing board is 
                controlled by locally elected officials,''.
    (b) Research.--Section 1006(a) (42 U.S.C. 2996e(a)) is amended by 
inserting ``and'' at the end of paragraph (1), by striking ``; and'' at 
the end of paragraph (2) and inserting a period, and by striking 
paragraph (3).
    (c) Attorneys' Fees.--Section 1006 (42 U.S.C. 2996e(f)) is amended 
by striking subsection (f) and inserting the following:
    ``(f)(1) A recipient, or any client of such recipient, may not 
claim or collect attorneys' fees from nongovernmental parties to 
litigation initiated by such client with the assistance of such 
recipient.
    ``(2) The Corporation shall create a fund to pay defendants or 
clients under paragraphs (3). In addition to any other amounts 
appropriated to the Corporation, there is authorized to be appropriated 
to such fund for each fiscal year such sums as may be necessary.
    ``(3) If a Federal court has found an action commenced by a 
plaintiff with the assistance of a recipient involves a violation of 
rule 11 of the Federal Rules of Civil Procedure, or if the president of 
the Corporation finds that an action commenced by a plaintiff with the 
assistance of a recipient in any court involves a violation of the 
standards of rule 11, or was commended for the purpose of retaliation 
or harassment, the president of the Corporation shall, upon application 
by the defendant, award from the Fund all reasonable costs and 
attorneys' fees incurred by the defendant in defending the action.
    ``(g)(1) The Board within 90 days after the date of the enactment 
of the Legal Services Reform Act of 1995, shall issue regulations to 
provide for the distribution of attorneys' fee received by a recipient, 
in accordance with paragraph (2).
    ``(2) Such fees shall be transferred to the Corporation and the 
Corporation shall distribute such fees among its grantees for the 
direct delivery of legal assistance, except that, subject to approval 
by the Corporation--
            ``(A) a recipient shall not be required to transfer fees or 
        other compensation received as a result of a mandated court 
        appointed;
            ``(B) a recipient may retain reasonable costs customarily 
        allowed in litigation against an unsuccessful party; and
            ``(C) a recipient may retain the actual cost of bringing 
        the action, including the proportion of the compensation of 
        each attorney involved in the action which is attributable to 
        that action.''.

SEC. 15. ABORTION.

    (a) Prohibition.--Section 1007 (42 U.S.C. 2996f), as amended by 
sections 6, 7, 12, and 13 of this Act, is further amended by adding at 
the end the following:
    ``(n) No funds made available to any recipient from any source may 
be used to participate in any litigation with respect to abortion.''.
    (b) Conforming Amendment.--Section 1007(b) (42 U.S.C. 2996f(b)), as 
amended by section 4, is amended by striking paragraph (8) and 
redesignating paragraphs (9), (10), and (11) as paragraphs (8), (9), 
and (10), respectively.

SEC. 16. CLASS ACTIONS.

    Section 1006(d)(5) (42 U.S.C. 2996e(d)(5)) is amended--
            (1) by striking ``No'' and inserting ``(A) Subject to 
        subparagraph (B), no''; and
            (2) by adding at the end the following:
    ``(B) No recipient or employee of a recipient may bring a class 
action suit against the Federal Government or any State or local 
government unless--
            ``(i) the governing body of the recipient has expressly 
        approved the filing of such an action;
            ``(ii) the class relief which is the subject of such an 
        action is sought for the primary benefit of individuals who are 
        eligible for legal assistance under this title; and
            ``(iii) before filing such an action, the project director 
        of the recipient determines that the government entity is not 
        likely to change the policy or practice in question, that the 
        policy or practice will continue to adversely affect eligible 
        clients, that the recipient has given notice of its intention 
        to seek class relief, and that responsible efforts to resolve 
        without litigation the adverse effects of the policy or 
        practice have not been successful or would be adverse to the 
        interest of the clients.''.

SEC. 17. RESTRICTIONS ON USE OF FUNDS FOR LEGAL ASSISTANCE TO ALIENS.

    Section 1007 (42 U.S.C. 2996f), as amended by sections 6, 7, 12, 
13, and 15 of this Act, is further amended by adding at the end the 
following:
    ``(o) No funds made available to any recipient from any sources may 
be expended to provide legal assistance for or on behalf of any alien 
unless the alien is present in the United States and is--
            ``(1) an alien lawfully admitted for permanent residence as 
        defined in section 101(a)(2) of the Immigration and Nationality 
        Act (8 U.S.C. 1101(a)(20));
            ``(2) an alien who is either married to a United States 
        citizen or is a parent or an unmarried child under the age of 
        21 years of such a citizen and who has filed an application for 
        adjustment of status to permanent resident under the 
        Immigration and Nationality Act, and such application has not 
        been rejected;
            ``(3) an alien who is lawfully present in the United States 
        pursuant to an admission under section 207 of the Immigration 
        and Nationality Act (8
         U.S.C. 1157, relating to refugee admissions) or who has been 
granted asylum by the Attorney General under such Act;
            ``(4) an alien who is lawfully present in the United States 
        as a result of the Attorney General's withholding of 
        deportation pursuant to section 243(h) of the Immigration and 
        Nationality Act (8 U.S.C. 1253(h)); or
            ``(5) an alien to whom section 305 of the Immigration 
        Reform and Control Act of 1986 applies, but only to the extent 
        that the legal assistance provided is that described in that 
        section.
An alien who is lawfully present in the United States as a result of 
being granted conditional entry pursuant to section 203(a)(7) of the 
Immigration and Nationality Act (8 U.S.C. 11553(a)(7)) before April 1, 
1980, because of persecution or fear of persecution on account of race, 
religion, or political opinion or because of being uprooted by 
catastrophic natural calamity shall be deemed to be an alien described 
in paragraph (3).''.

SEC. 18. TRAINING.

    Section 1007(b)(6) (42 U.S.C. 2996f(b)(6)) is amended to read as 
follows:
            ``(6) to support or conduct training programs for the 
        purpose of advocating particular public policies or encouraging 
        political activities, labor or antilabor activities, boycotts, 
        picketing, strikes, or demonstrations, including the 
        dissemination of information about such policies or activities, 
        except that this paragraph shall not be construed to prohibit 
        the training of attorneys or paralegal personnel necessary to 
        prepare them to provide adequate legal assistance to eligible 
        clients, to advise any eligible client as to the nature of the 
        legislative process, or to inform any eligible client of the 
        client's rights under any statute, order, or regulation;''.

SEC. 19. COPAYMENTS.

    Section 1007 (42 U.S.C. 2996f), as amended by sections 6, 7, 12, 
13, 15, and 17 of this Act, is further amended by adding at the end the 
following:
    ``(p) The Corporation shall undertake one or more demonstration 
projects in order to study the feasibility of using client copayments 
to assist in setting the service priorities of its programs. Based on 
those projects and such other information as it considers appropriate, 
the Corporation may adopt a permanent system of client copayments for 
some or all of its programs of legal assistance.''.

SEC. 20. FEE-GENERATING CASES.

    (a) Representation in Fee-Generating Case.--Paragraph (1) of 
section 1007(b) (42 U.S.C. 2996f(b)) is amended to read as follows:
            ``(1) to provide legal assistance with respect to any fee-
        generating case, except that this paragraph does not preclude 
        representation of otherwise eligible clients in cases in which 
        the client seeks benefits under titles II or XVI of the Social 
        Security Act;''.
    (b) Definition.--Section 1007(b) is amended by adding at the end 
the following: ``For purposes of paragraph (1), the term `fee-
generating case' means any case which if undertaken on behalf of an 
eligible client by an attorney in private practice may reasonably be 
expected to result in a fee for legal services from an award to a 
client from public funds, from the opposing party, or from any other 
source.''.

SEC. 21. WELFARE REFORM.

    Section 1007(b) (42 U.S.C. 2996f(b)), as amended by section 15(b), 
is amended--
            (1) by striking ``or'' at the end of paragraph (9),
            (2) by striking the period at the end of paragraph (10) and 
        inserting a semicolon, and
            (3) by adding after paragraph (10) the following:
            ``(11) to provide legal representation for any person or 
        participate in any other way in litigation, lobbying, or 
        rulemaking involving efforts to reform a State or Federal 
        welfare system, except that this paragraph does not preclude a 
        recipient from representing an individual client who seeking 
        specific relief from a welfare agency where such relief does 
        not involve an effort to amend or otherwise challenge existing 
        law; or''.

SEC. 22. PRISONER LITIGATION.

    Section 1007(b) (42 U.S.C. 2996f(b)), as amended by section 21, is 
amended by adding after paragraph (11) the following:
            ``(12) to provide legal representation in litigation on 
        behalf of a local, State, or Federal prisoner.''.

SEC. 23. APPOINTMENT OF CORPORATION PRESIDENT.

    Section 1005 (42 U.S.C. 2996d) is amended in subsection (a)--
            (1) by striking ``The Board shall'' and inserting ``The 
        President, by and with the advice and consent of the Senate, 
        shall'';
            (2) by adding ``who shall serve at the pleasure of the 
        President'' after ``the president of the Corporation,'';
            (3) by striking ``as the Board'' and inserting ``as the 
        President''; and
            (4) by striking ``by the Board'' and inserting ``by the 
        President''.

SEC. 24. EVASION.

    The Legal Services Corporation Act is amended--
            (1) by redesignating sections 1013 and 1014 as sections 
        1014 and 1015, respectively; and
            (2) by inserting after section 1012 the following new 
        section:

                               ``evasion

    ``Sec. 1013. Any attempt, such as the creation or use of 
`alternative corporations', to avoid or otherwise evade the provisions 
of this title or the Legal Services Reform Act of 1995 is 
prohibited.''.

SEC. 25. PAY FOR OFFICERS AND EMPLOYEES OF THE CORPORATION.

    Section 1005(d) (42 U.S.C. 2996d(d)) is amended--
            (1) by striking ``V'' and inserting ``III''; and
            (2) by striking ``5316'' and inserting ``5314''.

SEC. 26. LOCATION OF PRINCIPAL OFFICE.

    Section 1003(b) (42 U.S.C. 2996b(b)) is amended by striking 
``District of Columbia'' and inserting ``Washington D.C. metropolitan 
area''.

SEC. 27. DEFINITION.

    As used in section 1009(d) of Legal Services Corporation Act, the 
term ``attorney client privilege'' protects only a communication made 
in confidence to any attorney by a client for the purpose of seeking 
legal advice. Claims of such privilege and claims of confidentiality do 
not, except to the extent provided by court order, protect from 
disclosure to any Federal department or agency that is auditing the 
activities of the Legal Services Corporation or any recipient (as 
defined in section 1002 of the Legal Services Corporation Act), or to 
any auditor receiving Federal funds to conduct such auditing, including 
any auditor or monitor of the Corporation, the names of plaintiffs that 
are a matter of public record or documents which have been seen by 
third parties, including all financial books and records. The 
Corporation shall not disclose any such information, except to the 
Inspector General of the Corporation, to Federal or State law 
enforcement, judicial, or other officials, or to officials of 
appropriate bar associations for the purpose of conducting 
investigations of violations of rules of professional conduct.
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