[Federal Register Volume 62, Number 76 (Monday, April 21, 1997)]
[Rules and Regulations]
[Pages 19400-19406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10037]


-----------------------------------------------------------------------

LEGAL SERVICES CORPORATION

45 CFR Part 1612


Restrictions on Lobbying and Certain Other Activities

AGENCY: Legal Services Corporation.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule revises the Legal Services Corporation's 
(``Corporation'' or ``LSC'') regulation on lobbying, rulemaking and 
other restricted activities. It is intended to implement provisions in 
the Corporation's FY 1996 appropriations act that are currently 
incorporated by reference in the Corporation's FY 1997 appropriations 
act, and which prohibit recipients from engaging in agency rulemaking, 
legislative lobbying activity or advocacy training. The final rule also 
implements statutory exceptions to the prohibitions, which permit 
recipients to use non-LSC funds to comment on public rulemaking, 
respond to requests from legislative and administrative bodies, and 
engage in efforts to encourage State and local governments to make 
funds available for recipient activities. Finally, the final rule 
continues the pre-existing prohibitions on participation in organizing 
activities, public demonstrations and certain illegal activities.

DATES: Effective May 21, 1997.

FOR FURTHER INFORMATION CONTACT: Victor M. Fortuno, General Counsel 
(202) 336-8910.

SUPPLEMENTARY INFORMATION: On May 19, 1996, the Operations and 
Regulations Committee (``Committee'') of the LSC Board of Directors 
(``Board'') requested LSC staff to prepare an interim rule with a 
request for comments to implement Secs. 504(a)(2), (3), (4), (5), (6) 
and (12) and 504 (b) and (e) of the Corporation's FY 1996 
appropriations act, 110 Stat. 1321 (1996), prohibiting recipients from 
engaging in most rulemaking, lobbying and advocacy training activities. 
The Committee held hearings on staff proposals on July 10 and 19, 1996, 
and the Board adopted an interim rule on July 20, 1996, for publication 
in the Federal Register. Although the interim rule was effective upon 
publication, see 61 FR 45741 (August 29, 1996), the Corporation also 
solicited comments on the rule for review and consideration by the 
Committee and Board.
    Eight written timely comments were received by the Corporation. The 
comments generally approved the rule, but raised technical and 
clarifying issues as well as substantive policy concerns, particularly 
about the participation of recipient attorneys in bar association 
activities and in certain training programs. The Committee held public 
hearings on the rule on December 13, 1996, and January 5, 1997, and 
approved revisions to the interim rule to take into account the written 
comments and LSC staff recommendations. The Board adopted the 
Committee's recommended version on January 6, 1997, as a final rule.
    The Corporation's FY 1997 appropriations act became effective on 
October 1, 1996, see Pub. L. 104-208, 110 Stat. 3009. It incorporated 
by reference the Sec. 504 conditions on LSC grants and other sections 
of the FY 1996 appropriations act implemented by this rule. 
Accordingly, the preamble and text of this rule continue to refer to 
the applicable section number of the FY 1996 appropriations act.
    A section-by-section discussion of this final rule is provided 
below.

Section 1612.1  Purpose

    The purpose of this rule is to ensure that LSC recipients and their 
employees do not engage in certain activities, including rulemaking, 
lobbying, grassroots lobbying, and advocacy training, banned by Section 
504 in the Corporation's FY 1996 appropriations act, as incorporated by 
the Corporation's FY 1997 appropriations act. The rule continues 
existing provisions of the LSC Act that prohibit participation in 
public demonstrations, strikes, boycotts and organizing activities. It 
also provides guidance on when recipients may participate in public 
rulemaking, respond to requests from legislative and administrative 
bodies, and encourage State and local governments to make funds 
available to support recipient activities. In response to comments that 
the meaning of the term ``fundraising'' used in the interim rule was 
misleading, the final rule deletes the term ``fundraising'' in order to 
clarify that this part does not restrict efforts by recipients to 
engage in resource development activities. The activity that is 
restricted is what is commonly called ``self-interest lobbying,'' which 
is any effort by recipients to encourage State or local governments to 
appropriate funds for the financial support of recipients. This final 
rule prohibits the use of LSC funds by recipients for self-interest 
lobbying, but permits recipients to use non-LSC funds for such efforts.

Section 1612.2  Definitions

    The final rule significantly revises the definitions that were used 
in prior rules in order to reflect the new statutory restrictions and 
thus ensure that recipients do not engage in prohibited activity, and 
to provide greater clarity about the scope of the restrictions. In 
addition, definitions have been revised or eliminated because they are 
no longer necessary or the prior definition was inconsistent with the 
common sense usage of terms (such as the term

[[Page 19401]]

``legislation,'' which was defined to include administrative 
rulemaking).
    ``Grassroots lobbying,'' is defined to prohibit all communications 
and participation in activities which are designed to influence the 
public to contact public officials to support or oppose pending or 
proposed legislation. The definition does not use the term ``publicity 
or propaganda,'' which was used in prior regulations, because the FY 
1996 appropriations act does not use the term. However, the new 
definition of grassroots lobbying incorporates the definition of 
``publicity or propaganda'' that was previously used. The definition 
also provides that ``grassroots lobbying'' does not include 
communications which are limited solely to reporting the content or 
status of, or explaining, pending or proposed legislation or 
regulations. The interim rule would have allowed recipients to report 
on the effect such legislation or regulations may have on eligible 
clients or on their legal representation. This final rule has deleted 
the reference to ``reporting on the effect of legislation'' with 
language that permits recipients to explain pending and proposed 
legislation. This change clarifies that it is appropriate for 
recipients to prepare communications explaining the meaning and 
analyzing pending or proposed legislation when communicating about such 
legislation, but that it is inappropriate for recipients to prepare 
communications that could be used for or interpreted as grassroots 
lobbying. Thus, a recipient's communication about pending or proposed 
legislation could explain what the legislation does, the changes it 
would make in existing laws, the problems which the proposed 
legislation addresses, and who would be affected by the proposal. 
However, recipients could not prepare communications which encourage 
the public to support or oppose proposed or pending legislation.
    ``Legislation'' means any action or proposal for action by Congress 
or by a State or local legislative body which is intended to prescribe 
law or public policy. It does not include those actions of a 
legislative body which adjudicate the rights of individuals under 
existing laws (such as action taken by a local council sitting as a 
Board of Zoning Appeals). The Corporation has also retained the long-
standing interpretation that ``legislative bodies'' do not include 
Indian Tribal Councils.
    ``Public policy'' is defined to include an overall plan embracing 
the general goals and procedures of any governmental body as well as 
pending or proposed statutes, rules, and regulations. This term is 
found in this rule's section on training and is also found in the 
definition of ``legislation.'' As used in Sec. 1612.8 in regard to 
training, the modification of the definition from the prior regulation 
ensures that, consistent with current law, information on existing laws 
and regulations may be disseminated during training programs.
    The definition of ``political activity'' is eliminated from this 
regulation, because the provision in which it was used in the prior 
rule has been deleted. The provision was deleted because it did not 
deal with lobbying activity but rather with electoral and partisan 
political activities, which are governed by another LSC regulation, 45 
CFR part 1608. The elimination of the term does not result in any 
substantive change in any restriction on political activity.
    ``Rulemaking'' is defined to include the customary procedures on 
rulemaking used by agencies, such as negotiated rulemaking and notice 
and comment rulemaking procedures under the Federal Administrative 
Procedure Act, or similar procedures used by State or local government 
agencies. The term includes adjudicatory proceedings that formulate or 
modify agency policy of general applicability and future effect, but 
does not include administrative proceedings that produce determinations 
that are of particular, rather than general, applicability, such as 
Social Security hearings, welfare fair hearings or granting or 
withholding of licenses. The definition also does not include efforts 
by recipients to communicate with agency personnel for the purpose of 
obtaining information, clarification, or interpretation of the agency's 
rules, regulations, guidelines, policies or practices.
    The term ``public rulemaking,'' which is used in Sec. 504(e) of 110 
Stat. 1231, is defined as any rulemaking proceeding that is open to the 
public. The term would include proceedings that are the subject of (1) 
notices of proposed rulemaking published in the Federal Register or 
similar State or local journals; (2) announcements of public hearings 
on proposed rules or notices of proposed rulemaking, including those 
that are routinely sent to interested members of the public; or (3) 
other similar notifications to members of the public.
    The term ``similar procedure,'' which is used in the prohibition on 
legislative lobbying in Sec. 504(a)(4) of 110 Stat. 1321, is defined to 
mean a legislative process for the consideration of matters which by 
law must be determined by a vote of the electorate.
    The Committee considered but did not include in this final rule new 
definitions for the terms ``employee'' and ``recipient'' in order to 
reflect the different types of entities which may become recipients in 
a system of competition. Currently, these terms are defined in 45 CFR 
Sec. 1600.1. Until the Corporation makes clarifying changes in these 
definitions, for the purposes of this rule, the term ``recipient'' 
includes all types of recipients, including law firms, and the term 
``employee'' includes all personnel of recipients, including partners 
and associates in law firms.

Section 1612.3  Prohibited Legislative and Administrative Activities

    This section sets out the broad prohibitions on lobbying and 
rulemaking of Secs. 504(a) (2)-(6) of 110 Stat. 1321. These 
prohibitions are far more extensive than those included in prior 
appropriations provisions or in the LSC Act, which permitted rulemaking 
activity and direct contact with legislators on behalf of clients or 
when engaged in self-interest lobbying.
    While this part sets out the Corporation's general restrictions on 
lobbying and rulemaking, certain other LSC rules may also include 
lobbying restrictions specific to the activity restricted in the 
particular rule. See, e.g., 45 CFR part 1639 (welfare reform).
    Paragraph (a) sets out the prohibitions on legislative lobbying. 
Paragraph (b) prohibits participation in rulemaking and efforts to 
influence executive orders, except as permitted in Secs. 1612.5 and 
1612.6. Paragraph (c) tracks Sec. 504(a)(6) of 110 Stat. 1321, and 
provides that recipients may not use any funds to pay for any personal 
service, advertisement, telegram, telephone communication, letter, 
printed or written matter, or any other device associated with an 
activity prohibited in paragraphs (a) and (b) in this section.

Section 1612.4  Grassroots Lobbying

    This section sets out the absolute prohibition on grassroots 
lobbying by a recipient and its employees. There is no exception to the 
prohibition on grassroots lobbying. Thus, none of the activities 
permitted under Secs. 1612.5 or 1612.6 may include grassroots lobbying.

Section 1612.5  Permissible Activities Using Any Funds

    As with prior regulations regarding lobbying and rulemaking, the 
final regulation seeks to clarify the activities that are not 
prohibited by the rule. This list is not intended to be exhaustive. 
Rather, it seeks to clarify those instances likely to raise close 
questions.
    Paragraph (a) provides that recipients may represent eligible 
clients in administrative agency proceedings that

[[Page 19402]]

are intended to adjudicate the rights of an individual client, such as 
welfare and food stamp fair hearings, Social Security or SSI hearings, 
public housing hearings, veterans benefits hearings, unemployment 
insurance hearings and similar administrative adjudicatory hearings or 
negotiations directly involving that client's legal rights or 
responsibilities, including pre-litigation negotiation and negotiation 
in the course of litigation.
    Paragraph (b) provides that an employee of a recipient may initiate 
or participate in any litigation challenging agency rules, regulations, 
guidelines or policies, unless, of course, such litigation is otherwise 
prohibited by law or other Corporation regulations, such as part 1639 
on welfare reform or part 1617 on class actions.
    Paragraph (c) includes a list of some of the other activities that 
are not proscribed by the prohibitions on lobbying or rulemaking. The 
listing includes many permissible activities that have been included in 
prior regulations and others about which the Corporation has received 
inquiries. In response to public comments, subparagraph (c)(1) was 
added to make clear that recipients may apply for a governmental grant 
or contract that is issued by a legislative body or administrative 
agency. Subparagraph (c)(2) provides that recipients and employees of 
recipients can communicate with a governmental agency for the purpose 
of obtaining information, clarification, or interpretation of the 
agency's rules, regulations, practices, or policies. Under subparagraph 
(c)(3), recipients and their employees can inform clients, other 
recipients, or attorneys representing eligible clients about new or 
proposed statutes, executive orders, or administrative regulations. 
Thus, recipients can advise clients about the effect of agency rules 
and policies, analyze them and explain proposed changes and their 
effect, and advise their clients about their right to participate on 
their own behalf in agency rulemaking proceedings.
    Under subparagraph (c)(4), recipients and their employees may 
communicate directly or indirectly with the Corporation for any 
purpose, including commenting upon existing or proposed Corporation 
rules, regulations, guidelines, instructions and policies. Because the 
restriction applies only to contacts with government agencies and the 
Corporation is not a department, agency or instrumentality of the 
Federal Government, 42 U.S.C. 2996d(e)(1), recipients can contact LSC 
about any matter and comment on LSC rules, regulations or policies.
    Subparagraph (c)(5) allows recipient employees to participate in 
bar association activities, provided that recipient resources are not 
used to support and the recipient is not identified with activities of 
bar associations that are devoted to activities prohibited by this 
part. This provision is a change from that in the prior rule, which 
permitted a recipient's employees to use recipient funds to participate 
in bar activities involving otherwise prohibited advocacy, provided the 
employee did not engage in grassroots lobbying. Although comments urged 
the Corporation to retain the prior rule's policy, the Board determined 
that a policy change was necessary, because the statutory prohibitions 
on lobbying and rulemaking in 110 Stat. 1321 are significantly more 
extensive and restrictive than in past legislation. Recognizing that 
recipient attorneys participate in bar association activities as 
members of the legal profession rather than as staff attorneys, this 
new provision allows recipient attorneys to participate fully and 
actively in bar association activities, provided that they do not use 
recipient resources for and do not identify the recipient with any 
activities devoted to activities proscribed by this part. Permissible 
participation may include attending meetings and serving on committees 
of a bar association or serving as an officer or in other leadership 
roles in a bar association.
    The Corporation recognizes that there will be some situations where 
bar association activities will require the attorneys employed by a 
recipient to decline participation or to participate on the attorney's 
own time as, for example, when a bar association activity is devoted to 
a prohibited activity, such as participating in a meeting whose 
principal purpose is to determine and communicate the bar's position on 
pending or proposed legislation or regulations. Recipient attorneys 
must either decline to participate or participate solely on their own 
time. On the other hand, recipient attorneys could use recipient 
resources to attend and participate in a bar association meeting that 
was not focused on prohibited legislative or regulatory activity and 
where any discussion of prohibited activity was incidental to the 
decisions and actions taken at the meeting. Because it is not possible 
to craft a bright line between permissible and impermissible bar 
association activities, attorneys employed by recipients will have to 
exercise careful judgment when they are participating in bar 
association activities that may involve prohibited activities.
    Subparagraph (c)(6) allows recipients and their employees to advise 
a client of the client's right to communicate directly with an elected 
official. For example, recipient staff may advise specific clients whom 
they are representing of the identity of their elected representatives, 
about how legislation is enacted, and about the procedures for 
testifying. However, providing advice does not authorize recipient 
staff to prepare testimony for their clients or to conduct formal 
training sessions for clients on how to participate in lobbying or 
rulemaking.
    Finally, subparagraph (c)(7) permits recipients and their employees 
to participate in activity related to the judiciary, such as the 
promulgation of court rules, rules of professional responsibility or 
disciplinary rules, or participating on committees appointed by the 
courts to advise the courts about judicial matters. However, a 
recipient cannot become involved in any attempt to influence a 
legislative body confirming judicial nominations.

Section 1612.6  Permissible Activities Using Non-LSC Funds

    This section sets out activities authorized by Secs. 504 (b) and 
(e) of the Corporation's FY 1996 appropriations act to be conducted 
with non-LSC funds. Paragraphs (a) through (e) implement Sec. 504(e) 
and delineate the records required to be maintained by recipients 
responding to requests from appropriate officials. Paragraph (a) 
provides that employees of recipients may use non-LSC funds to respond 
to a written request from a governmental agency or official thereof, 
elected official, legislative body, committee, or member thereof made 
to the employee or to a recipient. Such response could include 
testifying, providing information and analyses, and participating in 
negotiated rulemaking. The Board deleted a reference in the interim 
rule to testifying or providing information to commissions, committees 
or advisory bodies because it judged that there was no need to single 
out this particular activity from the more generic listings of 
activities that could be undertaken in response to such a written 
request. The Board did not intend, however, to restrict participation 
on commissions, committees or advisory bodies provided that the 
participation is consistent with the requirements of this section. 
Under no circumstances may recipients engage in any grassroots lobbying 
when

[[Page 19403]]

responding to a request for information or testimony.
    Paragraph (b) provides that responses to requests may be 
distributed only to parties that make the request or to other persons 
or entities to the extent that such distribution is required to comply 
fully with the request. For example, agencies may require specific 
distribution of written testimony to committee members. If required by 
the agency or legislative rules, such distribution would be proper.
    Paragraph (c) includes the statutory restriction that no employee 
of the recipient shall solicit or arrange a request from any official 
to testify or otherwise provide information in connection with 
legislation or rulemaking.
    In order to ensure compliance with Sec. 504(e), paragraph (d) 
requires that recipients maintain copies of all written requests 
received by the recipient and any written responses provided, and make 
such requests and written responses available to monitors and other 
representatives of the Corporation upon request.
    Paragraph (e) implements Sec. 504(e), which provides that 
recipients may use non-LSC funds to provide oral or written comment to 
an agency and its staff in a public rulemaking proceeding. Recipients 
may prepare written comments in response to a Notice of Proposed 
Rulemaking in the Federal Register, in response to a similar notice in 
a State or local publication, or in response to any notice to the 
general public regarding a rulemaking proceeding that is public under 
State or local law. Commenting in public rulemaking, however, does not 
permit a recipient to engage in grassroots efforts to encourage comment 
by other recipients or other persons.
    Paragraph (f) implements Sec. 504(b), which permits recipients to 
engage in self-interest lobbying with non-LSC funds to seek funds for 
program activities. Under this provision, recipients may contact, 
communicate with, or respond to a request from a State or local 
government agency, a State or local legislative body or committee, or a 
member thereof, regarding funding for the recipient, including a 
pending or proposed legislative or agency proposal to fund such 
recipient. Consistent with Sec. 1612.6(c)(1), writing grant proposals 
in response to a request for proposals is not covered by this section 
and is not prohibited by this part. Both LSC and non-LSC funds may be 
used for this activity.

Section 1612.7  Public Demonstrations and Activities

    This section prohibits participation in public demonstrations and 
related activities. Two technical changes were made from the interim 
rule. Paragraph (a) was revised to clarify that the provision is 
referring to ``recipient'' resources, and the term ``person'' is used 
instead of ``employee.'' Thus, paragraph (a) prohibits any person from 
participating in public demonstrations, picketing, boycotts, or strikes 
(except as permitted by law in connection with the employee's own 
employment situation) or encouraging, directing, or coercing others to 
engage in such activities during working hours, while providing legal 
assistance or representation to the recipient's clients or while using 
recipient resources provided by the Corporation or private entities. 
This section is similar to previous regulations, but the text was 
rewritten to set out the prohibition more clearly.
    Paragraph (b) sets out prohibitions on activities engaged in by 
employees at any time, whether during working hours or not. These 
prohibitions apply to any recipient employee and apply regardless of 
what source of funds is used for the employee's compensation. Thus, 
employees of a recipient may not engage in or encourage others to 
engage in (1) any rioting or civil disturbance; (2) any activity 
determined by a court to be in violation of an outstanding injunction 
of any court of competent jurisdiction; or (3) any other illegal 
activity that is inconsistent with an employee's responsibilities under 
the LSC Act, appropriation law, Corporation regulation, or the rules of 
professional responsibility of the jurisdiction where the recipient is 
located or the employee practices law.
    Minor changes in the regulatory provisions have been made from the 
previous rule. First, the prohibition on identification of the 
Corporation or any recipient with any political activity was removed 
from Part 1612 because an identical prohibition is included in 45 CFR 
Sec. 1608.4(b). In addition, the regulatory language used in 
Sec. 1612.7(b)(2) now explicitly provides that it is a court, and not 
LSC, that should determine whether there has been a violation of an 
outstanding injunction. Finally, the regulation clarifies in 
Sec. 1612.7(b)(3) that the prohibition against the participation by 
employees in other illegal activity refers to activity that violates 
the LSC Act or other appropriate law or the rules of professional 
responsibility in the jurisdiction where the recipient is located or 
the employee practices law. By clarifying what activity is proscribed, 
Sec. 1612.7(b)(3) gives realistic guidance to recipients about what 
illegal activity would be deemed a violation.
    Consistent with the longstanding regulatory provisions, paragraph 
(c) provides that the restrictions on public demonstrations, strikes 
and boycotts do not prohibit an attorney working for or paid by a 
recipient from (1) informing and advising a client about legal 
alternatives to litigation or the lawful conduct thereof or (2) taking 
such action on behalf of a client as may be required by professional 
responsibilities or applicable law of any State or other jurisdiction.

Section 1612.8  Training

    This section implements the prohibitions on public policy advocacy 
training in Sec. 504(a)(12) of 110 Stat. 1321 and Sec. 1007(b)(6) of 
the LSC Act. Also, Sec. 1612.8(c) of the interim rule has been moved to 
Sec. 1612.8(a)(4) of this rule.
    Paragraph (a) sets out the prohibitions on advocacy training, 
including the dissemination of information about public policies and 
political activities. New subparagraph (4) clarifies that recipients 
may not conduct a training program to train participants to engage in 
activities prohibited by the Act, other applicable law, or Corporation 
regulations, guidelines or instructions. A similar restriction was 
included in both the interim and prior regulations, but the Board has 
adopted language in this final rule which more carefully delineates the 
scope of the restriction. Thus, under this new formulation of the 
restriction, a recipient could not run a training program which 
included training participants about how to engage in class actions, 
lobbying, welfare reform and the like. This new formulation makes 
clear, however, that using recipient resources, recipient employees may 
attend and participate in training programs sponsored by bar 
associations or continuing legal education institutes even if a portion 
of the training program involved training about a prohibited activity.
    Paragraph (b) tracks other provisions of Sec. 504(a)(12) and 
provides that attorneys or paralegals may be trained to prepare them to 
(1) provide adequate legal assistance to eligible clients and (2) 
inform any eligible client of the client's rights under any existing 
statute, order or regulation, or about the meaning or significance of 
particular bills. In previous regulations on training, there was an 
explicit statement that it was permissible to train attorneys and 
paralegals to understand what activities are permitted or prohibited 
under relevant laws and regulations.

[[Page 19404]]

This language was removed in both the interim and final rules as 
unnecessary and self-evident.

Section 1612.9  Organizing

    This section implements Sec. 1007(b)(7), 42 U.S.C. 
Sec. 2996f(b)(7), of the LSC Act which prohibits organizing activities. 
It is essentially the same as in the prior rule but has been 
restructured for clarity. The final rule makes no changes from the 
interim rule. Paragraph (a) provides that no funds made available by 
the Corporation or by private entities may be used to initiate the 
formation or to act as an organizer of any association, federation, 
labor union, coalition, network, alliance, or any similar entity. 
Paragraph (b) includes the two existing exceptions included in prior 
regulations. It first provides that the prohibition on organizing does 
not apply to informational meetings attended by persons engaged in the 
delivery of legal services at which information about new developments 
in law and pending cases or matters are discussed. Thus, recipients can 
establish or participate in task forces and other meetings of advocates 
to share information and develop more effective approaches to 
representation in particular subject areas. Paragraph (b) also provides 
that the prohibition does not apply to organizations composed 
exclusively of eligible clients formed for the purpose of advising a 
legal services programs about the delivery of legal services. Finally, 
paragraph (c) provides that the organizing prohibition does not prevent 
recipients and their employees from providing legal advice or 
assistance to eligible clients who desire to plan, establish or operate 
organizations, such as by preparing articles of incorporation and 
bylaws.

Section 1612.10  Recordkeeping and Accounting for Activities Funded 
With Non-LSC Funds

    This section implements Sec. 504(a)(6) of 110 Stat. 1321. No 
changes have been made from the interim rule. Thus, under paragraph (a) 
no LSC funds may be used to pay for administrative overhead or related 
costs associated with any activity permitted to be undertaken with non-
LSC funds by Sec. 1612.6.
    Paragraph (b) continues existing practice that requires recipients 
to maintain separate records documenting the expenditure of non-LSC 
funds for legislative and rulemaking activities permitted by 
Sec. 1612.6.
    Paragraph (c) provides that recipients shall submit semi-annual 
reports describing their non-LSC funded legislative and rulemaking 
activities conducted pursuant to these regulations under Sec. 1612.6, 
together with such supporting documentation as specified by the 
Corporation. The only change from existing policy is that the period 
for reporting such activities has been changed from quarterly to semi-
annually in order to reduce the administrative burden on recipients.

Section 1612.11  Recipient Policies and Procedures

    This section requires that recipients adopt written policies and 
procedures to guide the recipient's staff in compliance with the 
requirements of this part.

Additional Changes

    The prior rule, which was superseded by the interim rule and now 
this final regulation, included Sec. 1612.12, which set out enforcement 
procedures for part 1612. Section 1612.12 was deleted because the 
Corporation will be developing a comprehensive enforcement regulation 
that will address enforcement of all regulations and restrictions. 
Section 1612.13, permitting the use of private funds for certain 
lobbying activities, was also deleted, because, under 110 Stat. 1321, 
all funds of a recipient are restricted and the statutory exceptions to 
the prohibitions in Sec. 1612.6 make no distinction between non-LSC 
public or private funds.

List of Subjects in 45 CFR Part 1612

    Civil disorders, Grant program, Legal services, Lobbying.

    For the reasons set forth in the preamble, 45 CFR part 1612 is 
revised to read as follows:

PART 1612--RESTRICTIONS ON LOBBYING AND CERTAIN OTHER ACTIVITIES

Sec.
1612.1  Purpose.
1612.2  Definitions.
1612.3  Prohibited legislative and administrative activities.
1612.4  Grassroots lobbying.
1612.5  Permissible activities using any funds.
1612.6  Permissible activities using non-LSC funds.
1612.7  Public demonstrations and activities.
1612.8  Training.
1612.9  Organizing.
1612.10  Recordkeeping and accounting for activities funded with 
non-LSC funds.
1612.11  Recipient policies and procedures.

    Authority: Pub. L. 104-208, 110 Stat. 3009; Pub. L. 104-134, 110 
Stat. 1321, secs. 504(a) (2), (3), (4), (5), (6), and (12), 504 (b) 
and (e); 42 U.S.C. 2996e(b)(5), 2996f(a) (5) and (6), 2996f(b) (4), 
(6) and (7), and 2996g(e).


Sec. 1612.1  Purpose.

    The purpose of this part is to ensure that LSC recipients and their 
employees do not engage in certain prohibited activities, including 
representation before legislative bodies or other direct lobbying 
activity, grassroots lobbying, participation in rulemaking, public 
demonstrations, advocacy training, and certain organizing activities. 
The part also provides guidance on when recipients may participate in 
public rulemaking or in efforts to encourage State or local governments 
to make funds available to support recipient activities, and when they 
may respond to requests of legislative and administrative officials.


Sec. 1612.2  Definitions.

    (a) (1) Grassroots lobbying means any oral, written or 
electronically transmitted communication or any advertisement, 
telegram, letter, article, newsletter, or other printed or written 
matter or device which contains a direct suggestion to the public to 
contact public officials in support of or in opposition to pending or 
proposed legislation, regulations, executive decisions, or any decision 
by the electorate on a measure submitted to it for a vote. It also 
includes the provision of financial contributions by recipients to, or 
participation by recipients in, any demonstration, march, rally, 
fundraising drive, lobbying campaign, letter writing or telephone 
campaign for the purpose of influencing the course of such legislation, 
regulations, decisions by administrative bodies, or any decision by the 
electorate on a measure submitted to it for a vote.
    (2) Grassroots lobbying does not include communications which are 
limited solely to reporting on the content or status of, or explaining, 
pending or proposed legislation or regulations.
    (b) (1) Legislation means any action or proposal for action by 
Congress or by a State or local legislative body which is intended to 
prescribe law or public policy. The term includes, but is not limited 
to, action on bills, constitutional amendments, ratification of 
treaties and intergovernmental agreements, approval of appointments and 
budgets, and approval or disapproval of actions of the executive.
    (2) Legislation not include those actions of a legislative body 
which adjudicate the rights of individuals under existing laws; nor 
does it include legislation adopted by an Indian Tribal Council.
    (c) Public policy means an overall plan embracing the general goals 
and procedures of any governmental body and pending or proposed 
statutes, rules, and regulations.

[[Page 19405]]

    (d) (1) Rulemaking means any agency process for formulating, 
amending, or repealing rules, regulations or guidelines of general 
applicability and future effect issued by the agency pursuant to 
Federal, State or local rulemaking procedures, including:
    (i) The customary procedures that are used by an agency to 
formulate and adopt proposals for the issuance, amendment or revocation 
of regulations or other statements of general applicability and future 
effect, such as negotiated rulemaking and ``notice and comment'' 
rulemaking procedures under the Federal Administrative Procedure Act or 
similar procedures used by State or local government agencies; and
    (ii) Adjudicatory proceedings that are formal adversarial 
proceedings to formulate or modify an agency policy of general 
applicability and future effect.
    (2) Rulemaking does not include:
    (i) Administrative proceedings that produce determinations that are 
of particular, rather than general, applicability and affect only the 
private rights, benefits or interests of individuals, such as Social 
Security hearings, welfare fair hearings, or granting or withholding of 
licenses;
    (ii) Communication with agency personnel for the purpose of 
obtaining information, clarification, or interpretation of the agency's 
rules, regulations, guidelines, policies or practices.
    (e) Public rulemaking means any rulemaking proceeding or portion of 
such proceeding or procedure that is open to the public through notices 
of proposed rulemaking published in the Federal Register or similar 
State or local journals, announcements of public hearings on proposed 
rules or notices of proposed rulemaking including those that are 
routinely sent to interested members of the public, or other similar 
notifications to members of the public;
    (f) Similar procedure refers to a legislative process by which 
matters must be determined by a vote of the electorate.


Sec. 1612.3  Prohibited legislative and administrative activities.

    (a) Except as provided in Secs. 1612.5 and 1612.6, recipients shall 
not attempt to influence:
    (1) The passage or defeat of any legislation or constitutional 
amendment;
    (2) Any initiative, or any referendum or any similar procedure of 
the Congress, any State legislature, any local council, or any similar 
governing body acting in any legislative capacity;
    (3) Any provision in a legislative measure appropriating funds to, 
or defining or limiting the functions or authority of, the recipient or 
the Corporation; or,
    (4) The conduct of oversight proceedings concerning the recipient 
or the Corporation.
    (b) Except as provided in Secs. 1612.5 and 1612.6, recipients shall 
not participate in or attempt to influence any rulemaking, or attempt 
to influence the issuance, amendment or revocation of any executive 
order.
    (c) Recipients shall not use any funds to pay for any personal 
service, advertisement, telegram, telephone communication, letter, 
printed or written matter, administrative expense, or related expense 
associated with an activity prohibited in paragraphs (a) and (b) in 
this section.


Sec. 1612.4  Grassroots lobbying.

    A recipient shall not engage in any grassroots lobbying.


Sec. 1612.5  Permissible activities using any funds.

    (a) A recipient may provide administrative representation for an 
eligible client in a proceeding that adjudicates the particular rights 
or interests of such eligible client or in negotiations directly 
involving that client's legal rights or responsibilities, including 
pre-litigation negotiation and negotiation in the course of litigation.
    (b) A recipient may initiate or participate in litigation 
challenging agency rules, regulations, guidelines or policies, unless 
such litigation is otherwise prohibited by law or Corporation 
regulations.
    (c) Nothing in this part is intended to prohibit a recipient from:
    (1) Applying for a governmental grant or contract;
    (2) Communicating with a governmental agency for the purpose of 
obtaining information, clarification, or interpretation of the agency's 
rules, regulations, practices, or policies;
    (3) Informing clients, other recipients, or attorneys representing 
eligible clients about new or proposed statutes, executive orders, or 
administrative regulations;
    (4) Communicating directly or indirectly with the Corporation for 
any purpose including commenting upon existing or proposed Corporation 
rules, regulations, guidelines, instructions and policies;
    (5) Permitting its employees to participate in bar association 
activities, provided that recipient resources are not used to support 
and the recipient is not identified with activities of bar associations 
that are devoted to activities prohibited by this part.
    (6) Advising a client of the client's right to communicate directly 
with an elected official; or
    (7) Participating in activity related to the judiciary, such as the 
promulgation of court rules, rules of professional responsibility and 
disciplinary rules.


Sec. 1612.6  Permissible activities using non-LSC funds.

    (a) If the conditions of paragraphs (b) and (c) of this section are 
met, recipients and their employees may use non-LSC funds to respond to 
a written request from a governmental agency or official thereof, 
elected official, legislative body, committee, or member thereof made 
to the employee, or to a recipient to:
    (1) Testify orally or in writing;
    (2) Provide information which may include analysis of or comments 
upon existing or proposed rules, regulations or legislation, or drafts 
of proposed rules, regulations or legislation; or
    (3) Participate in negotiated rulemaking under the Negotiated 
Rulemaking Act of 1990, 5 U.S.C. 561, et seq., or comparable State or 
local laws.
    (b) Communications made in response to requests under paragraph (a) 
may be distributed only to the party or parties that made the request 
and to other persons or entities only to the extent that such 
distribution is required to comply with the request.
    (c) No employee of the recipient shall solicit or arrange for a 
request from any official to testify or otherwise provide information 
in connection with legislation or rulemaking.
    (d) Recipients shall maintain copies of all written requests 
received by the recipient and written responses made in response 
thereto and make such requests and written responses available to 
monitors and other representatives of the Corporation upon request.
    (e) Recipients may use non-LSC funds to provide oral or written 
comment to an agency and its staff in a public rulemaking proceeding.
    (f) Recipients may use non-LSC funds to contact or communicate 
with, or respond to a request from, a State or local government agency, 
a State or local legislative body or committee, or a member thereof, 
regarding funding for the recipient, including a pending or proposed 
legislative or agency proposal to fund such recipient.


Sec. 1612.7  Public demonstrations and activities.

    (a) During working hours, while providing legal assistance or 
representation to the recipient's clients or while using recipient 
resources provided by the Corporation or by private entities, no person 
shall:

[[Page 19406]]

    (1) Participate in any public demonstration, picketing, boycott, or 
strike, except as permitted by law in connection with the employee's 
own employment situation; or
    (2) Encourage, direct, or coerce others to engage in such 
activities.
    (b) No employee of a recipient shall at any time engage in or 
encourage others to engage in any:
    (1) Rioting or civil disturbance;
    (2) Activity determined by a court to be in violation of an 
outstanding injunction of any court of competent jurisdiction; or
    (3) Other illegal activity that is inconsistent with an employee's 
responsibilities under applicable law, Corporation regulations, or the 
rules of professional responsibility of the jurisdiction where the 
recipient is located or the employee practices law.
    (c) Nothing in this section shall prohibit an attorney from:
    (1) Informing and advising a client about legal alternatives to 
litigation or the lawful conduct thereof; or
    (2) Taking such action on behalf of a client as may be required by 
professional responsibilities or applicable law of any State or other 
jurisdiction.


Sec. 1612.8  Training.

    (a) A recipient may not support or conduct training programs that:
    (1) Advocate particular public policies;
    (2) Encourage or facilitate political activities, labor or anti-
labor activities, boycotts, picketing, strikes or demonstrations, or 
the development of strategies to influence legislation or rulemaking;
    (3) Disseminate information about such policies or activities; or
    (4) Train participants to engage in activities prohibited by the 
Act, other applicable law, or Corporation regulations, guidelines or 
instructions.
    (b) Nothing in this section shall be construed to prohibit training 
of any attorneys or paralegals, clients, lay advocates, or others 
involved in the representation of eligible clients necessary for 
preparing them:
    (1) To provide adequate legal assistance to eligible clients; or
    (2) To provide advice to any eligible client as to the legal rights 
of the client.


Sec. 1612.9  Organizing.

    (a) Recipients may not use funds provided by the Corporation or by 
private entities to initiate the formation, or to act as an organizer, 
of any association, federation, labor union, coalition, network, 
alliance, or any similar entity.
    (b) This section shall not be construed to apply to:
    (1) Informational meetings attended by persons engaged in the 
delivery of legal services at which information about new developments 
in law and pending cases or matters are discussed; or
    (2) Organizations composed exclusively of eligible clients formed 
for the purpose of advising a legal services program about the delivery 
of legal services.
    (c) Recipients and their employees may provide legal advice or 
assistance to eligible clients who desire to plan, establish or operate 
organizations, such as by preparing articles of incorporation and 
bylaws.


Sec. 1612.10  Recordkeeping and accounting for activities funded with 
non-LSC funds.

    (a) No funds made available by the Corporation shall be used to pay 
for administrative overhead or related costs associated with any 
activity listed in Sec. 1612.6.
    (b) Recipients shall maintain separate records documenting the 
expenditure of non-LSC funds for legislative and rulemaking activities 
permitted by Sec. 1612.6.
    (c) Recipients shall submit semi-annual reports describing their 
legislative activities with non-LSC funds conducted pursuant to 
Sec. 1612.6, together with such supporting documentation as specified 
by the Corporation.


Sec. 1612.11  Recipient policies and procedures.

    Each recipient shall adopt written policies and procedures to guide 
its staff in complying with this part.

    Dated: April 14, 1997.
Victor M. Fortuno,
General Counsel.
[FR Doc. 97-10037 Filed 4-18-97; 8:45 am]
BILLING CODE 7050-01-P