[Federal Register Volume 63, Number 149 (Tuesday, August 4, 1998)]
[Rules and Regulations]
[Pages 41404-41418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20760]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

[Regulations Nos. 4 and 16]
RIN 0960-AD73


Federal Old-Age, Survivors, and Disability Insurance and 
Supplemental Security Income for the Aged, Blind, and Disabled; 
Standards of Conduct for Claimant Representatives

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: We are amending our rules governing representation of 
claimants seeking Social Security or supplemental security income (SSI) 
benefits under title II or XVI of the Social Security Act (the Act), as 
amended. The final rules establish standards of conduct and 
responsibility for persons serving as representatives and further 
define our expectations regarding their obligations to those they 
represent and to us. The final rules include statutorily and 
administratively imposed requirements and prohibitions.

EFFECTIVE DATE: This regulation is effective September 3, 1998.

FOR FURTHER INFORMATION CONTACT: Robert J. Augustine, Legal Assistant, 
Office of Process and Innovation Management, Social Security 
Administration, 6401 Security Boulevard, Baltimore, MD 21235, (410) 
966-5121. For information on eligibility or claiming benefits, call our 
national toll-free number, 1-800-772-1213.

SUPPLEMENTARY INFORMATION:

Background

    Prior regulations governing representatives' conduct 
(Secs. 404.1740, et seq. and 416.1540, et seq.) under titles II and 
XVI, of the Act, primarily reiterate various statutory provisions set 
forth in the Act. Sections 404.1745 and 416.1545 also provide that a 
representative may be suspended or disqualified from practice before 
the Social Security Administration (SSA) if he or she has violated 
those rules, been convicted of a violation of sections 206 or 
1631(d)(2) of the Act, respectively, or ``otherwise refused to comply 
with our rules and regulations on representing claimants in dealings 
with us.'' This is consistent with sections 206(a)(1) and 1631(d)(2) of 
the Act, which provide that the Commissioner of Social Security (the 
Commissioner) may ``suspend or prohibit from further practice before 
him any such person, agent, or attorney who refuses to comply with the 
Commissioner's rules and regulations * * *'' (Section 206(a)(1) is

[[Page 41405]]

incorporated into title XVI of the Act by section 1631(d)(2)(A) of the 
Act.) Since their inception, the regulations have reflected the 
Commissioner's (formerly the Secretary of Health and Human Services') 
broad authority over matters involving representatives' activities in 
their dealings with us.
    These final rules are based on the notice of proposed rulemaking 
(NPRM) published in the Federal Register on January 3, 1997 (62 FR 
352). Specifically, they provide enforceable standards governing 
aspects of practice, performance and conduct for all persons who act as 
claimants' representatives. The final rules also recognize the 
increased participation of compensated representatives in the 
adjudicative process, the special circumstances presented by SSA's 
nonadversarial administrative process including its hearings, and 
statutory changes, such as the anti-fraud provisions of the Social 
Security Independence and Program Improvements Act of 1994, Public Law 
(Pub. L.) 103-296. The prior regulations pertaining to representatives' 
conduct had been largely unchanged since their promulgation in 1980, 
and no longer adequately addressed our experience concerning the 
extensive participation of representatives in the claims process.
    We take seriously our statutory responsibility to ensure that 
claimants are represented properly during the claims process. 
Therefore, we are publishing these rules to improve the efficiency of 
our administrative process and to ensure that claimants receive 
competent services from their representatives. While we recognize that 
most representatives do a conscientious job in assisting their clients, 
our experience has convinced us that there are sufficient instances of 
questionable conduct to warrant promulgation of additional regulatory 
authority. The prior regulations did not address a representative's 
responsibility to adequately prepare and present the claimant's case 
among other deficiencies. These final rules correct these omissions and 
are necessary to protect the claimant and the adjudicative process from 
those individuals who are incapable of providing, or unwilling to 
provide, meaningful assistance in expeditiously resolving pending 
claims.
    Although there are disparities in the levels of skill, experience, 
education and professional status among those who serve as 
representatives, we believe all such individuals must be bound by the 
same set of rules. In determining the appropriate standards, we 
considered the requirements and intent of the Act and its implementing 
regulations, administrative law principles applicable to adjudication 
and the American Bar Association's (ABA's) Model Rules of Professional 
Conduct and Model Code of Professional Responsibility.
    There are comparable rules in part 410, subpart F (Secs. 410.684, 
et seq.) governing representative conduct under the Black Lung benefits 
program. We are not revising those rules, however. Executive Order 
12866, Regulatory Planning and Review, issued by the President on 
October 4, 1993 (58 FR 51735), provides that ``Federal agencies should 
promulgate only such regulations as are required by law, are necessary 
to interpret the law, or are made necessary by compelling public need * 
* *.'' Because we process a very small number of claims involving Black 
Lung benefits, and the concerns giving rise to these rules have not 
affected those claims, there is no compelling need to revise the Black 
Lung rules.
    We expect that the final rules will further clarify the obligations 
of representatives to provide competent representation of their 
clients, in accordance with the procedural and evidentiary requirements 
of the claims process. Moreover, the final rules constitute official 
notice concerning our requirements and prohibitions.
    In drafting the proposed rules, we obtained information from 
various sources to address the concerns of claimants and others with a 
stake or interest in the issue of claimant representation; for example, 
we conducted focus groups with claimants and beneficiaries as part of 
our disability process redesign initiative. Participants in the public 
dialogue conducted in conjunction with our redesign initiative 
frequently noted the lack of timely or effective assistance on the part 
of claimants' representatives. We also used information gathered in 
investigating nearly 600 complaints involving misconduct by 
representatives from 1988 to 1997. In light of complaints about the 
quality and effectiveness of representatives' services, the Disability 
Process Redesign Team included within its recommendations provisions 
aimed at representatives' performance.
    In addition, in February 1995 we requested comments on a draft 
proposal from 33 separate groups and organizations drawn from the 
attorney and non-attorney claimant representative community. These 
groups included professional organizations, interest groups, think 
tanks, legal services organizations, and various private representative 
organizations. We received 92 responses to this informal request. Many 
were supportive, especially regarding the need to provide standards for 
non-attorney representatives. Many, however, were opposed to more 
regulation of their professional conduct. We carefully considered all 
the views and concerns in formulating the proposed rules, which we 
published in the Federal Register on January 3, 1997. Similarly, we 
considered the public comments received on the proposed rules, in 
formulating these final rules.

Regulatory Provisions

    These final regulations revise Secs. 404.1740, 404.1745, 404.1750, 
404.1765, 404.1770, 404.1799, 416.1540, 416.1545, 416.1550, 416.1565, 
and 416.1599.
    We revised Secs. 404.1740(a) and 416.1540(a) to explain the purpose 
and scope of these rules which are intended to ensure that 
representatives provide competent services to their clients and comport 
themselves in accordance with our rules and standards. Accordingly, the 
rules set forth affirmative duties and prohibited actions that shall 
govern the relationship between the representative and the Agency.
    We revised Secs. 404.1740(b) and 416.1540(b) to include affirmative 
duties, which are certain obligations that a representative must 
actively perform in his or her representation of claimants in matters 
before us. We expect these affirmative duties to promote competence, 
diligence, and timeliness in assisting the claimant to meet the burden 
of proving eligibility for benefits.
    We have not changed the regulations concerning our existing duties 
and responsibilities with regard to developing the record and obtaining 
evidence nor have we changed our expectations concerning what will be 
required of claimants (see Secs. 404.1512 and 416.912 concerning 
disability and blindness claims). Therefore, we will continue to carry 
out our existing responsibilities in this regard. Under these rules, 
however, representatives will be expected to assist claimants in 
meeting their obligations with respect to submitting information and 
evidence and responding to our requests in conformity with our existing 
regulations.
    New Secs. 404.1740(b)(1) and 416.1540(b)(1) clarify that a 
representative should act with reasonable promptness to obtain and 
submit to us the information and evidence that the claimant wants the 
decision maker to consider in ruling on a claim. Based on the comments 
we received on the proposed rules we published, we revised the wording 
of

[[Page 41406]]

these sections to more closely track other existing regulatory 
requirements. In disability and blindness claims, the new provisions 
include the obligation to assist the claimant in complying with 
Secs. 404.1512(a) and 416.912(a) which require claimants to bring 
information and evidence to our attention and to furnish medical and 
other evidence to us.
    New Secs. 404.1740(b)(2) and 416.1540(b)(2) require that the 
representative assist the claimant in complying, as soon as 
practicable, with our requests for information or evidence. In 
disability and blindness claims, this includes the obligation to assist 
the claimant in providing, upon our request, evidence pursuant to 
Secs. 404.1512(c) and 416.912(c).
    Based on the public comments we received, we deleted proposed 
Secs. 404.1740(b)(2)(i) and 416.1540(b)(2)(i), which would have 
required that the representative provide, upon request, information 
regarding the claimant's medical treatment, vocational factors or other 
specifically identified matters, or provide notification that the 
claimant does not consent to release the information. We also deleted 
proposed Secs. 404.1740(b)(2)(ii) and 416.1540(b)(2)(ii), which would 
have required that the representative provide, upon request, all 
evidence and documentation pertaining to specifically identified issues 
which the representative or claimant already has or may readily obtain. 
We deleted these proposed requirements to more closely track the 
existing regulatory requirements that explain a claimant's duties and 
responsibilities with regard to submitting evidence and providing 
information.
    In new Secs. 404.1740(b)(3) and 416.1540(b)(3), we set forth 
minimum requirements governing the competency, diligence and behavior 
of representatives in their dealings with us. Based on the comments we 
received, we revised these sections to more closely track the language 
of model codes concerning competency and diligence of representatives.
    In new Secs. 404.1740(b)(3)(i) and 416.1540(b)(3)(i), we establish 
an affirmative duty of competency. This includes the requirement that a 
representative know the significant issue(s) in a claim and have a 
working knowledge of the applicable provisions of the Act, the 
regulations and the Rulings. A representative should also know how to 
obtain and submit evidence regarding the claim.
    In new Secs. 404.1740(b)(3)(ii) and 416.1540(b)(3)(ii), we require 
that the representative act with reasonable diligence and promptness. 
This includes providing prompt and responsive answers to our requests 
and communications pertaining to the pending claim. A representative 
may not ignore official communications.
    We deleted proposed Secs. 404.1740(b)(3)(iii) and 
416.1540(b)(3)(iii), which would affirmatively have required 
cooperation in developing the record. We believe that cooperation is 
inherent in competency and diligence, and that representatives should 
cooperate with us in such matters as releasing medical records, 
scheduling consultative examinations and scheduling conferences or 
hearing dates. Therefore, a separate rule would be redundant.
    In revised Secs. 404.1740(c) and 416.1540(c), we describe 
prohibited actions, which are certain acts or activities that a 
representative must avoid. In part, the prohibited actions incorporate 
various statutory provisions set forth in the Act and other 
legislation.
    We based new Secs. 404.1740(c)(1) and 416.1540(c)(1) on the 
prohibitions (e.g., threatening or coercing a claimant) set forth in 
Secs. 206(a)(5) and 1631(d)(2) of the Act, and these sections are self-
explanatory. A representative's honest mistake would not be construed 
as knowingly misleading a claimant. In determining whether a 
representative knowingly misled a claimant, we will consider whether 
the action involved matters that the representative should have known 
were untrue.
    We based new Secs. 404.1740(c)(2) and 416.1540(c)(2) on the 
provisions of sections 206(a) and (b) and 1631(d)(2) of the Act which 
provide briefly that representatives are eligible for reasonable fees 
for representing a claimant, and these sections apply to all fee 
collections. With regard to section 206(a)(4) of the Act, we will 
assume, in the absence of evidence to the contrary, that work performed 
by support staff in a law office is performed under the supervision of 
an attorney, thereby permitting the attorney to validly claim direct 
payment from past-due benefits for those services in a title II claim. 
This assumption will not apply, however, when a person other than an 
attorney appears alone at a hearing to provide representation on behalf 
of a claimant. In those cases, the person appearing alone at the 
hearing shall be considered the representative and will be required to 
file a fee petition or fee agreement for his or her services, and will 
not be entitled to receive direct payment from past-due title II 
benefits for the representation at the hearing.
    Generally, we based new Secs. 404.1740(c)(3) and 416.1540(c)(3) on 
the criminal prohibitions in 18 U.S.C. 1001 and the provisions 
governing civil monetary penalties and assessments set forth in section 
1129 of the Act. These sections are self-explanatory.
    New Secs. 404.1740(c)(4) and 416.1540(c)(4) are directed against 
practices where improper acts or omissions by the representative, 
without good cause, have the effect of unreasonably delaying the 
disposition of a claim for benefits.
    We based new Secs. 404.1740(c)(5) and 416.1540(c)(5) on the 
provisions of section 1106 of the Act, which prohibit disclosure by any 
person of information obtained by the Agency in conjunction with a 
claim, except as may be authorized by regulations prescribed by us. The 
intent is to prohibit disclosure of information regarding a claimant 
without the claimant's consent.
    In new Secs. 404.1740(c)(6) and 416.1540(c)(6), we prohibit a 
representative from offering or giving anything of value to persons 
involved in the adjudication of a claim except as remuneration to a 
witness for legitimate expenses or for services rendered. The intent is 
to prevent the appearance of influencing, or attempting to influence, 
the disposition of a claim by bestowing gifts or favors on individuals 
in a position to materially affect the outcome of the adjudication of a 
claim.
    New Secs. 404.1740(c)(7) and 416.1540(c)(7) apply to conduct 
undertaken during the course of oral proceedings which is disruptive 
and detrimental to due process and the administration of justice.
    In new Secs. 404.1740(c)(7)(i) and 416.1540(c)(7)(i), we prohibit 
repeated absences from or persistent tardiness at scheduled proceedings 
without good cause because such conduct adversely affects claimants, 
diminishes the ability of the Agency to operate efficiently and harms 
other applicants by disrupting schedules and work flow.
    In new Secs. 404.1740(c)(7)(ii) and 416.1540(c)(7)(ii), we address 
deliberate acts which have the effect of disrupting the proceedings or 
diverting the attention of the participants from the purpose of the 
hearing to matters irrelevant to the merits of the case.
    New Secs. 404.1740(c)(7)(iii) and 416.1540(c)(7)(iii) are based in 
part on the provisions of sections 206(a)(5) and 1631(d)(2) of the Act, 
18 U.S.C. 111 and 28 CFR 64.2(x) and (aa). These provisions prohibit 
threatening or intimidating conduct directed at the participants in an 
oral proceeding or the employees assigned to our offices, which has the 
effect of disrupting the proceeding. We will not tolerate actual or 
implied threats of violence.

[[Page 41407]]

    In revised Secs. 404.1745 and 416.1545, we explain that we may 
begin proceedings to suspend or disqualify a person who does not meet 
our qualifications for a representative or who violates our rules and 
standards governing representatives in their dealings with us.
    We modified Secs. 404.1750(a) and (d), 404.1765(a) and (e), 
404.1799(c) and (e), 416.1550(a) and (d), 416.1565(a) and (e), and 
416.1599(c) and (e), to reflect current Agency official titles and 
organizational changes.
    We revised Secs. 404.1765(g)(3) and 416.1565(g)(3) to remove the 
first word ``not'' from each paragraph. This corrects errors made when 
the regulations on representation of parties were reorganized, 
renumbered and republished on August 5, 1980 (45 FR 52078). When the 
original regulation was published as Sec. 404.983(f) on April 26, 1969 
(34 FR 6973, 6974), it provided that ``[i]f the individual has filed an 
answer and if the hearing officer believes that there is relevant and 
material evidence available which has not been presented at the 
hearing, the hearing officer may at any time prior to the mailing of 
notice of the decision, or submittal of a recommended decision, reopen 
the hearing for the receipt of such evidence.'' This is consistent with 
the preceding language in Sec. 404.983(f), which states that if a 
representative ``has filed no answer he shall have no right to present 
evidence * * * .''
    In the 1980 final rule, the former Sec. 404.983(f) was renumbered 
as Sec. 404.1765(f), with a parallel title XVI provision at 
Sec. 416.1565(f). Paragraph (f)(2) addressed representatives who do not 
answer charges and paragraph (f)(3) addressed those who do. Paragraph 
(f)(3) (45 FR 52078, 52093, 52108) contained a misprint, however, which 
read, ``If the representative did not file an answer to the charges * * 
* .'' Thus, paragraphs (f)(2) and (f)(3) were inconsistent and 
conflicting. Subsequently, in 1991, paragraph (f) of Secs. 404.1765 and 
416.1565 was redesignated as paragraph (g) (56 FR 24129, 24131, 24132).
    The 1980 misprint substantively changed the meaning of current 
paragraph (g)(3). As specifically explained in the preamble to the 1980 
rules, however, SSA never intended to make any substantive changes to 
the regulations. The regulations were rewritten for the purpose of 
reorganizing and restating them more clearly in simpler language. The 
misprint has created confusion in the representative disciplinary 
process. Consequently, we are taking this opportunity to correct the 
error to reflect the original intent of the regulations.
    We also are correcting another minor misprint in the prior 
Sec. 404.1765(g)(3) by making ``decisions'' singular for correctness 
and consistency with Sec. 416.1565(g)(3).
    Finally, we are amending Sec. 404.1770, paragraphs (a)(3) and 
(b)(3), to correct a publication error that occurred after paragraph 
(a)(3) was revised in 1991. As correctly published in final rules on 
May 29, 1991 (56 FR 24129, 24132), paragraph (a)(3) was revised to show 
that the hearing officer shall mail a copy of the decision to the 
parties at their last known addresses. When codified in the 1992 volume 
of the Code of Federal Regulations, however, the revised language of 
paragraph (a)(3) was erroneously placed in paragraph (b)(3), 
superseding that existing language addressing the effect of a final 
decision imposing a suspension upon a representative. This correction 
accurately reflects the language and purpose of paragraphs (a)(3) and 
(b)(3) and brings Sec. 404.1770 into conformity with its equivalent 
Sec. 416.1570.

Public Comments

    When we published the NPRM, we provided the public a 60-day comment 
period. We received comments from over 70 individuals and 
organizations. These included comments referred to us by members of 
Congress, and comments from legal services organizations, the American 
Bar Association (ABA), the National Organization of Social Security 
Claimants' Representatives (NOSSCR), the Association of Administrative 
Law Judges, Inc., and other associations of attorneys, and non-attorney 
representatives. We also received comments from individual attorneys, 
non-attorney representatives, Administrative Law Judges (ALJs) and 
other SSA employees.
    Many of the commenters raised concerns that they or previous 
commenters raised informally with regard to our draft proposal in 
February 1995. Many commenters were opposed to our promulgating any 
additional regulations at all concerning representatives. However, we 
also received comments from individuals who believed that there is a 
need for clarifying regulations and who were supportive of our proposed 
rules. Other commenters expressed the idea that we should not regulate 
attorneys who practice before us, but should instead regulate non-
attorneys. On the other hand, many non-attorney representatives 
supported the idea of uniform national standards for both attorney and 
non-attorney representatives.
    The greatest concern was with regard to our proposed requirements 
concerning the submission of evidence and responding to our requests 
for information. In response to these comments and as we have indicated 
below, we revised these requirements extensively to conform to other 
existing regulations. We have summarized and addressed these statements 
in the comments and responses below with the other substantive comments 
received.
    The ABA expressed substantial reservations about our proposed 
standards. The ABA continued to believe, as it did in 1995, that some 
of the rules, especially those dealing with disclosure of medical 
information and the duty of advocacy for one's client, were far too 
broad and that enforcement would place the Agency in the troublesome 
position of attempting to override a lawyer's sworn duty to obey the 
Rules of Professional Conduct of the jurisdiction in which the lawyer 
is licensed to practice. The ABA believed that the proposed rules 
continued to include provisions that could give rise to serious ethical 
conflicts. The ABA voiced particular objections to our proposal to 
place duties on representatives to obtain and submit certain evidence 
by certain dates.
    NOSSCR raised concerns involving the primacy of State bar rules for 
most attorneys, the duty to obtain specific evidence, the duty to 
submit evidence by certain dates, and the vagueness of the conduct 
deemed overzealous. NOSSCR also objected to what they interpreted as 
our attempt to close the record through the use of deadlines. NOSSCR 
believed that there was no sound basis for our proposed rules as 
drafted and that, in effect, they should not be promulgated. This was a 
position taken by other associations of attorneys and individual 
attorneys as well.
    As we have explained below, in response to the ABA's and NOSSCR's 
comments and other comments we have received, we have revised the 
particular provisions that generated the most concern to make them 
track SSA's other existing regulations. We believe this removes the 
areas of greatest concern. For the reasons discussed below, we have not 
adopted the suggestion to refer complaints about attorneys to State bar 
licensing authorities for appropriate disposition. We have made other 
changes to address the objections with regard to wording of particular 
provisions and vagueness.
    Because some of the comments were quite detailed, we had to 
condense, summarize or paraphrase them. We

[[Page 41408]]

have, however, tried to summarize the commenters' views accurately and 
respond to all of the significant issues raised by the commenters that 
are within the scope of the proposed rules. As we discuss below in 
responding to the comments, we have made revisions and additions to the 
proposed rules to clarify their intent.
    Comment: Some commenters questioned our authority to promulgate 
these regulations. One commenter stated that the Act does not 
contemplate that SSA would impose standards such as these where such 
standards are already set out in State laws that regulate the conduct 
of attorneys and others who do business within those states. According 
to this commenter, there is no justification for ignoring the regional 
differences between states that are a necessary and direct result of 
our constitutional system. This commenter also stated that these 
regional differences are tolerated in other settings such as the 
Federal courts.
    Response: The Commissioner has broad rulemaking authority under 
sections 205 and 1631 of the Act to promulgate necessary and 
appropriate rules, regulations and procedures to carry out the 
provisions of titles II and XVI and under sections 206 and 1631(d)(2) 
of the Act to ``suspend or prohibit from further practice before him 
any such person, agent, or attorney who refuses to comply with the 
Commissioner's rules and regulations or who violates any provision of 
this section for which a penalty is prescribed.'' It is the 
Commissioner who is ultimately responsible for providing decisionmaking 
that is timely and efficient and results in an accurate disposition of 
a claim. As stated above, these regulations are necessary to address 
actual and potential problems impacting the efficiency and integrity of 
the administrative process resulting from the participation of 
representatives in the claims process and to ensure that claimants' 
eligibility for benefits is not prejudiced by ineffective assistance of 
their representatives.
    In Sperry v. State of Florida, 373 U.S. 379 (1963), Florida sought 
to enjoin a non-attorney registered to practice before the United 
States Patent Office from preparing and prosecuting patent applications 
in Florida because he was not a member of the Florida bar. The Supreme 
Court held that the Federal government has pre-emptive powers over 
states' legislative and judicial authorities when acting under valid 
Federal regulation.
    Based on the Commissioner's broad rulemaking authority and the 
Federal government's pre-emptive powers, we believe that we have the 
authority to promulgate these regulations on a nationwide basis, and 
they would supersede any inconsistent state or local rules.
    Comment: Many commenters questioned the need for additional 
regulations governing the conduct of representatives.
    Response: The goal of these regulations is to provide the public, 
especially claimants' representatives and claimants, with a uniform, 
clearly articulated set of rules that representatives are expected to 
follow in representing claimants before SSA. In so doing, we are 
informing the public of how we will carry out our statutory obligations 
in regard to claimant representation.
    We carefully considered the need to provide enforceable standards 
governing the practice, performance, and conduct of all persons who act 
as claimants' representatives. Under the prior regulations, we were 
unable to address some conduct by claimants' representatives that we 
believed was inappropriate. For example, under the prior regulations, 
we could not address a representative's misconduct during a hearing or 
failure to adequately prepare and present the claimant's case. 
Moreover, various sources, including claimants, have complained to SSA 
and expressed concern about the quality and effectiveness of claimants' 
representation. Based on these needs, and our statutory duty to protect 
claimants from claimants' representatives who do not comply with Social 
Security laws and regulations, we believe that the standards of conduct 
for representatives are necessary and that such standards clearly are 
in the public interest.
    Comment: The majority of responding attorneys, as well as the ABA 
and other organizations, complained that, since attorneys' conduct 
already is governed by their individual State bar codes of conduct and 
ethics rules, separate SSA standards of conduct are redundant and are 
an unnecessary infringement on State bar jurisdiction over attorneys. 
The ABA and several individuals suggested that SSA establish a system 
by which complaints can be referred to State bar disciplinary 
authorities when we suspect misconduct. The ABA supported SSA's concern 
that all representatives be held to certain standards of practice and 
conduct, but strongly advised that such standards comport with the ABA 
Model Rules, and that they be applied only to those representatives who 
would not otherwise be subject to the legal profession's rules of 
conduct. One individual recognized that State bar rules are not 
applicable to representatives who are not attorneys, but opined that 
there are not enough non-attorney representatives to warrant standards 
of conduct for non-attorneys.
    Some attorney commenters suggested that non-attorney 
representatives should be required to comply with State bar rules or 
the ABA Model Code. A few attorneys suggested that non-attorneys be 
barred from representing claimants before SSA. However, a few 
commenters specifically agreed with us that both attorneys and non-
attorneys should have their conduct evaluated by the same criteria.
    Response: Bar rules differ in language and format among the 50 
States, the District of Columbia, Puerto Rico and the U.S. territories 
and island possessions. As the administrator of a national program, 
however, SSA should not be expected or required to apply local rules, 
or local interpretations of the rules, to problems that require 
national uniformity. If we applied local rules or local interpretations 
rather than a national standard, it is conceivable that attorneys in 
one area could be subject to discipline by SSA for conduct that another 
jurisdiction would not find actionable, or vice versa. We do not 
believe it benefits the attorneys, the claimants or SSA to have this 
type of inconsistency in carrying out the Commissioner's statutory 
obligation to regulate the conduct of representatives in administering 
a nationwide program.
    Moreover, attorneys often represent claimants in jurisdictions 
other than those in which they are licensed to practice law. In those 
instances, it would be unclear which jurisdiction's rules would apply, 
which could lead to inconsistent application of the rules among 
attorneys practicing in the same geographical area.
    Furthermore, non-attorney representatives are not subject to any 
rules of conduct for representatives similar to bar rules. Contrary to 
one comment, individual non-attorney representatives and representative 
organizations represent a substantial number of claimants. Within the 
last eight years, suspension/disqualification actions against non-
attorneys comprised approximately 36 percent of SSA's representative 
disciplinary actions. Therefore, it is essential to provide rules that 
will govern the conduct of non-attorneys who practice before us. 
Moreover, it is only fair and equitable to hold all representatives who 
practice before us to the same standards.
    In addition, applying our rules to only non-attorney 
representatives is incompatible with the Commissioner's

[[Page 41409]]

statutory obligation to regulate the conduct of all representatives in 
order to ensure that claimants are being represented competently and 
fairly. Finally, we note that contrary to the suggestion that non-
attorneys be prohibited from acting as representatives, the Act allows 
such representation.
    Comment: Some commenters stated that there should be testing or 
certification of representatives. Another commenter stated that SSA 
should publish standards concerning the character, background, and 
qualifications of non-attorney representatives.
    Response: We have considered the possibility of testing or other 
formal certification procedures for non-attorney representatives, but 
we have determined that the idea is not feasible at this time. SSA 
currently has standards for non-attorney representatives in 
Secs. 404.1705 and 416.1505.
    Any individual who provides services as a representative for a fee 
shall be expected to demonstrate, in the performance of those services, 
sufficient knowledge of the claims process to be of assistance to the 
claimant. Ignorance of substantive provisions of law or procedural 
requirements shall not be considered a mitigating factor for acts or 
omissions which impede or disrupt the efficient and orderly disposition 
of a claim.
    Comment: One commenter offered that since no other Federal agency 
has a code of conduct for representatives, it is unnecessary for SSA to 
have one.
    Response: We disagree with the premise of the comment and the 
conclusion. The Internal Revenue Service has rules for practice before 
it. See 31 CFR, Part 10. We also note that on November 25, 1997, the 
Merit Systems Protection Board published an interim rule concerning 
misconduct by representatives (62 FR 62689) which was finalized 
recently at 63 FR 35499 (June 30, 1998). Furthermore, on January 20, 
1998, the Department of Justice, Immigration and Naturalization Service 
and the Executive Office for Immigration Review, published an NPRM to 
change the rules and procedures concerning professional conduct for 
practitioners, which includes attorneys and representatives (63 FR 
2901). Moreover, whether other agencies have codes of conduct should 
not be determinative. SSA has a responsibility to protect and preserve 
our administrative processes, and by law may take any reasonably 
necessary action in support of that obligation.
    Comment: A few individuals commented on the issue of payment of 
fees to non-attorneys and suggested that the prohibition against direct 
payment of fees to non-attorneys should be removed. One commenter 
suggested that non-attorneys should be required to sign retainer 
agreements prior to representing claimants and should also be required 
to submit itemized fee statements to SSA.
    Response: These issues go beyond the purpose of these rules. The 
intent in drafting these regulations was not to change the existing 
statutory and regulatory provisions regarding payment of fees. However, 
as stated in the NPRM, SSA is currently considering separate 
regulations to address the issues of authorization, direct payment and 
administrative review of fees for representation.
    Comment: Other commenters suggested that a representative engaging 
in prohibited or obstructive conduct be penalized by reduction in the 
amount of the fee authorized.
    Response: This issue also is not the subject of these rules. We may 
address this issue in the separate regulations referred to in the 
previous response.
    Comment: We received various comments regarding the number of 
complaints of misconduct by claimants' representatives investigated by 
the Office of Hearings and Appeals. Several commenters believed that 
the small number of complaints did not indicate a need for our proposed 
standards of conduct for representatives. Another commenter stated that 
our statistics underestimate the problem of inadequate representation 
of claimants.
    Response: Although we realize that most representatives do a 
conscientious job in assisting their clients, we believe that there are 
sufficient instances of misconduct to justify these standards of 
conduct based on the referrals and complaints we have received. We also 
observe, however, that many of the complaints we receive involve 
misconduct by claimants' representatives that could not be addressed 
under the prior regulations but can be addressed under these standards 
of conduct. In addition, we anticipate that our standards of conduct 
will result in more referrals of representative misconduct to the 
Office of Hearings and Appeals.
    Comment: Some commenters believed that SSA's decision to seek 
discipline of a claimant's representative will be based on the Agency's 
workload and will not be applied uniformly.
    Response: Our decision to seek discipline of a claimant's 
representative will be based solely on a representative's misconduct, 
not SSA's workload. We also believe that the rules provide a strong 
basis for uniform application of such actions and recognize our 
obligation to effectively implement them in an even-handed, consistent 
manner. Moreover, we believe that the rules clearly focus on the 
responsibilities of a claimant's representative, including avoiding 
unjustifiable delays that harm the processing of the claim. The rules 
apply to claimants' representatives in all stages of our process and 
all aspects of their representation before us.
    Comment: Several commenters pointed out the delays in our 
administrative decisionmaking process. Generally, observing that SSA is 
under no time constraints in processing cases, they expressed the 
belief that the delays result from Agency actions rather than 
representative misconduct.
    Response: The time it takes to decide claims in the administrative 
process is influenced by many factors. We believe that our new rules 
will enhance our efforts to improve the efficiency and timeliness of 
our adjudication process. At the same time, in fairness, we will not 
hold representatives accountable for matters solely within the control 
of the Agency.
    Comment: A few individuals observed that the new regulations would 
put an unnecessary administrative burden on SSA and would create a new 
bureaucracy. Others suggested that the rules would also place an 
unwarranted burden on representatives and would have a chilling effect 
upon representation.
    Response: Although, as noted previously, these regulations may 
result in our receiving additional complaints of misconduct, the 
complaints will be handled by the same staff and in the same manner as 
complaints filed under the prior regulations. As we have stated below 
in response to similar comments, we do not believe that these 
regulations place an unwarranted burden on representatives or 
discourage representation. Instead, we believe that these rules will 
improve the efficiency of our administrative process.
    Comment:  Several commenters complained about claimants' 
representatives' lack of access to claim files, lost records, lack of 
response from SSA to inquiries, and delay in obtaining records from 
SSA.
    Response:  We agree that these issues are relevant, but they are 
not directly related to the subject matter of these rules. We will, of 
course, consider such extenuating circumstances in deciding whether 
there was inappropriate delay or failure to adequately prepare and 
present the claimant's case. As noted below, we will not hold a 
representative

[[Page 41410]]

accountable for matters beyond his or her control.
    Comment:  Several commenters expressed concern that SSA employees, 
including ALJs, may abuse the process by improperly finding violations 
of the standards of conduct or by making unreasonable demands on 
representatives.
    Response:  We believe that the internal checks and balances within 
our operating procedures provide adequate safeguards against abuse of 
discretion and/or arbitrary action. Furthermore, we note that the 
determination on whether to file a complaint against a representative 
for violating these regulations will be made by the Deputy Commissioner 
for Disability and Income Security Programs (or other official the 
Commissioner may designate), or his or her designee (hereinafter Deputy 
Commissioner or designee), rather than by any other employee, including 
an ALJ. Even after a complaint is served, a representative is entitled 
to file an answer and petition for withdrawal of the complaint. 
Thereafter, the accused party has a right to a full evidentiary 
hearing, and a right to request review of the resulting decision. In 
view of these elaborate safeguards, administered at each step by 
independent decision makers, it is unlikely that an honest mistake or a 
reasonable misunderstanding on the part of a representative would 
result in sanctions.
    Comment:  Other commenters intimated that we are proposing these 
rules to punish representatives or decrease the rate of representation.
    Response:  SSA neither encourages nor discourages representation. 
Our sole purpose in proposing these regulations is to carry out our 
statutory obligation to ensure that representatives, when utilized, 
meet certain standards in their dealings with claimants and with us.
    Comment:  Other commenters suggested a code of conduct for SSA 
employees, including ALJs.
    Response:  The suggestion is outside the scope and purpose of these 
rules. All SSA employees, including ALJs, must conform their conduct to 
government-wide standards of conduct. Any member of the public who 
believes that any SSA employee has violated these standards should 
report these violations to us. Additionally, we also have existing 
procedures to address allegations of bias or misconduct on the part of 
ALJs.
    Comment:  Several individuals commented on the issue of SSA's 
ability to contact the claimant directly. One representative stated 
that the proposed standards of conduct fail to point out what rules 
apply to SSA employees who contact and, according to this commenter, 
allegedly intimidate claimants although these claimants may be 
represented. One attorney stated that in other legal matters such as 
criminal or civil actions, it is improper to contact the client 
directly. Another commenter stated that it was not true that SSA may 
not contact a represented claimant directly. This individual stated 
that SSA may do so in cases of fraud or similar fault or to resolve 
discrepancies, and must do so to provide and explain rights and 
responsibilities in connection with the filing of a claim. 
Additionally, this individual observed that representatives should be 
aware that SSA can and will make such contacts.
    Response:  SSA's general policy is that SSA makes all contacts with 
a represented claimant in connection with prosecution of a claim 
through, or with the permission of, the appointed representative. 
However, SSA may contact the claimant directly: if the representative 
asks SSA to deal directly with the claimant; or if SSA's records 
indicate that the claimant is represented, but there is insufficient or 
conflicting information regarding who the claimant's representative is; 
or if an appointed representative's authority may have expired, but 
there is insufficient information in the file or on the system to make 
this determination accurately; or if the issue involves a possible 
violation by the representative or the claimant. Also, because an 
appointed representative's authority ordinarily does not extend to 
signing an application on behalf of a claimant, SSA frequently does 
have direct contact with a claimant during the claims-filing process. 
Contacts other than as explained above are not in accordance with our 
procedures, and we would certainly want to be told about employee 
improprieties, such as alleged intimidation.
    Comment:  Several ALJs in one hearing office and the Association of 
ALJs requested an additional rule dealing with withdrawal of 
representation by representatives shortly before or on the date of the 
hearing. They indicated that in no court may a representative withdraw 
from a case without leave of court and that the absence of such a 
requirement for SSA hearings results in additional delay and a waste of 
time and money. These commenters propose a rule requiring the 
representative to show good cause for withdrawal, or by allowing 
withdrawal no later than six days after notice of hearing is issued 
without having to show good cause.
    Response: SSA's decisionmaking process is nonadversarial and 
informal, and claimants do not require representation. The decision to 
have a representative is the claimant's, and SSA neither encourages nor 
discourages representation. A claimant may revoke the appointment of a 
representative at any time. Likewise, a representative may withdraw 
from representing a claimant at any time. Any rule limiting the 
withdrawal of a representative would contravene SSA's basic policy on 
representation. If a claimant still desires representation after his or 
her representative withdraws, we will allow the individual time to 
secure a new representative before we adjudicate the claim.
    Comment: One ALJ suggested that SSA by regulation, or Congress 
through statute, provide SSA ALJs with some form of limited contempt or 
sanction powers to control the conduct of representatives and claimants 
in addition to the proposed rules. The ALJ mentioned that recently 
enacted legislation gave immigration judges the authority to sanction 
by civil money penalty any action or inaction in contempt of the 
judge's proper exercise of authority. The ALJ also cited a proposal to 
give Department of Health and Human Services Departmental Appeals Board 
ALJs sanction powers in civil monetary penalty cases. Another commenter 
suggested that Secs. 404.1740(b) and 416.1540(b) should place an 
affirmative duty on representatives to comply with prehearing orders. 
According to this commenter, the regulation should indicate that the 
ALJ has authority to issue and expect compliance with such prehearing 
orders.
    Response: SSA ALJs do not have contempt powers or sanction 
authority, and we do not have legislation similar to that cited by the 
commenter. SSA ALJs, on their own initiative, will not have the 
authority to enforce these rules. Instead, as noted above, the 
determination on whether to file a complaint against a representative 
will be made by the Deputy Commissioner or designee. Finally, we 
believe that giving contempt or sanction authority to ALJs does not 
seem necessary or appropriate to SSA's informal, nonadversarial 
proceedings which deal primarily with disability and retirement issues.
    Comment: A frequent comment concerning the February 1995 draft was 
that the proposed standards used terms that were too vague and 
ambiguous, such as ``timely,'' ``diligence,'' ``as soon as possible'' 
and ``matters at issue.'' To be responsive to these concerns and 
further clarify our requirements in the

[[Page 41411]]

NPRM, we modified the language that was most often identified as 
ambiguous. However, we received comments on the NPRM that some of the 
language continued to be vague and ambiguous.
    Response: We have made further revisions to address these concerns 
and, in some instances, have added language similar to that in model 
codes of conduct. Attorneys are familiar with model code language, and 
these codes have a long interpretive history of similar provisions and 
language which can be used as guidance for both attorneys and non-
attorneys.
    Comment: Some commenters found the entire substance of the proposed 
standards to be ambiguous, although one believed they were drawn too 
narrowly and should be expanded. Several argued that the proposals did 
not provide adequate notice to representatives of the exact types of 
conduct we would find to be in violation of these regulations.
    Response: We believe that the rules, as revised, define with 
sufficient specificity the types of conduct subject to regulation. 
Similar to other standards of conduct (e.g., the ABA Model Rules), 
these regulations do not list every act or omission which might 
constitute a violation. Such a listing would be inappropriate to a 
regulation and would be virtually impossible to complete given the 
limitless factual situations involved in representing claimants. 
Rather, we intend to deal with each complaint on a case-by-case basis 
to determine whether, under the attending circumstances, a 
representative engaged in actionable misconduct. In making this 
determination we will evaluate whether a reasonable person, in light of 
all the circumstances, would consider the act or omission violative of 
the rule in question. Once it is determined that a formal complaint is 
warranted, the Deputy Commissioner or designee reviews the proposal 
independently from the investigative component and makes a decision 
whether to file a complaint. Moreover, the individual or individuals 
identifying the misconduct, whether an ALJ or other employee, will not 
be the sanctioning authority or initiate the formal complaint.
    Comment: The majority of the commenters objected to the revised 
wording of proposed Secs. 404.1740(b)(1) and 416.1540(b)(1) which 
required the representative to ``[p]romptly obtain all information and 
evidence which the claimant wants to submit in support of the claim and 
forward the same for consideration as soon as practicable, but no later 
than the due date designated by the Agency, except for good cause 
shown.'' Many commenters believed that this rule was overly broad and 
would put an undue burden on representatives. They also believe that 
these requirements and the ones contained in Secs. 404.1740(b)(2) and 
416.1540(b)(2) are procedural rules which are inappropriate for ethical 
standards governing the conduct of representatives.
    Several representatives noted that they do not submit evidence 
until the case is at the ALJ level because, according to them, so few 
claims are allowed at the initial and reconsideration levels. Other 
commenters noted that rather than improving the efficiency of the 
process, this rule would add procedural barriers to the process by 
setting up vague, unspecified deadlines by which all evidence must be 
submitted.
    A few commenters stated that ``evidence which the claimant wants to 
submit in support of the claim'' should be defined. One commenter noted 
that this requirement is impractical because claimants often want their 
representatives to obtain and submit evidence that is 15 or 20 years 
old or do not remember relevant information. Another commenter observed 
that evidence is often incrementally discovered over a period of time 
so that it is not reasonable to require that all evidence be submitted 
by a specific date. An additional commenter pointed out that because 
SSA is not required to complete any step of the administrative 
decisionmaking process by a set deadline, it would be impossible for 
the representative to decide when to request and submit the evidence 
that would give the best chance of obtaining an award of benefits.
    A number of commenters objected to the requirement that evidence be 
submitted ``as soon as practicable'' or by the ``due date'' set by the 
Agency. They believe that these terms are vague and lack the 
specificity required in a rule governing conduct. One individual asked 
whether there was any way to state a specific event or method for 
determining due dates and noted that the proposed rules did not provide 
any direction to SSA personnel as to how to select due dates. Several 
commenters, including NOSSCR, stated that mandating due dates for 
submission of evidence is equivalent to closing the record in 
contravention of current law. One commenter noted that if the due date 
is prior to the date of the adjudicator's determination, good cause 
would have to exist as a matter of law to allow submission of evidence 
related to the time period between the due date and the decision date. 
Otherwise the result would be to close the record prior to the date of 
the determination. Several commenters also observed that the term 
``good cause'' is undefined, and there is no mechanism for determining 
when good cause would apply.
    Response: The claimant has a right to receive benefits under the 
Act only after establishing that he or she satisfies the underlying 
statutory and regulatory requirements. The NPRM envisioned that under 
the new disability process, claimants would be expected to take a more 
active role in establishing entitlement or eligibility for Social 
Security benefits. The representative, as the designated agent of the 
claimant, would likewise be called upon to play an even greater role in 
assisting the claimant in processing the claim.
    However, because SSA has not yet fully evaluated changes in the 
role that the claimant will have to play, we have revised the language 
concerning the duty of representatives in this area to conform with the 
current regulatory requirements placed on claimants in general, and on 
disability claimants in particular in Secs. 404.1512 and 416.912.
    We note that in promulgating these rules, we have not changed our 
existing duties and responsibilities with regard to developing the 
record and obtaining the evidence necessary to adjudicate disability 
and blindness claims. See section 223(d)(5)(B) of the Act and 
Secs. 404.1512 and 416.912 and 404.1614 and 416.1014. Moreover, we are 
not shifting the duty to claimants or representatives to develop the 
record. Instead, these rules are intended to ensure that a 
representative will assist the claimant in complying with his or her 
responsibilities to provide us information and evidence under our 
regulations. Although this requirement has not been previously included 
in the regulations, we believe that this assistance is an integral part 
of representation and has always been our expectation.
    Accordingly, we have revised Secs. 404.1740(b)(1) and 
416.1540(b)(1) to clarify that the representative will be expected to 
assist the claimant in submitting the evidence that the claimant wishes 
to have considered by SSA. In deleting the requirement that the 
evidence be submitted by a specific due date, we have acknowledged the 
possible difficulties that claimants and representatives may face in 
obtaining evidence. Furthermore, although we did not intend the rules 
to have the effect of closing the record, some individuals have 
mistakenly interpreted the due date requirement as an improper attempt 
to achieve that goal. Therefore, deletion of the due date requirement

[[Page 41412]]

should remove any confusion regarding this issue.
    Nevertheless, we expect the representative to assist the claimant 
in submitting evidence on a timely basis. This means that the 
representative should make a reasonable effort to promptly obtain and 
organize the available, supporting evidence and submit it to SSA for 
the earliest possible consideration. Every claimant is entitled to the 
earliest possible decision on as complete a record as possible at every 
stage of our process. SSA's commitment to claimant service relies on 
the availability of necessary evidence at the earliest possible stage 
in the process so that we can make an accurate and fair determination 
without delay caused by the need to obtain additional evidence.
    In assessing any allegation raised against a representative 
regarding failure to assist the claimant under these rules, we will 
consider the efforts taken to assist the claimant in submitting 
evidence. The rules apply both to disability and nondisability claims, 
with additional rules applying to disability claims. A representative 
will be expected to make reasonable, not extraordinary, efforts to 
obtain and submit evidence on a timely basis. We recognize that in 
providing representational services to a claimant, the representative 
may advise the claimant concerning the need to submit particular 
evidence. Also, we recognize that some claimants may be unable to 
effectively consult with their representatives regarding what evidence 
should be submitted and that the representative may be required to act 
on the claimant's behalf to ensure that the relevant evidence is 
available to the adjudicator. In addition, we have added to these 
regulations a reference to ``good cause'' when a representative is 
unable to submit such evidence (as defined in Secs. 404.911(b) and 
416.1411(b)), to provide examples of situations in which good cause may 
exist. ``Good cause'' will be determined in the administrative 
proceeding initiated by the Deputy Commissioner or designee to consider 
whether there was misconduct by the representative.
    Comment: The majority of commenters objected to the affirmative 
duties specified in Secs. 404.1740(b)(2) and 416.1540(b)(2) on the 
basis that SSA was attempting to improperly delegate to claimants and 
representatives its own duty to develop the record, which could place 
representatives at the mercy of arbitrary or unreasonable SSA requests 
for information. Specifically, a number of commenters observed that 
this rule conflicts with SSA's duty to develop the record pursuant to 
sections 223(d)(5)(B) and 1614(a)(3)(H) of the Act and Secs. 404.1512 
and 416.912. Other commenters cited possible conflicts with 
Secs. 404.1519a and 416.919a, and one commenter cited a possible 
conflict with Social Security Ruling 96-2p. A few commenters observed 
that the duty to develop the record must remain with SSA because the 
proceedings are nonadversarial, and the focus is on claimants who are 
seeking benefits when they are vulnerable. Several commenters also 
pointed out that the language did not allow for discretion in 
situations involving uncooperative treating physicians and 
uncooperative or uneducated claimants.
    Several commenters took exception to the statement in the NPRM that 
under the proposed redesigned disability process, claimants and 
representatives would be expected to take a more active role in 
developing the record. They believed that the proposed rules imposed 
new requirements on representatives when the duties placed on claimants 
themselves have not been changed. A few commenters also noted that 
applying different standards to represented and unrepresented claimants 
with regard to the rules for submission of evidence would violate equal 
protection.
    Noting some improvement from the February 1995 draft, the ABA and 
other commenters nevertheless believed that the proposed rules were 
vague and overly broad and interpreted them as giving Agency staff the 
right to demand that the representative produce copies of almost any 
client information and records, at any time after the claim was filed, 
with no effort to limit the scope, the relevance or the frequency of 
the requests. The ABA and a number of other commenters noted that 
frequent demands for repeated updating of the medical information from 
each treating physician would cause unnecessary expense to claimants 
and inconvenience to the party from whom the information is sought. A 
few commenters expressed confusion about the meaning of the term ``may 
readily obtain'' and questioned whether representatives would also be 
required to obtain consultative examinations that are now obtained by 
SSA. Citing the time taken to decide claims in SSA's administrative 
process, a number of commenters observed that they may be forced to 
update evidence on a regular basis while waiting up to a year or more 
for a determination on the claim.
    As with regard to Secs. 404.1740(b)(1) and 404.1540(b)(1), a number 
of commenters objected to the requirements that evidence be submitted 
``as soon as practicable'' or by the ``due date'' set by the Agency on 
the basis that these terms are vague and undefined. They also believe 
that setting deadlines for submission of evidence requested by SSA 
would result in improper closure of the record.
    Response: As we did with regard to Secs. 404.1540(b)(1) and 
416.912(b)(1) above, we have revised the language concerning the duty 
of representatives in this area to conform with our current regulatory 
requirements for both disability and nondisability claims in general, 
and in particular the requirements in disability and blindness claims 
placed on claimants in Secs. 404.1512 and 416.912. Therefore, we have 
revised this rule to clarify that the representative is required to 
assist the claimant in complying, as soon as practicable, with our 
requests for information and evidence at any stage of the 
administrative decisionmaking process pursuant to Secs. 404.1512(c) and 
416.912(c). This includes the obligation to provide evidence regarding 
the items listed therein. In our view, the provisions of 
Secs. 404.1740(b)(2) and 416.1540(b)(2) require the representative to 
comply with our requests made under statutory authority for full and 
accurate disclosure of material facts to the same extent that the 
claimant is required to do so.
    As stated above, we have not changed our existing duties and 
responsibilities with regard to developing the record and obtaining the 
evidence necessary to adjudicate claims, nor are we shifting any duty 
to claimants or representatives to develop the record. These rules are 
intended to ensure that a representative will assist the claimant in 
complying with his or her responsibilities under our regulations.
    As we did in Secs. 404.1740(b)(1) and 416.1540(b)(1), we have 
deleted the requirement that the information and evidence be submitted 
by the ``due date'' designated by the Agency. However, as noted above, 
we do expect the representative to assist the claimant in submitting 
the evidence and information requested by SSA on a timely basis. This 
means that the representative should make a reasonable effort to obtain 
and organize the available evidence and submit it to SSA for the 
earliest possible consideration. This will facilitate our goal to 
ensure that we make a correct determination at the earliest stage of 
the process.
    In assessing any allegation raised against a representative 
regarding failure to assist the claimant in complying with our request 
for information, we will consider the reasonableness of the request, 
the relevance of the information requested, and any factors that may

[[Page 41413]]

interfere with the procurement of requested information. For example, 
if a representative has made several attempts to obtain the requested 
information from the claimant or another source without receiving a 
response, we will likely determine that such efforts are in compliance 
with our rules.
    Comment: Many commenters raised the issue of who must pay to obtain 
medical records. A number of individuals cited the high costs of 
obtaining medical records from physicians and hospitals and noted that 
many claimants would be unable to pay such costs. Some attorneys 
expressed concern that they may be required to advance funds for 
records and that this may be in contravention of State bar rules.
    Response: We are not changing our existing rules concerning payment 
for evidence. We will continue to pay for the medical records that we 
need to adjudicate claims pursuant to our existing regulations.
    Comment: Many of the attorney commenters on the February 1995 draft 
stated that compliance with proposed Secs. 404.1740(b)(2) and 
416.1540(b)(2), which in the February 1995 draft asked representatives 
to ``[p]romptly comply, at every stage of the administrative review 
process, with our requests for information and evidence,'' might place 
them in violation of their own State bar rules requiring zealous 
advocacy and protection of confidential client information. As stated 
in the NPRM, based on these preliminary comments, we modified proposed 
Secs. 404.1740(b)(2) and 416.1540(b)(2) to permit representatives to 
protect a client's confidentiality by notifying SSA that ``the claimant 
does not consent to release of some or all of the [requested] 
material.'' This language in the NPRM caused many commenters, including 
the ABA, to state that the proposed revision would ``red flag'' this 
evidence and permit ALJs and SSA to draw adverse inferences based on 
the statement of the claimant's declination to release the material. 
The commenters believed that this issue raised serious ethical concerns 
and observed that notifying SSA of the claimant's refusal to submit 
evidence could subject them to sanction by their State bar associations 
for failing to protect the confidences and secrets of their clients.
    Specifically, one commenter noted that this provision would put 
attorneys at odds with the State Bar of Georgia's Standard #28 which 
provides that ``[a] lawyer may not reveal the secrets and confidences 
of a client.'' Similarly, another commenter cited a conflict with 
California Business and Professional Code section 6068 subsection (e), 
which requires an attorney ``to maintain inviolate the confidence, and 
at every peril to himself or herself to preserve the secrets, of his or 
her client.'' Additionally, the ABA cited a potential conflict with 
Model Rule 1.6 which prohibits an attorney from revealing client 
information without the client's consent.
    Conversely, a number of commenters, notably ALJs, felt that the 
proposed revision would create a privilege from disclosure for 
claimants where none was intended and no privilege currently exists. 
The ALJs found this to be extremely troublesome and noted that it would 
result in decisions that are based on an incomplete evidentiary record.
    Additionally, one commenter observed that it is unrealistic to 
expect a representative to engage in a consultation with the claimant 
in the short timeframe in which the claimant would be expected to 
exercise an informed decision on whether to release or withhold 
information. Other commenters noted that some medical and psychiatric 
reports are stamped with clear warnings that they should not be 
disclosed to the claimant. Therefore, it could be harmful if the 
representative was required to discuss such a report with the claimant 
to determine if the claimant would give consent for release.
    Response: Because of the confusion and ethical concerns surrounding 
this proposed language, we have removed it from the final regulations 
and inserted language which reflects the currently existing regulatory 
requirements concerning the claimant's and the representative's 
obligations in terms of responding to our requests. As explained above, 
in disability and blindness claims, this language is in conformity with 
the existing requirements of Secs. 404.1512 and 416.912.
    Comment: Some commenters expressed concerns about how proposed 
Secs. 404.1740(b)(3)(i) and 416.1540(b)(3)(i), which deal with a 
representative's duty to be cognizant of the matters at issue, as well 
as evidentiary and procedural requirements, would be applied. They 
specifically posed questions about whether lack of knowledge of one 
procedural rule or disagreement with an ALJ over the application of a 
particular standard or rule would be enough to cause a complaint to be 
filed against a representative.
    Response: We revised Secs. 404.1740(b)(3)(i) and 416.1540(b)(3)(i) 
to clarify our expectations regarding the knowledge and preparation 
required to represent claimants before us. We based this revision on 
ABA Model Rule 1.1 which requires competent representation. We also 
added language specifying that a representative should know the 
significant issue(s) in a claim and have a working knowledge of the 
applicable provisions of the Act, the regulations and the Rulings. 
However, this does not mean that a representative has to know every 
provision.
    Furthermore, we will deal with each complaint on a case-by-case 
basis to determine whether a representative engaged in actionable 
conduct. We will determine whether a reasonable person, in light of all 
the circumstances, would consider the act or omission violative of the 
section of the regulation in question.
    Comment: One commenter was confused about the meaning of 
Secs. 404.1740(b)(3)(ii) and 416.1540(b)(3)(ii) and asked whether 
``information pertinent to the processing of the claim'' would require 
a representative to investigate issues such as whether the claimant was 
engaging in part-time work.
    Response: We revised this section to clarify the requirement that 
the representative must promptly respond to our requests for 
information concerning the claim. We based this revision on ABA Model 
Rule 1.3 which requires reasonable diligence and promptness. In 
applying this rule, we will not expect the representative to 
investigate the claim or to obtain information that is not readily 
available. Instead, the rule is intended to ensure that representatives 
are responsive to our inquiries so that the processing of the claim 
will not be delayed pending a response from the representative on the 
claimant's behalf. There is no time limit on when responses must be 
provided, but a representative should promptly respond. Furthermore, 
``information pertinent to processing the claim'' means the information 
and evidence that the claimant, with the assistance of the 
representative, as required, should submit under the current statutory 
and regulatory requirements.
    Comment: One commenter believed that Secs. 404.1740(b)(3)(iii) and 
416.1540(b)(3)(iii) may raise an ethical problem for an attorney who 
may be put in the position between demonstrating good cause by showing 
that the claimant is unavailable and possibly uncooperative or risking 
a finding by SSA that the attorney is acting unethically.
    Response: We deleted this section from the final regulations 
because we believe that cooperation by the

[[Page 41414]]

representative is inherent in the competent and diligent representation 
of a claimant. With regard to a showing of ``good cause,'' this would 
occur in a proceeding separate from the claims process. Therefore, it 
would not impair the representative's ethical duty to his or her 
client.
    Comment: The ABA commented that although Secs. 404.1740(c) and 
416.1540(c) were an improvement over the earlier draft and began to 
define the conduct that would be considered objectionable, the proposed 
rules were still vaguely worded.
    Response: As discussed below, where appropriate, we have revised 
the provisions of these sections to clarify the conduct that we will 
consider to be inappropriate.
    Comment: An ALJ expressed concern about misstatements of fact or 
occurrences by representatives in their arguments before the Appeals 
Council. The ALJ suggested that we add a provision to Secs. 404.1740(c) 
and 416.1540(c) prohibiting a representative from making any incorrect 
statement about a proceeding or persons involved in a proceeding before 
SSA. The ALJ further suggested that this provision should make it clear 
that a ``material fact within our jurisdiction'' is to be read much 
more broadly than facts affecting the outcome of the case and should 
also include matters such as the conduct of the hearing, performance of 
the ALJ and other SSA personnel and the testimony of impartial 
witnesses.
    Response: We decided not to adopt this suggestion. We believe that 
the language of Secs. 404.1740(c)(3) and 416.1540(c)(3) adequately 
addresses our intent to prevent false statements concerning a claim at 
any stage in our process. Furthermore, if we added such a provision, we 
believe that SSA could be subject to disputes concerning the actual 
``correctness'' of statements made about SSA personnel, including ALJs. 
In order to more closely track the statutory requirements, we revised 
this section to add a prohibition against ``misleading'' statements.
    Comment: One commenter objected to Secs. 404.1740(c)(1) and 
416.1540(c)(1) on the basis that these sections conflict with 
Secs. 404.1740(b)(2)(i) and 416.1540(b)(2)(i), which require the 
representative to ask for the client's consent to release the evidence 
needed for adjudication. The commenter believed that requesting the 
claimant's consent would be the equivalent of coercing the claimant by 
using the representative's relationship with the claimant to direct a 
decision or action by the claimant.
    Response: For the reasons discussed in our response above, we have 
deleted Secs. 404.1740(b)(2)(i) and 416.1540(b)(2)(i) from the final 
regulations. A representative would never have been required to coerce 
a claimant in order to comply with any of the affirmative duties 
specified in the rules, and our deletion of these sections should 
clarify the matter. We also note that Secs. 404.1740(c)(1) and 
416.1540(c)(1) are based on the prohibitions set forth in section 
206(a)(5) of the Act and are self-explanatory.
    Comment: We received comments which indicated the perception that 
Secs. 404.1740(c)(2) and 416.1540(c)(2) would somehow change the 
statutory, regulatory and administrative authorities and requirements 
for submitting, evaluating and paying requests for approval of fees 
under the fee petition or fee agreement procedures.
    Response: That is not the import or intent of these sections. As we 
stated in the NPRM, these sections are based on the provisions of 
sections 206(a) and (b) and 1631(d)(2) of the Act and apply to all fee 
collections.
    Comment: With regard to Secs. 404.1740(c)(4) and 416.1540(c)(4), 
the ABA and other commenters stated that while SSA should not tolerate 
improper delays, representatives should not be subjected to sanction 
while acting in good faith and for purposes other than delay. The ABA 
noted that this rule fails to set forth a standard by which to measure 
the reason for the delay. Other commenters noted that the use of the 
word ``negligent'' is inappropriate and could subject a representative 
to sanction for missing only one deadline or by missing a deadline by 
only one day. One individual suggested that we add language prohibiting 
conduct resulting in delay for a significant period of time. Another 
commenter noted that this section creates a prohibited action which is 
beyond the control of the representative because all time limits are 
under the exclusive control of SSA. One commenter suggested that we 
define good cause to include any basis upon which a representative 
negligently or inadvertently failed to complete a required action. 
Another commenter stated that the ALJ has the sole authority to 
determine whether good cause would apply. An additional commenter 
suggested that we include language from the preamble indicating how 
these sections will be applied to the final regulations.
    Response: We revised these sections to clarify that representatives 
through their own actions or omissions should not unreasonably delay 
the processing of a claim. In addition, we deleted ``willfully or 
negligently'' and added a reference to Secs. 404.911(b) and 416.1411(b) 
which set forth examples of ``good cause.'' Furthermore, we reiterate 
that SSA does not intend to penalize representatives for reasonable or 
justifiable delays or delays that may occur even when reasonable care 
is taken in preparing the claim.
    In determining whether a representative has violated this rule, we 
will look at the gravity of the representative's conduct, the 
consequences to the claimant, whether the behavior represents a pattern 
or practice and other factual circumstances related to the matter. This 
section is intended to prohibit intentional conduct or conduct that 
evinces a failure to apply a reasonable standard of care in 
representing the claimant, e.g., conduct that results in an 
unreasonable delay, not a minor wait. We also note that representatives 
will not be held accountable for delays in our administrative 
decisionmaking process. Additionally, as stated above, the 
determination of whether to file a complaint for violation of this or 
any other regulation governing the conduct of representatives will be 
made by the Deputy Commissioner or designee.
    Comment: A few individuals and the ABA expressed concern about the 
intent of Secs. 404.1740(c)(5) and 416.1540(c)(5). The commenters 
questioned whether this rule would apply to information about the 
claimant or other persons and whether it would allow the representative 
to release the claimant's medical reports to the claimant's treating 
source. Another commenter believed that this rule was an attempt to 
interfere with the attorney-client relationship. The same individual 
also opined that this rule runs contrary to the provisions of the 
Privacy Act and the recent amendments to the Freedom of Information 
Act.
    Response: Similar language was included in the prior regulations at 
Secs. 404.1740(d) and 416.1540(d). This rule is based on section 1106 
of the Act, which prohibits disclosure by any person of information 
obtained from the Agency in conjunction with a claim, except as may be 
authorized by our regulations or as otherwise determined by Federal 
Law. It is intended to prevent a representative from improperly 
disclosing information received from SSA, without the claimant's 
consent, in contravention of our regulations. We have deleted the 
reference to information about another person to clarify that 
disclosure is warranted only

[[Page 41415]]

with the consent of the claimant or as otherwise authorized by Statute 
or our regulations.
    Comment: One commenter was confused about the meaning of 
Secs. 404.1740(c)(6) and 416.1540(c)(6) and questioned whether these 
sections would prohibit actions such as a law firm's discussing 
possible employment opportunities with SSA employees or social 
interactions between ALJs and private attorneys outside of work hours.
    Response: This rule is intended to prevent the fact or appearance 
of attempting to influence the disposition of a claim by offering or 
giving something of value to an individual in a position to materially 
affect the outcome of the case. It is not intended to apply to conduct 
unrelated to the adjudication of claims.
    Comment: Several commenters, including the ABA and NOSSCR, objected 
to Secs. 404.1740(c)(7) and 416.1540(c)(7) on the basis that these 
sections are vague and would interfere with an advocate's ability to 
zealously represent his or her client. The commenters believe that this 
rule does not provide an objective standard indicating what is 
permissible and what is not. The ABA also observed that the proposed 
limitations raised First Amendment concerns regarding freedom of 
speech.
    A few commenters noted that it may be appropriate for an attorney 
to ``threaten'' to appeal an ALJ's decision and to point out errors 
made by the ALJ during the hearing. A few individuals also opined that 
a representative who points out matters of ignorance or impropriety by 
the ALJ may be subject to allegations of discourteous behavior by the 
same ALJ. Another commenter observed that this rule is unnecessary 
because in most cases, the parties act appropriately.
    Response: In response to these concerns, we modified the language 
in Secs. 404.1740(c)(7)(iii) and 416.1540(c)(7)(iii) to prohibit 
threatening or intimidating language or conduct ``which results in a 
disruption of the orderly presentation and reception of evidence.'' We 
realize that zealous advocacy may require vigorous argument and that it 
may be appropriate for an advocate to point out errors during the 
proceeding or to take exception to the conduct of the proceeding. This 
rule is not intended to interfere with or limit an advocate's ability 
to argue the case on behalf of his or her client if done in a 
professional manner. Instead, this provision is intended to address 
blatantly offensive or disruptive conduct or language that prevents the 
adjudicator from conducting the proceeding in a manner that results in 
a full examination of the evidence and the testimony presented. We must 
ensure that the proceeding is conducted in an appropriate manner and is 
not disrupted by individuals who engage in conduct or language which 
prevents the full consideration of the issues to be decided.
    In determining whether a representative has violated this rule, we 
will look at the totality of the circumstances, including the 
egregiousness of the conduct, its impact on the claimant or the Agency, 
possible provocation and whether the behavior reflects a pattern or 
practice. By setting a threshold of disruption of the proceeding, we 
have set a standard high enough to avoid infringing on zealous, strong 
advocacy. Finally, to address concerns that ALJs or other individuals 
may improperly find violations of this provision, we again note that 
ALJs will not make the determination of whether to file a complaint 
against a representative and that instead, the decision will be made by 
the Deputy Commissioner or designee.
    Comment: A few individuals asked questions such as whether a 
representative can request instructional advice from SSA to avoid 
violating these rules or question our determination to file a 
complaint.
    Response: In order to ensure that representatives understand these 
rules and comply with them, we welcome requests for information and 
guidance from individual representatives. Furthermore, as under our 
current procedures, representatives will be given an opportunity to 
respond to charges that they have violated these rules. In many cases, 
we should be able to resolve the problem through informal means such as 
written or oral counselling of the representative, making a formal 
complaint unnecessary. In some cases, a representative may not be aware 
that his or her conduct has resulted in a violation of these 
regulations and once advised of the violation will conform with our 
rules. As under the current regulations, if the Deputy Commissioner or 
designee determines that a complaint should be filed against a 
representative, the Deputy Commissioner or designee will send the 
representative a notice containing a statement of the charges that 
constitute the basis for the proceeding. The representative will have 
30 days to file an answer stating why he or she should not be 
disqualified from acting as a representative. The representative will 
also have the opportunity for a hearing on the charges.
    Accordingly, for the reasons set out above, the proposed rules are 
being published as final rules with the revisions as noted.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these rules do not meet the criteria for a 
significant regulatory action under Executive Order 12866. Thus, they 
were not subject to OMB review.

Regulatory Flexibility Act

    We certify that these regulations will not have a significant 
economic impact on a substantial number of small entities. The 
provisions of the rules that involve entities were developed to allow 
them to provide representational services without generating any 
supplemental reporting requirements. These rules will not result in any 
increased legal, accounting or consulting costs to small businesses or 
small organizations, will not adversely affect competition in the 
marketplace, or create barriers to entry on the part of small entities. 
In fact, these rules may facilitate such entry into the representation 
sphere. The regulations will provide uniform standards applicable to 
all entities who engage in the business and tend to disqualify the 
unscrupulous and the incompetent practitioners, thereby expanding 
demand for others willing and able to perform the service. Therefore, a 
regulatory flexibility analysis as provided in the Regulatory 
Flexibility Act, as amended, is not required.

Paperwork Reduction Act

    These regulations impose no reporting/recordkeeping requirements 
necessitating clearance by OMB.

    (Catalog of Federal Domestic Assistance Program Nos. 96.001, 
Social Security-Disability Insurance; 96.002, Social Security-
Retirement Insurance; 96.004, Social Security-Survivors Insurance; 
96.006, Supplemental Security Income)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Blind, Disability benefits, 
Old-Age, Survivors and Disability Insurance, Reporting and 
recordkeeping requirements, Social Security.

20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Supplemental Security Income 
(SSI),

[[Page 41416]]

Reporting and recordkeeping requirements.

    Dated: July 24, 1998.
Kenneth S. Apfel,
Commissioner of Social Security.

    For the reasons set forth in the preamble, part 404, subpart R, and 
part 416, subpart O, chapter III of title 20 of the Code of Federal 
Regulations are amended as set forth below.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950-- )

Subpart R--[Amended]

    1. The authority citation for subpart R of part 404 continues to 
read as follows:

    Authority: Secs. 205(a), 206, and 702(a)(5) of the Social 
Security Act (42 U.S.C. 405(a), 406, and 902(a)(5)).

    2. Section 404.1740 is revised to read as follows:


Sec. 404.1740  Rules of conduct and standards of responsibility for 
representatives.

    (a) Purpose and scope. (1) All attorneys or other persons acting on 
behalf of a party seeking a statutory right or benefit shall, in their 
dealings with us, faithfully execute their duties as agents and 
fiduciaries of a party. A representative shall provide competent 
assistance to the claimant and recognize the authority of the Agency to 
lawfully administer the process. The following provisions set forth 
certain affirmative duties and prohibited actions which shall govern 
the relationship between the representative and the Agency, including 
matters involving our administrative procedures and fee collections.
    (2) All representatives shall be forthright in their dealings with 
us and with the claimant and shall comport themselves with due regard 
for the nonadversarial nature of the proceedings by complying with our 
rules and standards, which are intended to ensure orderly and fair 
presentation of evidence and argument.
    (b) Affirmative duties. A representative shall, in conformity with 
the regulations setting forth our existing duties and responsibilities 
and those of claimants (see Sec. 404.1512 in disability and blindness 
claims):
    (1) Act with reasonable promptness to obtain the information and 
evidence that the claimant wants to submit in support of his or her 
claim, and forward the same to us for consideration as soon as 
practicable. In disability and blindness claims, this includes the 
obligations to assist the claimant in bringing to our attention 
everything that shows that the claimant is disabled or blind, and to 
assist the claimant in furnishing medical evidence that the claimant 
intends to personally provide and other evidence that we can use to 
reach conclusions about the claimant's medical impairment(s) and, if 
material to the determination of whether the claimant is blind or 
disabled, its effect upon the claimant's ability to work on a sustained 
basis, pursuant to Sec. 404.1512(a);
    (2) Assist the claimant in complying, as soon as practicable, with 
our requests for information or evidence at any stage of the 
administrative decisionmaking process in his or her claim. In 
disability and blindness claims, this includes the obligation pursuant 
to Sec. 404.1512(c) to assist the claimant in providing, upon our 
request, evidence about:
    (i) The claimant's age;
    (ii) The claimant's education and training;
    (iii) The claimant's work experience;
    (iv) The claimant's daily activities both before and after the date 
the claimant alleges that he or she became disabled;
    (v) The claimant's efforts to work; and
    (vi) Any other factors showing how the claimant's impairment(s) 
affects his or her ability to work. In Secs. 404.1560 through 404.1569, 
we discuss in more detail the evidence we need when we consider 
vocational factors; and
    (3) Conduct his or her dealings in a manner that furthers the 
efficient, fair and orderly conduct of the administrative 
decisionmaking process, including duties to:
    (i) Provide competent representation to a claimant. Competent 
representation requires the knowledge, skill, thoroughness and 
preparation reasonably necessary for the representation. This includes 
knowing the significant issue(s) in a claim and having a working 
knowledge of the applicable provisions of the Social Security Act, as 
amended, the regulations and the Rulings; and
    (ii) Act with reasonable diligence and promptness in representing a 
claimant. This includes providing prompt and responsive answers to 
requests from the Agency for information pertinent to processing of the 
claim.
    (c) Prohibited actions. A representative shall not:
    (1) In any manner or by any means threaten, coerce, intimidate, 
deceive or knowingly mislead a claimant, or prospective claimant or 
beneficiary, regarding benefits or other rights under the Act;
    (2) Knowingly charge, collect or retain, or make any arrangement to 
charge, collect or retain, from any source, directly or indirectly, any 
fee for representational services in violation of applicable law or 
regulation;
    (3) Knowingly make or present, or participate in the making or 
presentation of, false or misleading oral or written statements, 
assertions or representations about a material fact or law concerning a 
matter within our jurisdiction;
    (4) Through his or her own actions or omissions, unreasonably delay 
or cause to be delayed, without good cause (see Sec. 404.911(b)), the 
processing of a claim at any stage of the administrative decisionmaking 
process;
    (5) Divulge, without the claimant's consent, except as may be 
authorized by regulations prescribed by us or as otherwise provided by 
Federal law, any information we furnish or disclose about a claim or 
prospective claim;
    (6) Attempt to influence, directly or indirectly, the outcome of a 
decision, determination or other administrative action by offering or 
granting a loan, gift, entertainment or anything of value to a 
presiding official, Agency employee or witness who is or may reasonably 
be expected to be involved in the administrative decisionmaking 
process, except as reimbursement for legitimately incurred expenses or 
lawful compensation for the services of an expert witness retained on a 
non-contingency basis to provide evidence; or
    (7) Engage in actions or behavior prejudicial to the fair and 
orderly conduct of administrative proceedings, including but not 
limited to:
    (i) Repeated absences from or persistent tardiness at scheduled 
proceedings without good cause (see Sec. 404.911(b));
    (ii) Willful behavior which has the effect of improperly disrupting 
proceedings or obstructing the adjudicative process; and
    (iii) Threatening or intimidating language, gestures or actions 
directed at a presiding official, witness or Agency employee which 
results in a disruption of the orderly presentation and reception of 
evidence.
    3. Section 404.1745 is revised to read as follows:


Sec. 404.1745  Violations of our requirements, rules, or standards.

    When we have evidence that a representative fails to meet our 
qualification requirements or has violated the rules governing dealings 
with us, we may begin proceedings to suspend or disqualify that 
individual from acting in a representational capacity before us. We may 
file charges

[[Page 41417]]

seeking such sanctions when we have evidence that a representative:
    (a) Does not meet the qualifying requirements described in 
Sec. 404.1705;
    (b) Has violated the affirmative duties or engaged in the 
prohibited actions set forth in Sec. 404.1740; or
    (c) Has been convicted of a violation under section 206 of the Act.
    4. Section 404.1750 is amended by revising paragraphs (a) and (d) 
to read as follows:


Sec. 404.1750  Notice of charges against a representative.

    (a) The Deputy Commissioner for Disability and Income Security 
Programs (or other official the Commissioner may designate), or his or 
her designee, will prepare a notice containing a statement of charges 
that constitutes the basis for the proceeding against the 
representative.
* * * * *
    (d) The Deputy Commissioner for Disability and Income Security 
Programs (or other official the Commissioner may designate), or his or 
her designee, may extend the 30-day period for good cause.
* * * * *
    5. Section 404.1765 is amended by revising paragraph (a), the 
second sentence of paragraph (e), and paragraph (g)(3) to read as 
follows:


Sec. 404.1765  Hearing on charges.

    (a) Scheduling the hearing. If the Deputy Commissioner for 
Disability and Income Security Programs (or other official the 
Commissioner may designate), or his or her designee, does not take 
action to withdraw the charges within 15 days after the date on which 
the representative filed an answer, we will hold a hearing and make a 
decision on the charges.
* * * * *
    (e) Parties. * * * The Deputy Commissioner for Disability and 
Income Security Programs (or other official the Commissioner may 
designate), or his or her designee, shall also be a party to the 
hearing.
* * * * *
    (g) * * *
    (3) If the representative did file an answer to the charges, and if 
the hearing officer believes that there is material evidence available 
that was not presented at the hearing, the hearing officer may at any 
time before mailing notice of the hearing decision reopen the hearing 
to accept the additional evidence.
* * * * *
    6. Section 404.1770 is amended by revising the first sentence of 
paragraph (a)(3) and paragraph (b)(3) to read as follows:


Sec. 404.1770  Decision by hearing officer.

    (a) * * *
    (3) The hearing officer shall mail a copy of the decision to the 
parties at their last known addresses. * * *
    (b) * * *
    (3) If the final decision is that a person is suspended for a 
specified period of time from being a representative in dealings with 
us, he or she will not be permitted to represent anyone in dealings 
with us during the period of suspension unless authorized to do so 
under the provisions of Sec. 404.1799.
    7. Section 404.1799 is amended by revising the first sentence of 
paragraph (c) and the second sentence of paragraph (e) to read as 
follows:


Sec. 404.1799  Reinstatement after suspension or disqualification--
period of suspension not expired.

* * * * *
    (c) The Deputy Commissioner for Disability and Income Security 
Programs (or other official the Commissioner may designate), or his or 
her designee, upon notification of receipt of the request, shall have 
30 days in which to present a written report of any experiences with 
the suspended or disqualified person subsequent to that person's 
suspension or disqualification. * * *
* * * * *
    (e) * * * It shall also mail a copy to the Deputy Commissioner for 
Disability and Income Security Programs (or other official the 
Commissioner may designate), or his or her designee.
* * * * *

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

Subpart O--[Amended]

    8. The authority citation for subpart O of part 416 continues to 
read as follows:

    Authority: Secs. 702(a)(5) and 1631(d) of the Social Security 
Act (42 U.S.C. 902(a)(5) and 1383(d)).

    9. Section 416.1540 is revised to read as follows:


Sec. 416.1540  Rules of conduct and standards of responsibility for 
representatives.

    (a) Purpose and scope. (1) All attorneys or other persons acting on 
behalf of a party seeking a statutory right or benefit shall, in their 
dealings with us, faithfully execute their duties as agents and 
fiduciaries of a party. A representative shall provide competent 
assistance to the claimant and recognize the authority of the Agency to 
lawfully administer the process. The following provisions set forth 
certain affirmative duties and prohibited actions which shall govern 
the relationship between the representative and the Agency, including 
matters involving our administrative procedures and fee collections.
    (2) All representatives shall be forthright in their dealings with 
us and with the claimant and shall comport themselves with due regard 
for the nonadversarial nature of the proceedings by complying with our 
rules and standards, which are intended to ensure orderly and fair 
presentation of evidence and argument.
    (b) Affirmative duties. A representative shall, in conformity with 
the regulations setting forth our existing duties and responsibilities 
and those of claimants (see Sec. 416.912 in disability and blindness 
claims):
    (1) Act with reasonable promptness to obtain the information and 
evidence that the claimant wants to submit in support of his or her 
claim, and forward the same to us for consideration as soon as 
practicable. In disability and blindness claims, this includes the 
obligations to assist the claimant in bringing to our attention 
everything that shows that the claimant is disabled or blind, and to 
assist the claimant in furnishing medical evidence that the claimant 
intends to personally provide and other evidence that we can use to 
reach conclusions about the claimant's medical impairment(s) and, if 
material to the determination of whether the claimant is blind or 
disabled, its effect upon the claimant's ability to work on a sustained 
basis, pursuant to Sec. 416.912(a);
    (2) Assist the claimant in complying, as soon as practicable, with 
our requests for information or evidence at any stage of the 
administrative decisionmaking process in his or her claim. In 
disability and blindness claims, this includes the obligation pursuant 
to Sec. 416.912(c) to assist the claimant in providing, upon our 
request, evidence about:
    (i) The claimant's age;
    (ii) The claimant's education and training;
    (iii) The claimant's work experience;
    (iv) The claimant's daily activities both before and after the date 
the claimant alleges that he or she became disabled;
    (v) The claimant's efforts to work; and
    (vi) Any other factors showing how the claimant's impairment(s) 
affects his or her ability to work, or, if the claimant is a child, his 
or her functioning. In

[[Page 41418]]

Sec. Sec. 416.960 through 416.969, we discuss in more detail the 
evidence we need when we consider vocational factors; and
    (3) Conduct his or her dealings in a manner that furthers the 
efficient, fair and orderly conduct of the administrative 
decisionmaking process, including duties to:
    (i) Provide competent representation to a claimant. Competent 
representation requires the knowledge, skill, thoroughness and 
preparation reasonably necessary for the representation. This includes 
knowing the significant issue(s) in a claim and having a working 
knowledge of the applicable provisions of the Social Security Act, as 
amended, the regulations and the Rulings; and
    (ii) Act with reasonable diligence and promptness in representing a 
claimant. This includes providing prompt and responsive answers to 
requests from the Agency for information pertinent to processing of the 
claim.
    (c) Prohibited actions. A representative shall not:
    (1) In any manner or by any means threaten, coerce, intimidate, 
deceive or knowingly mislead a claimant, or prospective claimant or 
beneficiary, regarding benefits or other rights under the Act;
    (2) Knowingly charge, collect or retain, or make any arrangement to 
charge, collect or retain, from any source, directly or indirectly, any 
fee for representational services in violation of applicable law or 
regulation;
    (3) Knowingly make or present, or participate in the making or 
presentation of, false or misleading oral or written statements, 
assertions or representations about a material fact or law concerning a 
matter within our jurisdiction;
    (4) Through his or her own actions or omissions, unreasonably delay 
or cause to be delayed, without good cause (see Sec. 416.1411(b)), the 
processing of a claim at any stage of the administrative decisionmaking 
process;
    (5) Divulge, without the claimant's consent, except as may be 
authorized by regulations prescribed by us or as otherwise provided by 
Federal law, any information we furnish or disclose about a claim or 
prospective claim;
    (6) Attempt to influence, directly or indirectly, the outcome of a 
decision, determination or other administrative action by offering or 
granting a loan, gift, entertainment or anything of value to a 
presiding official, Agency employee or witness who is or may reasonably 
be expected to be involved in the administrative decisionmaking 
process, except as reimbursement for legitimately incurred expenses or 
lawful compensation for the services of an expert witness retained on a 
non-contingency basis to provide evidence; or
    (7) Engage in actions or behavior prejudicial to the fair and 
orderly conduct of administrative proceedings, including but not 
limited to:
    (i) Repeated absences from or persistent tardiness at scheduled 
proceedings without good cause (see Sec. 416.1411(b));
    (ii) Willful behavior which has the effect of improperly disrupting 
proceedings or obstructing the adjudicative process; and
    (iii) Threatening or intimidating language, gestures or actions 
directed at a presiding official, witness or Agency employee which 
results in a disruption of the orderly presentation and reception of 
evidence.
    10. Section 416.1545 is revised to read as follows:


Sec. 416.1545  Violations of our requirements, rules, or standards.

    When we have evidence that a representative fails to meet our 
qualification requirements or has violated the rules governing dealings 
with us, we may begin proceedings to suspend or disqualify that 
individual from acting in a representational capacity before us. We may 
file charges seeking such sanctions when we have evidence that a 
representative:
    (a) Does not meet the qualifying requirements described in 
Sec. 416.1505;
    (b) Has violated the affirmative duties or engaged in the 
prohibited actions set forth in Sec. 416.1540; or
    (c) Has been convicted of a violation under section 1631(d) of the 
Act.
    11. Section 416.1550 is amended by revising paragraphs (a) and (d) 
to read as follows:


Sec. 416.1550  Notice of charges against a representative.

    (a) The Deputy Commissioner for Disability and Income Security 
Programs (or other official the Commissioner may designate), or his or 
her designee, will prepare a notice containing a statement of charges 
that constitutes the basis for the proceeding against the 
representative.
* * * * *
    (d) The Deputy Commissioner for Disability and Income Security 
Programs (or other official the Commissioner may designate), or his or 
her designee, may extend the 30-day period for good cause.
* * * * *
    12. Section 416.1565 is amended by revising paragraph (a), the 
second sentence of paragraph (e), and paragraph (g)(3) to read as 
follows:


Sec. 416.1565  Hearing on charges.

    (a) Scheduling the hearing. If the Deputy Commissioner for 
Disability and Income Security Programs (or other official the 
Commissioner may designate), or his or her designee, does not take 
action to withdraw the charges within 15 days after the date on which 
the representative filed an answer, we will hold a hearing and make a 
decision on the charges.
* * * * *
    (e) Parties. * * * The Deputy Commissioner for Disability and 
Income Security Programs (or other official the Commissioner may 
designate), or his or her designee, shall also be a party to the 
hearing.
* * * * *
    (g) * * *
    (3) If the representative did file an answer to the charges, and if 
the hearing officer believes that there is material evidence available 
that was not presented at the hearing, the hearing officer may at any 
time before mailing notice of the hearing decision reopen the hearing 
to accept the additional evidence.
* * * * *
    13. Section 416.1599 is amended by revising the first sentence of 
paragraph (c) and the second sentence of paragraph (e) to read as 
follows:


Sec. 416.1599  Reinstatement after suspension or disqualification--
period of suspension not expired.

* * * * *
    (c) The Deputy Commissioner for Disability and Income Security 
Programs (or other official the Commissioner may designate), or his or 
her designee, upon notification of receipt of the request, shall have 
30 days in which to present a written report of any experiences with 
the suspended or disqualified person subsequent to that person's 
suspension or disqualification. * * *
* * * * *
    (e) * * * It shall also mail a copy to the Deputy Commissioner for 
Disability and Income Security Programs (or other official the 
Commissioner may designate), or his or her designee.
* * * * *
[FR Doc. 98-20760 Filed 8-3-98; 8:45 am]
BILLING CODE 4190-29-P