[Federal Register Volume 66, Number 227 (Monday, November 26, 2001)]
[Proposed Rules]
[Pages 58986-58987]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29301]


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LEGAL SERVICES CORPORATION

45 CFR Part 1639


Welfare Reform

AGENCY: Legal Services Corporation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This Notice of Proposed Rulemaking sets forth a proposed 
change to the Legal Services Corporation's rule relating to limitations 
on grantee activities challenging or seeking reform of a welfare 
system. The proposed change, to delete the prohibition on the 
representation of an individual seeking welfare benefits if any such 
representation involves an effort to amend or otherwise challenge 
existing law, is necessitated to conform the regulation to the U.S. 
Supreme Court's decision Legal Services Corporation v. Velazquez, et 
al.

DATES: Comments on this NPRM are due on January 25, 2002.

ADDRESSES: Written comments may be submitted by mail, fax, or e-mail to 
Mattie C. Condray, Senior Assistant General Counsel, Office of Legal 
Affairs, Legal Services Corporation, 750 First Street, NE., Washington, 
DC 20002-4250; 202-336-8817; [email protected].

FOR FURTHER INFORMATION CONTACT: Mattie C. Condray, 202-336-8817.

SUPPLEMENTARY INFORMATION: On February 28, 2001, the United States 
Supreme Court issued a decision in Legal Services Corporation v. 
Velazquez, et al., Nos. 99-603 and 99-960, 121 S. Ct. 1043, 2001 WL 
193738 (U.S.), striking down as unconstitutional the restriction 
prohibiting LSC grantees from challenging welfare reform laws when 
representing clients seeking specific relief from a welfare agency. The 
stricken restriction was first imposed by Congress in Sec. 504(a)(16) 
of the FY 1996 Legal Services Corporation appropriations legislation 
(the Omnibus Consolidated Rescissions and Appropriations Act of 1996, 
Pub. L. 104-134, 110 stat. 1321-53 (1996)) and has been retained in 
each subsequent annual LSC appropriation. The relevant portion of 
Sec. 504(a)(16) prohibits funding of any organization:

that initiates legal representation or participates in any other 
way, in litigation, lobbying, or rulemaking, involving an effort to 
reform a Federal or State welfare system, except that this paragraph 
shall not be construed to preclude a recipient from representing an 
individual eligible client who is seeking specific relief from a 
welfare agency if such relief does not involve an effort to amend or 
otherwise challenge existing law in effect on the date of the 
initiation of the representation.

    This restriction was incorporated into LSC's regulations at 45 CFR 
part 1639. Specifically, 45 CFR 1639.3, Prohibition, provides that:

    Except as provided in Secs. 1639.4 and 1639.5, recipients may 
not initiate legal representation, or participate in any other way 
in litigation, lobbying or rulemaking, involving an effort to reform 
a Federal or State welfare system. Prohibited activities include 
participation in:
    (a) Litigation challenging laws or regulations enacted as part 
of an effort to reform a Federal or State welfare system.
    (b) Rulemaking involving proposals that are being considered to 
implement an effort to reform a Federal or State welfare system.
    (c) Lobbying before legislative or administrative bodies 
undertaken directly or through grassroots efforts involving pending 
or proposed legislation that is part of an effort to reform a 
Federal or State welfare system.

    45 CFR 1639.4 Permissible representation of eligible clients, 
provides that:

    Recipients may represent an individual eligible client who is 
seeking specific relief from a welfare agency, if such relief does 
not involve an effort to amend or otherwise challenge existing law 
in effect on the date of the initiation of the representation.\1\
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    \1\ The exception at Sec. 1639.5 regarding public rulemaking and 
responding to requests with non-LSC funds is not at issue here.

    The Supreme Court in Velazquez, upholding the decision of the Court 
of Appeals, invalidated that portion of the statute which provides that 
representation of an individual eligible client seeking specific relief 
from a welfare agency may not involve an effort to amend or otherwise 
challenge existing law. The Court held that such a qualification 
constitutes impermissible viewpoint discrimination under the First 
Amendment because it ``clearly seeks to discourage challenges to the 
status quo.'' 121 S. Ct. 1043, 1047 (2001).
    In determining specifically which language in the 1996 Act to 
strike as invalid, the Supreme Court noted that the Court of Appeals 
had concluded that congressional intent regarding severability was 
unclear. Since that ``determination was not discussed in the briefs of 
either party or otherwise contested'' in the appeal to the Supreme 
Court, the majority opinion noted that it was exercising its 
``discretion and prudential judgement'' by declining to address the 
issue. Id. at 1053. Instead, the Supreme Court opted to simply affirm 
the decision of the Court of Appeals to ``invalidate the smallest 
possible portion of the statute, excising only the viewpoint-based 
proviso rather than the entire exception of which it is a part.'' Id. 
at 1052.
    The effect of the Velazquez decision has been to render the 
stricken language null and void. This means that the limitation on 
representation of an individual eligible client seeking specific relief 
from a welfare agency which prohibits any such representation from 
involving an effort to amend or otherwise challenge existing law is not 
valid and may not be enforced or given effect. An individual eligible 
client seeking relief from a welfare agency may be represented by a 
recipient without regard to whether the relief involves an effort to 
amend or otherwise challenge existing welfare reform law.
    In light of foregoing, at it June 2001 meeting the LSC Board of 
Directors identified Part 1639 as an appropriate subject for rulemaking 
for the purpose of amending the regulation to make it conform to the 
decision in Velazquez.
    For reasons set forth above, LSC proposes to amend 45 CFR Part 1639 
as follows:

PART 1639--WELFARE REFORM

    1. The authority citation continues to read as follows: 42 U.S.C. 
2996g(e); Pub. L. 104-208, 110 Stat. 3009; Pub. L. 104-134, 110 Stat. 
1321.


 Section 1639.4  Permissible representation of eligible clients

    2. Section 1639.4 would be amended by deleting the words ``if such 
relief does not involve an effort to amend or otherwise challenge 
existing law in effect on the date of the initiation of the 
representation'' and by changing the

[[Page 58987]]

comma after the word ``agency'' to a period.

Victor M. Fortuno,
General Counsel and Vice President for Legal Affairs.
[FR Doc. 01-29301 Filed 11-23-01; 8:45 am]
BILLING CODE 7050-01-P