[Federal Register Volume 67, Number 76 (Friday, April 19, 2002)]
[Rules and Regulations]
[Pages 19342-19343]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9331]


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LEGAL SERVICES CORPORATION

45 CFR Part 1639


Welfare Reform

AGENCY: Legal Services Corporation.

ACTION: Final rule.

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SUMMARY: This Final Rule amends the Legal Services Corporation's rule 
relating to limitations on grantee activities challenging or seeking 
reform of a welfare system. The main 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. A definition of a term only used in the now deleted phrase is also 
being deleted.

DATES: This final rule is effective May 20, 2002.

FOR FURTHER INFORMATION CONTACT: 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].

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 section 
504(a)(16) of the FY 1996 Legal Services Corporation appropriations 
legislation (the Omnibus Consolidated Rescissions and Appropriations 
Act of 1996, Public Law 104-134, 110 Stat. 1321-53 (1996)) and was 
retained in each subsequent annual LSC appropriation through FY 2002. 
The relevant portion of section 504(a)(16) prohibited 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\

    \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

[[Page 19343]]

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 was 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 its 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. LSC published a notice of proposed rulemaking on 
November 26, 2001, proposing to amend part 1639 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 comma after the word ``agency'' to 
a period.\2\
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    \2\ Subsequent to the issuance of the NPRM, Congress acted to 
amend the language of section 504(a)(16) to make it conform to the 
decision in Velazquez. Specifically, the FY 2002 LSC appropriation 
bill amended section 504(a)(16) of the FY 1996 legislation ``by 
striking `if such relief does not involve' and all that follows 
through ``representation.''' See Pub. L. 107-77; 115 Stat. 748 
(November 28, 2001). This action provides further authority for 
LSC's action in this final rule.
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    LSC received six comments on the NPRM. All of the commenters 
supported the proposed change. Each of the comments also suggested that 
LSC should remove the definition of ``existing law'' at 1639.2(b), 
since the only place in which the term appears is in the phrase to be 
deleted. LSC agrees that the deletion of the definition of the term 
``existing law'' is appropriate. Accordingly, the term is being deleted 
and, as there will now be only one paragraph in this section remaining, 
paragraph (a) is being relabeled to remove the paragraph designator.
    One commenter also suggested that LSC restate the guidance in 
Program Letter 01-3 that a recipient may represent an individual 
eligible client seeking relief from a welfare agency without regard to 
whether the relief involves an effort to amend or otherwise challenge 
existing welfare reform law. Although LSC believes that this is clear 
from the regulatory action, LSC has no objection to reiterating this 
point and does so herewith.

    For reasons set forth above, LSC amends 45 CFR Part 1639 as 
follows:

PART 1639--WELFARE REFORM

    1. The authority citation continues to read as follows:

    Authority 42 U.S.C. 2996g(e); Pub. L. 104-208, 110 Stat. 3009; 
Pub. L. 104-134, 110 Stat. 1321.

    2. Section 1639.2 is being amended to remove the paragraph 
designator (a) from before the definition of ``an effort to reform a 
Federal or State welfare system'' and to remove paragraph (b) in its 
entirety. Section 1639.2 is revised to read in its entirety:


Sec. 1639.2  Definitions.

    An effort to reform a Federal or State welfare system includes all 
of the provisions, except for the Child Support Enforcement provisions 
of Title III, of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (Personal Responsibility Act), 110 Stat. 
2105 (1996), and subsequent legislation enacted by Congress or the 
States to implement, replace or modify key components of the provisions 
of the Personal Responsibility Act or by States to replace or modify 
key components of their General Assistance or similar means-tested 
programs conducted by States or by counties with State funding or under 
State mandates.


Sec. 1639.4  [Amended]

    3. Section 1639.4 is amended by removing 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 comma after the word ``agency'' to a period.

Victor M. Fortuno,
General Counsel and Vice President for Legal Affairs.
[FR Doc. 02-9331 Filed 4-18-02; 8:45 am]
BILLING CODE 7050-01-P