[Federal Register Volume 67, Number 222 (Monday, November 18, 2002)]
[Proposed Rules]
[Pages 69498-69502]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-29123]


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LEGAL SERVICES CORPORATION

45 CFR Part 1602


Procedures for Disclosure of Information Under the Freedom of 
Information Act

AGENCY: Legal Services Corporation (LSC).

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: This NPRM proposes several revisions to the LSC regulations 
implementing the Freedom of Information Act. The proposed revisions 
would add provisions detailing the submitter's rights process, provide 
LSC with express authority to defer action on pending and additional 
requests and appeals when a requester has an outstanding fee balance, 
and clarify the applicable fee waiver standards. LSC also proposes to 
revise the applicable fee structure to better reflect LSC's costs in 
complying with FOIA. Finally, the NPRM contains proposed technical 
changes to reflect current LSC nomenclature.

DATES: Comments on this NPRM are due on January 2, 2003.

ADDRESSES: Written comments may be submitted by mail, fax or email 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 (phone); (202) 336-8952 (fax); 
[email protected].

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

SUPPLEMENTARY INFORMATION: LSC is subject to the Freedom of Information 
Act (FOIA) by the terms of the Legal Services Corporation Act. 42 
U.S.C. 2996d(g).\1\ LSC has implemented FOIA by adopting regulations 
which contain the rules and procedures the Corporation follows in 
making agency records available to the public under FOIA. As part of an 
overall review of LSC's regulations, LSC determined that a variety of 
amendments to LSC's FOIA regulation are in order and part 1602 was 
assigned a high priority for rulemaking. In light of the above, at the 
August 24, 2002, meeting of the Board of Directors, the Board 
identified Part 1602 as an appropriate subject for rulemaking and LSC 
subsequently announced that it was initiating a Notice and Comment 
rulemaking to consider revisions to its FOIA regulations.
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    \1\ Absent this authority, LSC would not otherwise be subject to 
FOIA since LSC is not an agency, department or instrumentality of 
the Federal government. 42 U.S.C. 2996d(e)(1).
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Submitter's Rights Process

    Pursuant to current LSC practice, if a request is received for the 
grant application records of a current or prospective recipient, LSC 
provides that applicant with an opportunity to request that some or all 
of the records requested be withheld from disclosure prior to LSC 
sending its response to the requester. This practice, which is 
consistent with current FOIA law, is not described or discussed in the 
regulations. The submitter's rights process affords important rights to 
grant applicants and also impacts requesters who have to wait until the 
submitter's rights process has been completed to obtain releasable 
records subject to this process. LSC believes that it is important, 
therefore, for this process to be explicitly set forth in Part 1602. 
Accordingly, LSC proposes to add a new section 1602.14, Submitter's 
rights process, which would formally incorporate the Corporation's 
current practice into the regulations.
    At the outset, LSC notes that its submitter's rights process is 
based on the submitter's rights process outlined in Federal Executive 
Order No. 12,600 (June 23, 1987). E.O. 12,600 required Federal agencies 
to ``establish procedures to notify submitters of records containing 
confidential information [information arguably subject to FOIA 
Exemption 4] * * * when those records are requested under the Freedom 
of Information Act * * * .'' (Emphasis added) Although LSC is not a 
Federal agency, and, therefore, not subject to E.O. 12,600, LSC chose 
to develop a policy consistent with the Order. LSC believes that grant 
application records are the only records likely to contain 
``confidential information,'' the release of which could cause 
competitive harm. Thus, the current submitter's rights process is only 
invoked in relation to requests for grant application information, but 
not other records submitted by recipients. LSC is, at this time, 
proposing to keep the process limited to requests for grant application 
materials, but specifically invites comment on whether there are other 
records submitted by recipients which would likely be subject to 
withholding under Exemption 4.
    Under the proposed new section, when the Corporation receives a 
FOIA request seeking the release of a submitter's grant application(s), 
or portions thereof, the Corporation would provide prompt written 
notice of the request to the submitter in order to

[[Page 69499]]

afford the submitter with an opportunity to object to the disclosure of 
the requested records (or any portion thereof). If a submitter who has 
received notice of a request for the submitter's records objects to the 
disclosure of the records (or any portion thereof), the submitter would 
have to submit a written detailed statement identifying the information 
for which disclosure is objected to and specifying the grounds for 
withholding the information under the confidential information 
exemption of FOIA or this Part. The submitter's statement would have to 
be provided to LSC within seven business days of the date of the notice 
from the Corporation and if the submitter failed to respond to the 
notice from LSC within that time, LSC would deem the submitter to have 
no objection to the disclosure of the information.
    Upon receipt of written objection to disclosure by a submitter, LSC 
would be required to consider the submitter's objections and specific 
grounds for withholding in deciding whether to release the disputed 
information. Whenever LSC decided to disclose information over the 
objection of the submitter, LSC would be required to give the submitter 
written notice that the Corporation was rejecting the submitter's 
withholding request (including an explanation of why the request was 
being rejected) and informing the submitter that the submitter shall 
have 5 business days from the date of the notice of proposed release to 
appeal that decision to the LSC President, whose decision would be 
final.
    Under proposed paragraph (d), the submitter's rights process would 
not apply if (1) LSC determines, upon initial review, that the 
information requested is exempt from disclosure; (2) the information 
has been previously published or officially made available to the 
public; or (3) disclosure of the information is required by statute 
(other than FOIA) or LSC regulations.
    In addition, LSC proposes to include provisions requiring that: (1) 
Whenever a requester files a lawsuit seeking to compel disclosure of a 
submitter's information, LSC would have to promptly notify the 
submitter; (2) whenever LSC provides a submitter with notice and 
opportunity to object to disclosure under this section, LSC would also 
notify the requester; and (3) whenever a submitter files a lawsuit 
seeking to prevent the disclosure of the submitter's information, LSC 
would notify the requester.
    LSC also proposes to add a definition of the term ``submitter'' as 
that term would be used in this section. The definition proposed to be 
added at section 1602.2(k) would define ``submitter'' as any person or 
entity from whom the Corporation receives a grant application.

Authority to Defer Action Pending Receipt of Payment of Fees

    Many, if not most, agency FOIA regulations contain a provision 
permitting the agency to suspend continuing work on any pending 
requests and appeals from requesters who are 30 or more days in arrears 
on FOIA fees which they have been charged. Our regulations provide LSC 
with the authority to require anticipated fees for new requests be paid 
in advance for requesters with outstanding overdue bills, but do not 
expressly contain the authority to cease processing other existing 
requests, including appeals. Having this express authority would be 
helpful to the Corporation to avoid wasting resources on ``nuisance'' 
requesters who chronically have several requests and/or appeals pending 
before the Corporation at the same time, while being in arrears on 
properly assessed fees from prior requests to the Corporation. 
Accordingly, LSC proposes to add a new paragraph to section 1602.13, 
Fees, to provide for this authority. Specifically, the proposed new 
language would provide express authority to the Corporation to cease 
processing existing requests, including action on appeals, from a 
requester who is more than 30 days late in paying a properly assessed 
FOIA fee. This new language would appear as a new paragraph (j) and the 
current paragraphs (j), (k) and (l) would be redesignated as paragraphs 
(k), (l), and (m), respectively.

Fee Waiver Criteria

    Requesters of records under FOIA are generally expected to pay 
reasonable fees related to the processing of FOIA requests. However, 
the statute also provides for waivers or reductions of fees when 
certain enumerated criteria are met. Section 1602.13(f) of the current 
regulation restates the basic fee waiver criteria as set forth in the 
statute. By way of contrast, the Department of Justice (DOJ) FOIA 
regulations on fee waiver criteria are more detailed, providing more 
guidance, based on long standing case law in this area, on the meaning 
of each of the factors to be considered in assessing fee waiver 
requests. LSC believes it would be helpful to both LSC and requesters 
for the LSC FOIA regulations to provide additional guidance in this 
area. By having a better understanding of the criteria, requesters can 
better prepare fee waiver requests and there will be less opportunity 
for disagreements and confusion as to when a fee waiver or reduction is 
appropriate. LSC is, accordingly, proposing to add language to each of 
the subparagraphs setting forth the factors upon which fee waiver 
determinations are made that provides a greater explanation of that 
factor.
    Specifically, 1602.13(f)(1) of the current regulation lists the 
factors that the Corporation assesses in order to determine whether 
disclosure of information is in the public interest because it is 
likely to contribute significantly to public understanding of the 
operations or activities of the Corporation or Federal government. The 
first factor currently reads:

    (i) The subject of the request: Whether the subject of the 
requested records concerns ``the operations or activities of the 
Corporation or Federal government.''

    LSC proposes to add a sentence to this subparagraph explaining that 
the subject of the requested records must concern identifiable 
operations or activities of the Corporation or the Federal government, 
with a connection that is direct and clear, not remote or attenuated.
    The second factor currently reads:

    (ii) The informative value of the information to be disclosed: 
Whether the disclosure is ``likely to contribute'' to an 
understanding of Corporation or Federal government operations or 
activities.

LSC proposes to add language noting that the requested records must be 
meaningfully informative about government operations or activities in 
order to be likely to contribute to an increased public understanding 
of those operations or activities and that the disclosure of 
information that is already in the public domain, in either a 
duplicative or a substantially identical form, would not be likely to 
contribute to such understanding where nothing new would be added to 
the public's understanding.
    The third factor currently reads:

    (iii) The contribution to an understanding of the subject by the 
public likely to result from disclosure: Whether disclosure of the 
requested records will contribute to ``public understanding.''

LSC proposes to provide additional guidance on the meaning of this 
factor by adding language explaining that: The disclosure must 
contribute to a reasonably broad audience of persons interested in the 
subject, as opposed to the personal interest of the requester; a 
requester's expertise in the subject area and ability and intention to 
effectively convey information to the public shall be considered; and 
that it shall be presumed that a representative of the

[[Page 69500]]

news media will satisfy this consideration.
    The fourth factor currently reads:

    (iv) The significance of the contribution to public 
understanding: Whether the disclosure is likely to contribute 
``significantly'' to public understanding of Corporation or Federal 
government operations or activities.

LSC proposes to include additional guidance in this factor that the 
public's understanding of the subject in question, as compared to the 
level of public understanding existing prior to the disclosure must be 
enhanced by the disclosure to a significant extent.
    Section 1602.13(f)(2) sets forth the factors used by LSC to 
determine whether disclosure of the information is not primarily in the 
commercial interest of the requester. The first factor currently reads:

    (i) The existence and magnitude of a commercial interest: 
Whether the requester has a commercial interest that would be 
furthered by the requested disclosure.

LSC proposes to add a sentence to this subparagraph explaining that LSC 
shall consider any commercial interest of the requester (with reference 
to the definition of ``commercial use'' in this Part) or of any person 
on whose behalf the requester may be acting, that would be furthered by 
the requested disclosure.
    The second factor reads:

    (ii) The primary interest in disclosure: Whether the magnitude 
of the identified commercial interest is sufficiently large, in 
comparison with the public interest in disclosure, that disclosure 
is ``primarily'' in the commercial interest of the requester.

LSC proposes to add language specifying that a fee waiver or reduction 
is justified where the public interest standard is greater in magnitude 
than that of any identified commercial interest in disclosure and that 
LSC ordinarily shall presume that where a news media requester has 
satisfied the public interest standard, the public interest will be the 
interest primarily served by disclosure to that requester. That is, if 
the public interest standard has been satisfied, the fact that a news 
media requester has a commercial interest (i.e., in selling newspapers, 
etc.) will not ordinarily serve to prevent that requester from getting 
a fee waiver or reduction. LSC further proposes to add language 
providing that disclosure to data brokers or others who merely compile 
and market government information for direct economic return shall not 
be presumed primarily to serve a public interest.
    In each of these cases, the language proposed to be added is 
consistent with the current regulations and LSC practice, FOIA case law 
and government-wide FOIA practice. As noted above, LSC believes the 
additions will aid in public understanding of the meaning and 
application of the fee waiver criteria.

Miscellaneous Amendments

    There are several instances throughout the regulation where the 
regulation makes reference to the ``Office of the General Counsel.'' 
The Office of the General Counsel was renamed the Office of Legal 
Affairs in 1999. LSC, therefore, proposes to substitute the name 
``Office of Legal Affairs'' for ``Office of the General Counsel'' each 
time it appears in sections 1602.6 and 1602.8 of the regulations.
    Section 1602.5, Public reading room, sets forth, among other 
things, the address of LSC's public reading room. The address listed, 
750 First Street, NE., Washington, DC, 20002, is currently correct. 
However, LSC will be moving in June 2003 to new permanent headquarters. 
LSC proposes to add language to this section providing the address of 
the LSC public reading room in LSC's new home: 3333 K St., NW., 
Washington, DC 20007.
    In accordance with FOIA, LSC charges fees for processing FOIA 
requests and providing copies of requested documents. LSC's schedule of 
applicable fees is set forth in section 1602.13(e). The current 
schedule of fees was adopted in 1998 and no longer accurately reflects 
LSC's costs in responding to FOIA requests. LSC, therefore, proposes to 
increase fees for search and review time and for copying.
    LSC's fees for search and review time are based on LSC's pay 
schedule, which is divided into broad ``pay bands.'' In the four years 
since the regulation was last amended, LSC's pay bands have increased 
to keep up with inflation. The current midpoint of each band is now:

     Band 1: $16.15
     Band 2: $26.66
     Band 3: $39.15
     Band 4: $51.41
     Band 5: $54.99

LSC proposes to amend the search and review rates to reflect these 
current 2002 pay rates. LSC notes that the current regulation provides 
for one blended rate for Bands 4 and 5. LSC is proposing to separate 
these rates, providing separate search and review time rates for Bands 
4 and 5. These changes will permit LSC to recover fees that are more in 
line with its actual costs relating to search and review activities.
    Under the current regulation, LSC charges $0.10 per page for 
standard paper photocopying. LSC's actual costs for photocopying are 
now closer to $0.15 per page. LSC proposes to increase copying costs to 
$0.13 per page so as to better reflect LSC's costs, while still 
providing a small discount to requesters. In addition, LSC proposes to 
substitute the term ``Express mail'' for ``special delivery'' where it 
appears in section 1602.13(e)(7) to reflect current terminology.

List of Subjects in 45 CFR Part 1602

    Freedom of information, Reporting and recordkeeping requirements.
    For reasons set forth above, LSC proposes to amend 45 CFR part 1602 
as follows:

PART 1602--PROCEDURES FOR DISCLOSURE OF INFORMATION UNDER THE 
FREEDOM OF INFORMATION ACT

    1. The authority citation for part 1602 continues to read as 
follows:

    Authority: 42 U.S.C. 2996d(g); 5 U.S.C. 552.

    2. Section 1602.2, would be amended by adding a new paragraph (k) 
to read as follows:


Sec.  1602.2  Definitions.

* * * * *
    (k) Submitter means any person or entity from whom the Corporation 
receives grant application records.
    3. Paragraph (a) of Sec.  1602.5 would be revised to read as 
follows:


Sec.  1602.5  Public reading room.

    (a) The Corporation will maintain a public reading room at its 
office at 750 First Street, NE., Washington, DC, 20002. After June 1, 
2003, the Corporation's public reading room will be located at its 
office at 3333 K Street, NW., Washington, DC, 20007. This room will be 
supervised and will be open to the public during the regular business 
hours of the Corporation for inspecting and copying records described 
in paragraph (b) of this section.
* * * * *


Sec.  1602.6  [Amended]

    4. Section 1602.6 would be amended by replacing the words ``Office 
of the General Counsel'' in the second sentence with the words ``Office 
of Legal Affairs.''


Sec.  1602.8  [Amended]

    5. Paragraph (b) of Sec.  1602.8, would be amended by replacing the 
words ``Office of the General Counsel'' each of the three times that 
phrase appears in the paragraph with the words ``Office of Legal 
Affairs.''

[[Page 69501]]

    6. Section 1602.3 would be amended by:
    a. Revising paragraphs (e) and (f);
    b. Redesignating paragraphs (j) through (l) as paragraphs (k) 
through (m) respectively; and
    c. Adding a new paragraph (j).


Sec.  1602.13  Fees.

* * * * *
    (e) The schedule for charges for services regarding the production 
or disclosure of the Corporation's records is as follows:
    (1) Manual search for and review of records will be charged as 
follows:
    (i) Band 1: $16.15
    (ii) Band 2: $26.66
    (iii) Band 3: $39.15
    (iv) Band 4: $51.41
    (v) Band 5: $54.59
    (vi) Charges for search and review time less than a full hour will 
be billed by quarter-hour segments;
    (2) Computer time: actual charges as incurred;
    (3) Duplication by paper copy: 13 cents per page;
    (4) Duplication by other methods: actual charges as incurred;
    (5) Certification of true copies: $1.00 each;
    (6) Packing and mailing records: no charge for regular mail;
    (7) Express mail: actual charges as incurred.
    (f) Fee waivers. A requester may seek a waiver or reduction of fees 
below the fees established under paragraph (e) of this section. A fee 
waiver or reduction request will be granted where LSC has determined 
that the requester has demonstrated that disclosure of the information 
is in the public interest because it is likely to contribute 
significantly to public understanding of the operations of the 
Corporation or Federal government and is not primarily in the 
commercial interest of the requester.
    (1) In order to determine whether disclosure of the information is 
in the public interest because it is likely to contribute significantly 
to public understanding of the operations or activities of the 
Corporation or Federal government, the Corporation shall consider the 
following four factors:
    (i) The subject of the request: Whether the subject of the 
requested records concerns ``the operations or activities of the 
Corporation or Federal government.'' The subject of the requested 
records must concern identifiable operations or activities of the 
Corporation or Federal government, with a connection that is direct and 
clear, not remote or attenuated.
    (ii) The informative value of the information to be disclosed: 
Whether the disclosure is ``likely to contribute'' to an understanding 
of Corporation or Federal government operations or activities. The 
requested records must be meaningfully informative about government 
operations or activities in order to be likely to contribute to an 
increased public understanding of those operations or activities. The 
disclosure of information that is already in the public domain, in 
either a duplicative or a substantially identical form, would not be 
likely to contribute to such understanding where nothing new would be 
added to the public's understanding.
    (iii) The contribution to an understanding of the subject by the 
public likely to result from disclosure: Whether disclosure of the 
requested records will contribute to ``public understanding.'' The 
disclosure must contribute to a reasonably broad audience of persons 
interested in the subject, as opposed to the personal interest of the 
requester. A requester's expertise in the subject area and ability and 
intention to effectively convey information to the public shall be 
considered. It shall be presumed that a representative of the news 
media will satisfy this consideration.
    (iv) The significance of the contribution to public understanding: 
Whether the disclosure is likely to contribute ``significantly'' to 
public understanding of Corporation or Federal government operations or 
activities. The public's understanding of the subject in question, as 
compared to the level of public understanding existing prior to the 
disclosure, must be enhanced by the disclosure to a significant extent.
    (2) In order to determine whether disclosure of the information is 
not primarily in the commercial interest of the requester, the 
Corporation will consider the following two factors:
    (i) The existence and magnitude of a commercial interest: Whether 
the requester has a commercial interest that would be furthered by the 
requested disclosure. LSC shall consider any commercial interest of the 
requester (with reference to the definition of ``commercial use'' in 
this part) or of any person on whose behalf the requester may be 
acting, that would be furthered by the requested disclosure.
    (ii) The primary interest in disclosure: Whether the magnitude of 
the identified commercial interest is sufficiently large, in comparison 
with the public interest in disclosure, that disclosure is 
``primarily'' in the commercial interest of the requester. A fee waiver 
or reduction is justified where the public interest is greater in 
magnitude than that of any identified commercial interest in 
disclosure. LSC ordinarily shall presume that where a news media 
requester has satisfied the public interest standard, the public 
interest will be the interest primarily served by disclosure to that 
requester. Disclosure to data brokers or others who merely compile and 
market government information for direct economic return shall not be 
presumed primarily to serve a public interest.
    (3) Where LSC has determined that a fee waiver or reduction request 
is justified for only some of the records to be released, LSC shall 
grant the fee waiver or reduction for those records.
    (4) Requests for fee waivers and reductions shall be made in 
writing and must address the factors listed in this paragraph as they 
apply to the request.
* * * * *
    (j) When a requester has previously failed to pay a properly 
charged FOIA fee within 30 days of the date of billing, the Corporation 
may require the requester to pay the full amount due, plus any 
applicable interest, and to make an advance payment of the full amount 
of any anticipated fee before the Corporation begins to process a new 
request or continues to process a pending request (including appeals) 
from that requester.
* * * * *
    7. A new 1602.14, would be added to read as follows:


Sec.  1602.14  Submitter's rights process.

    (a) When the Corporation receives a FOIA request seeking the 
release of a submitter's grant application(s), or portions thereof, the 
Corporation shall provide prompt written notice of the request to the 
submitter in order to afford the submitter with an opportunity to 
object to the disclosure of the requested records (or any portion 
thereof). The notice shall reasonably describe the records requested 
and inform the submitter of the process required by paragraph (b) of 
this section.
    (b) If a submitter who has received notice of a request for the 
submitter's records desires to object to the disclosure of the records 
(or any portion thereof), the submitter must identify the information 
for which disclosure is objected and provide LSC with a written 
detailed statement to that effect. The statement must be submitted to 
the FOIA Officer in the Office of Legal Affairs and must specify the 
grounds for withholding the information under FOIA or this part. In 
particular, the submitter must demonstrate why the information is 
commercial or financial information that is privileged or confidential. 
The submitter's statement

[[Page 69502]]

must be provided to LSC within seven business days of the date of the 
notice from the Corporation. If the submitter fails to respond to the 
notice from LSC within that time, LSC will deem the submitter to have 
no objection to the disclosure of the information.
    (c) Upon receipt of written objection to disclosure by a submitter, 
LSC shall consider the submitter's objections and specific grounds for 
withholding in deciding whether to release the disputed information. 
Whenever LSC decides to disclose information over the objection of the 
submitter, LSC shall give the submitter written notice which shall 
include:
    (1) A description of the information to be released and a notice 
that LSC intends to release the information;
    (2) A statement of the reason(s) why the submitter's request for 
withholding is being rejected; and
    (3) Notice that the submitter shall have 5 business days from the 
date of the notice of proposed release to appeal that decision to the 
LSC President, whose decision shall be final.
    (d) The requirements of this section shall not apply if:
    (1) LSC determines upon initial review of the requested records 
they should not be disclosed;
    (2) The information has been previously published or officially 
made available to the public; or
    (3) Disclosure of the information is required by statute (other 
than FOIA) or LSC regulations.
    (e) Whenever a requester files a lawsuit seeking to compel 
disclosure of a submitter's information, LSC shall promptly notify the 
submitter.
    (f) Whenever LSC provides a submitter with notice and opportunity 
to oppose disclosure under this section, LSC shall notify the requester 
that the submitter's rights process under this section has been 
triggered. Whenever a submitter files a lawsuit seeking to prevent the 
disclosure of the submitter's information, LSC shall notify the 
requester.

Victor M. Fortuno,
General Counsel and Vice President for Legal Affairs.
[FR Doc. 02-29123 Filed 11-15-02; 8:45 am]
BILLING CODE 7050-01-P