[Federal Register Volume 68, Number 31 (Friday, February 14, 2003)]
[Rules and Regulations]
[Pages 7433-7438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3645]


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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.

ACTION: Final rule.

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SUMMARY: This Final Rule makes several revisions to the LSC regulations 
implementing the Freedom of Information Act. The revisions 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 is also revising the 
applicable fee structure to better reflect LSC's costs in complying 
with FOIA. Finally, the Final Rule contains technical changes to 
reflect current LSC nomenclature.

[[Page 7434]]


DATES: This Final Rule is effective March 17, 2003.

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 
(phone); (202) 336-8952 (fax); [email protected].

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. Subsequently, 
LSC published a Notice of Proposed Rulemaking (NPRM) on November 18, 
2002 (67 FR 69498).
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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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    LSC received seven comments on the NPRM, all of which generally 
supported the proposed revisions. Upon receipt of the comments, LSC 
drafted a Final Rule for the consideration of the Operations and 
Regulations Committee of the Board of Directors. This Final Rule was 
adopted by the Board of Directors at its meeting of February 1, 2003.

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 proposed to add a new section 1602.14, Submitter's 
rights process, to 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 proposed to keep the 
process limited to requests for grant application materials, but 
specifically invited comment on whether there are other records 
submitted by recipients which would likely be subject to withholding 
under Exemption 4.
    LSC received five comments specifically addressing this issue. Two 
of the five comments supported the proposed submitter's rights section 
as proposed. The other three comments all supported the proposed 
section while also urging LSC to broaden the process to cover any 
information submitted by grantees and which might be subject to any 
exemption from disclosure under FOIA. Although the commenters make good 
points about specific records being likely to be exempt from 
disclosure, LSC is not persuaded that the submitter's rights process 
should be extended to cover records other than grant applications and 
exemption 4 information, disclosure of which could cause competitive 
harm.
    Some of the information specifically referenced by the commenters, 
such as client names, financial records, etc., are already specifically 
protected from disclosure under 509(i) of the appropriations act (thus 
implicating FOIA exemption 3--information specifically protected from 
disclosure by law). LSC already knows not to disclose this information 
and believes that including requests for records that would be subject 
to this disclosure to the submitter's rights process would only add 
unnecessary administrative obstacles to fulfilling its obligations 
under FOIA. Moreover, whether information contained in client files, 
statements of facts, 1644 disclosure forms, and personnel files 
(examples mentioned by at least one commenter) would be subject FOIA 
exemption 6 (personal privacy) information or exemption 7 (law 
enforcement/personal privacy) information is a question which is 
properly decided by the Corporation under FOIA exemptions on a case-by-
case basis under the case law interpreting FOIA. To date, LSC has 
experienced no problems concerning releasing or withholding requested 
information contained in recipient provided records. Accordingly, LSC 
declines to broaden the proposed submitter's rights process beyond the 
circumstances envisioned by the Executive Order and has been 
implemented at LSC.
    Accordingly, LSC adopts new section 1602.14 as proposed. Under the 
new section, when the Corporation receives a FOIA request seeking the 
release of a submitter's grant application(s), or portions thereof, the 
Corporation will 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). 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 will 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 will have to be provided to LSC within seven 
business days of the date of the notice from the Corporation and 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.
    Upon receipt of written objection to disclosure by a submitter, LSC 
will be required to 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 will be required to give the submitter 
written notice that the Corporation was rejecting the submitter's 
withholding request (including an explanation of why the

[[Page 7435]]

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 will be final.
    Under paragraph (d), the submitter's rights process will 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 is including provisions requiring that: (1) 
Whenever a requester files a lawsuit seeking to compel disclosure of a 
submitter's information, LSC will have to promptly notify the 
submitter; (2) whenever LSC provides a submitter with notice and 
opportunity to object to disclosure under this section, LSC will also 
notify the requester; and (3) whenever a submitter files a lawsuit 
seeking to prevent the disclosure of the submitter's information, LSC 
will notify the requester.
    LSC also adds a definition of the term ``submitter'' as that term 
is used in this section. The definition 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. LSC 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 proposed to add a new paragraph to section 1602.13, 
Fees, to provide for this authority. Specifically, the new language 
proposed 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.
    LSC received three comments which generally supported the proposed 
new provision, but which requested that LSC clarify that the provision 
would not apply in circumstances in which a fee waiver decision remains 
in dispute through a properly filed and pending appeal or lawsuit. This 
was LSC's intent. Use of the phrase ``properly assessed fee'' in the 
preamble to the NPRM and ``properly charged FOIA fee'' in the proposed 
regulatory text was intended to convey this meaning. LSC is, however, 
happy to clarify that the phrase ``properly charged FOIA fee'' in the 
text of the regulation is intended to mean fees that have been fairly 
assessed and which are not the subject of a timely filed and pending 
appeal or lawsuit.
    LSC adopts the new language as proposed. This new language appears 
as a new paragraph (j) and the current paragraphs (j), (k) and (l) are 
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, accordingly, proposed 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.
    LSC received four comments specifically addressing the proposed 
revisions to the fee waiver criteria. All of these comments supported 
the proposed clarifications, although one commenter also provided 
suggestions for additional clarifications to the factors.
    LSC proposed to add a sentence to subparagraph (i), which currently 
reads in its entirety ``The subject of the request: Whether the subject 
of the requested records concerns ``the operations or activities of the 
Corporation or Federal government,'' 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. LSC received no objection 
to this proposed addition and LSC adopts the new sentence as 
proposed.(i)
    The second factor currently reads, in its entirety, ``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 
proposed 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.
    LSC received no comments objecting to the proposed additional 
language. One commenter suggested that LSC add additional language 
defining the terms ``public domain'' and ``substantially identical 
form'' as those terms are used in this section. Specifically, the 
commenter urges LSC define ``public domain'' as information that is 
``readily available'' to the public and ``substantially identical 
form'' as excluding compilations or summaries of information that is in 
the public domain. Each of these proposals stem from case law 
interpreting the statute.
    While LSC appreciates these suggestions, LSC does not believe it is 
necessary to define the terms ``public domain'' and ``substantially 
identical form'' in the regulation. LSC believes that these terms are 
reasonably straightforward. Moreover, in LSC's experience, requesters 
seeking fee waivers have not evinced much confusion about the meaning 
of these terms in making their fee waiver applications. LSC is 
interested in adding some additional language to the factors to aid 
requesters in understanding the fee waiver standards, but is also 
mindful

[[Page 7436]]

that nearly every term in FOIA has case law interpreting its meaning. 
It would be difficult and, in some cases, inappropriate to attempt to 
distill all of the existing case law into regulatory language. Thus, 
while LSC does not take issue with the meanings the applicable case law 
has developed for those terms, LSC believes that the terms are 
sufficiently clear on their face as not to need additional regulatory 
definition. Of course, in applying the fee waiver standards, LSC is, 
and will continue to be, mindful of the interpretations of terms as set 
forth in the applicable case law.
    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 proposed 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 news media will 
satisfy this consideration.
    LSC received no comments objecting to the proposed additional 
language. One commenter suggested that LSC add additional language 
defining the term ``public'' as including one or more segments of the 
public. LSC agrees that the term ``public'' in this instance may refer 
to a segment of the public, and not just to the public ``at large,'' 
and intends that the regulation be understood to have this meaning. 
However, LSC believes that the addition of the phrase ``reasonably 
broad audience of persons interested in the subject'' conveys that 
meaning. Thus, LSC believes that the language, as proposed, is 
appropriate.
    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 proposed 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.
    LSC received one comment in opposition to this language. The 
commenter found the additional proposed language to be confusing and 
not helpful to clarifying the meaning of the factor. Alternatively, the 
commenter suggested that, if LSC were to leave the language in the 
regulation, that LSC include greater explanation in the preamble of the 
meaning of the additional language.
    The proposed new language is intended to clarify that this factor 
is assessing whether the disclosure sought would be ``significant'' by 
comparing the likely level of public understanding of the subject 
matter of the disclosure as it exists at that moment to what the level 
of understanding would be after disclosure. LSC is not sure in what way 
this is confusing, but has no objection to providing additional 
explanation in the preamble if it will aid in understanding of the 
rule. Generally, the fourth factor examines whether the information 
that is the subject of the disclosure either has been so widely 
disseminated and publicized or is so lacking in substantial informative 
value, such that the disclosure of the information is not likely to add 
any new perspective or facts (or the like), as to increase the public's 
understanding of the subject.
    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 proposed 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. LSC received no comments 
objecting to the proposed additional language.
    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 proposed 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. LSC 
received no comments objecting to the proposed additional language.
    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. Accordingly, LSC adopts the new 
language on the fee waiver standards as proposed.
    Three of the commenters also suggested that LSC should generally 
grant fee waivers in connection with most, if not all, requests 
received from the legal services community. One of these comments 
further suggested that LSC formally adopt language providing a blanket 
fee waiver to all requests from grantees.
    LSC is authorized and required to provide fee waivers in accordance 
with the standards set forth in the FOIA. The statutory standards 
require fee waiver determinations to be made on a case-by-case basis in 
reference to the enumerated fee waiver criteria. As such, for LSC to 
either incorporate into the regulations or even adopt an informal 
policy to grant a blanket fee waiver policy in connection with requests 
from grantees or others in the legal services community would exceed 
LSC's authority under FOIA. LSC will continue, as it has always done, 
to consider requests individually and grant fee waivers and/or assess 
fees as required by the statute.

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, proposed to substitute the name 
``Office of Legal Affairs'' for ``Office of the General Counsel'' each 
time it appears in

[[Page 7437]]

sections 1602.6 and 1602.8 of the regulations. LSC received no 
objections to the proposed substitutions and LSC adopts them as 
proposed.
    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 proposed 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. LSC received no objections to the proposed 
addition and LSC adopts the change as proposed.
    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, proposed to 
increase fees for search and review time and for copying.
    LSC received no objections to the proposed fee increases. One 
commenter, however, did request that LSC apply the new fee schedule 
only to requests filed after the effective date of the amendment. LSC 
agrees that this is appropriate and LSC intends that the new fees will 
be assessed only on requests received on or after the effective date of 
this Final Rule.
    LSC adopts the changes to the fee schedule as proposed. 
Specifically, LSC amends the search and review fee rates to reflect 
recent (2002) pay rates as follows:

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

    LSC notes that the existing regulation provides for one blended 
rate for Bands 4 and 5. LSC is now separating 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 existing 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 is increasing 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 substitutes 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 amends 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 is 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 is 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.
* * * * *

    4. Section 1602.6 is amended by revising the words ``Office of the 
General Counsel'' in the second sentence to read ``Office of Legal 
Affairs.''

    5. Paragraph (b) of Sec.  1602.8 is amended by revising the words 
``Office of the General Counsel'' each of the three times that phrase 
appears in the paragraph to read ``Office of Legal Affairs.''

    6. Section 1602.13 is 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

[[Page 7438]]

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. Section 1602.14 is 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 grant application(s) (or any 
portion thereof). The notice shall reasonably describe the grant 
application(s), or portions thereof, 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 grant application(s) desires to object to the disclosure of 
the grant application(s) (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 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 grant 
application(s), or portions thereof, the requested information 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. 03-3645 Filed 2-13-03; 8:45 am]
BILLING CODE 7050-01-P