[Federal Register Volume 68, Number 101 (Tuesday, May 27, 2003)]
[Rules and Regulations]
[Pages 28744-28752]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11853]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 438

RIN 0960-AE29


Restrictions on Lobbying

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: These final rules establish new regulations dealing with the 
restrictions on lobbying contained in the Common Rule, ``New 
Restrictions on Lobbying,'' commonly referred to as the Byrd Anti-
Lobbying Amendment common rule. The Social Security Independence and 
Program Improvements Act of 1994 established SSA as an independent 
agency separate from the Department of Health and Human Services (HHS), 
effective on March 31, 1995. To implement our own set of grants 
regulations, we have essentially codified the text of the Common Rule. 
These final rules, along with the final rules we are publishing 
elsewhere in today's Federal Register, establish SSA grants 
regulations, separate from those of HHS, effective upon publication.

EFFECTIVE DATE: These final rules are effective May 27, 2003.

FOR FURTHER INFORMATION CONTACT: Phyllis Y. Smith, Chief Grants 
Management Officer, Office of Operations Contracts and Grants, Office 
of Acquisition and Grants, SSA, 1710 Gwynn Oak Ave., Baltimore, MD 
21207-5279; telephone (410) 965-9518; FAX (410) 966-9310.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 319 of Pub. L. 101-121, enacted October 23, 1989, amended 
title 31, United States Code, by adding a new section 1352, entitled 
``Limitation on Use of Appropriated Funds to Influence Certain Federal 
Contracting and Financial Transactions,'' commonly known as the Byrd 
Anti-Lobbying Amendment. This law prohibits the recipient of a Federal 
contract, grant, loan or cooperative agreement from using appropriated 
funds to pay any person to influence or attempt to influence an officer 
or employee of any agency, a Member of Congress, an officer or employee 
of Congress, or an employee of a Member of Congress in connection with 
any of the following covered Federal actions:
    [sbull] The awarding of any Federal contract,
    [sbull] The making of any Federal grant,
    [sbull] The making of any Federal loan,
    [sbull] The entering into of any cooperative agreement, and
    [sbull] The extension, continuation, renewal, amendment, or 
modification of any Federal contract, grant, loan, or cooperative 
agreement.
    The law also imposes requirements for disclosure and certification 
related to lobbying by recipients of any of the covered Federal 
actions. As called for by section 319 of Public Law 101-121, on 
December 18, 1989 (published December 20, 1989), the Office of 
Management and Budget (OMB) issued interim final guidance entitled 
``Governmentwide Guidance for New Restrictions on Lobbying,'' which 
called for governmentwide implementation of, and compliance with, the 
requirements of section 1352.
    HHS implements the provisions of the Byrd Anti-Lobbying Amendment 
common rule through its regulations at 45 CFR part 93. Prior to March 
31, 1995, SSA was an operating component of HHS. As a result of Public 
Law 103-296, SSA became an independent agency on March 31, 1995. 
However, pursuant to section 106(b) of that law, the HHS regulations at 
45 CFR part 93 have remained applicable to SSA. In order to implement 
our own set of grants regulations dealing with lobbying, we are 
essentially adopting the text of the anti-lobbying common rule at 20 
CFR part 438. Part 438 is similar in all material respects to 45 CFR 
part 93 and to the governmentwide anti-lobbying common rule, which 
implements the requirements of section 319, Public Law 101-121 (31 
U.S.C. 1352). HHS regulations at 45 CFR part 93 will cease to be 
applicable to SSA on the effective date of these regulations, in 
accordance with section 106(b) of Public Law 103-296.

II. Differences Between Part 438 and Common Rule/Part 93

    A. In Sec.  438.100(a), we have corrected the spelling of the word 
``agreement'' where it is initially used in the term ``cooperative 
agreement.''
    B. In the second sentence of Sec.  408.300(c), we have changed the 
word ``or'' to ``of.'' The sentence properly reads ``For example, 
drafting of a legal document accompanying a bid * * *''.
    C. Throughout new part 438, we have replaced, where appropriate, 
references to ``awarding agency(ies)'' with references to SSA. We have 
also made numerous nonsubstantive changes to make these rules easier 
for the public to read and understand.

Regulatory Procedures

Justification for Final Rule

    Section 702(a)(5) of the Social Security Act (Act) makes the 
regulations we prescribe subject to the rulemaking procedures 
established under section 553 of the Administrative Procedure Act 
(APA), 5 U.S.C. 553. These procedures generally require publication of 
notice of the proposed rulemaking and the solicitation of comments from 
interested persons. However, the APA provides exceptions to notice and 
comment procedures when an agency finds that there is good cause for 
dispensing with such procedures on the basis that they are 
impracticable, unnecessary, or contrary to the public interest.
    After due consideration, we have determined that under 5 U.S.C. 
553(b)(B), good cause exists for waiver of notice of proposed 
rulemaking because such procedure would be unnecessary. These final 
regulations adopt as SSA regulations the provisions of the 
governmentwide anti-lobbying common rule without substantive change. 
Pursuant to section 106(b) of Public Law 103-296, the HHS regulations 
at 45 CFR part 93, which implement the provisions of the anti-lobbying 
common rule, remain applicable to SSA until such time as these 
regulations become effective. The differences in these regulations over 
those of the anti-lobbying common rule or those of 45 CFR part 93 are 
not substantive. Accordingly, promulgation of these regulations 
pursuant to notice and comment rulemaking is unnecessary and may be 
dispensed with pursuant to 5 U.S.C. 553(b)(B).

Waiver of 30-Day Delay in Effective Date

    As indicated above, section 702(a)(5) of the Act makes the 
regulations we

[[Page 28745]]

prescribe subject to the rulemaking procedures established under 
section 553 of the APA. Section 553(d) of the APA requires that the 
effective date of a substantive rule be no less than 30 days after its 
publication, except in cases of: Rules which grant or recognize an 
exemption or relieve a restriction; interpretative rules and statements 
of policy; or as otherwise provided by the agency for good cause found 
and published with the rule.
    Under 5 U.S.C. 553(d)(3), good cause exists for dispensing with the 
minimum 30-day period between publication date and effective date. As 
indicated above, these regulations adopt without change the substantive 
provisions of the anti-lobbying common rule. A 30-day delay in the 
effective date of these regulations would serve no purpose since, 
during such delay, the identical provisions of Part 93, which implement 
the provisions of the anti-lobbying common rule, would remain 
applicable. Accordingly, these regulations are effective on 
publication.

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and have determined that these final rules do not meet the criteria for 
a significant regulatory action under Executive Order 12866, as amended 
by Executive Order 13258. Thus, they were not subject to OMB review. We 
have also determined that these rules meet the plain language 
requirement of Executive Order 12866, as amended by Executive Order 
13258.

Regulatory Flexibility Act

    We certify that these final rules will not have a significant 
economic impact on a substantial number of small entities because this 
rule merely reflects the adoption of existing grant policies and 
procedures by SSA and does not promulgate any new policies or 
procedures which would impact the public. Therefore, a regulatory 
flexibility analysis as provided in the Regulatory Flexibility Act, as 
amended, is not required.

Paperwork Reduction Act

    The Paperwork Reduction Act (PRA) of 1995 says that no persons are 
required to respond to a collection of information unless it displays a 
valid OMB control number. In accordance with the PRA, SSA is providing 
notice that the Office of Management and Budget has approved the 
information collection requirements contained in Sec.  438.110 of these 
final rules. The OMB Control Number for this collection is 0348-0046 
(Standard Form--LLL (Disclosure Form to Report Lobbying)

(Catalog of Federal Domestic Assistance: Program No. 96.007--Social 
Security--Research and Demonstration; and Program No. 96.008--Social 
Security Administration--Benefits Planning, Assistance, and Outreach 
Program)

List of Subjects in 20 CFR Part 438

    Administrative practice and procedures, Federal procurement 
programs, Grant programs.

    Dated: April 25, 2003.
Jo Anne B. Barnhart,
Commissioner of Social Security.

0
For the reasons set out in the preamble, we are adding a new part 438 
to chapter III of title 20 of the Code of Federal Regulations to read 
as follows:
0
1. Part 438 is added to read as follows:

PART 438--RESTRICTIONS ON LOBBYING

Subpart A--General
Sec.
438.100 Conditions on use of funds.
438.105 Definitions.
438.110 Certification and disclosure.
Subpart B--Activities by Own Employees
438.200 Agency and legislative liaison.
438.205 Professional and technical services.
438.210 Reporting.
Subpart C--Activities by Other than Own Employees
438.300 Professional and technical services.
Subpart D--Penalties and Enforcement
438.400 Penalties.
438.405 Penalty procedures.
438.410 Enforcement.
Subpart E--Exemptions
438.500 Secretary of Defense.
Subpart F--Agency Reports
438.600 Semi-annual compilation.
438.605 Inspector General report.
Appendix A to Part 438--Certification Regarding Lobbying
Appendix B to Part 438--Disclosure Form to Report Lobbying

    Authority: 5 U.S.C. 301.

Subpart A--General


Sec.  438.100  Conditions on use of funds.

    (a) No appropriated funds may be expended by the recipient of a 
Federal contract, grant, loan, or cooperative agreement to pay any 
person for influencing or attempting to influence an officer or 
employee of SSA, a Member of Congress, an officer or employee of 
Congress, or an employee of a Member of Congress in connection with any 
of the following covered Federal actions: the awarding of any Federal 
contract, the making of any Federal grant, the making of any Federal 
loan, the entering into of any cooperative agreement, and the 
extension, continuation, renewal, amendment, or modification of any 
Federal contract, grant, loan, or cooperative agreement.
    (b) Each person who requests or receives from SSA a Federal 
contract, grant, loan, or cooperative agreement must file with SSA a 
certification, set forth in Appendix A to this part, that the person 
has not made, and will not make, any payment prohibited by paragraph 
(a) of this section.
    (c) Each person who requests or receives from SSA a Federal 
contract, grant, loan, or a cooperative agreement must file with SSA a 
disclosure form, set forth in Appendix B to this part, if such person 
has made or has agreed to make any payment using non-appropriated funds 
(to include profits from any covered Federal action), which would be 
prohibited under paragraph (a) of this section if paid for with 
appropriated funds.
    (d) Each person who requests or receives from SSA a commitment 
providing for the United States to insure or guarantee a loan must file 
with SSA a statement, set forth in Appendix A to this part, whether 
that person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of SSA, a Member of 
Congress, an officer or employee of Congress, or an employee of a 
Member of Congress in connection with that loan insurance or guarantee.
    (e) Each person who requests or receives from SSA a commitment 
providing for the United States to insure or guarantee a loan must file 
with SSA a disclosure form, set forth in Appendix B to this part, if 
that person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of SSA, a Member of 
Congress, an officer or employee of Congress, or an employee of a 
Member of Congress in connection with that loan insurance or guarantee.


Sec.  438.105  Definitions.

    For purposes of this part:
    Commissioner means the Commissioner of Social Security.
    Covered Federal action means any of the following Federal actions:
    (1) The awarding of any Federal contract;
    (2) The making of any Federal grant;
    (3) The making of any Federal loan;
    (4) The entering into of any cooperative agreement; and,
    (5) The extension, continuation, renewal, amendment, or 
modification of any Federal contract, grant, loan, or cooperative 
agreement. Covered Federal action does not include receiving from

[[Page 28746]]

an agency a commitment providing for the United States to insure or 
guarantee a loan. Loan guarantees and loan insurance are addressed 
independently within this part.
    Federal contract means an acquisition contract awarded by the 
Social Security Administration, including those subject to the Federal 
Acquisition Regulation (FAR) (48 CFR chapter 1), and any other 
acquisition contract for real or personal property or services not 
subject to the FAR.
    Federal cooperative agreement means a cooperative agreement SSA 
enters into.
    Federal grant means an award of financial assistance in the form of 
money, or property in lieu of money, by the Federal Government or a 
direct appropriation made by law to any person. The term does not 
include technical assistance which provides services instead of money, 
or other assistance in the form of revenue sharing, loans, loan 
guarantees, loan insurance, interest subsidies, insurance, or direct 
United States cash assistance to an individual.
    Federal loan means a loan made by SSA. The term does not include 
loan guarantee or loan insurance.
    Indian tribe and tribal organization have the meaning provided in 
section 4 of the Indian Self-Determination and Education Assistance Act 
(25 U.S.C. 450B). Alaskan Natives are included under the definitions of 
Indian tribes in that Act.
    Influencing or attempting to influence means making, with the 
intent to influence, any communication to or appearance before an 
officer or employee of SSA, a Member of Congress, an officer or 
employee of Congress, or an employee of a Member of Congress in 
connection with any covered Federal action.
    Loan guarantee and loan insurance means SSA's guarantee or 
insurance of a loan made by a person.
    Local government means a unit of government in a State and, if 
chartered, established, or otherwise recognized by a State for the 
performance of a governmental duty, including a local public authority, 
a special district, an intrastate district, a council of governments, a 
sponsor group representative organization, and any other 
instrumentality of a local government.
    Officer or employee of SSA includes the following individuals who 
are employed by an agency:
    (1) An individual who is appointed to a position in the Government 
under title 5, U.S. Code, including a position under a temporary 
appointment;
    (2) A member of the uniformed services as defined in section 
101(3), title 37, U.S. Code;
    (3) A special Government employee as defined in section 202, title 
18, U.S. Code; and,
    (4) An individual who is a member of a Federal advisory committee, 
as defined by the Federal Advisory Committee Act, title 5, U.S. Code 
appendix 2.
    Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, and local government, 
regardless of whether such entity is operated for profit or not for 
profit. This term excludes an Indian tribe, tribal organization, or any 
other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    Reasonable compensation means, with respect to a regularly employed 
officer or employee of any person, compensation that is consistent with 
the normal compensation for such officer or employee for work that is 
not furnished to, not funded by, or not furnished in cooperation with 
the Federal Government.
    Reasonable payment means, with respect to professional and other 
technical services, a payment in an amount that is consistent with the 
amount normally paid for such services in the private sector.
    Recipient includes all contractors, subcontractors at any tier, and 
subgrantees at any tier of the recipient of funds received in 
connection with a Federal contract, grant, loan, or cooperative 
agreement. The term excludes an Indian tribe, tribal organization, or 
any other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    Regularly employed means, with respect to an officer or employee of 
a person requesting or receiving a Federal contract, grant, loan, or 
cooperative agreement or a commitment providing for the United States 
to insure or guarantee a loan, an officer or employee who is employed 
by such person for at least 130 working days within one year 
immediately preceding the date of the submission that initiates agency 
consideration of such person for receipt of such contract, grant, loan, 
cooperative agreement, loan insurance commitment, or loan guarantee 
commitment. An officer or employee who is employed by such person for 
less than 130 working days within one year immediately preceding the 
date of the submission that initiates agency consideration of such 
person shall be considered to be regularly employed as soon as he or 
she is employed by such person for 130 working days.
    SSA means the Social Security Administration.
    State means a State of the United States, the District of Columbia, 
the Commonwealth of Puerto Rico, a territory or possession of the 
United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and 
powers.


Sec.  438.110  Certification and disclosure.

    (a) Each person must file a certification, and a disclosure form, 
if required, with each submission that initiates SSA consideration of 
that person for:
    (1) Award of a Federal contract, grant, or cooperative agreement 
exceeding $100,000; or
    (2) An award of a Federal loan or a commitment providing for the 
United States to insure or guarantee a loan exceeding $150,000.
    (b) Each person must file a certification, and a disclosure form, 
if required, if he or she receives:
    (1) A Federal contract, grant, or cooperative agreement exceeding 
$100,000; or
    (2) A Federal loan or a commitment providing for the United States 
to insure or guarantee a loan exceeding $150,000, unless such person 
previously filed a certification, and a disclosure form, if required, 
under paragraph (a) of this section.
    (c) Each person must file a disclosure form at the end of each 
calendar quarter in which there occurs any event that requires 
disclosure or that materially affects the accuracy of the information 
contained in any disclosure form previously filed by that person under 
paragraphs (a) or (b) of this section. An event that materially affects 
the accuracy of the information reported includes:
    (1) A cumulative increase of $25,000 or more in the amount paid or 
expected to be paid for influencing or attempting to influence a 
covered Federal action; or
    (2) A change in the person(s) or individual(s) influencing or 
attempting to influence a covered Federal action; or,
    (3) A change in the officer(s), employee(s), or Member(s) contacted 
to influence or attempt to influence a covered Federal action.
    (d) Any person who requests or receives from a person referred to 
in paragraphs (a) or (b) of this section:
    (1) A subcontract exceeding $100,000 at any tier under a Federal 
contract;

[[Page 28747]]

    (2) A subgrant, contract, or subcontract exceeding $100,000 at any 
tier under a Federal grant;
    (3) A contract or subcontract exceeding $100,000 at any tier under 
a Federal loan exceeding $150,000; or,
    (4) A contract or subcontract exceeding $100,000 at any tier under 
a Federal cooperative agreement, must file a certification, and a 
disclosure form, if required, to the next tier above.
    (e) All disclosure forms, but not certifications, must be forwarded 
from tier to tier until received by the person referred to in 
paragraphs (a) or (b) of this section. That person must forward all 
disclosure forms to SSA.
    (f) Any certification or disclosure form filed under paragraph (e) 
of this section will be treated as a material representation of fact 
upon which all receiving tiers must rely. All liability arising from an 
erroneous representation will be borne solely by the tier filing that 
representation and will not be shared by any tier to which the 
erroneous representation is forwarded. Submitting an erroneous 
certification or disclosure constitutes a failure to file the required 
certification or disclosure, respectively. If a person fails to file a 
required certification or disclosure, the United States may pursue all 
available remedies, including those authorized by section 1352, title 
31, U.S. Code.
    (g) No reporting is required for an activity paid for with 
appropriated funds if that activity is allowable under either subpart B 
or C of this part.

Subpart B--Activities by Own Employees


Sec.  438.200  Agency and legislative liaison.

    (a) The prohibition on the use of appropriated funds, in Sec.  
438.100(a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement if 
the payment is for agency and legislative liaison activities not 
directly related to a covered Federal action.
    (b) For purposes of paragraph (a) of this section, providing any 
information specifically requested by SSA or Congress is allowable at 
any time.
    (c) For purposes of paragraph (a) of this section, the following 
agency and legislative liaison activities are allowable at any time 
only where they are not related to a specific solicitation for any 
covered Federal action:
    (1) Discussing with SSA (including individual demonstrations) the 
qualities and characteristics of the person's products or services, 
conditions or terms of sale, and service capabilities; and,
    (2) Technical discussions and other activities regarding the 
application or adaptation of the person's products or services for 
SSA's use.
    (d) For purposes of paragraph (a) of this section, the following 
agency and legislative liaison activities are allowable only where they 
are prior to formal solicitation of any covered Federal action:
    (1) Providing any information not specifically requested but 
necessary for SSA to make an informed decision about initiation of a 
covered Federal action;
    (2) Technical discussions regarding the preparation of an 
unsolicited proposal prior to its official submission; and,
    (3) Capability presentations by persons seeking awards from SSA 
pursuant to the provisions of the Small Business Act, as amended by 
Public Law 95-507 and other subsequent amendments.
    (e) Only those activities expressly authorized by this section are 
allowable under this section.


Sec.  438.205  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec.  
438.100(a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement or 
an extension, continuation, renewal, amendment, or modification of a 
Federal contract, grant, loan, or cooperative agreement if payment is 
for professional or technical services rendered directly in the 
preparation, submission, or negotiation of any bid, proposal, or 
application for that Federal contract, grant, loan, or cooperative 
agreement or for meeting requirements imposed by or pursuant to law as 
a condition for receiving that Federal contract, grant, loan, or 
cooperative agreement.
    (b) For purposes of paragraph (a) of this section, professional and 
technical services are limited to advice and analysis directly applying 
any professional or technical discipline. For example, drafting of a 
legal document accompanying a bid or proposal by a lawyer is allowable. 
Similarly, technical advice provided by an engineer on the performance 
or operational capability of a piece of equipment rendered directly in 
the negotiation of a contract is allowable. However, communications 
with the intent to influence made by a professional (such as a licensed 
lawyer) or a technical person (such as a licensed accountant) are not 
allowable under this section unless they provide advice and analysis 
directly applying their professional or technical expertise and unless 
the advice or analysis is rendered directly and solely in the 
preparation, submission or negotiation of a covered Federal action. 
Thus, for example, communications with the intent to influence made by 
a lawyer that do not provide legal advice or analysis directly and 
solely related to the legal aspects of his or her client's proposal, 
but generally advocate one proposal over another are not allowable 
under this section because the lawyer is not providing professional 
legal services. Similarly, communications with the intent to influence 
made by an engineer providing an engineering analysis prior to the 
preparation or submission of a bid or proposal are not allowable under 
this section since the engineer is providing technical services but not 
directly in the preparation, submission or negotiation of a covered 
Federal action.
    (c) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (d) Only those services expressly authorized by this section are 
allowable under this section.


Sec.  438.210  Reporting.

    No reporting is required with respect to payments of reasonable 
compensation made to regularly employed officers or employees of a 
person.

Subpart C--Activities by Other Than Own Employees


Sec.  438.300  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec.  
438.100(a), does not apply in the case of any reasonable payment to a 
person, other than an officer or employee of a person requesting or 
receiving a covered Federal action, if the payment is for professional 
or technical services rendered directly in the preparation, submission, 
or negotiation of any bid, proposal, or application for that Federal 
contract, grant, loan, or cooperative agreement or for meeting 
requirements imposed by or pursuant to law as a condition for receiving 
that Federal contract, grant, loan, or cooperative agreement.
    (b) The reporting requirements in Sec.  438.110 (a) and (b) 
regarding filing a

[[Page 28748]]

disclosure form by each person, if required, do not apply with respect 
to professional or technical services rendered directly in the 
preparation, submission, or negotiation of any commitment providing for 
the United States to insure or guarantee a loan.
    (c) For purposes of paragraph (a) of this section, professional and 
technical services are limited to advice and analysis directly applying 
any professional or technical discipline. For example, drafting of a 
legal document accompanying a bid or proposal by a lawyer is allowable. 
Similarly, technical advice provided by an engineer on the performance 
or operational capability of a piece of equipment rendered directly in 
the negotiation of a contract is allowable. However, communications 
with the intent to influence made by a professional (such as a licensed 
lawyer) or a technical person (such as a licensed accountant) are not 
allowable under this section unless they provide advice and analysis 
that directly apply to their professional or technical expertise and 
unless the advice or analysis is rendered directly and solely in the 
preparation, submission or negotiation of a covered Federal action. 
Thus, for example, communications with the intent to influence made by 
a lawyer that do not provide legal advice or analysis directly and 
solely related to the legal aspects of his or her client's proposal, 
but generally advocate one proposal over another are not allowable 
under this section because the lawyer is not providing professional 
legal services. Similarly, communications with the intent to influence 
made by an engineer providing an engineering analysis prior to the 
preparation or submission of a bid or proposal are not allowable under 
this section since the engineer is providing technical services but not 
directly in the preparation, submission or negotiation of a covered 
Federal action.
    (d) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (e) Persons other than officers or employees of a person requesting 
or receiving a covered Federal action include consultants and trade 
associations.
    (f) Only those services expressly authorized by this section are 
allowable under this section.

Subpart D--Penalties and Enforcement


Sec.  438.400  Penalties.

    (a) Any person who makes an expenditure prohibited by this part is 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each prohibited expenditure.
    (b) Any person who fails to file or amend the disclosure form (see 
Appendix B to this part) to be filed or amended if required by this 
part is subject to a civil penalty of not less than $10,000 and not 
more than $100,000 for each failure.
    (c) A filing or amended filing on or after the date on which an 
administrative action for the imposition of a civil penalty is begun 
does not prevent the imposition of such civil penalty for a failure 
occurring before that date. An administrative action begins with 
respect to a failure when an investigating official determines in 
writing to begin an investigation of an allegation of such failure.
    (d) In determining whether to impose a civil penalty, and the 
amount of any such penalty, by reason of a violation by any person, SSA 
will consider the nature, circumstances, extent, and gravity of the 
violation, the effect on the ability of the person to continue in 
business, any prior violations by the person, the degree of culpability 
of the person, the ability of the person to pay the penalty, and any 
other matters that may be appropriate.
    (e) First offenders under paragraphs (a) or (b) of this section are 
subject to a civil penalty of $10,000, absent aggravating 
circumstances. Second and subsequent offenses by persons are subject to 
an appropriate civil penalty between $10,000 and $100,000, as 
determined by the Commissioner or his or her designee.
    (f) Imposition of a civil penalty under this section does not 
prevent the United States from seeking any other remedy that may apply 
to the same conduct that is the basis for the imposition of the civil 
penalty.


Sec.  438.405  Penalty procedures.

    We will impose and collect civil penalties pursuant to the 
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, 
and 3812, to the extent these provisions are not inconsistent with the 
requirements in this part.


Sec.  438.410  Enforcement.

    The Commissioner of Social Security will take any actions necessary 
to ensure that the provisions in this part are vigorously implemented 
and enforced.

Subpart E--Exemptions


Sec.  438.500  Secretary of Defense.

    (a) The Secretary of Defense may exempt, on a case-by-case basis, a 
covered Federal action from the prohibition whenever the Secretary 
determines, in writing, that such an exemption is in the national 
interest. The Secretary shall transmit a copy of each such written 
exemption to Congress immediately after making such a determination.
    (b) The Department of Defense may issue supplemental regulations to 
implement paragraph (a) of this section.

Subpart F--Agency Reports


Sec.  438.600  Semi-annual compilation.

    (a) The Commissioner of Social Security will collect and compile 
the disclosure reports (see Appendix B to this part) and, on May 31 and 
November 30 of each year, submit to the Secretary of the Senate and the 
Clerk of the House of Representatives a report containing a compilation 
of the information contained in the disclosure reports received during 
the 6-month period ending on March 31 or September 30, respectively, of 
that year.
    (b) The report, including the compilation, will be available for 
public inspection 30 days after receipt of the report by the Secretary 
and the Clerk.
    (c) Information that involves intelligence matters will be reported 
only to the Select Committee on Intelligence of the Senate, the 
Permanent Select Committee on Intelligence of the House of 
Representatives and the Committee on Appropriations of the Senate and 
the House of Representatives in accordance with procedures agreed to by 
such committees. Such information will not be available for public 
inspection.
    (d) Information that is classified under Executive Order 12356 or 
any successor order will be reported only to the Committee on Foreign 
Relations of the Senate and the Committee on Foreign Affairs of the 
House of Representatives (whichever such committees have jurisdiction 
of matters involving such information) and to the Committees on 
Appropriations of the Senate and the House of Representatives in 
accordance with procedures agreed to by such committees. Such 
information will not be available for public inspection.
    (e) The first semi-annual compilation was submitted on May 31, 
1990, and contains a compilation of the disclosure

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reports received from December 23, 1989 to March 31, 1990.
    (f) Major agencies designated by the Office of Management and 
Budget (OMB) were required to provide machine-readable compilations to 
the Secretary of the Senate and the Clerk of the House of 
Representatives by May 31, 1991. OMB provided detailed specifications 
in a memorandum to these agencies.
    (g) SSA will keep the originals of all disclosure reports in our 
official files.


Sec.  438.605  Inspector General report.

    (a) The Inspector General of Social Security, or other official as 
specified in paragraph (b) of this section, will prepare and submit to 
Congress each year an evaluation of SSA compliance with, and the 
effectiveness of, the requirements in this part. The evaluation may 
include any recommended changes that may be necessary to strengthen or 
improve the requirements.
    (b) The annual report will be submitted at the same time we submit 
our annual budget justification to Congress.
    (c) The annual report will include the following: All alleged 
violations covered by the report, the actions taken by the Commissioner 
in the year covered by the report with respect to those alleged 
violations and alleged violations in previous years, and the amounts of 
civil penalties imposed by SSA in the year covered by the report.

Appendix A to Part 438--Certification Regarding Lobbying

Certification for Contracts, Grants, Loans, and Cooperative Agreements

    The undersigned certifies, to the best of his or her knowledge 
and belief, that:
    (1) No Federal appropriated funds have been paid or will be 
paid, by or on behalf of the undersigned, to any person for 
influencing or attempting to influence an officer or employee of an 
agency, a Member of Congress, an officer or employee of Congress, or 
an employee of a Member of Congress in connection with the awarding 
of any Federal contract, the making of any Federal grant, the making 
of any Federal loan, the entering into of any cooperative agreement, 
and the extension, continuation, renewal, amendment, or modification 
of any Federal contract, grant, loan, or cooperative agreement.
    (2) If any funds other than Federal appropriated funds have been 
paid or will be paid to any person for influencing or attempting to 
influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a 
Member of Congress in connection with this Federal contract, grant, 
loan, or cooperative agreement, the undersigned shall complete and 
submit Standard Form--LLL, ``Disclosure Form to Report Lobbying,'' 
in accordance with its instructions.
    (3) The undersigned shall require that the language of this 
certification be included in the award documents for all subawards 
at all tiers (including subcontracts, subgrants, and contracts under 
grants, loans, and cooperative agreements) and that all 
subrecipients shall certify and disclose accordingly.
    This certification is a material representation of fact upon 
which reliance was placed when this transaction was made or entered 
into. Submission of this certification is a prerequisite for making 
or entering into this transaction imposed by section 1352, title 31, 
U.S. Code. Any person who fails to file the required certification 
shall be subject to a civil penalty of not less than $10,000 and not 
more than $100,000 for each such failure.

Statement for Loan Guarantees and Loan Insurance

    The undersigned states, to the best of his or her knowledge and 
belief, that:
    If any funds have been paid or will be paid to any person for 
influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or 
an employee of a Member of Congress in connection with this 
commitment providing for the United States to insure or guarantee a 
loan, the undersigned shall complete and submit Standard Form--LLL, 
``Disclosure Form to Report Lobbying,'' in accordance with its 
instructions.
    Submission of this statement is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, 
U.S. Code. Any person who fails to file the required statement shall 
be subject to a civil penalty of not less than $10,000 and not more 
than $100,000 for each such failure.

Appendix B to Part 438--Disclosure Form to Report Lobbying

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[FR Doc. 03-11853 Filed 5-23-03; 8:45 am]
BILLING CODE 4191-02-C