[Federal Register Volume 71, Number 11 (Wednesday, January 18, 2006)]
[Rules and Regulations]
[Pages 2871-2879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-433]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

RIN 0960-AG15


Representation of Parties; Recognition, Disqualification, and 
Reinstatement of Representative

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: We are revising our regulations to identify additional bases 
upon which we may bring charges to disqualify an individual from acting 
as a representative before the Social Security Administration (SSA), 
and to set forth the conditions under which we will reinstate an 
individual whom we have disqualified as a representative because the 
individual collected or received, and retains, a fee in excess of the 
amount we authorized. These final rules revise our regulations on the 
representation of parties to implement section 205 of the Social 
Security Protection Act of 2004 (SSPA) and to make additional changes 
in these regulations that relate to the changes required by this 
legislation. The rules also make technical changes in our regulations 
on the representation of parties.

DATES: These rules are effective February 17, 2006.

FOR FURTHER INFORMATION CONTACT: Richard Bresnick, Social Insurance 
Specialist, Office of Regulations, Social Security Administration, 100 
Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, 
(410) 965-1758 or TTY (410) 966-5609. For information on eligibility or 
filing for benefits, call our national toll-free number, 1-800-772-1213 
or TTY 1-800-325-0778, or visit our Internet site, Social Security 
Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register at http://www.gpoaccess.gov/fr/index.html.

Background

    Section 206(a)(1) of the Social Security Act (the Act) provides 
that attorneys and non-attorneys may represent claimants before SSA. 
Prior to enactment of the SSPA, Public Law 108-203, on March 2, 2004, 
section 206(a)(1) specified that ``[a]n attorney in good standing who 
is admitted to practice before the highest court of the State, 
Territory, District, or insular possession of his residence or before 
the Supreme Court of the United States or the inferior Federal courts'' 
is entitled to represent claimants before SSA. Section 206(a)(1) also 
authorized SSA to prescribe rules and regulations governing recognition 
of individuals other than attorneys.
    Section 205 of the SSPA amended section 206(a)(1) of the Act with 
respect to the recognition and disqualification of certain attorneys as 
claimants' representatives. As amended, section 206(a)(1) provides that 
the Commissioner of Social Security (the Commissioner), after due 
notice and opportunity for hearing, may refuse to recognize as a 
representative, and may disqualify a representative already recognized, 
any attorney who has been disbarred or suspended from any court or bar 
to which he or she was previously admitted to practice or who has been 
disqualified from participating in or appearing before any Federal 
program or agency. Section 206(a)(1) as amended further provides that 
the Commissioner may also, after due notice and opportunity for 
hearing, refuse to recognize, and may disqualify, as a non-attorney 
representative, any attorney who has been disbarred or suspended from 
any court or bar to which he or she was previously admitted to 
practice.
    Section 205 of the SSPA also amended section 206(a)(1) of the Act 
with respect to reinstatement of certain individuals (whether or not 
they are attorneys) who have been disqualified or suspended from 
appearing before SSA. Under the Act as amended, a representative who 
has been disqualified or suspended from appearing before SSA as a 
result of collecting or receiving a fee in excess of the amount 
authorized shall be barred from appearing before SSA as a 
representative until full restitution is made to the claimant and, 
thereafter, may be considered for reinstatement only under such rules 
as the Commissioner may prescribe.

Regulatory Provisions Implementing SSPA Section 205 and Making Related 
Changes

    As amended, section 206(a)(1) of the Act identifies certain 
specific bases upon which, after notice and opportunity for hearing, we 
may refuse to recognize an attorney as a representative or disqualify 
an attorney whom we have already recognized as a representative. We are 
implementing these statutory provisions by revising our regulations at 
20 CFR 404.1745 and 416.1545, which describe the circumstances in which 
we may file charges seeking to suspend or disqualify an individual from 
acting in a representational capacity before us. Specifically, we are 
revising these sections to expand the stated bases upon which we may 
file such charges to include those in which we have evidence that a 
representative has been, by reason of misconduct--
     Disbarred or suspended from any court or bar to which he 
or she was previously admitted to practice, or
     Disqualified from participating in or appearing before any 
Federal program or agency.
    Sections 404.1745 and 416.1545 as a whole pertain to our bringing 
of charges that may seek either to suspend or to disqualify a 
representative. As we explain below in connection with revisions we are 
making in our regulations dealing with the decisions hearing officers 
make on charges brought against representatives (20 CFR 404.1770 and 
416.1570), disqualification is the sole sanction available if the 
charges against a representative are sustained because the 
representative has been, by reasons of

[[Page 2872]]

misconduct, disbarred or suspended from any court or bar to which he or 
she was previously admitted to practice or disqualified from 
participating in or appearing before any Federal program or agency.
    Sections 404.1745 and 416.1545, as revised and as they previously 
existed, apply with respect to both attorney and non-attorney 
representatives. Under these sections as revised, we have authority to 
bring charges to disqualify a non-attorney representative if we have 
evidence that the representative has been, by reason of misconduct--
     Disbarred or suspended from any court or bar to which he 
or she was previously admitted to practice, or
     Disqualified from participating in or appearing before any 
Federal program or agency.
    As amended by the SSPA, section 206(a)(1) of the Act specifically 
provides that, after providing due notice and an opportunity for 
hearing, SSA ``may refuse to recognize, and may disqualify, as a non-
attorney representative any attorney who has been disbarred or 
suspended from any court or bar to which he or she was previously 
admitted to practice.'' Thus, the Act provides that disbarment or 
suspension by a court or bar may be a basis for disqualifying an 
individual from representational functions before SSA irrespective of 
whether the individual seeks to represent individuals as an attorney or 
non-attorney. Although it provides that we may refuse to recognize or 
disqualify an attorney who has been disqualified from participating in 
or appearing before a Federal program or agency, the Act as amended 
does not also state that we may refuse to recognize a non-attorney (or 
former attorney) who has been disqualified from participating in or 
appearing before any Federal program or agency. These final rules 
include a rule making disqualification from participating in or 
appearing before any Federal program or agency a basis for bringing 
charges to disqualify a non-attorney in order to make our rules, with 
respect to recognition of non-attorneys, consistent with our rules for 
attorneys. By making this a basis for bringing charges against non-
attorneys as well as attorneys, we ensure that the additional 
protections provided by the SSPA are available for all claimants, 
regardless of whether their representatives are attorneys or non-
attorneys.
    We are promulgating this rule regarding non-attorney 
representatives under the general authority of the Commissioner, as set 
forth in section 206(a)(1) of the Act, to prescribe rules and 
regulations ``governing the recognition'' of non-attorney 
representatives and to require such representatives to ``show that they 
are of good character and in good repute'' and capable of providing 
claimants valuable services. Under this rule, if we determine, after 
providing due notice and opportunity for a hearing, that a non-attorney 
individual has been disqualified from participating in or appearing 
before a Federal program or agency for reasons of misconduct, we will 
disqualify the individual as having failed to show that he or she is of 
good character and in good repute and will thereafter, absent 
reinstatement in accordance with the provisions of 20 CFR 404.1799 and 
416.1599, refuse to recognize the individual as a representative. The 
effect of this rule is to require a non-attorney whom we charge with 
having been disqualified from participating in or appearing before a 
Federal program or agency for reasons of misconduct to show, in 
accordance with our rules at 20 CFR 404.1750ff. and 416.1550ff. on 
hearing and deciding charges against representatives, that he or she 
has not been disqualified from participating in or appearing before a 
Federal program or agency for reasons of misconduct and is thus, in 
that respect, of good character and in good repute.
    This rule codifies a practice we currently apply under Program 
Operations Manual System section GN 03970.011, which sets forth a non-
exclusive list of circumstances in which we may bring charges (under 
Sec. Sec.  404.1745 and 416.1545) to suspend or disqualify a non-
attorney from practice before us for lack of good character and 
reputation. We believe we should codify that disqualification by a 
Federal program or agency may be a basis for bringing charges against a 
non-attorney representative because the Act as amended by the SSPA is 
silent on that issue, even though it provides that we may bring charges 
against a non-attorney for disbarment or suspension by a court or bar. 
Our codification of this particular basis for bringing charges based on 
a lack of good character and reputation does not limit our discretion 
to bring charges against a non-attorney representative, as we do at 
present, whenever we believe that we have evidence that a non-attorney 
fails to meet the qualification requirement concerning good character 
and reputation included in the provisions of Sec. Sec.  404.1705 and 
416.1505 on ``Who may be your representative.''
    Under Sec. Sec.  404.1745 and 416.1545 as revised, we have 
discretion in determining whether to bring charges when we have 
evidence that an individual has been disbarred, suspended or 
disqualified by a court, bar, Federal program or agency. One factor we 
will consider in determining whether to bring charges is whether the 
individual has been reinstated by the court, bar, Federal program or 
agency that disbarred, suspended or disqualified the individual. 
Reinstatement will not necessarily preclude the bringing of charges. 
Further, we may also bring charges if the disbarment, suspension or 
disqualification by a court, bar, Federal program or agency became 
final prior to the enactment of section 205 of the SSPA.
    We are revising 20 CFR 404.1755 and 416.1555, the sections of our 
regulations that deal with the withdrawal of charges that have been 
filed against a representative, to clarify the existing provisions and 
to set forth specific criteria we apply in determining whether to 
withdraw charges where we have filed charges against a representative 
based on disbarment, suspension or disqualification by a court, bar or 
Federal program or agency and subsequently learn that the 
representative has been reinstated by the court, bar or Federal program 
or agency that took the action against the representative. We describe 
these revisions and our reasons for making them below under Public 
Comments.
    Under the Act as amended by the SSPA, we have discretionary 
authority to refuse to permit an individual to function as a 
representative before us because that individual has been disbarred, 
suspended or disqualified by a court, bar or Federal program or agency. 
To implement that authority, we are revising Sec. Sec.  404.1770 and 
416.1570 to explain that in deciding whether to impose that sanction we 
will consider the reasons for the disbarment, suspension, or 
disqualification action of the court, bar or Federal program or agency 
and will not disqualify the individual from acting as a representative 
before SSA if the court, bar, or Federal program or agency action was 
taken for reasons unrelated to misconduct (e.g., solely for 
administrative reasons such as failure to pay dues or failure to 
complete continuing legal education requirements). Sections 404.1770 
and 416.1570 as revised also explain that this exception to 
disqualification will not apply if the administrative action was taken 
by the court, bar or Federal program or agency in lieu of disciplinary 
proceedings (e.g., the acceptance of a voluntary resignation pending 
disciplinary action), and that although we will consider the reasons

[[Page 2873]]

for the disbarment, suspension, or disqualification action in 
determining whether to disqualify an individual from appearing before 
us as a representative, we will not re-examine or revise the factual or 
legal conclusions that led to the disbarment, suspension or 
disqualification action.
    As revised, Sec. Sec.  404.1770 and 416.1570 also explain what we 
mean by the terms ``disqualified,'' ``Federal program,'' and ``Federal 
agency'' for the purposes of deciding whether an individual has been 
disqualified from participating in or appearing before any Federal 
program or agency. For that purpose, ``disqualified'' refers to any 
action that prohibits an individual from participating in or appearing 
before the program or agency, regardless of how long the prohibition 
lasts or the specific terminology used. The program or agency need not 
use the term ``disqualified'' to describe the action. For example, an 
agency may use analogous terms such as ``suspend,'' ``decertify,'' 
``exclude,'' ``expel,'' or ``debar'' to describe the individual's 
disqualification from participating in the program or the agency. For 
the purposes of deciding whether an individual has been disqualified 
from participating in or appearing before any Federal program or 
agency, ``Federal program'' refers to any program established by an Act 
of Congress or administered by a Federal agency and ``Federal agency'' 
refers to any authority of the executive branch of the Government of 
the United States.
    As previously noted, we are also revising Sec. Sec.  404.1770 and 
416.1570 to provide that disqualification will be the only sanction 
that may be applied if charges against a representative (attorney or 
non-attorney) are sustained because the representative has been, by 
reason of misconduct, disbarred or suspended from any court or bar to 
which he or she was previously admitted to practice or disqualified 
from participating in or appearing before any Federal program or 
agency. The Act, as amended by the SSPA, states only that we may 
``refuse to recognize'' and, where recognition has already occurred, 
``disqualify'' an individual who has been disbarred, suspended or 
disqualified by a court, bar or Federal program or agency. Under our 
rules on reinstatement, a suspended representative is automatically 
reinstated at the end of the period of suspension (20 CFR 404.1797 and 
416.1597). By contrast, under Sec. Sec.  404.1799 and 416.1599 of our 
rules, if an individual has been disqualified, reinstatement can occur 
only if the individual asks the Appeals Council of our Office of 
Hearings and Appeals for permission to serve as a representative again 
and the Appeals Council decides that it is reasonable to expect that 
the individual will, in the future, act in accordance with the 
provisions of section 206(a) of the Act and our rules and regulations. 
We cannot ensure that reinstatement is warranted on that basis in cases 
in which the sanction imposed by us is a suspension. Based on the 
above, and for reasons further explained below under Public Comments, 
we believe that disqualification is the only appropriate sanction where 
charges are sustained because we find that a representative has been, 
by reason of misconduct, disbarred, suspended or disqualified by a 
court, bar or Federal program or agency.
    We are also revising Sec. Sec.  404.1770 and 416.1570 to state 
that, if the charges against the representative are sustained because 
the representative has collected or received, and retains, a fee for 
representational services in excess of the amount authorized, 
disqualification will be the only sanction available. This change is 
intended to ensure that such a representative is barred from appearing 
before SSA until full restitution has been made, as required by the Act 
as amended by the SSPA. Sections 404.1770 and 416.1570 as revised 
recognize that restitution is required only where the representative 
has not already made full restitution at the time at which we sustain 
charges of collecting or receiving an unauthorized fee. The 
representative ``retains'' an unauthorized fee that has been collected 
or received if full restitution has not been made for any reason. If a 
representative makes full restitution before the charges against the 
representative have been sustained, we are not precluded from finding 
that the representative has charged, collected, or retained a fee in 
violation of Sec. Sec.  404.1740(c)(2) and/or 416.1540(c)(2), and 
suspending or disqualifying that representative from practice.
    We are revising 20 CFR 404.1790 and 416.1590, which deal with 
decisions made by the Appeals Council where a party to the hearing 
requests review of a hearing officer's decision in a sanction case, to 
conform these sections to the changes made in Sec. Sec.  404.1770 and 
416.1570 to limit the sanction available to disqualification where 
charges are sustained either because the representative has been, by 
reason of misconduct, disbarred or suspended from any court or bar to 
which he or she was previously admitted to practice or disqualified 
from participating in or appearing before any Federal program or 
agency, or because the representative has collected or received, and 
retains, a fee in excess of the amount authorized. As revised, 
Sec. Sec.  404.1790 and 416.1590 provide that the Appeals Council may 
not modify a hearing officer's decision to impose a suspension, instead 
of a disqualification, when disqualification is the only sanction 
available under Sec. Sec.  404.1770 and 416.1570.
    We are also revising our rules on reinstatement in Sec. Sec.  
404.1799 and 416.1599 to provide that, if the representative has been 
disqualified because he or she was disbarred or suspended from a court 
or bar, the Appeals Council will grant reinstatement to the individual 
as a representative only if the individual not only satisfies the 
Council with respect to the required expectation of future behavior, 
but also shows that he or she has been admitted (or readmitted) to and 
is in good standing with the court or bar from which he or she had been 
disbarred or suspended. This provision ensures that an individual will 
not be reinstated as a representative unless the individual can satisfy 
the court or bar that disbarred or suspended the individual that he or 
she is fit to act in a representational capacity again.
    Sections 404.1799 and 416.1599 as revised include a similar rule 
for reinstatement of a representative who has been disqualified because 
he or she was disqualified from participating in or appearing before 
any Federal program or agency. This rule provides that such an 
individual must not only satisfy the Appeals Council with respect to 
the required expectation of future behavior, but also show that he or 
she is once again qualified to participate in or appear before that 
Federal program or agency.
    As revised, Sec. Sec.  404.1799 and 416.1599 also state that, if a 
representative has been disqualified as a result of collecting or 
receiving, and retaining, a fee for representational services in excess 
of the amount authorized, full restitution of the excess fee must be 
made before the person may be considered for reinstatement. This 
provision implements the provision of the SSPA requiring us to bar from 
appearing before us, until full restitution is made, a representative 
who has been disqualified or suspended from appearing before us as a 
result of collecting or receiving a fee in excess of the amount 
authorized.

Other Changes

    We are making a technical change to 20 CFR 404.1750(e)(2) and 
416.1550(e)(2), which explain how a representative must answer a notice 
containing a statement of charges. Our

[[Page 2874]]

rules have heretofore directed that the answer be filed with Special 
Counsel Staff in SSA's Office of Hearings and Appeals. This component 
no longer exists. (See 68 FR 59231 and 68 FR 61240.) The notice 
containing a statement of charges provides specific instructions on how 
and where to file an answer. Therefore, we are revising this rule to 
reflect that the representative must file the answer with SSA, at the 
address specified in the notice, within the 30-day time period.
    We are also making technical changes in Sec. Sec.  404.1755 and 
416.1555. These technical changes are in addition to the previously 
noted changes made to these sections (i.e., the clarification of 
existing provisions and inclusion of the criteria we apply in deciding 
whether to withdraw charges when we learn of the reinstatement of a 
representative after we file charges against the representative based 
on disbarment, suspension, or disqualification for misconduct). The 
technical changes we are making in Sec. Sec.  404.1755 and 416.1555 
include specifying that the Deputy Commissioner for Disability and 
Income Security Programs, or his or her designee is, as the official 
who decides to initiate a representative sanction proceeding, also the 
official who may withdraw charges against a representative. This change 
is needed because questions have arisen about who in the agency has 
authority to withdraw charges. As we discuss below under Public 
Comments, we are also making additional technical changes in these 
sections to clarify our existing practices and rules regarding the 
withdrawal of charges against a representative.
    Finally, we are also making a technical change to Sec. Sec.  
404.1765(l) and 416.1565(l) to state that the Office of the General 
Counsel will represent the Deputy Commissioner for Disability and 
Income Security Programs in all representative sanction proceedings, 
including those involving a request for reinstatement by a suspended or 
disqualified individual. This amendment is necessary because the former 
Special Counsel Staff previously represented the Deputy Commissioner. 
(See 56 FR 24129.)

Public Comments

    We published these regulatory provisions in the Federal Register as 
a notice of proposed rulemaking (NPRM) on April 13, 2005 (70 FR 19361). 
We provided the public with a 60-day comment period. Two individuals 
and an organization submitted comments.
    Because some of the comments submitted by the organization were 
detailed, we have condensed, summarized, or paraphrased them below. 
However, we have tried to summarize the views presented in these 
comments accurately and to respond to the significant issues raised in 
the comments that were within the scope of the proposed rules. We have 
not summarized the comments submitted by the two individuals because 
those comments were not within the scope of the proposed rulemaking.
    Comment: The organization expressed support for our proposal to 
make disqualification from appearing before any Federal program or 
agency a basis for bringing charges to disqualify non-attorneys as well 
as attorneys.
    Response: Comment noted.
    Comment: Observing that the proposed rules stated in Sec. Sec.  
404.1770(a)(3)(ii) and 416.1570(a)(3)(ii) that disqualification would 
be the sole sanction available if charges against a representative are 
sustained because the representative has been disbarred or suspended 
from a court or bar or disqualified from participating in or appearing 
before any Federal program or agency, and that the statutory language 
says that SSA ``may'' refuse to recognize an individual in such 
instances, the commenter suggests that the final rules explain why SSA 
has decided to make disqualification mandatory.
    Response: The rules make disqualification mandatory only if SSA has 
brought and sustained charges based on disbarment, suspension or 
disqualification due to misconduct. SSA has exercised discretion by 
narrowing, through these rules, the basis upon which charges of 
disbarment, suspension or disqualification may be sustained. Section 
205 of the SSPA provides SSA with the discretion to disqualify 
representatives from practice before SSA if the representative has been 
suspended or disbarred by a court or bar, or has been disqualified from 
participating in or appearing before a Federal program or agency. SSA 
has in these rules elected to narrow the circumstances under which it 
will disqualify a representative to those disbarments, suspensions, or 
disqualifications that were based on misconduct. SSA will also exercise 
discretion under these rules in deciding when to bring charges.
    As we explained in the preamble to the NPRM and above, because our 
rules on reinstatement after suspension provide for automatic 
reinstatement at the end of a period of suspension, we believe it is 
necessary to make disqualification the only available sanction where 
charges of disbarment, suspension or disqualification for misconduct 
are sustained in order to ensure that we have an opportunity to 
determine if reinstatement is warranted. We believe it is mandatory 
that we have the opportunity to decide that issue in these cases, 
considering the seriousness of the representative's offense in 
instances in which we have sustained charges of disbarment, suspension 
or disqualification for misconduct by the representative.
    SSA's decision to disqualify representatives who have been adjudged 
to have committed misconduct by a court, bar or Federal program or 
agency is also consistent with SSA's long-standing policy and practice. 
Social Security Ruling (SSR) 74-29 stated the policy that SSA could 
disqualify non-attorney representatives who had been disbarred by a 
court because such a disbarment would appear to be inconsistent with 
the requirement in section 206(a)(1) of the Act that a non-attorney 
have a good character and be in good repute to be eligible to practice 
before SSA. Program Operations Manual System section GN 03970.011 also 
states that suspension or disbarment by a court or disqualification by 
a Federal agency is evidence that a non-attorney representative is not 
qualified to be a representative under the good character and 
reputation requirement.
    The appropriate place to set forth the explanation for regulatory 
provisions is in the preambles to rules, not in the rules themselves. 
We have explained in the preamble to the proposed rules, and above, the 
rationale for the provision making disqualification the sole sanction 
available where charges of disbarment, suspension or disqualification 
based on misconduct are sustained. Accordingly, we are not including an 
explanation of this provision in the final rules.
    Comment: The commenter recommends that the regulations should be 
expanded to include provisions specifying that a representative's 
reinstatement by a court, bar or agency will not preclude us from 
bringing charges against a representative. While recognizing that the 
rules as proposed would permit us to proceed with filing charges in 
these instances, the commenter believes that we should put 
representatives on notice of that fact by making the regulations 
explicit in this respect. The commenter also thought that the 
regulations should address the situation in which reinstatement occurs 
after charges are brought but before a hearing is held.
    Response: Sections 404.1745(d) and 416.1545(d) as proposed for 
revision authorized us to file charges against a

[[Page 2875]]

representative where we have evidence that the representative ``has 
been'' disbarred or suspended by a court or bar by reason of 
misconduct. Sections 404.1745(e) and 416.1545(e) as proposed authorized 
us to file charges against a representative where we have evidence that 
a representative ``has been'' disqualified from participating in or 
appearing before a Federal program or agency by reason of misconduct. 
As proposed for revision, these sections included no language 
indicating that our authority to bring charges in these circumstances 
is conditional on the absence or presence of any other circumstances. 
We believe that the proposed language puts representatives on notice 
that charges may be brought against them if they have been disbarred, 
suspended or disqualified, even though reinstatement may have occurred, 
and that no change in the language is required in the final rules to 
clarify that point. The preamble to the proposed rules and the preamble 
to these final rules state that we are not precluded from filing 
charges where reinstatement has occurred.
    We agree with this commenter that the regulations should include 
provisions addressing situations in which SSA files charges against a 
representative based on disbarment, suspension or disqualification and 
then receives evidence, before a hearing is held, that the 
representative has been reinstated to practice before the court, bar, 
or Federal agency or program. We believe that the necessary guidance 
should address situations in which we learn after filing charges of a 
possible reinstatement irrespective of whether the reinstatement 
occurred before or after our filing of charges.
    We are providing such guidance in these final rules by adding to 
Sec. Sec.  404.1755 and 416.1555 new third and fourth sentences that 
describe specific criteria we apply when we determine whether to 
withdraw charges of disbarment, suspension or disqualification because 
the representative may have been reinstated before or after our filing 
of charges. The criteria we apply in these situations are the same 
criteria that the Appeals Council applies to determine whether a 
disqualified representative should be reinstated. Those criteria are 
whether the representative has proven that he or she has been 
reinstated to the court, bar, or Federal program or agency that 
disbarred, suspended or disqualified the representative, and that the 
reinstatement is currently in effect (i.e., the individual remains in 
good standing with the court or bar involved or, if the adverse action 
was by a Federal program or agency, the individual is currently 
qualified to participate in or appear before that program or agency); 
and whether SSA can reasonably expect the representative to comply with 
section 206 of the Act and our rules and regulations in the future.
    In adding these specific criteria for withdrawing charges of 
disbarment, suspension or disqualification based on possible 
reinstatement of the representative, we have determined that we should 
also clarify the second sentence of Sec. Sec.  404.1755 and 416.1555, 
which has heretofore stated: ``We will [withdraw charges against a 
representative] if the representative files an answer, or we obtain 
evidence, that satisfies us that there is reasonable doubt about 
whether he or she should be suspended or disqualified from acting as a 
representative in dealings with us.'' The ``reasonable doubt'' 
discussed in the second sentence of Sec. Sec.  404.1755 and 416.1555 is 
concerned with the extent of our discretion to decide not to pursue 
charges and is contingent on whether the representative's answer or the 
available evidence ``satisfies us'' that the charges should be 
withdrawn. However, that language could be misunderstood to indicate 
that we will withdraw charges if the representative establishes a 
reasonable doubt that he or she is no longer disbarred, suspended or 
disqualified, and will not violate section 206 of the Act and our rules 
and regulations in the future. To prevent such a misunderstanding, we 
are revising the final clause of the second sentence of Sec. Sec.  
404.1755 and 416.1555 to state: ``* * * if the representative files an 
answer, or we obtain evidence, that satisfies us that we should not 
suspend or disqualify the representative from acting as a 
representative in dealings with us.''
    This clarification also precludes any possibility that the 
provisions of the second sentence could be misunderstood to imply that 
we sustain charges brought against a representative only if the charges 
have been proven ``beyond a reasonable doubt.'' Any criminal charges 
that might be brought against representatives must be proven beyond a 
reasonable doubt. However, in the decisions made under Sec. Sec.  
404.1770 and 416.1570 in response to administrative charges brought 
against a representative under Sec. Sec.  404.1745 and 416.1545, 
hearing officers decide findings of fact based on the preponderance of 
the evidence.
    To further address situations in which we consider withdrawing 
charges that have been filed, we are also making additional technical 
changes in Sec. Sec.  404.1755 and 416.1555 that clarify our existing 
practices and rules with respect to withdrawing charges. These changes, 
which we are setting forth in a new fifth sentence included in 
Sec. Sec.  404.1755 and 416.1555, specify that our action regarding 
withdrawal of charges is solely that of the Deputy Commissioner for 
Disability and Income Security Programs, or his or her designee, and is 
not reviewable, or a matter for consideration in decisions on charges 
that are made against a representative under Sec. Sec.  404.1770, 
404.1790, 416.1570 or 416.1590.
    Comment: Observing that the possibility that the same action could 
lead to disbarment in one State, but not in another, the commenter 
recommends that the final rules should address this situation.
    Response: We believe that we do not need to address this issue in 
the final rules because the rules as proposed support the intended 
policy, which is that we disqualify a representative whenever we bring 
and sustain charges that the representative has been disbarred or 
suspended for reasons of misconduct by any court or bar before which he 
or she was previously admitted to practice. In the Social Security 
ruling discussed above, SSR 74-29, SSA cited the U.S. Supreme Court's 
opinion in Selling v. Radford, 243 U.S. 46 (1917), for the proposition 
that, ``the effect of [a State court's] disbarment, as long as the 
State court action stands unreversed, has been characterized as 
destroying the condition of fair private and professional character 
which an individual must possess to continue as a member of the Federal 
bar.'' SSA policy reflects this holding by the Supreme Court in Program 
Operations Manual System section GN 03970.011. SSA has long accepted 
the decisions of different State courts and bar associations to disbar 
or suspend individuals for misconduct as conclusive evidence that these 
individuals are no longer qualified to practice before SSA irrespective 
of the specific misconduct or governing law that is the basis for the 
disbarment or suspension. As previously stated, we believe that any 
individual who has been proven to have violated applicable laws, 
regulations, or rules should be prohibited from practice before SSA 
until that individual is found to be fit to practice before the court 
that disbarred or suspended the individual and has proven fitness to be 
reinstated to practice before SSA. While local court rules may vary, 
each attorney has the obligation to follow those rules.

[[Page 2876]]

    Comment: The commenter expresses support for the provision of 
Sec. Sec.  404.1770(a)(2) and 416.1570(a)(2) that an individual will 
not be disqualified for disbarment, suspension or disqualification if 
the action against the representative was taken solely for 
administrative reasons. The commenter also asks that, if possible, 
additional guidance should be provided in the final rules regarding 
this exception to disqualification.
    Response: The proposed rules provided guidance on the application 
of the exception regarding adverse actions taken solely for 
administrative reasons by providing two examples of instances in which 
the exception would apply--i.e., when the adverse action was taken for 
failure to pay dues or to complete continuing legal education 
requirements. The proposed rules provided further guidance by 
specifying that the exception does not apply if the administrative 
action was taken in lieu of disciplinary proceedings (e.g., acceptance 
of a voluntary resignation pending disciplinary action). Finally, the 
proposed rules provided additional guidance by stating that in deciding 
whether a representative should be disqualified by reason of 
disbarment, suspension or disqualification, the hearing officer will 
not re-examine or revise the factual or legal conclusions that led to 
the adverse action. In our judgment, the guidance in the proposed rules 
provides specific guidance while at the same time not interfering with 
the ability of the hearing officer to exercise appropriate discretion 
in assessing and making decisions based on the complete facts of the 
particular case. In addition, of course, the representative in each 
case will have an opportunity to offer evidence and argument to show 
that any disbarment, suspension, or disqualification is unrelated to 
misconduct and administrative in nature.
    We further note that where an adverse action against a 
representative has been taken solely for administrative reasons and 
thus will not support disqualification of the representative under the 
provisions of Sec. Sec.  404.1745 and 416.1545 concerning disbarment, 
suspension or disqualification by a court, bar or Federal program or 
agency, we are not precluded from considering the behavior of the 
representative that caused the adverse action in connection with 
charges that we might bring against the representative under other 
provisions of Sec. Sec.  404.1745 and 416.1545. Thus, for example, we 
could consider the fact that a representative failed to take needed 
continuing education courses in connection with charges brought against 
a representative under Sec. Sec.  404.1745(b) or 416.1745(b) for 
violation of the affirmative duty of representatives to provide 
claimants competent representation. No change in the rules as proposed 
is required to ensure this authority because the proposed rules dealt 
with behavior such as failure to complete continuing education only as 
it can affect disqualification of a representative because of 
disbarment, suspension, or disqualification of the representative by a 
court, bar or Federal program or agency.

Regulatory Procedures

Executive Order 12866

    The Office of Management and Budget (OMB) has reviewed these rules 
in accordance with Executive Order 12866, as amended by Executive Order 
13258. 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 they 
affect only individuals. Thus, a regulatory flexibility analysis, as 
provided in the Regulatory Flexibility Act, as amended, is not 
required.

Paperwork Reduction Act

    The final rules contain information collection activities at 20 CFR 
404.1750(e)(2) and 416.1550(e)(2). However, the activities are exempt 
under 44 U.S.C. 3518(c) from the clearance requirements of 44 U.S.C. 
3507 as amended by section 2 of Public Law 104-13 (May 22, 1995), the 
Paperwork Reduction Act of 1995.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social 
Security--Disability Insurance; 96.002, Social Security--Retirement 
Insurance; 96.004, Social Security--Survivors Insurance; 96.006, 
Supplemental Security Income.)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Blind, Disability benefits, 
Old-Age, Survivors, and Disability Insurance, Reporting and 
recordkeeping requirements, Social Security.

20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping 
requirements, Supplemental Security Income.

    Dated: October 19, 2005.
Jo Anne B. Barnhart,
Commissioner of Social Security.

0
For the reasons set out in the preamble, we are amending subpart R of 
part 404 and subpart O of part 416 of chapter III of title 20 of the 
Code of Federal Regulations as set forth below:

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950- )

Subpart R--[Amended]

0
1. The authority citation for subpart R of part 404 continues to read 
as follows:

    Authority: Secs. 205(a), 206, and 702(a)(5) of the Social 
Security Act (42 U.S.C. 405(a), 406, and 902(a)(5)).


0
2. Amend Sec.  404.1745 by removing the word ``or'' at the end of 
paragraph (b), changing the period to a semicolon at the end of 
paragraph (c), and adding new paragraphs (d) and (e) to read as 
follows:


Sec.  404.1745  Violation of our requirements, rules, or standards.

* * * * *
    (d) Has been, by reason of misconduct, disbarred or suspended from 
any bar or court to which he or she was previously admitted to practice 
(see Sec.  404.1770(a)); or
    (e) Has been, by reason of misconduct, disqualified from 
participating in or appearing before any Federal program or agency (see 
Sec.  404.1770(a)).

0
3. Amend Sec.  404.1750 by revising paragraph (e)(2) to read as 
follows:


Sec.  404.1750  Notice of charges against a representative.

* * * * *
    (e) * * *
    (2) File the answer with the Social Security Administration, at the 
address specified on the notice, within the 30-day time period.
* * * * *

0
4. Revise Sec.  404.1755 to read as follows:


Sec.  404.1755  Withdrawing charges against a representative.

    The Deputy Commissioner for Disability and Income Security Programs 
(or other official the Commissioner may designate), or his or her 
designee, may withdraw charges against a representative. We will do 
this if the representative files an answer, or we obtain evidence, that 
satisfies us that we should not suspend or disqualify the 
representative from acting as a representative in dealings with us. 
When we consider withdrawing charges brought under Sec.  404.1745(d) or 
(e) based

[[Page 2877]]

on the representative's assertion that, before or after our filing of 
charges, the representative has been reinstated to practice by the 
court, bar, or Federal program or agency that suspended, disbarred, or 
disqualified the representative, the Deputy Commissioner for Disability 
and Income Security Programs, or his or her designee, will determine 
whether such reinstatement occurred, whether it remains in effect, and 
whether he or she is reasonably satisfied that the representative will 
in the future act in accordance with the provisions of section 206(a) 
of the Act and our rules and regulations. If the representative proves 
that reinstatement occurred and remains in effect and the Deputy 
Commissioner, or his or her designee, is so satisfied, the Deputy 
Commissioner, or his or her designee, will withdraw those charges. The 
action of the Deputy Commissioner, or his or her designee, regarding 
withdrawal of charges is solely that of the Deputy Commissioner for 
Disability and Income Security Programs, or his or her designee, and is 
not reviewable, or subject to consideration in decisions made under 
Sec. Sec.  404.1770 and 404.1790. If we withdraw the charges, we shall 
notify the representative by mail at his or her last known address.

0
5. Amend Sec.  404.1765(l) by adding a second sentence, to read as 
follows:


Sec.  404.1765  Hearing on charges.

* * * * *
    (l) Representation. * * * The Deputy Commissioner for Disability 
and Income Security Programs (or other official the Commissioner may 
designate), or his or her designee, will be represented by one or more 
attorneys from the Office of the General Counsel.
* * * * *

0
6. Amend Sec.  404.1770 by redesignating existing paragraphs (a)(2) and 
(a)(3) as (a)(3) and (a)(4), by adding a new paragraph (a)(2), and by 
revising redesignated paragraph (a)(3)(ii), to read as follows:


Sec.  404.1770  Decision by hearing officer.

    (a) * * *
    (2) In deciding whether an individual has been, by reason of 
misconduct, disbarred or suspended by a court or bar, or disqualified 
from participating in or appearing before any Federal program or 
agency, the hearing officer will consider the reasons for the 
disbarment, suspension, or disqualification action. If the action was 
taken for solely administrative reasons (e.g., failure to pay dues or 
to complete continuing legal education requirements), that will not 
disqualify the individual from acting as a representative before SSA. 
However, this exception to disqualification does not apply if the 
administrative action was taken in lieu of disciplinary proceedings 
(e.g., acceptance of a voluntary resignation pending disciplinary 
action). Although the hearing officer will consider whether the 
disbarment, suspension, or disqualification action is based on 
misconduct when deciding whether an individual should be disqualified 
from acting as a representative before us, the hearing officer will not 
re-examine or revise the factual or legal conclusions that led to the 
disbarment, suspension or disqualification. For purposes of determining 
whether an individual has been, by reason of misconduct, disqualified 
from participating in or appearing before any Federal program or 
agency--
    (i) Disqualified refers to any action that prohibits an individual 
from participating in or appearing before a Federal program or agency, 
regardless of how long the prohibition lasts or the specific 
terminology used.
    (ii) Federal program refers to any program established by an Act of 
Congress or administered by a Federal agency.
    (iii) Federal agency refers to any authority of the executive 
branch of the Government of the United States.
    (3) * * *
    (ii) Disqualify the representative from acting as a representative 
in dealings with us until he or she may be reinstated under Sec.  
404.1799. Disqualification is the sole sanction available if the 
charges have been sustained because the representative has been 
disbarred or suspended from any court or bar to which he or she was 
previously admitted to practice or disqualified from participating in 
or appearing before any Federal program or agency, or because the 
representative has collected or received, and retains, a fee for 
representational services in excess of the amount authorized.
* * * * *

0
7. Amend Sec.  404.1790 by revising paragraph (b) to read as follows:


Sec.  404.1790  Appeals Council's decision.

* * * * *
    (b) The Appeals Council, in changing a hearing officer's decision 
to suspend a representative for a specified period, shall in no event 
reduce the period of suspension to less than 1 year. In modifying a 
hearing officer's decision to disqualify a representative, the Appeals 
Council shall in no event impose a period of suspension of less than 1 
year. Further, the Appeals Council shall in no event impose a 
suspension when disqualification is the sole sanction available in 
accordance with Sec.  404.1770(a)(3)(ii).
* * * * *

0
8. Amend Sec.  404.1799 by revising paragraph (d) to read as follows:


Sec.  404.1799  Reinstatement after suspension or disqualification--
period of suspension not expired.

* * * * *
    (d)(1) The Appeals Council shall not grant the request unless it is 
reasonably satisfied that the person will in the future act according 
to the provisions of section 206(a) of the Act, and to our rules and 
regulations.
    (2) If a person was disqualified because he or she had been 
disbarred or suspended from a court or bar, the Appeals Council will 
grant a request for reinstatement as a representative only if the 
criterion in paragraph (d)(1) of this section is met and the 
disqualified person shows that he or she has been admitted (or 
readmitted) to and is in good standing with the court or bar from which 
he or she had been disbarred or suspended.
    (3) If a person was disqualified because he or she had been 
disqualified from participating in or appearing before a Federal 
program or agency, the Appeals Council will grant the request for 
reinstatement only if the criterion in paragraph (d)(1) of this section 
is met and the disqualified person shows that he or she is now 
qualified to participate in or appear before that Federal program or 
agency.
    (4) If the person was disqualified as a result of collecting or 
receiving, and retaining, a fee for representational services in excess 
of the amount authorized, the Appeals Council will grant the request 
only if the criterion in paragraph (d)(1) of this section is met and 
the disqualified person shows that full restitution has been made.
* * * * *

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

Subpart O--[Amended]

0
9. The authority citation for subpart O of part 416 continues to read 
as follows:

    Authority: Secs. 702(a)(5) and 1631(d) of the Social Security 
Act (42 U.S.C. 902(a)(5) and 1383(d)).


0
10. Amend Sec.  416.1545 by removing the word ``or'' at the end of 
paragraph (b), changing the period to a semicolon at the end of 
paragraph (c), and adding

[[Page 2878]]

new paragraphs (d) and (e) to read as follows:


Sec.  416.1545  Violation of our requirements, rules, or standards.

* * * * *
    (d) Has been, by reason of misconduct, disbarred or suspended from 
any bar or court to which he or she was previously admitted to practice 
(see Sec.  416.1570(a)); or
    (e) Has been, by reason of misconduct, disqualified from 
participating in or appearing before any Federal program or agency (see 
Sec.  416.1570(a)).

0
11. Amend Sec.  416.1550 by revising paragraph (e)(2) to read as 
follows:


Sec.  416.1550  Notice of charges against a representative.

* * * * *
    (e) * * *
    (2) File the answer with the Social Security Administration, at the 
address specified on the notice, within the 30-day time period.
* * * * *

0
12. Revise Sec.  416.1555 to read as follows:


Sec.  416.1555  Withdrawing charges against a representative.

    The Deputy Commissioner for Disability and Income Security Programs 
(or other official the Commissioner may designate), or his or her 
designee, may withdraw charges against a representative. We will do 
this if the representative files an answer, or we obtain evidence, that 
satisfies us that we should not suspend or disqualify the 
representative from acting as a representative in dealings with us. 
When we consider withdrawing charges brought under Sec.  416.1545(d) or 
(e) based on the representative's assertion that, before or after our 
filing of charges, the representative has been reinstated to practice 
by the court, bar, or Federal program or agency that suspended, 
disbarred, or disqualified the representative, the Deputy Commissioner 
for Disability and Income Security Programs, or his or her designee, 
will determine whether such reinstatement occurred, whether it remains 
in effect, and whether he or she is reasonably satisfied that the 
representative will in the future act in accordance with the provisions 
of section 206(a) of the Act and our rules and regulations. If the 
representative proves that reinstatement occurred and remains in effect 
and the Deputy Commissioner, or his or her designee, is so satisfied, 
the Deputy Commissioner, or his or her designee, will withdraw those 
charges. The action of the Deputy Commissioner, or his or her designee, 
regarding withdrawal of charges is solely that of the Deputy 
Commissioner for Disability and Income Security Programs, or his or her 
designee, and is not reviewable, or subject to consideration in 
decisions made under Sec. Sec.  416.1570 and 416.1590. If we withdraw 
the charges, we shall notify the representative by mail at his or her 
last known address.

0
13. Amend Sec.  416.1565(l) by adding a second sentence, to read as 
follows:


Sec.  416.1565  Hearing on charges.

* * * * *
    (l) Representation. * * * The Deputy Commissioner for Disability 
and Income Security Programs (or other official the Commissioner may 
designate), or his or her designee, will be represented by one or more 
attorneys from the Office of the General Counsel.
* * * * *

0
14. Amend Sec.  416.1570 by redesignating existing paragraphs (a)(2) 
and (a)(3) as (a)(3) and (a)(4), by adding a new paragraph (a)(2), and 
by revising redesignated paragraph (a)(3)(ii), to read as follows:


Sec.  416.1570  Decision by hearing officer.

    (a) * * *
    (2) In deciding whether an individual has been, by reason of 
misconduct, disbarred or suspended by a court or bar, or disqualified 
from participating in or appearing before any Federal program or 
agency, the hearing officer will consider the reasons for the 
disbarment, suspension, or disqualification action. If the action was 
taken for solely administrative reasons (e.g., failure to pay dues or 
to complete continuing legal education requirements), that will not 
disqualify the individual from acting as a representative before SSA. 
However, this exception to disqualification does not apply if the 
administrative action was taken in lieu of disciplinary proceedings 
(e.g., acceptance of a voluntary resignation pending disciplinary 
action). Although the hearing officer will consider whether the 
disbarment, suspension, or disqualification action is based on 
misconduct when deciding whether an individual should be disqualified 
from acting as a representative before us, the hearing officer will not 
re-examine or revise the factual or legal conclusions that led to the 
disbarment, suspension or disqualification. For purposes of determining 
whether an individual has been, by reason of misconduct, disqualified 
from participating in or appearing before any Federal program or 
agency--
    (i) Disqualified refers to any action that prohibits an individual 
from participating in or appearing before a Federal program or agency, 
regardless of how long the prohibition lasts or the specific 
terminology used.
    (ii) Federal program refers to any program established by an Act of 
Congress or administered by a Federal agency.
    (iii) Federal agency refers to any authority of the executive 
branch of the Government of the United States.
    (3) * * *
    (ii) Disqualify the representative from acting as a representative 
in dealings with us until he or she may be reinstated under Sec.  
416.1599. Disqualification is the sole sanction available if the 
charges have been sustained because the representative has been 
disbarred or suspended from any court or bar to which he or she was 
previously admitted to practice or disqualified from participating in 
or appearing before any Federal program or agency, or because the 
representative has collected or received, and retains, a fee for 
representational services in excess of the amount authorized.
* * * * *

0
15. Amend Sec.  416.1590 by revising paragraph (b) to read as follows:


Sec.  416.1590  Appeals Council's decision.

* * * * *
    (b) The Appeals Council, in changing a hearing officer's decision 
to suspend a representative for a specified period, shall in no event 
reduce the period of suspension to less than 1 year. In modifying a 
hearing officer's decision to disqualify a representative, the Appeals 
Council shall in no event impose a period of suspension of less than 1 
year. Further, the Appeals Council shall in no event impose a 
suspension when disqualification is the sole sanction available in 
accordance with Sec.  416.1570(a)(3)(ii).
* * * * *

0
16. Amend Sec.  416.1599 by revising paragraph (d) to read as follows:


Sec.  416.1599  Reinstatement after suspension or disqualification--
period of suspension not expired.

* * * * *
    (d)(1) The Appeals Council shall not grant the request unless it is 
reasonably satisfied that the person will in the future act according 
to the provisions of section 206(a) of the Act, and to our rules and 
regulations.
    (2) If a person was disqualified because he or she had been 
disbarred or suspended from a court or bar, the Appeals Council will 
grant a request for reinstatement as a representative only if the 
criterion in paragraph (d)(1) of this

[[Page 2879]]

section is met and the disqualified person shows that he or she has 
been admitted (or readmitted) to and is in good standing with the court 
or bar from which he or she had been disbarred or suspended.
    (3) If a person was disqualified because he or she had been 
disqualified from participating in or appearing before a Federal 
program or agency, the Appeals Council will grant the request for 
reinstatement only if the criterion in paragraph (d)(1) of this section 
is met and the disqualified person shows that he or she is now 
qualified to participate in or appear before that Federal program or 
agency.
    (4) If the person was disqualified as a result of collecting or 
receiving, and retaining, a fee for representational services in excess 
of the amount authorized, the Appeals Council will grant the request 
only if the criterion in paragraph (d)(1) of this section is met and 
the disqualified person shows that full restitution has been made.

[FR Doc. 06-433 Filed 1-17-06; 8:45 am]
BILLING CODE 4191-02-P