[Federal Register Volume 73, Number 38 (Tuesday, February 26, 2008)]
[Proposed Rules]
[Pages 10210-10218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-3489]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Refugee Resettlement

45 CFR Part 404

RIN 0970-AC28


Limitation on Use of Funds and Eligibility for Funds Made 
Available by the Office of Refugee Resettlement, Within the 
Administration for Children and Families, of the Department of Health 
and Human Services, To Monitor and Combat Trafficking in Persons

AGENCY: Office of Refugee Resettlement (ORR), Administration for 
Children and Families (ACF), U.S. Department of Health and Human 
Services (HHS).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement two provisions of the 
Trafficking Victims Protection Act (TVPA) (22 U.S.C. Chapter 78), as 
amended by the Trafficking Victims Protection Reauthorization Act 
(TVPRA) of 2003 (Pub. L. 108-193), that provide limitations on the use 
of funds. The provisions at Title 22 of the U.S.C. 7110(g) prohibit 
programs from using trafficking funds to promote, support, or advocate 
the legalization or practice of prostitution. They make ineligible to 
receive funds any organization that promotes, supports, or advocates 
the legalization or the practice of prostitution if the organization 
operates a program that targets victims of severe forms of trafficking, 
unless the organization provides assistance to individuals solely after 
they are no longer engaged in activities that resulted from their being 
trafficked. This proposed rule applies to funds that Congress 
appropriates for the U.S. Department of Health and Human Services for 
anti-trafficking purposes under Title 22 of the United States Code.

DATES: Comment Date: HHS will consider comments received on or before 
April 28, 2008.

ADDRESSES: You may submit your comments in writing to the Office of 
Refugee Resettlement, Administration for Children and Families, U.S. 
Department of Health and Human Services, 370 L'Enfant Promenade, SW., 
8th Floor, Washington, DC 20447. Comments will be available for public 
inspection Monday through Friday, 8:30 a.m. to 5 p.m., at the 
Department's offices at the above address. You may download a copy of 
this regulation at www.regulations.gov, or you may download a copy and 
transmit written comments electronically via the Internet at the 
following address: http://www.regulations.acf.hhs.gov.

FOR FURTHER INFORMATION CONTACT: Vanessa Garza, Associate Director for 
Trafficking Policy, Office of Refugee Resettlement, Administration for 
Children and Families, U.S. Department of Health and Human Services, 
(202) 401-2334, or by e-mail at [email protected]. Do not e-
mail comments on the Proposed Rule to this address.

SUPPLEMENTARY INFORMATION:

I. Statutory Authority

    This proposed rule implements two provisions concerning 
restrictions on the use of funds that were added to the TVPA by the 
TVPRA of 2003 and codified at Title 22 of the U.S.C. 7110(g). These 
provisions: (1) Prohibit any Federal funds appropriated under the TVPA, 
Public Law 106-386, and the TVPRA of 2003, or any amendments thereto, 
from being used to promote, support, or advocate the legalization or 
the practice of prostitution (designated the ``Restriction on 
Programs'' in the statute); and (2) make ineligible to receive Federal 
funds appropriated under the TVPA or TVPRA, or any amendments thereto, 
any organization that promotes, supports, or advocates the legalization 
or the practice of prostitution if the organization operates a program 
that targets victims of severe forms of trafficking, unless the 
organization provides assistance to individuals solely after they are 
no longer engaged in the activities that resulted from such victims 
being trafficked (designated the ``Restriction on Organizations'' in 
the statute).

II. Background

    This regulation implements these statutory provisions as part of 
the U.S. Government's vigorous and comprehensive campaign to eliminate 
trafficking in persons at home and around the world. Congress and the 
Executive Branch are especially concerned about the significant role 
sexual exploitation plays in fueling trafficking in persons. The U.S. 
Government is opposed to prostitution and related activities, which are 
inherently harmful and dehumanizing,

[[Page 10211]]

and which contribute to the phenomenon of trafficking in persons. 
Reducing the incidence of prostitution is therefore an inseparable part 
of the larger strategy of the United States to combat trafficking. In 
addition, prostitution is inherently harmful to society and degrading 
to the women and children involved in it, even if they allegedly choose 
prostitution as a form of ``work,'' and even if authorities make 
prostitution legal or decriminalize it such that no person involved 
faces criminal prosecution. The U.S. Government does not accept the 
claim that the legalization of prostitution and/or societal acceptance 
of prostitution as a legitimate form of work would be effective 
strategies to reduce trafficking in persons. In sharp contrast, the 
U.S. Government has concluded that legalization and/or societal 
acceptance of prostitution would increase the sexual exploitation of 
women and children, particularly girls, and trafficking in persons 
specifically.
    To pursue its comprehensive campaign to combat trafficking, the 
U.S. Government provides funds to domestic and foreign non-profit 
organizations (including, but not limited to, community action 
agencies, research institutes, educational associations, health 
centers, and hospitals), for-profit entities; U.S. State, local, and 
tribal governments and subdivisions thereof; Foreign Governments and 
subdivisions thereof; international organizations, such as agencies of 
the United Nations; international inter-governmental organizations; and 
other groups (hereinafter referred to collectively in this regulation 
as ``organizations,'' or ``organization'' in the singular); and in some 
circumstances to individuals, for direct services to victims, public 
information campaigns, and other interventions.
    Because of the connection between trafficking and prostitution, the 
U.S. Government cannot execute its comprehensive anti-trafficking 
campaign through programs or organizations that promote, support, or 
advocate the legalization of prostitution. Furthermore, the Executive 
Branch, as stated in the Trafficking in Persons National Security 
Presidential Directive 22 (NSPD-22), actively seeks to support efforts 
to develop civil-society institutions that promote the human rights of 
victims and populations vulnerable to trafficking, support law 
enforcement, and provide victims with assistance and protection. The 
goal of this policy is to provide incentives to rescue trafficking 
victims, rather than accept or validate the situations that result from 
their being trafficked.
    The statute directs that Federal funds must not go to programs that 
promote, support, or advocate the legalization or practice of 
prostitution, and that organizations that operate programs to target 
victims of severe forms of trafficking must ``state'' that they do not 
promote, support, or advocate the legalization or the practice of 
prostitution. The Senior Policy Operating Group (SPOG), a statutorily 
established inter-agency, U.S. Government coordinating body, with 
membership determined pursuant to Executive Order No. 13257 of February 
13, 2002 and including the Secretary of State, the Attorney General, 
the Secretary of Labor, the Secretary of Health and Human Services, the 
Director of Central Intelligence, the Director of the Office of 
Management and Budget, the Administrator of the United States Agency 
for International Development, and any additional officers or employees 
of the United States as may be designated by the President, has decided 
that a statement in the form of a certification is the best means to 
ensure enforcement of these requirements.
    This proposed rule applies to funds that Congress appropriates for 
the U.S. Department of Health and Human Services (HHS) for anti-
trafficking purposes under Title 22 of the United States Code. 
Specifically, the rule proposes certification language that 
organizations must provide in applications for grants, cooperative 
agreements, contracts, grants under a contract, and other funding 
instruments made available by the HHS Administration for Children and 
Families (ACF) Office of Refugee Resettlement (ORR), the component 
carrying out the Victims of Human Trafficking program.
    The statute requires the limitations to apply to a ``grant 
application, a grant agreement, or both.'' The HHS/ACF/ORR interprets 
this reference to encompass all mechanisms for providing Federal 
assistance. Transfers of Federal funds occur through a diverse range of 
instruments in addition to grants. The policy against support, 
promotion, or advocacy of prostitution applies broadly to all such 
transfers, not merely those accomplished through grants. By applying 
the limitations to a diverse range of funding instruments, HHS/ACF/ORR 
reinforces the statutory purpose at 22 U.S.C. 7110(g)(1) that ``no 
funds made available to carry out [the trafficking statute] may be used 
to promote, support, or advocate the legalization or practice of 
prostitution,'' (emphasis added) and ensures a more consistent 
implementation of the limitations. In addition, application of the 
proposed rule to grants only would invite evasion of the policy. The 
proposed rule therefore applies to grants, cooperative agreements, 
contracts, grants under a contract, and other funding instruments.
    The regulation is prospective and does not apply to funds already 
provided; the regulation does, however, apply to funds made available 
subject to a periodic renewal application or award.
    There are two periods of time covered by restrictions in the 
statute and the regulation: (1) While victims are being trafficked and 
(2) after they are no longer engaged in the activities that resulted 
from their being trafficked. As specified by the statute, the proposed 
rule clarifies that prohibited ``support'' for prostitution does not 
prohibit assistance to victims to ameliorate their suffering, or health 
risks to them, both ``while they are being trafficked,'' and ``after 
they are out of the situation that resulted from their being 
trafficked.'' The regulation defines ``ameliorative assistance'' to 
include assistance intended to mitigate the suffering of, or health 
risks to, victims of trafficking caused by their being trafficked, or 
their engagement in the activities resulting from such victims being 
trafficked, including incidental or limited assistance deemed necessary 
to develop a relationship and rapport with the victim as part of a 
strategy to help the victim escape his or her trafficked condition, and 
cease those activities which result from their being trafficked.
    The HHS/ACF/ORR is issuing this regulation in coordination with 
other U.S. Government Departments and agencies represented on the SPOG, 
all of which have developed their own proposed regulations or policy 
directives from a model regulation developed under the supervision of 
the SPOG. Each SPOG member Department or agency will implement its 
regulation in accordance with its standard grant-making and 
administrative procedures, which vary.
    Nothing in the regulation is intended to lessen or relieve relevant 
prohibitions on Federal Government funding under other applicable 
Federal laws.

III. Discussion of the Proposed Rule

    These sections discuss the proposed rule by defining the terms 
relevant to this proposed rule; detailing the restriction on programs 
for use of Federal anti-trafficking funds; discussing the restriction 
on organizations that receive Federal anti-trafficking funds; 
describing the certifications required for the receipt of Federal anti-
trafficking funds;

[[Page 10212]]

explaining how the proposed rule applies to consortia; setting forth a 
policy for recordkeeping and inspection; and discussing the process for 
termination of Federal funding in the case of a violation of the rule.

Section 401.1 Definitions

    This section defines the terms that are pertinent to this rule. 
Specifically, we propose the following definitions:
    ``Activities that resulted from the trafficking of such victims'' 
means commercial sex acts induced by force, fraud, or coercion, or any 
such act in which the person induced to perform such act has not 
attained 18 years of age; or labor or services in which the 
recruitment, harboring, transportation, provision, or obtaining of the 
person induced to perform such labor or services has been through the 
use of force, fraud, or coercion for the purpose of subjection to 
involuntary servitude, peonage, debt bondage, or slavery. It does not 
mean mere presence in the United States.
    ``Ameliorative assistance'' means assistance intended to relieve 
the suffering of, or health risks to, victims of trafficking caused by 
their being trafficked, or their engagement in activities resulting 
from such victims being trafficked, including incidental or limited 
assistance deemed necessary to develop a relationship and rapport with 
the victim as part of a strategy to help the victim escape his or her 
trafficked condition and cease those activities which result from their 
being trafficked. It does not mean assistance that supports the 
trafficker or that is not intended to facilitate the eventual rescue of 
the trafficking victim.
    ``Being trafficked'' means the subject is the victim of a severe 
form of trafficking.
    ``Commercial sex act'', defined in Title 22 of the U.S.C. 7102(3), 
means any sex act on account of which anything of value is given to or 
received by any person.
    ``Emergency medical care'' means examination or other care 
appropriate to address an existing emergency medical condition, 
including transport for further care.
    ``Emergency medical condition'' means a medical condition that 
manifests itself by acute symptoms of sufficient severity (including 
severe pain), such that the absence of immediate medical attention 
could reasonably be expected to result in a physical disorder, physical 
illness, or physical injury that:
    (a) Is life-threatening;
    (b) results in permanent impairment of a body function or permanent 
damage to a body structure; or
    (c) necessitates medical or surgical intervention to preclude 
permanent impairment of a body function or permanent damage to a body 
structure.
    ``Funds made available for the purpose of monitoring or combating 
the trafficking of persons'' means any U.S. Government funds 
appropriated by the U.S. Congress to the U.S. Department of Health and 
Human Services for anti-trafficking purposes under Title 22 of the 
United States Code, whether distributed through grants, cooperative 
agreements, contracts, grants under a contract, and other funding 
instruments.
    ``Legalization of prostitution'' means a state of affairs in which 
prostitution is legal, decriminalized such that no person involved 
faces criminal prosecution, or regulated as a legitimate form of work.
    ``Organization'' means a non-profit organization (including, but 
not limited to, a community action agency, research institute, 
educational association, health center, or hospital), a for-profit 
entity; U.S. State, local, or tribal government; or a contractor, 
including a personal services contractor.
    ``Program'' means the method or procedures used to deliver 
assistance. The term includes activities conducted by a single 
individual or organization, by consortia of individuals or 
organizations, or by collaborations between or among individuals or 
organizations.
    ``Program that targets victims of severe forms of trafficking in 
persons'' means a program that is designed to, or does, monitor or 
provide assistance to or is aimed at assisting victims of severe forms 
of trafficking in persons, including but not limited to, the Victims of 
Human Trafficking Program administered by the HHS/ACF/ORR.
    ``Prostitution'' and ``the practice of prostitution'' means 
procuring or providing any commercial sex act as defined in Section 
103(3) of the TVPA of 2000 (22 U.S.C. 7102(3)).
    ``Recipient'' means an organization or individual that receives 
U.S. Government funds made available for the purpose of monitoring or 
combating the trafficking of persons.
    ``Severe forms of trafficking in persons'' means sex trafficking in 
which a commercial sex act is induced by force, fraud, or coercion, or 
any such act in which the person induced to perform such act has not 
attained 18 years of age; or the recruitment, harboring, 
transportation, provision, or obtaining of a person for labor or 
services, through the use of force, fraud, or coercion for the purpose 
of subjection to involuntary servitude, peonage, debt bondage, or 
slavery.
    ``Sex trafficking'' means the recruitment, harboring, 
transportation, provision, or obtaining of a person for the purpose of 
a commercial sex act.
    ``Situation that resulted from such victims being trafficked'' 
means a situation caused by or characterized by a victim engaging in 
activities that resulted from his or her being trafficked. It does not 
mean mere presence in the United States.
    ``Sub-recipient'' means any entity to which a recipient of Federal 
funds makes some or all of those funds available, and which is 
accountable to the recipient for the use of the funds provided, 
including, without limitation, sub-sub grantees and sub-sub 
contractors.
    ``To support the legalization or the practice of prostitution'' 
means to knowingly provide financial support, including the transfer of 
funds, services, or goods, to any individual or organization that 
engages in the practice of prostitution, or that promotes or advocates 
the legalization or the practice of prostitution, or that supports the 
legalization of prostitution; or to endorse or sponsor or support a 
document or conference that supports the legalization of prostitution; 
or to provide assistance to trafficking victims that is not 
ameliorative assistance, as defined in this regulation. An organization 
or recipient shall not be deemed to have knowingly provided such 
support if that organization or recipient did not know, and by the 
exercise of reasonable diligence would not have known, that its 
financial or organizational support was being used for, or would be 
used for, such purposes. Further, providing trafficking victims with 
emergency medical care for an emergency medical condition does not 
constitute such support.
    ``To promote or to advocate the legalization or the practice of 
prostitution'' means to use financial, personal, in-kind, or other 
resources to further the legalization or the practice of prostitution, 
including by sponsoring or supporting conferences or publications that 
further the legalization or the practice of prostitution. This 
includes, but is not limited to, engaging in lobbying activities or 
public information or advocacy campaigns to further the legalization or 
the practice of prostitution.

Section 404.2 Restriction on Programs

    This section of the proposed rule relates to the use of anti-
trafficking funds provided by the HHS/ACF/ORR.

[[Page 10213]]

    Under the proposed rule, Paragraph (a) would provide that no 
organization may use funds made available by the HHS/ACF/ORR for the 
purpose of monitoring or combating trafficking in persons to promote, 
support, or advocate the legalization or practice of prostitution.
    Paragraph (b) would stipulate that nothing in paragraph (a) of this 
subsection shall be construed to preclude assistance designed to 
ameliorate the suffering of, or health risks to, victims while they are 
being trafficked, or after they are out of the situation that resulted 
from their being trafficked.
    The proposed rule does not prohibit the provision of emergency 
medical care for an emergency medical condition, whenever provided. The 
HHS/ACF/ORR has determined the statutory prohibition on ``support'' for 
prostitution does not prohibit the provision of emergency medical care 
for an emergency medical condition, and thus that recipients of funds 
may provide emergency medical care for an emergency medical condition 
to victims during the two time periods described above. The HHS/ACF/ORR 
has defined ``emergency medical condition'' under Section 401.1. The 
statute, however, does not give authorization for assistance that 
supports the trafficker, or that is not intended to facilitate the 
eventual rescue of the trafficking victim. The HHS/ACF/ORR understands 
that Congress intended anti-trafficking funds to focus on activities 
designed to end trafficking and rescue victims, not on activities that 
would effectively facilitate, encourage, expand, condone, or subsidize 
prostitution activities.

Section 404.3 Restriction on Organizations

    This section of the proposed rule describes the restrictions on the 
organizations that receive anti-trafficking funds from the HHS/ACF/ORR. 
The Federal Government finds that organizations that promote, support, 
or advocate the legalization or the practice of prostitution are not 
appropriate to conduct programs that serve victims of human 
trafficking.
    Under Paragraph (a), no organization may use Federal funds made 
available for the purpose of monitoring or combating trafficking in 
persons to implement any program that targets victims of severe forms 
of trafficking in persons through any organization that has not 
certified it does not promote, support, or advocate the legalization or 
practice of prostitution. However, this would not apply to 
organizations that provide assistance to individuals solely after they 
are no longer engaged in activities that resulted from such victims 
being trafficked.
    Under Paragraph (b) of this section, an organization is ineligible 
to receive any Federal funds made available for the purpose of 
monitoring or combating trafficking in persons, unless it has provided 
the certifications required by Section 404.4.

Section 404.4 Certifications

    This section of the proposed rule describes the certifications 
required to receive anti-trafficking funding from the HHS/ACF/ORR. The 
required certification has three basic parts, each of which 
organizations must complete as a part of their application for funding.
    The first part implements the statutory Restriction on Programs 
through a Use of Funds Certification, located at Section 404.4(d)(1), 
in which an applicant or a recipient that is seeking or receiving 
Federal anti-trafficking funds administered by the HHS/ACF/ORR 
certifies it will not use those funds to promote, support, or advocate 
the legalization or the practice of prostitution.
    The second part implements the Restriction on Organizations through 
three alternative certifications, of which organizations must sign at 
least one. Organizations that are implementing a program to target 
victims of severe forms of trafficking must provide the Primary 
Eligibility Certification, located at Section 404.4(d)(2)(i), unless 
they serve only individuals who are no longer engaged in the activities 
that resulted from their being trafficked. In that case, they must 
provide Secondary Eligibility Certification A at Section 
404.4(d)(2)(ii), stating that they serve or provide services only to 
victims who are no longer engaged in the activities that resulted from 
their being trafficked. Other organizations that provide assistance to 
victims of non-severe forms of trafficking, or otherwise do not meet 
the criteria for organizations that must provide the other 
certifications, must provide Secondary Eligibility Certification B, 
located at Section 404.4(d)(2)(iii), to state that the organization 
does not implement a program that targets victims of severe forms of 
trafficking.
    The third part of the certification contains Acknowledgement and 
Sub-recipient Certifications at Section 404.4(d)(3). These require each 
applicant to acknowledge that its provision of the certifications is a 
prerequisite to receiving Federal funds; that the Federal Government 
can stop or withdraw those funds if the HHS/ACF/ORR finds a 
certification to have been, or becomes, inaccurate; and that the 
applicant will ensure that all its sub-applicants also provide the 
required certifications. As detailed in the certifications section, a 
sub-applicant must, at a minimum, provide the same certification as 
that provided by the original applicant.
    To remain consistent with the policies for contracts in other HHS 
programs, the HHS/ACF/ORR is considering providing an exemption from 
the second part of the certification requirements, ``Restrictions on 
Organizations,'' for ``specified types of commercial contracts.'' 
``Specified types of commercial contracts'' would be defined as 
contracts awarded for commercial items and services as defined in FAR 
2.101, such as pharmaceuticals, medical supplies, logistics support, 
data management, and freight forwarding. Despite the preceding 
definition, ``specified types of commercial contracts'' would not 
include contracts awarded to carry out the trafficking program by:
    (a) Providing supplies or services directly to victims of 
trafficking
    (b) providing technical assistance and training to individuals or 
entities that provide supplies or services directly to victims of 
trafficking;
    (c) providing the types of services listed in FAR 37.203(b)(1)-(6) 
that involve giving advice about substantive policies of a recipient, 
giving advice regarding the activities referenced in (a) and (b) above, 
or making decisions or functioning in a recipient's chain of command 
(e.g., providing managerial or supervisory services approving financial 
transactions, personnel actions, etc.).
    In October 2007, HHS' Office of Acquisition Management and Policy 
issued a policy to exempt such contracts/subcontracts for recipients of 
HHS funds in connection with the United States Leadership Against HIV/
AIDS, Tuberculosis and Malaria Act of 2003, or ``Leadership Act'' 
(http://www.hhs.gov/oamp/policies/leadershipactclause.doc). The HHS/
ACF/ORR is interested in receiving comments about whether this 
exemption should also be contained in the rule.
    Paragraph (e) of this section would define violations of this 
regulation by individuals who are employees, directors, or otherwise 
under the control of the recipient. This part also provides for 
exceptions in which the recipient does not provide reimbursement for 
such actions or the recipient takes reasonable steps necessary to 
clearly show that the recipient does not support, promote, or advocate 
the individual's position.

[[Page 10214]]

    Paragraph (f) contains information regarding requirements for the 
renewal of certification. These require each recipient to file renewed 
certifications upon any extension, amendment, or modification of the 
funding instrument that extends the term of such instrument or adds 
additional funds to it. Additionally, the requirements state that 
current funding recipients, as of the effective date of the regulation, 
must file a certification upon any extension, amendment, or 
modification of the funding instrument that extends the term of such 
instrument or adds additional funds to it.
    Under Paragraph (g), recipients must submit certifications from 
each sub-recipient in writing, signed by the sub-recipient's officer or 
other person authorized to bind the sub-recipient.

Section 404.5 Restriction on Programs Operated with or through 
Consortia

    No funds made available for the purpose of monitoring or combating 
the trafficking of persons may be made available through, or expended 
by, programs operated with, or through, a consortium of organizations 
that includes any organization that has not provided the HHS/ACF/ORR 
with a certification, as set out in Section 404.4.
    In order to maintain the integrity of the funding limitations 
provided by Title 22 of the U.S.C. 7110(g), the HHS/ACF/ORR is 
considering adding a section to the final rule which would describe the 
factors used to determine whether an applicant, recipient, or sub-
recipient of funds made available for the purpose of monitoring or 
combating trafficking in persons is appropriately separate from an 
affiliated organization that has not provided the certifications 
required by Section 404.4. These factors could be similar to those 
contained in 45 CFR 1610.8, which describe the extent of separation and 
independence that recipients of funds from the Legal Services 
Corporation must maintain from organizations that are ineligible to 
receive such funds because they do not make required certifications. 
These factors could also be similar to those contained in a July 2007 
guidance issued by HHS pertaining to the ``Leadership Act'' (http://www.globalhealth.gov/reports/index.html#guidance). For example, a 
recipient could be found to be separate and independent from an 
affiliate organization if: (1) The affiliate organization is a legally 
separate entity; (2) the affiliate organization receives no transfer of 
HHS/ACF/ORR funds, and HHS/ACF/ORR funds do not subsidize restricted 
activities; and (3) the recipient is physically and financially 
separate from the other organization. The HHS/ACF/ORR is interested in 
receiving comments about whether such factors should be contained in 
the rule and their content.

Section 404.6 Record-keeping and Inspection

    This section of the proposed rule sets forth policy on record-
keeping and inspection. Under Paragraph (a), recipients and sub-
recipients shall maintain press and public relations material, Internet 
content, and other broadly disseminated documents (such as training 
manuals, curricula, and other educational matter) pertinent to 
establishing the validity of the certifications, provided for a period 
of three years after the end of the term of the grant, cooperative 
agreement, contract, grant under a contract, or other funding 
instrument through which the HHS/ACF/ORR or a recipient provided the 
Federal funds. If a recipient or sub-recipient starts any litigation, 
claim or audit before the expiration of the three-year period, parties 
must retain the records until all litigation, claims or audit findings 
involving the materials have been resolved and final action taken.
    Paragraph (b) as proposed provides that authorized employees of the 
HHS/ACF/ORR have the right to timely and unrestricted access to the 
materials described in paragraph (a). This right also includes timely 
and reasonable access to a recipient's personnel for the purpose of 
interview and discussion related to such documents.

Section 404.7 Termination of Funding

    This section of the proposed rule relates to the process for 
termination of funding for failure to comply with this regulation. 
Under paragraph (a) of this section, the HHS/ACF/ORR may terminate the 
transfer of funds to a recipient if the HHS/ACF/ORR determines that the 
recipient or a sub-recipient of the funds has failed to comply with the 
requirements of this part.
    Paragraph (b) provides that a recipient whose funding the HHS/ACF/
ORR has terminated shall reimburse the HHS/ACF/ORR for all funds 
expended after the violation occurred, or, in the case of a grant, 
cooperative agreement, contract, grant under a contract, or other 
funding instrument, the funds in their entirety, if the HHS/ACF/ORR 
determines that an organization's certification was or has become 
false.
    Paragraph (c) provides that, in addition to termination of funding, 
the HHS/ACF/ORR may suspend or debar a recipient in violation of this 
part from receiving any further Federal Government funds if the HHS/
ACF/ORR determines that the violation of this part was willful.
    Finally, paragraph (d) stipulates that terminations will be in 
accordance with the Federal Acquisitions Regulations, Part 49 for 
contracts; 45 CFR Part 74 or Part 92 for grants, cooperative 
agreements, and grants under a contract.

IV. Impact Analysis

Regulatory Flexibility Act

    The Secretary certifies under Title 5 of the U.S.C. 605(b), as 
enacted by the Regulatory Flexibility Act (Pub. L. 96-354), that this 
rule will not result in a significant impact on a substantial number of 
small entities. The number of contracts affected by this rule is 
minimal. Since enactment of the anti-prostitution provision in the 
TVPRA of 2003, the HHS/ACF/ORR has required its program announcements 
for discretionary trafficking funding grants to include a 
``Certification Regarding Prostitution and Related Activities,'' which 
can take any form, including a written statement. The statute 
explicitly requires certifications.

Executive Order 12866--Regulatory Planning and Review

    The HHS has drafted and reviewed this regulation in accordance with 
Executive Order 12866, Section 1(b), Principles of Regulation. The HHS/
ACF/ORR has determined this rule is a ``significant regulatory action'' 
under Executive Order 12866, Section 3(f)(4), Regulatory Planning and 
Review, because it raises novel legal or policy issues, that arise out 
of legal mandates and the President's priorities, and accordingly the 
Office of Management and Budget has reviewed it.
    The benefits of this rule are that the limitations on supporting, 
promoting, or advocating the legalization or the practice of 
prostitution will (1) help further the U.S. Government's strategy to 
reduce sexual exploitation that fuels trafficking in persons and (2) 
demonstrate the U.S. Government's opposition to prostitution. In 
addition, a potential benefit of the regulation could be that the 
incidence of prostitution and trafficking in the United States could 
decline.

Executive Order 13132--Federalism

    Executive Order 13132 on Federalism requires Federal Departments 
and agencies to consult with State and local Government officials in 
the development of regulatory policies with implications for 
Federalism. This rule does not have Federalism implications

[[Page 10215]]

for State or local Governments, as defined in the Executive Order.

Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that a covered Federal department or agency prepare a budgetary impact 
statement before promulgating a rule that includes any Federal mandate 
that could result in the expenditure by State, local, and tribal 
Governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. The HHS has determined this rule would 
not impose a mandate that will result in the expenditure by State, 
local, and Tribal Governments, in the aggregate, or by the private 
sector, of more than $100 million in any one year.

Assessment of Federal Regulation and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal Departments and agencies to determine 
whether a proposed policy or regulation could affect family well-being. 
If the determination is affirmative, then the Department or agency must 
prepare an impact assessment to address criteria specified in the law. 
These regulations will not have an impact on family well-being, as 
defined in this legislation.

Paperwork Reduction Act of 1995

    Section 404.4 and 404.6 of this proposed rule contains an 
information collection requirement. As required by the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507(d)), the Administration for 
Children and Families has submitted a copy of this section to the 
Office of Management and Budget (OMB) for its review.
    The title of the information collection is ``Certification 
Regarding Use of Funds and Eligibility for Funds, as required by the 
Trafficking Victims Protection Reauthorization Act.'' The HHS/ACF/ORR 
sponsors the information collection. To obtain or retain Federal 
funding for anti-trafficking activities, the HHS/ACF/ORR requires the 
information of all applicants and recipients and all sub-applicants and 
sub-recipients of ORR anti-trafficking funding. The certification and 
associated documents are necessary to ensure organizations are not 
using Federal anti-trafficking funds to promote, support or advocate 
the legalization or practice of prostitution, and that organizations 
that receive Federal funds to monitor and combat severe forms of 
trafficking in persons do not support, promote, or advocate the 
legalization or the practice of prostitution.
    Likely respondents to this information collection include non-
profit organizations (including, but not limited to, community action 
agencies, research institutes, educational associations, health 
centers, and hospitals); for-profit entities; U.S. State, local, and 
tribal governments and subdivisions thereof; and other groups and 
individuals.
    The HHS/ACF/ORR estimates that 36 respondents will complete the 
certification within five minutes, and prepare documents to validate 
the certification within 25 minutes. Additionally, the HHS/ACF/ORR 
estimates a limited burden for record keeping of supporting 
documentation pertinent to establishing the validity of the 
certifications. The HHS therefore estimates annual aggregate burden to 
collect the information as follows:

                                             Annual Burden Estimates
----------------------------------------------------------------------------------------------------------------
                                                                     Number of        Average
                   Instrument                        Number of     responses per   burden hours    Total burden
                                                    respondents     respondent     per response        hours
----------------------------------------------------------------------------------------------------------------
Certification Regarding Prostitution............              36               1              .5              18
Recordkeeping and inspection....................              36               1              .5              18
----------------------------------------------------------------------------------------------------------------

    Estimated Total Annual Burden Hours: 36.
    The Administration for Children and Families will consider comments 
by the public on this proposed collection of information in the 
following areas: Evaluating whether the proposed collection is 
necessary for the proper performance of the functions of ACF, including 
whether the information will have practical utility; evaluating the 
accuracy of the ACF's estimate of the burden of the proposed collection 
of information, including the validity of the methodology and 
assumptions used; enhancing the quality, usefulness, and clarity of the 
information to be collected; and minimizing the burden of the 
collection of information on those who are to respond, including 
through the use of appropriate automated, electronic, mechanical, or 
other technology, e.g., permitting electronic submission of responses. 
To ensure that public comments have maximum effect in developing the 
final regulations, the ACF urges that each comment clearly identify the 
specific section or sections of the regulations that the comment 
addresses and that comments be in the same order as the regulations.
    OMB is required to make a decision concerning the collection of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment to the Department on the proposed 
regulations. Written comments to OMB for the proposed information 
collection should be sent to the Office of Management and Budget either 
by e-mail to [email protected] or by fax to 202-395-6974. 
Please mark all comments ``Attention: Desk Officer for the 
Administration for Children and Families.''

List of Subjects in 45 CFR Part 404

    Administrative practice and procedure, Aliens, Civil rights, Human 
trafficking, Immigration, Federal aid programs, Grant programs, Grants 
administration, Refugees, Victims.

    Dated: February 9, 2007.
Martha E. Newton,
Director, Office of Refugee Resettlement,
    Dated: February 11, 2007.
Wade F. Horn,
Assistant Secretary for Children and Families.
    Approved: November 9, 2007.
Michael O. Leavitt,
Secretary of Health and Human Services.
    For the reasons stated in the preamble, the Administration for 
Children and Families amends 45 CFR chapter IV to add part 404 to read 
as follows:

[[Page 10216]]

PART 404--LIMITATIONS ON ELIGIBILITY FOR AND USE OF FUNDS MADE 
AVAILABLE BY THE OFFICE OF REFUGEE RESETTLEMENT (ORR), WITHIN THE 
ADMINISTRATION FOR CHILDREN AND FAMILIES (ACF) OF THE U.S. 
DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), FOR MONITORING AND 
COMBATING TRAFFICKING IN PERSONS

Sec.
404.1 Definitions.
404.2 Restriction on programs.
404.3 Restriction on organizations.
404.4 Certifications.
404.5 Restriction on programs operated with or through consortia.
404.6 Record-keeping and inspection.
404.7 Termination of funding.

    Authority: 22 U.S.C. 7110(g).


Sec.  404.1  Definitions.

    For the purposes of this part:
    Activities that resulted from such victims being trafficked means 
commercial sex acts induced by force, fraud, or coercion, or any such 
act in which the person induced to perform such act has not attained 18 
years of age; or labor or services in which the recruitment, harboring, 
transportation, provision, or obtaining of the person induced to 
perform such labor or services has been through the use of force, 
fraud, or coercion for the purpose of subjection to involuntary 
servitude, peonage, debt bondage, or slavery. It does not mean mere 
presence in the United States.
    Ameliorative assistance means assistance intended to relieve the 
suffering of, or health risks to, victims of trafficking caused by 
their being trafficked or their engagement in activities resulting from 
such victims being trafficked, including incidental or limited 
assistance deemed necessary to develop a relationship and rapport with 
the victim as part of a strategy to help the victim escape his or her 
trafficked condition and cease those activities which result from their 
being trafficked. It does not mean assistance that supports the 
trafficker or is not intended to facilitate the eventual rescue of the 
trafficking victim.
    Being trafficked means the subject is the victim of a severe form 
of trafficking.
    Commercial sex act, defined in Title 22 of the U.S.C. 7102(3), 
means any sex act on account of which anything of value is given to or 
received by any person.
    Emergency medical care means examination or other care appropriate 
to address an existing emergency medical condition, including transport 
for further care.
    Emergency medical condition means a medical condition that 
manifests itself by acute symptoms of sufficient severity (including 
severe pain), such that the absence of immediate medical attention 
could reasonably be expected to result in a physical disorder, physical 
illness, or physical injury that:
    (1) Is life threatening,
    (2) Results in permanent impairment of a body function or permanent 
damage to a body structure, or
    (3) Necessitates medical or surgical intervention to preclude 
permanent impairment of a body function or permanent damage to a body 
structure.
    Funds made available for the purpose of monitoring or combating the 
trafficking of persons means any U.S. Government funds appropriated by 
the U.S. Congress to the U.S. Department of Health and Human Services 
for anti-trafficking purposes under Title 22 of the United States Code, 
whether distributed through grants, cooperative agreements, contracts, 
grants under a contract, or other funding instruments.
    Legalization of prostitution means a state of affairs in which 
prostitution is legal, decriminalized such that no person involved 
faces criminal prosecution, or regulated as a legitimate form of work.
    Organization means a non-profit organization (including, but not 
limited to, a community action agency, research institute, educational 
association, health center, or hospital), a for-profit entity; U.S. 
State, local, or tribal Government; or a contractor, including a 
personal services contractor.
    Program means the method or procedures used to deliver assistance. 
The term includes activities conducted by a single individual or 
organization, by consortia of individuals or organizations, or by 
collaborations between or among individuals or organizations.
    Program that targets victims of severe forms of trafficking in 
persons means a program that is designed to, or does, monitor or 
provide assistance to or is aimed at assisting victims of severe forms 
of trafficking in persons, including but not limited to, the Victims of 
Human Trafficking Program administered by the HHS/ACF/ORR.
    Prostitution and the practice of prostitution means procuring or 
providing any commercial sex act as defined in Section 103(3) of the 
Trafficking Victims Protection Act (TVPA) of 2000 (22 U.S.C. 7102(3)).
    Recipient means an organization or individual receiving U.S. 
Government funds made available for the purpose of monitoring or 
combating the trafficking of persons.
    Severe forms of trafficking in persons means sex trafficking in 
which a commercial sex act is induced by force, fraud, or coercion, or 
any such act in which the person induced to perform such act has not 
attained 18 years of age; or the recruitment, harboring, 
transportation, provision, or obtaining of a person for labor or 
services, through the use of force, fraud, or coercion for the purpose 
of subjection to involuntary servitude, peonage, debt bondage, or 
slavery.
    Sex trafficking means the recruitment, harboring, transportation, 
provision, or obtaining of a person for the purpose of a commercial sex 
act.
    Situation that resulted from such victims being trafficked means a 
situation caused by or characterized by a victim's engaging in 
activities that resulted from his or her being trafficked. It does not 
mean mere presence in the United States.
    Sub-recipient means any entity to which a recipient of Federal 
funds makes some or all of those funds available, and which is 
accountable to the recipient for the use of the funds provided, 
including, without limitation, sub-sub grantees and sub-sub 
contractors.
    To support the legalization or the practice of prostitution means 
to knowingly provide financial support, including the transfer of 
funds, services, or goods, to any individual or organization that 
engages in the practice of prostitution or that promotes or advocates 
the legalization or the practice of prostitution, or that supports the 
legalization of prostitution; or to endorse or sponsor or support a 
document or conference that supports the legalization of prostitution; 
or to provide assistance to trafficking victims that is not 
ameliorative assistance, as defined in this regulation. An organization 
or recipient shall not be deemed to have knowingly provided such 
support if that organization or recipient did not know, and by the 
exercise of reasonable diligence would not have known, that its 
financial or organizational support was being used for, or would be 
used for, such purposes. Further, providing trafficking victims with 
emergency medical care for an emergency medical condition does not 
constitute such support.
    To promote or to advocate the legalization or the practice of 
prostitution means to use financial, personal, in-kind, or other 
resources to further the legalization or the practice of prostitution, 
including by sponsoring or supporting conferences or publications that 
further the legalization or the practice of prostitution. This 
includes,

[[Page 10217]]

but is not limited to, engaging in lobbying activities or public 
information or advocacy campaigns to further the legalization or 
practice of prostitution.


Sec.  404.2  Restriction on programs.

    (a) No funds made available by the HHS/ACF/ORR for the purpose of 
monitoring or combating trafficking in persons may be used to promote, 
support, or advocate the legalization or practice of prostitution.
    (b) Nothing in paragraph (a) of this section shall be construed to 
preclude assistance designed to ameliorate the suffering of, or health 
risks to, victims while they are being trafficked or after they are out 
of the situation that resulted from their being trafficked.


Sec.  404.3  Restriction on organizations.

    (a) No funds made available for the purpose of monitoring or 
combating trafficking in persons may be used to implement any program 
that targets victims of severe forms of trafficking in persons through 
any organization that has not certified that it does not promote, 
support, or advocate the legalization or practice of prostitution. The 
preceding sentence shall not apply to organizations that provide 
services to individuals solely after they are no longer engaged in 
activities that resulted from their being trafficked.
    (b) An organization is ineligible to receive any funds made 
available for the purpose of monitoring or combating trafficking in 
persons, unless it has provided the certifications required by Sec.  
404.4.


Sec.  404.4  Certifications.

    (a) Applicants shall include certifications in the application for 
the grant, cooperative agreement, contract, grant under a contract, or 
other funding instrument, made by an officer or other person authorized 
to bind the applicant.
    (b) The HHS/ACF/ORR shall notify applicants for any grant, 
cooperative agreement, contract, grant under a contract, or other 
funding instrument of the certification requirement through public 
announcement of the availability of the grant, cooperative agreement, 
contract, grant under a contract, or other funding instrument.
    (c) All applicants must provide the certifications in paragraph 
(d)(1) of this section (the Use of Funds Certification) and paragraph 
(d)(3) of this section (Acknowledgement and Sub-Applicant 
Certifications), and organizations that are applicants must provide at 
least one of the certifications in paragraph (d)(2) of this section (by 
choosing among the Primary Eligibility certification and the two 
Secondary Eligibility Certifications). Organizations that are sub-
applicants of an organization that provides the Primary Eligibility 
Certification must themselves provide the Primary Eligibility 
Certification. Likewise, organizations that are sub-applicants of an 
organization that provides Secondary Eligibility Certification A must 
themselves provide Secondary Eligibility Certification A, and 
organizations that are sub-recipients of an organization that provides 
Secondary Eligibility Certification B must provide Secondary 
Eligibility Certification B.
    (d) The certifications shall state as follows:
    (1) Use of Funds Certification: ``I hereby certify that the 
recipient of the funds made available through this [grant, cooperative 
agreement, contract, grant under a contract, or other funding 
instrument] will not use such funds to promote, support, or advocate 
the legalization or the practice of prostitution.''
    (2) Eligibility Certifications.
    (i) Primary Eligibility Certification: ``I certify that the 
organization does not promote, support, or advocate the legalization or 
the practice of prostitution, and will not promote, support, or 
advocate the legalization or the practice of prostitution during the 
term of this [grant, cooperative agreement, contract, grant under a 
contract, or other funding instrument]. I further certify that the 
organization does not operate through any other organization or 
individual that supports, promotes, or advocates the legalization or 
the practice of prostitution.''
    (ii) Secondary Eligibility Certification A: ``I certify that the 
organization provides assistance to individuals only after they are no 
longer engaged in activities that resulted from their being trafficked, 
and that the organization does not operate through any organization 
that provides assistance to victims other than after those victims are 
no longer engaged in the activities that resulted from their being 
trafficked. I further certify that if, during the funding period, the 
organization or any sub-recipient begins to provide assistance to other 
victims, the organization and all its sub-recipients, prior to the time 
such assistance is provided, will provide the Primary Eligibility 
Certification in 45 CFR 404.4(d)(2)(i).''
    (iii) Secondary Eligibility Certification B: ``I certify that the 
organization does not implement a program that serves victims of severe 
forms of trafficking, and that the applicant does not operate through 
any organization or individual that implements a program that serves 
victims of severe forms of trafficking. I further certify that if, 
during the funding period, the organization or any sub-recipient begins 
to implement such a program, the organization and all its sub-
recipients, prior to implementation of such a program, will provide the 
Primary Eligibility Certification in 45 CFR 404.4(d)(2)(i).''
    (3) Acknowledgement and Sub-applicant Certifications: ``I further 
certify that the applicant acknowledges that these certifications are a 
prerequisite to receipt of U.S. Government funds in connection with 
this [grant, cooperative agreement, contract, grant under a contract, 
or other funding instrument], and that any violation of these 
certifications shall be grounds for unilateral termination by the HHS/
ACF/ORR of any grant, cooperative agreement, contract, grant under a 
contract, or other funding instrument prior to the end of its term and 
recovery of appropriated funds expended prior to termination. I further 
certify that the applicant will include this identical certification 
requirement in any [grant, cooperative agreement, contract, grant under 
a contract, or other funding instrument] to a sub-applicant of funds 
made available under this [grant, cooperative agreement, contract, 
grant under a contract, or other funding instrument], and will require 
such sub-applicant to provide the same certification that the 
organization provided.''
    (e) The HHS/ACF/ORR shall consider an recipient in violation of its 
certifications if an individual who is an employee, director, or 
otherwise under the control of the recipient supports, promotes, or 
advocates the legalization or the practice of prostitution, unless:
    (1) The recipient does not endorse or provide financial support for 
the action by the individual and prohibits the individual from 
accepting reimbursement from other organizations for such action 
insofar as such reimbursement occurs because of the individual's 
position with the recipient.
    (2) The applicant takes reasonable steps necessary to ensure that a 
reasonable observer would understand the individual is not representing 
the applicant, and that the applicant does not endorse the individual's 
promotion, support, or advocacy of prostitution or its legalization.
    (f) Recipient, sub-recipients, applicants and sub-applicants of 
funds must file a renewed certification upon any extension, amendment, 
or modification of the grant, cooperative agreement, contract, grant 
under a contract, or other funding instrument that extends the term of 
such instrument

[[Page 10218]]

or adds additional funds to it. Recipients and sub-recipients that are 
already recipients, sub-recipients, applicants and sub-applicants as of 
the effective date of this regulation must file a certification upon 
any extension, amendment, or modification of the grant, cooperative 
agreement, contract, grant under a contract, or other funding 
instrument that extends the term of such instrument or adds additional 
funds to it.
    (g) Sub-applicants of funds must provide the HHS/ACF/ORR with a 
certification as set out in Paragraph (c) of this section, or in a 
separate writing signed by the sub-applicant officer or other person 
authorized to bind the applicant, submitted as part of the application 
for award of the grant, cooperative agreement, contract, grant under a 
contract, or other funding instrument.


Sec.  404.5  Restriction on programs operated with or through 
consortia.

    The HHS/ACF/ORR may not make available any funds appropriated for 
the purpose of monitoring or combating the trafficking of persons 
through, or expended by, programs operated with, or through, a 
consortium of organizations that includes any organization that has not 
provided the HHS/ACF/ORR with a certification as set out in Sec.  
404.4.


Sec.  404.6  Record-keeping and inspection.

    (a) Recipients and sub-recipients shall maintain press and public 
relations material, Internet content, and other broadly disseminated 
documents (such as training manuals, curricula, and other educational 
matter) pertinent to establishing the validity of the certifications 
for a period of three years after the end of the term of the grant, 
cooperative agreement, contract, grant under a contract, or other 
funding instrument through which the HHS/ACF/ORR provided the funds. If 
any litigation, claim or audit is started before the expiration of the 
three year period, the records must be retained until all litigation, 
claims or audit findings involving the materials have been resolved and 
final action taken.
    (b) Authorized HHS/ACF/ORR employees have the right to timely and 
unrestricted access to the materials described in paragraph (a) of this 
section. This right also includes timely and reasonable access to a 
recipient's personnel for the purpose of interview and discussion 
related to such documents.


Sec.  404.7  Termination of funding.

    (a) The HHS/ACF/ORR may terminate transfer of funds to a recipient, 
including by terminating a grant, cooperative agreement, contract, 
grant under a contract, or other funding instrument, if the HHS/ACF/ORR 
determines that the recipient or a sub-recipient of the funds has 
failed to comply with the requirements of this part.
    (b) A recipient whose HHS/ACF/ORR funding has been terminated shall 
reimburse the HHS/ACF/ORR for all funds expended after the violation 
occurred, or, in the case of a grant, cooperative agreement, contract, 
grant under a contract, or other funding instrument, the funds in their 
entirety if the HHS/ACF/ORR determines that an organization's statement 
was or has become false.
    (c) In addition to termination of funding, the HHS/ACF/ORR may 
suspend or debar a recipient in violation of this part from receiving 
any further Federal government funds if the HHS/ACF/ORR determines that 
the violation of this part was willful.
    (d) Terminations will be in accordance with the Federal Acquisition 
Regulations, Part 49 for contracts; 45 CFR Part 74 or Part 92 for 
grants, cooperative agreements, and grants under a contract.

 [FR Doc. E8-3489 Filed 2-25-08; 8:45 am]
BILLING CODE 4184-01-P