[Federal Register Volume 73, Number 166 (Tuesday, August 26, 2008)]
[Proposed Rules]
[Pages 50260-50263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19674]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

[Docket No. SSA-2008-0030]
RIN 0960-AG82


Authorization of Representative Fees

AGENCY: Social Security Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: We propose to revise our rules regarding payment of 
representative fees to allow representatives to charge and receive a 
fee from third parties without requiring our authorization in certain 
instances. We also propose to eliminate the requirement that we 
authorize fees for legal guardians or court-appointed representatives 
who provide representational services in claims before us if a court 
has already authorized their fees. We are proposing these revisions to 
reflect changes in representatives' business practices, and in the ways 
in which claimants obtain representation, and to make more efficient 
the way we process representative fees.

DATES: To make sure that your comments are considered, we must receive 
them no later than September 25, 2008.

ADDRESSES: You may submit comments by any one of four methods--
Internet, facsimile, regular mail, or hand-delivery. Commenters should 
not submit the same comments multiple times or by more than one method. 
Regardless of which of the following methods you choose, please state 
that your comments refer to Docket No. SSA-2008-0030 to ensure that we 
can associate your comments with the correct regulation:
    1. Federal eRulemaking portal at http://www.regulations.gov. (This 
is the most expedient method for submitting your comments, and we 
strongly urge you to use it.) In the ``Comment or Submission'' section 
of the webpage, type ``SSA-2008-0030'', select ``Go'', and then click 
``Send a Comment or Submission.'' The Federal eRulemaking portal issues 
you a tracking number when you submit a comment.
    2. Telefax to (410) 966-2830.
    3. Letter to the Commissioner of Social Security, P.O. Box 17703, 
Baltimore, MD 21235-7703.
    4. Deliver your comments to the Office of Regulations, Social 
Security Administration, 922 Altmeyer Building, 6401 Security 
Boulevard, Baltimore, Maryland 21235-6401, between 8 a.m. and 4:30 p.m. 
on regular business days.
    All comments are posted on the Federal eRulemaking portal, although 
they may not appear for several days after receipt of the comment. You 
may also inspect the comments on regular business days by making 
arrangements with the contact person shown in this preamble.
    Caution: All comments we receive from members of the public are 
available for public viewing on the Federal eRulemaking portal at 
http://www.regulations.gov. Therefore, you should be careful to include 
in your comments only information that you wish to make publicly 
available on the Internet. We strongly urge you not to include any 
personal information, such as your Social Security number or medical 
information, in your comments.

[[Page 50261]]


FOR FURTHER INFORMATION CONTACT: Marg Handel, Supervisory Social 
Insurance Specialist, Office of Income Security Programs, Social 
Security Administration, 6401 Security Boulevard, Baltimore, MD 21235-
6401, (410) 965-4639. 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.

Explanation of Changes

Authority

    We may issue regulations to administer the Social Security Act 
(Act). 42 U.S.C. 405(a), 902(a)(5), and 1383(d)(1). Specifically, we 
may issue regulations allowing attorneys and non-attorneys to represent 
claimants before us. We also may set the maximum fees for those 
services. 42 U.S.C. 406(a)(1) and 1383(d)(2). Based on this authority, 
we are proposing new rules to revise our current regulations on fees 
paid to claimant representatives found in part 404 subpart R and part 
416 subpart O.

Current Regulations on Fees Paid by Third Parties

    We require all representatives to obtain our approval before 
charging or receiving a fee for representational services. 20 CFR 
404.1720 and 416.1520. We also prohibit representatives from charging 
or receiving fees that are more than the amount we approve regardless 
of whether the fee is charged to, or received from, claimants or third 
parties. 20 CFR 404.1720(b)(3) and 416.1520(b)(3). However, under our 
long-standing interpretation of these regulations, if certain criteria 
are met, we need not approve a fee if a nonprofit organization pays the 
fee out of funds provided by a government entity. Social Security 
Ruling (SSR) 85-3.

Proposed Changes

    We propose to revise our current policy and allow representatives, 
in certain cases, to be paid fees for providing representational 
services without requiring our authorization. The primary reason that 
we set maximum fees is to protect claimants and beneficiaries. Our 
current regulations carry out this purpose. Nevertheless, when a party 
other than a claimant or beneficiary incurs the liability for the cost 
of the representative's services, there is little risk that the 
individual may be charged an unreasonable fee. Often third parties, 
such as insurance companies, have provided claimants representation and 
have paid the representatives' fees without any liability to the 
claimants. We do not believe that we need to continue approving fee 
arrangements between representatives and third parties when the amount 
of claimants' benefits will not be affected.
    Similarly, there is no reason to require legal guardians or court-
appointed representatives to obtain our approval for fee arrangements 
if a court has already authorized their fees. Because courts, when 
authorizing guardians' fees, generally consider the wards' best 
interests and have reviewed and approved the legal guardian's 
accounting, there is little risk to the beneficiary that the fee 
approved is unreasonable. Thus, under our current subregulatory 
instructions, we do not require legal guardians or court-appointed 
representatives to obtain our approval for fee arrangements if a court 
has already authorized their fees for representation before us, 
regardless of who bears the liability for paying the fee.
    We propose to define ``legal guardian or court-appointed 
representative'' as ``a court-appointed person, committee, or 
conservator who is lawfully invested with the power and charged with 
the duty of taking care of and managing the property and rights of an 
individual who is considered incapable of managing his or her own 
affairs'' in Sec. Sec.  404.1703 and 416.1503.
    In both of the situations addressed in these proposed rules, 
eliminating the requirement that we review these fee arrangements would 
not adversely affect the interests of our beneficiaries and would allow 
our resources and the resources of the representatives to be used to 
serve claimants and beneficiaries in other ways. However, to ensure 
that the interests of our beneficiaries are not adversely affected, we 
are including criteria in proposed Sec. Sec.  404.1720(e) and 
416.1520(e) that are similar to the criteria we currently have in SSR 
85-3. Under these proposed regulations, our approval would not be 
necessary when the fees are paid by a third party, the claimant is free 
from any liability for a fee, and the representative waives the right 
to charge and collect a fee. As we previously noted, our approval of 
the fee request would also not be necessary where a court has already 
authorized the fee in cases where legal guardians or court-appointed 
representatives provide representational services in claims before us. 
Our experience has been that these criteria adequately ensure that the 
cases where our prior approval of a fee is not needed are limited to 
ones where claimants and beneficiaries are already protected from 
unreasonable attorney fees.
    We also propose to make minor conforming changes to paragraph 
(b)(3) in Sec. Sec.  404.1720 and 416.1520.
    Please note that in another proposed rule document that we are 
publishing separately, Revisions to Rules on Representation of Parties, 
RIN 0960-AG56, we propose different revisions to Sec. Sec.  404.1703, 
404.1720, 416.1503, and 416.1520. When we publish any final rules 
following the public comment period, we will coordinate revisions to 
these sections.
    Lastly, SSR 85-3 explains that we do not need to authorize a 
representative's fee if the fee is paid by a nonprofit organization or 
an agency out of funds provided or administered by a government entity 
and not paid by the claimant or beneficiary. The proposed rules would 
codify this policy. In accordance with our usual practice, we will 
rescind SSR 85-3 as obsolete if and when we adopt these rules in final.

Clarity of These Rules

    Executive Order 12866, as amended, requires each agency to write 
all rules in plain language. In addition to your substantive comments 
on these proposed rules, we invite your comments on how to make them 
easier to understand.
    For example:
     Have we organized the material to suit your needs?
     Are the requirements in the rules clearly stated?
     Do the rules contain technical language or jargon that 
isn't clear?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rules easier to understand?
     Would more (but shorter) sections be better?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     What else could we do to make the rules easier to 
understand?

When Will We Start To Use These Rules?

    We will not use these rules until we evaluate the public comments 
we receive on them, determine whether they should be issued as final 
rules, and issue final rules in the Federal Register. If we publish 
final rules, we will explain in the preamble how we will

[[Page 50262]]

apply them, and summarize and respond to the public comments. Until the 
effective date of any final rules, we will continue to use our current 
rules.

Regulatory Procedures

Executive Order 12866, as Amended

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these proposed rules meet the criteria for a 
significant regulatory action under Executive Order 12866, as amended. 
Therefore, they were reviewed by OMB.

Regulatory Flexibility Act

    We certify that these proposed rules will not have a significant 
economic impact on a substantial number of small entities. These 
proposed rules do not place significant costs on small entities because 
they will relieve some small entities of the need to obtain SSA 
approval of a fee. It is anticipated that the cost to small entities 
will either be minimal, or it will result in cost savings as a result 
of increased efficiency. Therefore, a regulatory flexibility analysis 
as provided in the Regulatory Flexibility Act, as amended, is not 
required.

Paperwork Reduction Act

    We are proposing revisions to our rules on obtaining approval for 
charging a fee for representing claimants. These proposed rules contain 
public reporting requirements that must be approved by OMB. The chart 
below lists these sections, describes their content, and provides their 
burden. We previously accounted for these public reporting burdens in 
the Information Collection Requests for the various forms the public 
uses to submit the information to SSA. Consequently, we are inserting a 
1-hour placeholder burden in these sections.

----------------------------------------------------------------------------------------------------------------
                                                                                  Average burden     Estimated
       Regulation sections and description           Number of     Frequency of    per response    annual burden
                                                    respondents      response        (minutes)        (hours)
----------------------------------------------------------------------------------------------------------------
404.1720; 416.1520..............................  ..............  ..............  ..............               1
    The representative submits to us a form we
     prescribe waiving the right to charge and
     collect a fee..............................
----------------------------------------------------------------------------------------------------------------

    We have submitted an Information Collection Request to OMB for 
clearance. We are soliciting comments on the burden estimate; the need 
for the information; its practical utility; ways to enhance its 
quality, utility and clarity; and on ways to minimize the burden on 
respondents, including the use of automated collection techniques or 
other forms of information technology. You can call, e-mail or write to 
the addresses/phone numbers listed below to request a copy of the 
Information Collection Request package or to comment.

Office of Management and Budget, Attn: Desk Officer for SSA, Fax 
Number: 202-395-6974, E-mail address: [email protected].
Social Security Administration, Attn: Reports Clearance Officer, 1333 
Annex Building, 6401 Security Blvd., Baltimore, MD 21235, Fax: 410-965-
6400, E-mail address: [email protected].
    You can submit comments on the paperwork burdens associated with 
this rule for up to 60 days after publication of this notice; however, 
they will be most useful if received within 30 days of publication. 
This does not affect the deadline for the public to comment to SSA on 
the proposed regulations. These information collection requirements 
will not become effective until approved by OMB. When OMB has approved 
these information collection requirements, SSA will publish a notice in 
the Federal Register.

(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; and 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; Penalties; Reporting and 
recordkeeping requirements; Social Security.

20 CFR Part 416

    Administrative practice and procedure; Penalties; Reporting and 
recordkeeping requirements; Supplemental Security Income (SSI).

    Dated: May 27, 2008.
Michael J. Astrue,
Commissioner of Social Security.

    Editorial Note: This document was received at the Office of the 
Federal Register on August 20, 2008.
    For the reasons set out in the preamble, we propose to amend 20 CFR 
parts 404 and 416 as set forth below:

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

Subpart R--[Amended]

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

    Authority: Secs. 205(a), 206, 702(a)(5), and 1127 of the Social 
Security Act (42 U.S.C. 405(a), 406, 902(a)(5), and 1320a-6); sec. 
303, Pub. L. 108-203, 118 Stat. 493.

    2. Amend Sec.  404.1703 by adding a definition for ``legal guardian 
or court-appointed representative'' in alphabetical order to read as 
follows:


Sec.  404.1703  Definitions.

* * * * *
    Legal guardian or court-appointed representative means a court-
appointed person, committee, or conservator who is lawfully invested 
with the power and charged with the duty of taking care of and managing 
the property and rights of an individual who is considered incapable of 
managing his or her own affairs.
* * * * *
    3. Amend Sec.  404.1720 by revising paragraph (b) heading and 
(b)(3) and by adding paragraph (e) to read as follows:


Sec.  404.1720  Fee for a representative's services.

* * * * *
    (b) Charging and receiving a fee under the fee petition process. * 
* *
    (3) Subject to paragraph (e) of this section, a representative must 
not charge or receive any fee unless we have approved it, and a 
representative must not charge or receive any fee that is more than the 
amount we approve.
* * * * *
    (e) When we need not authorize a fee. We do not need to authorize a 
fee when:
    (1) A non-profit organization, a Federal, State, county, or city 
government agency, or a third party that is a business entity 
independent of your representative pays from its funds the 
representative fees and expenses and both of the following conditions 
apply:
    (i) You (including any auxiliary beneficiaries) are free of any 
liability to

[[Page 50263]]

pay a fee or any expenses, or any part thereof, directly or indirectly, 
to the representative or someone else; and
    (ii) The representative submits to us a form we prescribe waiving 
the right to charge and collect a fee and any expenses from you and the 
auxiliary beneficiaries, if any, directly or indirectly, in whole or in 
part; or
    (2) A court authorizes a fee for your representative who, in your 
case, is your legal guardian or a court-appointed representative.

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

Subpart O--[Amended]

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

    Authority: Secs. 702(a)(5), 1127 and 1631(d) of the Social 
Security Act (42 U.S.C. 902(a)(5), 1320a-6 and 1383(d)); sec. 303, 
Pub. L. 108-203, 118 Stat. 493.

    5. Amend Sec.  416.1503 by adding a definition for ``legal guardian 
or court-appointed representative'' in alphabetical order to read as 
follows:


Sec.  416.1503  Definitions.

* * * * *
    Legal guardian or court-appointed representative means a court-
appointed person, committee, or conservator who is lawfully invested 
with the power and charged with the duty of taking care of and managing 
the property and rights of an individual who is considered incapable of 
managing his or her own affairs.
* * * * *
    6. Amend Sec.  416.1520 by revising paragraph (b) heading and 
(b)(3) and by adding paragraph (e) to read as follows:


Sec.  416.1520  Fee for a representative's services.

* * * * *
    (b) Charging and receiving a fee under the fee petition process. * 
* *
    (3) Subject to paragraph (e) of this section, a representative must 
not charge or receive any fee unless we have approved it, and a 
representative must not charge or receive any fee that is more than the 
amount we approve.
* * * * *
    (e) When we need not authorize a fee. We do not need to authorize a 
fee when:
    (1) A non-profit organization, a Federal, State, county, or city 
government agency, or a third party that is a business entity 
independent of your representative pays from its funds the 
representative fees and expenses and both of the following conditions 
apply:
    (i) You are free of any liability to pay a fee or any expenses, or 
any part thereof, directly or indirectly, to the representative or 
someone else; and
    (ii) The representative submits to us a form we prescribe waiving 
the right to charge and collect a fee and any expenses from you if any, 
directly or indirectly, in whole or in part; or
    (2) A court authorizes a fee for your representative who, in your 
case, is your legal guardian or a court-appointed representative.
 [FR Doc. E8-19674 Filed 8-25-08; 8:45 am]
BILLING CODE 4191-02-P