[Federal Register Volume 80, Number 157 (Friday, August 14, 2015)]
[Rules and Regulations]
[Pages 48762-48765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-20025]



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LEGAL SERVICES CORPORATION

45 CFR Chapter XVI


Revised Rulemaking Protocol

AGENCY: Legal Services Corporation.

ACTION: Announcement--adoption of revised rulemaking protocol.

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SUMMARY: This document sets forth the text of the revised rulemaking 
protocol adopted by the LSC Board of Directors.

DATES: This policy statement and protocol became effective on July 18, 
2015.

FOR FURTHER INFORMATION CONTACT: Stefanie K. Davis, Assistant General 
Counsel, Legal Services Corporation, 3333 K Street NW., Washington, DC 
20007; (202) 295-1563 (phone), (202) 337-6519 (fax), or [email protected].

SUPPLEMENTARY INFORMATION: In order to carry out its mission, the Legal 
Services Corporation (``LSC'' or ``Corporation'') is authorized under 
the LSC Act to issue binding federal regulations with the force of law. 
The United States Court of Appeals for the District of Columbia Circuit 
has described LSC as possessing ``general rulemaking authority.'' Texas 
Rural Legal Aid, Inc., et al. v. Legal Services Corporation, 940 F.2d 
685, 692 (D.C. Cir. 1991); see 42 U.S.C. 2996e. The LSC Act specifies, 
however, that the Corporation ``shall not be considered a department, 
agency, or instrumentality, of the Federal Government.'' 42 U.S.C. 
2996d(e). Consequently, the Corporation's regulatory process is not 
statutorily tied to the Administrative Procedure Act (APA, 5 U.S.C. Ch. 
5 et seq.), which binds federal agencies. Instead, Congress has 
required more specifically that LSC ``shall afford notice and 
reasonable opportunity for comment to interested parties prior to 
issuing rules, regulations, and guidelines, and it shall publish in the 
Federal Register at least 30 days prior to their effective date all its 
rules, regulations, guidelines, and instructions.'' 42 U.S.C. 2996g(e). 
The scope of LSC's Rulemaking Protocol encompasses ``rules'' and 
``regulations,'' which are interpreted as essentially synonymous and 
which result in codified federal regulations.
    Although the APA does not bind LSC, the Corporation has identified 
the broad purposes of that statute--public participation and reasoned, 
orderly, decision-making based on high-quality information--as 
consistent with its own statutory requirements and the general goals of 
regulation. LSC is also guided by other best practices broadly adopted 
by federal agencies, which include Executive Orders 12866 (1993) and 
13563 (2011) and Office of Management and Budget Circular A-4 (2003).
    Collectively, these documents suggest that regulation should 
proceed by demonstrating why action is needed and should be justified 
by a consideration of the costs and benefits of the regulatory approach 
chosen. Costs and benefits may be qualitative or quantitative and 
include outcomes related to the widespread distribution of ``equity, 
human dignity, [and] fairness,'' \1\ which is in accord with the goals 
of the LSC Act. In addition, these federal best practices remind us to 
maintain regulatory flexibility where possible by specifying objectives 
rather than detailed rules, and also to engage in a regular examination 
of existing regulations to identify those that are redundant, 
unnecessary, or in need of modification.
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    \1\ See E.O. 13563, sec. 1(c).
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    LSC intends that an important source of new rulemaking activity and 
agenda items will be an ongoing retrospective review of its existing 
regulations. LSC's regulations are not voluminous, and to the extent 
they can be improved, they should be, as time and resources allow. In 
particular, LSC will examine its regulations to identify those where 
costs and burdens can be lessened without compromising effectiveness, 
or where effectiveness can be increased without increasing cost. It 
also will identify, with the input of the Office of Inspector General, 
regulations that are outdated or otherwise no longer useful or 
manageable, and those rules implicated by LSC's Strategic Plan. In 
order to maintain this process of continuous improvement, however, LSC 
anticipates the need for assistance from the regulated community, which 
is in the best position to highlight unanticipated problems that have 
arisen from particular regulatory provisions.
    Similarly, existing nonregulatory guidance, including Program 
Letters and External Opinions, may often be a basis for agenda items. 
For a variety of reasons, it may be useful to codify successful 
guidance following a notice and comment process. In other cases, LSC 
may identify this guidance as founded in outdated regulation and as 
problematic in practice; revision of the underlying regulations would 
then be called for. Because of these important relationships between 
guidance and regulation, LSC's commitment to retrospective review 
extends to its guidance documents, as does its reliance on the 
communicated experience of the public and regulated community.

Rulemaking Protocol of the Legal Services Corporation (2015)

I. Purposes, Principles, and Authorities

    The purpose of this protocol is to explain the procedures used by 
LSC in the development, modification, rescission, and promulgation of 
its regulations, currently codified beginning at 45 CFR part 1600. The 
regulatory principles guiding LSC are intended to advance its overall 
mission as an organization: To provide financial support for legal 
assistance in civil matters to persons financially unable to afford 
legal assistance in a manner consistent with the LSC Act and other 
statutory directives of Congress. See 42 U.S.C. 2996b(a). LSC, in 
particular, is asked ``to insure that grants and contracts are made so 
as to provide the most economical and effective delivery of legal 
assistance to persons'' eligible for LSC-funded services. 42 U.S.C. 
2996f(a)(3).
    LSC first developed a formal rulemaking protocol in 2000. The 
rulemaking protocol was revised in 2002. The Board of Directors of LSC 
(``Board'') at that time believed that while there was no legal 
requirement for rulemaking procedures to be formalized in a written 
protocol, it was appropriate for LSC to produce such a document. As an 
independent entity not bound by the Administrative Procedure Act, LSC 
does not follow precisely the standardized regulatory processes of 
federal agencies, and in the interests of conducting its business in an 
open and fair way, LSC should make its rulemaking procedure generally 
known. The Board issuing this Protocol has determined these views to be 
sensible and has also determined that further revisions would be 
useful. This 2015 revision reflects more than a decade's worth of 
experience in rulemaking under the prior protocol and in addition 
incorporates certain trends in regulations, such as the emphasis on 
outcomes and on cost-benefit analysis.
    It should be noted that because this Protocol is a statement of LSC 
internal procedure and is not itself a ``rule, regulation, guideline or 
instruction,'' LSC is not required by law to publish this Protocol or 
seek public comment. LSC is choosing to publish this Protocol in the 
Federal Register (and has also posted it on the LSC Web site at http://www.lsc.gov) in furtherance of LSC's general policy of transparency.\2\ 
The

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Protocol begins with an overview of the rulemaking process as usually 
conducted and then proceeds to a more detailed discussion of the steps 
involved and certain variations that may occur.
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    \2\ Although this Protocol reflects LSC policy, it is not 
intended to and shall not create or confer any rights for or on 
behalf of any person or party and shall not establish legally 
enforceable rights against LSC or establish any legally enforceable 
obligations on the part of LSC, its directors, officers, employees 
and other agents.
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II. Summary of the Usual Rulemaking Process

    The Operations and Regulations Committee (``Committee'') is 
responsible for identifying rulemaking priorities for the Corporation 
in consultation with LSC management (``Management'') and LSC's Office 
of Inspector General (``OIG''), and for laying the groundwork for the 
Board's initial consideration of a regulatory change. The usual vehicle 
for the Committee's work will be a Rulemaking Agenda (``Agenda''), 
revised at least annually. Through the Agenda, Management will propose 
a prioritized list of regulatory actions that the Committee will 
consider for action and presentation to the Board. The Agenda will 
serve as a work plan for the Committee and LSC staff.
    As items from the Rulemaking Agenda come up for Committee 
consideration, LSC staff will produce a written statement describing 
the need for regulatory action. This document, termed a Justification 
Memorandum (``Memorandum''), is intended to be flexible in character, 
and will be of a length and scope appropriate to the issue. The 
Memorandum will contain a recommendation from Management regarding 
whether or not to authorize rulemaking.
    Final authority over LSC rulemaking policies and actions rests with 
the Board. Under the LSC Act, the Board has the legal authority to 
initiate, terminate, or otherwise direct a rulemaking at any duly 
authorized meeting. Under normal circumstances, the Board will take 
three votes on a rulemaking:

(Vote 1) To authorize rulemaking
(Vote 2) To publish a Notice of Proposed Rulemaking (``NPRM'') for 
notice and comment
(Vote 3) To publish a Final Rule

    Prior to each of these votes, the Committee normally will engage in 
public deliberation on the rulemaking, and the meeting or meetings at 
which such deliberations occur will include an opportunity for public 
comment. Upon concluding its deliberations, the Committee will vote on 
and issue a recommendation to the Board.

III. Rulemaking Protocol in Detail

Step 1--Issue Identification and Inclusion on the Agenda

    The initial impetus for a rulemaking may come from a variety of 
sources, including:
     New studies or other evidence;
     Initiatives arising from the Corporation's Strategic Plan;
     Retrospective review of the Corporation's regulations;
     Congressional directives;
     Board or Committee decisions;
     Requests from Management, the OIG, or individual members 
of the Board or Committee; or
     Petitions or recommendations from the regulated community 
and general public.
    Management is responsible for compiling and conveying these 
possibilities, together with its views, for Committee consideration. At 
minimum, this will occur annually during revision of the Rulemaking 
Agenda.\3\ It may, however, occur at any time as circumstances dictate 
or if a potential rulemaking is time-sensitive. From the possibilities 
presented by Management, the Committee will determine which items to 
include or exclude from further consideration for the coming year and 
will also indicate general priorities among the items included.
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    \3\ This parallels the practice followed by many federal 
agencies of publishing their regulatory plans semi-annually in the 
Unified Agenda of Regulatory and Deregulatory Actions 
(www.reginfo.gov). LSC is not required to include its regulatory 
plans in this document, and its creation of a Rulemaking Agenda 
should not be interpreted as indicating intent at this time to 
participate in the Unified Agenda or to follow its requirements.
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    The annual preparation of the Agenda (and any significant 
revisions) will be reported to the Board at its Spring quarterly 
meeting. The Committee normally will develop the Agenda without Board 
action, but rather in consultation with Management and the OIG. The 
Board may specifically act to place (or remove) items on the Agenda. 
During the course of the year, the Committee may authorize LSC to 
undertake rulemakings that were not placed on the Rulemaking Agenda.

Step 2--The Need for Regulation and the Justification Memorandum

    Generally, Management will work on items on the Rulemaking Agenda 
in the order of priority established by the Committee. Management will 
present each item to the Committee at a public meeting. Prior to that 
meeting, Management will prepare a Justification Memorandum discussing 
the potential rulemaking for the Committee and the Board. This 
Memorandum will discuss the need for the regulatory action and 
Management's views on whether action is necessary or desirable. The 
Memorandum represents Management's considered view on the initiation of 
rulemaking and is developed in consultation with the OIG. OIG's views 
may be incorporated in the Memorandum submitted by Management, or OIG 
may submit them to the Committee independently.
    Beyond these elements, the format of the Memorandum will be 
determined by the characteristics of each particular proposed 
rulemaking. Often, the focus at this early stage of the rulemaking will 
be simply on whether some change is warranted, rather than an 
assessment of any specific changes or routes by which they could be 
achieved. The Memorandum may discuss and evaluate:
     The effects of acting or not acting on a particular 
rulemaking proposal;
     The costs and benefits of engaging in rulemaking, compared 
to the status quo;
     Whether LSC needs additional information from the public 
before it can proceed with drafting an NPRM; and
     The suitability of particular processes, such as fact-
gathering through a rulemaking workshop with stakeholders.
    In other circumstances, where rulemaking is needed to conform the 
rule to statutory or regulatory changes, none of these analyses may be 
necessary.
    Management may provide the Committee and the Board with privileged 
advice related to a proposed rulemaking. That advice may be provided in 
writing, as well as in a closed session of the Committee or Board's 
meeting, as permitted by the Government in the Sunshine Act.
    The Committee will consider the Memorandum at a public meeting, and 
a copy of the Memorandum (but not any privileged material) will be 
publicly available, either physically or online, at the time of the 
meeting. The Committee will then provide an independent recommendation 
to the Board on the advisability of initiating rulemaking. Instead of 
issuing a recommendation, the Committee may also choose to request 
further work by Management on particular issues and development of a 
revised Memorandum, which the Committee will consider at future public 
meeting.
    If the Committee makes a recommendation to the Board, it is asking 
the Board to take the first of its votes on a particular rulemaking. 
The Board also has the option of requesting

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further work and a revised Memorandum before acting on the Committee's 
recommendation. If the Board votes to not initiate rulemaking without 
further instruction, it is effectively removing the rulemaking from the 
Rulemaking Agenda. If the Board votes to initiate rulemaking, it may 
attach to its vote further instructions regarding the scope of the 
rulemaking, particular changes desired, or processes to be used in 
developing the rule.
    In certain circumstances, including time-sensitive matters that are 
relatively straightforward and anticipated to be uncontroversial, an 
accelerated process may be employed that combines Step 2 and Step 3 
(discussed below). This would involve Management's preparation, with 
the concurrence of the Committee, of a Memorandum and a draft of an 
NPRM. If the Committee votes to recommend rulemaking, it could then 
proceed at the same meeting to consider a recommendation regarding the 
draft NPRM, and then present both recommendations in a combined motion 
to the Board. The Board could then choose to authorize both the opening 
of rulemaking and the publication of the NPRM for comment. In these 
circumstances, the Memorandum should contain a separate justification 
for the use of this accelerated process.

Step 3--The Development of the Proposed Rule

    Once the Board votes to open rulemaking, Management and the 
Committee will work together to oversee the process of developing the 
rule. For relatively straightforward rules, this may involve simply 
converting the Memorandum into the preamble of a draft NPRM, 
accompanied by proposed regulatory changes.
    More complex rulemakings, especially those with different 
alternatives for regulating a particular issue, may call for public 
engagement at an early stage. The Committee, after consulting with 
Management, may vote at a public meeting to authorize preliminary 
information-gathering actions. Should the Committee use these methods, 
it will regularly report its actions and the results of its efforts to 
the Board.
    In particular, rulemaking may be enhanced in some cases by the 
issuance of an Advanced Notice of Proposed Rulemaking (``ANPRM'') or a 
Request for Information (``RFI'') that solicits comments on certain 
issues or requests certain factual information at an early stage of the 
rulemaking process. An ANPRM or RFI may also be useful in collecting 
public views on the scope of the proposed rulemaking and on what issues 
to include or exclude from the proposed rule. In addition, if the costs 
and benefits associated with the rulemaking are unclear, LSC may use an 
ANPRM or an RFI to request that public input and data be provided to 
help understand the costs and benefits more clearly and accurately.
    Alternatively, LSC may choose to seek public input through 
Rulemaking Workshops. Rulemaking Workshops consist of one or more 
publicly noticed meetings of the Committee with the participation of 
Management, invited stakeholder representatives, and other interested 
and well-informed parties. Workshops are open discussions designed to 
elicit information about problems or concerns with the regulation (or 
certain aspects thereof) and provide an opportunity for sharing ideas 
regarding how to address those issues. Using whatever electronic and 
online methods are feasible, the Workshop should be open to observation 
by, and input from, the general public, including those not physically 
present with the Committee. The Workshop is not generally intended to 
develop detailed alternatives or to obtain consensus on regulatory 
proposals, and the primary anticipated role of Committee members would 
be to engage other participants with relevant questions rather than 
issue immediate decisions.
    A Negotiated Rulemaking \4\ is another alternative to develop an 
NPRM for a particular item. If the Committee determines this is the 
best approach, it will work with Management to designate a group of 
external representatives that will then meet with Management over an 
extended period, under supervision of a professional facilitator, in 
order to develop consensus regarding particular regulatory alternatives 
and the form of a draft NPRM.
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    \4\ For further general information, see Negotiated Rulemaking 
Act of 1990, codified at 5 U.S.C. 561-70. LSC would be generally 
guided in the conduct of a negotiated rulemaking, should it choose 
to conduct one, by the principles and models contained in these 
statutes, but its particular parameters would be designated by the 
LSC Board of Directors, acting through the Committee.
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    The above mechanisms do not exhaust the ways LSC may develop its 
proposed rules. Where appropriate, LSC may publish general or specific 
requests for comment or surveys or use social media to seek public 
input on a proposed rule.
    After gathering the necessary input, and as directed by the 
Committee, LSC staff will be responsible for drafting the NPRM in 
consultation with the OIG. LSC staff will submit the draft for review 
and approval or revision by the President of LSC. Once approved, 
Management will submit the draft NPRM to the Committee for 
consideration at a public meeting.
    Management will provide the draft NPRM to the Committee 
sufficiently in advance of the meeting to allow adequate time for 
consideration. The draft also will be made available both 
electronically in advance of the meeting and in physical form at the 
meeting. LSC will publish in the Federal Register a notice of the 
meeting announcing the placement of the draft NPRM on the Committee 
agenda and the availability of the draft NPRM on LSC's Web site. At the 
Committee meeting, Management will present the draft NPRM, and the 
Committee will provide a designated opportunity for public comment 
prior to a vote of the Committee to recommend publication. The 
Committee will then deliberate and decide whether to recommend that the 
Board publish the NPRM, recommend that the Board terminate the 
rulemaking, or make no recommendation to the Board, but instead return 
the draft to Management for further development.
    If the Board authorizes by its vote publication of the NPRM, 
Management will make any necessary technical revisions to the document 
and submit it to the Federal Register for publication. The comment 
period will be at least 30 days, but may be longer at the discretion of 
the Committee and Management, or at the direction of the Board.

Step 4--Public Comment and the Development of the Final Rule

    LSC will accept comments submitted in either physical or electronic 
form by the closing date stated in the NPRM published in the Federal 
Register. LSC will publish the notice and the NPRM on LSC's Web site.
    Copies of all comments received during the designated comment 
period will be provided to the Committee and made available to other 
Board Members upon request. Copies of all comments will also be placed 
in a public docket available for inspection and copying in the FOIA 
Reading Room at the Corporation's offices, as well as in an electronic 
docket accessible from LSC's Web site.
    In addition to comments received during the comment period, any 
relevant public comments made to the Committee during its public 
meetings on the rulemaking--including written comments submitted in 
conjunction with oral presentations--will be considered part of the 
administrative record of the rulemaking and included

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in LSC's docket. LSC will not consider or respond to comments submitted 
outside of the public comment period or the relevant Committee meetings 
for a particular rulemaking. In the event a comment submitted outside 
the time periods described above raises significant substantive or 
procedural questions that LSC believes are likely to affect the outcome 
of the rulemaking, LSC may provide another opportunity for the 
submitter to provide the comment to LSC in a public forum or by 
reopening the rulemaking.
    In some circumstances, LSC may determine that publication of a 
revised (or ``further'') NPRM (``FNPRM'') or a supplemental NPRM is 
necessary. These notices may be used to request comment on specific 
issues, on revisions to discrete parts of an NPRM, to clarify or add 
missing information to an existing NPRM, or in other instances where 
LSC wishes to obtain from or share information with the public. Such 
instances may include times when LSC makes material changes to the rule 
text proposed in the NPRM. With notice to the Board, the Committee may 
authorize an FNPRM or a supplemental NPRM at a public meeting, 
designating an additional period of public comment for no less than 30 
days. The Committee may also authorize an extension or re-opening of 
the comment period on an existing NPRM.
    Upon the close of the comment period, and upon determination that 
no further comment periods are needed, Management will draft the Final 
Rule in consultation with the OIG. Management will submit the draft 
Final Rule to the Committee for consideration at a public meeting. The 
draft also will be made available both electronically in advance of the 
meeting and in physical form at the meeting. LSC will publish in the 
Federal Register a notice of the meeting announcing the placement of 
the draft Final Rule on the Committee agenda and the availability of 
the draft Final Rule on LSC's Web site. At the Committee meeting, 
Management will present the draft Final Rule, and the Committee will 
provide a designated opportunity for public comment prior to a vote of 
the Committee to recommend publication. The Committee will then 
deliberate and decide whether to recommend that the Board adopt the 
Final Rule as a federal regulation, recommend that the Board terminate 
the rulemaking, or make no recommendation to the Board, but instead 
return the draft to Management for further development.
    If the Board authorizes by its vote adoption of the Final Rule (as 
amended, if it chooses to do so), Management will make any necessary 
minor revisions to the document submitting it to the Federal Register. 
Any changes to LSC's regulations will also be reflected on LSC's Web 
site. In accordance with the LSC Act, any regulatory change will not be 
operative for at least 30 days after publication as a Final Rule, and 
this period may be extended at the discretion of the Committee and 
Management, or at the direction of the Board.

    Dated: August 10, 2015.
Stefanie K. Davis,
Assistant General Counsel.
[FR Doc. 2015-20025 Filed 8-13-15; 8:45 am]
BILLING CODE 7050-01-P