[Federal Register Volume 83, Number 151 (Monday, August 6, 2018)]
[Proposed Rules]
[Pages 38270-38272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16765]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 83, No. 151 / Monday, August 6, 2018 / 
Proposed Rules  

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LEGAL SERVICES CORPORATION

45 CFR Part 1607


Governing Bodies

AGENCY: Legal Services Corporation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule revises the Legal Services Corporation (LSC 
or Corporation) regulation regarding recipient governing bodies. LSC is 
proposing two revisions to give recipient governing bodies flexibility 
in how they recruit, appoint, and retain client eligible members while 
remaining faithful to the LSC Act's requirement to appoint client-
eligible board members who may also represent associations or 
organizations of eligible clients. First, LSC proposes to revise the 
definition of the term eligible client to remove the requirement that a 
client-eligible board member must be financially eligible ``at the time 
of appointment to each term of office'' (emphasis added). Second, LSC 
proposes to eliminate the requirement that client-eligible members be 
appointed by outside groups.

DATES: Comments must be submitted by October 5, 2018.

ADDRESSES: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include ``Comments on 
Revisions to Part 1607'' in the subject line of the message.
     Fax: (202) 337-6519.
     Mail: Stefanie K. Davis, Assistant General Counsel, Legal 
Services Corporation, 3333 K Street NW, Washington, DC 20007, ATTN: 
Part 1607 Rulemaking.
     Hand Delivery/Courier: Stefanie K. Davis, Assistant 
General Counsel, Legal Services Corporation, 3333 K Street NW, 
Washington, DC 20007, ATTN: Part 1607 Rulemaking.
    Instructions: Electronic submissions are preferred via email with 
attachments in Acrobat PDF format. LSC will not consider written 
comments sent to any other address or received after the end of the 
comment period.

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:

I. Background

    In December 1977, Congress amended Sec.  1007(c) of the LSC Act. 
Public Law 95-222, 11, 91 Stat. 1619. Through the amendment, Congress 
directed LSC to fund only those organizations whose governing bodies 
consisted of ``one-third . . . persons who are, when selected, eligible 
clients who may also be representatives of associations or 
organizations of eligible clients.'' Id. at 1622. LSC published a 
notice of proposed rulemaking (NPRM) to implement the new requirement 
in May 1978. In that NPRM, LSC proposed to define ``eligible client'' 
as an ``individual eligible to receive legal assistance under the LSC 
Act.'' 43 FR 21902, May 22, 1978. The proposed definition was narrower 
than the LSC Act's definition of the term ``[e]ligible client,'' which 
the Act defines as ``any person financially unable to afford legal 
assistance.'' Sec. 1002(3), Public Law 88-452, title X; 42 U.S.C. 
2996a(3). LSC also proposed to adopt a requirement that eligible client 
members ``be selected from, or designated by, a variety of appropriate 
groups including, but not limited to, client and neighborhood 
associations and organizations.'' Id. This language reflected LSC's 
``attempt to insure that programs will be accountable to the 
communities that they serve.'' On July 28, 1978, LSC adopted the 
proposed rule without change. 43 FR 32772, July 28, 1978.
    The provisions governing the appointment of client-eligible members 
to recipient governing bodies remained unchanged for 16 years. In 1994, 
LSC proposed to revise Part 1607 in two relevant ways. First, LSC 
proposed to amend the regulation to reflect its interpretation of the 
statutory language requiring one-third of a recipient governing body's 
members to be ``persons who are, when selected, eligible clients'':

    [T]he language has been revised to make it clear that client 
board members must be eligible at the time of their appointment to 
each term of office. Thus, a client member who is financially 
eligible for services when first appointed to a recipient's board 
may not be reappointed to a second or subsequent term if, at the 
time of reappointment, the client board member is no longer 
financially eligible for LSC-funded services.

59 FR 30885, 30886, June 16, 1994. The second proposed revision ``would 
codify the current LSC interpretation of the language to require that 
client board members be selected by client groups that have been 
designated by the recipient.'' Id. at 30886-87.
    In a final rule published on December 19, 1994, LSC adopted both 
proposed changes. LSC revised the proposed definition of ``eligible 
client'' to make clear that the member had to be financially eligible 
``to receive legal assistance under the Act and part 1611'' of LSC's 
regulations. 59 FR 65249-50, Dec. 19, 1994. In so doing, LSC rejected 
comments recommending that LSC expand the definition to include 
individuals whose income exceeds LSC's financial eligibility limit, but 
who are eligible to receive non-LSC-funded legal assistance from a 
recipient. LSC limited the definition to individuals who were 
financially eligible for LSC-funded legal assistance because it 
``wished to insure that the focus of the legal services program remains 
on the indigent population.'' Id. at 65250. As it did in 1978, LSC 
adopted a narrower definition of the term ``eligible client'' than the 
one provided in Sec.  1002 of the LSC Act.
    With respect to LSC's proposal to require that client-eligible 
members be appointed by organizations or associations, LSC received 
comments both in support of and opposing the requirement. In the 
preamble to the final rule, LSC explained that favorable comments 
``supported the clarification and the policy choice that it 
represented.'' Id. at 65251. LSC provided more detailed explanations of 
the comments in opposition. One basis for opposition was that it would 
be difficult or impossible for some recipients to comply with the 
requirement because ``often there are no organized client groups within 
the service area and, even when there are, it is not necessarily true 
that client groups speak for the client community.'' Id. at 65251. The 
other was that ``recipients often come into contact with program 
clients or other financially eligible individuals who would make

[[Page 38271]]

good client board members but who, for one reason or another, are not 
involved with any client group.'' Id. LSC adopted the language from the 
NPRM without change.
    In 2015, LSC Board Member Julie Reiskin provided Management with a 
memorandum detailing concerns clients had expressed to her. The primary 
concerns expressed in the memorandum were that some client governing 
body members were not truly representative of the population eligible 
for LSC-funded legal services and that the rule was more prescriptive 
than Sec.  1007(c) of the LSC Act, which states that client-eligible 
members (1) must be eligible when selected; and (2) may be 
representatives of associations or organizations of eligible clients. 
42 U.S.C. 2996f(c). Following up on this memorandum, in 2017, the 
Office of Legal Affairs (OLA) participated in Board Member Reiskin's 
and President Sandman's client-listening session at the National Legal 
Aid and Defender Association's annual conference. Recipients and their 
clients communicated that two provisions in Part 1607 present obstacles 
to recruiting and retaining qualified client-eligible members: the 
definition of ``eligible client'' and the requirement that outside 
organizations appoint client-eligible members.
    LSC takes seriously the client community's concerns and believes 
regulatory action is justified for two reasons. First, LSC believes 
that the current rule interprets Sec.  1007(c) too restrictively. 
Second, LSC believes that recipients should have discretion to 
establish board member appointment procedures that maximize their 
ability to recruit qualified client-eligible board members.
    On April 23, 2017, the Committee approved Management's proposed 
2017-2018 rulemaking, which included revising part 1607 as a Tier 2 
rulemaking item. On April 8, 2018, the Committee voted to recommend 
that the Board authorize rulemaking on part 1607. On April 10, 2018, 
the Board authorized LSC to begin rulemaking. On July 25, 2018, the 
Committee voted to recommend that the Board authorize publication of 
this NPRM in the Federal Register for notice and comment. On July 26, 
2018, the Board accepted the Committee's recommendation and voted to 
approve publication of this NPRM.

II. Proposed Changes

Sec.  1607.1 Purpose

    LSC proposes to make no changes to this section.

Sec.  1607.2 Definitions

    LSC proposes to remove the requirement that a board member be 
financially eligible ``at the time of appointment to each term of 
office to the recipient's governing body'' to allow client-eligible 
members who improve their financial position to serve consecutive terms 
on a recipient's governing body (emphasis added). Under this 
interpretation, the member's eligibility status would be evaluated upon 
first appointment and at any subsequent appointment following a gap in 
service on the recipient's governing body, but not upon reappointment 
to consecutive terms of service. This is not intended to require the 
recipient to reappoint the client-eligible member to another term; it 
merely permits the recipient to do so. Thus, for example, if a client-
eligible board member's income increases negligibly, but nonetheless 
sufficiently to exceed the applicable financial eligibility income 
ceiling, the recipient would have the discretion and flexibility to 
reappoint that client-eligible board member to a successive term. This 
is consistent with the statutory language of Section 1007(c) of the LSC 
Act that ``at least one-third of [the recipient's governing body] 
consists of persons who are, when selected, eligible clients . . .'' 
(emphasis added).

Sec.  1607.3 Composition

    LSC proposes to eliminate the Sec.  1607.3(c) requirement that 
client-eligible members be appointed by groups. Unlike the requirement 
that the majority of attorney members of recipient governing bodies be 
appointed by state, county, or local bar associations, LSC's governing 
statutes do not require client-eligible members to be appointed by 
groups. LSC believes that each recipient governing body should have the 
authority and flexibility to implement an appointment procedure that 
takes into account its unique client population, including associations 
and organizations of client-eligible people. Under LSC's proposal, 
recipients may choose to continue using the procedure required by 
existing Sec.  1607.3(c), but will no longer be required to have 
outside organizations appoint client-eligible members to the 
recipients' governing bodies.

Sec.  1607.4 Functions of a Governing Body

    LSC proposes to make no changes to this section.

Sec.  1607.5 Compensation

    LSC proposes to make no changes to this section.

Sec.  1607.6 Waiver

    LSC proposes to make no changes to this section.

List of Subjects in 45 CFR Part 1607

    Grant programs--law, Legal services.
    For the reasons set forth in the preamble, the Legal Services 
Corporation proposes to amend 45 CFR part 1607 as follows:

PART 1607--GOVERNING BODIES

0
 1. Revise the authority citation for part 1607 to read as follows:

     Authority: 42 U.S.C. 2996g(e).

0
2. Revise paragraph (c) of Sec.  1607.2 to read as follows:

Sec.  1607.2   Definitions.

* * * * *
    (c) Eligible client member means a board member who is financially 
eligible to receive legal assistance under the Act and part 1611 of 
this chapter, without regard to whether the person actually has 
received or is receiving legal assistance at that time. Eligibility of 
client members must be determined by the recipient or, if the recipient 
so chooses, by the nominating organization(s) or group(s) in accordance 
with written policies adopted by the recipient.
* * * * *
0
3. Revise paragraph (c) of Sec.  1607.3 to read as follows:

Sec.  1607.3   Composition.

* * * * *
    (c) At least one-third of the members of a recipient's governing 
body must be eligible client members when initially appointed by the 
recipient. The recipient must solicit recommendations for eligible 
client members from a variety of appropriate groups designated by the 
recipient that may include, but are not limited to, client and 
neighborhood associations and community-based organizations that 
advocate for or deliver services or resources to the client community 
served by the recipient. Recipients should solicit recommendations from 
groups in a manner that reflects, to the extent possible, the variety 
of interests

[[Page 38272]]


within the client community, and eligible client members should be 
selected so that they reasonably reflect the diversity of the eligible 
client population served by the recipient, including race, gender, 
ethnicity and other similar factors.
* * * * *

    Dated: August 1, 2018.
Stefanie Davis,
Assistant General Counsel.
[FR Doc. 2018-16765 Filed 8-3-18; 8:45 am]
 BILLING CODE 7050-01-P