Office of Global Health Affairs; Regulation on the Organizational Integrity of Entities That Are Implementing Programs and Activities Under the Leadership Act, 78997-79002 [E8-30686]

Download as PDF Federal Register / Vol. 73, No. 248 / Wednesday, December 24, 2008 / Rules and Regulations § 59.501 Am I subject to this subpart? * * * * * (c) Except as provided in paragraph (e) of this section, the provisions of this subpart apply to aerosol coatings manufactured on or after July 1, 2009, for sale or distribution in the United States.* * * * * * * * (f) * * * (3) * * * (i) You must submit an initial notification no later than the compliance date stated in § 59.502(a), or on or before the date that you start manufacturing aerosol coating products that are sold in the United States, whichever is later. * * * * * * * * 3. Section 59.502 is amended by revising paragraph (a) to read as follows: ■ § 59.502 When do I have to comply with this subpart? (a) Except as provided in § 59.509 and paragraphs (b) and (c) of this section, you must be in compliance with all provisions of this subpart by July 1, 2009. * * * * * 4. Section 59.511 is amended by revising the first sentence of paragraph (b) introductory text and the first sentence of paragraph (e) introductory text to read as follows: ■ § 59.511 What notifications and reports must I submit? * * * * * (b) You must submit an initial notification no later than the compliance date stated in § 59.502, or on or before the date that you first manufacture, distribute, or import aerosol coatings, whichever is later. * * * * * * * * (e) If you claim the exemption under § 59.501(e), you must submit an initial notification no later than the compliance date stated in 59.502(a), or on or before the date that you first manufacture aerosol coatings, whichever is later. * * * * * * * * pwalker on PROD1PC71 with RULES [FR Doc. E8–30699 Filed 12–23–08; 8:45 am] BILLING CODE 6560–50–P VerDate Aug<31>2005 19:28 Dec 23, 2008 Jkt 217001 DEPARTMENT OF HEALTH AND HUMAN SERVICES 45 CFR Part 88 RIN 0991–AB46 Office of Global Health Affairs; Regulation on the Organizational Integrity of Entities That Are Implementing Programs and Activities Under the Leadership Act AGENCY: Office of Global Health Affairs, U.S. Department of Health and Human Services. ACTION: Final rule. SUMMARY: The Office of Global Health Affairs within the U.S. Department of Health and Human Services (‘‘HHS’’) is issuing this final rule to clarify that recipients of HHS funds to implement HIV/AIDS programs and activities under the United States Leadership Against HIV/AIDS, Tuberculosis and Malaria Act of 2003 (the ‘‘Leadership Act’’), Public Law 108–25 (May 27, 2003), that are required to have a policy opposing prostitution and sex trafficking, and must submit certification of this policy with the grant or contract application, may, consistent with this policy requirement, maintain an affiliation with organizations that do not have such a policy, provided such affiliations do not threaten the integrity of the government’s programs and its message opposing prostitution and sex trafficking. The rule describes the separation that must exist between a recipient of HHS HIV/AIDS funds that has a policy opposing prostitution and sex trafficking, as required under section 301(f) of the Leadership Act, 22 U.S.C. 7631(f), and another organization that engages in activities that are not consistent with a policy opposing prostitution and sex trafficking. DATES: This rule is effective January 20, 2009. FOR FURTHER INFORMATION CONTACT: Jeanne Monahan, Office of Global Health Affairs, Hubert H. Humphrey Building, Room 639H, 200 Independence Avenue, SW., Washington, DC 20201, Tel: 202.690.6174, E-mail: Jeanne.monahan@hhs.gov. SUPPLEMENTARY INFORMATION: I. Background The U.S. Government is opposed to prostitution and related activities, which are inherently harmful and dehumanizing, and contribute to the phenomenon of trafficking in persons. It is critical to the effectiveness of the Leadership Act, and to the U.S. PO 00000 Frm 00081 Fmt 4700 Sfmt 4700 78997 Government’s foreign policy that underlies this effort, that organizations that receive Leadership Act funds maintain the integrity of the Leadership Act programs and activities they implement, and not confuse the U.S. Government’s message opposing prostitution and sex trafficking by holding positions that conflict with this policy. On April 17, 2008, HHS published in the Federal Register (73 FR 20900), a Notice of Proposed Rulemaking (‘‘NPRM’’) regarding the requirement expressed in 22 U.S.C. 7631(f), which provides that organizations that are receiving Leadership Act funds must have a policy explicitly opposing prostitution and sex trafficking. Specifically, the NPRM described the legal, financial, and organizational separation that must exist between entities that receive grants, contracts, or cooperative agreements from HHS under the Leadership Act and another organization that engages in activities that are not consistent with a policy opposing prostitution and sex trafficking. A Notice of Correction of Proposed Rule to correct a technical error in the NPRM was published in the Federal Register (73 FR 29096). Although the public comment period initially closed on May 19, 2008, a Notice of Reopening of the Comment Period was published in the Federal Register (73 FR 36293), and the final date to submit comments on the NPRM was July 28, 2008. This final rule is designed to provide additional clarity for contracting and grant officers, contracting officers’ technical representatives, program officials and implementing partners (e.g., grantees, contractors) of HHS regarding the application of language in Notices of Availability, Requests for Proposals, and other documents pertaining to the policy requirement expressed in 22 U.S.C. 7631(f). This final rule clarifies that the Government’s organizational partners that have a policy opposing prostitution and sex trafficking may, consistent with this policy requirement, maintain an affiliation with organizations that do not have such a policy, provided such affiliations do not threaten the integrity of the Government’s programs and its message opposing prostitution and sex trafficking, as specified in this final rule. To maintain program integrity, adequate separation, as outlined in this final rule, is required between an organization that expresses views on prostitution and sex trafficking contrary to the Government’s message and any federally funded partner organization. Examples of activities inconsistent with a policy E:\FR\FM\24DER1.SGM 24DER1 78998 Federal Register / Vol. 73, No. 248 / Wednesday, December 24, 2008 / Rules and Regulations opposing prostitution and sex trafficking include, but are not limited, to advocating for the legalization of the institution of prostitution or organizing or unionizing prostituted people for the purpose of advocating for the legalization of prostitution. This final rule applies to funds used by HHS to implement HIV/AIDS programs and activities under the Leadership Act. The rule includes certification language that organizations must provide to receive grants, cooperative agreements, contracts, and other funding instruments made available by HHS. All recipients that receive funds directly from HHS (‘‘prime recipients’’) must certify compliance with the final rule prior to actual receipt of such funds, in a written statement addressed to the HHS agency’s grants or contract officer. The certifications by prime recipients are prerequisites to payment by HHS of any U.S. Government funds in connection with an award under the Leadership Act. All recipients must insert provisions to implement the applicable parts of this final rule in all sub-agreements under their awards. These provisions must be express terms and conditions of the subagreement, must acknowledge that compliance with this final rule is a prerequisite to the receipt and expenditure of U.S. Government funds in connection with this document, and must acknowledge that any violation of the provisions shall be grounds for unilateral termination of the agreement, prior to the end of its term. Recipients must agree that HHS may, at any reasonable time, inspect the documents and materials maintained or prepared by the recipient that relate to the organization’s compliance with this final rule. Nothing in this rule is intended to affect relevant prohibitions on Federal Government funding under other applicable Federal laws. II. Discussion of the Final Rule These sections discuss the final rule by defining the terms relevant to this final rule and discussing the requirements that must be satisfied by organizations that receive Leadership Act funds. pwalker on PROD1PC71 with RULES Section 88.1 Definitions This section defines the terms that are pertinent to this rule. Specifically, we include the following definitions: ‘‘Commercial Sex Act’’ means any sex act on account of which anything of value is given to or received by any person. VerDate Aug<31>2005 19:28 Dec 23, 2008 Jkt 217001 ‘‘Prime Recipients’’ are contractors, grantees, applicants or awardees that receive Leadership Act funds for HIV/ AIDS programs directly from HHS. ‘‘Prostitution’’ means procuring or providing any commercial sex act. ‘‘Recipients’’ are contractors, grantees, applicants or awardees that receive Leadership Act funds for HIV/AIDS programs directly or indirectly from HHS. Recipients include both prime recipients and sub-recipients. ‘‘Sex Trafficking’’ means the recruitment, harboring, transportation, provision, or obtaining of a person for the purpose of a commercial sex act. ‘‘Sub-Recipients’’ are contractors, grantees, applicants or awardees that receive Leadership Act funds for HIV/ AIDS programs from other recipients rather than directly from HHS. Section 88.2 Objective Integrity of Recipients This section of the final rule describes the separation that must exist between a recipient of funds from HHS to implement HIV/AIDS programs under the Leadership Act and another organization that engages in activities that are not consistent with a policy opposing prostitution and sex trafficking, as required under section 301(f) of the Leadership Act. Paragraph (a) sets forth criteria for establishing the objective integrity and independence that a recipient must have from another organization that engages in activities inconsistent with a policy opposing prostitution and sex trafficking. The criteria for organizational integrity and independence in this final rule is modeled on criteria upheld as facially constitutional by the U.S. Court of Appeals for the Second Circuit in Velazquez v. Legal Services Corp., 164 F.3d 757, 767 (2d Cir. 1999), and Brooklyn Legal Services Corp. v. Legal Services Corp., 462 F.3d 219, 229–33 (2d Cir. 2006), cases involving similar organization-wide limitations applied to recipients of Federal funding. This final rule clarifies that an organization affiliated with a recipient of Leadership Act funds need not have a policy explicitly opposing prostitution and sex trafficking for the recipient to maintain compliance with the policy requirement. The affiliated organization’s position on these issues will have no effect on the recipient’s eligibility for Leadership Act funds, so long as the recipient satisfies the criteria for objective integrity and independence detailed in this final rule. By ensuring adequate separation between the recipient and affiliate, these criteria guard against a public perception that PO 00000 Frm 00082 Fmt 4700 Sfmt 4700 the affiliate’s views on prostitution and sex trafficking may be attributed to the recipient, and thus to the Government, thereby avoiding the risk of confusing the Government’s message opposing prostitution and sex trafficking. In addition, the separation also guards against a public perception that resources between affiliate and recipient are fungible, and thus Government funds could inadvertently subsidize other activities inconsistent with a policy opposing prostitution and sex trafficking. Under Paragraph (b) of this section, an organization is eligible to receive from HHS Federal funds made available under the Leadership Act only if it has provided the certifications required by section 88.3. Section 88.3 Certifications This section of the rule describes the certifications required to receive Leadership Act funding from HHS. The certifications section contains an Organizational Integrity Certification, located at section 88.3(d)(1), in which a recipient of Leadership Act funds administered by an HHS agency certifies it has objective integrity and independence from any organization that engages in activities inconsistent with a policy opposing prostitution and sex trafficking. The certification section also contains Acknowledgement and Sub-Recipient Compliance Certifications at section 88.3(d)(2) and (3). These require each recipient 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 HHS finds a certification to have been inaccurate or to have become inaccurate, and that the prime recipient will ensure all its subrecipients provide the required certifications. A sub-recipient must provide the same certifications as those provided by the prime recipient. Paragraph (e) contains information regarding requirements for the renewal of the certifications. HHS requires each recipient to provide renewed certifications each Federal Fiscal Year, in alignment with the award cycle. Additionally, current 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. III. Response to Public Comments In response to the proposed rule, the Office of Global Health Affairs received five written comments from Members of E:\FR\FM\24DER1.SGM 24DER1 pwalker on PROD1PC71 with RULES Federal Register / Vol. 73, No. 248 / Wednesday, December 24, 2008 / Rules and Regulations Congress, a university law school, nongovernmental organizations involved in public health and advocacy, and other organizations. The following is a summary of the comments and the responses from the HHS Office of Global Health Affairs: Comment: Several commenters argue that the proposed rule did not address the merits of the underlying policy requirement expressed in the Leadership Act, which provides that organizations that are receiving Leadership Act funds must have a policy explicitly opposing prostitution and sex trafficking. They state that the policy requirement in the Leadership Act runs contrary to best practices in public health efforts to stem the spread of HIV/AIDS and human trafficking, and the regulation appears to prohibit organizations receiving Leadership Act funds from participating in prevention programs that use strategies that involve those engaged in prostitution and sex trafficking. Response: The objective of the rule is to clarify that recipients of HHS HIV/ AIDS funds that have adopted a policy opposing prostitution and sex trafficking may, consistent with this policy requirement, maintain an affiliation with other organizations that do not have such a policy, provided such affiliations do not threaten the integrity of the Government’s programs and its message opposing prostitution and sex trafficking. In doing so, the rule describes the legal, financial, and organizational separation that must exist between these recipients of HHS funds and other organizations that engage in activities that are not consistent with a policy opposing prostitution and sex trafficking. The rule is not designed to address the merits of the policy requirement in the Leadership Act. Moreover, the rule does not prevent an organization from providing prevention, care and treatment to marginalized populations. In fact, most Leadership Act funds are going expressly for those purposes. Organizations around the world that receive Leadership Act funds, including those with extensive experience working directly with prostituted people, have stated they are in compliance with the requirement that they must have a policy opposing prostitution and sex trafficking. Comment: Several commenters note that the regulation does not define ‘‘activities inconsistent with a policy opposing prostitution and sex trafficking.’’ They state that the language of the regulation is vague and that there is confusion in the field about permissible activities. The commenters note that the broadness of the language VerDate Aug<31>2005 19:28 Dec 23, 2008 Jkt 217001 of the rule increases the possibility that organizations will curtail effective programs for fear of being seen as supporting or promoting prostitution. Response: As stated above, the purpose of the rule is to describe the degree of separation that must exist between recipients of HHS HIV/AIDS funds, who must have a policy opposing prostitution and sex trafficking, and other organizations who do not have such a policy, in order to preserve the integrity of the Government’s message opposing prostitution and sex trafficking. The purpose of the rule is not to define activities that are inconsistent with a policy opposing prostitution and sex trafficking. As stated above, the rule does not prevent recipients of Leadership Act funds from providing prevention, care and treatment programs to marginalized populations, and organizations around the world that receive Leadership Act funds, including those with extensive experience working directly with prostituted people, have stated that they have a policy opposing prostitution and sex trafficking. Comment: One commenter notes that the regulation does not define ‘‘affiliate.’’ The commenter writes that there are no limitations on organizations that might be considered affiliates. The commenter notes that the speech and activities of affiliate organizations will be scrutinized to a high degree, and that cooperation between non-governmental organizations (‘‘NGOs’’) will be discouraged. Response: The Office of Global Health Affairs has determined that the term ‘‘affiliate’’ is not necessary to the rule, as the objective of the rule is to describe the degree of separation that must exist between recipients of Leadership Act funds and any other organizations that do not have a policy opposing prostitution and sex trafficking, regardless of whether these other organizations are technically defined as ‘‘affiliates’’ of the recipient. Consequently, the HHS Office of Global Health Affairs has deleted the term ‘‘affiliate’’ from the rule. Further, the separation requirements are designed to ensure the U.S. Government’s message opposing prostitution and sex trafficking is not confused or diluted. Organizations may still cooperate with each other, provided that, if they receive Leadership Act funds for HIV/AIDS programs, they also have a policy opposing sex trafficking and prostitution, and remain sufficiently separate from organizations that do not have such a policy. Comment: Several commenters note that the level of separation required by PO 00000 Frm 00083 Fmt 4700 Sfmt 4700 78999 the rule is unnecessary. The commenters state that the level of separation currently applied to faithbased organizations would be sufficient for recipients of HIV/AIDS funding. The commenters also claim that the rule is inconsistent with HHS’s previous conclusion that, in the context of faithbased organizations, separation requirements of this sort are excessive. Response: The policy requirement in the Leadership Act is not analogous to the Federal Government’s partnership with faith-based organizations. The Constitution of the United States requires the Government to be neutral on matters of faith and religion. However, the Constitution does not require the Government to be neutral on prostitution and sex trafficking. The United States is free to adopt policies that favor or disfavor activities related to prostitution and sex trafficking. In the Leadership Act, Congress chose to establish a policy that requires funding recipients to have a policy against prostitution and sex trafficking, which is inherently different from the neutrality the U.S. Government must exhibit towards faith-based organizations. The U.S. Government has found prostitution and sex trafficking to be degrading and harmful to those involved, and therefore a stronger separation standard is required than is established for faith-based organizations. This clearer form of separation is necessary to ensure that the U.S. Government policy against prostitution and sex trafficking is clear and not confused with a contrary policy held by a grantee or contractor. Comment: Several commenters argue that the regulation requires recipients to achieve a level of separation from affiliates that will be an undue burden on NGOs, and defies Congress’ intent to promote efficiency in foreign aid. The commenters note that the level of separation required for recipients of HIV/AIDS funding is so stringent that recipients will not be able to set up affiliates. They note that having separate personnel and management factors will create lengthy delays in working in developing countries. They also claim that the separation requirements will harm the recipients’ ability to raise money. Response: The burden and cost of the rule is unlikely to be significant for organizations that are receiving Leadership Act funds because the policy requirement has been in place for a number of years. Since 2004, over 18 billion dollars have supported HIV/ AIDS prevention, care, and treatment programs, and these groups have stated E:\FR\FM\24DER1.SGM 24DER1 79000 Federal Register / Vol. 73, No. 248 / Wednesday, December 24, 2008 / Rules and Regulations their compliance with section 301(f) of the Leadership Act. The rule does not alter the policy requirement. Rather, it clarifies that a recipient of Leadership Act funds may maintain an affiliation with an organization that does not have a policy opposing prostitution and sex trafficking if the two organizations are sufficiently separate. Comment: One commenter states that the policy undermines Congress’ desire to promote public/private partnerships in the delivery of HIV/AIDS services. The commenter claims that recipients will find it dangerous, and in some cases illegal, to work with other NGOs. The commenter notes that the separation requirements will force recipients to increase administrative costs, and will undercut organizations’ ability to raise funds both from the Government and from the private sector. Response: The intent of the rule is not to prevent public/private partnerships, but to more clearly define the organizations that can enter into those partnerships and receive funding under the Leadership Act. The cost of the rule is unlikely to be significant for organizations receiving Leadership Act funds. Since 2004, HHS has required recipients of Leadership Act funds to certify their compliance with section 301(f) of the Leadership Act, and on July 23, 2007, the Office of Global Health Affairs issued a ‘‘Guidance on Organizational Integrity,’’ similar to this final regulation. The Office of Global Health Affairs instructed HHS agencies to disseminate the guidance to their contractors and grantees that receive funding under the Leadership Act, and provided means for the public to comment on the guidance, including whether the guidance is economically significant under definitions provided by the Office of Management and Budget (‘‘OMB’’). The Office of Global Health Affairs has received no comments on the guidance. pwalker on PROD1PC71 with RULES Regulatory Flexibility Act The Secretary certifies under 5 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. Since enactment of the policy requirement in the Leadership Act, HHS has required its contract solicitations and grant announcements for Leadership Act funding to include a VerDate Aug<31>2005 19:28 Dec 23, 2008 Jkt 217001 section regarding ‘‘Prostitution and Related Activities.’’ Executive Order 12866—Regulatory Planning and Review HHS has drafted and reviewed this regulation in accordance with Executive Order 12866, section 1(b), Principles of Regulation. HHS 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 promoting or advocating the legalization or the practice of prostitution and sex trafficking will (1) help further the U.S. Government’s strategy to reduce sexual exploitation that fuels the spread of HIV/AIDS and opportunistic infections, such as tuberculosis and malaria, and (2) demonstrate the U.S. Government’s opposition to prostitution and sex trafficking. The cost of this rule is unlikely to be significant, according to cost estimations, approximately $7337.10 in total. Since 2004, HHS has required recipients of Leadership Act funds to certify their compliance with section 301(f) of the Leadership Act. Further, the Office of Global Health Affairs issued a guidance, similar to this final rule, on July 23, 2007. The Office of Global Health Affairs instructed HHS agencies to disseminate the guidance to their contractors and grantees that receive funding under the Leadership Act, and provided means for the public to comment on the guidance, including whether the guidance is economically significant under definitions provided by OMB. The Office of Global Health Affairs has received no comments on the guidance. 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 for State or local Governments, as defined in the Executive Order. PO 00000 Frm 00084 Fmt 4700 Sfmt 4700 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. HHS has determined that 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 final 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. This rule will not have an impact on family well-being, as defined in this legislation. Paperwork Reduction Act To obtain or retain Leadership Act funding, HHS will require recipients to submit certifications. The title of the information collection is ‘‘Certification Regarding the Organizational Integrity of Entities Implementing Leadership Act Programs and Activities.’’ The documents are necessary to ensure that recipients of Leadership Act funding have objective integrity and independence from any organizations that engage in activities inconsistent with a policy opposing prostitution and sex trafficking. HHS estimates that 555 respondents will prepare documents to validate that recipients have objective integrity and independence from organizations that engage in activities inconsistent with policies opposing prostitution and sex trafficking. HHS also estimates that the average cost per hour will be $26.44, with 1⁄2 hour estimated time burden per response. In total, the estimated burden cost is approximately $7337.10. HHS therefore estimates annual aggregate burden to collect the information as follows: E:\FR\FM\24DER1.SGM 24DER1 Federal Register / Vol. 73, No. 248 / Wednesday, December 24, 2008 / Rules and Regulations 79001 ANNUAL BURDEN ESTIMATES Instrument Number of respondents Number of responses per respondent Average burden hours per response Average cost per hour Total burden hours Total burden cost Certifications ............................................ 555 1 .5 $26.44 277.5 $7,337.10 During the Notice of Revised Rulemaking (NPRM) process, HHS accepted comments from the public, in accordance with the Paperwork Reduction Act of 1995. HHS will submit this information collection to the Office of Management and Budget (OMB) for regular approval. Affected parties do not have to comply with the information collection requirements in the final rule until the Department of Health and Human Services publishes in the Federal Register the control numbers assigned by the Office of Management and Budget (OMB). Publication of the control numbers notifies the public that OMB has approved these information collection requirements under the Paperwork Reduction Act of 1995. Prime Recipients are contractors, grantees, applicants or awardees who receive Leadership Act funds for HIV/ AIDS programs directly from HHS. Prostitution means procuring or providing any commercial sex act. Recipients are contractors, grantees, applicants or awardees who receive Leadership Act funds for HIV/AIDS programs directly or indirectly from HHS. Recipients include both prime recipients and sub-recipients. Sex Trafficking means the recruitment, harboring, transportation, provision, or obtaining of a person for the purpose of a commercial sex act. Sub-Recipients are contractors, grantees, applicants or awardees, other than prime recipients, who receive Leadership Act funds for HIV/AIDS programs from other recipients rather than directly from HHS. List of Subjects in 45 CFR Part 88 Administrative practice and procedure, Federal aid programs, Grant programs, Grants administration. Dated: September 26, 2008. William R. Steiger, Director, Office of Global Health Affairs. Approved: October 22, 2008. Michael O. Leavitt, Secretary of Health and Human Services. Editorial Note: This document was received in the Office of the Federal Register on Friday, December 19, 2008. For the reasons stated in the preamble, the Office of Global Health Affairs amends 45 CFR subtitle A to add Part 88 as follows: ■ PART 88–ORGANIZATIONAL INTEGRITY OF ENTITIES IMPLEMENTING PROGRAMS AND ACTIVITIES UNDER THE LEADERSHIP ACT Sec. 88.1 88.2 88.3 Definitions. Organizational integrity of recipients. Certifications. Authority: 22 U.S.C. 7631(f) and 5 U.S.C. 301. pwalker on PROD1PC71 with RULES § 88.1 Definitions. For the purposes of this part: Commercial Sex Act means any sex act on account of which anything of value is given to or received by any person. ■ VerDate Aug<31>2005 19:28 Dec 23, 2008 Jkt 217001 § 88.2 Organizational integrity of recipients. (a) A recipient must have objective integrity and independence from any organization that engages in activities inconsistent with a policy opposing prostitution and sex trafficking. A recipient will be found to have objective integrity and independence from such an organization if: (1) The organization is a legally separate entity; (2) The organization receives no transfer of Leadership Act funds, and Leadership Act funds do not subsidize activities inconsistent with a policy opposing prostitution and sex trafficking; and (3) The recipient is physically and financially separate from the organization. Mere bookkeeping separation of Leadership Act funds from other funds is not sufficient. HHS will determine, on a case-by-case basis and based on the totality of the facts, whether sufficient physical and financial separation exists. The presence or absence of any one or more factors will not be determinative. Factors relevant to this determination shall include, but will not be limited to, the following: (i) The existence of separate personnel, management, and governance; PO 00000 Frm 00085 Fmt 4700 Sfmt 4700 (ii) The existence of separate accounts, accounting records, and timekeeping records; (iii) The degree of separation from facilities, equipment and supplies used by the organization to conduct activities inconsistent with a policy opposing prostitution and sex trafficking, and the extent of such activities by the organization; (iv) The extent to which signs and other forms of identification that distinguish the recipient from the organization are present, and signs and materials that could be associated with the organization or activities inconsistent with a policy opposing prostitution and sex trafficking are absent; and (v) The extent to which HHS, the U.S. Government and the project name are protected from public association with the organization and its activities inconsistent with a policy opposing prostitution and sex trafficking in materials such as publications, conferences and press or public statements. (b) An organization is ineligible to receive any Leadership Act funds unless it has provided the certifications required by § 88.3. § 88.3 Certifications. (a) HHS agencies shall include the certification requirements for any grant, cooperative agreement, contract, or other funding instrument in the public announcement of the availability of the grant, cooperative agreement, contract, or other funding instrument. (b) Unless the recipient is otherwise excepted, a person authorized to bind the recipient shall execute the certifications for the grant, cooperative agreement, contract, or other funding instrument. (c) A prime recipient must submit its certifications to the grant or contract officer of the HHS agency that will award funds. A sub-recipient must provide its certifications to the prime recipient. The prime recipient will submit certifications from its subrecipients when requested to do so by the HHS grant or contract officer. (d) The certifications shall state as follows: E:\FR\FM\24DER1.SGM 24DER1 79002 Federal Register / Vol. 73, No. 248 / Wednesday, December 24, 2008 / Rules and Regulations [FR Doc. E8–30686 Filed 12–19–08; 4:15 pm] pwalker on PROD1PC71 with RULES BILLING CODE 4150–28–P VerDate Aug<31>2005 19:28 Dec 23, 2008 Jkt 217001 PHMSA published a Notice of Proposed Rulemaking (NPRM) (73 FR 1307; January 8, 2008) proposing to increase the design factor and corresponding operating pressure limitations for natural gas pipelines made from new Polyamide–11 (PA–11) thermoplastic pipe. PHMSA initiated this rulemaking in response to several petitions submitted by Arkema, Inc. (Arkema), a manufacturer of PA–11 pipe. In October 2004, Arkema submitted two petitions to PHMSA requesting we revise 49 CFR 192.121 and 192.123. The first petition requested an increase in the design factor from 0.32 to 0.40 in the plastic pipe design formula in § 192.121 for new PA–11 plastic pipe. The second petition requested an increase in the design pressure limitation in § 192.123 from 100 psig (689 kPa) to 200 psig (1379 kPa) for new 2-inch IPS 1 PA–11 plastic pipe. The design factor and design pressure limitations for all other plastic pipe would remain unchanged. On June 22, 2005, PHMSA published a notice in the Federal Register (70 FR 36093) seeking comments on the Arkema petitions. Following public comments and recommendations from PHMSA staff, on April 6, 2006, Arkema submitted amended petitions proposing various additional requirements and safety controls on the use of PA–11 pipe. Arkema again proposed an increase in the design factor in § 192.121 from 0.32 to 0.40 for new PA– 11 pipe, but proposed two new conditions: (1) The minimum wall thickness for pipe of a given diameter must be SDR 2–11 or thicker; and (2) the rapid crack propagation (RCP) characteristics of each new pipe design involving a new diameter or thicker wall must be measured using accepted industry standard test methods. Likewise, Arkema proposed that we amend § 192.123 to allow the use of PA– 11 pipe at a maximum design pressure of up to 200 psig (1379 kPa) for SDR– 11 pipe, but broadened its request to include pipe at diameters of up to 4inch IPS. This request was based on the availability of complete PA–11 piping systems; results from a three-year research program by the Gas Technology Institute; and the successful testing of exhumed samples of PA–11 pipe that had been installed and operated under Federal and State waivers. Finally, Arkema supported a commenter’s recommendation to reduce the risk of excavation-related damage by requiring that PA–11 pipe be buried with warning tapes or other devices designed to alert excavators to the presence of a high pressure gas line. PHMSA is adopting the amendments as proposed in the NPRM with four exceptions: (1) We are adding the term ‘‘copper tubing size (CTS)’’ to clarify that pipeline operators may use copper tube size pipe as well as iron pipe size pipe. (2) We are adding the term ‘‘thicker pipe wall’’ to clarify that ‘‘SDR–11 or greater’’ means pipe with thicker pipe wall. (3) We are clarifying that the use of arithmetic interpolation to determine a design pressure rating at a specified temperature (i.e., ‘‘S’’ in the plastic pipe design formula in § 192.121) will not be allowed for PA–11 pipe. Arkema did not request that we permit such an 1 IPS means Iron Pipe Size, while CTS means copper tube size. These are recognized pipe size standards that refer to a nominal pipe diameter, not to the actual inside diameter (ID) or outside diameter (OD) of a pipe. IPS is generally used for pipe sizes 2 inches or greater; CTS is generally used for pipe sizes 2 inches or less. (1) Organizational Integrity Certification: ‘‘I hereby certify that [name of recipient], a recipient of the funds made available through this [grant, cooperative agreement, contract, or other funding instrument], has objective integrity and independence from any organization that engages in activities inconsistent with a policy opposing prostitution and sex trafficking.’’ (2) Acknowledgement Certification: ‘‘I further certify that the recipient acknowledges that these certifications are a prerequisite to receipt of U.S. Government funds in connection with this [grant, cooperative agreement, contract, or other funding instrument], and that any violation of these certifications shall be grounds for termination by HHS in accordance with the Federal Acquisition Regulations, Part 49 for contracts, 45 CFR Parts 74 or 92 for grants and cooperative agreements, as well as any other remedies as provided by law.’’ (3) Sub-Recipient Compliance Certification: ‘‘I further certify that the recipient will include these identical certification requirements in any [grant, cooperative agreement, contract, or other funding instrument] to a subrecipient of funds made available under this [grant, cooperative agreement, contract, or other funding instrument], and will require such sub-recipient to provide the same certifications that the recipient provided.’’ (e) Prime recipients and subrecipients of funds must file a renewed certification each Fiscal Year, in alignment with the award cycle. Prime recipients and sub-recipients that are already recipients as of the effective date of this regulation must file a certification upon any extension, amendment, or modification of the grant, cooperative agreement, contract, or other funding instrument that extends the term of such instrument, or adds additional funds to it. 2 SDR (standard dimension ratio) means the ratio of a pipe’s average specified outside diameter to the minimum specified wall thickness of the pipe. For any given pipe diameter, the higher the SDR, the thinner the pipe wall. Typical SDRs are specified in industry standards developed by the American National Standards Institute (ANSI). DEPARTMENT OF TRANSPORTATION Pipeline and Hazardous Materials Safety Administration 49 CFR Part 192 [Docket No. PHMSA–2005–21305] RIN 2137–AE26 Pipeline Safety: Polyamide–11 (PA–11) Plastic Pipe Design Pressures AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA); DOT. ACTION: Final rule. SUMMARY: This final rule amends the design factor and design pressure limits for natural gas pipelines made from new Polyamide–11 (PA–11) thermoplastic pipe. Together, these two changes in the regulations allow pipeline operators to operate certain pipelines constructed of new PA–11 pipe at higher operating pressures than is currently allowed for other plastic pipe materials. DATES: This final rule takes effect January 23, 2009. FOR FURTHER INFORMATION CONTACT: Richard Sanders at (405) 954–7214, or by e-mail at Richard.Sanders@dot.gov. SUPPLEMENTARY INFORMATION: Background PO 00000 Frm 00086 Fmt 4700 Sfmt 4700 E:\FR\FM\24DER1.SGM 24DER1

Agencies

[Federal Register Volume 73, Number 248 (Wednesday, December 24, 2008)]
[Rules and Regulations]
[Pages 78997-79002]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-30686]


=======================================================================
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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 88

RIN 0991-AB46


Office of Global Health Affairs; Regulation on the Organizational 
Integrity of Entities That Are Implementing Programs and Activities 
Under the Leadership Act

AGENCY: Office of Global Health Affairs, U.S. Department of Health and 
Human Services.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Global Health Affairs within the U.S. Department 
of Health and Human Services (``HHS'') is issuing this final rule to 
clarify that recipients of HHS funds to implement HIV/AIDS programs and 
activities under the United States Leadership Against HIV/AIDS, 
Tuberculosis and Malaria Act of 2003 (the ``Leadership Act''), Public 
Law 108-25 (May 27, 2003), that are required to have a policy opposing 
prostitution and sex trafficking, and must submit certification of this 
policy with the grant or contract application, may, consistent with 
this policy requirement, maintain an affiliation with organizations 
that do not have such a policy, provided such affiliations do not 
threaten the integrity of the government's programs and its message 
opposing prostitution and sex trafficking. The rule describes the 
separation that must exist between a recipient of HHS HIV/AIDS funds 
that has a policy opposing prostitution and sex trafficking, as 
required under section 301(f) of the Leadership Act, 22 U.S.C. 7631(f), 
and another organization that engages in activities that are not 
consistent with a policy opposing prostitution and sex trafficking.

DATES: This rule is effective January 20, 2009.

FOR FURTHER INFORMATION CONTACT: Jeanne Monahan, Office of Global 
Health Affairs, Hubert H. Humphrey Building, Room 639H, 200 
Independence Avenue, SW., Washington, DC 20201, Tel: 202.690.6174, E-
mail: Jeanne.monahan@hhs.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    The U.S. Government is opposed to prostitution and related 
activities, which are inherently harmful and dehumanizing, and 
contribute to the phenomenon of trafficking in persons. It is critical 
to the effectiveness of the Leadership Act, and to the U.S. 
Government's foreign policy that underlies this effort, that 
organizations that receive Leadership Act funds maintain the integrity 
of the Leadership Act programs and activities they implement, and not 
confuse the U.S. Government's message opposing prostitution and sex 
trafficking by holding positions that conflict with this policy.
    On April 17, 2008, HHS published in the Federal Register (73 FR 
20900), a Notice of Proposed Rulemaking (``NPRM'') regarding the 
requirement expressed in 22 U.S.C. 7631(f), which provides that 
organizations that are receiving Leadership Act funds must have a 
policy explicitly opposing prostitution and sex trafficking. 
Specifically, the NPRM described the legal, financial, and 
organizational separation that must exist between entities that receive 
grants, contracts, or cooperative agreements from HHS under the 
Leadership Act and another organization that engages in activities that 
are not consistent with a policy opposing prostitution and sex 
trafficking.
    A Notice of Correction of Proposed Rule to correct a technical 
error in the NPRM was published in the Federal Register (73 FR 29096). 
Although the public comment period initially closed on May 19, 2008, a 
Notice of Reopening of the Comment Period was published in the Federal 
Register (73 FR 36293), and the final date to submit comments on the 
NPRM was July 28, 2008.
    This final rule is designed to provide additional clarity for 
contracting and grant officers, contracting officers' technical 
representatives, program officials and implementing partners (e.g., 
grantees, contractors) of HHS regarding the application of language in 
Notices of Availability, Requests for Proposals, and other documents 
pertaining to the policy requirement expressed in 22 U.S.C. 7631(f). 
This final rule clarifies that the Government's organizational partners 
that have a policy opposing prostitution and sex trafficking may, 
consistent with this policy requirement, maintain an affiliation with 
organizations that do not have such a policy, provided such 
affiliations do not threaten the integrity of the Government's programs 
and its message opposing prostitution and sex trafficking, as specified 
in this final rule. To maintain program integrity, adequate separation, 
as outlined in this final rule, is required between an organization 
that expresses views on prostitution and sex trafficking contrary to 
the Government's message and any federally funded partner organization. 
Examples of activities inconsistent with a policy

[[Page 78998]]

opposing prostitution and sex trafficking include, but are not limited, 
to advocating for the legalization of the institution of prostitution 
or organizing or unionizing prostituted people for the purpose of 
advocating for the legalization of prostitution.
    This final rule applies to funds used by HHS to implement HIV/AIDS 
programs and activities under the Leadership Act. The rule includes 
certification language that organizations must provide to receive 
grants, cooperative agreements, contracts, and other funding 
instruments made available by HHS.
    All recipients that receive funds directly from HHS (``prime 
recipients'') must certify compliance with the final rule prior to 
actual receipt of such funds, in a written statement addressed to the 
HHS agency's grants or contract officer. The certifications by prime 
recipients are prerequisites to payment by HHS of any U.S. Government 
funds in connection with an award under the Leadership Act.
    All recipients must insert provisions to implement the applicable 
parts of this final rule in all sub-agreements under their awards. 
These provisions must be express terms and conditions of the sub-
agreement, must acknowledge that compliance with this final rule is a 
prerequisite to the receipt and expenditure of U.S. Government funds in 
connection with this document, and must acknowledge that any violation 
of the provisions shall be grounds for unilateral termination of the 
agreement, prior to the end of its term.
    Recipients must agree that HHS may, at any reasonable time, inspect 
the documents and materials maintained or prepared by the recipient 
that relate to the organization's compliance with this final rule.
    Nothing in this rule is intended to affect relevant prohibitions on 
Federal Government funding under other applicable Federal laws.

II. Discussion of the Final Rule

    These sections discuss the final rule by defining the terms 
relevant to this final rule and discussing the requirements that must 
be satisfied by organizations that receive Leadership Act funds.

Section 88.1 Definitions

    This section defines the terms that are pertinent to this rule. 
Specifically, we include the following definitions:
    ``Commercial Sex Act'' means any sex act on account of which 
anything of value is given to or received by any person.
    ``Prime Recipients'' are contractors, grantees, applicants or 
awardees that receive Leadership Act funds for HIV/AIDS programs 
directly from HHS.
    ``Prostitution'' means procuring or providing any commercial sex 
act.
    ``Recipients'' are contractors, grantees, applicants or awardees 
that receive Leadership Act funds for HIV/AIDS programs directly or 
indirectly from HHS. Recipients include both prime recipients and sub-
recipients.
    ``Sex Trafficking'' means the recruitment, harboring, 
transportation, provision, or obtaining of a person for the purpose of 
a commercial sex act.
    ``Sub-Recipients'' are contractors, grantees, applicants or 
awardees that receive Leadership Act funds for HIV/AIDS programs from 
other recipients rather than directly from HHS.

Section 88.2 Objective Integrity of Recipients

    This section of the final rule describes the separation that must 
exist between a recipient of funds from HHS to implement HIV/AIDS 
programs under the Leadership Act and another organization that engages 
in activities that are not consistent with a policy opposing 
prostitution and sex trafficking, as required under section 301(f) of 
the Leadership Act.
    Paragraph (a) sets forth criteria for establishing the objective 
integrity and independence that a recipient must have from another 
organization that engages in activities inconsistent with a policy 
opposing prostitution and sex trafficking.
    The criteria for organizational integrity and independence in this 
final rule is modeled on criteria upheld as facially constitutional by 
the U.S. Court of Appeals for the Second Circuit in Velazquez v. Legal 
Services Corp., 164 F.3d 757, 767 (2d Cir. 1999), and Brooklyn Legal 
Services Corp. v. Legal Services Corp., 462 F.3d 219, 229-33 (2d Cir. 
2006), cases involving similar organization-wide limitations applied to 
recipients of Federal funding.
    This final rule clarifies that an organization affiliated with a 
recipient of Leadership Act funds need not have a policy explicitly 
opposing prostitution and sex trafficking for the recipient to maintain 
compliance with the policy requirement. The affiliated organization's 
position on these issues will have no effect on the recipient's 
eligibility for Leadership Act funds, so long as the recipient 
satisfies the criteria for objective integrity and independence 
detailed in this final rule. By ensuring adequate separation between 
the recipient and affiliate, these criteria guard against a public 
perception that the affiliate's views on prostitution and sex 
trafficking may be attributed to the recipient, and thus to the 
Government, thereby avoiding the risk of confusing the Government's 
message opposing prostitution and sex trafficking. In addition, the 
separation also guards against a public perception that resources 
between affiliate and recipient are fungible, and thus Government funds 
could inadvertently subsidize other activities inconsistent with a 
policy opposing prostitution and sex trafficking.
    Under Paragraph (b) of this section, an organization is eligible to 
receive from HHS Federal funds made available under the Leadership Act 
only if it has provided the certifications required by section 88.3.

Section 88.3 Certifications

    This section of the rule describes the certifications required to 
receive Leadership Act funding from HHS.
    The certifications section contains an Organizational Integrity 
Certification, located at section 88.3(d)(1), in which a recipient of 
Leadership Act funds administered by an HHS agency certifies it has 
objective integrity and independence from any organization that engages 
in activities inconsistent with a policy opposing prostitution and sex 
trafficking.
    The certification section also contains Acknowledgement and Sub-
Recipient Compliance Certifications at section 88.3(d)(2) and (3). 
These require each recipient 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 HHS finds a 
certification to have been inaccurate or to have become inaccurate, and 
that the prime recipient will ensure all its sub-recipients provide the 
required certifications. A sub-recipient must provide the same 
certifications as those provided by the prime recipient. Paragraph (e) 
contains information regarding requirements for the renewal of the 
certifications. HHS requires each recipient to provide renewed 
certifications each Federal Fiscal Year, in alignment with the award 
cycle. Additionally, current 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.

III. Response to Public Comments

    In response to the proposed rule, the Office of Global Health 
Affairs received five written comments from Members of

[[Page 78999]]

Congress, a university law school, non-governmental organizations 
involved in public health and advocacy, and other organizations. The 
following is a summary of the comments and the responses from the HHS 
Office of Global Health Affairs:
    Comment: Several commenters argue that the proposed rule did not 
address the merits of the underlying policy requirement expressed in 
the Leadership Act, which provides that organizations that are 
receiving Leadership Act funds must have a policy explicitly opposing 
prostitution and sex trafficking. They state that the policy 
requirement in the Leadership Act runs contrary to best practices in 
public health efforts to stem the spread of HIV/AIDS and human 
trafficking, and the regulation appears to prohibit organizations 
receiving Leadership Act funds from participating in prevention 
programs that use strategies that involve those engaged in prostitution 
and sex trafficking.
    Response: The objective of the rule is to clarify that recipients 
of HHS HIV/AIDS funds that have adopted a policy opposing prostitution 
and sex trafficking may, consistent with this policy requirement, 
maintain an affiliation with other organizations that do not have such 
a policy, provided such affiliations do not threaten the integrity of 
the Government's programs and its message opposing prostitution and sex 
trafficking. In doing so, the rule describes the legal, financial, and 
organizational separation that must exist between these recipients of 
HHS funds and other organizations that engage in activities that are 
not consistent with a policy opposing prostitution and sex trafficking. 
The rule is not designed to address the merits of the policy 
requirement in the Leadership Act. Moreover, the rule does not prevent 
an organization from providing prevention, care and treatment to 
marginalized populations. In fact, most Leadership Act funds are going 
expressly for those purposes. Organizations around the world that 
receive Leadership Act funds, including those with extensive experience 
working directly with prostituted people, have stated they are in 
compliance with the requirement that they must have a policy opposing 
prostitution and sex trafficking.
    Comment: Several commenters note that the regulation does not 
define ``activities inconsistent with a policy opposing prostitution 
and sex trafficking.'' They state that the language of the regulation 
is vague and that there is confusion in the field about permissible 
activities. The commenters note that the broadness of the language of 
the rule increases the possibility that organizations will curtail 
effective programs for fear of being seen as supporting or promoting 
prostitution.
    Response: As stated above, the purpose of the rule is to describe 
the degree of separation that must exist between recipients of HHS HIV/
AIDS funds, who must have a policy opposing prostitution and sex 
trafficking, and other organizations who do not have such a policy, in 
order to preserve the integrity of the Government's message opposing 
prostitution and sex trafficking. The purpose of the rule is not to 
define activities that are inconsistent with a policy opposing 
prostitution and sex trafficking. As stated above, the rule does not 
prevent recipients of Leadership Act funds from providing prevention, 
care and treatment programs to marginalized populations, and 
organizations around the world that receive Leadership Act funds, 
including those with extensive experience working directly with 
prostituted people, have stated that they have a policy opposing 
prostitution and sex trafficking.
    Comment: One commenter notes that the regulation does not define 
``affiliate.'' The commenter writes that there are no limitations on 
organizations that might be considered affiliates. The commenter notes 
that the speech and activities of affiliate organizations will be 
scrutinized to a high degree, and that cooperation between non-
governmental organizations (``NGOs'') will be discouraged.
    Response: The Office of Global Health Affairs has determined that 
the term ``affiliate'' is not necessary to the rule, as the objective 
of the rule is to describe the degree of separation that must exist 
between recipients of Leadership Act funds and any other organizations 
that do not have a policy opposing prostitution and sex trafficking, 
regardless of whether these other organizations are technically defined 
as ``affiliates'' of the recipient. Consequently, the HHS Office of 
Global Health Affairs has deleted the term ``affiliate'' from the rule. 
Further, the separation requirements are designed to ensure the U.S. 
Government's message opposing prostitution and sex trafficking is not 
confused or diluted. Organizations may still cooperate with each other, 
provided that, if they receive Leadership Act funds for HIV/AIDS 
programs, they also have a policy opposing sex trafficking and 
prostitution, and remain sufficiently separate from organizations that 
do not have such a policy.
    Comment: Several commenters note that the level of separation 
required by the rule is unnecessary. The commenters state that the 
level of separation currently applied to faith-based organizations 
would be sufficient for recipients of HIV/AIDS funding. The commenters 
also claim that the rule is inconsistent with HHS's previous conclusion 
that, in the context of faith-based organizations, separation 
requirements of this sort are excessive.
    Response: The policy requirement in the Leadership Act is not 
analogous to the Federal Government's partnership with faith-based 
organizations. The Constitution of the United States requires the 
Government to be neutral on matters of faith and religion. However, the 
Constitution does not require the Government to be neutral on 
prostitution and sex trafficking. The United States is free to adopt 
policies that favor or disfavor activities related to prostitution and 
sex trafficking. In the Leadership Act, Congress chose to establish a 
policy that requires funding recipients to have a policy against 
prostitution and sex trafficking, which is inherently different from 
the neutrality the U.S. Government must exhibit towards faith-based 
organizations. The U.S. Government has found prostitution and sex 
trafficking to be degrading and harmful to those involved, and 
therefore a stronger separation standard is required than is 
established for faith-based organizations.
    This clearer form of separation is necessary to ensure that the 
U.S. Government policy against prostitution and sex trafficking is 
clear and not confused with a contrary policy held by a grantee or 
contractor.
    Comment: Several commenters argue that the regulation requires 
recipients to achieve a level of separation from affiliates that will 
be an undue burden on NGOs, and defies Congress' intent to promote 
efficiency in foreign aid. The commenters note that the level of 
separation required for recipients of HIV/AIDS funding is so stringent 
that recipients will not be able to set up affiliates. They note that 
having separate personnel and management factors will create lengthy 
delays in working in developing countries. They also claim that the 
separation requirements will harm the recipients' ability to raise 
money.
    Response: The burden and cost of the rule is unlikely to be 
significant for organizations that are receiving Leadership Act funds 
because the policy requirement has been in place for a number of years. 
Since 2004, over 18 billion dollars have supported HIV/AIDS prevention, 
care, and treatment programs, and these groups have stated

[[Page 79000]]

their compliance with section 301(f) of the Leadership Act. The rule 
does not alter the policy requirement. Rather, it clarifies that a 
recipient of Leadership Act funds may maintain an affiliation with an 
organization that does not have a policy opposing prostitution and sex 
trafficking if the two organizations are sufficiently separate.
    Comment: One commenter states that the policy undermines Congress' 
desire to promote public/private partnerships in the delivery of HIV/
AIDS services. The commenter claims that recipients will find it 
dangerous, and in some cases illegal, to work with other NGOs. The 
commenter notes that the separation requirements will force recipients 
to increase administrative costs, and will undercut organizations' 
ability to raise funds both from the Government and from the private 
sector.
    Response: The intent of the rule is not to prevent public/private 
partnerships, but to more clearly define the organizations that can 
enter into those partnerships and receive funding under the Leadership 
Act. The cost of the rule is unlikely to be significant for 
organizations receiving Leadership Act funds. Since 2004, HHS has 
required recipients of Leadership Act funds to certify their compliance 
with section 301(f) of the Leadership Act, and on July 23, 2007, the 
Office of Global Health Affairs issued a ``Guidance on Organizational 
Integrity,'' similar to this final regulation. The Office of Global 
Health Affairs instructed HHS agencies to disseminate the guidance to 
their contractors and grantees that receive funding under the 
Leadership Act, and provided means for the public to comment on the 
guidance, including whether the guidance is economically significant 
under definitions provided by the Office of Management and Budget 
(``OMB''). The Office of Global Health Affairs has received no comments 
on the guidance.

Regulatory Flexibility Act

    The Secretary certifies under 5 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. Since enactment of the policy requirement in the Leadership 
Act, HHS has required its contract solicitations and grant 
announcements for Leadership Act funding to include a section regarding 
``Prostitution and Related Activities.''

Executive Order 12866--Regulatory Planning and Review

    HHS has drafted and reviewed this regulation in accordance with 
Executive Order 12866, section 1(b), Principles of Regulation. HHS 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 promoting or 
advocating the legalization or the practice of prostitution and sex 
trafficking will (1) help further the U.S. Government's strategy to 
reduce sexual exploitation that fuels the spread of HIV/AIDS and 
opportunistic infections, such as tuberculosis and malaria, and (2) 
demonstrate the U.S. Government's opposition to prostitution and sex 
trafficking.
    The cost of this rule is unlikely to be significant, according to 
cost estimations, approximately $7337.10 in total. Since 2004, HHS has 
required recipients of Leadership Act funds to certify their compliance 
with section 301(f) of the Leadership Act. Further, the Office of 
Global Health Affairs issued a guidance, similar to this final rule, on 
July 23, 2007. The Office of Global Health Affairs instructed HHS 
agencies to disseminate the guidance to their contractors and grantees 
that receive funding under the Leadership Act, and provided means for 
the public to comment on the guidance, including whether the guidance 
is economically significant under definitions provided by OMB. The 
Office of Global Health Affairs has received no comments on the 
guidance.

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 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. HHS has determined that 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 final 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. 
This rule will not have an impact on family well-being, as defined in 
this legislation.

Paperwork Reduction Act

    To obtain or retain Leadership Act funding, HHS will require 
recipients to submit certifications. The title of the information 
collection is ``Certification Regarding the Organizational Integrity of 
Entities Implementing Leadership Act Programs and Activities.'' The 
documents are necessary to ensure that recipients of Leadership Act 
funding have objective integrity and independence from any 
organizations that engage in activities inconsistent with a policy 
opposing prostitution and sex trafficking.
    HHS estimates that 555 respondents will prepare documents to 
validate that recipients have objective integrity and independence from 
organizations that engage in activities inconsistent with policies 
opposing prostitution and sex trafficking. HHS also estimates that the 
average cost per hour will be $26.44, with \1/2\ hour estimated time 
burden per response. In total, the estimated burden cost is 
approximately $7337.10.
    HHS therefore estimates annual aggregate burden to collect the 
information as follows:

[[Page 79001]]



                                                                 Annual Burden Estimates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Number of     Average  burden
                    Instrument                         Number of      responses per      hours  per      Average cost     Total burden     Total burden
                                                      respondents       respondent        response         per hour          hours             cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Certifications....................................             555                1               .5           $26.44            277.5        $7,337.10
--------------------------------------------------------------------------------------------------------------------------------------------------------

    During the Notice of Revised Rulemaking (NPRM) process, HHS 
accepted comments from the public, in accordance with the Paperwork 
Reduction Act of 1995. HHS will submit this information collection to 
the Office of Management and Budget (OMB) for regular approval.
    Affected parties do not have to comply with the information 
collection requirements in the final rule until the Department of 
Health and Human Services publishes in the Federal Register the control 
numbers assigned by the Office of Management and Budget (OMB). 
Publication of the control numbers notifies the public that OMB has 
approved these information collection requirements under the Paperwork 
Reduction Act of 1995.

List of Subjects in 45 CFR Part 88

    Administrative practice and procedure, Federal aid programs, Grant 
programs, Grants administration.

    Dated: September 26, 2008.
William R. Steiger,
Director, Office of Global Health Affairs.
    Approved: October 22, 2008.
Michael O. Leavitt,
Secretary of Health and Human Services.

    Editorial Note: This document was received in the Office of the 
Federal Register on Friday, December 19, 2008.

0
For the reasons stated in the preamble, the Office of Global Health 
Affairs amends 45 CFR subtitle A to add Part 88 as follows:

PART 88-ORGANIZATIONAL INTEGRITY OF ENTITIES IMPLEMENTING PROGRAMS 
AND ACTIVITIES UNDER THE LEADERSHIP ACT

Sec.
88.1 Definitions.
88.2 Organizational integrity of recipients.
88.3 Certifications.

    Authority: 22 U.S.C. 7631(f) and 5 U.S.C. 301.


Sec.  88.1  Definitions.

0
For the purposes of this part:
    Commercial Sex Act means any sex act on account of which anything 
of value is given to or received by any person.
    Prime Recipients are contractors, grantees, applicants or awardees 
who receive Leadership Act funds for HIV/AIDS programs directly from 
HHS.
    Prostitution means procuring or providing any commercial sex act.
    Recipients are contractors, grantees, applicants or awardees who 
receive Leadership Act funds for HIV/AIDS programs directly or 
indirectly from HHS. Recipients include both prime recipients and sub-
recipients.
    Sex Trafficking means the recruitment, harboring, transportation, 
provision, or obtaining of a person for the purpose of a commercial sex 
act.
    Sub-Recipients are contractors, grantees, applicants or awardees, 
other than prime recipients, who receive Leadership Act funds for HIV/
AIDS programs from other recipients rather than directly from HHS.


Sec.  88.2  Organizational integrity of recipients.

    (a) A recipient must have objective integrity and independence from 
any organization that engages in activities inconsistent with a policy 
opposing prostitution and sex trafficking. A recipient will be found to 
have objective integrity and independence from such an organization if:
    (1) The organization is a legally separate entity;
    (2) The organization receives no transfer of Leadership Act funds, 
and Leadership Act funds do not subsidize activities inconsistent with 
a policy opposing prostitution and sex trafficking; and
    (3) The recipient is physically and financially separate from the 
organization. Mere bookkeeping separation of Leadership Act funds from 
other funds is not sufficient. HHS will determine, on a case-by-case 
basis and based on the totality of the facts, whether sufficient 
physical and financial separation exists. The presence or absence of 
any one or more factors will not be determinative. Factors relevant to 
this determination shall include, but will not be limited to, the 
following:
    (i) The existence of separate personnel, management, and 
governance;
    (ii) The existence of separate accounts, accounting records, and 
timekeeping records;
    (iii) The degree of separation from facilities, equipment and 
supplies used by the organization to conduct activities inconsistent 
with a policy opposing prostitution and sex trafficking, and the extent 
of such activities by the organization;
    (iv) The extent to which signs and other forms of identification 
that distinguish the recipient from the organization are present, and 
signs and materials that could be associated with the organization or 
activities inconsistent with a policy opposing prostitution and sex 
trafficking are absent; and
    (v) The extent to which HHS, the U.S. Government and the project 
name are protected from public association with the organization and 
its activities inconsistent with a policy opposing prostitution and sex 
trafficking in materials such as publications, conferences and press or 
public statements.


(b) An organization is ineligible to receive any Leadership Act funds 
unless it has provided the certifications required by Sec.  88.3.


Sec.  88.3  Certifications.

    (a) HHS agencies shall include the certification requirements for 
any grant, cooperative agreement, contract, or other funding instrument 
in the public announcement of the availability of the grant, 
cooperative agreement, contract, or other funding instrument.
    (b) Unless the recipient is otherwise excepted, a person authorized 
to bind the recipient shall execute the certifications for the grant, 
cooperative agreement, contract, or other funding instrument.
    (c) A prime recipient must submit its certifications to the grant 
or contract officer of the HHS agency that will award funds. A sub-
recipient must provide its certifications to the prime recipient. The 
prime recipient will submit certifications from its sub-recipients when 
requested to do so by the HHS grant or contract officer.
    (d) The certifications shall state as follows:

[[Page 79002]]

    (1) Organizational Integrity Certification: ``I hereby certify that 
[name of recipient], a recipient of the funds made available through 
this [grant, cooperative agreement, contract, or other funding 
instrument], has objective integrity and independence from any 
organization that engages in activities inconsistent with a policy 
opposing prostitution and sex trafficking.''
    (2) Acknowledgement Certification: ``I further certify that the 
recipient acknowledges that these certifications are a prerequisite to 
receipt of U.S. Government funds in connection with this [grant, 
cooperative agreement, contract, or other funding instrument], and that 
any violation of these certifications shall be grounds for termination 
by HHS in accordance with the Federal Acquisition Regulations, Part 49 
for contracts, 45 CFR Parts 74 or 92 for grants and cooperative 
agreements, as well as any other remedies as provided by law.''
    (3) Sub-Recipient Compliance Certification: ``I further certify 
that the recipient will include these identical certification 
requirements in any [grant, cooperative agreement, contract, or other 
funding instrument] to a sub-recipient of funds made available under 
this [grant, cooperative agreement, contract, or other funding 
instrument], and will require such sub-recipient to provide the same 
certifications that the recipient provided.''
    (e) Prime recipients and sub-recipients of funds must file a 
renewed certification each Fiscal Year, in alignment with the award 
cycle. Prime recipients and sub-recipients that are already recipients 
as of the effective date of this regulation must file a certification 
upon any extension, amendment, or modification of the grant, 
cooperative agreement, contract, or other funding instrument that 
extends the term of such instrument, or adds additional funds to it.

 [FR Doc. E8-30686 Filed 12-19-08; 4:15 pm]
BILLING CODE 4150-28-P