Application of Federal Law to LSC Recipients, 21654-21656 [2015-08974]
Download as PDF
<![CDATA[
mstockstill on DSK4VPTVN1PROD with RULES
21654
Federal Register / Vol. 80, No. 75 / Monday, April 20, 2015 / Rules and Regulations
272 note) do not apply. As required by
section 3 of Executive Order 12988 (61
FR 4729, February 7, 1996), in issuing
this rule, EPA has taken the necessary
steps to eliminate drafting errors and
ambiguity, minimize potential litigation,
and provide a clear legal standard for
affected conduct. EPA has complied
with Executive Order 12630 (53 FR
8859, March 15, 1988) by examining the
takings implications of the rule in
accordance with the ‘‘Attorney
General’s Supplemental Guidelines for
the Evaluation of Risk and Avoidance of
Unanticipated Takings’’ issued under
the executive order. This rule does not
impose an information collection
burden under the provisions of the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.). Executive Order
12898 (59 FR 7629, Feb. 16, 1994)
establishes federal executive policy on
environmental justice. Its main
provision directs federal agencies, to the
greatest extent practicable and
permitted by law, to make
environmental justice part of their
mission by identifying and addressing,
as appropriate, disproportionately high
and adverse human health or
environmental effects of their programs,
policies, and activities on minority
populations and low-income
populations in the United States.
Because this rule authorizes pre-existing
State rules which are at least equivalent
to, and no less stringent than existing
federal requirements, and imposes no
additional requirements beyond those
imposed by State law, and there are no
anticipated significant adverse human
health or environmental effects, the rule
is not subject to Executive Order 12898.
The Congressional Review Act, 5
U.S.C. 801 et seq., as added by the Small
Business Regulatory Enforcement
Fairness Act of 1996, generally provides
that before a rule may take effect, the
agency promulgating the rule must
submit a rule report, which includes a
copy of the rule, to each House of the
Congress and to the Comptroller General
of the United States. EPA will submit a
report containing this document and
other required information to the U.S.
Senate, the U.S. House of
Representatives, and the Comptroller
General of the United States prior to
publication in the Federal Register. A
major rule cannot take effect until 60
days after it is published in the Federal
Register. This action is not a ‘‘major
rule’’ as defined by 5 U.S.C. 804(2). This
action nevertheless will be effective 60
days after it is published, because it is
a direct final rule.
VerDate Sep<11>2014
16:33 Apr 17, 2015
Jkt 235001
List of Subjects in 40 CFR Part 271
Environmental protection, Hazardous
waste.
Authority: This action is issued under the
authority of sections 2002(a), 3006 and
7004(b) of the Solid Waste Disposal Act as
amended 42 U.S.C. 6912(a), 6926, 6974(b).
Dated: March 24, 2015.
H. Curtis Spalding,
Regional Administrator, EPA Region 1.
[FR Doc. 2015–08997 Filed 4–17–15; 8:45 am]
BILLING CODE 6560–50–P
LEGAL SERVICES CORPORATION
45 CFR Part 1640
Application of Federal Law to LSC
Recipients
Legal Services Corporation
Final rule.
AGENCY:
ACTION:
This final rule updates the
Legal Services Corporation (LSC or
Corporation) regulation on the
application of Federal law to LSC
recipients. The FY 1996 appropriations
act (incorporated in LSC’s
appropriations by reference annually
thereafter) subjects LSC recipients and
its employees and board members to
Federal law relating to the proper use of
Federal funds. This final rule provides
recipients with notice of the applicable
Federal laws each recipient and its
employees and board members must
agree to be subject to under this rule, the
consequences of a violation of an
applicable Federal law, and where LSC
will maintain the list of applicable laws.
DATES: This final rule will be effective
on May 20, 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 sdavis@lsc.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. History of This Rulemaking
Section 504(a)(19) of LSC’s FY 1996
appropriations act required LSC
recipients to enter into a contract that
subjected them to ‘‘all provisions of
Federal law relating to the proper use of
Federal funds.’’ Sec. 504(a)(19), Public
Law.= 104–134, title V; 110 Stat. 1321.
By its terms, a violation of Sec.
504(a)(19) renders any LSC grant or
contract null and void. The provision
has been incorporated by reference into
each of LSC’s annual appropriations act
since. Accordingly, the preamble and
text of this final rule continue to refer
PO 00000
Frm 00016
Fmt 4700
Sfmt 4700
to the relevant section number of the FY
1996 appropriations act.
The Corporation first issued 45 CFR
part 1640 as an interim rule in 1996 to
implement Sec. 504(a)(19). 61 FR 45760,
Aug. 29, 1996. The interim rule was put
in place to provide immediate guidance
to LSC recipients on legislation that was
already in effect and carried significant
penalties for noncompliance. Id. In the
preamble to the interim rule, LSC
announced that it was interpreting the
statutory phrase ‘‘all provisions of
Federal law relating to the proper use of
Federal funds’’ to mean ‘‘with respect to
[a recipient’s] LSC funds, all programs
should be subject to Federal laws which
address issues of waste, fraud and abuse
of Federal funds.’’ Id. LSC based its
interpretation on legislative history that
appeared to limit the applicable laws to
those dealing with fraud, waste, and
abuse of Federal funds.
In particular, LSC relied on two
congressional documents to support its
interpretation. First, the Corporation
cited to the House Report for H.R. 2076,
which was a prior effort to enact a
provision similar to section 504(a)(19).
The relevant language in that report
stated:
[S]ection 504(20) requires all programs
receiving Federal funds to comply with
Federal statutes and regulations governing
waste, fraud, and abuse of Federal funds.
H. Rep. No. 104–196, 104th Cong., 1st
Sess. 116 (July 1995) (emphasis added).
Second, LSC cited section 5 of H.R.
1806, the Legal Services Reform Act of
1995, which was an unsuccessful
attempt to revise the LSC Act. As an
extension of his remarks introducing
H.R. 1806, Rep. McCollum submitted a
partial summary of the bill, including a
discussion of section 5 entitled
‘‘Application of waste, fraud, and abuse
laws.’’ 141 Cong. Rec. E1220–21 (daily
ed. June 9, 1995). Section 5 itself was
titled ‘‘Protection Against Theft and
Fraud,’’ and expressly included
provisions of Title 18 of the U.S. Code
pertaining to criminal offenses
involving the misuse of Federal funds,
as well as provisions of the False Claims
Act. H.R. 1806, 104th Cong., § 5 (1995).
LSC adopted the list of statutes in
section 5, with one exception. Through
negotiation with LSC’s Office of
Inspector General (OIG), LSC
determined that two other criminal
statutes should be included in the list.
61 FR 45760, Aug. 29, 1996. These
statutes prohibit bribery of public
officials and witnesses and conspiracy
to defraud the United States. Id. at
45761.
Minor changes to the interim rule, not
affecting this list, were made before the
E:\FR\FM\20APR1.SGM
20APR1
mstockstill on DSK4VPTVN1PROD with RULES
Federal Register / Vol. 80, No. 75 / Monday, April 20, 2015 / Rules and Regulations
final rule was published in 1997. 62 FR
19424–19427, Apr. 21, 1997. LSC has
not revised Part 1640 since the
publication of the final rule.
Since the final rule was published,
Congress has amended or passed other
Federal laws relating to the proper use
of Federal funds. In 2014, OIG raised
concerns that the § 1640.2(a)(1) list of
applicable Federal laws is now underinclusive. As an example, OIG noted the
omission of 18 U.S.C. 666, which
prohibits theft or bribery concerning
programs receiving Federal funds and
has been the basis for OIG’s referrals to
the Department of Justice for
prosecution. Subsequently, LSC staff
researched other Federal laws
applicable to fraud, waste, and abuse of
Federal funds. The search revealed at
least two other Federal laws relating to
the proper use of Federal funds
currently missing from the § 1640.2(a)(1)
list: 18 U.S.C. 285—Taking or using
papers relating to claims, and 18 U.S.C.
1031—Major fraud against the United
States.
As required by the LSC Rulemaking
Protocol, LSC staff prepared an
explanatory rulemaking options paper,
accompanied by a proposed rule
amending Part 1640. On January 22,
2015, the Operations and Regulations
Committee (Committee) voted to
authorize LSC to initiate rulemaking
and to recommend that the LSC Board
of Directors (Board) approve publishing
the proposed rule. On January 24, 2015,
the Board approved the proposed rule
for publication in the Federal Register
for notice and comment. LSC published
the notice of the proposed rulemaking
(the NPRM) in the Federal Register on
February 3, 2015. 80 FR 5016, Feb. 3,
2015. The comment period remained
open for thirty days and closed on
March 5, 2015.
On April 12, 2015, the Committee
considered the draft final rule for
publication and voted to recommend its
publication to the Board, subject to one
amendment. The Committee voted to
amend the language in § 1640.2(a) to
explicitly state that the Board would
vote at a public meeting on any
proposed changes to the list of Federal
laws relating to the proper use of
Federal funds. The Committee made
this amendment in response to a
comment made during the meeting by
the National Legal Aid and Defender
Association (NLADA) expressing its
position that proposed changes to the
list should be subject to public comment
prior to adoption by the Board. On April
14, 2015, the Board voted to adopt and
publish the final rule as amended.
Material regarding this rulemaking is
available in the open rulemaking section
VerDate Sep<11>2014
16:33 Apr 17, 2015
Jkt 235001
of LSC’s Web site at https://www.lsc.gov/
about/regulations-rules/openrulemaking. After the effective date of
the rule, those materials will appear in
the closed rulemaking section at
https://www.lsc.gov/about/regulationsrules/closed-rulemaking.
II. Section-by-Section Discussion of
Comments and Regulatory Provisions
LSC received two comments during
the public comment period. One
comment was submitted by an LSCfunded recipient, Colorado Legal
Services (CLS). The other comment was
submitted by the non-LSC-funded nonprofit NLADA through its Civil Policy
Group and its Regulations and Policy
Committee. Both commenters were
generally supportive of the changes LSC
proposed to Part 1640.
Proposed § 1640.1—Purpose
LSC proposed revising this section to
reflect the changes to Part 1640,
specifically removing the language
stating that the applicable Federal laws
were identified in Part 1640. LSC
received no comments on this proposal.
Proposed § 1640.2—Applicable Federal
Laws
LSC proposed deleting the existing
§ 1640.2(a)(1) list of applicable Federal
laws. The contracts between the
Corporation and its recipients, currently
referred to as the LSC Grant Assurances,
will be modified to provide recipients
with a weblink to the updated list. LSC
proposed a new § 1640.2(a), which
states that the Corporation will maintain
a public list of applicable Federal law
on the Corporation’s Web site. LSC
stated in the preamble of the NPRM that
the list would be exhaustive but did not
specifically use that term in the
proposed rule text.
Comment 1: NLADA and CLS both
expressed concern that LSC’s decision
to move the list of applicable Federal
laws from the rule to LSC’s Web site
would decrease stakeholders’ ability to
comment on proposed changes to the
list. NLADA noted that this was the
second proposal by LSC in the past year
to remove a section of a regulation from
the usual rulemaking process. NLADA
stated: ‘‘While we understand and
support LSC’s desire in this instance to
avoid an unnecessary, time-consuming
regulatory process, we want to confirm
NLADA’s very strong support’’ for LSC’s
commitment, expressed in the 2002
rulemaking protocol, to ‘‘conduct its
rulemaking activities in a spirit of
cooperative dialog with [] recipients and
other interested parties.’’ CLS similarly
asserted that ‘‘[a]s LSC is a program
uniquely committed to protecting due
PO 00000
Frm 00017
Fmt 4700
Sfmt 4700
21655
process rights and protections, it should
adhere to them strictly itself and
provide an opportunity for comment
before the list of Federal laws relating to
the proper use of Federal funds by LSC
recipients is modified or changed.’’
Response: LSC views updating the list
of applicable Federal laws to be an
administrative task that does not affect
the underlying substance of the rule.
Updating the list does not materially
change the Part 1640 requirement that
recipients, and its employees and board
members, comply with Federal laws
relating to the proper use of Federal
funds.
Although the regulation does not
require notice and an opportunity for
comment before submitting
modifications of the list to the Board for
approval, LSC remains committed to
providing recipients with notice of any
proposed modifications before a Board
meeting. Recipients will have an
opportunity to comment on the
proposed modifications prior to and at
the meeting where the modifications
will be discussed.
Comment 2: CLS and NLADA
supported LSC’s decision to make the
list of applicable Federal laws
exhaustive. In its comment, NLADA
recommended that LSC include
language in the text of the rule stating
that the list is exhaustive.
Response: LSC will adopt NLADA’s
recommendation. LSC will revise the
first sentence of § 1640.2(a) to read:
‘‘LSC will maintain an exhaustive list of
applicable Federal laws relating to the
proper use of Federal funds on its Web
site and provide recipients with a link
to the list in the contractual agreement.’’
LSC proposed renumbering
§ 1640.2(a)(2) as § 1640.2(b) and revising
the language for clarity and readability.
No substantive changes were made to
this subsection. LSC received no
comments on this proposal. LSC
proposed redesignating existing
§ 1640.2(b)(1) and (2) as § 1640.4(a) and
(c) respectively.
Proposed § 1640.3—Contractual
Agreement
LSC proposed revising existing
§ 1640.3 for clarity and readability. No
substantive changes were made to this
subsection. LSC received no comments
on this proposal.
Proposed § 1640.4—Violation of
Agreement
LSC proposed redesignating existing
§ 1640.2(b)(1) and (2) as § 1640.4(a) and
(c) respectively. The proposed move
groups each definition in existing
§ 1640.2(b) with each definition’s
consequence for violating the agreement
E:\FR\FM\20APR1.SGM
20APR1
21656
Federal Register / Vol. 80, No. 75 / Monday, April 20, 2015 / Rules and Regulations
in existing § 1640.4. No substantive
changes were made, but the text has
been revised for clarity and readability
throughout the section. LSC received no
comments on this proposal.
List of Subjects in 45 CFR part 1640
Fraud; Grant programs—law; Legal
services.
For the reasons stated in the
preamble, the Legal Services
Corporation revises 45 CFR part 1640 to
read as follows:
PART 1640—APPLICATION OF
FEDERAL LAW TO LSC RECIPIENTS
Sec.
1640.1
1640.2
1640.3
1640.4
Purpose.
Applicable Federal laws.
Contractual agreement.
Violation of agreement.
Authority: 42 U.S.C. 2996e(g).
§ 1640.1
Purpose.
The purpose of this part is to ensure
that recipients use their LSC funds in
accordance with Federal law related to
the proper use of Federal funds. This
part also provides notice to recipients of
the consequences of a violation of such
Federal laws by a recipient, its
employees or board members.
§ 1640.2
Applicable federal laws.
(a) LSC will maintain an exhaustive
list of applicable Federal laws relating
to the proper use of Federal funds on its
Web site and provide recipients with a
link to the list in the contractual
agreement. The list may be modified
with the approval of the Corporation’s
Board of Directors at a public meeting.
LSC will provide recipients with notice
when the list is modified.
(b) For the purposes of this part and
the laws referenced in paragraph (a) of
this section, LSC is considered a Federal
agency and a recipient’s LSC funds are
considered Federal funds provided by
grant or contract.
mstockstill on DSK4VPTVN1PROD with RULES
§ 1640.3
Contractual agreement.
As a condition of receiving LSC
funds, a recipient must enter into a
written agreement with the Corporation
that, with respect to its LSC funds, will
subject the recipient to the applicable
Federal laws relating to the proper use
of Federal funds. The agreement must
include a statement that all of the
recipient’s employees and board
members have been informed of such
Federal law and of the consequences of
a violation of such law, both to the
recipient and to themselves as
individuals.
VerDate Sep<11>2014
16:33 Apr 17, 2015
Jkt 235001
§ 1640.4
Violation of agreement.
(a) LSC will determine that a recipient
has violated the agreement described in
§ 1640.3 when the recipient has been
convicted of, or judgment has been
entered against the recipient for, a
violation of an applicable Federal law
relating to the proper use of Federal
funds with respect to its LSC grant or
contract, by the court having
jurisdiction of the matter, and any
appeals of the conviction or judgment
have been exhausted or the time for
appeal has expired.
(b) A violation of the agreement by a
recipient based on recipient conduct
will result in the Corporation
terminating the recipient’s LSC grant or
contract without need for a termination
hearing. While an appeal of a conviction
or judgment is pending, the Corporation
may take any necessary steps to
safeguard its funds.
(c) LSC will determine that the
recipient has violated the agreement
described in § 1640.3 when an employee
or board member of the recipient has
been convicted of, or judgment has been
entered against the employee or board
member for, a violation of an applicable
Federal law relating to the proper use of
Federal funds with respect to the
recipient’s grant or contract with LSC,
by the court having jurisdiction of the
matter, and any appeals of the
conviction or judgment have been
exhausted or the time for appeal has
expired, and the Corporation finds that
the recipient has knowingly or through
gross negligence allowed the employee
or board member to engage in such
activities.
(d) A violation of the agreement by
the recipient based on employee or
board member conduct will result in the
Corporation terminating the recipient’s
LSC grant or contract. Prior to
termination, the Corporation will
provide notice and an opportunity to be
heard for the sole purpose of
determining whether the recipient
knowingly or through gross negligence
allowed the employee or board member
to engage in the activities leading to the
conviction or judgment. While an
appeal of a conviction or judgment or a
hearing is pending, the Corporation may
take any necessary steps to safeguard its
funds.
Dated: April 15, 2015.
Stefanie K. Davis,
Assistant General Counsel.
[FR Doc. 2015–08974 Filed 4–17–15; 8:45 am]
Frm 00018
Fmt 4700
Defense Acquisition Regulations
System
[Docket Number DARS–2015–0018]
48 CFR Parts 205, 206, 208, 210, 213,
215, and 216
Defense Federal Acquisition
Regulation Supplement; Technical
Amendments
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is making technical
amendments to the Defense Federal
Acquisition Regulation Supplement
(DFARS) to provide needed editorial
changes.
SUMMARY:
DATES:
Effective April 20, 2015.
Mr.
Manuel Quinones, Defense Acquisition
Regulations System,
OUSD(AT&L)DPAP(DARS), Room
3B941, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Telephone 571–372–6088; facsimile
571–372–6094.
SUPPLEMENTARY INFORMATION: This final
rule amends the DFARS as follows:
1. Directs contracting officers to
additional procedures and guidance by
adding references at—
• DFARS 205.205.205–71 to DFARS
Procedures, Guidance and Information
(PGI) 206.302–1(d);
• DFARS 206.000 to PGI 206.000;
• DFARS 206.302–1(d) to PGI
206.302–1(d);
• DFARS 206.303–2 to PGI 206.303–
2(b)(i);
• DFARS 206.304(a)(S–70) to PGI
206.304(a)(S–70);
• DFARS 208.405–6 to PGI 208.405–
6;
• DFARS 210.002 to PGI
210.002(e)(ii);
• DFARS 213.104 to PGI 213.104;
• DFARS 213.500–70 to PGI 215.371–
2;
• DFARS 213.501 to PGI
206.304(a)(S–70);
• DFARS 215.371–2 to PGI 215.371–
2; and
• DFARS 216.505(b)(2) to PGI
216.505(b)(2).
2. Revises paragraph structure of
sections 210.002 and 215.371–2.
FOR FURTHER INFORMATION CONTACT:
List of Subjects in 48 CFR Parts 205,
206, 208, 210, 213, 215, and 216
Government procurement.
BILLING CODE 7050–01–P
PO 00000
DEPARTMENT OF DEFENSE
Sfmt 4700
E:\FR\FM\20APR1.SGM
20APR1
]]>Agencies
[Federal Register Volume 80, Number 75 (Monday, April 20, 2015)]
[Rules and Regulations]
[Pages 21654-21656]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-08974]
=======================================================================
-----------------------------------------------------------------------
LEGAL SERVICES CORPORATION
45 CFR Part 1640
Application of Federal Law to LSC Recipients
AGENCY: Legal Services Corporation
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule updates the Legal Services Corporation (LSC or
Corporation) regulation on the application of Federal law to LSC
recipients. The FY 1996 appropriations act (incorporated in LSC's
appropriations by reference annually thereafter) subjects LSC
recipients and its employees and board members to Federal law relating
to the proper use of Federal funds. This final rule provides recipients
with notice of the applicable Federal laws each recipient and its
employees and board members must agree to be subject to under this
rule, the consequences of a violation of an applicable Federal law, and
where LSC will maintain the list of applicable laws.
DATES: This final rule will be effective on May 20, 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 sdavis@lsc.gov.
SUPPLEMENTARY INFORMATION:
I. History of This Rulemaking
Section 504(a)(19) of LSC's FY 1996 appropriations act required LSC
recipients to enter into a contract that subjected them to ``all
provisions of Federal law relating to the proper use of Federal
funds.'' Sec. 504(a)(19), Public Law.= 104-134, title V; 110 Stat.
1321. By its terms, a violation of Sec. 504(a)(19) renders any LSC
grant or contract null and void. The provision has been incorporated by
reference into each of LSC's annual appropriations act since.
Accordingly, the preamble and text of this final rule continue to refer
to the relevant section number of the FY 1996 appropriations act.
The Corporation first issued 45 CFR part 1640 as an interim rule in
1996 to implement Sec. 504(a)(19). 61 FR 45760, Aug. 29, 1996. The
interim rule was put in place to provide immediate guidance to LSC
recipients on legislation that was already in effect and carried
significant penalties for noncompliance. Id. In the preamble to the
interim rule, LSC announced that it was interpreting the statutory
phrase ``all provisions of Federal law relating to the proper use of
Federal funds'' to mean ``with respect to [a recipient's] LSC funds,
all programs should be subject to Federal laws which address issues of
waste, fraud and abuse of Federal funds.'' Id. LSC based its
interpretation on legislative history that appeared to limit the
applicable laws to those dealing with fraud, waste, and abuse of
Federal funds.
In particular, LSC relied on two congressional documents to support
its interpretation. First, the Corporation cited to the House Report
for H.R. 2076, which was a prior effort to enact a provision similar to
section 504(a)(19). The relevant language in that report stated:
[S]ection 504(20) requires all programs receiving Federal funds to
comply with Federal statutes and regulations governing waste, fraud,
and abuse of Federal funds.
H. Rep. No. 104-196, 104th Cong., 1st Sess. 116 (July 1995) (emphasis
added). Second, LSC cited section 5 of H.R. 1806, the Legal Services
Reform Act of 1995, which was an unsuccessful attempt to revise the LSC
Act. As an extension of his remarks introducing H.R. 1806, Rep.
McCollum submitted a partial summary of the bill, including a
discussion of section 5 entitled ``Application of waste, fraud, and
abuse laws.'' 141 Cong. Rec. E1220-21 (daily ed. June 9, 1995). Section
5 itself was titled ``Protection Against Theft and Fraud,'' and
expressly included provisions of Title 18 of the U.S. Code pertaining
to criminal offenses involving the misuse of Federal funds, as well as
provisions of the False Claims Act. H.R. 1806, 104th Cong., Sec. 5
(1995).
LSC adopted the list of statutes in section 5, with one exception.
Through negotiation with LSC's Office of Inspector General (OIG), LSC
determined that two other criminal statutes should be included in the
list. 61 FR 45760, Aug. 29, 1996. These statutes prohibit bribery of
public officials and witnesses and conspiracy to defraud the United
States. Id. at 45761.
Minor changes to the interim rule, not affecting this list, were
made before the
[[Page 21655]]
final rule was published in 1997. 62 FR 19424-19427, Apr. 21, 1997. LSC
has not revised Part 1640 since the publication of the final rule.
Since the final rule was published, Congress has amended or passed
other Federal laws relating to the proper use of Federal funds. In
2014, OIG raised concerns that the Sec. 1640.2(a)(1) list of
applicable Federal laws is now under-inclusive. As an example, OIG
noted the omission of 18 U.S.C. 666, which prohibits theft or bribery
concerning programs receiving Federal funds and has been the basis for
OIG's referrals to the Department of Justice for prosecution.
Subsequently, LSC staff researched other Federal laws applicable to
fraud, waste, and abuse of Federal funds. The search revealed at least
two other Federal laws relating to the proper use of Federal funds
currently missing from the Sec. 1640.2(a)(1) list: 18 U.S.C. 285--
Taking or using papers relating to claims, and 18 U.S.C. 1031--Major
fraud against the United States.
As required by the LSC Rulemaking Protocol, LSC staff prepared an
explanatory rulemaking options paper, accompanied by a proposed rule
amending Part 1640. On January 22, 2015, the Operations and Regulations
Committee (Committee) voted to authorize LSC to initiate rulemaking and
to recommend that the LSC Board of Directors (Board) approve publishing
the proposed rule. On January 24, 2015, the Board approved the proposed
rule for publication in the Federal Register for notice and comment.
LSC published the notice of the proposed rulemaking (the NPRM) in the
Federal Register on February 3, 2015. 80 FR 5016, Feb. 3, 2015. The
comment period remained open for thirty days and closed on March 5,
2015.
On April 12, 2015, the Committee considered the draft final rule
for publication and voted to recommend its publication to the Board,
subject to one amendment. The Committee voted to amend the language in
Sec. 1640.2(a) to explicitly state that the Board would vote at a
public meeting on any proposed changes to the list of Federal laws
relating to the proper use of Federal funds. The Committee made this
amendment in response to a comment made during the meeting by the
National Legal Aid and Defender Association (NLADA) expressing its
position that proposed changes to the list should be subject to public
comment prior to adoption by the Board. On April 14, 2015, the Board
voted to adopt and publish the final rule as amended.
Material regarding this rulemaking is available in the open
rulemaking section of LSC's Web site at https://www.lsc.gov/about/regulations-rules/open-rulemaking. After the effective date of the
rule, those materials will appear in the closed rulemaking section at
https://www.lsc.gov/about/regulations-rules/closed-rulemaking.
II. Section-by-Section Discussion of Comments and Regulatory Provisions
LSC received two comments during the public comment period. One
comment was submitted by an LSC-funded recipient, Colorado Legal
Services (CLS). The other comment was submitted by the non-LSC-funded
non-profit NLADA through its Civil Policy Group and its Regulations and
Policy Committee. Both commenters were generally supportive of the
changes LSC proposed to Part 1640.
Proposed Sec. 1640.1--Purpose
LSC proposed revising this section to reflect the changes to Part
1640, specifically removing the language stating that the applicable
Federal laws were identified in Part 1640. LSC received no comments on
this proposal.
Proposed Sec. 1640.2--Applicable Federal Laws
LSC proposed deleting the existing Sec. 1640.2(a)(1) list of
applicable Federal laws. The contracts between the Corporation and its
recipients, currently referred to as the LSC Grant Assurances, will be
modified to provide recipients with a weblink to the updated list. LSC
proposed a new Sec. 1640.2(a), which states that the Corporation will
maintain a public list of applicable Federal law on the Corporation's
Web site. LSC stated in the preamble of the NPRM that the list would be
exhaustive but did not specifically use that term in the proposed rule
text.
Comment 1: NLADA and CLS both expressed concern that LSC's decision
to move the list of applicable Federal laws from the rule to LSC's Web
site would decrease stakeholders' ability to comment on proposed
changes to the list. NLADA noted that this was the second proposal by
LSC in the past year to remove a section of a regulation from the usual
rulemaking process. NLADA stated: ``While we understand and support
LSC's desire in this instance to avoid an unnecessary, time-consuming
regulatory process, we want to confirm NLADA's very strong support''
for LSC's commitment, expressed in the 2002 rulemaking protocol, to
``conduct its rulemaking activities in a spirit of cooperative dialog
with [] recipients and other interested parties.'' CLS similarly
asserted that ``[a]s LSC is a program uniquely committed to protecting
due process rights and protections, it should adhere to them strictly
itself and provide an opportunity for comment before the list of
Federal laws relating to the proper use of Federal funds by LSC
recipients is modified or changed.''
Response: LSC views updating the list of applicable Federal laws to
be an administrative task that does not affect the underlying substance
of the rule. Updating the list does not materially change the Part 1640
requirement that recipients, and its employees and board members,
comply with Federal laws relating to the proper use of Federal funds.
Although the regulation does not require notice and an opportunity
for comment before submitting modifications of the list to the Board
for approval, LSC remains committed to providing recipients with notice
of any proposed modifications before a Board meeting. Recipients will
have an opportunity to comment on the proposed modifications prior to
and at the meeting where the modifications will be discussed.
Comment 2: CLS and NLADA supported LSC's decision to make the list
of applicable Federal laws exhaustive. In its comment, NLADA
recommended that LSC include language in the text of the rule stating
that the list is exhaustive.
Response: LSC will adopt NLADA's recommendation. LSC will revise
the first sentence of Sec. 1640.2(a) to read: ``LSC will maintain an
exhaustive list of applicable Federal laws relating to the proper use
of Federal funds on its Web site and provide recipients with a link to
the list in the contractual agreement.''
LSC proposed renumbering Sec. 1640.2(a)(2) as Sec. 1640.2(b) and
revising the language for clarity and readability. No substantive
changes were made to this subsection. LSC received no comments on this
proposal. LSC proposed redesignating existing Sec. 1640.2(b)(1) and
(2) as Sec. 1640.4(a) and (c) respectively.
Proposed Sec. 1640.3--Contractual Agreement
LSC proposed revising existing Sec. 1640.3 for clarity and
readability. No substantive changes were made to this subsection. LSC
received no comments on this proposal.
Proposed Sec. 1640.4--Violation of Agreement
LSC proposed redesignating existing Sec. 1640.2(b)(1) and (2) as
Sec. 1640.4(a) and (c) respectively. The proposed move groups each
definition in existing Sec. 1640.2(b) with each definition's
consequence for violating the agreement
[[Page 21656]]
in existing Sec. 1640.4. No substantive changes were made, but the
text has been revised for clarity and readability throughout the
section. LSC received no comments on this proposal.
List of Subjects in 45 CFR part 1640
Fraud; Grant programs--law; Legal services.
For the reasons stated in the preamble, the Legal Services
Corporation revises 45 CFR part 1640 to read as follows:
PART 1640--APPLICATION OF FEDERAL LAW TO LSC RECIPIENTS
Sec.
1640.1 Purpose.
1640.2 Applicable Federal laws.
1640.3 Contractual agreement.
1640.4 Violation of agreement.
Authority: 42 U.S.C. 2996e(g).
Sec. 1640.1 Purpose.
The purpose of this part is to ensure that recipients use their LSC
funds in accordance with Federal law related to the proper use of
Federal funds. This part also provides notice to recipients of the
consequences of a violation of such Federal laws by a recipient, its
employees or board members.
Sec. 1640.2 Applicable federal laws.
(a) LSC will maintain an exhaustive list of applicable Federal laws
relating to the proper use of Federal funds on its Web site and provide
recipients with a link to the list in the contractual agreement. The
list may be modified with the approval of the Corporation's Board of
Directors at a public meeting. LSC will provide recipients with notice
when the list is modified.
(b) For the purposes of this part and the laws referenced in
paragraph (a) of this section, LSC is considered a Federal agency and a
recipient's LSC funds are considered Federal funds provided by grant or
contract.
Sec. 1640.3 Contractual agreement.
As a condition of receiving LSC funds, a recipient must enter into
a written agreement with the Corporation that, with respect to its LSC
funds, will subject the recipient to the applicable Federal laws
relating to the proper use of Federal funds. The agreement must include
a statement that all of the recipient's employees and board members
have been informed of such Federal law and of the consequences of a
violation of such law, both to the recipient and to themselves as
individuals.
Sec. 1640.4 Violation of agreement.
(a) LSC will determine that a recipient has violated the agreement
described in Sec. 1640.3 when the recipient has been convicted of, or
judgment has been entered against the recipient for, a violation of an
applicable Federal law relating to the proper use of Federal funds with
respect to its LSC grant or contract, by the court having jurisdiction
of the matter, and any appeals of the conviction or judgment have been
exhausted or the time for appeal has expired.
(b) A violation of the agreement by a recipient based on recipient
conduct will result in the Corporation terminating the recipient's LSC
grant or contract without need for a termination hearing. While an
appeal of a conviction or judgment is pending, the Corporation may take
any necessary steps to safeguard its funds.
(c) LSC will determine that the recipient has violated the
agreement described in Sec. 1640.3 when an employee or board member of
the recipient has been convicted of, or judgment has been entered
against the employee or board member for, a violation of an applicable
Federal law relating to the proper use of Federal funds with respect to
the recipient's grant or contract with LSC, by the court having
jurisdiction of the matter, and any appeals of the conviction or
judgment have been exhausted or the time for appeal has expired, and
the Corporation finds that the recipient has knowingly or through gross
negligence allowed the employee or board member to engage in such
activities.
(d) A violation of the agreement by the recipient based on employee
or board member conduct will result in the Corporation terminating the
recipient's LSC grant or contract. Prior to termination, the
Corporation will provide notice and an opportunity to be heard for the
sole purpose of determining whether the recipient knowingly or through
gross negligence allowed the employee or board member to engage in the
activities leading to the conviction or judgment. While an appeal of a
conviction or judgment or a hearing is pending, the Corporation may
take any necessary steps to safeguard its funds.
Dated: April 15, 2015.
Stefanie K. Davis,
Assistant General Counsel.
[FR Doc. 2015-08974 Filed 4-17-15; 8:45 am]
BILLING CODE 7050-01-P
