Union Calendar No. 136

104TH CONGRESS

1ST SESSION H. R. 2277

[Report No. 104–255]

A BILL

To abolish the Legal Services Corporation and proservices. vide the States with money to fund qualified legal

SEPTEMBER 21, 1995

Reported with an amendment, committed to the Commitordered to be printed tee of the Whole House on the State of the Union, and
IB

Union Calendar No. 136

104TH CONGRESS

1ST SESSION H. R. 2277

[Report No. 104–255]

To abolish the Legal Services Corporation and provide the States with money

to fund qualified legal services.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 7, 1995

Mr. GEKAS (for himself, Mr. ARMEY, Mr. HYDE, and Mr. INGLIS of South

Carolina) introduced the following bill; which was referred to the Committee on the Judiciary

SEPTEMBER 21, 1995

Additional sponsors: Mr. MILLER of Florida and Mr. ROHRABACHER

SEPTEMBER 21, 1995

Reported with an amendment, committed to the Committee of the Whole

House on the State of the Union, and ordered to be printed

[Strike out all after the enacting clause and insert the part printed in italic]

[For text of introduced bill, see copy of bill as introduced on September 7, 1995]

A BILL

To abolish the Legal Services Corporation and provide the

States with money to fund qualified legal services.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Legal Aid Act of 1995’’.

3 SEC. 2. LEGAL SERVICES CORPORATION.

4 The Legal Services Corporation Act (42 U.S.C. 2996–

5 2996l) is amended to read as follows:

6 ‘‘SECTION 1. SHORT TITLE.

7 ‘‘This Act may be cited as the ‘Legal Aid Grant Act’.

8 ‘‘SEC. 2. DEFINITIONS.

9 ‘‘For purposes of this Act:

10 ‘‘(1) QUALIFIED LEGAL SERVICE PROVIDER.—

11 ‘‘(A) IN GENERAL.—The term ‘qualified

12 legal service provider’ means—

13 ‘‘(i) any individual who is licensed to

14 practice law in a State for not less than 3

15 calendar years, who has practiced law in

16 such State not less than 3 calendar years,

17 and who is so licensed during the period of

18 a contract under section 4; or

19 ‘‘(ii) a person who employs or con20 tracts with an individual described in

21 clause (i) to provide qualified legal services.

22 Nothing in this subparagraph shall be inter23 preted to prohibit a qualified legal service pro24 vider from employing an individual who is not

25 described in clause (i) to assist in providing

26 qualified legal services.
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1 ‘‘(B) NOT QUALIFIED.—No individual shall

2 be considered, or employed by, a qualified legal

3 service provider if such individual during the 10

4 years preceding the submission of a bid for a

5 contract under section 4—

6 ‘‘(i) has been convicted of a felony; or

7 ‘‘(ii) has been suspended or disbarred

8 from the practice of law for misconduct, in9 competence, or neglect of a client in any

10 State; or

11 if such individual has a criminal charge pending

12 on the date of the submission of a bid for a con13 tract under section 4. In determining whether to

14 award a contract under section 4, a State may

15 also consider, to the extent the State considers it

16 relevant in evaluating the qualifications of an

17 applicant, whether an applicant has been found

18 in contempt of a court of competent jurisdiction

19 in any State or Federal court or has been sanc20 tioned under Federal Rule of Civil Procedure 11

21 or an equivalent State rule of procedure applica22 ble in civil actions.

23 ‘‘(C) ADDITIONAL REQUIREMENTS.—No

24 State may impose a requirement on an individ25 ual or person as a condition to bidding on a
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1 contract under section 4 or to being awarded

2 such a contract which requirement is different

3 from any other requirement of subparagraph

4 (B).

5 ‘‘(2) QUALIFIED LEGAL SERVICES.—The term

6 ‘qualified legal services’ means—

7 ‘‘(A) mediation, negotiation, arbitration,

8 counseling, advice, instruction, referral, or rep9 resentation, and

10 ‘‘(B) legal research or drafting in support of

11 the services described in subparagraph (A),

12 provided by or under the supervision of a qualified

13 legal service provider to a qualified client for a quali14 fied cause of action.

15 ‘‘(3) QUALIFIED CLIENT.—The term ‘qualified

16 client’ means any individual who is a United States

17 citizen or an alien admitted for permanent residence

18 who in the 3 months prior to seeking legal assistance

19 from a qualified legal service provider had an income

20 from any source which was equal to or less than the

21 poverty line established under section 673(2) of the

22 Community Services Block Grant Act (42 U.S.C.

23 9902(2)).

24 ‘‘(4) QUALIFIED CAUSE OF ACTION.—
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1 ‘‘(A) The term ‘qualified cause of action’

2 means only a civil cause of action which results

3 only from—

4 ‘‘(i) landlord and tenant disputes, in5 cluding an eviction from housing except an

6 eviction where the prima facie case for the

7 eviction is based on criminal conduct;

8 ‘‘(ii) foreclosure of a debt on a quali9 fied client’s residence;

10 ‘‘(iii) the filing of a petition under

11 chapter 7 or 12 of title 11, United States

12 Code, or under chapter 13 of such title un13 less a petition of eviction has preceded the

14 filing of such petition;

15 ‘‘(iv) enforcement of a debt;

16 ‘‘(v) an application for a statutory

17 benefit;

18 ‘‘(vi) appeal of a denial of a statutory

19 benefit on a statutory ground;

20 ‘‘(vii) child custody and support;

21 ‘‘(viii) action to quiet title;

22 ‘‘(ix) activities involving spousal or

23 child abuse on behalf of the abused party;

24 ‘‘(x) an insurance claim;

25 ‘‘(xi) competency hearing;
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1 ‘‘(xii) probate;

2 ‘‘(xiii) divorce or separation;

3 ‘‘(xiv) employment matters; or

4 ‘‘(xv) consumer fraud.

5 Additional causes of action qualify as a qualified

6 cause of action if they arise out of the same

7 transaction as a cause of action described in this

8 subparagraph unless such additional causes of

9 action are described in clause (i) of subpara10 graph (B).

11 ‘‘(B) Such term does not include—

12 ‘‘(i) a class action under Federal,

13 State, or local law; or

14 ‘‘(ii) any challenge to the constitu15 tionality of any statute.

16 ‘‘(5) STATE.—The term ‘State’ means any State

17 of the United States, the District of Columbia, the

18 Commonwealth of Puerto Rico, the Virgin Islands,

19 Guam, American Samoa, the Trust Territory of the

20 Pacific Islands, and any other territory or possession

21 of the United States and includes any recognized gov22 erning body of an Indian Tribe or Alaskan Native

23 Village that carries out substantial governmental

24 powers and duties.
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1 ‘‘SEC. 3. GRANTS.

2 ‘‘(a) GRANT AUTHORITY.—The Attorney General shall

3 direct the Office of Justice Programs to make grants to

4 States for the provision of qualified legal services and to

5 insure compliance with the requirements of this Act. To re6 ceive a grant under this subsection a State shall make an

7 application to the Attorney General. Such an application

8 shall be in such form and submitted in such manner as

9 the Attorney General may require.

10 ‘‘(b) POVERTY LINE.—Grants shall be made under sub11 section (a) to States in such proportion as the number of

12 residents of each State which receive a grant who live in

13 households having income equal to or less than the poverty

14 line established under section 673(2) of the Community

15 Services Block Grant Act (42 U.S.C. 9902(2)) bears to the

16 total number of residents in the United States living in such

17 households.

18 ‘‘(c) RETENTION OF GRANT FUNDS.—Each State may

19 in any fiscal year retain for administrative costs not more

20 than 5 percent of the amount granted to the State under

21 subsection (a) in such fiscal year. The remainder of such

22 grant shall be paid under contracts to qualified legal service

23 providers in the State for the provision in the State of

24 qualified legal services. If a State which has received a

25 grant under subsection (a) has at the end of any fiscal year
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1 funds which have not been obligated, such State shall return

2 such funds to the Attorney General.

3 ‘‘(d) REQUIREMENTS OF THIS ACT.—No State may re4 ceive a grant under subsection (a) unless the State has cer5 tified to the Attorney General that the State will comply

6 with and enforce the requirements of this Act.

7 ‘‘(e) LIMITATION ON USE OF GRANT FUNDS.—None of

8 the funds provided under subsection (a) shall be used by

9 a qualified legal service provider—

10 ‘‘(1) to make available any funds, personnel, or

11 equipment for use in advocating or opposing any

12 plan or proposal or represent any party or partici13 pate in any other way in litigation, that is intended

14 to or has the effect of altering, revising, or reappor15 tioning a legislative, judicial, or elective district at

16 any level of government, including influencing the

17 timing or manner of the taking of a census;

18 ‘‘(2) to attempt to influence the issuance, amend19 ment, or revocation of any executive order, regulation,

20 policy, or similar promulgation by any Federal,

21 State, or local agency;

22 ‘‘(3) to attempt to influence the passage or defeat

23 of any legislation, constitutional amendment, referen24 dum, initiative, confirmation proceeding, or any
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1 similar procedure of the Congress of the United States

2 or by any State or local legislative body;

3 ‘‘(4) to support or conduct training programs for

4 the purpose of advocating particular public policies

5 or encouraging political activities, labor or anti-labor

6 activities, boycotts, picketing, strikes, and demonstra7 tions, including the dissemination of information

8 about such policies or activities;

9 ‘‘(5) to participate in any litigation, lobbying,

10 rulemaking or any other matter with respect to abor11 tion;

12 ‘‘(6) to participate in any litigation or provide

13 any representation on behalf of a local, State, or Fed14 eral prisoner;

15 ‘‘(7) to pay for any personal service, advertise16 ment, telegram, telephone communication, letter, or

17 printed or written matter or to pay administrative

18 expenses or related expenses, associated with an activ19 ity prohibited in paragraph (1), (2), (3), (4), (5), or

20 (6);

21 ‘‘(8) to solicit in-person any client for the pur22 pose of providing any legal service; or

23 ‘‘(9) to pay any voluntary membership dues to

24 any private or non-profit organization.
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1 ‘‘(f) LIMITATION ON USE OF STATE FUNDS.—A State

2 which receives a grant under subsection (a) and which also

3 distributes State funds for the provision of legal services

4 shall require that such State funds be used to provide quali5 fied legal services to qualified clients and shall impose on

6 the use of such State funds the limitations prescribed by

7 subsection (e).

8 ‘‘(g) ATTORNEYS’ FEES.—A qualified legal service pro9 vider of any qualified client or any client of such provider

10 may not claim or collect attorneys’ fees from parties to any

11 litigation initiated by such client.

12 ‘‘(h) EVASION.—Any attempt to avoid or otherwise

13 evade the requirements of this Act is prohibited.

14 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—For

15 grants under subsection (a) there are authorized to be ap16 propriated to the Attorney General $278,000,000 for fiscal

17 year 1996, $250,000,000 for fiscal year 1997, 175,000,000

18 for fiscal year 1998, and $100,000,000 for fiscal year 1999.

19 ‘‘SEC. 4. CONTRACTS.

20 ‘‘(a) IN GENERAL.—Each State which receives a grant

21 under section 3(a) shall make funds under the grant avail22 able for contracts entered into for the provision of qualified

23 legal services within the State.

24 ‘‘(b) BIDS.—
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1 ‘‘(1) AUTHORITY.—The Governor of each State

2 shall designate the authority of the State which shall

3 be responsible for soliciting and awarding bids for

4 contracts for the provision of qualified legal services

5 within such State.

6 ‘‘(2) SERVICE AREA.—The authority of a State

7 designated under paragraph (1) shall designate serv8 ice areas within the State. Such service areas shall be

9 the counties or parishes within a State but such au10 thority may combine contiguous counties or parishes

11 to form a service area to assure the adequate provi12 sion of qualified legal services.

13 ‘‘(3) NON-ENGLISH-SPEAKING CLIENTS.—If 5

14 percent or more of the population of qualified clients

15 in a qualified legal service provider’s service area in16 cludes individuals whose household language is other

17 than English, the qualified legal service provider shall

18 include provision in the provider’s bid for satisfying

19 the communication needs of that portion of such pop20 ulation.

21 ‘‘(c) AVAILABILITY OF FUNDS.—A State shall allocate

22 grant funds for contracts for the provision of qualified legal

23 services in a service area on the same basis as grants are

24 made available to States under section 3(b).
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1 ‘‘(d) CONTRACT AWARDS.—A State shall award a con2 tract for the provision of qualified legal services in a service

3 area to the applicant who is best qualified, as determined

4 by the State, and who in its bid offers to provide, in accord5 ance with section 5, the greatest number of hours of quali6 fied legal services provided by lawyers or paralegals in such

7 area. In determining which applicant is best qualified, a

8 State shall consider the reputations of the principals of the

9 applicant, the quality, feasibility, and cost effectiveness of

10 plans submitted by the applicant for the delivery of quali11 fied legal services to the qualified clients to be served, and

12 a demonstration of willingness to abide by the restrictions

13 of this Act.

14 ‘‘(e) FORM AND BILLING.—A State contract awarded

15 under subsection (d) shall be in such form as the State re16 quires. The contract shall provide for the rendering of bills

17 supported by time records at the close of each month in

18 which qualified legal services are provided. A State shall

19 make payment to a qualified legal service provider at the

20 contract rate only for hours of qualified legal services pro21 vided and supported by appropriate records. The contract

22 rate shall be the total dollar amount of the contract divided

23 by the total hours bid by the qualified legal service provider.

24 A State shall have 60 days to make full payment of such

25 bills.
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1 ‘‘SEC. 5. REQUIREMENTS FOR THE PROVISION OF QUALI2 FIED LEGAL SERVICES UNDER A CONTRACT.

3 ‘‘(a) TERM.—The term of a contract entered into under

4 section 4 shall be not more than 1 year.

5 ‘‘(b) MANNER OF PROVISION OF SERVICES.—A quali6 fied legal service provider shall service the legal needs of

7 qualified clients under a contract entered into under section

8 4 in a professional manner consistent with applicable law.

9 ‘‘(c) CASE FILES.—A qualified legal service provider

10 shall maintain a qualified client’s case file, including any

11 pleadings and research, at least until the later of 5 years

12 after the resolution of client’s cause of action or 5 years

13 after the termination of the contract under which services

14 were provided to such client or as provided by the applica15 ble code of professional responsibility.

16 ‘‘(d) TIME RECORDS.—A qualified legal service pro17 vider shall keep daily time records of the provision of serv18 ices to a qualified client in one tenth of an hour increments

19 identifying such client, the general nature of the work per20 formed in each increment, and the account which will be

21 charged for such work.

22 ‘‘(e) QUESTIONNAIRE.—Each qualified client shall be

23 provided a self-mailing customer satisfaction questionnaire

24 in a form approved by the authority granting the contract

25 under section 4 which identifies the qualified legal service

26 provider and is preaddressed to such authority.
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1 ‘‘(f) ATTORNEY CLIENT PRIVILEGE.—Any qualified

2 client who receives legal services other than advice or legal

3 services provided by mail or telephone shall execute with

4 respect to such services a waiver of attorney client and at5 torney work product privilege as a condition to receiving

6 such service. The waiver shall be limited to the extent nec7 essary to determine the quantity and quality of the service

8 rendered by the qualified legal service provider and compli9 ance with this Act. Such waiver shall not constitute a waiv10 er as to other parties. The use of such waiver or any infor11 mation obtained under such waiver for any purpose other

12 than determining the quantity and quality of the service

13 of a provider or compliance with this Act shall be strictly

14 prohibited.

15 ‘‘(g) RECORDS OF QUALIFICATIONS.—A qualified legal

16 service provider shall make and maintain records detailing

17 the basis upon which the provider determined the qualifica18 tions of qualified clients. Such records shall be made and

19 maintained for 3 years following the termination of a con20 tract under section 4 for the provision of legal services to

21 such clients.

22 ‘‘(h) AUDITS.—A qualified legal service provider shall

23 consent to audits by the Attorney General, the General Ac24 counting Office, or the authority which awarded a contract

25 to such provider. Any such audit may be conducted at the
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1 provider’s principal place of business. Such an audit shall

2 be limited to a determination of whether such provider is

3 meeting the requirements of this Act and the provider’s con4 tract under section 4.

5 ‘‘(i) RECOVERY OF FEES.—A contract shall provide for

6 the recovery of reasonable attorneys’ fees in any successful

7 action brought to compel payment to a qualified legal serv8 ice provider under a contract under section 4.

9 ‘‘(j) TERMINATION AND RECOVERY OF FUNDS.—The

10 Attorney General, the Governor, or the authority which

11 awarded a contract shall terminate a qualified legal service

12 provider who is found to have a committed a material vio13 lation of this Act. A material violation shall include in14 volvement with any prohibited activity. A breach of con15 tract by a qualified legal service provider shall entitle the

16 Governor or the authority to terminate the contract, to

17 award a new contract, and to recover any funds improperly

18 expended by the provider, together with interest at the statu19 tory rate in the State for interest on judgments. If such

20 a breach was willful, the provider shall pay to the authority

21 which awarded the contract an additional amount equal

22 to one half of the amount improperly expended by the pro23 vider.’’.
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1 SEC. 3. TRANSITION AND EFFECTIVE DATE.

2 (a) TERMINATION.—The Legal Services Corporation

3 shall terminate on the expiration of 6 months after the date

4 of the enactment of this Act.

5 (b) PENDING CASES.—During the 6-month period

6 after the termination of the Legal Services Corporation, the

7 Attorney General may make funds available to grantees

8 under the Legal Services Corporation Act to bring to a com9 pletion any legal action filed in a State or Federal court

10 on or before the date of the enactment of this Act. The Attor11 ney General shall use funds appropriated to the Attorney

12 General under section 3(i) of the Legal Aid Grant Act to

13 fund such grantees. Such funds for such purpose may not

14 exceed 1 percent of the amount appropriated to the Attorney

15 General under such section 3(i) for fiscal year 1996.

16 (c) TRANSITION.—Upon termination of such Corpora17 tion all assets, liabilities, obligations, property, and records

18 employed directly or held or used primarily in connection

19 with any function of the President of the Legal Services

20 Corporation in carrying out legal services activities under

21 the Legal Services Corporation Act shall be transferred to

22 the Attorney General.

23 (d) ACTION OF THE PRESIDENT.—Notwithstanding

24 any other provision of law, upon termination of the Legal

25 Services Corporation the President of the Legal Services

26 Corporation shall take such action as may be necessary—
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1 (1) to assist the Attorney General in the initial

2 undertaking of the Attorney General’s responsibilities

3 under the Legal Aid Grant Act; and

4 (2) to transfer to the Attorney General for use

5 under the Legal Aid Grant Act all unexpended bal6 ances of funds appropriated for the purpose of carry7 ing out legal services programs and activities under

8 the Legal Services Corporation Act.

9 (e) EFFECTIVE DATE.—The amendment made by sec10 tion 2 shall take effect on the date of the enactment of this

11 Act.

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