16720 Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations 

[FR Doc. E7–6213 Filed 4–4–07; 8:45 am] 

BILLING CODE 6717–01–C 

SOCIAL SECURITY ADMINISTRATION 

20 CFR Parts 404 and 416 

[Docket No. SSA 2006–0097] 

RIN 0960–AG35 

Temporary Extension of Attorney Fee 

Payment System to Title XVI; 5-Year 

Demonstration Project Extending Fee 

Withholding and Payment Procedures 

to Eligible Non-Attorney 

Representatives; Definition of PastDue Benefits; and Assessment for Fee 

Payment Services 

AGENCY: Social Security Administration. 

ACTION: Interim final rules with request 

for comments. 

SUMMARY: We are issuing these interim 

final rules to reflect in our regulations 

three self-implementing statutory 

provisions in the Social Security 

Protection Act of 2004 (SSPA) and three 

related self-implementing provisions in 

earlier legislation. These earlier 

provisions are in the Omnibus Budget 

Reconciliation Act of 1990 (OBRA), the 

Social Security Independence and 

Program Improvements Act of 1994 

(SSIPIA), and the Ticket to Work and 

Work Incentives Improvement Act of 

1999 (TWWIIA). 

DATES: These rules are effective April 5, 

2007. To be sure your comments are 

considered, we must receive them no 

later than June 4, 2007. 

ADDRESSES: You may give us your 

comments by: Internet through the 

Federal eRulemaking Portal at http:// 

www.regulations.gov; e-mail to 

regulations@ssa.gov; telefax to (410) 

966–2830; or letter to the Commissioner 

of Social Security, P.O. Box 17703, 

Baltimore, MD 21235–7703. You may 

also deliver them to the Office of 

Regulations, Social Security 

Administration, 107 Altmeyer Building, 

6401 Security Boulevard, Baltimore, MD 

21235–6401, between 8 a.m. and 4:30 

p.m. on regular business days. 

Comments are posted on the Federal 

eRulemaking Portal, or you may inspect 

them on regular business days by 

making arrangements with the contact 

person shown in this preamble. 

FOR FURTHER INFORMATION CONTACT: 

Marg Handel, Supervisory Social 

Insurance Specialist, Office of Income 

Security Programs, Social Security 

Administration, 239 Altmeyer Building, 

6401 Security Boulevard, Baltimore, MD 

21235–6401, (410) 965–4639 or TTY 

(410) 966–5609. For information on 

eligibility or filing for benefits, call our 

national toll-free number, 1–800–772–

1213 or TTY 1–800–325–0778, or visit 

our Internet site, Social Security Online, 

at http://www.socialsecurity.gov. 

SUPPLEMENTARY INFORMATION: 

Electronic Version 

The electronic file of this document is 

available on the date of publication in 

the Federal Register at http:// 

www.gpoaccess.gov/fr/index.html. 

Background 

Sections 206(a) and 1631(d) of the 

Social Security Act (Act) direct the 

Commissioner of Social Security 


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Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations 16721 

(Commissioner) to determine the 

maximum fees representatives may 

charge claimants for services that they 

perform in claims before the Social 

Security Administration (SSA) under 

title II or title XVI of the Act. For claims 

under title II in which the claimant is 

found entitled to past-due benefits, 

section 206 of the Act further authorizes 

the Commissioner to pay attorneys’ fees, 

approved by the Commissioner or by a 

Federal court, out of a portion of the 

past-due benefits in the case. Prior to 

enactment of the SSPA (Pub. L. 108–

203), we were not authorized to 

withhold and pay fees approved for 

attorneys in title XVI cases or for nonattorney representatives in cases under 

either title of the Act. 

Direct Payment of Attorneys’ Fees in 

Title XVI 

Section 302 of the SSPA amended 

section 1631(d)(2) of the Act to extend 

the attorney fee withholding and direct 

payment procedures to claims under 

title XVI of the Act. The amendments 

made by section 302 apply with respect 

to attorney fees that were first required 

to be paid from title XVI past-due 

benefits on or after February 28, 2005, 

and we began paying fees directly to 

attorneys in cases effectuated on or after 

that date. Section 302 includes a sunset 

provision. Under that provision, the 

amendments made by section 302 will 

not apply to claims for benefits with 

respect to which the claimant and the 

representative enter into the agreement 

for representation after February 28, 

2010. 

Direct Payment of Fees to Eligible NonAttorney Representatives 

Section 303 of the SSPA directs the 

Commissioner to carry out a 5-year 

nationwide demonstration project to 

determine the potential results of 

extending the fee withholding and 

direct payment procedures that apply to 

attorneys under titles II and XVI of the 

Act, to non-attorney representatives 

who meet certain minimum 

prerequisites specified in section 303 

and any additional prerequisites that the 

Commissioner may prescribe. Under the 

prerequisites specified in section 303, 

individuals applying to participate in 

the demonstration project must have a 

bachelor’s degree or equivalent 

education, possess liability insurance or 

equivalent insurance adequate to protect 

claimants in the event of malpractice by 

the representative, pass a criminal 

background check ensuring fitness to 

practice before SSA, pass an 

examination testing knowledge of the 

relevant provisions of the Act and the 

most recent developments in Agency 

and court decisions, and demonstrate 

ongoing completion of qualified 

continuing education courses. In 

addition, the Commissioner has 

required that individuals applying to 

participate in the demonstration project 

show that they have sufficient prior 

experience representing claimants 

before SSA. More detailed information 

about these prerequisites may be found 

in the Federal Register notices 

published at the start of the 

demonstration project in 2005 (70 FR 

2447, January 13, 2005; 70 FR 14490, 

March 22, 2005; and 70 FR 41250, July 

18, 2005). 

The 5-year demonstration project on 

direct payment of fees to eligible nonattorneys under section 303 of the SSPA 

commenced on February 28, 2005. We 

began making direct payment to nonattorneys under the demonstration 

project on July 28, 2005, the date on 

which we determined that the initial 

group of applicants had satisfied the 

prerequisites for participation in the 

project. The demonstration project 

established by SSPA section 303 applies 

to claims for benefits with respect to 

which the agreement for representation 

is entered into after February 27, 2005, 

and before March 1, 2010. In these 

interim final rules, we are amending our 

regulations to reflect the fact that nonattorney representatives participating in 

the demonstration project may have 

their approved fees withheld from their 

clients’ past-due benefits and paid 

directly to them. 

Definition of ‘‘Past-Due Benefits’’

The amount of ‘‘past-due benefits’’ is 

important in calculating the fees of 

representatives and in determining the 

maximum amount we can pay directly 

for representation. Since we last defined 

the term ‘‘past-due benefits’’ in our 

regulations, there have been several 

legislative enactments that affect the 

definition of past-due benefits. In 

section 5106 of the OBRA (Pub. L. 101–

508), section 321(f) of the SSIPIA (Pub. 

L. 103–296), and section 302 of the 

SSPA, the Act was amended to exclude 

from past-due benefits any continued 

benefits paid pursuant to § 404.1597a of 

part 404, any interim benefits paid 

pursuant to section 223(h) of the Act, 

any continued benefits paid pursuant to 

§ 416.996 of part 416, any continued 

benefits paid pursuant to § 416.1336(b) 

of part 416, and any interim benefits 

paid pursuant to section 1631(a)(8) of 

the Act; to specify how a reduction 

under section 1127 of the Act (for 

receipt of benefits for the same period 

under both title II and title XVI) affects 

the past-due benefit computation; and to 

address the effect of interim assistance 

reimbursement payments. We are 

amending our regulations to reflect 

these statutory changes. 

Assessment on Direct Payment of Fees 

Section 406 of the TWWIIA (Pub. L. 

106–170) amended section 206 of the 

Act by adding section 206(d), which 

imposed an assessment on attorneys for 

the services we provide in determining 

and paying fees directly to attorneys 

from the benefits due claimants under 

title II of the Act. When that provision 

took effect on February 1, 2000, the 

amount of the assessment was 6.3 

percent of the direct payment amount, 

with a provision allowing the 

Commissioner to determine for future 

years the percentage (not to exceed 6.3 

percent) necessary to achieve full 

recovery of the costs of determining and 

paying fees to attorneys. Effective 

September 1, 2004, section 301 of the 

SSPA revised section 206(d) to cap the 

assessment at the lesser of the amount 

calculated using the percentage rate 

determined by the Commissioner or 

$75, and to provide for annual 

adjustment of the $75 cap based on the 

cost-of-living computation in section 

215(i)(2)(A)(ii) of the Act. Sections 302 

and 303 of the SSPA extended this 

assessment to the direct payment of fees 

to attorneys under title XVI and to the 

direct payment of fees to non-attorney 

representatives participating in the 

demonstration project authorized by 

section 303. 

Explanation of Changes 

We are amending our regulations on 

representation in 20 CFR parts 404 and 

416 to reflect the legislative changes to 

sections 206, 1127 and 1631(d) of the 

Act that were enacted under section 

5106 of OBRA, section 321(f) of the 

SSIPIA, section 406 of the TWWIIA, and 

sections 301 and 302 of the SSPA. In 

addition, we are revising the regulations 

to reflect the provisions of section 303 

of the SSPA. We are making only those 

substantive changes necessary to 

conform our regulations to these 

currently applicable statutory 

provisions. In these changes we are: 

• Amending § 404.1703 to revise the 

definition of ‘‘past-due benefits’’ to 

explain that we determine past-due 

benefits before any applicable reduction 

for receipt of benefits for the same 

period under title XVI and that past-due 

benefits do not include continued 

payment of disability benefits during 

appeal or interim benefits in cases of 

delayed final decision. 

• Adding to § 416.1503 the definition 

of ‘‘past-due benefits’’ for title XVI 

benefits to explain that when we 

determine the amount of past-due 


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16722 Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations 

benefits, we subtract the amount of any 

reduction under section 1127 for the 

concurrent receipt of benefits for the 

same period under both title II and title 

XVI, regardless of whether the actual 

reduction was applied to the title II 

benefits or to the title XVI benefits, and 

that past-due benefits do not include 

continued benefits or interim benefits. 

• Adding new §§ 404.1717 and 

416.1517 to reflect the demonstration 

project extending benefit withholding 

and direct fee payment to non-attorneys 

under title II and title XVI. These 

sections also define ‘‘eligible to 

participate in the direct payment 

demonstration project’’ and describe the 

claims to which the demonstration 

project applies. 

• Amending § 404.1720 to revise 

paragraph (b)(4) to provide that we 

make direct fee payments from title II 

past-due benefits both to attorneys and 

to non-attorney representatives eligible 

to participate in the direct payment 

demonstration project, and that we 

assume no responsibility for the 

payment of any fee that we have 

authorized to a non-attorney if the 

representative is not eligible to 

participate in the demonstration project. 

We are also revising paragraph (c)(3) to 

provide that our notice of a fee 

determination will state whether we are 

responsible for paying the 

representative’s fee from past-due 

benefits. 

• Amending § 416.1520 to add a new 

paragraph (b)(4) stating that we make 

direct payment of fees from past-due 

benefits under title XVI to attorneys and 

to non-attorneys eligible to participate 

in the direct payment demonstration 

project, and that we assume no 

responsibility for the payment of any fee 

that we have authorized to a nonattorney if the representative is not 

eligible to participate in the 

demonstration project. We are revising 

paragraph (c)(3) to state that our notice 

of fee determination will state whether 

we are responsible for paying the fee, 

rather than that we are not responsible 

for paying the fee. We are also revising 

paragraph (d)(3) to state that we assume 

no responsibility for fee payment based 

on a revised determination if the 

representative does not file the request 

for administrative review timely. 

• Revising § 416.1528 to place the 

existing text in a newly designated 

paragraph (a) having the heading, 

‘‘Representation of a party in court 

proceedings’’ and to add a new 

paragraph (b) that has the heading 

‘‘Attorney fee allowed by a Federal 

court.’’ Paragraph (b) states that the 

court may allow a reasonable fee to an 

attorney as part of its favorable 

judgment in a proceeding under title 

XVI of the Act and that we may pay the 

attorney the amount of the fee out of, 

but not in addition to, the amount of the 

past-due benefits payable to the 

claimant by reason of the court 

judgment. 

• Amending § 404.1730 to insert a 

previously omitted ‘‘the’’ in paragraph 

(a), to add a cross-reference to the 

definition of ‘‘past-due benefits’’ in 

§ 404.1703, and to reflect in paragraphs 

(b) and (c) the extension of the direct 

payment of fees from past-due benefits 

under title II to non-attorneys eligible to 

participate in the direct payment 

demonstration project. We are also 

adding a new paragraph (d) to reflect 

that we impose an assessment on the 

representative when we pay a fee 

directly to the representative; to explain 

how we calculate the assessment; and to 

state that the representative may not, 

directly or indirectly, request or 

otherwise obtain reimbursement of the 

amount of the assessment from the 

claimant. 

• Adding new § 416.1530 to state that 

direct payment of fees under title XVI 

extends to attorneys for fees we 

authorize and for fees a Federal court 

allows, and extends to non-attorneys 

eligible to participate in the direct 

payment demonstration project for fees 

we authorize. This section also 

describes the maximum amount we will 

pay to the representative; shows that we 

impose an assessment on the 

representative when we pay a fee 

directly to the representative; explains 

how we calculate the assessment; and 

states that the representative may not, 

directly or indirectly, request or 

otherwise obtain reimbursement of the 

amount of the assessment from the 

claimant. 

In addition to these substantive 

changes, we are revising 

§§ 404.1720(b)(4) and 404.1730(a), (b), 

and (c) to refer to the person claiming 

a right under the old-age, disability, 

dependents’, or survivors’ benefits 

program in the second person, and thus 

make the language in these sections 

consistent with the use of the second 

person throughout the regulations. 

Regulatory Procedures 

Pursuant to sections 205(a), 702(a)(5) 

and 1631(d)(1) of the Act, 42 U.S.C. 

405(a), 902(a)(5) and 1383(d)(1), we 

follow the Administrative Procedure 

Act (APA) rulemaking procedures 

specified in 5 U.S.C. 553 in the 

development of our regulations. The 

APA provides exceptions to its prior 

notice and public comment procedures 

when an agency finds there is good 

cause for dispensing with such 

procedures on the basis that they are 

impracticable, unnecessary, or contrary 

to the public interest. 

In the case of these rules, we believe 

that, under 5 U.S.C. 553(b)(B), good 

cause exists for issuing these regulatory 

changes as interim final rules, without 

prior public comment. In these rules, we 

are merely revising our existing 

regulations on representation of parties 

to reflect statutory changes made by 

section 5106 of OBRA, section 321(f) of 

the SSIPIA, section 406 of the TWWIIA, 

and sections 301, 302 and 303 of the 

SSPA. Our intent is to conform our 

regulations to the changes enacted in 

those statutes, all of which are already 

in effect and all of which we have 

already implemented. We also have no 

discretion not to apply these statutory 

enactments. Therefore, we believe 

opportunity for prior public comment is 

unnecessary, and we are issuing these 

regulations as interim final rules. 

However, we recognize that the 

statutory provisions reflected in these 

rules are of considerable importance to 

those who are affected by them. We also 

are considering the possibility that some 

affected individuals may disagree with 

our interpretation of the numerous 

statutory provisions reflected in these 

interim final rules. Therefore, we are 

inviting public comment on the changes 

made by these interim final rules, and 

will consider any responsive comments 

received within 60 days of the 

publication of these interim final rules. 

In addition, we find good cause for 

dispensing with the 30-day delay in the 

effective date of a substantive rule, 

provided for by 5 U.S.C. 553(d). As 

explained above, we are revising our 

title II and title XVI rules on 

representation of parties to reflect 

legislative provisions that are already in 

effect, and that we have been applying 

since they became effective. Without 

these changes, our rules will not reflect 

current law or our operating policy and 

procedures, and thus may mislead the 

public. Therefore, we find that it is in 

the public interest to make these rules 

effective upon publication. 

Executive Order 12866 

We have consulted with the Office of 

Management and Budget (OMB) and 

determined that these interim final rules 

meet the criteria for a significant 

regulatory action under Executive Order 

12866, as amended by Executive Order 

13258. Thus, they were subject to OMB 

review. We have also determined that 

these rules meet the plain language 

requirement of Executive Order 12866, 

as amended by Executive Order 13258. 


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Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations 16723 

Regulatory Flexibility Act 

We certify that these final regulations 

will not have a significant economic 

impact on a substantial number of small 

entities. Also, these final regulations 

simply reflect legislation already in 

effect. Therefore, a regulatory flexibility 

analysis as provided in the Regulatory 

Flexibility Act, as amended, is not 

required. 

Paperwork Reduction Act 

These rules contain reporting 

requirements at §§ 404.1717, 

404.1730(c)(1), 404.1730(c)(2)(i), 

404.1730(c)(2)(ii), 416.1528(a), 

416.1530(c)(1), 416.1530(c)(2)(i), and 

416.1530(c)(2)(ii). Following is a chart 

describing the burdens posed by these 

regulation sections. Most of the 

Information Collections contained in 

this rule have been cleared under preexisting OMB control numbers 0960–

0699 (Non-Attorney Representative 

Demonstration Project), 0960–0737 

(Continuing Education Information 

Collection under Non-Attorney 

Demonstration Project), and 0960–0104 

(SSA–1560–U4, the Petition to Obtain 

Approval of a Fee for Representing a 

Claimant before the Social Security 

Administration). The 1-hour 

placeholder burden figures in the chart 

indicate that the burdens for these 

sections were already cleared by OMB 

in ICRs submitted prior to the 

publication of these interim final rules. 

For the sections not covered by existing 

Information Collections, we have 

provided specific burden information. 

Regulation section Description of public reporting requirement Number of 

respondents 

Frequency of 

response 

Average 

burden per 

response 

(minutes) 

Estimated annual 

burden 

(hours) 

404.1717 ................... To establish eligibility to participate in the 

demonstration project.

........................ ........................ ........................ 1 hour (placeholder 

burden). 

404.1730(c)(1) ........... To receive direct payment of fees from 

beneficiaries’ past-due benefits, their representatives must file a request for approval of a fee, or written notice of intent 

to file a request, at an SSA office within 

60 days of the date a favorable determination notice is mailed.

........................ ........................ ........................ 1 hour (placeholder 

burden). 

404.1730(c)(2)(i) ....... If representatives do not file a request within 60 days, they will receive a notice telling them to do so within 20 days of the 

notice date.

841 10 30 4,205 

404.1730(c)(2)(ii) ....... Representatives must send beneficiaries 

copies of time extension requests they 

made to SSA.

600 1 3 30 

416.1517 ................... Same as for 404.1717, except this section 

applies to Title XVI beneficiaries.

........................ ........................ ........................ 1 hour (placeholder 

burden). 

416.1528(a) ............... If representatives have provided the beneficiary services relating to dealings with 

SSA, they must specify what portion of 

the fee they want to charge for those 

services; representatives must file the request for charging fees.

........................ ........................ ........................ 1 hour (placeholder 

burden). 

416.1530(c)(1) ........... Same as for 404.1730(c)(1), except this 

section applies to Title XVI beneficiaries.

1 1 1 1 hour (placeholder 

burden). 

416.1530(c)(2)(i) ....... Same as for 404.1730(c)(2)(i), except this 

section applies to Title XVI beneficiaries.

561 10 30 2,805 

416.1530(c)(2)(ii) ....... Same as for 404.1730(c)(2)(ii), except this 

section applies to Title XVI beneficiaries.

400 1 3 20 

Totals ................. N/A ................................................................ 2,402 ........................ ........................ 7,065 

Information Collection Requests have 

been submitted to OMB for those 

information collections that require 

revisions as a result of this rule. While 

these rules will be effective upon 

publication, these burdens will not be 

effective until cleared by OMB. We will 

publish a notice in the Federal Register 

upon OMB approval of the information 

collection requirement(s). 

Not all Information Collections will 

be revised as a result of this rule. 

Nevertheless, we are soliciting 

comments on the burden estimate; the 

need for the information; its practical 

utility; ways to enhance its quality, 

utility, and clarity; and on ways to 

minimize the burden on respondents, 

including the use of automated 

collection techniques or other forms of 

information technology. Comments 

should be faxed or e-mailed to the OMB 

desk officer for SSA at the following fax 

number or e-mail address: Office of 

Management and Budget, Attn: Desk 

Officer for SSA, Fax Number: 202–395–

6974, E-mail address: 

OIRA_Submission@omb.eop.gov. 

A comment is best assured of having 

its full effect if OMB receives it within 

30 days of publication of this proposed 

rule. 

To receive a copy of the OMB 

clearance package, you may call the 

SSA Reports Clearance Officer at 410–

965–0454 or e-mail at 

OPLM.RCO@ssa.gov. 

(Catalog of Federal Domestic Assistance 

Program Nos. 96.001, Social SecurityDisability Insurance; 96.002, Social SecurityRetirement Insurance; 96.004, Social 

Security-Survivors Insurance; and 96.006, 

Supplemental Security Income) 

List of Subjects 

20 CFR Part 404 

Administrative practice and 

procedure, Blind, Disability benefits, 

Old-Age, Survivors, and Disability 

Insurance, Reporting and recordkeeping 

requirements, Social Security. 


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16724 Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations 

20 CFR Part 416 

Administrative practice and 

procedure, Aged, Blind, Disability 

benefits, Public assistance programs, 

Reporting and recordkeeping 

requirements, Supplemental Security 

Income. 

Dated: December 1, 2006. 

Jo Anne B. Barnhart, 

Commissioner of Social Security. 

For the reasons set out in the 

preamble, we are amending subpart R of 

part 404 and subpart O of part 416 of 

chapter III of title 20 of the Code of 

Federal Regulations as set forth below: 

PART 404—FEDERAL OLD-AGE, 

SURVIVORS AND DISABILTIY 

INSURANCE (1950–) 

Subpart R—[Amended] 

■ 1. Revise the authority citation for 

subpart R of part 404 to read as follows: 

Authority: Secs. 205(a), 206, 702(a)(5), and 

1127 of the Social Security Act (42 U.S.C. 

405(a), 406, 902(a)(5), and 1320a–6); sec. 303, 

Pub. L. 108–203, 118 Stat. 493. 

■ 2. Amend § 404.1703 by revising the 

definition of ‘‘past-due benefits’’ to read 

as follows: 

§ 404.1703 Definitions. 

* * * * * 

Past-due benefits means the total 

amount of benefits under title II of the 

Act that has accumulated to all 

beneficiaries because of a favorable 

administrative or judicial determination 

or decision, up to but not including the 

month the determination or decision is 

made. For purposes of calculating fees 

for representation, we determine pastdue benefits before any applicable 

reduction under section 1127 of the Act 

(for receipt of benefits for the same 

period under title XVI). Past-due 

benefits do not include: 

(1) Continued benefits paid pursuant 

to § 404.1597a of this part; or 

(2) Interim benefits paid pursuant to 

section 223(h) of the Act. 

* * * * * 

■ 3. Add § 404.1717 to read as follows: 

§ 404.1717 Demonstration project on 

direct payment of fees to non-attorneys. 

(a) Section 303 of the Social Security 

Protection Act of 2004 (SSPA), Public 

Law 108–203, requires the 

Commissioner of Social Security 

(Commissioner) to develop and 

implement a 5-year nationwide 

demonstration project that extends 

attorney fee withholding and direct 

payment procedures to any non-attorney 

representative who meets minimum 

prerequisites for participating in the 

project specified in section 303 of the 

SSPA and any additional prerequisites 

prescribed by the Commissioner. The 

objective of the demonstration project is 

to determine the effect of extending to 

certain non-attorneys the fee 

withholding and direct payment 

procedures that apply to attorneys. A 

final report on the results of the 

demonstration project is to be 

completed and transmitted to Congress 

within 90 days of the project 

termination date, February 28, 2010. 

(b) As used in this subpart, the term 

‘‘eligible to participate in the direct 

payment demonstration project’’ refers 

to the status of a non-attorney who we 

have determined meets the prerequisites 

for participation in the demonstration 

project. 

(c) The provisions of section 303 

authorizing the direct payment of fees to 

non-attorneys and the withholding of 

title II benefits for that purpose apply in 

claims for benefits with respect to 

which the agreement for representation 

is entered into after February 27, 2005, 

and before March 1, 2010. 

■ 4. Amend § 404.1720 by revising 

paragraphs (b)(4) and (c)(3) to read as 

follows: 

§ 404.1720 Fee for a representative’s 

services. 

* * * * * 

(b) * * * 

(4) If your representative is an 

attorney, or a non-attorney who is 

eligible to participate in the direct 

payment demonstration project, as 

defined in § 404.1717, and you are 

entitled to past-due benefits, as defined 

in § 404.1703, we will pay the 

authorized fee, or a part of the 

authorized fee, directly to the 

representative out of the past-due 

benefits, subject to the limitations 

described in § 404.1730(b)(1). If the 

representative is a non-attorney who is 

not eligible to participate in the direct 

payment demonstration project, we 

assume no responsibility for the 

payment of any fee that we have 

authorized. 

(c) * * * 

(3) Whether we are responsible for 

paying the fee from past-due benefits; 

and 

* * * * * 

■ 5. Revise § 404.1730 to read as 

follows: 

§ 404.1730 Payment of fees. 

(a) Fees allowed by a Federal court. 

We will pay a representative who is an 

attorney, out of your past-due benefits, 

as defined in § 404.1703, the amount of 

the fee allowed by a Federal court in a 

proceeding under title II of the Act. The 

payment we make to the attorney is 

subject to the limitations described in 

paragraph (b)(1) of this section. 

(b) Fees we may authorize—(1) 

Attorneys and non-attorneys eligible to 

participate in the direct payment 

demonstration project. Except as 

provided in paragraph (c) of this 

section, if we make a determination or 

decision in your favor and you were 

represented by an attorney or a nonattorney who is eligible to participate in 

the direct payment demonstration 

project, as defined in § 404.1717, and as 

a result of the determination or decision 

you have past-due benefits, as defined 

in § 404.1703, we will pay the 

representative out of the past-due 

benefits, the smaller of the amounts in 

paragraph (b)(1)(i) or (ii) of this section, 

less the amount of the assessment 

described in paragraph (d) of this 

section. 

(i) Twenty-five percent of the total of 

the past-due benefits; or 

(ii) The amount of the fee that we set. 

(2) Non-attorneys not eligible to 

participate in the direct payment 

demonstration project. If the 

representative is a non-attorney who is 

not eligible to participate in the direct 

payment demonstration project, we 

assume no responsibility for the 

payment of any fee that we have 

authorized. We will not deduct the fee 

from your past-due benefits. 

(c) Time limit for filing request for 

approval of fee in order to obtain direct 

payment. (1) In order to receive direct 

payment of a fee from your past-due 

benefits, a representative who is either 

an attorney or a non-attorney who is 

eligible to participate in the direct 

payment demonstration project should 

file a request for approval of a fee, or 

written notice of the intent to file a 

request, at one of our offices within 60 

days of the date the notice of the 

favorable determination is mailed. 

(2)(i) If no request is filed within 60 

days of the date the notice of the 

favorable determination is mailed, we 

will mail a written notice to you and 

your representative at your last known 

addresses. The notice will inform you 

and the representative that unless the 

representative files, within 20 days from 

the date of the notice, a written request 

for approval of a fee under § 404.1725, 

or a written request for an extension of 

time, we will pay all the past-due 

benefits to you. 

(ii) The representative must send you 

a copy of any request made to us for an 

extension of time. If the request is not 

filed within 20 days of the date of the 

notice, or by the last day of any 

extension we approved, we will pay all 


rwilkins on PROD1PC63 with RULES
Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations 16725 

past-due benefits to you. We must 

approve any fee the representative 

charges after that time, but the 

collection of any approved fee is a 

matter between you and the 

representative. 

(d) Assessment when we pay a fee 

directly to a representative. (1) 

Whenever we pay a fee directly to a 

representative from past-due benefits, 

we impose an assessment on the 

representative. 

(2) The amount of the assessment is 

equal to the lesser of: 

(i) The product we obtain by 

multiplying the amount of the fee we 

are paying to the representative by the 

percentage rate the Commissioner of 

Social Security determines is necessary 

to achieve full recovery of the costs of 

determining and paying fees directly to 

representatives, but not in excess of 6.3 

percent; and 

(ii) The maximum assessment 

amount. The maximum assessment 

amount was initially set at $75, but by 

law is adjusted annually to reflect the 

increase in the cost of living. (See 

§§ 404.270 through 404.277 for an 

explanation of how the cost-of-living 

adjustment is computed.) If the adjusted 

amount is not a multiple of $1, we 

round down the amount to the next 

lower $1, but the amount will not be 

less than $75. We will announce any 

increase in the maximum assessment 

amount and explain how the increase 

was determined in the Federal Register. 

(3) We collect the assessment by 

subtracting it from the amount of the fee 

to be paid to the representative. The 

representative who is subject to an 

assessment may not, directly or 

indirectly, request or otherwise obtain 

reimbursement of the assessment from 

you. 

PART 416—SUPPLEMENTAL 

SECURITY INCOME FOR THE AGED, 

BLIND, AND DISABLED 

Subpart O—[Amended] 

■ 6. Revise the authority citation for 

subpart O of part 416 to read as follows: 

Authority: Secs. 702(a)(5), 1127 and 

1631(d) of the Social Security Act (42 U.S.C. 

902(a)(5), 1320a-6 and 1383(d)); sec. 303, 

Pub. L. 108–203, 118 Stat. 493. 

■ 7. Amend § 416.1503 by adding a new 

definition, in alphabetical order, to read 

as follows: 

§ 416.1503 Definitions. 

* * * * * 

Past-due benefits means the total 

amount of payments under title XVI of 

the Act, the Supplemental Security 

Income (SSI) program, including any 

Federally administered State payments, 

that has accumulated to you and your 

spouse because of a favorable 

administrative or judicial determination 

or decision, up to but not including the 

month the determination or decision is 

made. For purposes of calculating fees 

for representation, we first determine 

the SSI past-due benefits before any 

applicable reduction for reimbursement 

to a State (or political subdivision) for 

interim assistance reimbursement, and 

before any applicable reduction under 

section 1127 of the Act (for receipt of 

benefits for the same period under title 

II). We then reduce that figure by the 

amount of any reduction of title II or 

title XVI benefits that was required by 

section 1127. We do this whether the 

actual offset, as provided under section 

1127, reduced the title II or title XVI 

benefits. Past-due benefits do not 

include: 

(1) Continued benefits paid pursuant 

to § 416.996 of this part; 

(2) Continued benefits paid pursuant 

to § 416.1336(b) of this part; or 

(3) Interim benefits paid pursuant to 

section 1631(a)(8) of the Act. 

* * * * * 

■ 8. Add § 416.1517 to read as follows: 

§ 416.1517 Demonstration project on 

direct payment of fees to non-attorneys. 

(a) Section 303 of the Social Security 

Protection Act of 2004 (SSPA), Public 

Law 108–203, requires the 

Commissioner of Social Security 

(Commissioner) to develop and 

implement a 5-year nationwide 

demonstration project that extends 

attorney fee withholding and direct 

payment procedures to any non-attorney 

representative who meets minimum 

prerequisites for participating in the 

project specified in section 303 of the 

SSPA and any additional prerequisites 

prescribed by the Commissioner. The 

objective of this demonstration project 

is to determine the effect of extending 

to certain non-attorneys the fee 

withholding and direct payment 

procedures that apply to attorneys. A 

final report on the results of the 

demonstration project is to be 

completed and transmitted to Congress 

within 90 days of the project 

termination date, February 28, 2010. 

(b) As used in this subpart, the term 

‘‘eligible to participate in the direct 

payment demonstration project’’ refers 

to the status of a non-attorney who we 

have determined meets the prerequisites 

for participation in the demonstration 

project. 

(c) The provisions of section 303 

authorizing the direct payment of fees to 

non-attorneys and the withholding of 

title XVI benefits for that purpose apply 

in claims for benefits with respect to 

which the agreement for representation 

is entered into after February 27, 2005, 

and before March 1, 2010. 

■ 9. Amend § 416.1520 by adding 

paragraph (b)(4) and revising paragraphs 

(c)(3) and (d)(3) to read as follows: 

§ 416.1520 Fee for a representative’s 

services. 

* * * * * 

(b) * * * 

(4) If your representative is an 

attorney, or a non-attorney who is 

eligible to participate in the direct 

payment demonstration project, as 

defined in § 416.1517, and you are 

entitled to past-due benefits, as defined 

in § 416.1503, we will pay the 

authorized fee, or a part of the 

authorized fee, directly to the 

representative out of the past-due 

benefits, subject to the limitations 

described in § 416.1530(b)(1). If the 

representative is a non-attorney who is 

not eligible to participate in the direct 

payment demonstration project, we 

assume no responsibility for the 

payment of any fee that we have 

authorized. 

(c) * * * 

(3) Whether we are responsible for 

paying the fee from past-due benefits; 

and 

* * * * * 

(d) * * * 

(3) Payment of fees. We assume no 

responsibility for the payment of a fee 

based on a revised determination if the 

request for administrative review was 

not filed on time. 

■ 10. Revise § 416.1528 to read as 

follows: 

§ 416.1528 Proceedings before a State or 

Federal court. 

(a) Representation of a party in court 

proceedings. We shall not consider any 

service the representative gave you in 

any proceeding before a State or Federal 

court to be services as a representative 

in dealings with us. However, if the 

representative also has given service to 

you in the same connection in any 

dealings with us, he or she must specify 

what, if any, portion of the fee he or she 

wants to charge is for services 

performed in dealings with us. If the 

representative charges any fee for those 

services, he or she must file the request 

and furnish all of the information 

required by § 416.1525. 

(b) Attorney fee allowed by a Federal 

court. If a Federal court in any 

proceeding under title XVI of the Act 

makes a judgment in favor of the 

claimant who was represented before 

the court by an attorney, and the court, 

under section 1631(d)(2) of the Act, 


rwilkins on PROD1PC63 with RULES
16726 Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations 

allows to the attorney as part of its 

judgment a fee not in excess of 25 

percent of the total of past-due benefits 

to which the claimant is eligible by 

reason of the judgment, we may pay the 

attorney the amount of the fee out of, 

but not in addition to, the amount of the 

past-due benefits payable. We will not 

pay directly any other fee your 

representative may request. 

■ 11. Add § 416.1530 to read as follows: 

§ 416.1530 Payment of fees. 

(a) Fees allowed by a Federal court. 

Commencing February 28, 2005, we will 

pay a representative who is an attorney, 

out of your past-due benefits, as defined 

in § 416.1503, the amount of the fee 

allowed by a Federal court in a 

proceeding under title XVI of the Act. 

The payment we make to the attorney is 

subject to the limitations described in 

paragraph (b)(1) of this section. 

(b) Fees we may authorize—(1) 

Attorneys and non-attorneys eligible to 

participate in the direct payment 

demonstration project. Except as 

provided in paragraphs (c) and (e) of 

this section, commencing February 28, 

2005, if we make a determination or 

decision in your favor and you were 

represented by an attorney or a nonattorney who is eligible to participate in 

the direct payment demonstration 

project, as defined in § 416.1517, and as 

a result of the determination or decision 

you have past-due benefits, as defined 

in § 416.1503, we will pay the 

representative out of the past-due 

benefits, the smallest of the amounts in 

paragraphs (b)(1)(i) through (iii) of this 

section, less the amount of the 

assessment described in paragraph (d) of 

this section. 

(i) Twenty-five percent of the total of 

the past-due benefits, as determined 

before any payment to a State (or 

political subdivision) to reimburse the 

State (or political subdivision) for 

interim assistance furnished you, as 

described in § 416.525 of this part, and 

reduced by the amount of any reduction 

in benefits under this title or title II 

pursuant to section 1127 of the Act; 

(ii) The amount of past-due benefits 

remaining after we pay to a State (or 

political subdivision) an amount 

sufficient to reimburse the State (or 

political subdivision) for interim 

assistance furnished you, as described 

in § 416.525 of this part, and after any 

applicable reductions under section 

1127 of the Act; or 

(iii) The amount of the fee that we set. 

(2) Non-attorneys not eligible to 

participate in the direct payment 

demonstration project. If the 

representative is a non-attorney who is 

not eligible to participate in the direct 

payment demonstration project, we 

assume no responsibility for the 

payment of any fee that we have 

authorized. We will not deduct the fee 

from your past-due benefits. 

(c) Time limit for filing request for 

approval of fee in order to obtain direct 

payment. (1) In order to receive direct 

payment of a fee from your past-due 

benefits, a representative who is either 

an attorney or a non-attorney who is 

eligible to participate in the direct 

payment demonstration project should 

file a request for approval of a fee, or 

written notice of the intent to file a 

request, at one of our offices within 60 

days of the date the notice of the 

favorable determination is mailed. 

(2)(i) If no request is filed within 60 

days of the date the notice of the 

favorable determination is mailed, we 

will mail a written notice to you and 

your representative at your last known 

addresses. The notice will inform you 

and the representative that unless the 

representative files, within 20 days from 

the date of the notice, a written request 

for approval of a fee under § 416.1525, 

or a written request for an extension of 

time, we will pay all the past-due 

benefits to you. 

(ii) The representative must send you 

a copy of any request made to us for an 

extension of time. If the request is not 

filed within 20 days of the date of the 

notice, or by the last day of any 

extension we approved, we will pay to 

you all past-due benefits remaining after 

we reimburse the State for any interim 

assistance you received. We must 

approve any fee the representative 

charges after that time, but the 

collection of any approved fee is a 

matter between you and the 

representative. 

(d) Assessment when we pay a fee 

directly to a representative. (1) 

Whenever we pay a fee directly to a 

representative from past-due benefits, 

we impose an assessment on the 

representative. 

(2) The amount of the assessment is 

equal to the lesser of: 

(i) The product we obtain by 

multiplying the amount of the fee we 

are paying to the representative by the 

percentage rate the Commissioner of 

Social Security determines is necessary 

to achieve full recovery of the costs of 

determining and paying fees directly to 

representatives, but not in excess of 6.3 

percent; and 

(ii) The maximum assessment 

amount. The maximum assessment 

amount was initially set at $75, but by 

law is adjusted annually to reflect the 

increase in the cost of living. (See 

§§ 404.270 through 404.277 for an 

explanation of how the cost-of-living 

adjustment is computed.) If the adjusted 

amount is not a multiple of $1, we 

round down the amount to the next 

lower $1, but the amount will not be 

less than $75. We will announce any 

increase in the maximum assessment 

amount, and explain how that increase 

was determined in the Federal Register. 

(3) We collect the assessment by 

subtracting it from the amount of the fee 

to be paid to the representative. The 

representative who is subject to an 

assessment may not, directly or 

indirectly, request or otherwise obtain 

reimbursement of the assessment from 

you. 

(e) Effective dates for extension of 

direct payment of fee to attorneys. The 

provisions of this subpart authorizing 

the direct payment of fees to attorneys 

and the withholding of title XVI benefits 

for that purpose, apply in claims for 

benefits with respect to which the 

agreement for representation is entered 

into before March 1, 2010. 

[FR Doc. E7–6383 Filed 4–4–07; 8:45 am] 

BILLING CODE 4191–02–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[CCGD05–07–023] 

RIN 1625–AA00 

Safety Zone: Willoughby Point Located 

on Langley Air Force Base, Back River, 

Hampton, VA 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary final rule. 

SUMMARY: The Coast Guard is 

establishing a temporary safety zone in 

support of the Langley Air Force Base 

Air Show event occurring on April 27, 

28 and 29, 2007 on the Back River in the 

vicinity of Willoughby Point in 

Hampton, VA. This action is intended to 

restrict vessel traffic on Back River as 

necessary to protect mariners from the 

hazards associated with the air show. 

DATES: This rule is effective from 2 p.m. 

on April 27, 2007 until 4:30 p.m. on 

April 29, 2007. 

ADDRESSES: Documents indicated in this 

preamble as being available in the 

docket are part of docket CGD05–07–

023 and are available for inspection or 

copying at the Sector Hampton Roads, 

Norfolk Federal Building, 200 Granby 

St., 7th Floor, Norfolk, VA 23510, 

between 9 a.m. and 2 p.m., Monday 

through Friday, except Federal holidays. 


rwilkins on PROD1PC63 with RULES