[Federal Register Volume 62, Number 2 (Friday, January 3, 1997)]
[Proposed Rules]
[Pages 352-361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-38]


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SOCIAL SECURITY ADMINISTRATION
20 CFR Parts 404 and 416

[Regulations Nos. 4 and 16]
RIN 0960-AD73


Federal Old-Age, Survivors, and Disability Insurance and 
Supplemental Security Income for the Aged, Blind, and Disabled; 
Standards of Conduct for Claimant Representatives

AGENCY: Social Security Administration.

ACTION: Proposed rules.

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SUMMARY: These proposed rules would revise our regulations governing 
representation of claimants seeking Social Security or supplemental 
security income (SSI) benefits under title II or XVI of the Social 
Security Act (the Act). They would establish standards of conduct and 
responsibility for persons serving as representatives and further 
define our expectations regarding their obligations to those they 
represent and to us. They would include statutorily and 
administratively imposed requirements and prohibitions.

DATES: To be sure that your comments are considered, we must receive 
them no later than March 4, 1997.

ADDRESSES: Comments should be submitted in writing to the Commissioner 
of Social Security, P.O. Box 1585, Baltimore, MD 21235, sent by telefax 
to (410) 966-2830, sent by E-mail to <a href="/cdn-cgi/l/email-protection#9efefeecfbf9ebf2ffeaf7f1f0eddeededffb0f9f1e8">``<span class="__cf_email__" data-cfemail="f98b9c9e8c95988d9096978ab98a8a98d79e968f">[email protected]</span></a>'', or 
delivered to the Division of Regulations and Rulings, Social Security 
Administration, 3-B-1 Operations Building, 6401 Security Boulevard, 
Baltimore, MD 21235, between 8:00 a.m. and 4:30 p.m. on regular 
business days. Comments received may be inspected during these hours by 
making arrangements with the contact person shown below.

FOR FURTHER INFORMATION CONTACT: Richard M. Bresnick, Legal Assistant, 
Division of Regulations and Rulings, Social Security Administration, 
6401 Security Boulevard, Baltimore, MD 21235, (410) 965-1758.

SUPPLEMENTARY INFORMATION

Purpose and Scope

    Existing regulations governing representatives' conduct 
(Secs. 404.1740, et seq. and 416.1540, et seq.) under titles II and XVI 
primarily reiterate various statutory provisions set forth in the Act. 
Sections 404.1745 and 416.1545 also provide that a representative may 
be suspended or disqualified if he or she has violated those rules, 
been convicted of a violation of section 206 of the Act or ``otherwise 
refused to comply with our rules and regulations on representing 
claimants in dealings with us.'' This is consistent with section 
206(a)(1) of the Act, which provides that the Commissioner of Social 
Security (the Commissioner) may ``suspend or prohibit from further 
practice before him any such person, agent, or attorney who refuses to 
comply with the Commissioner's rules and regulations * * *.'' Since 
their inception, the regulations have reflected the Commissioner's 
(formerly the Secretary of Health and Human Services' (the 
Secretary's)) broad authority over matters involving representatives' 
activities in their dealings with us.
    These proposed rules specifically provide enforceable standards 
governing aspects of practice, performance and conduct for all persons 
who act as claimants' representatives. The proposed rules also 
recognize potential changes in the procedures used by the

[[Page 353]]

Social Security Administration (SSA) to process claims, the increased 
participation of compensated representatives in the adjudicative 
process, the special circumstances presented by SSA's nonadversarial 
hearings, and statutory amendments, such as the anti-fraud provisions 
of the Social Security Independence and Program Improvements Act of 
1994, Public Law (Pub. L.) 103-296. The existing regulations pertaining 
to representatives' conduct have been largely unchanged since their 
promulgation in 1980, and do not adequately address actual and 
potential problems resulting from the participation of representatives 
in the claims process.
    Although we realize that most representatives do a conscientious 
job in assisting their clients, our experience has convinced us that 
there are sufficient instances of questionable conduct to warrant 
promulgation of additional regulatory authority. The existing 
regulations do not address a representative's willful or negligent 
delay, refusal to cooperate, failure to adequately prepare and present 
the claimant's case and other deficiencies. The proposed rules correct 
these omissions and are necessary to protect the claimant and the 
process from those individuals who are incapable of providing, or 
unwilling to provide, meaningful assistance in expeditiously resolving 
pending claims.
    Although there are disparities in the levels of skill, experience, 
education and professional status among those who serve as 
representatives, we believe all such individuals must be bound by the 
same set of rules. In determining appropriate standards, we considered 
the requirements and intent of the Act and its implementing 
regulations, administrative law principles applicable to adjudication 
and the American Bar Association's (ABA) Model Rules of Professional 
Conduct and Model Code of Professional Responsibility.
    There are comparable rules in part 410, subpart F (Secs. 410.684, 
et seq.) governing representative conduct under the Black Lung benefits 
program. We are not revising those rules, however. Executive Order 
12866, Regulatory Planning and Review, issued by the President on 
October 4, 1993 (58 FR 51735), provides that ``Federal agencies should 
promulgate only such regulations as are required by law, are necessary 
to interpret the law, or are made necessary by compelling public need * 
* *.'' Because we have found no problems with representative conduct in 
claims involving Black Lung benefits comparable to those that have led 
to these proposed rules for titles II and XVI, there is no compelling 
need to revise the Black Lung rules.
    We expect that the proposed rules will further clarify our 
expectations regarding the obligations of representatives to provide 
competent representation of their clients, in accordance with 
procedural and evidentiary requirements of the claims process. 
Moreover, the proposed regulations, when published, will constitute 
official notice concerning our requirements and prohibitions.
    To address the concerns of claimants and others with a stake or 
interest in the issue of claimant representation in drafting the 
proposed rules, we obtained information from various sources. We 
conducted focus groups with claimants and beneficiaries as part of our 
disability process redesign initiative. We also used information 
gathered in investigating nearly 600 complaints of representative 
misconduct made by claimants from 1988 to date.

Communication With Claimants

    Participants in the public dialogue conducted in conjunction with 
our disability process redesign initiative frequently complained about 
the lack of timely or effective assistance on the part of claimants' 
representatives. They felt that some representatives delayed submitting 
evidence until the case reached the hearing level in order to increase 
the amount of past-due benefits and thereby increase the amount of 
their fees. Others did not believe that all representatives provided 
adequate assistance in the preparation or presentation of the case. In 
the latter category, there were recurring complaints that the claimant 
did not see or have any contact with the representative until shortly 
before the hearing when the representative, allegedly for the first 
time, would review the file. These claimants did not believe that the 
representative was adequately prepared to present their case, or had 
provided any assistance in ensuring that the record was complete. Some 
individuals complained that their representatives' failure to obtain 
medical documentation for inclusion in the record, despite being 
informed that the evidence was available and material, forced them 
personally to obtain the required documentation. The dissatisfaction 
with the quality and effectiveness of representatives' services was 
strong enough to prompt the Disability Process Redesign Team to include 
within its recommendations provisions aimed at correcting shortcomings 
in the representatives' performance.
    The comments received from focus groups and at public meetings are 
consistent with written complaints we receive about representatives who 
do not participate or cooperate in the processing of claims. We have 
seen instances where a representative demands that all communications 
with the claimant be made through his or her office and refuses, at 
lower levels of adjudication, to produce available medical evidence or 
make his or her client available for a consultative examination. Some 
representatives, as a matter of practice, do not submit available 
evidence until the day of the hearing even though in some cases the 
matter might have been favorably decided some time before on the basis 
of new medical reports. In addition to delaying payment unnecessarily 
in some cases, this practice can further delay disposition of a claim 
when the administrative law judge or expert witnesses do not have an 
opportunity to review and consider the new evidence prior to the 
hearing.

Consultation With the Representative Community

    In February 1995 we requested comments on a draft proposal from 33 
separate groups and organizations comprising the attorney and non-
attorney representative community. These groups included professional 
organizations, interest groups, think tanks, the Legal Services 
Corporation, and various private representative organizations.
    We received 92 individual responses. Many were supportive, 
especially regarding the need to provide standards for non-attorney 
representatives. Many, however, were opposed to more regulation of 
their professional conduct. We carefully considered all of the 
individual views and concerns in formulating these proposed rules. A 
summary of the major views and concerns and our responses follows.
    1. A common complaint was that the proposed standards used terms 
that were too vague and ambiguous, such as ``timely,'' ``diligence,'' 
``as soon as possible'' and ``matters at issue.'' To be responsive to 
these concerns and further clarify our requirements, we have modified 
the language that was most often identified as ambiguous.
    For example, the earlier language in what are now proposed 
Secs. 404.1740(b)(1) and (2) and 416.1540(b)(1) and (2) called for 
representatives to diligently develop the record and submit evidence as 
soon as possible. In these proposed rules, we ask representatives to 
submit evidence ``as soon as practicable, but no later than

[[Page 354]]

the due date designated by the Agency, except for good cause shown.'' 
We believe this standard is more specific, and gives representatives 
some discretion in the submission of information and evidence. Also, in 
place of the phrase ``matters at issue'' in what are now proposed 
Secs. 404.1740(b)(2)(ii) and 416.1540(b)(2)(ii), we say ``pertaining to 
specifically identified issues.'' In proposed Secs. 404.1740(b)(3)(i) 
and 416.1540(b)(3)(i), we narrowed the ``matters at issue'' to those 
matters ``establishing entitlement or eligibility to the claimed right 
or benefit.''
    Some individuals found the entire substance of the proposed 
standards to be ambiguous, although one believed they were drawn too 
narrowly and should be expanded. Several argued that the proposals did 
not provide adequate notice to representatives of the exact types of 
conduct we would find to violate these regulations.
    It is our position that the proposed rules define with specificity 
the types of conduct subject to regulation. Similar to other codes of 
conduct (e.g., the ABA Model Rules), the proposed regulations do not 
list every act or omission which might constitute a violation. Such a 
listing would be virtually impossible given the limitless factual 
situations involved in claims processing. Rather, we intend to deal 
with each complaint on a case-by-case basis to determine whether under 
the attending circumstances, a representative engaged in actionable 
misconduct. In making this determination we will apply an objective 
test, that is, whether a reasonable person, in light of all the 
circumstances, would consider the act or omission violative of the rule 
in question.
    This has been our practice in the past. In all but the most 
egregious instances of potential misconduct, we give representatives 
notice of the alleged wrongdoing and an opportunity to respond before 
formal charges are ever proposed. Once it is determined that a formal 
complaint is warranted, the Deputy Commissioner for Programs, Policy, 
Evaluation and Communications (or other official the Commissioner may 
designate) reviews the proposal independently from the investigative 
component and makes a decision whether to file a complaint.
    We believe that the internal checks and balances within our 
operating procedures provide adequate safeguards against abuse of 
discretion or arbitrary action. Even after a complaint is served, a 
representative is entitled to file an answer and petition for 
withdrawal of the complaint. Thereafter, the accused party has a right 
to a full evidentiary hearing, and a right to request review of the 
resulting decision. In view of these elaborate safeguards, administered 
at each step by independent decision makers, it is unlikely that an 
honest mistake or a reasonable misunderstanding on the part of a 
representative would result in sanctions.
    2. A majority of responding attorneys complained that, since their 
conduct already is governed by their individual State bar codes of 
conduct and ethical rules, a separate SSA code of conduct is redundant. 
Several individuals expressed the opinion that SSA simply can refer an 
attorney to his or her State bar disciplinary authority when we suspect 
misconduct. Another recognized that State bar rules are not applicable 
to representatives who are not attorneys, but opined that there are not 
enough non-attorney representatives to warrant standards of conduct for 
non-attorneys.
    Bar rules differ in language and format among the 50 States, the 
District of Columbia and the U.S. territories. As the administrator of 
a national program, however, SSA should not be expected or required to 
apply local rules, or local interpretations of the rules, to problems 
which extend beyond the boundaries of local jurisdictions. Furthermore, 
if we applied local rules or local interpretations rather than a 
national standard, it is conceivable that attorneys in one area could 
be subject to discipline for conduct that another jurisdiction would 
not find actionable. We do not believe it benefits the attorneys, the 
claimants or SSA to have this type of inconsistency in effecting the 
Commissioner's statutory obligation to regulate the conduct of 
representatives.
    Moreover, attorneys often represent claimants in jurisdictions 
other than those in which they are licensed to practice law. In those 
instances, it would be unclear which jurisdiction's rules would apply, 
which could lead to inconsistent application of the rules among 
attorneys practicing in the same geographical area.
    Also, under existing laws, referral of suspected attorney 
misconduct to a State bar disciplinary authority could possibly 
constitute a violation of the provisions of section 1106 of the Act 
and, under certain circumstances, the Privacy Act (5 U.S.C. 552a) on 
maintaining the confidentiality of personal information that we 
maintain in our files.
    A major concern is the fact that currently there is no external 
authority enforcing standards or rules of conduct for representatives 
who are not attorneys. Contrary to one individual's opinion, individual 
non-attorney representatives and representative organizations represent 
a substantial number of claimants. Within the last 7 years, suspension/
disqualification actions against non-attorneys comprised approximately 
36 percent of SSA's representative disciplinary actions. Therefore, it 
is essential to provide rules that will govern the conduct of non-
attorneys who practice before us. Moreover, it is only fair and 
equitable to hold all representatives who practice before us to the 
same standards.
    3. A majority of responding individuals objected to the earlier 
wording of what now are proposed Secs. 404.1740(b)(1) and 
416.1540(b)(1), which required representatives to ``[e]xercise 
diligence in developing the record on behalf of his or her client by 
obtaining and submitting, as soon as possible, all information and 
evidence intended for inclusion in the record.''
    They argued that SSA was attempting to improperly delegate to 
claimants and representatives its own duty to develop the record, which 
could place representatives at the mercy of arbitrary or unreasonable 
SSA requests for information. They also pointed out that the original 
language did not allow for discretion in situations involving 
uncooperative treating physicians and uncooperative or uneducated 
claimants.
    The claimant has a right to receive benefits under the Act only 
after establishing that he or she satisfies the underlying statutory 
and regulatory requirements.
    Historically, SSA has assisted claimants in gathering evidence and 
perfecting the claim. Current workloads and revised processing 
procedures will require, however, that the claimant take a more active 
role in establishing entitlement or eligibility. The representative, as 
the designated agent of the claimant, will be called upon to respond to 
our requests just as an unrepresented claimant will be required to 
cooperate.
    Our intention is for the representative to ensure that the 
claimant's evidence is available for inclusion in the record when the 
claim is ready for adjudication, unless there is a valid reason for the 
delay. This is consistent with the ABA Model Rules, which state at Rule 
3.2--Expediting Litigation, that ``[a] lawyer shall make reasonable 
efforts to expedite litigation consistent with the interests of the 
client.'' The comment accompanying the rule states that ``[d]elay 
should not be indulged merely for the convenience of the advocates,'' 
and ``[r]ealizing financial or other

[[Page 355]]

benefit from otherwise improper delay in litigation is not a legitimate 
interest of the client.''
    It is in the best interests of the claimant to have full 
adjudication of the claim as early in the adjudicative process as 
possible. Although there will be instances when evidence is not readily 
available despite reasonable effort, we believe that in most cases the 
information can be secured timely.
    In our experience, some representatives do not submit evidence 
promptly and fail to cooperate with our attempts to obtain necessary 
information and evidence. Under our current rules at Secs. 404.1715(a) 
and 416.1515(a), we are required to send the representative requests 
for information and evidence. Since we may not contact a represented 
claimant directly, the claimant often does not even know the claim is 
being delayed by the representative. Although this practice is not 
pervasive, when it does occur we are required to engage in unwarranted 
and time-consuming efforts to develop the evidence. More importantly, 
however, the claimant is harmed by delay in the disposition of the 
claim.
    We do not believe that our proposed rules unduly burden claimants 
or representatives. The duties in question only require a good faith 
effort to assist the claimant in timely submission of material 
information and evidence that the claimant wants included in the 
record.
    Many individuals complained that compliance with what are now 
proposed Secs. 404.1740(b)(2) and 416.1540(b)(2), which originally 
asked representatives to ``[p]romptly comply, at every stage of the 
administrative review process, with our requests for information and 
evidence,'' might place them in violation of their own State bar rules 
requiring zealous advocacy and protection of confidential client 
information.
    We recognize that State bar rules vary in their interpretation of 
an attorney's duty to maintain the confidences and secrets of the 
client. We believe that our proposed rules, as we have modified them in 
response to individual representatives' concerns, will permit an 
attorney to satisfy our requirements without risking unauthorized 
disclosures of information.
    Under the ABA Model Rules, an attorney may reveal information that 
is ``impliedly authorized in order to carry out the representation.'' 
Moreover, Rule 1.6a provides that the attorney is not barred from 
making disclosures if ``the client consents after consultation.'' We 
believe that an attorney can act in accordance with State bar rules by 
informing the client that SSA requires certain information and evidence 
from claimants, and that as the claimant's representative, the attorney 
must either comply with these requests or tell SSA that the claimant 
declines to furnish the data. Taking these rules into consideration, we 
have modified proposed Secs. 404.1740(b)(2) and 416.1540(b)(2) to 
permit representatives to protect a client's confidentiality by 
notifying SSA that ``the claimant does not consent to release of some 
or all of the [requested] material.''
    We do not believe, however, that deliberate and purposeful 
withholding from us of information or evidence is justifiable under the 
various State bar rules. In fact, such actions may be illegal and 
subject to severe penalty. Section 206 of Public Law 103-296 adds a new 
section 1129 to the Social Security Act, providing that: ``Any person * 
* * who makes, or causes to be made, a statement or representation of a 
material fact for use in determining [the right to benefits under title 
II or title XVI] that the person knows or should know is false or 
misleading or knows or should know omits a material fact * * * shall be 
subject to, in addition to any other penalties that may be prescribed 
by law, a civil money penalty of not more than $5,000 * * * .'' A 
material fact is defined as ``one which the Commissioner of Social 
Security may consider in evaluating whether an applicant is entitled to 
benefits * * * .'' (See sections 1129(a) (1) and (2) of the Act.)
    Further, section 205(u)(1)(A) of the Act, as added by section 
206(d) of Public Law 103-296, provides that the Commissioner ``shall 
immediately redetermine the entitlement of individuals to monthly 
insurance benefits under * * * [title II] if there is reason to believe 
that fraud or similar fault was involved in the application of the 
individual for such benefits * * * .'' Section 1631(e)(6)(A)(i) of the 
Act, which also was added by section 206(d) of Public Law 103-296, is a 
comparable provision covering eligibility for title XVI benefits. 
Similar fault is defined in sections 205(u)(2) and 1631(e)(6)(B) of the 
Act as knowingly making ``an incorrect or incomplete statement that is 
material to the determination'' or knowingly concealing ``information 
that is material to the determination.'' Moreover, section 205(a) of 
the Act provides that the Commissioner shall adopt ``reasonable and 
proper rules and regulations to regulate and provide for the nature and 
extent of the proofs and evidence and the method of taking and 
furnishing the same in order to establish the right to benefits 
hereunder.'' This section is made applicable to the title XVI program 
by section 1631(d)(1) of the Act.
    In our view, the provisions of proposed Secs. 404.1740(b)(2) and 
416.1540(b)(2) require the representative to comply with our requests 
made under statutory authority for full and accurate disclosure of 
material facts to the same extent that the claimant is required to do 
so. In assessing any allegation raised against a representative 
regarding failure to comply with our request for information, we will 
consider the reasonableness of the request, the relevance of the 
information requested, and any factors that may interfere with the 
procurement of requested information.
    4. A few individuals questioned the need for any rules or standards 
of conduct, expressing their opinion that representatives rarely engage 
in misconduct sufficient to warrant formalized investigative and 
disciplinary procedures. Several speculated that only representatives 
who were not attorneys engaged in misconduct warranting SSA attention.
    From August 1988 through August 1995, the Office of Hearings and 
Appeals received approximately 566 referrals of representative 
misconduct. Some of these referrals complained of questionable conduct 
which warranted corrective action, but which was not covered by any 
existing regulatory authority. Of the remaining referrals, we were able 
to close many without formal disciplinary action. In approximately 160 
claims, we closed the disciplinary referral upon the representative's 
refund to a claimant or to SSA of monies collected without 
authorization or as a result of Agency overpayments to representatives. 
As of August 15, 1995, we have collected from these representatives a 
total of $279,411.98, returning $176,096 of this amount to the 
claimants who had been overcharged, and the remainder to SSA.
    We also have filed approximately 136 formal complaints against 
representatives. We were able to resolve many complaints before a 
formal hearing. The remainder, however, have resulted in the suspension 
or disqualification of 57 representatives. Approximately 64 percent of 
the suspended or disqualified representatives were attorneys.
    We believe these general statistics provide ample evidence of the 
need to continue our investigative and disciplinary role. We expect the 
proposed rules and standards to provide the representative community 
with improved notice of the conduct we view as inappropriate, and 
supply SSA with

[[Page 356]]

the tools to address representatives' conduct that falls below our 
published standards.
    5. Several individuals were confused about the addition of the word 
``retain'' in what are now proposed Secs. 404.1740(c)(2) and 
416.1540(c)(2), which state that a representative shall not 
``[k]nowingly charge, collect or retain * * * any fee for 
representational services in violation of applicable law or 
regulation.'' They questioned whether this was a change in SSA's policy 
permitting representatives to collect money toward payment of their 
fees before any fee is authorized, as long as the collection is placed 
in a trust or escrow account.
    This is not a policy change. Social Security Ruling (SSR) 82-39 
still permits representatives to solicit from claimants a deposit of 
money into a trust or escrow account as a means of assuring payment of 
the fees for services in connection with such representation, as long 
as the claimant willingly enters into the trust or escrow agreement and 
willingly deposits the money in the trust or escrow account; none of 
the money in the account is paid over to the representative unless and 
until SSA authorizes a fee, and then only in an amount up to, but not 
exceeding, the authorized fee; and any funds in the account in excess 
of the authorized fee are refunded promptly to the claimant.
    We have added the word ``retain'' to cover those situations in 
which the representative has charged or collected a fee and has 
improperly retained the fee despite a claimant's or SSA's request for 
refund. If a representative places the money charged and collected from 
a claimant into a trust or escrow account, and complies with the 
conditions set forth in SSR 82-39, we will not consider that money to 
be an improperly retained fee.
    6. A few individuals were concerned with what are now proposed 
Secs. 404.1740(c)(3) and 416.1540(c)(3), which prohibit representatives 
from knowingly making or participating in the making or presentation of 
false oral or written statements, assertions or representations about a 
material fact concerning a matter within our jurisdiction. They 
suggested that it required them to be a guarantor of a claimant's 
testimony, or to impeach their own client if they suspected that the 
client was presenting false evidence or testimony.
    This prohibition applies only to knowing presentations of false 
statements. There already exist both criminal and civil penalties for 
knowingly making or participating in the making of false 
representations to a claimant or to SSA. (See 18 U.S.C. 1001 and 
sections 208 and 1129 of the Act.) By incorporating this prohibition in 
our rules of conduct, we place representatives on notice that, in 
addition to the criminal and civil sanctions possible for this 
misconduct, the making or presentation of such false statements also 
may lead to their suspension or disqualification from representing 
claimants in matters before us.
    We do not place an affirmative duty on representatives to impeach 
their clients or guarantee a client's honesty. Nonetheless, we do 
expect representatives who practice before us not to knowingly prompt, 
encourage or engage in false or misleading representations about 
material facts in connection with the representation of a claimant.
    7. Several individuals expressed concern about what are now 
proposed Secs. 404.1740(c)(4) and 416.1540(c)(4), which prohibit 
willfully or negligently delaying, or causing to be delayed, the 
processing of a claim. They suggested that it was overly broad, and 
could be interpreted to prohibit even such reasonable delays as 
scheduling conflicts, illness, family emergency and claimants' 
continuing treatment.
    Black's Law Dictionary defines an act or omission as willfully done 
``if done voluntarily and intentionally and with the specific intent to 
do something the law forbids, or with the specific intent to fail to do 
something the law requires to be done.'' It includes actions engaged in 
with a bad motive or purpose, with indifference to the natural 
consequences, or without justifiable excuse. A negligent action 
involves the failure to exhibit the conduct or care a reasonable person 
would exhibit under similar circumstances. It is characterized chiefly 
by inadvertence, thoughtlessness and inattention.
    Under our proposed standard prohibiting willful or negligent delay, 
SSA does not intend to penalize reasonable or justifiable delays, or 
delays that may occur even when reasonable care is taken in claim 
preparation. In determining whether a representative has violated this 
rule we will look to the gravity of the act or omission, the 
consequences for the claimant, whether the behavior reflects a pattern 
or practice, and other factual circumstances particular to the matter.
    8. The draft proposal had language prohibiting representatives from 
engaging in disruptive, defiant or confrontational behavior or repeated 
challenges to the presiding official's authority, which clearly exceed 
the bounds of zealous advocacy. Many individuals found this provision 
to be vague and an interference with their duty to provide zealous 
advocacy.
    In response to these concerns, we modified the language in proposed 
Secs. 404.1740(c)(7)(ii) and 416.1540(c)(7)(ii) to prohibit ``[w]illful 
behavior which has the effect of improperly disrupting proceedings or 
obstructing the adjudicative process.'' We envision actionable conduct 
under this provision to include grossly undignified or discourteous 
behavior and inflammatory language directed at the presiding official 
which prejudice the orderly presentation and reception of evidence.
    This rule is not intended to inhibit zealous advocacy or vigorous 
dissent, but to prevent conduct or language which significantly exceeds 
the bounds of civility, and disrupts a proceeding. In determining 
whether a representative has violated this provision, we will look at 
the totality of the circumstances, including the egregiousness of the 
conduct, its impact on the claimant or the Agency, possible provocation 
and whether the behavior reflects a pattern or practice.
    9. The draft proposal included a prohibition against soliciting or 
accepting from SSA direct payment of fees from past-due benefits, in 
violation of law or regulation, for services performed by a person 
other than an attorney. Many individuals misunderstood the intent of 
this provision, believing that it meant either that non-attorney 
representatives could not be paid for their representational services, 
or that attorneys could not receive direct payment from SSA for persons 
other than attorneys who provided representational services under their 
direct supervision.
    Because of the confusion involving this provision, and the fact 
that SSA currently is considering separate regulations to address 
direct payment of fees in more detail, this provision is not included 
in these proposed rules.
    10. The draft proposal contained a prohibition against making off-
the-record communications relevant to the merits of an adjudication to 
anyone involved in the administrative review process. Many individuals 
found this provision to be vague and undefined. They were concerned 
that it prohibited communications to SSA in claims that had extenuating 
circumstances, such as claimants who were terminally ill or suicidal. 
In their opinion, it would unduly formalize nonadversarial proceedings, 
would foster inefficiency by requiring increased documentation of SSA 
contacts, and would be in conflict

[[Page 357]]

with SSA's goal of expediting claims processing.
    We agreed that the provision was confusing and possibly 
counterproductive, so it is not included in these proposed rules.
    11. The draft proposal also contained a prohibition against 
engaging in dilatory tactics or neglectful actions which are 
prejudicial to the fair or orderly conduct of oral proceedings. Some 
individuals pointed out that it was vague and duplicated an existing 
provision. We agreed, and this provision is not included in these 
proposed rules.

Explanation of Revisions

    These proposed regulations would revise Secs. 404.1740, 404.1745, 
404.1750, 404.1765, 404.1770, 404.1799, 416.1540, 416.1545, 416.1550, 
416.1565, and 416.1599.
    Proposed Secs. 404.1740(b) and 416.1540(b) describe affirmative 
duties, which are certain obligations that a representative must 
actively perform in his or her representation of claimants in matters 
before us. We expect these affirmative duties to promote efficiency and 
timeliness in assisting the claimant to meet the burden of proving 
eligibility for benefits.
    Proposed Secs. 404.1740(b)(1) and 416.1540(b)(1) require the 
representative to exercise diligence in obtaining and submitting that 
evidence which the claimant wants the decision maker to consider in 
ruling on a claim.
    Proposed Secs. 404.1740(b)(2)(i) and 416.1540(b)(2)(i) require that 
the representative provide, upon request, information regarding the 
claimant's medical treatment, vocational factors or other specifically 
identified matters, or provide notification that the claimant does not 
consent to release the information.
    Proposed Secs. 404.1740(b)(2)(ii) and 416.1540(b)(2)(ii) require 
that the representative provide, upon request, evidence material to 
identified issues which the representative or claimant already has or 
may readily obtain. This rule requires furnishing evidence already in 
the possession of the representative or claimant, or obtaining copies 
of existing evidence not already of record. The provision also mandates 
that the representative and claimant furnish all the pertinent evidence 
requested, even if it is ostensibly unfavorable to the claimant, or 
provide notification by the representative that the claimant does not 
consent to its release.
    Proposed Secs. 404.1740(b)(3) and 416.1540(b)(3) are intended to 
establish minimum requirements governing the competency and behavior of 
representatives in their dealings with us. They seek to ensure that the 
representative does not become a hindrance, either through ignorance or 
willful obstruction, in our attempts to provide a fair and expeditious 
disposition of the claim for benefits.
    We have weighed the possibility of testing or other formal 
certification procedures for non-attorney representatives, but rejected 
the idea as infeasible at this time. Nonetheless, in order to identify 
those persons who do not possess the requisite qualifications, we are 
considering possible revisions to Secs. 404.1705 and 416.1505 to define 
in greater detail the minimum requirements to serve as a 
representative.
    Any individual who provides services as a representative for a fee 
shall be expected to demonstrate, in the performance of those services, 
sufficient knowledge of the claims process to be of assistance to the 
claimant. Ignorance of substantive provisions of law or procedural 
requirements shall not be considered a mitigating factor for acts or 
omissions which impede or disrupt the efficient and orderly disposition 
of a claim.
    Proposed Secs. 404.1740(b)(3)(i) and 416.1540(b)(3)(i) essentially 
state that the representative must understand what the claimant must 
prove in order to qualify for benefits, and know how to obtain and 
submit evidence regarding the claim.
    Proposed Secs. 404.1740(b)(3)(ii) and 416.1540(b)(3)(ii) require 
the representative to promptly answer our requests and communications 
pertaining to the pending claim. It is not permissible for the 
representative to ignore official communications.
    Proposed Secs. 404.1740(b)(3)(iii) and 416.1540(b)(3)(iii) require 
cooperation in developing the record, which may typically include 
transactions requiring the participation of the claimant, such as 
consenting to a treating source's release of medical records, 
scheduling consultative examinations and scheduling conferences or 
hearing dates.
    Proposed Secs. 404.1740(c) and 416.1540(c) describe prohibited 
actions, which are certain acts or activities that a representative 
must avoid. In part, the prohibited actions incorporate various 
statutory provisions set forth in the Act and other legislation.
    Proposed Secs. 404.1740(c)(1) and 416.1540(c)(1) are based on the 
prohibitions set forth in section 206(a)(5) of the Act and are self-
explanatory. A representative's honest mistake would not be construed 
as knowingly misleading a claimant. In determining whether a 
representative knowingly misled a claimant, we will consider whether 
the action involved matters that the representative should have known 
were untrue.
    Proposed Secs. 404.1740(c)(2) and 416.1540(c)(2) are based on the 
provisions of sections 206 (a) and (b) of the Act and apply to all fee 
collections. With regard to section 206(a)(4) of the Act, we will 
assume in the absence of evidence to the contrary that work performed 
by support staff in a law office is performed under the supervision of 
an attorney, thereby permitting the attorney to validly claim direct 
payment from past-due benefits for those services in a title II claim. 
This assumption will not apply, however, when a person other than an 
attorney appears alone at a hearing to provide representation on behalf 
of a claimant.
    In those cases, the person shall be considered the representative 
and will be required to file a fee petition or fee agreement for his or 
her services, and will not be entitled to receive direct payment from 
past-due benefits for the representation at the hearing.
    Proposed Secs. 404.1740(c)(3) and 416.1540(c)(3) are based 
generally on the criminal prohibitions in 18 U.S.C. 1001 and the 
provisions governing civil monetary penalties and assessments set forth 
in section 1129 of the Act and are self-explanatory.
    Proposed Secs. 404.1740(c)(4) and 416.1540(c)(4) are directed 
against practices where willful or negligent acts or omissions have the 
effect of delaying the disposition of a claim for benefits.
    Proposed Secs. 404.1740(c)(5) and 416.1540(c)(5) are based on the 
provisions of section 1106 of the Act, which prohibit disclosure by any 
person of information obtained by the Agency in conjunction with a 
claim, except as may be authorized by regulations prescribed by us.
    Proposed Secs. 404.1740(c)(6) and 416.1540(c)(6) prohibit a 
representative from offering or giving anything of value to persons 
involved in the adjudication except as remuneration to a witness for 
legitimate expenses or for services rendered. The intent is to prevent 
the fact or the appearance of attempting to influence the disposition 
of a claim by bestowing gifts or favors on individuals in a position to 
materially affect the outcome.
    Proposed Secs. 404.1740(c)(7) and 416.1540(c)(7) are directed at 
conduct undertaken during the course of oral proceedings which is 
disruptive and detrimental to due process and the administration of 
justice.
    Proposed Secs. 404.1740(c)(7)(i) and 416.1540(c)(7)(i) prohibit 
repeated instances of unexcused absences or

[[Page 358]]

tardiness because such conduct adversely affects claimants, diminishes 
the ability of the Agency to operate efficiently and harms other 
applicants by disrupting hearing schedules and work flow.
    Proposed Secs. 404.1740(c)(7)(ii) and 416.1540(c)(7)(ii) address 
deliberate acts which have the effect of disrupting the proceedings or 
diverting the attention of the participants from the purpose of the 
hearing to matters irrelevant to the merits of the case.
    Proposed Secs. 404.1740(c)(7)(iii) and 416.1540(c)(7)(iii) are 
based in part on the provisions of section 206(a)(5) of the Act, 18 
U.S.C. 111 and 28 CFR 64.2(x). They prohibit threatening or 
intimidating the participants in an oral proceeding or the employees 
assigned to our offices. Actual or implied threats of violence will not 
be tolerated.
    Proposed Secs. 404.1745 and 416.1545 explain that we may begin 
proceedings to suspend or disqualify a person who does not meet our 
qualifications for a representative or who violates our rules and 
standards governing representatives in their dealings with us.
    Proposed Secs. 404.1750 (a) and (d), 404.1765 (a) and (e), 404.1799 
(c) and (e), 416.1550 (a) and (d), 416.1565 (a) and (e), and 416.1599 
(c) and (e) are being modified to reflect current Agency official 
titles and organizational changes.
    Proposed Secs. 404.1765(g)(3) and 416.1565(g)(3) are being revised 
to remove the first word ``not'' from each paragraph. This corrects 
errors made when the regulations on representation of parties were 
reorganized, renumbered and republished on August 5, 1980 (45 FR 
52078). When the original regulation was published as Sec. 404.983(f) 
on April 26, 1969 (34 FR 6973, 6974), it provided that ``[i]f the 
individual has filed an answer and if the hearing officer believes that 
there is relevant and material evidence available which has not been 
presented at the hearing, the hearing officer may at any time prior to 
the mailing of notice of the decision, or submittal of a recommended 
decision, reopen the hearing for the receipt of such evidence.'' This 
is consistent with the preceding language in Sec. 404.983(f), which 
states that if a representative ``has filed no answer he shall have no 
right to present evidence * * * .''
    In the 1980 final rule, the former Sec. 404.983(f) was renumbered 
as Sec. 404.1765(f), with a parallel SSI provision at Sec. 416.1565(f). 
Paragraph (f)(2) addressed representatives who do not answer charges 
and paragraph (f)(3) addressed those who do. Paragraph (f)(3) (45 FR 
52078, 52093, 52108) contained a misprint, however, which read, ``If 
the representative did not file an answer to the charges * * * .'' 
Thus, paragraphs (f)(2) and (f)(3) were inconsistent and conflicting. 
Subsequently, in 1991, paragraph (f) of Secs. 404.1765 and 416.1565 was 
redesignated as paragraph (g) (56 FR 24129, 24131, 24132).
    The 1980 misprint substantively changed the meaning of current 
paragraph (g)(3). As specifically explained in the preamble to those 
rules, however, SSA never intended to make any substantive changes in 
those regulations. The regulations were rewritten for the purpose of 
reorganizing and restating them more clearly in simpler language. The 
misprint has created confusion in the representative disciplinary 
process. Consequently, we are taking this opportunity to correct the 
error to reflect the original intent of the regulations.
    We also are correcting another minor misprint in the current 
Sec. 404.1765(g)(3) by making ``decisions'' singular for correctness 
and consistency with Sec. 416.1565(g)(3).
    Finally, in proposed Sec. 404.1770, paragraphs (a)(3) and (b)(3) 
are being amended to correct a publication error that occurred after 
paragraph (a)(3) was revised in 1991. As correctly published in final 
rules on May 29, 1991 (56 FR 24129, 24132), paragraph (a)(3) was 
revised to show that the hearing officer shall mail a copy of the 
decision to the parties at their last known addresses. When codified in 
the 1992 volume of the Code of Federal Regulations, however, the 
revised language of paragraph (a)(3) was erroneously placed in 
paragraph (b)(3), superseding that existing language addressing the 
effect of a final decision imposing a suspension upon a representative. 
With this correction, we will accurately reflect the language and 
purpose of paragraphs (a)(3) and (b)(3) and bring Sec. 404.1770 into 
conformity with its equivalent Sec. 416.1570.

Electronic Versions

    The electronic file of this document is available on the Federal 
Bulletin Board (FBB) at 9:00 a.m. on the date of publication in the 
Federal Register. To download the file, modem dial (202) 512-1387. The 
FBB instructions will explain how to download the file and the fee. 
This file is in WordPerfect and will remain on the FBB during the 
comment period.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these rules do not meet the criteria for a 
significant regulatory action under Executive Order 12866. Thus, they 
were not subject to OMB review.

Regulatory Flexibility Act

    We certify that the proposed rules, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
The provisions of the proposed rules that involve entities were 
developed to allow them to provide representational services without 
generating any supplemental reporting requirements. The proposed rules 
will not result in any increased legal accounting or consulting costs 
to small businesses or small organizations, will not adversely affect 
competition in the marketplace, or create barriers to entry on the part 
of small entities. In fact, these rules may facilitate such entry into 
the representation sphere. The regulations will provide uniform 
standards applicable to all entities who engage in the business and 
tend to disqualify the unscrupulous and the incompetent practitioners, 
thereby expanding demand for others willing and able to perform the 
service. Therefore, a regulatory flexibility analysis as provided in 
Public Law 96-354, the Regulatory Flexibility Act, is not required.

Paperwork Reduction Act

    These regulations impose no reporting/recordkeeping requirements 
necessitating clearance by OMB.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social 
Security-Disability Insurance; 96.002, Social Security-Retirement 
Insurance; 96.004, Social Security-Survivors Insurance; 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.

20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping, 
Supplemental Security Income (SSI) requirements.

    Dated: December 23, 1996.
Shirley S. Chater,
Commissioner of Social Security.

    For the reasons set forth in the preamble, part 404, subpart R, 
chapter III of title 20 of the Code of Federal

[[Page 359]]

Regulations is proposed to be amended as set forth below.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950-    )

    1. The authority citation for subpart R of part 404 continues to 
read as follows:

    Authority: Secs. 205(a), 206, and 702(a)(5) of the Social 
Security Act (42 U.S.C. 405(a), 406, and 902(a)(5)).

    2. Section 404.1740 is revised to read as follows:


Sec. 404.1740  Rules of conduct and standards of responsibility for 
representatives.

    (a) Purpose and scope. (1) All attorneys or other persons acting on 
behalf of a party seeking a statutory right or benefit shall, in their 
dealings with us, faithfully execute their duties as agents and 
fiduciaries of a party. A representative shall provide competent 
assistance to the claimant and recognize the authority of the Agency to 
lawfully administer the process. The following provisions in this 
section set forth certain affirmative duties and prohibited actions 
which shall govern the relationship between the representative and the 
Agency, including matters involving our administrative procedures and 
fee collections.
    (2) Moreover, all representatives shall be forthright in their 
dealings with us and with the claimant and shall comport themselves 
with due regard for the nonadversarial nature of the proceedings by 
complying with our rules and standards, which are intended to ensure 
orderly and fair presentation of evidence and argument.
    (b) Affirmative duties. A representative shall:
    (1) Promptly obtain all information and evidence which the claimant 
wants to submit in support of the claim and forward the same for 
consideration as soon as practicable, but no later than the due date 
designated by the Agency, except for good cause shown;
    (2) Comply with our requests for information or evidence at any 
stage of the administrative review process as soon as practicable, but 
no later than the due date designated by the Agency, except for good 
cause shown. This includes the obligation to:
    (i) Provide, upon request, identification of all known medical 
sources, updated information regarding medical treatment, new or 
corrected information regarding work activity, other specifically 
identified information pertaining to the claimed right or benefit, or 
notification by the representative after consultation with the claimant 
that the claimant does not consent to the release of some or all of the 
material; and
    (ii) Provide, upon request, all evidence and documentation 
pertaining to specifically identified issues which the representative 
or the claimant either has within his or her possession or may readily 
obtain, or notification by the representative after consultation with 
the claimant that the claimant does not consent to the release of some 
or all of the material;
    (3) Conduct his or her dealings in a manner which does not obstruct 
the efficient, fair or orderly conduct of the administrative review 
process, including duties to:
    (i) Be cognizant of the matters at issue in establishing 
entitlement or eligibility to the claimed right or benefit, and 
knowledgeable of our evidentiary and procedural requirements in order 
to provide competent assistance to the party he or she represents;
    (ii) Provide timely and responsive answers to requests from the 
Agency for information pertinent to processing of the claim; and
    (iii) Cooperate with our attempts to obtain information and 
documentation, or complete processing requirements for a claimed right 
or benefit.
    (c) Prohibited actions. A representative shall not:
    (1) In any manner or by any means threaten, coerce, intimidate, 
deceive or knowingly mislead a claimant, or prospective claimant or 
beneficiary, regarding benefits or other rights under the Act;
    (2) Knowingly charge, collect or retain, or make any arrangement to 
charge, collect or retain, from any source, directly or indirectly, any 
fee for representational services in violation of applicable law or 
regulation;
    (3) Knowingly make or present, or participate in the making or 
presentation of, false oral or written statements, assertions or 
representations about a material fact concerning a matter within our 
jurisdiction;
    (4) Willfully or negligently delay, or cause to be delayed, by any 
act or omission, without good cause, the processing of a claim at any 
stage of the administrative review process;
    (5) Divulge, except as may be authorized by regulations prescribed 
by us, any information we furnish or disclose about a claim or 
prospective claim of another person;
    (6) Attempt to influence, directly or indirectly, the outcome of a 
decision, determination or other administrative action by offering or 
granting a loan, gift, entertainment or anything of value to a 
presiding official, Agency employee or witness who is or may reasonably 
be expected to be involved in the administrative review process, except 
as reimbursement for legitimately incurred expenses or lawful 
compensation for the services of an expert witness retained on a non-
contingency basis to provide evidence; or
    (7) Engage in actions or behavior prejudicial to the fair and 
orderly conduct of oral proceedings, including but not limited to:
    (i) Repeated instances of unauthorized absences, or persistent 
tardiness at scheduled proceedings;
    (ii) Willful behavior which has the effect of improperly disrupting 
proceedings or obstructing the adjudicative process; and
    (iii) Threatening or intimidating language, gestures or actions 
directed at a presiding official, witness or Agency employee.
    3. Section 404.1745 is revised to read as follows:


Sec. 404.1745  Violations of our requirements, rules, or standards.

    When we have evidence that a representative fails to meet our 
qualification requirements or has violated the rules governing dealings 
with us, we may begin proceedings to suspend or disqualify that 
individual from acting in a representational capacity before us. We may 
file charges seeking such sanctions when we have evidence that a 
representative:
    (a) Does not meet the qualifying requirements described in 
Sec. 404.1705;
    (b) Has violated the affirmative duties or engaged in the 
prohibited actions set forth in Sec. 404.1740; or
    (c) Has been convicted of a violation under section 206 of the Act.
    4. Section 404.1750 is amended by revising paragraphs (a) and (d) 
to read as follows:


Sec. 404.1750  Notice of charges against a representative.

    (a) The Deputy Commissioner for Programs, Policy, Evaluation and 
Communications (or other official the Commissioner may designate), or 
his or her designee, will prepare a notice containing a statement of 
charges that constitutes the basis for the proceeding against the 
representative.
* * * * *
    (d) The Deputy Commissioner for Programs, Policy, Evaluation and 
Communications (or other official the Commissioner may designate), or 
his or her designee, may extend the 30-day period for good cause.
* * * * *
    5. Section 404.1765 is amended by revising paragraph (a), the 
second

[[Page 360]]

sentence of paragraph (e), and paragraph (g)(3) to read as follows:


Sec. 404.1765   Hearing on charges.

    (a) Scheduling the hearing. If the Deputy Commissioner for 
Programs, Policy, Evaluation and Communications (or other official the 
Commissioner may designate), or his or her designee, does not take 
action to withdraw the charges within 15 days after the date on which 
the representative filed an answer, we will hold a hearing and make a 
decision on the charges.
* * * * *
    (e) Parties. * * * The Deputy Commissioner for Programs, Policy, 
Evaluation and Communications (or other official the Commissioner may 
designate), or his or her designee, shall also be a party to the 
hearing.
* * * * *
    (g) * * *
    (3) If the representative did file an answer to the charges, and if 
the hearing officer believes that there is material evidence available 
that was not presented at the hearing, the hearing officer may at any 
time before mailing notice of the hearing decision reopen the hearing 
to accept the additional evidence.
* * * * *
    6. Section 404.1770 is amended by revising the first sentence of 
paragraph (a)(3) and by revising paragraph (b)(3) to read as follows:


Sec. 404.1770  Decision by hearing officer.

    (a) * * *
    (3) The hearing officer shall mail a copy of the decision to the 
parties at their last known addresses. * * *
    (b) * * *
    (3) If the final decision is that a person is suspended for a 
specified period of time from being a representative in dealings with 
us, he or she will not be permitted to represent anyone in dealings 
with us during the period of suspension unless authorized to do so 
under the provisions of Sec. 404.1799.
    7. Section 404.1799 is amended by revising the first sentence of 
paragraph (c) and the second sentence of paragraph (e) to read as 
follows:


Sec. 404.1799   Reinstatement after suspension or disqualification--
period of suspension not expired.

* * * * *
    (c) The Appeals Council shall allow the Deputy Commissioner for 
Programs, Policy, Evaluation and Communications (or other official the 
Commissioner may designate), or his or her designee, upon notification 
of receipt of the request, 30 days in which to present a written report 
of any experiences with the suspended or disqualified person subsequent 
to that person's suspension or disqualification. * * *
* * * * *
    (e) * * * It shall also mail a copy to the Deputy Commissioner for 
Programs, Policy, Evaluation and Communications (or other official the 
Commissioner may designate), or his or her designee.
* * * * *
    For the reasons set forth in the preamble, part 416, subpart O, 
chapter III of title 20 of the Code of Federal Regulations is proposed 
to be amended as set forth below.

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

    8. The authority citation for subpart O of part 416 continues to 
read as follows:

    Authority: Secs. 702(a)(5) and 1631(d) of the Social Security 
Act (42 U.S.C. 902(a)(5) and 1383(d)).

    9. Section 416.1540 is revised to read as follows:


Sec. 416.1540   Rules of conduct and standards of responsibility for 
representatives.

    (a) Purpose and scope. (1) All attorneys or other persons acting on 
behalf of a party seeking a statutory right or benefit shall, in their 
dealings with us, faithfully execute their duties as agents and 
fiduciaries of a party. A representative shall provide competent 
assistance to the claimant and recognize the authority of the Agency to 
lawfully administer the process. The following provisions in this 
section set forth certain affirmative duties and prohibited actions 
which shall govern the relationship between the representative and the 
Agency, including matters involving our administrative procedures and 
fee collections.
    (2) Moreover, all representatives shall be forthright in their 
dealings with us and with the claimant and shall comport themselves 
with due regard for the nonadversarial nature of the proceedings by 
complying with our rules and standards, which are intended to ensure 
orderly and fair presentation of evidence and argument.
    (b) Affirmative duties. A representative shall:
    (1) Promptly obtain all information and evidence which the claimant 
wants to submit in support of the claim and forward the same for 
consideration as soon as practicable, but no later than the due date 
designated by the Agency, except for good cause shown;
    (2) Comply with our requests for information or evidence at any 
stage of the administrative review process as soon as practicable, but 
no later than the due date designated by the Agency, except for good 
cause shown. This includes the obligation to:
    (i) Provide, upon request, identification of all known medical 
sources, updated information regarding medical treatment, new or 
corrected information regarding work activity, other specifically 
identified information pertaining to the claimed right or benefit, or 
notification by the representative after consultation with the claimant 
that the claimant does not consent to the release of some or all of the 
material; and
    (ii) Provide, upon request, all evidence and documentation 
pertaining to specifically identified issues which the representative 
or the claimant either has within his or her possession or may readily 
obtain, or notification by the representative after consultation with 
the claimant that the claimant does not consent to the release of some 
or all of the material;
    (3) Conduct his or her dealings in a manner which does not obstruct 
the efficient, fair or orderly conduct of the administrative review 
process, including duties to:
    (i) Be cognizant of the matters at issue in establishing 
entitlement or eligibility to the claimed right or benefit, and 
knowledgeable of our evidentiary and procedural requirements in order 
to provide competent assistance to the party he or she represents;
    (ii) Provide timely and responsive answers to requests from the 
Agency for information pertinent to processing of the claim; and
    (iii) Cooperate with our attempts to obtain information and 
documentation, or complete processing requirements for a claimed right 
or benefit.
    (c) Prohibited actions. A representative shall not:
    (1) In any manner or by any means threaten, coerce, intimidate, 
deceive or knowingly mislead a claimant, or prospective claimant or 
beneficiary, regarding benefits or other rights under the Act;
    (2) Knowingly charge, collect or retain, or make any arrangement to 
charge, collect or retain, from any source, directly or indirectly, any 
fee for representational services in violation of applicable law or 
regulation;
    (3) Knowingly make or present, or participate in the making or 
presentation of, false oral or written statements, assertions or 
representations about a material fact concerning a matter within our 
jurisdiction;
    (4) Willfully or negligently delay, or cause to be delayed, by any 
act or

[[Page 361]]

omission, without good cause, the processing of a claim at any stage of 
the administrative review process;
    (5) Divulge, except as may be authorized by regulations prescribed 
by us, any information we furnish or disclose about a claim or 
prospective claim of another person;
    (6) Attempt to influence, directly or indirectly, the outcome of a 
decision, determination or other administrative action by offering or 
granting a loan, gift, entertainment or anything of value to a 
presiding official, Agency employee or witness who is or may reasonably 
be expected to be involved in the administrative review process, except 
as reimbursement for legitimately incurred expenses or lawful 
compensation for the services of an expert witness retained on a non-
contingency basis to provide evidence; or
    (7) Engage in actions or behavior prejudicial to the fair and 
orderly conduct of oral proceedings, including but not limited to:
    (i) Repeated instances of unauthorized absences, or persistent 
tardiness at scheduled proceedings;
    (ii) Willful behavior which has the effect of improperly disrupting 
proceedings or obstructing the adjudicative process; and
    (iii) Threatening or intimidating language, gestures or actions 
directed at a presiding official, witness or Agency employee.
    10. Section 416.1545 is revised to read as follows:


Sec. 416.1545  Violations of our requirements, rules, or standards.

    When we have evidence that a representative fails to meet our 
qualification requirements or has violated the rules governing dealings 
with us, we may begin proceedings to suspend or disqualify that 
individual from acting in a representational capacity before us. We may 
file charges seeking such sanctions when we have evidence that a 
representative:
    (a) Does not meet the qualifying requirements described in 
Sec. 416.1505;
    (b) Has violated the affirmative duties or engaged in the 
prohibited actions set forth in Sec. 416.1540; or
    (c) Has been convicted of a violation under section 1631(d) of the 
Act.
    11. Section 416.1550 is amended by revising paragraphs (a) and (d) 
to read as follows:


Sec. 416.1550  Notice of charges against a representative.

    (a) The Deputy Commissioner for Programs, Policy, Evaluation and 
Communications (or other official the Commissioner may designate), or 
his or her designee, will prepare a notice containing a statement of 
charges that constitutes the basis for the proceeding against the 
representative.
* * * * *
    (d) The Deputy Commissioner for Programs, Policy, Evaluation and 
Communications (or other official the Commissioner may designate), or 
his or her designee, may extend the 30-day period for good cause.
* * * * *
    12. Section 416.1565 is amended by revising paragraph (a), the 
second sentence of paragraph (e), and paragraph (g)(3) to read as 
follows:


Sec. 416.1565  Hearing on charges.

    (a) Scheduling the hearing. If the Deputy Commissioner for 
Programs, Policy, Evaluation and Communications (or other official the 
Commissioner may designate), or his or her designee, does not take 
action to withdraw the charges within 15 days after the date on which 
the representative filed an answer, we will hold a hearing and make a 
decision on the charges.
* * * * *
    (e) Parties. * * * The Deputy Commissioner for Programs, Policy, 
Evaluation and Communi cations (or other official the Commissioner may 
designate), or his or her designee, shall also be a party to the 
hearing.
* * * * *
    (g) * * *
    (3) If the representative did file an answer to the charges, and if 
the hearing officer believes that there is material evidence available 
that was not presented at the hearing, the hearing officer may at any 
time before mailing notice of the hearing decision reopen the hearing 
to accept the additional evidence.
* * * * *
    13. Section 416.1599 is amended by revising the first sentence of 
paragraph (c) and the second sentence of paragraph (e) to read as 
follows:


Sec. 416.1599  Reinstatement after suspension or disqualification--
period of suspension not expired.

* * * * *
    (c) The Appeals Council shall allow the Deputy Commissioner for 
Programs, Policy, Evaluation and Communications (or other official the 
Commissioner may designate), or his or her designee, upon notification 
of receipt of the request, 30 days in which to present a written report 
of any experiences with the suspended or disqualified person subsequent 
to that person's suspension or disqualification. * * *
* * * * *
    (e) * * * It shall also mail a copy to the Deputy Commissioner for 
Programs, Policy, Evaluation and Communications (or other official the 
Commissioner may designate), or his or her designee.
* * * * *
[FR Doc. 97-38 Filed 1-2-97; 8:45 am]
BILLING CODE 4190-29-P


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