58288 Federal Register / Vol. 65, No. 189 / Thursday, September 28, 2000 / Notices

Having examined the record in this

investigation, including the briefs and

the responses thereto, the Commission

determined (1) not to review the ALJ’s

finding in the IAO that access from the

United States of Mentor’s foreign design

verification centers would not be

covered by the Commission’s cease and

desist order, (2) to take no position on

the ALJ’ s alternative determination in

the IAO concerning the ‘‘use’’ of

Mentor’s hardware logic emulator in the

United States if the term ‘‘covered

product’’ in the cease and desist order

is interpreted to include infringing

hardware and software that has not been

imported, (3) to affirm Order No. 115,

and (4) to grant Quickturn’s motion to

file a reply to the response of the IA to

Quickturn’s petitions to the

Commission.

This action is taken under the

authority of section 337 of the Tariff Act

of 1930, 19 U.S.C. 1337, and

Commission rule 210.79, 19 CFR 210.79.

Issued: September 22, 2000.

By order of the Commission.

Donna R. Koehnke,

Secretary.

[FR Doc. 00–24915 Filed 9–27–00; 8:45 am]

BILLING CODE 7020–02–P

INTERNATIONAL TRADE

COMMISSION

[Investigation Nos. 332–350 and 332–351]

Monitoring of U.S. Imports of

Tomatoes, Monitoring of U.S. Imports

of Peppers

AGENCY: United States International

Trade Commission.

ACTION: Changes in written submission’s

due date and date of publication of

monitoring reports in 2000.

EFFECTIVE DATE: September 22 , 2000.

FOR FURTHER INFORMATION CONTACT: For

general information, Timothy McCarty

(202–205–3324) or Cathy Jabara (202–

205–3309), Agriculture and Forest

Products Division, Office of Industries,

or for information on legal aspects,

William Gearhart (202–205–3091),

Office of the General Counsel, U.S.

International Trade Commission.

Hearing impaired persons can obtain

information on these studies by

contacting the Commission’s TDD

terminal on (202) 205–1810. General

information concerning the Commission

may also be obtained by accessing its

internet server (http://www.usitc.gov).

Background

Section 316 of the North American

Free-Trade Agreement Implementation

Act (NAFTA Implementation Act), 19

U.S.C. 3381, directs the Commission to

monitor imports of fresh or chilled

tomatoes (HTS heading 0702.00) and

fresh or chilled peppers, other than chili

peppers (HTS subheading 0709.60.00),

until January 1, 2009. As a result of such

monitoring, the domestic industry

producing a like or directly competitive

perishable agricultural product may

request, in a global safeguard petition

filed under section 202 of the Trade Act

of 1974 or a bilateral safeguard petition

filed under section 302 of the NAFTA

Implementation Act, that provisional

relief be provided pending completion

of a full section 202 or 302

investigation. If provisional relief is

requested, the Commission has 21 days

in which to make its decision and to

transmit any provisional relief

recommendation to the President. In

response to the monitoring directive, the

Commission instituted investigation No.

332–350, Monitoring of U.S. Imports of

Tomatoes (59 FR 1763) and

investigation No. 332–351, Monitoring

of U.S. Imports of Peppers (59 FR 1762).

Although section 316 of the NAFTA

Implementation Act does not require

that the Commission publish reports on

the results of its monitoring activities,

the initial notices of investigation for

these studies indicated that the

Commission planned to publish reports

on the monitoring annually.

Subsequently, the Commission has

published statistical reports in those

years in which it was not conducting an

investigation under other statutory

authority with respect to such products.

On June 12, 2000, the Commission

published in the Federal Register a

notice that it intended to publish

monitoring reports in September 2000.

In the same notice, the Commission also

invited all interested persons to submit

written statements concerning the

matters to be addressed in the reports,

so as to be received no later than the

close of business on June 28, 2000. In

response to this request, the

Commission received two comments,

from the Florida Tomato Exchange and

the Florida Department of Agriculture

and Consumer Services, asking that

additional data be included in the

Commission’s forthcoming reports and

that the official record of these

investigations be held open so that

certain Florida statistics might be

included in this year’s reports. In

response, the Commission extended the

deadline for filing of written statements

until October 2, 2000, and changed the

date for intended publication of its

reports to November 15, 2000.

Written Submissions

The Commission does not plan to

hold a public hearing in connection

with preparation of the 2000 statistical

reports. However, interested persons are

invited to submit written statements

concerning the matters to be addressed

in the reports. Commercial or financial

information which a submitter desires

the Commission to treat as confidential

must be provided on separate sheets of

paper, each clearly marked

‘‘Confidential Business Information’’ at

the top. All submissions requesting

confidential treatment must conform

with the requirements of section 201.6

of the Commission’s Rules of Practice

and Procedure (19 CFR 201.6). All

written submissions, except for

confidential business information, will

be made available in the Office of the

Secretary of the Commission for

inspection by interested persons. To be

assured of consideration by the

Commission, written statements relating

to the Commission’s report should be

submitted to the Commission in

accordance with section 201.8 of the

Commission’s rules at the earliest

practical date and should be received no

later than the close of business on

October 2, 2000. All submissions should

be addressed to the Secretary, United

States International Trade Commission,

500 E Street SW., Washington, DC

20436.

Issued: September 22, 2000.

By order of the Commission.

Donna R. Koehnke,

Secretary.

[FR Doc. 00–24916 Filed 9–27–00; 8:45 am]

BILLING CODE 7020–02–P

LEGAL SERVICES CORPORATION

Proposed Property Acquisition and

Management Manual

AGENCY: Legal Services Corporation

ACTION: Notice of proposed Property

Acquisition and Management Manual.

SUMMARY: This Notice sets forth the text

of a proposed Property Acquisition and

Management Manual that, once

adopted, will govern the use by

recipients of LSC funds to acquire, use

and dispose of real and nonexpendable

personal property. The proposed

Property Acquisition and Management

Manual is intended to provide

recipients with a single complete and

consolidated set of policies and

procedures related to property

acquisition, use and disposal and would

supercede guidance currently contained

in several LSC documents.

Federal Register / Vol. 65, No. 189 / Thursday, September 28, 2000 / Notices 58289

1The Introduction to the 1981 Property Manual

states that it was intended to supersede the 1975

Instruction. No mention is made of the 1979

Instruction. However, because the Manual was

finalized as a slightly revised version of the 1979

Instruction, longstanding LSC policy has been that

the 1981 Property Manual superseded the 1979

Instruction as well. Current LSC grant assurances

and the current Accounting Guide for LSC

Recipients reference the Property Manual ‘‘or its

duly adopted successor.’’

2There have been suggestions to LSC that the

1981 Property Manual was originally intended to

apply to real property and was so applied at

sometime in the past. LSC’s reading of the terms of

the manual, however, and LSC’s practice over the

last several years applying the requirements of the

1981 Property Manual only to personal property,

indicate that it does not, in fact, apply to real

property.

DATES: Written comments must be

received on or before November 27,

2000.

ADDRESSES: Written comments may be

submitted by mail, fax or email to

Mattie C. Condray at the addresses

listed below.

FOR FURTHER INFORMATION CONTACT:

Mattie C. Condray, Senior Assistant

General Counsel, Office of Legal Affairs,

Legal Services Corporation, 750 First

Street, NE., Washington, DC 20002–

4250; 202/336–8817 (phone); 202/336–

8952 (fax); mcondray@lsc.gov.

SUPPLEMENTARY INFORMATION:

Background

The Legal Services Corporation’s

(LSC) policies and procedures regarding

LSC-funded recipients’ property

acquisition, use and disposal are

incomplete, outdated and disbursed

among several different LSC documents.

In 1975 and again in 1979, LSC

published Instructions in the Federal

Register setting out procedures for the

procurement, inventory control and

disposal of nonexpendable personal

property by LSC recipients. See 44 FR

22525, April 16, 1979. In 1981, the 1979

Instruction was superseded by the

Property Management Manual for LSC

Programs (‘‘1981 Property Manual’’).1

LSC also addressed property

acquisition and management issues in

the 1981 version of the Audit and

Accounting Guide for Recipients and

Auditors (‘‘1981 Audit Guide’’). The

1981 Audit Guide included provisions

requiring LSC’s prior approval of certain

purchases and leases of property (real

and personal). These provisions were

superseded by the LSC rule on cost

standards and procedures, 45 CFR part

1630, which was adopted in 1986. See

51 FR 29082, August 13, 1986. Under

the current part 1630 rule, LSC must

approve in advance all purchases of real

property, purchases or leases of

personal property with a value of over

$10,000 and capital expenditures of

more than $10,000 to improve real

property. 45 CFR 1630.5(b).

Notwithstanding the 1981 Audit

Guide (or the current part 1630

requirements), the 1981 Property

Manual, like its predecessor

Instructions, does not address the

acquisition, use or disposal of real

property.2 LSC has instead established

its policies relating to real property in

a variety of internal memoranda,

Program Letters, regulations, grant

assurances and individual agreements

with recipients purchasing real property

which have either restricted the use or

regulated the disposal of the property in

the event of cessation of LSC funding.

Having policies related to real property

in such unconnected and disparate

sources has become untenable. For

example, grant assurances on property

have not been consistent over time and

have on occasion been challenged as

lacking legal authority.

Accordingly, LSC has decided that all

of the relevant policies and

requirements related to the acquisition,

use and disposal of real and personal

property should be consolidated and

issued in one document. LSC offers the

following proposed Property

Acquisition and Management Manual

(PAMM) for comment prior to adopting

a final, revised version.

Purpose and Scope

LSC proposes that this PAMM apply

to both real and non-expendable

personal property (equipment), but not

apply to expendable personal property

(supplies) or services, except for

services related to capital expenditures

as defined in the PAMM. LSC has not

previously applied its standards in the

1981 Property Manual to supplies or

services and LSC does not believe it is

necessary to enlarge the scope of its

oversight in such a manner.

LSC proposes to apply the

requirements of the PAMM to purchases

made on or after the PAMM’s effective

date as published in the Federal

Register. For purchases of real property

prior to the PAMM’s effective date, the

written agreement between the program

and LSC will control. For prior

purchases of personal property, the

1981 Property Manual will control.

Proposed Property Acquisition and

Management Manual

Generally

The proposed PAMM contains both

existing and new or revised standards

and procedures. In developing the new

or revised standards and procedures,

LSC looked to three existing Federal

sources of property acquisition and

management policy: the Federal

Acquisition Regulations (FAR); the

Federal Property Management

Regulations; and Office of Management

and Budget (OMB) Circular A–110,

‘‘Uniform Administrative Requirements

for Grants and Agreements with

Institutions of Higher Education,

Hospitals, and Other Non-Profit

Organizations’’ which contains

standards governing the use and

disposition of personal and real

property by non-profit recipients of

Federal funding. While many provisions

of the proposed PAMM are based on

equivalent sections on these sources,

LSC has revised these provisions as

necessary to be consistent with LSC law

and practice.

The proposed personal property use

standards are intended to give recipients

flexibility in using such property

acquired with LSC funds, provided that

the primary use of the property is for the

delivery of legal services to eligible

clients in accordance with the

requirements of the LSC Act and

regulations. The proposed standards

governing the disposal of personal

property revise existing policy to reflect

the heightened need, in this era of

reduced funding and competition for

grants, for LSC to be compensated for its

interest in LSC-funded property.

Accordingly, in the event that a

recipient owning personal property

purchased with LSC funds ceases to

receive LSC funding, these standards

require LSC approval prior to disposal

of the property.

The proposed PAMM would retain

LSC’s longstanding policy to permit

recipients, with LSC’s approval, to use

LSC funds to purchase real property for

the delivery of legal services to eligible

clients. The proposed procedures,

which incorporate provisions from

Program Letter 98-4, would require

recipients to demonstrate that

purchasing is more economical than

leasing. Recipients would also be

required to agree to reimburse LSC in

the event of a discontinuation of

funding.

Section-by-Section Analysis

Section 1—Purpose and Scope

The section contains a statement

indicating that the purpose of this

PAMM is to set forth standards

governing the acquisition, retention, use

and disposal of personal and real

property acquired in whole or in part

with LSC funds. The section would also

specify that LSC intends the standards

in this PAMM to apply to both real and

non-expendable personal property

58290 Federal Register / Vol. 65, No. 189 / Thursday, September 28, 2000 / Notices

3The proposed requirement for ‘‘written’’ quotes

is intended to include electronic transmission of

information. This approach is consistent with

Federal policy in the FAR.

(equipment), but not to expendable

personal property (supplies) or services,

except services for capital

improvements which are subject to the

requirements of Section 4(f). LSC has

not previously applied the 1981

Property Manual standards to supplies

and LSC does not believe that it is

necessary to enlarge the scope of its

oversight in such a manner. Finally, this

section makes clear that LSC proposes

to apply the requirements of the PAMM

to purchases made on or after the

PAMM’s effective date as published in

the Federal Register. For purchases of

real property prior to the PAMM’s

effective date, the written agreement

between the program and LSC would

control. For prior purchases of personal

property, LSC intends that the 1981

Property Manual would control.

Section 2—Definitions

This section sets forth proposed

definitions of key terms used

throughout the PAMM.

Section (2)(a) would define

acquisition as a purchase of real

property or a purchase or lease of

personal property. It can consist of a

single item or it can consist of multiple

items obtained simultaneously through

a single contract. This definition of

acquisition is adapted from the

definition of acquisition appearing in

the FAR. The FAR definition of

acquisition includes leases of real

property as well, but LSC proposes to

leave real property leases out of the

definition of acquisition because LSC

proposes to exclude leases of real

property from the coverage of the

PAMM. LSC proposes to use the term

‘‘acquisition’’ throughout the PAMM,

except in those instances in which it is

necessary to differentiate between

personal property which is leased and

personal property which has been

purchased. In those cases, the terms

‘‘lease’’ or ‘‘purchase’’ will be used as

appropriate.

Section 2(b), capital improvement,

incorporates the $10,000 capitalization

threshold of LSC’s regulation governing

cost standards and procedures, 45 CFR

1530.5(b)(2).

Section 2(c) proposes to define lease

as a contract for the use of property

during a specified period for a specified

price. Under a lease, the lessee does not

take ownership of or title to the

property.

Section 2(d) contains a definition for

LSC property interest agreement, a term

used in Sections 4(e) and 8(d) of this

PAMM. The proposed definition is

consistent with section 2–2.4 of the

Accounting Guide for LSC Recipients,

which sets forth the principle that LSC

possesses a reversionary interest in real

property purchased in whole or in part

with LSC funds. LSC is not, however,

proposing to use the term ‘‘reversionary

interest’’ because LSC believes that the

use of ‘‘reversionary interest’’ might be

confusing. Although LSC’s recipients

who have entered into agreements with

LSC pursuant to the purchase of real

property understand what reversionary

interest means in the context of their

agreements, the term is a widely used

term of art in the property law context

with a somewhat broader and different

meaning. To avoid potential confusion,

LSC proposes to use the more accurate

‘‘LSC property interest agreement.’’

Section 2(e) contains a definition of

personal property adapted from OMB

Circular A–110. LSC proposes to omit

supplies, which are considered to be

personal property in the OMB Circular,

from the definition because LSC does

not intend to apply its property

acquisition and management standards

to the purchase, retention or use of

supplies.

Section 2(f) proposes to limit the

definition of real or personal property to

property with a market value of over

$1000 and a useful life of more than one

year. This definition is taken from

Section 2–2.4 of the Accounting Guide

for LSC Recipients. This definition is

consistent with OMB Circular A–110,

except that LSC has chosen a

capitalization threshold of $1,000

instead of $5,000. The lower threshold

is intended to maintain consistency

with the LSC Accounting Guide. With

this definition, LSC proposes that the

property acquisition and management

standards would not apply to property

excluded from the definition.

Section 2(g) contains a proposed

definition of purchase. LSC proposes to

use the term purchase in reference to

personal property which the recipient

obtains ownership of, as distinguished

from leased personal property.

Section 2(h) sets forth a proposed

definition for quote which incorporates

language from the definition of ‘‘offer’’

in the FAR. For the purposes of the

PAMM, a quote is intended to be the

basis for informal negotiation which

results in an offer by the recipient,

typically in the form of a purchase

order, which a source may accept or

reject.

Section 2(i) sets forth a proposed

definition of real property taken from

the definition of the same term in OMB

Circular A–110.

Section 2(j) contains a proposed

definition of source as a supplier,

vendor or contractor who has agreed to

provide property to a recipient through

a purchase or lease agreement.

Section 3—Acquisition Procedures for

Personal Property

This section sets forth the proposed

procedures governing the acquisition of

personal property with LSC funds. The

requirements herein are based on both

the FAR and OMB Circular A–110.

Through the use of these procedures,

LSC intends to encourage recipients to

conduct their property acquisitions in a

manner that provides free and open

competition to the maximum extent

practical.

Acquisitions of over $10,000 would

have to be accomplished by written

competitive quote.3 The FAR and OMB

Circular A–110 each require that

requests for quotes clearly identify the

salient characteristics of the property to

be acquired, as well as the basis for

evaluating quotes and selecting a

source. LSC proposes to require

competitive quotes to help ensure that

the recipient has a reasonable basis for

determining that it is receiving a fair

deal that meets its needs.

The proposed procedures would

permit sole source acquisitions if

circumstances prevent requesting

competitive quotes. In such cases,

recipients would have to document the

reason(s) for conducting the acquisition

on a sole source basis. This proposed

requirement is consistent with the FAR.

Further, individual item acquisitions

of over $10,000 would have to be

approved in advance by LSC. This

includes acquisitions made to replace

already-existing property, the original

acquisition of which LSC may have

approved at a prior point in time.

Consistent with previous LSC guidance,

requests for prior approvals would have

to include a justification stating the

need for the acquisition, a brief

description of the property to be

acquired and a description of the

acquisition process used, including the

quotes received by the recipient.

Section 4—Acquisition Procedures for

Real Property

Section 4 contains the proposed

procedures for the acquisition of real

property. Under this section, prior to

acquiring real property, a recipient

would have to identify and evaluate at

least three potential sites. This proposal

draws upon a similar requirement in the

FAR relating to the selection of sources

for the leasing of real property. The

types of costs to be considered in an

analysis of an acquisition of real

property would be those which LSC

Federal Register / Vol. 65, No. 189 / Thursday, September 28, 2000 / Notices 58291

4LSC’s longstanding policy is that leases of real

property do not require prior approval and LSC

does not propose any change to that policy.

5By reference to 45 CFR 1630.12, section 6(c)

would clarify that income from the sale of property

purchased with LSC funds is LSC derivative income

subject to the requirements of the LSC Act,

regulations, and other applicable law. As such, LSC

derivative income becomes part of the LSC fund

balance which may need to be returned to LSC if

the fund balance amount exceeds the 10 or 25

percent limits established by 45 CFR Part 1628.

asks recipients to describe when seeking

prior approval of an acquisition of real

property pursuant to LSC Program

Letter 98–4, dated July 1, 1998.

Recipients are encouraged to negotiate

with potential sources prior to entering

a contract in order to obtain the most

favorable contract terms possible.

This section proposes to retain LSC’s

prior approval requirement for

acquisitions of real property.4 Sections

4(d)(1) through (7) reflect provisions

from Program Letter 98–4 setting forth

the types of information which LSC

requires recipients to submit in support

of a request for prior approval of an

acquisition of real property.

This section also proposes to retain

LSC’s longstanding practice of

requiring, as a condition of LSC’s

approval of the acquisition of real

property, a formal agreement between

LSC and the recipient setting forth the

terms of LSC’s approval. These

agreements have included provisions

governing the disposal of property

purchased with LSC funds, both during

the grant term and upon cessation of

funding and requiring the recipient to

record LSC’s interest in the property.

Finally, LSC proposes to restate in the

PAMM, LSC’s requirement in 45 CFR

1630.5(b)(4) that recipients obtain prior

approval of expenditures for capital

improvements. This requirement

applies to leasehold improvements as

well as improvements to recipientowned property. LSC proposes to retain

the existing requirement from Program

Letter 98–4 that recipients submit

certain information in support of

requests for prior approval of capital

improvements.

Section 5—Retention and Use of

Property Acquired With LSC Funds

Section 5 sets forth the proposed

standards for the management of real

and personal property acquired with

LSC funds. These standards build upon

the principle contained in OMB Circular

A–110, that grant recipients should

possess full ownership of personal and

real property purchased in whole or in

part with grant funds. With regard to

leased personal property, LSC proposes

to make clear current LSC policy that

leased property may be used according

to the lease terms during the term of an

LSC grant or contract, and must be

disposed of according to the lease terms

in the event that there is a cessation of

LSC funding.

Under the provisions of this section,

recipients would be permitted to retain

property as long as they continue to

receive LSC funding. This represents a

change from the existing policy which

permits recipients to retain property as

long as it is needed for civil legal

assistance. This change is being

proposed to reflect the heightened need,

in the competitive grant environment,

for LSC to ensure that its funds are

available to the maximum extent

possible for LSC recipients and

programs.

Notwithstanding the above, LSC

proposes to permit recipients to use

property acquired with LSC funds for

permissible non-LSC activities, such as

the representation of income-ineligible

clients, provided that such other use

does not interfere with the performance

of the recipient’s duties under its LSC

grant. This flexibility parallels similar

provisions in OMB Circular A–110. LSC

further proposes to allow a recipient to

lease space to others or otherwise allow

the use of its property for restricted

activities, provided that the recipient

charges a fair market price for such lease

or property use. Any such use would

also have to be consistent with the

program integrity requirements of 45

CFR Part 1610. These provisions

incorporate language from OMB

Circular A–110 and are consistent with

IRS rules governing the provision of

services by non-profit organizations.

Section 5(f) addresses the use of a

particular subset of personal property—

copyrights. Incorporating language from

OMB Circular A–110, this paragraph

proposes that recipients be permitted to

own copyrights to publications,

software, and other copyrightable works

created in whole or part with LSC

funds. However, in conformance with

longstanding LSC policy, recipients

creating or otherwise obtaining

copyrightable materials with LSC funds

would have to provide LSC free access

to and use of such materials, including

the right to make such materials

available to other LSC recipients.

Section 6—Disposal of Personal

Property Acquired With LSC Funds

This section proposes to establish

requirements governing the disposal of

personal property. Generally, a recipient

would have considerable discretion in

selecting methods of disposing of

personal property purchased with LSC

funds, except at the point that the

recipient ceased to receive LSC funds.

At the cessation of LSC funding,

recipients would have an obligation to

LSC with respect to items of personal

property.

LSC proposes, as noted above, to

permit recipients, considerable latitude

in disposing of personal property

purchased with LSC funds during the

term of an LSC grant. Specifically,

under this section, recipients would be

permitted to: (1) Trade property to

suppliers or vendors in return for

reductions in the acquisition price of

new or replacement property; (2) sell

the property, by the solicitation of

formal quotes for property with a value

of over $15,000, or by negotiation where

the property has a value $15,000 or less

or where advertising for bids has not

resulted in reasonable bid prices; 5 (3)

transfer the property to third parties

which are eligible under statute to

receive support from LSC; (4) transfer

the property to non-LSC programs,

subject to LSC approval; or (5) transfer

the property to other nonprofit programs

serving the poor in the same

community. These options are

consistent with current Federal practice

as reflected in OMB Circular A–110, the

Federal Property Management

Regulations (41 CFR Chapter 101) and

the 1981 Property Manual.

Under this section, recipients would

be prohibited from disposing of

personal property purchased with LSC

funds by making such property

available to recipients’ board members

or employees (by sale or otherwise).

Although Federal policy does not

restrict sales of property to employees,

LSC is concerned that such sales could

create a real or perceived conflict of

interest, particularly since such

property would have significant market

value (since property would be defined

as having to be worth more than $1000).

Disposition of items not meeting the

$1000 value threshold would not be

considered property subject to the

PAMM and, therefore, would not be

subject to this restriction. LSC

specifically seeks comment on this

issue. What are recipients’ current

policies and experience in this area?

LSC is proposing different options for

the disposal of personal property at the

point that a recipient ceases to receive

LSC funding. Recipients would be

permitted to transfer or retain personal

property purchased with LSC funds,

provided that LSC would be

compensated in an amount equal to the

percentage of the property’s acquisition

cost funded with LSC monies. These

provisions are based on disposal options

set forth in OMB Circular A–110. It is

58292 Federal Register / Vol. 65, No. 189 / Thursday, September 28, 2000 / Notices

6By reference to 45 CFR 1630.12, Section 7(b)

would clarify that income from the sale of property

acquired with LSC funds is LSC derivative income

subject to the requirements of the LSC Act,

regulations, and other applicable law. As such, LSC

derivative income becomes part of the LSC fund

balance which may need to be returned to LSC if

the fund balance amount exceeds the limits

established by 45 CFR Part 1628.

7Section 2(c) adapts and incorporates the

definition of personal property which appears in

Section 2(v) of OMB Circular A–110. For the

purposes of this manual, supplies, which are

normally considered to be personal property, are

omitted from the definition because the manual is

not applicable to the purchase, retention or use of

supplies.

anticipated that LSC and recipients will

identify, on a case by case basis at the

time of cessation of funding, the best

method for disposing of personal

property purchased with LSC funds.

With respect to leased personal

property, LSC proposes that during the

term of an LSC grant or contract,

recipients be permitted to dispose of

such leased with LSC funds in

accordance with the terms of the lease.

When a recipient ceases to receive LSC

funding, the recipient would be

required to dispose of items of personal

property leased with LSC funds in

accordance with the terms of the lease.

Section 7—Disposal of Real Property

Acquired With LSC Funds

Section 7 sets forth the proposed

standards for the disposal of real

property purchased with LSC funds. As

with the personal property disposal

standards in Section 6, LSC proposes to

provide different options for disposals

occurring during the grant term and at

the cessation of LSC funding

For recipients seeking to dispose of

real property during the grant term, LSC

proposes to continue the longstanding

LSC policy whereby recipients are

permitted to sell real property acquired

with LSC funds.6 Recipients would also

be permitted to transfer real property to

other LSC recipients. This is consistent

with most LSC property interest

agreements between LSC and recipients

using LSC funds to purchase real

property.

At the point of cessation of LSC

funding, LSC proposes to permit

recipients to sell, transfer or retain real

property acquired with LSC funds,

provided that LSC is compensated in an

amount equal to the percentage of the

property’s acquisition cost funded by

LSC monies. LSC would have to

approve any such disposition in

advance.

Section 8—Documentation and

Recordkeeping Requirements

Section 8 contains proposed

requirements for the documentation of

property acquisitions and disposals.

This section is intended to ensure that

recipients create and retain the required

records in support of property

acquisition and disposal decisions and

LSC fund expenditures related thereto.

Section 9—Recipient Policies and

Procedures

This section proposes to require that

recipients adopt written procurement

procedures. This proposal stems from

OMB Circular A–110 and is intended to

ensure that recipients have standardized

procurement procedures that are

consistent with LSC requirements. LSC

does not propose to collect, review or

approve such procedures, although a

recipient would have to make them

available to LSC upon request for LSC

oversight and compliance purposes.

Property Acquisition and Management

Manual

Sec. 1 Purpose and Scope.

Sec. 2 Definitions.

Sec. 3 Acquisition Procedures for Personal

Property.

Sec. 4 Acquisition Procedures for Real

Property.

Sec. 5 Retention and Use of Property

Acquired with LSC Funds.

Sec. 6 Disposal of Personal Property

Acquired with LSC Funds.

Sec. 7 Disposal of Real Property Acquired

with LSC Funds.

Sec. 8 Documentation and Recordkeeping

Requirements.

Sec. 9 Recipient Policies and Procedures.

Section 1—Purpose and Scope

The purpose of this PAMM is to set

forth standards governing the

acquisition, retention, use and disposal

of personal and real property acquired

in whole or in part with LSC funds. The

standards set forth herein apply to both

real and non-expendable personal

property (equipment), but not apply to

expendable personal property (supplies)

or services, except for services for

capital improvements which are subject

to the requirements of Section 4(f)

herein.

The requirements set forth herein

apply to acquisitions made on or after

the PAMM’s effective date as published

in the Federal Register. For purchases

of real property prior to the PAMM’s

effective date, the written agreement

between the program and LSC will

control. For prior acquisitions of

personal property, the 1981 Property

Manual will control.

Section 2—Definitions

(a) Acquisition means a purchase of

real property or a purchase or lease of

personal property in whole or in part

with LSC funds. For the purposes of this

PAMM, recipients should treat a

purchase or lease of related property as

a single acquisition when the property

can be readily obtained through a single

contract with a single source.

(b) Capital improvement means an

expenditure of an amount exceeding

$10,000 to improve real property

through construction or the purchase of

immovable items which become an

integral part of real property.

(c) Lease means a contract for the use

of property during a specified period for

a specified price.

(d) LSC property interest agreement

means a formal written agreement

between LSC and a recipient setting

forth the terms of LSC’s approval of the

recipient’s use of LSC funds to acquire

real property.

(e) Personal Property means property

of any kind, including tangible property

(having physical existence), such as

equipment, or intangible (having no

physical existence), such as copyrights

or patents, but does not include

supplies or real property or

improvements to real property. 7

(f) Property means any real or

personal property having a market value

greater than $1,000 and a useful life of

more than one year.

(g) Purchase means to obtain and take

ownership of property through the

payment of money or its equivalent.

(h) Quote means a quotation or bid

from a potential source interested in

selling or leasing property to a recipient.

(i) Real property means land,

buildings, and appurtenances, including

capital improvements thereto, but not

including moveable personal property.

(j) Source means a supplier, vendor,

or contractor who has agreed to provide

property to a recipient through a

purchase or lease agreement.

Section 3—Acquisition Procedures for

Personal Property

(a) Before making an acquisition of

personal property that has an aggregate

cost over $10,000, a recipient shall make

a written request from at least three

potential sources for competitive quotes

for the property.

(b) Written requests for quotes must

include:

(1) A clear and accurate description of

the property to be acquired; and

(2) Identification of the criteria which

will be the basis for the recipient’s

selection of a source.

(c) The selection of a source shall be

on the basis of criteria established in the

request for quotes. Such criteria may

include price alone or price in

combination with other factors.

(d) Notwithstanding paragraph (a) of

this section, a recipient may request

Federal Register / Vol. 65, No. 189 / Thursday, September 28, 2000 / Notices 58293

quotes from a sole source when

circumstances prevent the requesting of

competitive quotes. When a request for

quotes is made to a sole source, the

recipient shall maintain written

documentation of the reason(s) for not

obtaining competitive quotes.

(e) The use of more than $10,000 of

LSC funds to acquire an individual item

of personal property requires LSC’s

prior approval pursuant to 45 CFR

1630.5(b)(2), whether or not the

acquisition is to replace existing

property. When requesting LSC’s prior

approval of an acquisition of personal

property, recipients shall provide to

LSC:

(1) Three written quotes, if obtained;

and

(2) A letter or memorandum

containing:

(i) A statement of need explaining

how the acquisition will further the

delivery of legal services to eligible

clients;

(ii) A brief description of the property

to be acquired, including the make and

manufacture of the item, the name of the

source supplying the item, the quantity

to be acquired, and the total dollar

amount of the acquisition; and

(iii) A brief description of the

acquisition process, including the

names of the potential sources who

submitted quotes, the amounts of the

quotes, the quantity of items offered by

the potential sources, and a brief

explanation of the reasons for selecting

a particular source to supply the item(s).

In the absence of quotes, the description

should explain what circumstances

prevented the recipient from obtaining

quotes.

Section 4—Acquisition Procedures for

Real Property

(a) Prior to acquiring real property

with LSC funds, recipients shall

conduct an informal market survey in

order to identify and evaluate at least

three potential sources. Recipients may

retain a real estate agent or broker for

the purposes of conducting a market

survey, provided that the cost is

reasonable.

(b) The evaluation of potential

acquisitions of real property shall

include consideration of:

(1) The total cost of the acquisition;

and

(2) The quality of the property to be

acquired.

(c) Recipients shall conduct an

analysis of the average annual cost of

the acquisition, including the costs of a

down payment, interest and principal

payments on debt acquired to finance

the acquisition, closing costs,

renovation costs, and the costs of

utilities, maintenance, and taxes, where

applicable. The cost analysis shall

include a comparison of:

(1) The total costs of acquiring the

property over the life of the financing of

the acquisition; with

(2) The total costs of leasing similar

property over the same period of time.

(d) The use of LSC funds to acquire

real property requires LSC’s prior

approval pursuant to 45 CFR

1630.5(b)(3). When requesting LSC prior

approval of an acquisition of real

property, recipients shall provide to

LSC in writing:

(1) A statement of need explaining

how the acquisition will further the

delivery of legal services to eligible

clients in terms of:

(i) The location of the property in

terms of accessibility to program clients;

(ii) Trends in funding and program

staffing levels in relation to space needs;

and

(iii) Whether the property will replace

or be in addition to existing program

offices;

(2) A brief analysis comparing:

(i) The estimated average annual cost

of the planned acquisition over the life

of the financing of the acquisition,

including the costs of maintenance,

utilities, and taxes; with

(ii) The estimated average annual cost

of leasing or purchasing other, similar

property over the same period of time;

(3) A current, independent appraisal

of a type sufficient to secure a mortgage;

(4) Documentation of board approval

consisting of either a board resolution or

board minutes demonstrating approval

of the acquisition;

(5) A statement of handicapped

accessibility sufficient to meet the

requirements of 45 CFR 1624.5(c);

(6) A copy of an acquisition

agreement, contract, or other document

containing a description of the property

and the terms of the acquisition; and

(7) An explanation of the anticipated

financing of the acquisition including:

(i) The estimated total cost of the

acquisition, including renovations,

moving, and closing costs;

(ii) The source and amount of funds

to be applied toward a down payment;

(iii) The source of funds to be applied

toward a monthly mortgage payment, if

any;

(iv) The monthly amount of principal

and interest payments on debt secured

to finance the acquisition, if any; and

(v) The source and estimated amounts

of funds needed to cover moving,

renovations, and closing costs.

(e) At the time of approving a

recipient’s use of LSC funds to acquire

real property, LSC and the recipient

shall enter into a written LSC property

interest agreement, which shall include,

at a minimum:

(1) Provisions consistent with

Sections 5(a), 7(a) and 7(b) herein;

(2) An agreement by the recipient not

to encumber the property without prior

approval of LSC;

(3) An agreement by the recipient to

record, in accordance with appropriate

and applicable state law, LSC’s interest

in the property.

(f) Expenditures for capital

improvements require LSC’s prior

approval pursuant to 45 CFR

1630.5(b)(4). When requesting LSC’s

prior approval of such expenditures,

recipients shall provide to LSC in

writing, the following:

(1) A statement of need explaining

how the improvement will further the

delivery of legal services to eligible

clients;

(2) A brief description of the

improvement, including the nature of

the work to be done, the name of the

contractor performing the work, and the

total expected cost of the improvement;

and

(3) A brief description of the

contractor selection process, including

the names of the contractors who

submitted quotes, the amounts of the

quotes, and a brief explanation of the

reason(s) for selecting a particular

contractor to perform the work.

Section 5—Retention and Use of

Property Acquired With LSC Funds

(a) Subject to the requirements herein,

recipients may use LSC funds to acquire

and use personal and real property for

the purpose of delivering legal services

to eligible clients. Title to personal and

real property purchased in whole or in

part with LSC funds vests in the

recipient subject to the conditions set

out in paragraphs (b) through (f) of this

section.

(b) Recipients may retain personal

and real property purchased with LSC

funds for as long as they continue to

receive LSC funding. When a recipient

ceases to receive LSC funding, property

purchased with LSC funds shall be

disposed of in accordance with the

requirements of Sections 6(d) and 7(c)

herein.

(c) Recipients may retain personal

property obtained through a lease using

LSC funds for as long as they continue

to receive LSC funds, subject to the

terms of the lease. When a recipient

ceases to receive LSC funding, property

leased with LSC funds shall be disposed

of in accordance with Section 6(b)

herein.

(d) When using personal or real

property acquired in whole or in part

with LSC funds for the performance of

58294 Federal Register / Vol. 65, No. 189 / Thursday, September 28, 2000 / Notices

an LSC grant or contract, recipients may

use such property for other activities,

provided that such other activities do

not interfere with the performance of

the LSC grant or contract, and provided

that such other uses meet the

requirements of paragraphs (e) and (f) of

this section.

(e) If a recipient uses personal

property acquired in whole or in part

with LSC funds to provide services to

another organization which engages in

activity restricted by the LSC Act,

regulations, or other applicable law, the

recipient shall charge the other

organization a fee which shall not be

less than that which private non-profit

organizations in the same locality

charge for the same services under

similar conditions.

(f) If a recipient uses real property

acquired in whole or in part with LSC

funds to provide space to another

organization which engages in activity

restricted by the LSC Act, regulations, or

other applicable law, the recipient shall

charge the other organization an amount

of rent which shall not be less than that

which private non-profit organizations

in the same locality charge for the same

amount of space under similar

conditions.

(g) Recipients may copyright any

work that is subject to copyright and

was developed, or for which ownership

was obtained, under an LSC grant or

contract, provided that LSC reserves a

royalty-free, nonexclusive, and

irrevocable license to reproduce,

publish, or otherwise use work

copyrighted by recipients, when the

work is obtained or developed in whole

or in part with LSC funds.

Section 6—Disposal of Personal

Property Acquired With LSC Funds

(a) During the term of an LSC grant or

contract, recipients may dispose of

items of personal property leased with

LSC funds in accordance with the terms

of the lease.

(b) When a recipient ceases to receive

LSC funding, the recipient shall dispose

of items of personal property leased

with LSC funds in accordance with the

terms of the lease.

(c) During the term of an LSC grant or

contract, recipients may dispose of

items of personal property purchased

with LSC funds by:

(1) Trading in the property at the time

of acquiring replacement property;

(2) Selling the property at a

reasonable negotiated price, without

advertising for quotes, where the

property item has a current fair market

value not exceeding $15,000;

(3) Selling the property after having

advertised for and received quotes,

where the current fair market value of

the property item exceeds $15,000;

(4) Transferring the property to

another recipient of LSC funds; or

(5) With the approval of LSC,

transferring the property to another

nonprofit organization serving the poor

in the same service area.

(d) Recipients shall not dispose of

items of personal property by sale,

donation or other transfer of the

property to the recipients’ board

members and employees.

(e) During the term of an LSC grant or

contract, recipients selling personal

property purchased with LSC funds may

retain and use income from the sale

according to the requirements of 45 CFR

1630.12 and 45 CFR 1628.3.

(f) When a recipient ceases to receive

LSC funding, subject to the approval of

LSC, recipients shall dispose of

individual items of personal property

purchased with LSC funds according to

one of the following methods:

(1) The recipient may transfer the

property to another recipient of LSC

funds, in which case the recipient

transferring the property shall be

entitled to compensation in the amount

of that percentage of the property’s

current fair market value which is equal

to that percentage of the property’s

acquisition cost which was borne by

non-LSC funds;

(2) The recipient may transfer the

property to another nonprofit

organization serving the poor in the

same service area, in which case LSC

shall be entitled to compensation for

that percentage of the property’s current

fair market value which is equal to that

percentage of the property’s acquisition

cost which was borne by LSC funds;

(3) The recipient may sell the

property and retain the proceeds from

the sale after compensating LSC for that

percentage of the property’s current fair

market value which is equal to that

percentage of the property’s acquisition

cost which was borne by LSC funds;

(4) The recipient may retain the

property, in which case LSC shall be

entitled to compensation from the

recipient for that percentage of the

property’s current fair market value

which is equal to that percentage of the

property’s acquisition cost which was

borne by LSC funds.

Section 7—Disposal of Real Property

Acquired With LSC Funds

(a) During the term of an LSC grant or

contract, recipients may dispose of real

property acquired with LSC funds by:

(1) Selling the property after having

advertised for and received offers, in

which case the recipient may retain and

use the proceeds from the sale of the

property for the purpose of delivering

legal services to eligible clients; or

(2) Transferring the property to

another recipient of LSC funds, in

which case the recipient transferring the

property shall be entitled to

compensation in the amount of that

percentage of the property’s current fair

market value which is equal to that

percentage of the property’s acquisition

cost which was borne by non-LSC

funds.

(b) During the term of an LSC grant or

contract, recipients selling real property

acquired with LSC funds may retain and

use income from the sale of the property

according to the requirements of 45 CFR

1630.12 and 45 CFR 1628.3.

(c) When a recipient owning real

property acquired with LSC funds

ceases to receive funding from LSC, the

recipient shall, with the approval of

LSC, dispose of the real property

according to one of the following

methods:

(1) The recipient may transfer title to

the property to another recipient of LSC

funds, in which case the recipient

transferring the property shall be

entitled to compensation for that

percentage of the property’s current fair

market value which is equal to that

percentage of the property’s acquisition

cost which was borne by non-LSC

funds;

(2) The recipient may retain title to

the property without further obligation

to LSC after the recipient compensates

LSC for that percentage of the property’s

current fair market value which is equal

to the percentage of the property’s

acquisition cost which was borne by

LSC funds;

(3) The recipient may sell the

property and compensate LSC for that

percentage of the property’s current fair

market value which is equal to the

percentage of the property’s acquisition

cost that was borne by LSC funds, after

the deduction of actual and reasonable

selling and fix-up expenses, if any.

Section 8—Documentation and

Recordkeeping Requirements

(a) Recipients shall account for

personal property acquired with LSC

funds according to the requirements of

Sections 2–2.4 and 3–5.4(c) of the

Accounting Guide for LSC Recipients.

(b) Recipients acquiring real property

with LSC funds shall keep such records

as are customary for the retention of real

property in the jurisdiction where the

property is located.

(c) Recipients shall account for

income earned from the sale of real or

personal property purchased with LSC

funds in accordance with the

requirements of 45 CFR 1630.12.

Federal Register / Vol. 65, No. 189 / Thursday, September 28, 2000 / Notices 58295

1Although this Draft Protocol reflects LSC policy,

it is not intended to and shall not create or confer

any rights for or on behalf of any person or party

and shall not establish legally enforceable rights

against LSC or establish any legally enforceable

obligations on the part of LSC, its directors, officers,

employees and other agents.

2Rulemaking includes both the development of

new rules and regulations and the amendment of

existing rules and regulations.

3The Office of Legal Affairs is the office

previously known as the Office of General Counsel

and serves as legal advisor and corporate secretary

to LSC.

4There may be instances in which use of

Negotiated Rulemaking is unnecessary or

inappropriate, such as for non-controversial issues

or issues relating solely to LSC’s internal

operations. In such cases, LSC may determine that

Continued

(d) Documentation of real property

acquisitions shall consist of the

acquisition contract, evidence of a

market survey, cost or price analysis,

and an explanation of the reason(s) for

selecting a particular source, a copy of

an independent appraisal of the

property’s market value, evidence of

board approval of the acquisition, a

statement of handicapped accessibility

sufficient to meet the requirements of 45

CFR 1624.5(c), and a copy of the LSC

property interest agreement required by

Section 4(e) herein.

Section 9—Recipient Policies and

Procedures

Recipients shall develop written

policies and procedures which

implement, at a minimum, the

requirements of Sections 3 and 4 herein.

Victor M. Fortuno,

General Counsel and Vice President for Legal

Affairs.

[FR Doc. 00–24835 Filed 9–27–00; 8:45 am]

BILLING CODE 7050–01–P

LEGAL SERVICES CORPORATION

Rulemaking Protocol

AGENCY: Legal Services Corporation.

ACTION: Announcement of adoption of

rulemaking protocol and establishment

of new rulemakings notification mailing

list.

SUMMARY: This notice sets forth the text

of a new rulemaking protocol adopted

by the LSC Board of Directors which

will govern LSC rulemaking activities

and announces the establishment of a

mailing list for persons and

organizations wishing to be notified of

future LSC rulemakings.

DATES: This Rulemaking Protocol

became effective upon its adoption at

the LSC Board of Directors Meeting on

September 18, 2000.

FOR FURTHER INFORMATION CONTACT:

Mattie C. Condray, Senior Assistant

General Counsel, Office of Legal Affairs,

Legal Services Corporation, 750 First

Street, NE, Washington, DC 20002–

4250; 202/336–8817 (phone); 202/336–

8952 (fax); mcondray@lsc.gov.

SUPPLEMENTARY INFORMATION:

Background

The Legal Services Corporation is

authorized by Congress to issue

regulations as necessary to carry out its

mission. See 42 U.S.C. 2996(e). LSC,

however, is not a ‘‘department, agency,

or instrumentality of the Federal

Government.’’ 42 U.S.C. 2996(d). As

such, LSC is not subject to the

requirements of the Administrative

Procedures Act, which governs the

rulemaking activities of Federal

agencies. Rather, LSC is required to

‘‘afford notice and reasonable

opportunity for comment to interested

parties prior to issuing rules,

regulations, and guidelines, and it shall

publish in the Federal Register at least

30 days prior to their effective date all

its rules, regulations, guidelines and

instructions.’’ 42 U.S.C. 2999(g).

Throughout its history, LSC has

conducted its rulemaking in compliance

with the statutory requirements

described above, but has not had a

written statement of the Board of

Directors (‘‘Board’’) setting forth the

procedures to be followed in the course

of LSC rulemaking activities. The Board

determined that, while there is no legal

requirement for LSC to have a written

protocol related to rulemaking, having

one would serve to advance LSC’s

policy of conducting its rulemaking

activities in a spirit of cooperative

dialog with our recipients and other

interested parties. Accordingly, on

September 18, 2000, at a meeting of its

Board of Directors, the Legal Services

Corporation adopted a new Rulemaking

Protocol to govern its rulemaking

activities. The text of the Protocol is set

forth below.

It should be noted that, since this

Protocol is a statement of LSC internal

procedure and is not a ‘‘rule, regulation,

guideline or instruction,’’ LSC is not

required by law to publish this Protocol

or seek public comment. LSC is

choosing to publish this Protocol in the

Federal Register (and has also posted it

on the LSC website at

http:\\www.lsc.gov) in furtherance of

LSC’s interest in and policy of

conducting its business in a fair and

open manner.

Rulemaking Protocol

This Rulemaking Protocol is intended

to reflect the policy of LSC to conduct

its rulemaking activities in a spirit of

cooperative dialog with our recipients

and other interested parties 1 and has

the following six objectives:

1. Enhanced implementation of the

will of Congress as expressed in the LSC

Act, amendments thereto and other

statutory enactments;

2. Increased public participation in

the manner and method in which LSC

promulgates rules;

3. The adoption of procedures that

reflect the best practices in rulemaking

as articulated in the Administrative

Procedures Act, the Negotiated

Rulemaking Act of 1990 and Executive

Order 12866;

4. Implementation of LSC’s strategic

initiatives as set forth in Strategic

Directions, 2000–2005 (adopted January

29, 2000);

5. Formalization of LSC’s policies

governing rulemaking and specifically

reserving specific responsibilities and

authorities unto the Board; and

6. Development of a rulemaking

protocol that is efficient and effective.

Regulatory Policy Direction

The Board, through the Operations

and Regulations Committee

(‘‘Committee’’), provides direction on

LSC regulatory policy and establishes

priorities for LSC rulemaking activities.

The Committee will look to staff to

effectuate LSC rulemaking policies and

priorities through this Protocol. Final

authority over LSC rulemaking policies

and actions rests with the Board.

Initiation of Rulemaking

The impetus for a rulemaking 2 may

come from any one of several sources;

Congressional directive; internal LSC

initiative (Board or Committee members

and/or staff); or a formal request from a

member of the regulated community or

general public. Once the Board has

agreed on a potential subject for

rulemaking, LSC’s Office of Legal

Affairs 3 (‘‘OLA’’), in close consultation

with appropriate Corporation staff, will

develop a Rulemaking Options Paper

(‘‘ROP’’). The ROP will contain a

discussion of the subject for the

potential rulemaking, and will include

an outline of the policy and legal issues

involved. The ROP shall also

recommend whether the potential

rulemaking should be Negotiated or

accomplished by Notice and Comment

Rulemaking. The appropriate

rulemaking process shall be selected on

a case-by-case with full recognition,

however, of LSC’s policy favoring open

and collaborative rulemaking. It is

anticipated that most rulemaking will be

Negotiated. 4 Once the ROP is