5716 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Proposed Rules 

term savings, for example, through the 

adoption of new technologies? What 

information, data, or technical 

assistance do regulated entities need in 

order to better assess these 

opportunities? 

• How should the Department 

capture information about changes in 

firm and market behavior in response to 

a regulation? 

• What data or other indicators 

suggest that the estimated costs and 

benefits of an existing regulation should 

be reviewed? What other strategies exist 

for increasing the flexibility of 

regulations without limiting important 

protections? 

• What information, data, or other 

technical assistance do stakeholders 

require in order to better assess the longterm impact of these reforms upon such 

protections? 

The Department is especially 

interested in candidates for review for 

which there is evidence of rapid 

technological change in a sector that 

could influence the structure and need 

for the regulation, whether the chosen 

regulatory approach will impose large 

ongoing costs on regulated entities, 

whether the agency is regulating in an 

area of significant uncertainty that may 

be lowered with a future retrospective 

study, and other similar conditions. 

The Department intends the questions 

on the portal to initiate public dialogue, 

and does not intend to restrict the issues 

that may be raised or addressed. The 

questions were developed with the 

intent to probe a range of areas, 

including tools that can be used to 

prioritize regulations for review; 

strategies that can be used to increase 

flexibility of regulations; and measures 

to ensure scientific integrity of data. 

Please note that these questions do 

not pertain to DOL rulemakings 

currently open for public comment. To 

comment on an open rulemaking, please 

visit regulations.gov and submit 

comments by the deadline indicated in 

that rulemaking. Comments that pertain 

to rulemakings currently open for public 

comment will not be addressed by the 

Department in this venue, which 

focuses on retrospective review. 

When addressing the questions in the 

portal, the Department requests that 

commenters identify with specificity the 

regulation or reporting requirement at 

issue, providing legal citation(s) where 

available. The Department also requests 

that submitters provide, in as much 

detail as possible, an explanation of 

why a regulation or reporting 

requirement should be modified, 

streamlined, expanded, or repealed, as 

well as specific suggestions of ways the 

Department can better achieve its 

regulatory objectives. Whenever 

possible, please provide empirical 

evidence and data to support your 

response. 

The Department will consider public 

comments as we update our plan to 

review the Department’s significant 

rules. The Department is issuing this 

request solely to seek useful information 

as we update our review plan. While 

responses to this request do not bind the 

Department to any further actions 

related to the response, all submissions 

will be made available to the public on 

http://www.dol.gov/regulations/

regreview/. 

Authority: E.O. 13653, 76 FR 3821, Jan. 21, 

2011; E.O. 12866, 58 FR 51735, Oct. 4, 1993. 

Dated: January 28, 2015. 

Christopher P. Lu, 

Deputy Secretary. 

[FR Doc. 2015–01916 Filed 2–2–15; 8:45 am] 

BILLING CODE 4510–23–P 

LEGAL SERVICES CORPORATION 

45 CFR Part 1640 

Application of Federal Law to LSC 

Recipients 

AGENCY: Legal Services Corporation. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: This proposed rule updates 

the Legal Services Corporation (LSC or 

Corporation) regulation on the 

application of Federal law to LSC 

recipients. The FY 1996 appropriations 

act (incorporated in LSC’s 

appropriations by reference annually 

thereafter) subjects LSC recipients to 

Federal law relating to the proper use of 

Federal funds. This proposed rule will 

provide recipients with notice of the 

applicable Federal laws each recipient 

must agree to be subject to under this 

rule, the consequences of a violation of 

an applicable Federal law, and where 

LSC will maintain the list of applicable 

laws. 

DATES: Comments must be submitted by 

March 5, 2015. 

ADDRESSES: Written comments must be 

submitted to Stefanie K. Davis, Assistant 

General Counsel, Legal Services 

Corporation, 3333 K Street NW., 

Washington, DC 20007; (202) 337–6519 

(fax) or lscrulemaking@lsc.gov. 

Electronic submissions are preferred via 

email with attachments in Acrobat PDF 

format. Written comments sent to any 

other address or received after the end 

of the comment period may not be 

considered by LSC. 

FOR FURTHER INFORMATION CONTACT: 

Stefanie K. Davis, Assistant General 

Counsel, Legal Services Corporation, 

3333 K Street NW., Washington, DC 

20007; (202) 295–1563 (phone), (202) 

337–6519 (fax), or lscrulemaking@

lsc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Statutory and Regulatory Background 

Section 504(a)(19) of LSC’s FY 1996 

appropriations act required LSC 

recipients to enter into a contract that 

subjected recipients to ‘‘all provisions of 

Federal law relating to the proper use of 

Federal funds.’’ Sec. 504(a)(19), Public 

Law 104–134, title V; 110 Stat. 1321. By 

its terms, a violation of Sec. 504(a)(19) 

renders any LSC grant or contract null 

and void. The provision has been 

incorporated by reference into each of 

LSC’s annual appropriations act since. 

Accordingly, the preamble and text of 

this proposed rule continue to refer to 

the appropriate section number of the 

FY 1996 appropriations act. 

The Corporation first issued 45 CFR 

part 1640 as an interim rule in 1996 to 

implement Sec. 504(a)(19). 61 FR 45760 

(Aug. 29, 1996). The interim rule was 

put in place to provide immediate 

guidance to LSC recipients on 

legislation that was already in effect and 

carried significant penalties for 

noncompliance. Id. In the preamble to 

the interim rule, LSC announced that it 

was interpreting the statutory phrase 

‘‘all provisions of Federal law relating to 

the proper use of Federal funds’’ to 

mean ‘‘with respect to [a recipient’s] 

LSC funds, all programs should be 

subject to Federal laws which address 

issues of waste, fraud and abuse of 

Federal funds.’’ Id. LSC based its 

interpretation on legislative history that 

appeared to limit the applicable laws to 

those dealing with fraud, waste, and 

abuse of Federal funds. 

In particular, LSC relied on two 

congressional documents to support its 

interpretation. First, the Corporation 

cited to the House Report for H.R. 2076, 

which was a prior effort to enact a 

provision similar to section 504(a)(19). 

The relevant language in that report 

stated: 

[S]ection 504(20) requires all programs 

receiving Federal funds to comply with 

Federal statutes and regulations governing 

waste, fraud, and abuse of Federal funds. 

H. Rep. No. 104–196, 104th Cong., 1st 

Sess. 116 (July 1995) (emphasis added). 

Second, LSC cited section 5 of H.R. 

1806, the Legal Services Reform Act of 

1995, which was an unsuccessful 

attempt to revise the LSC Act. As an 

extension of his remarks introducing 

H.R. 1806, Rep. McCollum submitted a 

partial summary of the bill, including a 

discussion of section 5 entitled 


rljohnson on DSK3VPTVN1PROD with PROPOSALS
Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Proposed Rules 5717 

‘‘Application of waste, fraud, and abuse 

laws.’’ 141 Cong. Rec. E1220–21 (daily 

ed. June 9, 1995). Section 5 itself was 

titled ‘‘Protection Against Theft and 

Fraud,’’ and expressly included 

provisions of Title 18 of the U.S. Code 

pertaining to criminal offenses 

involving the misuse of Federal funds, 

as well as provisions of the False Claims 

Act. H.R. 1806, 104th Cong., § 5 (1995). 

LSC adopted the list of statutes in 

section 5, with one exception. Through 

negotiation with LSC’s Office of 

Inspector General (OIG), LSC 

determined that two other criminal 

statutes should be included in the list. 

61 FR 45760. These statutes prohibit 

bribery of public officials and witnesses 

and conspiracy to defraud the United 

States. Id. at 45761. 

Minor changes to the interim rule, not 

affecting this list, were made before the 

final rule was published in 1997. 62 FR 

19424–19427 (April 21, 1997). LSC has 

not revised Part 1640 since the 

publication of the final rule. 

II. LSC’s Consideration of the 

Applicable Federal Laws 

Since the final rule was published, 

Congress has amended or passed other 

Federal laws relating to the proper use 

of Federal funds. In 2014, OIG raised 

concerns that the § 1640.2(a)(1) list of 

applicable Federal laws is now underinclusive. As an example, OIG noted the 

omission of 18 U.S.C. 666, which 

prohibits theft or bribery concerning 

programs receiving Federal funds and is 

the basis for many of OIG’s referrals to 

the Department of Justice for 

prosecution. Subsequently, LSC staff 

researched other Federal laws 

applicable to fraud, waste, and abuse of 

Federal funds. The search revealed at 

least two other Federal laws relating to 

the proper use of Federal funds 

currently missing from the § 1640.2(a)(1) 

list: 18 U.S.C. 285—Taking or using 

papers relating to claims, and 18 U.S.C. 

1031—Major fraud against the United 

States. 

In response to OIG’s concern, LSC 

initially considered removing all 

statutory references from the regulation 

and instead drafting a definition of 

‘‘Federal law relating to the proper use 

of Federal funds’’ to encompass all the 

applicable Federal laws without the 

need to specifically list the statutory 

references. LSC staff concluded that any 

possible definition would either narrow 

the scope of Section 504(a)(19) too 

much or allow for too broad of an 

interpretation of the provision. LSC 

subsequently based its options for 

revising Part 1640 on two 

considerations: whether the list of 

‘‘Federal law relating to the proper use 

of Federal funds’’ should remain in Part 

1640 or be moved to LSC’s Web site, 

and whether the list should remain 

exhaustive or be made illustrative. LSC 

considered whether each option for 

amending the regulation appropriately 

balanced the desire for notice to 

recipients about the ‘‘Federal law 

relating to the proper use of Federal 

funds’’ covered by the rule with LSC’s 

interest in expeditiously amending the 

list of such laws whenever Congress acts 

to add, repeal, or amend them. 

First, the Corporation considered 

adding the missing statutes to the 

current § 1640.2(a)(1) list and revising 

the language to make it clear that the list 

of statutes is merely illustrative. LSC 

staff concluded that an illustrative list 

would not give recipients adequate 

notice about which laws may be 

included in this part. Second, LSC 

considered simply adding the three 

missing statutes to the current list in 

§ 1640.2(a)(1) and retaining the list’s 

exhaustive nature. LSC staff concluded 

that this option would not address OIG’s 

concerns about the rule becoming overor under-inclusive as laws governing the 

proper use of Federal funds are 

amended, added, or repealed. Nor 

would this option improve LSC’s ability 

to update the list in a timely fashion. 

Finally, LSC considered removing all 

statutory references from the regulation 

and instead referring readers to the LSC 

Web site, where LSC would maintain an 

easily updated list of applicable 

statutes. LSC staff concluded that this 

option would allow LSC more flexibility 

to update and revise the list of laws in 

a timely manner. This option would 

also provide recipients with adequate 

notice of the applicable laws because 

LSC would provide a link to the list in 

the annual contractual agreement. 

LSC proposes to adopt this last option 

using an exhaustive list of statutes. This 

approach would require a minor 

modification in the contractual 

agreement between the Corporation and 

its recipients, which currently directs 

recipients to the § 1640.2(a)(1) list. The 

Corporation refers to this contractual 

agreement as the ‘‘LSC Grant 

Assurances,’’ and requires recipients to 

consent to the agreement annually as a 

condition of receiving LSC funding. The 

Grant Assurances would be modified to 

direct recipients to the Corporation’s 

Web site, where the list of applicable 

laws would be maintained. 

As required by the LSC Rulemaking 

Protocol, LSC staff prepared an 

explanatory rulemaking options paper, 

accompanied by a proposed rule 

amending Part 1640. On January 22, 

2015, the Committee voted to authorize 

LSC to initiate rulemaking and to 

recommend that the Board approve 

publishing the proposed rule. On 

January 24, 2015, the Board approved 

the proposed rule for publication in the 

Federal Register for notice and 

comment. A section by section analysis 

of the proposed rule is provided below. 

III. Proposed List of Federal Laws 

Relating to the Proper Use of Federal 

Funds 

LSC proposes to post the following 

list of applicable Federal laws relating 

to the proper use of Federal funds on 

the Corporation’s Web site. The list 

would be subject to change as 

legislation changes. LSC seeks comment 

on both the proposal to remove the list 

from Part 1640 and the proposed list of 

statutes. 

1. 18 U.S.C. 201 (Bribery of Public 

Officials and Witnesses); 

2. 18 U.S.C. 285 (Taking or using papers 

relating to claims); 

3. 18 U.S.C. 286 (Conspiracy to Defraud 

the Government With Respect to 

Claims); 

4. 18 U.S.C. 287 (False, Fictitious or 

Fraudulent Claims); 

5. 18 U.S.C. 371 (Conspiracy to Commit 

Offense or Defraud the United States); 

6. 18 U.S.C. 641 (Public Money, 

Property or Records); 

7. 18 U.S.C. 666 (Theft or bribery 

concerning programs receiving 

Federal funds); 

8. 18 U.S.C. 1001 (Statements or Entries 

Generally); 

9. 18 U.S.C. 1002 (Possession of False 

Papers to Defraud the United States); 

10. 18 U.S.C. 1031 (Major fraud against 

the United States); 

11. 18 U.S.C. 1516 (Obstruction of 

Federal Audit); 

12. 31 U.S.C. 3729 (False Claims); 

13. 31 U.S.C. 3730 (Civil Actions for 

False Claims), except that actions that 

are authorized by 31 U.S.C. 3730(b) to 

be brought by persons may not be 

brought against the Corporation, any 

recipient, subrecipient, grantee, or 

contractor of the Corporation, or its 

employees; 

14. 31 U.S.C. 3731 (False Claims 

Procedure); 

15. 31 U.S.C. 3732 (False Claims 

Jurisdiction); and 

16. 31 U.S.C. 3733 (Civil Investigative 

Demands). 

IV. Proposed Changes 

1640.1 Purpose 

LSC proposes to revise § 1640.1 to 

reflect the changes to § 1640.2. 

1640.2 Applicable Federal laws 

LSC proposes to delete existing 

§ 1640.2(a)(1), redesignate § 1640.2(a)(2) 


rljohnson on DSK3VPTVN1PROD with PROPOSALS
5718 Federal Register / Vol. 80, No. 22 / Tuesday, February 3, 2015 / Proposed Rules 

as § 1640.2(b), and redesignate existing 

§ 1640.2(b)(1) and (2) as § 1640.4(a)(1) 

and (b)(1) respectively. 

Proposed § 1640.2(a) states that the 

Corporation will maintain a public list 

of applicable Federal laws. The list will 

be maintained on the Corporation’s Web 

site. The contract between the 

Corporation and the recipient, currently 

referred to as the LSC Grant Assurances, 

will be revised to provide recipients 

with a link to the list. 

Removing the list of statutes from the 

text of the rule will allow the 

Corporation to modify the list as needed 

with approval of the Board, rather than 

requiring LSC to engage in rulemaking 

prior to making any necessary changes. 

This change will allow LSC to update 

the list more quickly in response to 

congressional actions adding, amending, 

or repealing ‘‘Federal law relating to the 

proper use of Federal funds.’’ 

Modification of the list with Board 

approval does not rule out notice and 

comment for any changes, but it also 

does not require notice and comment for 

any changes. LSC will provide 

recipients with notice any time the list 

is modified. 

Proposed § 1640.2(b) renumbers and 

revises existing § 1640.2(a)(2) for clarity 

and readability. LSC made no 

substantive changes to this subsection. 

Recipients are reminded that OIG has 

statutory responsibility to investigate 

the activities covered by the applicable 

Federal laws. Although the contractual 

agreement with the Corporation would 

apply only to LSC funds, recipients are 

further reminded that OIG investigates 

reports of possible theft or misuse of a 

recipient’s non-LSC funds as well as its 

LSC funds and would report any theft 

or misuse that is found to the 

appropriate Federal or State authorities. 

1640.3 Contractual Agreement 

LSC proposes to revise existing 

§ 1640.3 to reflect the removal of the list 

of Federal law relating to the proper use 

of Federal funds from § 1640.2. LSC also 

proposes minor editorial changes to the 

rule. 

1640.4 Violation of Agreement 

LSC proposes to redesignate existing 

§ 1640.2(b)(1) and (2) as § 1640.4(a) and 

(c) respectively. The proposed move 

will group each definition in existing 

§ 1640.2(b) with each definition’s 

consequence for violating the agreement 

in existing § 1640.4. LSC made no 

substantive changes to this subsection, 

but has revised the text for clarity. 

List of Subjects in 45 CFR Part 1640 

Fraud; Grant programs—law; Legal 

services. 

For the reasons set forth in the 

preamble, the Legal Services 

Corporation proposes to revise 45 CFR 

part 1640 to read as follows: 

PART 1640—APPLICATION OF 

FEDERAL LAW TO LSC RECIPIENTS 

Sec. 

1640.1 Purpose 

1640.2 Applicable Federal laws 

1640.3 Contractual agreement 

1640.4 Violation of agreement 

Authority: 42 U.S.C. 2996g(e). 

§ 1640.1 Purpose. 

The purpose of this part is to ensure 

that recipients use their LSC funds in 

accordance with Federal law related to 

the proper use of Federal funds. This 

part also provides notice to recipients of 

the consequences of a violation of such 

Federal laws by a recipient, its 

employees or board members. 

§ 1640.2 Applicable Federal laws. 

(a) LSC will maintain a public list of 

applicable Federal laws relating to the 

proper use of Federal funds on its Web 

site and provide recipients with a link 

to the list in the contractual agreement. 

The list may be modified with the 

approval of the Corporation’s Board of 

Directors. LSC will provide recipients 

with notice when the list is modified. 

(b) For the purposes of this part and 

the laws referenced in paragraph (a) of 

this section, LSC is considered a Federal 

agency and a recipient’s LSC funds are 

considered Federal funds provided by 

grant or contract. 

§ 1640.3 Contractual agreement. 

As a condition of receiving LSC 

funds, a recipient must enter into a 

written agreement with the Corporation 

that, with respect to its LSC funds, will 

subject the recipient to the applicable 

Federal laws relating to the proper use 

of Federal funds. The agreement must 

include a statement that all of the 

recipient’s employees and board 

members have been informed of such 

Federal law and of the consequences of 

a violation of such law, both to the 

recipient and to themselves as 

individuals. 

§ 1640.4 Violation of agreement. 

(a) LSC will determine that a recipient 

has violated the agreement described in 

§ 1640.3 when the recipient has been 

convicted of, or judgment has been 

entered against the recipient for, a 

violation of an applicable Federal law 

relating to the proper use of Federal 

funds with respect to its LSC grant or 

contract, by the court having 

jurisdiction of the matter, and any 

appeals of the conviction or judgment 

have been exhausted or the time for 

appeal has expired. 

(b) A violation of the agreement by a 

recipient based on recipient conduct 

will result in the Corporation 

terminating the recipient’s LSC grant or 

contract without need for a termination 

hearing. While an appeal of a conviction 

or judgment is pending, the Corporation 

may take any necessary steps to 

safeguard its funds. 

(c) LSC will determine that the 

recipient has violated the agreement 

described in § 1640.3 when an employee 

or board member of the recipient has 

been convicted of, or judgment has been 

entered against the employee or board 

member for, a violation of an applicable 

Federal law relating to the proper use of 

Federal funds with respect to the 

recipient’s grant or contract with LSC, 

by the court having jurisdiction of the 

matter, and any appeals of the 

conviction or judgment have been 

exhausted or the time for appeal has 

expired, and the Corporation finds that 

the recipient has knowingly or through 

gross negligence allowed the employee 

or board member to engage in such 

activities. 

(d) A violation of the agreement by 

the recipient based on employee or 

board member conduct will result in the 

Corporation terminating the recipient’s 

LSC grant or contract. Prior to 

termination, the Corporation will 

provide notice and an opportunity to be 

heard for the sole purpose of 

determining whether the recipient 

knowingly or through gross negligence 

allowed the employee or board member 

to engage in the activities leading to the 

conviction or judgment. While an 

appeal of a conviction or judgment or a 

hearing is pending, the Corporation may 

take any necessary steps to safeguard its 

funds. 

Dated: January 28, 2015. 

Stefanie K. Davis, 

Assistant General Counsel. 

[FR Doc. 2015–01893 Filed 2–2–15; 8:45 am] 

BILLING CODE 7050–01–P 


rljohnson on DSK3VPTVN1PROD with PROPOSALS