41404 Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations

77See also Proposed Governmental Accounting

Standards Board Technical Bulletin No. 98–a,

‘‘Disclosures about Year 2000 Resources

Committed,’’ July 24, 1998. It can be found at

<http://www.rutgers.edu/accounting/raw/gasb/

gasbhome.html>.

will not be able to meet such

obligations.

Issuers of general obligation debt may

wish to consider, for example, the

adverse effects, if any, Year 2000 issues

may pose to their ability to assess and

collect ad valorem taxes and allocate

receipts and disbursements to proper

funds in a timely manner to make debt

service payments when due. In

addition, while Year 2000 issues may

not directly affect an issuer’s ability to

pay debt service, they may affect an

issuer’s general accounting and payment

functions, which may be material to

investors.

Revenue bond issuers may wish to

consider, for example, any adverse

effects Year 2000 issues may have on

their ability to collect and administer

the revenue stream securing their bonds

and their ability to make timely

payment of principal and interest on

their obligations, as well as adverse

effects to general accounting and

payment functions, which may be

material to investors.

Conduit borrowers, such as hospitals,

universities and others, may wish to

consider, for example, any adverse

effects Year 2000 issues may have on

their ability to deliver services, collect

revenue and make timely payment on

their obligations, including the

obligation to pay debt service relating to

municipal securities, which may be

material to investors.

All issuers and conduit borrowers

also may wish to consider the impact of

Year 2000 problems facing third parties

on their own ability to satisfy their

responsibilities.

Other examples of suggested

disclosure for consideration include, but

are not limited to, the costs associated

with fixing an issuer’s Year 2000

problems, any loss associated with

fixing an issuer’s Year 2000 problems,

any loss an issuer may incur because of

Year 2000 problems, and any liabilities

associated with an issuer’s Year 2000

problems.

While not binding on issuers of

municipal securities, issuers and

persons assisting in preparing

municipal issuer disclosure seeking

further guidance may wish to review

Sections III.A, B, and C of this release

applicable to public companies.77 The

anti-fraud provisions of the federal

securities law prohibit materially false

and misleading statements or omissions,

including those relating to the Year

2000 issues we have discussed in this

release.

List of Subjects

17 CFR Parts 231, 241, and 276

Securities.

17 CFR Part 271

Investment companies, Securities.

Amendments to the Code of Federal

Regulations

For the reasons set forth in the

preamble, the Commission is amending

title 17, chapter II of the Code of Federal

Regulations as follows:

PART 231—INTERPRETATIVE

RELEASES RELATING TO THE

SECURITIES ACT OF 1933 AND

GENERAL RULES AND REGULATIONS

THEREUNDER

1. Part 231 is amended by adding

Release No. 33–7558 and the release

date of July 29, 1998, to the list of

interpretative releases.

PART 241—INTERPRETATIVE

RELEASES RELATING TO THE

SECURITIES EXCHANGE ACT OF 1934

AND GENERAL RULES AND

REGULATIONS THEREUNDER

2. Part 241 is amended by adding

Release No. 34–40277 and the release

date of July 29, 1998, to the list of

interpretative releases.

PART 271—INTERPRETATIVE

RELEASES RELATING TO THE

INVESTMENT COMPANY ACT OF 1940

AND GENERAL RULES AND

REGULATIONS THEREUNDER

3. Part 271 is amended by adding

Release No. IC–23366 and the release

date of July 29, 1998, to the list of

interpretative releases.

PART 276—INTERPRETATIVE

RELEASES RELATING TO THE

INVESTMENT ADVISERS ACT OF 1940

AND GENERAL RULES AND

REGULATIONS THEREUNDER

4. Part 276 is amended by adding

Release No. IA–1738 and the release

date of July 29, 1998, to the list of

interpretative releases.

Dated: July 29, 1998.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–20749 Filed 8–3–98; 8:45 am]

BILLING CODE 8010–01–U

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: Final rules.

SUMMARY: We are amending our rules

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), as amended. The final rules

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. The

final rules include statutorily and

administratively imposed requirements

and prohibitions.

EFFECTIVE DATE: This regulation is

effective September 3, 1998.

FOR FURTHER INFORMATION CONTACT:

Robert J. Augustine, Legal Assistant,

Office of Process and Innovation

Management, Social Security

Administration, 6401 Security

Boulevard, Baltimore, MD 21235, (410)

966–5121. For information on eligibility

or claiming benefits, call our national

toll-free number, 1–800–772–1213.

SUPPLEMENTARY INFORMATION:

Background

Prior regulations governing

representatives’ conduct (§§ 404.1740, et

seq. and 416.1540, et seq.) under titles

II and XVI, of the Act, 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 from practice before the

Social Security Administration (SSA) if

he or she has violated those rules, been

convicted of a violation of sections 206

or 1631(d)(2) of the Act, respectively, or

‘‘otherwise refused to comply with our

rules and regulations on representing

claimants in dealings with us.’’ This is

consistent with sections 206(a)(1) and

1631(d)(2) of the Act, which provide

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 * * *’’ (Section 206(a)(1) is
Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations 41405

incorporated into title XVI of the Act by

section 1631(d)(2)(A) of the Act.) Since

their inception, the regulations have

reflected the Commissioner’s (formerly

the Secretary of Health and Human

Services’) broad authority over matters

involving representatives’ activities in

their dealings with us.

These final rules are based on the

notice of proposed rulemaking (NPRM)

published in the Federal Register on

January 3, 1997 (62 FR 352).

Specifically, they provide enforceable

standards governing aspects of practice,

performance and conduct for all persons

who act as claimants’ representatives.

The final rules also recognize the

increased participation of compensated

representatives in the adjudicative

process, the special circumstances

presented by SSA’s nonadversarial

administrative process including its

hearings, and statutory changes, such as

the anti-fraud provisions of the Social

Security Independence and Program

Improvements Act of 1994, Public Law

(Pub. L.) 103–296. The prior regulations

pertaining to representatives’ conduct

had been largely unchanged since their

promulgation in 1980, and no longer

adequately addressed our experience

concerning the extensive participation

of representatives in the claims process.

We take seriously our statutory

responsibility to ensure that claimants

are represented properly during the

claims process. Therefore, we are

publishing these rules to improve the

efficiency of our administrative process

and to ensure that claimants receive

competent services from their

representatives. While we recognize 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

prior regulations did not address a

representative’s responsibility to

adequately prepare and present the

claimant’s case among other

deficiencies. These final rules correct

these omissions and are necessary to

protect the claimant and the

adjudicative 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 the

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’s) Model Rules of

Professional Conduct and Model Code

of Professional Responsibility.

There are comparable rules in part

410, subpart F (§§ 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 process a very

small number of claims involving Black

Lung benefits, and the concerns giving

rise to these rules have not affected

those claims, there is no compelling

need to revise the Black Lung rules.

We expect that the final rules will

further clarify the obligations of

representatives to provide competent

representation of their clients, in

accordance with the procedural and

evidentiary requirements of the claims

process. Moreover, the final rules

constitute official notice concerning our

requirements and prohibitions.

In drafting the proposed rules, we

obtained information from various

sources to address the concerns of

claimants and others with a stake or

interest in the issue of claimant

representation; for example, we

conducted focus groups with claimants

and beneficiaries as part of our

disability process redesign initiative.

Participants in the public dialogue

conducted in conjunction with our

redesign initiative frequently noted the

lack of timely or effective assistance on

the part of claimants’ representatives.

We also used information gathered in

investigating nearly 600 complaints

involving misconduct by representatives

from 1988 to 1997. In light of

complaints about the quality and

effectiveness of representatives’

services, the Disability Process Redesign

Team included within its

recommendations provisions aimed at

representatives’ performance.

In addition, in February 1995 we

requested comments on a draft proposal

from 33 separate groups and

organizations drawn from the attorney

and non-attorney claimant

representative community. These

groups included professional

organizations, interest groups, think

tanks, legal services organizations, and

various private representative

organizations. We received 92 responses

to this informal request. Many were

supportive, especially regarding the

need to provide standards for nonattorney representatives. Many,

however, were opposed to more

regulation of their professional conduct.

We carefully considered all the views

and concerns in formulating the

proposed rules, which we published in

the Federal Register on January 3, 1997.

Similarly, we considered the public

comments received on the proposed

rules, in formulating these final rules.

Regulatory Provisions

These final regulations revise

§§ 404.1740, 404.1745, 404.1750,

404.1765, 404.1770, 404.1799, 416.1540,

416.1545, 416.1550, 416.1565, and

416.1599.

We revised §§ 404.1740(a) and

416.1540(a) to explain the purpose and

scope of these rules which are intended

to ensure that representatives provide

competent services to their clients and

comport themselves in accordance with

our rules and standards. Accordingly,

the rules set forth affirmative duties and

prohibited actions that shall govern the

relationship between the representative

and the Agency.

We revised §§ 404.1740(b) and

416.1540(b) to include 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 competence, diligence, and

timeliness in assisting the claimant to

meet the burden of proving eligibility

for benefits.

We have not changed the regulations

concerning our existing duties and

responsibilities with regard to

developing the record and obtaining

evidence nor have we changed our

expectations concerning what will be

required of claimants (see §§ 404.1512

and 416.912 concerning disability and

blindness claims). Therefore, we will

continue to carry out our existing

responsibilities in this regard. Under

these rules, however, representatives

will be expected to assist claimants in

meeting their obligations with respect to

submitting information and evidence

and responding to our requests in

conformity with our existing

regulations.

New §§ 404.1740(b)(1) and

416.1540(b)(1) clarify that a

representative should act with

reasonable promptness to obtain and

submit to us the information and

evidence that the claimant wants the

decision maker to consider in ruling on

a claim. Based on the comments we

received on the proposed rules we

published, we revised the wording of
41406 Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations

these sections to more closely track

other existing regulatory requirements.

In disability and blindness claims, the

new provisions include the obligation to

assist the claimant in complying with

§§ 404.1512(a) and 416.912(a) which

require claimants to bring information

and evidence to our attention and to

furnish medical and other evidence to

us.

New §§ 404.1740(b)(2) and

416.1540(b)(2) require that the

representative assist the claimant in

complying, as soon as practicable, with

our requests for information or

evidence. In disability and blindness

claims, this includes the obligation to

assist the claimant in providing, upon

our request, evidence pursuant to

§§ 404.1512(c) and 416.912(c).

Based on the public comments we

received, we deleted proposed

§§ 404.1740(b)(2)(i) and

416.1540(b)(2)(i), which would have

required 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. We also deleted proposed

§§ 404.1740(b)(2)(ii) and

416.1540(b)(2)(ii), which would have

required that the representative provide,

upon request, all evidence and

documentation pertaining to specifically

identified issues which the

representative or claimant already has

or may readily obtain. We deleted these

proposed requirements to more closely

track the existing regulatory

requirements that explain a claimant’s

duties and responsibilities with regard

to submitting evidence and providing

information.

In new §§ 404.1740(b)(3) and

416.1540(b)(3), we set forth minimum

requirements governing the

competency, diligence and behavior of

representatives in their dealings with

us. Based on the comments we received,

we revised these sections to more

closely track the language of model

codes concerning competency and

diligence of representatives.

In new §§ 404.1740(b)(3)(i) and

416.1540(b)(3)(i), we establish an

affirmative duty of competency. This

includes the requirement that a

representative know the significant

issue(s) in a claim and have a working

knowledge of the applicable provisions

of the Act, the regulations and the

Rulings. A representative should also

know how to obtain and submit

evidence regarding the claim.

In new §§ 404.1740(b)(3)(ii) and

416.1540(b)(3)(ii), we require that the

representative act with reasonable

diligence and promptness. This

includes providing prompt and

responsive answers to our requests and

communications pertaining to the

pending claim. A representative may

not ignore official communications.

We deleted proposed

§§ 404.1740(b)(3)(iii) and

416.1540(b)(3)(iii), which would

affirmatively have required cooperation

in developing the record. We believe

that cooperation is inherent in

competency and diligence, and that

representatives should cooperate with

us in such matters as releasing medical

records, scheduling consultative

examinations and scheduling

conferences or hearing dates. Therefore,

a separate rule would be redundant.

In revised §§ 404.1740(c) and

416.1540(c), we 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.

We based new §§ 404.1740(c)(1) and

416.1540(c)(1) on the prohibitions (e.g.,

threatening or coercing a claimant) set

forth in §§ 206(a)(5) and 1631(d)(2) of

the Act, and these sections are selfexplanatory. 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.

We based new §§ 404.1740(c)(2) and

416.1540(c)(2) on the provisions of

sections 206(a) and (b) and 1631(d)(2) of

the Act which provide briefly that

representatives are eligible for

reasonable fees for representing a

claimant, and these sections 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 appearing

alone at the hearing 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 title II benefits for the

representation at the hearing.

Generally, we based new

§§ 404.1740(c)(3) and 416.1540(c)(3) 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. These

sections are self-explanatory.

New §§ 404.1740(c)(4) and

416.1540(c)(4) are directed against

practices where improper acts or

omissions by the representative, without

good cause, have the effect of

unreasonably delaying the disposition

of a claim for benefits.

We based new §§ 404.1740(c)(5) and

416.1540(c)(5) 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. The intent is to prohibit disclosure

of information regarding a claimant

without the claimant’s consent.

In new §§ 404.1740(c)(6) and

416.1540(c)(6), we prohibit a

representative from offering or giving

anything of value to persons involved in

the adjudication of a claim except as

remuneration to a witness for legitimate

expenses or for services rendered. The

intent is to prevent the appearance of

influencing, or attempting to influence,

the disposition of a claim by bestowing

gifts or favors on individuals in a

position to materially affect the outcome

of the adjudication of a claim.

New §§ 404.1740(c)(7) and

416.1540(c)(7) apply to conduct

undertaken during the course of oral

proceedings which is disruptive and

detrimental to due process and the

administration of justice.

In new §§ 404.1740(c)(7)(i) and

416.1540(c)(7)(i), we prohibit repeated

absences from or persistent tardiness at

scheduled proceedings without good

cause because such conduct adversely

affects claimants, diminishes the ability

of the Agency to operate efficiently and

harms other applicants by disrupting

schedules and work flow.

In new §§ 404.1740(c)(7)(ii) and

416.1540(c)(7)(ii), we 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.

New §§ 404.1740(c)(7)(iii) and

416.1540(c)(7)(iii) are based in part on

the provisions of sections 206(a)(5) and

1631(d)(2) of the Act, 18 U.S.C. 111 and

28 CFR 64.2(x) and (aa). These

provisions prohibit threatening or

intimidating conduct directed at the

participants in an oral proceeding or the

employees assigned to our offices,

which has the effect of disrupting the

proceeding. We will not tolerate actual

or implied threats of violence.
Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations 41407

In revised §§ 404.1745 and 416.1545,

we 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.

We modified §§ 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), to reflect

current Agency official titles and

organizational changes.

We revised §§ 404.1765(g)(3) and

416.1565(g)(3) 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 § 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 § 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

§ 404.983(f) was renumbered as

§ 404.1765(f), with a parallel title XVI

provision at § 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

§§ 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 the 1980

rules, however, SSA never intended to

make any substantive changes to the

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 prior § 404.1765(g)(3) by

making ‘‘decisions’’ singular for

correctness and consistency with

§ 416.1565(g)(3).

Finally, we are amending § 404.1770,

paragraphs (a)(3) and (b)(3), 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. This correction

accurately reflects the language and

purpose of paragraphs (a)(3) and (b)(3)

and brings § 404.1770 into conformity

with its equivalent § 416.1570.

Public Comments

When we published the NPRM, we

provided the public a 60-day comment

period. We received comments from

over 70 individuals and organizations.

These included comments referred to us

by members of Congress, and comments

from legal services organizations, the

American Bar Association (ABA), the

National Organization of Social Security

Claimants’ Representatives (NOSSCR),

the Association of Administrative Law

Judges, Inc., and other associations of

attorneys, and non-attorney

representatives. We also received

comments from individual attorneys,

non-attorney representatives,

Administrative Law Judges (ALJs) and

other SSA employees.

Many of the commenters raised

concerns that they or previous

commenters raised informally with

regard to our draft proposal in February

1995. Many commenters were opposed

to our promulgating any additional

regulations at all concerning

representatives. However, we also

received comments from individuals

who believed that there is a need for

clarifying regulations and who were

supportive of our proposed rules. Other

commenters expressed the idea that we

should not regulate attorneys who

practice before us, but should instead

regulate non-attorneys. On the other

hand, many non-attorney

representatives supported the idea of

uniform national standards for both

attorney and non-attorney

representatives.

The greatest concern was with regard

to our proposed requirements

concerning the submission of evidence

and responding to our requests for

information. In response to these

comments and as we have indicated

below, we revised these requirements

extensively to conform to other existing

regulations. We have summarized and

addressed these statements in the

comments and responses below with the

other substantive comments received.

The ABA expressed substantial

reservations about our proposed

standards. The ABA continued to

believe, as it did in 1995, that some of

the rules, especially those dealing with

disclosure of medical information and

the duty of advocacy for one’s client,

were far too broad and that enforcement

would place the Agency in the

troublesome position of attempting to

override a lawyer’s sworn duty to obey

the Rules of Professional Conduct of the

jurisdiction in which the lawyer is

licensed to practice. The ABA believed

that the proposed rules continued to

include provisions that could give rise

to serious ethical conflicts. The ABA

voiced particular objections to our

proposal to place duties on

representatives to obtain and submit

certain evidence by certain dates.

NOSSCR raised concerns involving

the primacy of State bar rules for most

attorneys, the duty to obtain specific

evidence, the duty to submit evidence

by certain dates, and the vagueness of

the conduct deemed overzealous.

NOSSCR also objected to what they

interpreted as our attempt to close the

record through the use of deadlines.

NOSSCR believed that there was no

sound basis for our proposed rules as

drafted and that, in effect, they should

not be promulgated. This was a position

taken by other associations of attorneys

and individual attorneys as well.

As we have explained below, in

response to the ABA’s and NOSSCR’s

comments and other comments we have

received, we have revised the particular

provisions that generated the most

concern to make them track SSA’s other

existing regulations. We believe this

removes the areas of greatest concern.

For the reasons discussed below, we

have not adopted the suggestion to refer

complaints about attorneys to State bar

licensing authorities for appropriate

disposition. We have made other

changes to address the objections with

regard to wording of particular

provisions and vagueness.

Because some of the comments were

quite detailed, we had to condense,

summarize or paraphrase them. We
41408 Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations

have, however, tried to summarize the

commenters’ views accurately and

respond to all of the significant issues

raised by the commenters that are

within the scope of the proposed rules.

As we discuss below in responding to

the comments, we have made revisions

and additions to the proposed rules to

clarify their intent.

Comment: Some commenters

questioned our authority to promulgate

these regulations. One commenter stated

that the Act does not contemplate that

SSA would impose standards such as

these where such standards are already

set out in State laws that regulate the

conduct of attorneys and others who do

business within those states. According

to this commenter, there is no

justification for ignoring the regional

differences between states that are a

necessary and direct result of our

constitutional system. This commenter

also stated that these regional

differences are tolerated in other

settings such as the Federal courts.

Response: The Commissioner has

broad rulemaking authority under

sections 205 and 1631 of the Act to

promulgate necessary and appropriate

rules, regulations and procedures to

carry out the provisions of titles II and

XVI and under sections 206 and

1631(d)(2) of the Act to ‘‘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 or

who violates any provision of this

section for which a penalty is

prescribed.’’ It is the Commissioner who

is ultimately responsible for providing

decisionmaking that is timely and

efficient and results in an accurate

disposition of a claim. As stated above,

these regulations are necessary to

address actual and potential problems

impacting the efficiency and integrity of

the administrative process resulting

from the participation of representatives

in the claims process and to ensure that

claimants’ eligibility for benefits is not

prejudiced by ineffective assistance of

their representatives.

In Sperry v. State of Florida, 373 U.S.

379 (1963), Florida sought to enjoin a

non-attorney registered to practice

before the United States Patent Office

from preparing and prosecuting patent

applications in Florida because he was

not a member of the Florida bar. The

Supreme Court held that the Federal

government has pre-emptive powers

over states’ legislative and judicial

authorities when acting under valid

Federal regulation.

Based on the Commissioner’s broad

rulemaking authority and the Federal

government’s pre-emptive powers, we

believe that we have the authority to

promulgate these regulations on a

nationwide basis, and they would

supersede any inconsistent state or local

rules.

Comment: Many commenters

questioned the need for additional

regulations governing the conduct of

representatives.

Response: The goal of these

regulations is to provide the public,

especially claimants’ representatives

and claimants, with a uniform, clearly

articulated set of rules that

representatives are expected to follow in

representing claimants before SSA. In so

doing, we are informing the public of

how we will carry out our statutory

obligations in regard to claimant

representation.

We carefully considered the need to

provide enforceable standards governing

the practice, performance, and conduct

of all persons who act as claimants’

representatives. Under the prior

regulations, we were unable to address

some conduct by claimants’

representatives that we believed was

inappropriate. For example, under the

prior regulations, we could not address

a representative’s misconduct during a

hearing or failure to adequately prepare

and present the claimant’s case.

Moreover, various sources, including

claimants, have complained to SSA and

expressed concern about the quality and

effectiveness of claimants’

representation. Based on these needs,

and our statutory duty to protect

claimants from claimants’

representatives who do not comply with

Social Security laws and regulations, we

believe that the standards of conduct for

representatives are necessary and that

such standards clearly are in the public

interest.

Comment: The majority of responding

attorneys, as well as the ABA and other

organizations, complained that, since

attorneys’ conduct already is governed

by their individual State bar codes of

conduct and ethics rules, separate SSA

standards of conduct are redundant and

are an unnecessary infringement on

State bar jurisdiction over attorneys.

The ABA and several individuals

suggested that SSA establish a system

by which complaints can be referred to

State bar disciplinary authorities when

we suspect misconduct. The ABA

supported SSA’s concern that all

representatives be held to certain

standards of practice and conduct, but

strongly advised that such standards

comport with the ABA Model Rules,

and that they be applied only to those

representatives who would not

otherwise be subject to the legal

profession’s rules of conduct. One

individual 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.

Some attorney commenters suggested

that non-attorney representatives should

be required to comply with State bar

rules or the ABA Model Code. A few

attorneys suggested that non-attorneys

be barred from representing claimants

before SSA. However, a few commenters

specifically agreed with us that both

attorneys and non-attorneys should

have their conduct evaluated by the

same criteria.

Response: Bar rules differ in language

and format among the 50 States, the

District of Columbia, Puerto Rico and

the U.S. territories and island

possessions. 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 that require

national uniformity. 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 by SSA for conduct

that another jurisdiction would not find

actionable, or vice versa. We do not

believe it benefits the attorneys, the

claimants or SSA to have this type of

inconsistency in carrying out the

Commissioner’s statutory obligation to

regulate the conduct of representatives

in administering a nationwide program.

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.

Furthermore, non-attorney

representatives are not subject to any

rules of conduct for representatives

similar to bar rules. Contrary to one

comment, individual non-attorney

representatives and representative

organizations represent a substantial

number of claimants. Within the last

eight 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 nonattorneys who practice before us.

Moreover, it is only fair and equitable to

hold all representatives who practice

before us to the same standards.

In addition, applying our rules to only

non-attorney representatives is

incompatible with the Commissioner’s
Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations 41409

statutory obligation to regulate the

conduct of all representatives in order to

ensure that claimants are being

represented competently and fairly.

Finally, we note that contrary to the

suggestion that non-attorneys be

prohibited from acting as

representatives, the Act allows such

representation.

Comment: Some commenters stated

that there should be testing or

certification of representatives. Another

commenter stated that SSA should

publish standards concerning the

character, background, and

qualifications of non-attorney

representatives.

Response: We have considered the

possibility of testing or other formal

certification procedures for non-attorney

representatives, but we have determined

that the idea is not feasible at this time.

SSA currently has standards for nonattorney representatives in §§ 404.1705

and 416.1505.

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.

Comment: One commenter offered

that since no other Federal agency has

a code of conduct for representatives, it

is unnecessary for SSA to have one.

Response: We disagree with the

premise of the comment and the

conclusion. The Internal Revenue

Service has rules for practice before it.

See 31 CFR, Part 10. We also note that

on November 25, 1997, the Merit

Systems Protection Board published an

interim rule concerning misconduct by

representatives (62 FR 62689) which

was finalized recently at 63 FR 35499

(June 30, 1998). Furthermore, on

January 20, 1998, the Department of

Justice, Immigration and Naturalization

Service and the Executive Office for

Immigration Review, published an

NPRM to change the rules and

procedures concerning professional

conduct for practitioners, which

includes attorneys and representatives

(63 FR 2901). Moreover, whether other

agencies have codes of conduct should

not be determinative. SSA has a

responsibility to protect and preserve

our administrative processes, and by

law may take any reasonably necessary

action in support of that obligation.

Comment: A few individuals

commented on the issue of payment of

fees to non-attorneys and suggested that

the prohibition against direct payment

of fees to non-attorneys should be

removed. One commenter suggested that

non-attorneys should be required to sign

retainer agreements prior to

representing claimants and should also

be required to submit itemized fee

statements to SSA.

Response: These issues go beyond the

purpose of these rules. The intent in

drafting these regulations was not to

change the existing statutory and

regulatory provisions regarding payment

of fees. However, as stated in the NPRM,

SSA is currently considering separate

regulations to address the issues of

authorization, direct payment and

administrative review of fees for

representation.

Comment: Other commenters

suggested that a representative engaging

in prohibited or obstructive conduct be

penalized by reduction in the amount of

the fee authorized.

Response: This issue also is not the

subject of these rules. We may address

this issue in the separate regulations

referred to in the previous response.

Comment: We received various

comments regarding the number of

complaints of misconduct by claimants’

representatives investigated by the

Office of Hearings and Appeals. Several

commenters believed that the small

number of complaints did not indicate

a need for our proposed standards of

conduct for representatives. Another

commenter stated that our statistics

underestimate the problem of

inadequate representation of claimants.

Response: Although we realize that

most representatives do a conscientious

job in assisting their clients, we believe

that there are sufficient instances of

misconduct to justify these standards of

conduct based on the referrals and

complaints we have received. We also

observe, however, that many of the

complaints we receive involve

misconduct by claimants’

representatives that could not be

addressed under the prior regulations

but can be addressed under these

standards of conduct. In addition, we

anticipate that our standards of conduct

will result in more referrals of

representative misconduct to the Office

of Hearings and Appeals.

Comment: Some commenters believed

that SSA’s decision to seek discipline of

a claimant’s representative will be based

on the Agency’s workload and will not

be applied uniformly.

Response: Our decision to seek

discipline of a claimant’s representative

will be based solely on a

representative’s misconduct, not SSA’s

workload. We also believe that the rules

provide a strong basis for uniform

application of such actions and

recognize our obligation to effectively

implement them in an even-handed,

consistent manner. Moreover, we

believe that the rules clearly focus on

the responsibilities of a claimant’s

representative, including avoiding

unjustifiable delays that harm the

processing of the claim. The rules apply

to claimants’ representatives in all

stages of our process and all aspects of

their representation before us.

Comment: Several commenters

pointed out the delays in our

administrative decisionmaking process.

Generally, observing that SSA is under

no time constraints in processing cases,

they expressed the belief that the delays

result from Agency actions rather than

representative misconduct.

Response: The time it takes to decide

claims in the administrative process is

influenced by many factors. We believe

that our new rules will enhance our

efforts to improve the efficiency and

timeliness of our adjudication process.

At the same time, in fairness, we will

not hold representatives accountable for

matters solely within the control of the

Agency.

Comment: A few individuals observed

that the new regulations would put an

unnecessary administrative burden on

SSA and would create a new

bureaucracy. Others suggested that the

rules would also place an unwarranted

burden on representatives and would

have a chilling effect upon

representation.

Response: Although, as noted

previously, these regulations may result

in our receiving additional complaints

of misconduct, the complaints will be

handled by the same staff and in the

same manner as complaints filed under

the prior regulations. As we have stated

below in response to similar comments,

we do not believe that these regulations

place an unwarranted burden on

representatives or discourage

representation. Instead, we believe that

these rules will improve the efficiency

of our administrative process.

Comment: Several commenters

complained about claimants’

representatives’ lack of access to claim

files, lost records, lack of response from

SSA to inquiries, and delay in obtaining

records from SSA.

Response: We agree that these issues

are relevant, but they are not directly

related to the subject matter of these

rules. We will, of course, consider such

extenuating circumstances in deciding

whether there was inappropriate delay

or failure to adequately prepare and

present the claimant’s case. As noted

below, we will not hold a representative
41410 Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations

accountable for matters beyond his or

her control.

Comment: Several commenters

expressed concern that SSA employees,

including ALJs, may abuse the process

by improperly finding violations of the

standards of conduct or by making

unreasonable demands on

representatives.

Response: We believe that the internal

checks and balances within our

operating procedures provide adequate

safeguards against abuse of discretion

and/or arbitrary action. Furthermore, we

note that the determination on whether

to file a complaint against a

representative for violating these

regulations will be made by the Deputy

Commissioner for Disability and Income

Security Programs (or other official the

Commissioner may designate), or his or

her designee (hereinafter Deputy

Commissioner or designee), rather than

by any other employee, including an

ALJ. 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.

Comment: Other commenters

intimated that we are proposing these

rules to punish representatives or

decrease the rate of representation.

Response: SSA neither encourages nor

discourages representation. Our sole

purpose in proposing these regulations

is to carry out our statutory obligation

to ensure that representatives, when

utilized, meet certain standards in their

dealings with claimants and with us.

Comment: Other commenters

suggested a code of conduct for SSA

employees, including ALJs.

Response: The suggestion is outside

the scope and purpose of these rules.

All SSA employees, including ALJs,

must conform their conduct to

government-wide standards of conduct.

Any member of the public who believes

that any SSA employee has violated

these standards should report these

violations to us. Additionally, we also

have existing procedures to address

allegations of bias or misconduct on the

part of ALJs.

Comment: Several individuals

commented on the issue of SSA’s ability

to contact the claimant directly. One

representative stated that the proposed

standards of conduct fail to point out

what rules apply to SSA employees who

contact and, according to this

commenter, allegedly intimidate

claimants although these claimants may

be represented. One attorney stated that

in other legal matters such as criminal

or civil actions, it is improper to contact

the client directly. Another commenter

stated that it was not true that SSA may

not contact a represented claimant

directly. This individual stated that SSA

may do so in cases of fraud or similar

fault or to resolve discrepancies, and

must do so to provide and explain rights

and responsibilities in connection with

the filing of a claim. Additionally, this

individual observed that representatives

should be aware that SSA can and will

make such contacts.

Response: SSA’s general policy is that

SSA makes all contacts with a

represented claimant in connection with

prosecution of a claim through, or with

the permission of, the appointed

representative. However, SSA may

contact the claimant directly: if the

representative asks SSA to deal directly

with the claimant; or if SSA’s records

indicate that the claimant is

represented, but there is insufficient or

conflicting information regarding who

the claimant’s representative is; or if an

appointed representative’s authority

may have expired, but there is

insufficient information in the file or on

the system to make this determination

accurately; or if the issue involves a

possible violation by the representative

or the claimant. Also, because an

appointed representative’s authority

ordinarily does not extend to signing an

application on behalf of a claimant, SSA

frequently does have direct contact with

a claimant during the claims-filing

process. Contacts other than as

explained above are not in accordance

with our procedures, and we would

certainly want to be told about

employee improprieties, such as alleged

intimidation.

Comment: Several ALJs in one

hearing office and the Association of

ALJs requested an additional rule

dealing with withdrawal of

representation by representatives

shortly before or on the date of the

hearing. They indicated that in no court

may a representative withdraw from a

case without leave of court and that the

absence of such a requirement for SSA

hearings results in additional delay and

a waste of time and money. These

commenters propose a rule requiring the

representative to show good cause for

withdrawal, or by allowing withdrawal

no later than six days after notice of

hearing is issued without having to

show good cause.

Response: SSA’s decisionmaking

process is nonadversarial and informal,

and claimants do not require

representation. The decision to have a

representative is the claimant’s, and

SSA neither encourages nor discourages

representation. A claimant may revoke

the appointment of a representative at

any time. Likewise, a representative

may withdraw from representing a

claimant at any time. Any rule limiting

the withdrawal of a representative

would contravene SSA’s basic policy on

representation. If a claimant still desires

representation after his or her

representative withdraws, we will allow

the individual time to secure a new

representative before we adjudicate the

claim.

Comment: One ALJ suggested that

SSA by regulation, or Congress through

statute, provide SSA ALJs with some

form of limited contempt or sanction

powers to control the conduct of

representatives and claimants in

addition to the proposed rules. The ALJ

mentioned that recently enacted

legislation gave immigration judges the

authority to sanction by civil money

penalty any action or inaction in

contempt of the judge’s proper exercise

of authority. The ALJ also cited a

proposal to give Department of Health

and Human Services Departmental

Appeals Board ALJs sanction powers in

civil monetary penalty cases. Another

commenter suggested that

§§ 404.1740(b) and 416.1540(b) should

place an affirmative duty on

representatives to comply with

prehearing orders. According to this

commenter, the regulation should

indicate that the ALJ has authority to

issue and expect compliance with such

prehearing orders.

Response: SSA ALJs do not have

contempt powers or sanction authority,

and we do not have legislation similar

to that cited by the commenter. SSA

ALJs, on their own initiative, will not

have the authority to enforce these

rules. Instead, as noted above, the

determination on whether to file a

complaint against a representative will

be made by the Deputy Commissioner or

designee. Finally, we believe that giving

contempt or sanction authority to ALJs

does not seem necessary or appropriate

to SSA’s informal, nonadversarial

proceedings which deal primarily with

disability and retirement issues.

Comment: A frequent comment

concerning the February 1995 draft 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 in the
Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations 41411

NPRM, we modified the language that

was most often identified as ambiguous.

However, we received comments on the

NPRM that some of the language

continued to be vague and ambiguous.

Response: We have made further

revisions to address these concerns and,

in some instances, have added language

similar to that in model codes of

conduct. Attorneys are familiar with

model code language, and these codes

have a long interpretive history of

similar provisions and language which

can be used as guidance for both

attorneys and non-attorneys.

Comment: Some commenters 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 be in

violation of these regulations.

Response: We believe that the rules,

as revised, define with sufficient

specificity the types of conduct subject

to regulation. Similar to other standards

of conduct (e.g., the ABA Model Rules),

these regulations do not list every act or

omission which might constitute a

violation. Such a listing would be

inappropriate to a regulation and would

be virtually impossible to complete

given the limitless factual situations

involved in representing claimants.

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 evaluate

whether a reasonable person, in light of

all the circumstances, would consider

the act or omission violative of the rule

in question. Once it is determined that

a formal complaint is warranted, the

Deputy Commissioner or designee

reviews the proposal independently

from the investigative component and

makes a decision whether to file a

complaint. Moreover, the individual or

individuals identifying the misconduct,

whether an ALJ or other employee, will

not be the sanctioning authority or

initiate the formal complaint.

Comment: The majority of the

commenters objected to the revised

wording of proposed §§ 404.1740(b)(1)

and 416.1540(b)(1) which required the

representative to ‘‘[p]romptly 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.’’ Many commenters believed

that this rule was overly broad and

would put an undue burden on

representatives. They also believe that

these requirements and the ones

contained in §§ 404.1740(b)(2) and

416.1540(b)(2) are procedural rules

which are inappropriate for ethical

standards governing the conduct of

representatives.

Several representatives noted that

they do not submit evidence until the

case is at the ALJ level because,

according to them, so few claims are

allowed at the initial and

reconsideration levels. Other

commenters noted that rather than

improving the efficiency of the process,

this rule would add procedural barriers

to the process by setting up vague,

unspecified deadlines by which all

evidence must be submitted.

A few commenters stated that

‘‘evidence which the claimant wants to

submit in support of the claim’’ should

be defined. One commenter noted that

this requirement is impractical because

claimants often want their

representatives to obtain and submit

evidence that is 15 or 20 years old or do

not remember relevant information.

Another commenter observed that

evidence is often incrementally

discovered over a period of time so that

it is not reasonable to require that all

evidence be submitted by a specific

date. An additional commenter pointed

out that because SSA is not required to

complete any step of the administrative

decisionmaking process by a set

deadline, it would be impossible for the

representative to decide when to request

and submit the evidence that would

give the best chance of obtaining an

award of benefits.

A number of commenters objected to

the requirement that evidence be

submitted ‘‘as soon as practicable’’ or by

the ‘‘due date’’ set by the Agency. They

believe that these terms are vague and

lack the specificity required in a rule

governing conduct. One individual

asked whether there was any way to

state a specific event or method for

determining due dates and noted that

the proposed rules did not provide any

direction to SSA personnel as to how to

select due dates. Several commenters,

including NOSSCR, stated that

mandating due dates for submission of

evidence is equivalent to closing the

record in contravention of current law.

One commenter noted that if the due

date is prior to the date of the

adjudicator’s determination, good cause

would have to exist as a matter of law

to allow submission of evidence related

to the time period between the due date

and the decision date. Otherwise the

result would be to close the record prior

to the date of the determination. Several

commenters also observed that the term

‘‘good cause’’ is undefined, and there is

no mechanism for determining when

good cause would apply.

Response: 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. The NPRM envisioned

that under the new disability process,

claimants would be expected to take a

more active role in establishing

entitlement or eligibility for Social

Security benefits. The representative, as

the designated agent of the claimant,

would likewise be called upon to play

an even greater role in assisting the

claimant in processing the claim.

However, because SSA has not yet

fully evaluated changes in the role that

the claimant will have to play, we have

revised the language concerning the

duty of representatives in this area to

conform with the current regulatory

requirements placed on claimants in

general, and on disability claimants in

particular in §§ 404.1512 and 416.912.

We note that in promulgating these

rules, we have not changed our existing

duties and responsibilities with regard

to developing the record and obtaining

the evidence necessary to adjudicate

disability and blindness claims. See

section 223(d)(5)(B) of the Act and

§§ 404.1512 and 416.912 and 404.1614

and 416.1014. Moreover, we are not

shifting the duty to claimants or

representatives to develop the record.

Instead, these rules are intended to

ensure that a representative will assist

the claimant in complying with his or

her responsibilities to provide us

information and evidence under our

regulations. Although this requirement

has not been previously included in the

regulations, we believe that this

assistance is an integral part of

representation and has always been our

expectation.

Accordingly, we have revised

§§ 404.1740(b)(1) and 416.1540(b)(1) to

clarify that the representative will be

expected to assist the claimant in

submitting the evidence that the

claimant wishes to have considered by

SSA. In deleting the requirement that

the evidence be submitted by a specific

due date, we have acknowledged the

possible difficulties that claimants and

representatives may face in obtaining

evidence. Furthermore, although we did

not intend the rules to have the effect of

closing the record, some individuals

have mistakenly interpreted the due

date requirement as an improper

attempt to achieve that goal. Therefore,

deletion of the due date requirement
41412 Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations

should remove any confusion regarding

this issue.

Nevertheless, we expect the

representative to assist the claimant in

submitting evidence on a timely basis.

This means that the representative

should make a reasonable effort to

promptly obtain and organize the

available, supporting evidence and

submit it to SSA for the earliest possible

consideration. Every claimant is entitled

to the earliest possible decision on as

complete a record as possible at every

stage of our process. SSA’s commitment

to claimant service relies on the

availability of necessary evidence at the

earliest possible stage in the process so

that we can make an accurate and fair

determination without delay caused by

the need to obtain additional evidence.

In assessing any allegation raised

against a representative regarding failure

to assist the claimant under these rules,

we will consider the efforts taken to

assist the claimant in submitting

evidence. The rules apply both to

disability and nondisability claims, with

additional rules applying to disability

claims. A representative will be

expected to make reasonable, not

extraordinary, efforts to obtain and

submit evidence on a timely basis. We

recognize that in providing

representational services to a claimant,

the representative may advise the

claimant concerning the need to submit

particular evidence. Also, we recognize

that some claimants may be unable to

effectively consult with their

representatives regarding what evidence

should be submitted and that the

representative may be required to act on

the claimant’s behalf to ensure that the

relevant evidence is available to the

adjudicator. In addition, we have added

to these regulations a reference to ‘‘good

cause’’ when a representative is unable

to submit such evidence (as defined in

§§ 404.911(b) and 416.1411(b)), to

provide examples of situations in which

good cause may exist. ‘‘Good cause’’

will be determined in the administrative

proceeding initiated by the Deputy

Commissioner or designee to consider

whether there was misconduct by the

representative.

Comment: The majority of

commenters objected to the affirmative

duties specified in §§ 404.1740(b)(2) and

416.1540(b)(2) on the basis 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. Specifically, a number

of commenters observed that this rule

conflicts with SSA’s duty to develop the

record pursuant to sections 223(d)(5)(B)

and 1614(a)(3)(H) of the Act and

§§ 404.1512 and 416.912. Other

commenters cited possible conflicts

with §§ 404.1519a and 416.919a, and

one commenter cited a possible conflict

with Social Security Ruling 96–2p. A

few commenters observed that the duty

to develop the record must remain with

SSA because the proceedings are

nonadversarial, and the focus is on

claimants who are seeking benefits

when they are vulnerable. Several

commenters also pointed out that the

language did not allow for discretion in

situations involving uncooperative

treating physicians and uncooperative

or uneducated claimants.

Several commenters took exception to

the statement in the NPRM that under

the proposed redesigned disability

process, claimants and representatives

would be expected to take a more active

role in developing the record. They

believed that the proposed rules

imposed new requirements on

representatives when the duties placed

on claimants themselves have not been

changed. A few commenters also noted

that applying different standards to

represented and unrepresented

claimants with regard to the rules for

submission of evidence would violate

equal protection.

Noting some improvement from the

February 1995 draft, the ABA and other

commenters nevertheless believed that

the proposed rules were vague and

overly broad and interpreted them as

giving Agency staff the right to demand

that the representative produce copies

of almost any client information and

records, at any time after the claim was

filed, with no effort to limit the scope,

the relevance or the frequency of the

requests. The ABA and a number of

other commenters noted that frequent

demands for repeated updating of the

medical information from each treating

physician would cause unnecessary

expense to claimants and inconvenience

to the party from whom the information

is sought. A few commenters expressed

confusion about the meaning of the term

‘‘may readily obtain’’ and questioned

whether representatives would also be

required to obtain consultative

examinations that are now obtained by

SSA. Citing the time taken to decide

claims in SSA’s administrative process,

a number of commenters observed that

they may be forced to update evidence

on a regular basis while waiting up to

a year or more for a determination on

the claim.

As with regard to §§ 404.1740(b)(1)

and 404.1540(b)(1), a number of

commenters objected to the

requirements that evidence be

submitted ‘‘as soon as practicable’’ or by

the ‘‘due date’’ set by the Agency on the

basis that these terms are vague and

undefined. They also believe that setting

deadlines for submission of evidence

requested by SSA would result in

improper closure of the record.

Response: As we did with regard to

§§ 404.1540(b)(1) and 416.912(b)(1)

above, we have revised the language

concerning the duty of representatives

in this area to conform with our current

regulatory requirements for both

disability and nondisability claims in

general, and in particular the

requirements in disability and blindness

claims placed on claimants in

§§ 404.1512 and 416.912. Therefore, we

have revised this rule to clarify that the

representative is required to assist the

claimant in complying, as soon as

practicable, with our requests for

information and evidence at any stage of

the administrative decisionmaking

process pursuant to §§ 404.1512(c) and

416.912(c). This includes the obligation

to provide evidence regarding the items

listed therein. In our view, the

provisions of §§ 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.

As stated above, we have not changed

our existing duties and responsibilities

with regard to developing the record

and obtaining the evidence necessary to

adjudicate claims, nor are we shifting

any duty to claimants or representatives

to develop the record. These rules are

intended to ensure that a representative

will assist the claimant in complying

with his or her responsibilities under

our regulations.

As we did in §§ 404.1740(b)(1) and

416.1540(b)(1), we have deleted the

requirement that the information and

evidence be submitted by the ‘‘due

date’’ designated by the Agency.

However, as noted above, we do expect

the representative to assist the claimant

in submitting the evidence and

information requested by SSA on a

timely basis. This means that the

representative should make a reasonable

effort to obtain and organize the

available evidence and submit it to SSA

for the earliest possible consideration.

This will facilitate our goal to ensure

that we make a correct determination at

the earliest stage of the process.

In assessing any allegation raised

against a representative regarding failure

to assist the claimant in complying with

our request for information, we will

consider the reasonableness of the

request, the relevance of the information

requested, and any factors that may
Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations 41413

interfere with the procurement of

requested information. For example, if a

representative has made several

attempts to obtain the requested

information from the claimant or

another source without receiving a

response, we will likely determine that

such efforts are in compliance with our

rules.

Comment: Many commenters raised

the issue of who must pay to obtain

medical records. A number of

individuals cited the high costs of

obtaining medical records from

physicians and hospitals and noted that

many claimants would be unable to pay

such costs. Some attorneys expressed

concern that they may be required to

advance funds for records and that this

may be in contravention of State bar

rules.

Response: We are not changing our

existing rules concerning payment for

evidence. We will continue to pay for

the medical records that we need to

adjudicate claims pursuant to our

existing regulations.

Comment: Many of the attorney

commenters on the February 1995 draft

stated that compliance with proposed

§§ 404.1740(b)(2) and 416.1540(b)(2),

which in the February 1995 draft 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. As stated in the NPRM,

based on these preliminary comments,

we modified proposed §§ 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.’’ This language in the NPRM

caused many commenters, including the

ABA, to state that the proposed revision

would ‘‘red flag’’ this evidence and

permit ALJs and SSA to draw adverse

inferences based on the statement of the

claimant’s declination to release the

material. The commenters believed that

this issue raised serious ethical

concerns and observed that notifying

SSA of the claimant’s refusal to submit

evidence could subject them to sanction

by their State bar associations for failing

to protect the confidences and secrets of

their clients.

Specifically, one commenter noted

that this provision would put attorneys

at odds with the State Bar of Georgia’s

Standard #28 which provides that ‘‘[a]

lawyer may not reveal the secrets and

confidences of a client.’’ Similarly,

another commenter cited a conflict with

California Business and Professional

Code section 6068 subsection (e), which

requires an attorney ‘‘to maintain

inviolate the confidence, and at every

peril to himself or herself to preserve

the secrets, of his or her client.’’

Additionally, the ABA cited a potential

conflict with Model Rule 1.6 which

prohibits an attorney from revealing

client information without the client’s

consent.

Conversely, a number of commenters,

notably ALJs, felt that the proposed

revision would create a privilege from

disclosure for claimants where none

was intended and no privilege currently

exists. The ALJs found this to be

extremely troublesome and noted that it

would result in decisions that are based

on an incomplete evidentiary record.

Additionally, one commenter

observed that it is unrealistic to expect

a representative to engage in a

consultation with the claimant in the

short timeframe in which the claimant

would be expected to exercise an

informed decision on whether to release

or withhold information. Other

commenters noted that some medical

and psychiatric reports are stamped

with clear warnings that they should not

be disclosed to the claimant. Therefore,

it could be harmful if the representative

was required to discuss such a report

with the claimant to determine if the

claimant would give consent for release.

Response: Because of the confusion

and ethical concerns surrounding this

proposed language, we have removed it

from the final regulations and inserted

language which reflects the currently

existing regulatory requirements

concerning the claimant’s and the

representative’s obligations in terms of

responding to our requests. As

explained above, in disability and

blindness claims, this language is in

conformity with the existing

requirements of §§ 404.1512 and

416.912.

Comment: Some commenters

expressed concerns about how proposed

§§ 404.1740(b)(3)(i) and

416.1540(b)(3)(i), which deal with a

representative’s duty to be cognizant of

the matters at issue, as well as

evidentiary and procedural

requirements, would be applied. They

specifically posed questions about

whether lack of knowledge of one

procedural rule or disagreement with an

ALJ over the application of a particular

standard or rule would be enough to

cause a complaint to be filed against a

representative.

Response: We revised

§§ 404.1740(b)(3)(i) and

416.1540(b)(3)(i) to clarify our

expectations regarding the knowledge

and preparation required to represent

claimants before us. We based this

revision on ABA Model Rule 1.1 which

requires competent representation. We

also added language specifying that a

representative should know the

significant issue(s) in a claim and have

a working knowledge of the applicable

provisions of the Act, the regulations

and the Rulings. However, this does not

mean that a representative has to know

every provision.

Furthermore, we will deal with each

complaint on a case-by-case basis to

determine whether a representative

engaged in actionable conduct. We will

determine whether a reasonable person,

in light of all the circumstances, would

consider the act or omission violative of

the section of the regulation in question.

Comment: One commenter was

confused about the meaning of

§§ 404.1740(b)(3)(ii) and

416.1540(b)(3)(ii) and asked whether

‘‘information pertinent to the processing

of the claim’’ would require a

representative to investigate issues such

as whether the claimant was engaging in

part-time work.

Response: We revised this section to

clarify the requirement that the

representative must promptly respond

to our requests for information

concerning the claim. We based this

revision on ABA Model Rule 1.3 which

requires reasonable diligence and

promptness. In applying this rule, we

will not expect the representative to

investigate the claim or to obtain

information that is not readily available.

Instead, the rule is intended to ensure

that representatives are responsive to

our inquiries so that the processing of

the claim will not be delayed pending

a response from the representative on

the claimant’s behalf. There is no time

limit on when responses must be

provided, but a representative should

promptly respond. Furthermore,

‘‘information pertinent to processing the

claim’’ means the information and

evidence that the claimant, with the

assistance of the representative, as

required, should submit under the

current statutory and regulatory

requirements.

Comment: One commenter believed

that §§ 404.1740(b)(3)(iii) and

416.1540(b)(3)(iii) may raise an ethical

problem for an attorney who may be put

in the position between demonstrating

good cause by showing that the claimant

is unavailable and possibly

uncooperative or risking a finding by

SSA that the attorney is acting

unethically.

Response: We deleted this section

from the final regulations because we

believe that cooperation by the
41414 Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations

representative is inherent in the

competent and diligent representation

of a claimant. With regard to a showing

of ‘‘good cause,’’ this would occur in a

proceeding separate from the claims

process. Therefore, it would not impair

the representative’s ethical duty to his

or her client.

Comment: The ABA commented that

although §§ 404.1740(c) and 416.1540(c)

were an improvement over the earlier

draft and began to define the conduct

that would be considered objectionable,

the proposed rules were still vaguely

worded.

Response: As discussed below, where

appropriate, we have revised the

provisions of these sections to clarify

the conduct that we will consider to be

inappropriate.

Comment: An ALJ expressed concern

about misstatements of fact or

occurrences by representatives in their

arguments before the Appeals Council.

The ALJ suggested that we add a

provision to §§ 404.1740(c) and

416.1540(c) prohibiting a representative

from making any incorrect statement

about a proceeding or persons involved

in a proceeding before SSA. The ALJ

further suggested that this provision

should make it clear that a ‘‘material

fact within our jurisdiction’’ is to be

read much more broadly than facts

affecting the outcome of the case and

should also include matters such as the

conduct of the hearing, performance of

the ALJ and other SSA personnel and

the testimony of impartial witnesses.

Response: We decided not to adopt

this suggestion. We believe that the

language of §§ 404.1740(c)(3) and

416.1540(c)(3) adequately addresses our

intent to prevent false statements

concerning a claim at any stage in our

process. Furthermore, if we added such

a provision, we believe that SSA could

be subject to disputes concerning the

actual ‘‘correctness’’ of statements made

about SSA personnel, including ALJs. In

order to more closely track the statutory

requirements, we revised this section to

add a prohibition against ‘‘misleading’’

statements.

Comment: One commenter objected to

§§ 404.1740(c)(1) and 416.1540(c)(1) on

the basis that these sections conflict

with §§ 404.1740(b)(2)(i) and

416.1540(b)(2)(i), which require the

representative to ask for the client’s

consent to release the evidence needed

for adjudication. The commenter

believed that requesting the claimant’s

consent would be the equivalent of

coercing the claimant by using the

representative’s relationship with the

claimant to direct a decision or action

by the claimant.

Response: For the reasons discussed

in our response above, we have deleted

§§ 404.1740(b)(2)(i) and

416.1540(b)(2)(i) from the final

regulations. A representative would

never have been required to coerce a

claimant in order to comply with any of

the affirmative duties specified in the

rules, and our deletion of these sections

should clarify the matter. We also note

that §§ 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 selfexplanatory.

Comment: We received comments

which indicated the perception that

§§ 404.1740(c)(2) and 416.1540(c)(2)

would somehow change the statutory,

regulatory and administrative

authorities and requirements for

submitting, evaluating and paying

requests for approval of fees under the

fee petition or fee agreement

procedures.

Response: That is not the import or

intent of these sections. As we stated in

the NPRM, these sections are based on

the provisions of sections 206(a) and (b)

and 1631(d)(2) of the Act and apply to

all fee collections.

Comment: With regard to

§§ 404.1740(c)(4) and 416.1540(c)(4), the

ABA and other commenters stated that

while SSA should not tolerate improper

delays, representatives should not be

subjected to sanction while acting in

good faith and for purposes other than

delay. The ABA noted that this rule fails

to set forth a standard by which to

measure the reason for the delay. Other

commenters noted that the use of the

word ‘‘negligent’’ is inappropriate and

could subject a representative to

sanction for missing only one deadline

or by missing a deadline by only one

day. One individual suggested that we

add language prohibiting conduct

resulting in delay for a significant

period of time. Another commenter

noted that this section creates a

prohibited action which is beyond the

control of the representative because all

time limits are under the exclusive

control of SSA. One commenter

suggested that we define good cause to

include any basis upon which a

representative negligently or

inadvertently failed to complete a

required action. Another commenter

stated that the ALJ has the sole authority

to determine whether good cause would

apply. An additional commenter

suggested that we include language from

the preamble indicating how these

sections will be applied to the final

regulations.

Response: We revised these sections

to clarify that representatives through

their own actions or omissions should

not unreasonably delay the processing

of a claim. In addition, we deleted

‘‘willfully or negligently’’ and added a

reference to §§ 404.911(b) and

416.1411(b) which set forth examples of

‘‘good cause.’’ Furthermore, we reiterate

that SSA does not intend to penalize

representatives for reasonable or

justifiable delays or delays that may

occur even when reasonable care is

taken in preparing the claim.

In determining whether a

representative has violated this rule, we

will look at the gravity of the

representative’s conduct, the

consequences to the claimant, whether

the behavior represents a pattern or

practice and other factual circumstances

related to the matter. This section is

intended to prohibit intentional conduct

or conduct that evinces a failure to

apply a reasonable standard of care in

representing the claimant, e.g., conduct

that results in an unreasonable delay,

not a minor wait. We also note that

representatives will not be held

accountable for delays in our

administrative decisionmaking process.

Additionally, as stated above, the

determination of whether to file a

complaint for violation of this or any

other regulation governing the conduct

of representatives will be made by the

Deputy Commissioner or designee.

Comment: A few individuals and the

ABA expressed concern about the intent

of §§ 404.1740(c)(5) and 416.1540(c)(5).

The commenters questioned whether

this rule would apply to information

about the claimant or other persons and

whether it would allow the

representative to release the claimant’s

medical reports to the claimant’s

treating source. Another commenter

believed that this rule was an attempt to

interfere with the attorney-client

relationship. The same individual also

opined that this rule runs contrary to

the provisions of the Privacy Act and

the recent amendments to the Freedom

of Information Act.

Response: Similar language was

included in the prior regulations at

§§ 404.1740(d) and 416.1540(d). This

rule is based on section 1106 of the Act,

which prohibits disclosure by any

person of information obtained from the

Agency in conjunction with a claim,

except as may be authorized by our

regulations or as otherwise determined

by Federal Law. It is intended to prevent

a representative from improperly

disclosing information received from

SSA, without the claimant’s consent, in

contravention of our regulations. We

have deleted the reference to

information about another person to

clarify that disclosure is warranted only
Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations 41415

with the consent of the claimant or as

otherwise authorized by Statute or our

regulations.

Comment: One commenter was

confused about the meaning of

§§ 404.1740(c)(6) and 416.1540(c)(6) and

questioned whether these sections

would prohibit actions such as a law

firm’s discussing possible employment

opportunities with SSA employees or

social interactions between ALJs and

private attorneys outside of work hours.

Response: This rule is intended to

prevent the fact or appearance of

attempting to influence the disposition

of a claim by offering or giving

something of value to an individual in

a position to materially affect the

outcome of the case. It is not intended

to apply to conduct unrelated to the

adjudication of claims.

Comment: Several commenters,

including the ABA and NOSSCR,

objected to §§ 404.1740(c)(7) and

416.1540(c)(7) on the basis that these

sections are vague and would interfere

with an advocate’s ability to zealously

represent his or her client. The

commenters believe that this rule does

not provide an objective standard

indicating what is permissible and what

is not. The ABA also observed that the

proposed limitations raised First

Amendment concerns regarding

freedom of speech.

A few commenters noted that it may

be appropriate for an attorney to

‘‘threaten’’ to appeal an ALJ’s decision

and to point out errors made by the ALJ

during the hearing. A few individuals

also opined that a representative who

points out matters of ignorance or

impropriety by the ALJ may be subject

to allegations of discourteous behavior

by the same ALJ. Another commenter

observed that this rule is unnecessary

because in most cases, the parties act

appropriately.

Response: In response to these

concerns, we modified the language in

§§ 404.1740(c)(7)(iii) and

416.1540(c)(7)(iii) to prohibit

threatening or intimidating language or

conduct ‘‘which results in a disruption

of the orderly presentation and

reception of evidence.’’ We realize that

zealous advocacy may require vigorous

argument and that it may be appropriate

for an advocate to point out errors

during the proceeding or to take

exception to the conduct of the

proceeding. This rule is not intended to

interfere with or limit an advocate’s

ability to argue the case on behalf of his

or her client if done in a professional

manner. Instead, this provision is

intended to address blatantly offensive

or disruptive conduct or language that

prevents the adjudicator from

conducting the proceeding in a manner

that results in a full examination of the

evidence and the testimony presented.

We must ensure that the proceeding is

conducted in an appropriate manner

and is not disrupted by individuals who

engage in conduct or language which

prevents the full consideration of the

issues to be decided.

In determining whether a

representative has violated this rule, 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. By setting

a threshold of disruption of the

proceeding, we have set a standard high

enough to avoid infringing on zealous,

strong advocacy. Finally, to address

concerns that ALJs or other individuals

may improperly find violations of this

provision, we again note that ALJs will

not make the determination of whether

to file a complaint against a

representative and that instead, the

decision will be made by the Deputy

Commissioner or designee.

Comment: A few individuals asked

questions such as whether a

representative can request instructional

advice from SSA to avoid violating

these rules or question our

determination to file a complaint.

Response: In order to ensure that

representatives understand these rules

and comply with them, we welcome

requests for information and guidance

from individual representatives.

Furthermore, as under our current

procedures, representatives will be

given an opportunity to respond to

charges that they have violated these

rules. In many cases, we should be able

to resolve the problem through informal

means such as written or oral

counselling of the representative,

making a formal complaint unnecessary.

In some cases, a representative may not

be aware that his or her conduct has

resulted in a violation of these

regulations and once advised of the

violation will conform with our rules.

As under the current regulations, if the

Deputy Commissioner or designee

determines that a complaint should be

filed against a representative, the

Deputy Commissioner or designee will

send the representative a notice

containing a statement of the charges

that constitute the basis for the

proceeding. The representative will

have 30 days to file an answer stating

why he or she should not be

disqualified from acting as a

representative. The representative will

also have the opportunity for a hearing

on the charges.

Accordingly, for the reasons set out

above, the proposed rules are being

published as final rules with the

revisions as noted.

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 these regulations will

not have a significant economic impact

on a substantial number of small

entities. The provisions of the rules that

involve entities were developed to allow

them to provide representational

services without generating any

supplemental reporting requirements.

These 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 the Regulatory Flexibility

Act, as amended, 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 SecurityDisability Insurance; 96.002, Social SecurityRetirement 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,

Supplemental Security Income (SSI),
41416 Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations

Reporting and recordkeeping

requirements.

Dated: July 24, 1998.

Kenneth S. Apfel,

Commissioner of Social Security.

For the reasons set forth in the

preamble, part 404, subpart R, and part

416, subpart O, chapter III of title 20 of

the Code of Federal Regulations are

amended as set forth below.

PART 404—FEDERAL OLD-AGE,

SURVIVORS AND DISABILITY

INSURANCE (1950— )

Subpart R—[Amended]

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:

§ 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 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) 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, in conformity with

the regulations setting forth our existing

duties and responsibilities and those of

claimants (see § 404.1512 in disability

and blindness claims):

(1) Act with reasonable promptness to

obtain the information and evidence

that the claimant wants to submit in

support of his or her claim, and forward

the same to us for consideration as soon

as practicable. In disability and

blindness claims, this includes the

obligations to assist the claimant in

bringing to our attention everything that

shows that the claimant is disabled or

blind, and to assist the claimant in

furnishing medical evidence that the

claimant intends to personally provide

and other evidence that we can use to

reach conclusions about the claimant’s

medical impairment(s) and, if material

to the determination of whether the

claimant is blind or disabled, its effect

upon the claimant’s ability to work on

a sustained basis, pursuant to

§ 404.1512(a);

(2) Assist the claimant in complying,

as soon as practicable, with our requests

for information or evidence at any stage

of the administrative decisionmaking

process in his or her claim. In disability

and blindness claims, this includes the

obligation pursuant to § 404.1512(c) to

assist the claimant in providing, upon

our request, evidence about:

(i) The claimant’s age;

(ii) The claimant’s education and

training;

(iii) The claimant’s work experience;

(iv) The claimant’s daily activities

both before and after the date the

claimant alleges that he or she became

disabled;

(v) The claimant’s efforts to work; and

(vi) Any other factors showing how

the claimant’s impairment(s) affects his

or her ability to work. In §§ 404.1560

through 404.1569, we discuss in more

detail the evidence we need when we

consider vocational factors; and

(3) Conduct his or her dealings in a

manner that furthers the efficient, fair

and orderly conduct of the

administrative decisionmaking process,

including duties to:

(i) Provide competent representation

to a claimant. Competent representation

requires the knowledge, skill,

thoroughness and preparation

reasonably necessary for the

representation. This includes knowing

the significant issue(s) in a claim and

having a working knowledge of the

applicable provisions of the Social

Security Act, as amended, the

regulations and the Rulings; and

(ii) Act with reasonable diligence and

promptness in representing a claimant.

This includes providing prompt and

responsive answers to requests from the

Agency for information pertinent to

processing of the claim.

(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 or misleading oral

or written statements, assertions or

representations about a material fact or

law concerning a matter within our

jurisdiction;

(4) Through his or her own actions or

omissions, unreasonably delay or cause

to be delayed, without good cause (see

§ 404.911(b)), the processing of a claim

at any stage of the administrative

decisionmaking process;

(5) Divulge, without the claimant’s

consent, except as may be authorized by

regulations prescribed by us or as

otherwise provided by Federal law, any

information we furnish or disclose

about a claim or prospective claim;

(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 decisionmaking process,

except as reimbursement for

legitimately incurred expenses or lawful

compensation for the services of an

expert witness retained on a noncontingency basis to provide evidence;

or

(7) Engage in actions or behavior

prejudicial to the fair and orderly

conduct of administrative proceedings,

including but not limited to:

(i) Repeated absences from or

persistent tardiness at scheduled

proceedings without good cause (see

§ 404.911(b));

(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 which results in a disruption

of the orderly presentation and

reception of evidence.

3. Section 404.1745 is revised to read

as follows:

§ 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
Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations 41417

seeking such sanctions when we have

evidence that a representative:

(a) Does not meet the qualifying

requirements described in § 404.1705;

(b) Has violated the affirmative duties

or engaged in the prohibited actions set

forth in § 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:

§ 404.1750 Notice of charges against a

representative.

(a) The Deputy Commissioner for

Disability and Income Security

Programs (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

Disability and Income Security

Programs (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

sentence of paragraph (e), and paragraph

(g)(3) to read as follows:

§ 404.1765 Hearing on charges.

(a) Scheduling the hearing. If the

Deputy Commissioner for Disability and

Income Security Programs (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 Disability and Income

Security Programs (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 paragraph (b)(3) to read as

follows:

§ 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

§ 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:

§ 404.1799 Reinstatement after

suspension or disqualification—period of

suspension not expired.

* * * * *

(c) The Deputy Commissioner for

Disability and Income Security

Programs (or other official the

Commissioner may designate), or his or

her designee, upon notification of

receipt of the request, shall have 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 Disability

and Income Security Programs (or other

official the Commissioner may

designate), or his or her designee.

* * * * *

PART 416—SUPPLEMENTAL

SECURITY INCOME FOR THE AGED,

BLIND, AND DISABLED

Subpart O—[Amended]

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:

§ 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 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) 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, in conformity with

the regulations setting forth our existing

duties and responsibilities and those of

claimants (see § 416.912 in disability

and blindness claims):

(1) Act with reasonable promptness to

obtain the information and evidence

that the claimant wants to submit in

support of his or her claim, and forward

the same to us for consideration as soon

as practicable. In disability and

blindness claims, this includes the

obligations to assist the claimant in

bringing to our attention everything that

shows that the claimant is disabled or

blind, and to assist the claimant in

furnishing medical evidence that the

claimant intends to personally provide

and other evidence that we can use to

reach conclusions about the claimant’s

medical impairment(s) and, if material

to the determination of whether the

claimant is blind or disabled, its effect

upon the claimant’s ability to work on

a sustained basis, pursuant to

§ 416.912(a);

(2) Assist the claimant in complying,

as soon as practicable, with our requests

for information or evidence at any stage

of the administrative decisionmaking

process in his or her claim. In disability

and blindness claims, this includes the

obligation pursuant to § 416.912(c) to

assist the claimant in providing, upon

our request, evidence about:

(i) The claimant’s age;

(ii) The claimant’s education and

training;

(iii) The claimant’s work experience;

(iv) The claimant’s daily activities

both before and after the date the

claimant alleges that he or she became

disabled;

(v) The claimant’s efforts to work; and

(vi) Any other factors showing how

the claimant’s impairment(s) affects his

or her ability to work, or, if the claimant

is a child, his or her functioning. In
41418 Federal Register / Vol. 63, No. 149 /Tuesday, August 4, 1998 /Rules and Regulations

§§ 416.960 through 416.969, we discuss

in more detail the evidence we need

when we consider vocational factors;

and

(3) Conduct his or her dealings in a

manner that furthers the efficient, fair

and orderly conduct of the

administrative decisionmaking process,

including duties to:

(i) Provide competent representation

to a claimant. Competent representation

requires the knowledge, skill,

thoroughness and preparation

reasonably necessary for the

representation. This includes knowing

the significant issue(s) in a claim and

having a working knowledge of the

applicable provisions of the Social

Security Act, as amended, the

regulations and the Rulings; and

(ii) Act with reasonable diligence and

promptness in representing a claimant.

This includes providing prompt and

responsive answers to requests from the

Agency for information pertinent to

processing of the claim.

(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 or misleading oral

or written statements, assertions or

representations about a material fact or

law concerning a matter within our

jurisdiction;

(4) Through his or her own actions or

omissions, unreasonably delay or cause

to be delayed, without good cause (see

§ 416.1411(b)), the processing of a claim

at any stage of the administrative

decisionmaking process;

(5) Divulge, without the claimant’s

consent, except as may be authorized by

regulations prescribed by us or as

otherwise provided by Federal law, any

information we furnish or disclose

about a claim or prospective claim;

(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 decisionmaking process,

except as reimbursement for

legitimately incurred expenses or lawful

compensation for the services of an

expert witness retained on a noncontingency basis to provide evidence;

or

(7) Engage in actions or behavior

prejudicial to the fair and orderly

conduct of administrative proceedings,

including but not limited to:

(i) Repeated absences from or

persistent tardiness at scheduled

proceedings without good cause (see

§ 416.1411(b));

(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 which results in a disruption

of the orderly presentation and

reception of evidence.

10. Section 416.1545 is revised to read

as follows:

§ 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 § 416.1505;

(b) Has violated the affirmative duties

or engaged in the prohibited actions set

forth in § 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:

§ 416.1550 Notice of charges against a

representative.

(a) The Deputy Commissioner for

Disability and Income Security

Programs (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

Disability and Income Security

Programs (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:

§ 416.1565 Hearing on charges.

(a) Scheduling the hearing. If the

Deputy Commissioner for Disability and

Income Security Programs (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 Disability and Income

Security Programs (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:

§ 416.1599 Reinstatement after

suspension or disqualification—period of

suspension not expired.

* * * * *

(c) The Deputy Commissioner for

Disability and Income Security

Programs (or other official the

Commissioner may designate), or his or

her designee, upon notification of

receipt of the request, shall have 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 Disability

and Income Security Programs (or other

official the Commissioner may

designate), or his or her designee.

* * * * *

[FR Doc. 98–20760 Filed 8–3–98; 8:45 am]

BILLING CODE 4190–29–P