‘‘(C) take into account the ongoing ethical and
professional responsibilities of recipients, other
grantees or contractors of the Corporation, and their
attorneys for existing cases, the potential disruption
in client services, and loss of experienced staff, pro
bono services, funds from sources other than the
Corporation, and other resources if an existing recip-
ient or other grantee or contractor were replaced;
‘‘(D) ensure that every recipient or other grant-
ee or contractor seeking a grant or contract through
a competitive bidding process will comply with all
provisions of this title and the rules, regulations,
guidelines, and instructions issued under this title
that are applicable to those recipients and other
grantees and contractors organized for the purpose
of providing legal services to eligible clients; and
‘‘(E) ensure that a new recipient or other
grantee or contractor selected would provide a suffi-
cient level of quality, economy, and effectiveness to
justify the burdens of replacing the current recipi-
ent, grantee, or contractor, using the criteria set
forth in this paragraph and those developed by the
Corporation in accordance with section 1007(d)(4).’’.
SEC. 17. TRAINING.
Section 1007(b)(6) (42 U.S.C. 2996f(b)(6)) is
amended to read as follows:
‘‘(6) to support or conduct training programs
for the purpose of advocating particular public poli-
cies or encouraging political activities, labor or
antilabor activities, boycotts, picketing, strikes, or
demonstrations, except that this paragraph shall not
be construed to prohibit the training of attorneys or
paralegal personnel necessary to prepare them to
provide adequate legal assistance to eligible clients,
to advise any eligible client as to the nature of the
legislative process, or to inform any eligible client of
his or her rights under any statute, order, or regula-
tion;’’.
SEC. 18. LIMITATION ON USE AMENDMENTS.
Section 1007(b) (42 U.S.C. 2996f(b)) is amended by
striking paragraph (9) and redesignating paragraph (10)
and paragraph (11) (as added by section 9 of this Act)
as paragraphs (9) and (10), respectively.
SEC. 19. RECORDKEEPING AND NONCORPORATION FUNDS.
(a) NON-CORPORATION FUNDS.—Section 1010(c)
(42 U.S.C. 2996i(c)) is amended by adding at the end the
following: ‘‘Public funds received by any recipient or other
grantee or contractor of the Corporation, including funds
from Interest on Lawyer Trust Account (IOLTA) pro-
grams, shall not be used to engage in publicity or propa-
ganda as restricted by section 1007(a)(5).’’.
(b) TIMEKEEPING.—Section 1008(b) (42 U.S.C.
2996g(b)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and
(2) by adding at the end the following:
‘‘(2) The Corporation, by regulation adopted pursu-
ant to subsection (e) of this section, shall require each re-
cipient or other grantee or contractor of the Corporation
to maintain records of time spent on the cases or matters
with respect to which that recipient, grantee, or contractor
is engaged in activities and to maintain a recordkeeping
system that discloses the source of funds to be charged
for each such case or matter. The specific time and record-
keeping system to be employed shall be determined by the
recipient or other grantee or contractor in a manner that
meets the requirements of a recordkeeping system as set
forth in the preceding sentence and meets obligations that
are imposed by other funding sources. Pursuant to regula-
tions adopted under this paragraph, each employee of such
recipient, grantee, or contractor, who is an attorney or
paralegal, shall be required to keep contemporaneous
records of the time spent by case or matter and the type
of case or matter.’’.
SEC. 20. EVASION.
The Legal Services Corporation Act is amended—
(1) by redesignating sections 1013 and 1014 as
sections 1014 and 1015, respectively; and
(2) by inserting after section 1012 the following
new section:
‘‘EVASION
‘‘SEC. 1013. The use of ‘alternative corporations’ to
avoid or otherwise evade the provisions of this title or the
Legal Services Reauthorization Act of 1993 is prohibited.
The term ‘alternative corporation’ means any corporation,
law firm, business association, group, entity, or enterprise
which, through shared staff or control over workload or
interlocking boards of directors, has a single identity of
interest with a recipient or other grantee or contractor of
the Corporation. Any recipient or other grantee or con-
tractor of the Corporation which shares employees with
any other corporation, law firm, business association,
group, entity, or enterprise shall specify with particularity
the use of any funds by such employees in accordance with
the timekeeping and recordkeeping requirements estab-
lished under section 1008(b).’’.
SEC. 21. FEE-GENERATING CASE PROVISIONS.
Section 1007(b)(1) (42 U.S.C. 2996f(b)(1)) is
amended by striking ‘‘(which guidelines’’ and all that fol-