Section 404.1717

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Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations

RIN 0960–AG35

DATES:

BILLING CODE 6717–01–C

SOCIAL SECURITY ADMINISTRATION
20 CFR Parts 404 and 416

Temporary Extension of Attorney Fee
Payment System to Title XVI; 5-Year
Demonstration Project Extending Fee
Withholding and Payment Procedures
to Eligible Non-Attorney
Representatives; Definition of PastDue Benefits; and Assessment for Fee
Payment Services
Social Security Administration.
ACTION: Interim final rules with request
for comments.
rwilkins on PROD1PC63 with RULES

AGENCY:

SUMMARY: We are issuing these interim
final rules to reflect in our regulations
three self-implementing statutory
provisions in the Social Security
Protection Act of 2004 (SSPA) and three

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These rules are effective April 5,
2007. To be sure your comments are
considered, we must receive them no
later than June 4, 2007.

You may give us your
comments by: Internet through the
Federal eRulemaking Portal at http://
www.regulations.gov; e-mail to
[email protected]; telefax to (410)
966–2830; or letter to the Commissioner
of Social Security, P.O. Box 17703,
Baltimore, MD 21235–7703. You may
also deliver them to the Office of
Regulations, Social Security
Administration, 107 Altmeyer Building,
6401 Security Boulevard, Baltimore, MD
21235–6401, between 8 a.m. and 4:30
p.m. on regular business days.
Comments are posted on the Federal

ADDRESSES:

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eRulemaking Portal, or you may inspect
them on regular business days by
making arrangements with the contact
person shown in this preamble.
FOR FURTHER INFORMATION CONTACT:
Marg Handel, Supervisory Social
Insurance Specialist, Office of Income
Security Programs, Social Security
Administration, 239 Altmeyer Building,
6401 Security Boulevard, Baltimore, MD
21235–6401, (410) 965–4639 or TTY
(410) 966–5609. For information on
eligibility or filing for benefits, call our
national toll-free number, 1–800–772–
1213 or TTY 1–800–325–0778, or visit
our Internet site, Social Security Online,
at http://www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION:
Electronic Version
The electronic file of this document is
available on the date of publication in
the Federal Register at http://
www.gpoaccess.gov/fr/index.html.
Background
Sections 206(a) and 1631(d) of the
Social Security Act (Act) direct the
Commissioner of Social Security

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ER05AP07.003

[Docket No. SSA 2006–0097]

related self-implementing provisions in
earlier legislation. These earlier
provisions are in the Omnibus Budget
Reconciliation Act of 1990 (OBRA), the
Social Security Independence and
Program Improvements Act of 1994
(SSIPIA), and the Ticket to Work and
Work Incentives Improvement Act of
1999 (TWWIIA).

[FR Doc. E7–6213 Filed 4–4–07; 8:45 am]

Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations
(Commissioner) to determine the
maximum fees representatives may
charge claimants for services that they
perform in claims before the Social
Security Administration (SSA) under
title II or title XVI of the Act. For claims
under title II in which the claimant is
found entitled to past-due benefits,
section 206 of the Act further authorizes
the Commissioner to pay attorneys’ fees,
approved by the Commissioner or by a
Federal court, out of a portion of the
past-due benefits in the case. Prior to
enactment of the SSPA (Pub. L. 108–
203), we were not authorized to
withhold and pay fees approved for
attorneys in title XVI cases or for nonattorney representatives in cases under
either title of the Act.

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Direct Payment of Attorneys’ Fees in
Title XVI
Section 302 of the SSPA amended
section 1631(d)(2) of the Act to extend
the attorney fee withholding and direct
payment procedures to claims under
title XVI of the Act. The amendments
made by section 302 apply with respect
to attorney fees that were first required
to be paid from title XVI past-due
benefits on or after February 28, 2005,
and we began paying fees directly to
attorneys in cases effectuated on or after
that date. Section 302 includes a sunset
provision. Under that provision, the
amendments made by section 302 will
not apply to claims for benefits with
respect to which the claimant and the
representative enter into the agreement
for representation after February 28,
2010.
Direct Payment of Fees to Eligible NonAttorney Representatives
Section 303 of the SSPA directs the
Commissioner to carry out a 5-year
nationwide demonstration project to
determine the potential results of
extending the fee withholding and
direct payment procedures that apply to
attorneys under titles II and XVI of the
Act, to non-attorney representatives
who meet certain minimum
prerequisites specified in section 303
and any additional prerequisites that the
Commissioner may prescribe. Under the
prerequisites specified in section 303,
individuals applying to participate in
the demonstration project must have a
bachelor’s degree or equivalent
education, possess liability insurance or
equivalent insurance adequate to protect
claimants in the event of malpractice by
the representative, pass a criminal
background check ensuring fitness to
practice before SSA, pass an
examination testing knowledge of the
relevant provisions of the Act and the
most recent developments in Agency

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and court decisions, and demonstrate
ongoing completion of qualified
continuing education courses. In
addition, the Commissioner has
required that individuals applying to
participate in the demonstration project
show that they have sufficient prior
experience representing claimants
before SSA. More detailed information
about these prerequisites may be found
in the Federal Register notices
published at the start of the
demonstration project in 2005 (70 FR
2447, January 13, 2005; 70 FR 14490,
March 22, 2005; and 70 FR 41250, July
18, 2005).
The 5-year demonstration project on
direct payment of fees to eligible nonattorneys under section 303 of the SSPA
commenced on February 28, 2005. We
began making direct payment to nonattorneys under the demonstration
project on July 28, 2005, the date on
which we determined that the initial
group of applicants had satisfied the
prerequisites for participation in the
project. The demonstration project
established by SSPA section 303 applies
to claims for benefits with respect to
which the agreement for representation
is entered into after February 27, 2005,
and before March 1, 2010. In these
interim final rules, we are amending our
regulations to reflect the fact that nonattorney representatives participating in
the demonstration project may have
their approved fees withheld from their
clients’ past-due benefits and paid
directly to them.
Definition of ‘‘Past-Due Benefits’’
The amount of ‘‘past-due benefits’’ is
important in calculating the fees of
representatives and in determining the
maximum amount we can pay directly
for representation. Since we last defined
the term ‘‘past-due benefits’’ in our
regulations, there have been several
legislative enactments that affect the
definition of past-due benefits. In
section 5106 of the OBRA (Pub. L. 101–
508), section 321(f) of the SSIPIA (Pub.
L. 103–296), and section 302 of the
SSPA, the Act was amended to exclude
from past-due benefits any continued
benefits paid pursuant to § 404.1597a of
part 404, any interim benefits paid
pursuant to section 223(h) of the Act,
any continued benefits paid pursuant to
§ 416.996 of part 416, any continued
benefits paid pursuant to § 416.1336(b)
of part 416, and any interim benefits
paid pursuant to section 1631(a)(8) of
the Act; to specify how a reduction
under section 1127 of the Act (for
receipt of benefits for the same period
under both title II and title XVI) affects
the past-due benefit computation; and to
address the effect of interim assistance

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16721

reimbursement payments. We are
amending our regulations to reflect
these statutory changes.
Assessment on Direct Payment of Fees
Section 406 of the TWWIIA (Pub. L.
106–170) amended section 206 of the
Act by adding section 206(d), which
imposed an assessment on attorneys for
the services we provide in determining
and paying fees directly to attorneys
from the benefits due claimants under
title II of the Act. When that provision
took effect on February 1, 2000, the
amount of the assessment was 6.3
percent of the direct payment amount,
with a provision allowing the
Commissioner to determine for future
years the percentage (not to exceed 6.3
percent) necessary to achieve full
recovery of the costs of determining and
paying fees to attorneys. Effective
September 1, 2004, section 301 of the
SSPA revised section 206(d) to cap the
assessment at the lesser of the amount
calculated using the percentage rate
determined by the Commissioner or
$75, and to provide for annual
adjustment of the $75 cap based on the
cost-of-living computation in section
215(i)(2)(A)(ii) of the Act. Sections 302
and 303 of the SSPA extended this
assessment to the direct payment of fees
to attorneys under title XVI and to the
direct payment of fees to non-attorney
representatives participating in the
demonstration project authorized by
section 303.
Explanation of Changes
We are amending our regulations on
representation in 20 CFR parts 404 and
416 to reflect the legislative changes to
sections 206, 1127 and 1631(d) of the
Act that were enacted under section
5106 of OBRA, section 321(f) of the
SSIPIA, section 406 of the TWWIIA, and
sections 301 and 302 of the SSPA. In
addition, we are revising the regulations
to reflect the provisions of section 303
of the SSPA. We are making only those
substantive changes necessary to
conform our regulations to these
currently applicable statutory
provisions. In these changes we are:
• Amending § 404.1703 to revise the
definition of ‘‘past-due benefits’’ to
explain that we determine past-due
benefits before any applicable reduction
for receipt of benefits for the same
period under title XVI and that past-due
benefits do not include continued
payment of disability benefits during
appeal or interim benefits in cases of
delayed final decision.
• Adding to § 416.1503 the definition
of ‘‘past-due benefits’’ for title XVI
benefits to explain that when we
determine the amount of past-due

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Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations

benefits, we subtract the amount of any
reduction under section 1127 for the
concurrent receipt of benefits for the
same period under both title II and title
XVI, regardless of whether the actual
reduction was applied to the title II
benefits or to the title XVI benefits, and
that past-due benefits do not include
continued benefits or interim benefits.
• Adding new §§ 404.1717 and
416.1517 to reflect the demonstration
project extending benefit withholding
and direct fee payment to non-attorneys
under title II and title XVI. These
sections also define ‘‘eligible to
participate in the direct payment
demonstration project’’ and describe the
claims to which the demonstration
project applies.
• Amending § 404.1720 to revise
paragraph (b)(4) to provide that we
make direct fee payments from title II
past-due benefits both to attorneys and
to non-attorney representatives eligible
to participate in the direct payment
demonstration project, and that we
assume no responsibility for the
payment of any fee that we have
authorized to a non-attorney if the
representative is not eligible to
participate in the demonstration project.
We are also revising paragraph (c)(3) to
provide that our notice of a fee
determination will state whether we are
responsible for paying the
representative’s fee from past-due
benefits.
• Amending § 416.1520 to add a new
paragraph (b)(4) stating that we make
direct payment of fees from past-due
benefits under title XVI to attorneys and
to non-attorneys eligible to participate
in the direct payment demonstration
project, and that we assume no
responsibility for the payment of any fee
that we have authorized to a nonattorney if the representative is not
eligible to participate in the
demonstration project. We are revising
paragraph (c)(3) to state that our notice
of fee determination will state whether
we are responsible for paying the fee,
rather than that we are not responsible
for paying the fee. We are also revising
paragraph (d)(3) to state that we assume
no responsibility for fee payment based
on a revised determination if the
representative does not file the request
for administrative review timely.
• Revising § 416.1528 to place the
existing text in a newly designated
paragraph (a) having the heading,
‘‘Representation of a party in court
proceedings’’ and to add a new
paragraph (b) that has the heading
‘‘Attorney fee allowed by a Federal
court.’’ Paragraph (b) states that the
court may allow a reasonable fee to an
attorney as part of its favorable

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judgment in a proceeding under title
XVI of the Act and that we may pay the
attorney the amount of the fee out of,
but not in addition to, the amount of the
past-due benefits payable to the
claimant by reason of the court
judgment.
• Amending § 404.1730 to insert a
previously omitted ‘‘the’’ in paragraph
(a), to add a cross-reference to the
definition of ‘‘past-due benefits’’ in
§ 404.1703, and to reflect in paragraphs
(b) and (c) the extension of the direct
payment of fees from past-due benefits
under title II to non-attorneys eligible to
participate in the direct payment
demonstration project. We are also
adding a new paragraph (d) to reflect
that we impose an assessment on the
representative when we pay a fee
directly to the representative; to explain
how we calculate the assessment; and to
state that the representative may not,
directly or indirectly, request or
otherwise obtain reimbursement of the
amount of the assessment from the
claimant.
• Adding new § 416.1530 to state that
direct payment of fees under title XVI
extends to attorneys for fees we
authorize and for fees a Federal court
allows, and extends to non-attorneys
eligible to participate in the direct
payment demonstration project for fees
we authorize. This section also
describes the maximum amount we will
pay to the representative; shows that we
impose an assessment on the
representative when we pay a fee
directly to the representative; explains
how we calculate the assessment; and
states that the representative may not,
directly or indirectly, request or
otherwise obtain reimbursement of the
amount of the assessment from the
claimant.
In addition to these substantive
changes, we are revising
§§ 404.1720(b)(4) and 404.1730(a), (b),
and (c) to refer to the person claiming
a right under the old-age, disability,
dependents’, or survivors’ benefits
program in the second person, and thus
make the language in these sections
consistent with the use of the second
person throughout the regulations.

procedures on the basis that they are
impracticable, unnecessary, or contrary
to the public interest.
In the case of these rules, we believe
that, under 5 U.S.C. 553(b)(B), good
cause exists for issuing these regulatory
changes as interim final rules, without
prior public comment. In these rules, we
are merely revising our existing
regulations on representation of parties
to reflect statutory changes made by
section 5106 of OBRA, section 321(f) of
the SSIPIA, section 406 of the TWWIIA,
and sections 301, 302 and 303 of the
SSPA. Our intent is to conform our
regulations to the changes enacted in
those statutes, all of which are already
in effect and all of which we have
already implemented. We also have no
discretion not to apply these statutory
enactments. Therefore, we believe
opportunity for prior public comment is
unnecessary, and we are issuing these
regulations as interim final rules.
However, we recognize that the
statutory provisions reflected in these
rules are of considerable importance to
those who are affected by them. We also
are considering the possibility that some
affected individuals may disagree with
our interpretation of the numerous
statutory provisions reflected in these
interim final rules. Therefore, we are
inviting public comment on the changes
made by these interim final rules, and
will consider any responsive comments
received within 60 days of the
publication of these interim final rules.
In addition, we find good cause for
dispensing with the 30-day delay in the
effective date of a substantive rule,
provided for by 5 U.S.C. 553(d). As
explained above, we are revising our
title II and title XVI rules on
representation of parties to reflect
legislative provisions that are already in
effect, and that we have been applying
since they became effective. Without
these changes, our rules will not reflect
current law or our operating policy and
procedures, and thus may mislead the
public. Therefore, we find that it is in
the public interest to make these rules
effective upon publication.

Regulatory Procedures
Pursuant to sections 205(a), 702(a)(5)
and 1631(d)(1) of the Act, 42 U.S.C.
405(a), 902(a)(5) and 1383(d)(1), we
follow the Administrative Procedure
Act (APA) rulemaking procedures
specified in 5 U.S.C. 553 in the
development of our regulations. The
APA provides exceptions to its prior
notice and public comment procedures
when an agency finds there is good
cause for dispensing with such

Executive Order 12866

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We have consulted with the Office of
Management and Budget (OMB) and
determined that these interim final rules
meet the criteria for a significant
regulatory action under Executive Order
12866, as amended by Executive Order
13258. Thus, they were subject to OMB
review. We have also determined that
these rules meet the plain language
requirement of Executive Order 12866,
as amended by Executive Order 13258.

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Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations
Regulatory Flexibility Act
We certify that these final regulations
will not have a significant economic
impact on a substantial number of small
entities. Also, these final regulations
simply reflect legislation already in
effect. Therefore, a regulatory flexibility
analysis as provided in the Regulatory
Flexibility Act, as amended, is not
required.
Paperwork Reduction Act
These rules contain reporting
requirements at §§ 404.1717,

(SSA–1560–U4, the Petition to Obtain
Approval of a Fee for Representing a
Claimant before the Social Security
Administration). The 1-hour
placeholder burden figures in the chart
indicate that the burdens for these
sections were already cleared by OMB
in ICRs submitted prior to the
publication of these interim final rules.
For the sections not covered by existing
Information Collections, we have
provided specific burden information.

Regulation section

Description of public reporting requirement

Number of
respondents

Frequency of
response

Average
burden per
response
(minutes)

404.1717 ...................

To establish eligibility to participate in the
demonstration project.
To receive direct payment of fees from
beneficiaries’ past-due benefits, their representatives must file a request for approval of a fee, or written notice of intent
to file a request, at an SSA office within
60 days of the date a favorable determination notice is mailed.
If representatives do not file a request within 60 days, they will receive a notice telling them to do so within 20 days of the
notice date.
Representatives must send beneficiaries
copies of time extension requests they
made to SSA.
Same as for 404.1717, except this section
applies to Title XVI beneficiaries.
If representatives have provided the beneficiary services relating to dealings with
SSA, they must specify what portion of
the fee they want to charge for those
services; representatives must file the request for charging fees.
Same as for 404.1730(c)(1), except this
section applies to Title XVI beneficiaries.
Same as for 404.1730(c)(2)(i), except this
section applies to Title XVI beneficiaries.
Same as for 404.1730(c)(2)(ii), except this
section applies to Title XVI beneficiaries.

........................

........................

........................

........................

........................

........................

841

10

30

600

1

3

........................

........................

........................

........................

........................

........................

1

1

1

561

10

30

400

1

3

N/A ................................................................

2,402

........................

........................

404.1730(c)(1) ...........

404.1730(c)(2)(i) .......

404.1730(c)(2)(ii) .......
416.1517 ...................
416.1528(a) ...............

416.1530(c)(1) ...........
416.1530(c)(2)(i) .......
416.1530(c)(2)(ii) .......
Totals .................

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404.1730(c)(1), 404.1730(c)(2)(i),
404.1730(c)(2)(ii), 416.1528(a),
416.1530(c)(1), 416.1530(c)(2)(i), and
416.1530(c)(2)(ii). Following is a chart
describing the burdens posed by these
regulation sections. Most of the
Information Collections contained in
this rule have been cleared under preexisting OMB control numbers 0960–
0699 (Non-Attorney Representative
Demonstration Project), 0960–0737
(Continuing Education Information
Collection under Non-Attorney
Demonstration Project), and 0960–0104

Information Collection Requests have
been submitted to OMB for those
information collections that require
revisions as a result of this rule. While
these rules will be effective upon
publication, these burdens will not be
effective until cleared by OMB. We will
publish a notice in the Federal Register
upon OMB approval of the information
collection requirement(s).
Not all Information Collections will
be revised as a result of this rule.
Nevertheless, we are soliciting
comments on the burden estimate; the
need for the information; its practical
utility; ways to enhance its quality,
utility, and clarity; and on ways to
minimize the burden on respondents,

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including the use of automated
collection techniques or other forms of
information technology. Comments
should be faxed or e-mailed to the OMB
desk officer for SSA at the following fax
number or e-mail address: Office of
Management and Budget, Attn: Desk
Officer for SSA, Fax Number: 202–395–
6974, E-mail address:
[email protected].
A comment is best assured of having
its full effect if OMB receives it within
30 days of publication of this proposed
rule.
To receive a copy of the OMB
clearance package, you may call the
SSA Reports Clearance Officer at 410–

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16723

Estimated annual
burden
(hours)
1 hour (placeholder
burden).
1 hour (placeholder
burden).

4,205

30
1 hour (placeholder
burden).
1 hour (placeholder
burden).

1 hour (placeholder
burden).
2,805
20
7,065

965–0454 or e-mail at
[email protected].
(Catalog of Federal Domestic Assistance
Program Nos. 96.001, Social SecurityDisability Insurance; 96.002, Social SecurityRetirement Insurance; 96.004, Social
Security-Survivors Insurance; and 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.

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20 CFR Part 416
Administrative practice and
procedure, Aged, Blind, Disability
benefits, Public assistance programs,
Reporting and recordkeeping
requirements, Supplemental Security
Income.
Dated: December 1, 2006.
Jo Anne B. Barnhart,
Commissioner of Social Security.

For the reasons set out in the
preamble, we are amending subpart R of
part 404 and subpart O of part 416 of
chapter III of title 20 of the Code of
Federal Regulations as set forth below:
PART 404—FEDERAL OLD-AGE,
SURVIVORS AND DISABILTIY
INSURANCE (1950–)
Subpart R—[Amended]
1. Revise the authority citation for
subpart R of part 404 to read as follows:

■

Authority: Secs. 205(a), 206, 702(a)(5), and
1127 of the Social Security Act (42 U.S.C.
405(a), 406, 902(a)(5), and 1320a–6); sec. 303,
Pub. L. 108–203, 118 Stat. 493.

2. Amend § 404.1703 by revising the
definition of ‘‘past-due benefits’’ to read
as follows:

■

§ 404.1703

§ 404.1720
services.

Definitions.

*

*
*
*
*
Past-due benefits means the total
amount of benefits under title II of the
Act that has accumulated to all
beneficiaries because of a favorable
administrative or judicial determination
or decision, up to but not including the
month the determination or decision is
made. For purposes of calculating fees
for representation, we determine pastdue benefits before any applicable
reduction under section 1127 of the Act
(for receipt of benefits for the same
period under title XVI). Past-due
benefits do not include:
(1) Continued benefits paid pursuant
to § 404.1597a of this part; or
(2) Interim benefits paid pursuant to
section 223(h) of the Act.
*
*
*
*
*
■ 3. Add § 404.1717 to read as follows:

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§ 404.1717 Demonstration project on
direct payment of fees to non-attorneys.

(a) Section 303 of the Social Security
Protection Act of 2004 (SSPA), Public
Law 108–203, requires the
Commissioner of Social Security
(Commissioner) to develop and
implement a 5-year nationwide
demonstration project that extends
attorney fee withholding and direct
payment procedures to any non-attorney
representative who meets minimum
prerequisites for participating in the

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16:26 Apr 04, 2007

project specified in section 303 of the
SSPA and any additional prerequisites
prescribed by the Commissioner. The
objective of the demonstration project is
to determine the effect of extending to
certain non-attorneys the fee
withholding and direct payment
procedures that apply to attorneys. A
final report on the results of the
demonstration project is to be
completed and transmitted to Congress
within 90 days of the project
termination date, February 28, 2010.
(b) As used in this subpart, the term
‘‘eligible to participate in the direct
payment demonstration project’’ refers
to the status of a non-attorney who we
have determined meets the prerequisites
for participation in the demonstration
project.
(c) The provisions of section 303
authorizing the direct payment of fees to
non-attorneys and the withholding of
title II benefits for that purpose apply in
claims for benefits with respect to
which the agreement for representation
is entered into after February 27, 2005,
and before March 1, 2010.
■ 4. Amend § 404.1720 by revising
paragraphs (b)(4) and (c)(3) to read as
follows:

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Fee for a representative’s

*

*
*
*
*
(b) * * *
(4) If your representative is an
attorney, or a non-attorney who is
eligible to participate in the direct
payment demonstration project, as
defined in § 404.1717, and you are
entitled to past-due benefits, as defined
in § 404.1703, we will pay the
authorized fee, or a part of the
authorized fee, directly to the
representative out of the past-due
benefits, subject to the limitations
described in § 404.1730(b)(1). If the
representative is a non-attorney who is
not eligible to participate in the direct
payment demonstration project, we
assume no responsibility for the
payment of any fee that we have
authorized.
(c) * * *
(3) Whether we are responsible for
paying the fee from past-due benefits;
and
*
*
*
*
*
5. Revise § 404.1730 to read as
follows:

■

§ 404.1730

Payment of fees.

(a) Fees allowed by a Federal court.
We will pay a representative who is an
attorney, out of your past-due benefits,
as defined in § 404.1703, the amount of
the fee allowed by a Federal court in a

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proceeding under title II of the Act. The
payment we make to the attorney is
subject to the limitations described in
paragraph (b)(1) of this section.
(b) Fees we may authorize—(1)
Attorneys and non-attorneys eligible to
participate in the direct payment
demonstration project. Except as
provided in paragraph (c) of this
section, if we make a determination or
decision in your favor and you were
represented by an attorney or a nonattorney who is eligible to participate in
the direct payment demonstration
project, as defined in § 404.1717, and as
a result of the determination or decision
you have past-due benefits, as defined
in § 404.1703, we will pay the
representative out of the past-due
benefits, the smaller of the amounts in
paragraph (b)(1)(i) or (ii) of this section,
less the amount of the assessment
described in paragraph (d) of this
section.
(i) Twenty-five percent of the total of
the past-due benefits; or
(ii) The amount of the fee that we set.
(2) Non-attorneys not eligible to
participate in the direct payment
demonstration project. If the
representative is a non-attorney who is
not eligible to participate in the direct
payment demonstration project, we
assume no responsibility for the
payment of any fee that we have
authorized. We will not deduct the fee
from your past-due benefits.
(c) Time limit for filing request for
approval of fee in order to obtain direct
payment. (1) In order to receive direct
payment of a fee from your past-due
benefits, a representative who is either
an attorney or a non-attorney who is
eligible to participate in the direct
payment demonstration project should
file a request for approval of a fee, or
written notice of the intent to file a
request, at one of our offices within 60
days of the date the notice of the
favorable determination is mailed.
(2)(i) If no request is filed within 60
days of the date the notice of the
favorable determination is mailed, we
will mail a written notice to you and
your representative at your last known
addresses. The notice will inform you
and the representative that unless the
representative files, within 20 days from
the date of the notice, a written request
for approval of a fee under § 404.1725,
or a written request for an extension of
time, we will pay all the past-due
benefits to you.
(ii) The representative must send you
a copy of any request made to us for an
extension of time. If the request is not
filed within 20 days of the date of the
notice, or by the last day of any
extension we approved, we will pay all

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Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations
past-due benefits to you. We must
approve any fee the representative
charges after that time, but the
collection of any approved fee is a
matter between you and the
representative.
(d) Assessment when we pay a fee
directly to a representative. (1)
Whenever we pay a fee directly to a
representative from past-due benefits,
we impose an assessment on the
representative.
(2) The amount of the assessment is
equal to the lesser of:
(i) The product we obtain by
multiplying the amount of the fee we
are paying to the representative by the
percentage rate the Commissioner of
Social Security determines is necessary
to achieve full recovery of the costs of
determining and paying fees directly to
representatives, but not in excess of 6.3
percent; and
(ii) The maximum assessment
amount. The maximum assessment
amount was initially set at $75, but by
law is adjusted annually to reflect the
increase in the cost of living. (See
§§ 404.270 through 404.277 for an
explanation of how the cost-of-living
adjustment is computed.) If the adjusted
amount is not a multiple of $1, we
round down the amount to the next
lower $1, but the amount will not be
less than $75. We will announce any
increase in the maximum assessment
amount and explain how the increase
was determined in the Federal Register.
(3) We collect the assessment by
subtracting it from the amount of the fee
to be paid to the representative. The
representative who is subject to an
assessment may not, directly or
indirectly, request or otherwise obtain
reimbursement of the assessment from
you.
PART 416—SUPPLEMENTAL
SECURITY INCOME FOR THE AGED,
BLIND, AND DISABLED
Subpart O—[Amended]
6. Revise the authority citation for
subpart O of part 416 to read as follows:

■

Authority: Secs. 702(a)(5), 1127 and
1631(d) of the Social Security Act (42 U.S.C.
902(a)(5), 1320a-6 and 1383(d)); sec. 303,
Pub. L. 108–203, 118 Stat. 493.

7. Amend § 416.1503 by adding a new
definition, in alphabetical order, to read
as follows:

■

rwilkins on PROD1PC63 with RULES

§ 416.1503

Definitions.

*

*
*
*
*
Past-due benefits means the total
amount of payments under title XVI of
the Act, the Supplemental Security
Income (SSI) program, including any

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16:26 Apr 04, 2007

Jkt 211001

Federally administered State payments,
that has accumulated to you and your
spouse because of a favorable
administrative or judicial determination
or decision, up to but not including the
month the determination or decision is
made. For purposes of calculating fees
for representation, we first determine
the SSI past-due benefits before any
applicable reduction for reimbursement
to a State (or political subdivision) for
interim assistance reimbursement, and
before any applicable reduction under
section 1127 of the Act (for receipt of
benefits for the same period under title
II). We then reduce that figure by the
amount of any reduction of title II or
title XVI benefits that was required by
section 1127. We do this whether the
actual offset, as provided under section
1127, reduced the title II or title XVI
benefits. Past-due benefits do not
include:
(1) Continued benefits paid pursuant
to § 416.996 of this part;
(2) Continued benefits paid pursuant
to § 416.1336(b) of this part; or
(3) Interim benefits paid pursuant to
section 1631(a)(8) of the Act.
*
*
*
*
*
■ 8. Add § 416.1517 to read as follows:
§ 416.1517 Demonstration project on
direct payment of fees to non-attorneys.

(a) Section 303 of the Social Security
Protection Act of 2004 (SSPA), Public
Law 108–203, requires the
Commissioner of Social Security
(Commissioner) to develop and
implement a 5-year nationwide
demonstration project that extends
attorney fee withholding and direct
payment procedures to any non-attorney
representative who meets minimum
prerequisites for participating in the
project specified in section 303 of the
SSPA and any additional prerequisites
prescribed by the Commissioner. The
objective of this demonstration project
is to determine the effect of extending
to certain non-attorneys the fee
withholding and direct payment
procedures that apply to attorneys. A
final report on the results of the
demonstration project is to be
completed and transmitted to Congress
within 90 days of the project
termination date, February 28, 2010.
(b) As used in this subpart, the term
‘‘eligible to participate in the direct
payment demonstration project’’ refers
to the status of a non-attorney who we
have determined meets the prerequisites
for participation in the demonstration
project.
(c) The provisions of section 303
authorizing the direct payment of fees to
non-attorneys and the withholding of
title XVI benefits for that purpose apply

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16725

in claims for benefits with respect to
which the agreement for representation
is entered into after February 27, 2005,
and before March 1, 2010.
■ 9. Amend § 416.1520 by adding
paragraph (b)(4) and revising paragraphs
(c)(3) and (d)(3) to read as follows:
§ 416.1520
services.

Fee for a representative’s

*

*
*
*
*
(b) * * *
(4) If your representative is an
attorney, or a non-attorney who is
eligible to participate in the direct
payment demonstration project, as
defined in § 416.1517, and you are
entitled to past-due benefits, as defined
in § 416.1503, we will pay the
authorized fee, or a part of the
authorized fee, directly to the
representative out of the past-due
benefits, subject to the limitations
described in § 416.1530(b)(1). If the
representative is a non-attorney who is
not eligible to participate in the direct
payment demonstration project, we
assume no responsibility for the
payment of any fee that we have
authorized.
(c) * * *
(3) Whether we are responsible for
paying the fee from past-due benefits;
and
*
*
*
*
*
(d) * * *
(3) Payment of fees. We assume no
responsibility for the payment of a fee
based on a revised determination if the
request for administrative review was
not filed on time.
■ 10. Revise § 416.1528 to read as
follows:
§ 416.1528 Proceedings before a State or
Federal court.

(a) Representation of a party in court
proceedings. We shall not consider any
service the representative gave you in
any proceeding before a State or Federal
court to be services as a representative
in dealings with us. However, if the
representative also has given service to
you in the same connection in any
dealings with us, he or she must specify
what, if any, portion of the fee he or she
wants to charge is for services
performed in dealings with us. If the
representative charges any fee for those
services, he or she must file the request
and furnish all of the information
required by § 416.1525.
(b) Attorney fee allowed by a Federal
court. If a Federal court in any
proceeding under title XVI of the Act
makes a judgment in favor of the
claimant who was represented before
the court by an attorney, and the court,
under section 1631(d)(2) of the Act,

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Federal Register / Vol. 72, No. 65 / Thursday, April 5, 2007 / Rules and Regulations

allows to the attorney as part of its
judgment a fee not in excess of 25
percent of the total of past-due benefits
to which the claimant is eligible by
reason of the judgment, we may pay the
attorney the amount of the fee out of,
but not in addition to, the amount of the
past-due benefits payable. We will not
pay directly any other fee your
representative may request.
■ 11. Add § 416.1530 to read as follows:

rwilkins on PROD1PC63 with RULES

§ 416.1530

Payment of fees.

(a) Fees allowed by a Federal court.
Commencing February 28, 2005, we will
pay a representative who is an attorney,
out of your past-due benefits, as defined
in § 416.1503, the amount of the fee
allowed by a Federal court in a
proceeding under title XVI of the Act.
The payment we make to the attorney is
subject to the limitations described in
paragraph (b)(1) of this section.
(b) Fees we may authorize—(1)
Attorneys and non-attorneys eligible to
participate in the direct payment
demonstration project. Except as
provided in paragraphs (c) and (e) of
this section, commencing February 28,
2005, if we make a determination or
decision in your favor and you were
represented by an attorney or a nonattorney who is eligible to participate in
the direct payment demonstration
project, as defined in § 416.1517, and as
a result of the determination or decision
you have past-due benefits, as defined
in § 416.1503, we will pay the
representative out of the past-due
benefits, the smallest of the amounts in
paragraphs (b)(1)(i) through (iii) of this
section, less the amount of the
assessment described in paragraph (d) of
this section.
(i) Twenty-five percent of the total of
the past-due benefits, as determined
before any payment to a State (or
political subdivision) to reimburse the
State (or political subdivision) for
interim assistance furnished you, as
described in § 416.525 of this part, and
reduced by the amount of any reduction
in benefits under this title or title II
pursuant to section 1127 of the Act;
(ii) The amount of past-due benefits
remaining after we pay to a State (or
political subdivision) an amount
sufficient to reimburse the State (or
political subdivision) for interim
assistance furnished you, as described
in § 416.525 of this part, and after any
applicable reductions under section
1127 of the Act; or
(iii) The amount of the fee that we set.
(2) Non-attorneys not eligible to
participate in the direct payment
demonstration project. If the
representative is a non-attorney who is
not eligible to participate in the direct

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payment demonstration project, we
assume no responsibility for the
payment of any fee that we have
authorized. We will not deduct the fee
from your past-due benefits.
(c) Time limit for filing request for
approval of fee in order to obtain direct
payment. (1) In order to receive direct
payment of a fee from your past-due
benefits, a representative who is either
an attorney or a non-attorney who is
eligible to participate in the direct
payment demonstration project should
file a request for approval of a fee, or
written notice of the intent to file a
request, at one of our offices within 60
days of the date the notice of the
favorable determination is mailed.
(2)(i) If no request is filed within 60
days of the date the notice of the
favorable determination is mailed, we
will mail a written notice to you and
your representative at your last known
addresses. The notice will inform you
and the representative that unless the
representative files, within 20 days from
the date of the notice, a written request
for approval of a fee under § 416.1525,
or a written request for an extension of
time, we will pay all the past-due
benefits to you.
(ii) The representative must send you
a copy of any request made to us for an
extension of time. If the request is not
filed within 20 days of the date of the
notice, or by the last day of any
extension we approved, we will pay to
you all past-due benefits remaining after
we reimburse the State for any interim
assistance you received. We must
approve any fee the representative
charges after that time, but the
collection of any approved fee is a
matter between you and the
representative.
(d) Assessment when we pay a fee
directly to a representative. (1)
Whenever we pay a fee directly to a
representative from past-due benefits,
we impose an assessment on the
representative.
(2) The amount of the assessment is
equal to the lesser of:
(i) The product we obtain by
multiplying the amount of the fee we
are paying to the representative by the
percentage rate the Commissioner of
Social Security determines is necessary
to achieve full recovery of the costs of
determining and paying fees directly to
representatives, but not in excess of 6.3
percent; and
(ii) The maximum assessment
amount. The maximum assessment
amount was initially set at $75, but by
law is adjusted annually to reflect the
increase in the cost of living. (See
§§ 404.270 through 404.277 for an
explanation of how the cost-of-living

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Sfmt 4700

adjustment is computed.) If the adjusted
amount is not a multiple of $1, we
round down the amount to the next
lower $1, but the amount will not be
less than $75. We will announce any
increase in the maximum assessment
amount, and explain how that increase
was determined in the Federal Register.
(3) We collect the assessment by
subtracting it from the amount of the fee
to be paid to the representative. The
representative who is subject to an
assessment may not, directly or
indirectly, request or otherwise obtain
reimbursement of the assessment from
you.
(e) Effective dates for extension of
direct payment of fee to attorneys. The
provisions of this subpart authorizing
the direct payment of fees to attorneys
and the withholding of title XVI benefits
for that purpose, apply in claims for
benefits with respect to which the
agreement for representation is entered
into before March 1, 2010.
[FR Doc. E7–6383 Filed 4–4–07; 8:45 am]
BILLING CODE 4191–02–P

DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 165
[CCGD05–07–023]
RIN 1625–AA00

Safety Zone: Willoughby Point Located
on Langley Air Force Base, Back River,
Hampton, VA
Coast Guard, DHS.
Temporary final rule.

AGENCY:
ACTION:

SUMMARY: The Coast Guard is
establishing a temporary safety zone in
support of the Langley Air Force Base
Air Show event occurring on April 27,
28 and 29, 2007 on the Back River in the
vicinity of Willoughby Point in
Hampton, VA. This action is intended to
restrict vessel traffic on Back River as
necessary to protect mariners from the
hazards associated with the air show.
DATES: This rule is effective from 2 p.m.
on April 27, 2007 until 4:30 p.m. on
April 29, 2007.
ADDRESSES: Documents indicated in this
preamble as being available in the
docket are part of docket CGD05–07–
023 and are available for inspection or
copying at the Sector Hampton Roads,
Norfolk Federal Building, 200 Granby
St., 7th Floor, Norfolk, VA 23510,
between 9 a.m. and 2 p.m., Monday
through Friday, except Federal holidays.

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