[Federal Register Volume 74, Number 224 (Monday, November 23, 2009)]
[Proposed Rules]
[Pages 61096-61100]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28127]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Part 89
RIN 0991-AB60
Organizational Integrity of Entities Implementing Leadership Act
Programs and Activities
AGENCY: U.S. Department of Health and Human Services.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Department of Health and Human Services (HHS) is issuing
this Notice of Proposed Rulemaking (NPRM) to obtain input from
stakeholders and other interested parties. This is a proposal to amend
the rule governing the separation that must exist between a recipient
of HHS funds to implement HIV/AIDS programs and activities under the
United States Leadership Against HIV/AIDS, Tuberculosis and Malaria Act
of 2003 and an affiliate organization that engages in activities that
are not consistent with a policy opposing prostitution and sex
trafficking. The proposed rule relaxes the criteria for recipient--
affiliate separation, and simplifies the process for compliance with
the statutory requirement that recipients of HHS Leadership Act HIV/
AIDS funds have a policy explicitly opposing prostitution and sex
[[Page 61097]]
trafficking. This proposal eliminates the requirement that recipients
prepare and file additional documentation specifically to demonstrate
adherence to this policy. The documentation will instead consist of a
statement in the awarding document to which the prime recipient must
agree in order to receive Leadership Act HIV/AIDS funds.
DATES: To be assured consideration, submit electronic comments on or
before December 23, 2009 via the Internet at http://www.regulations.gov.
ADDRESSES: You may submit comments, identified by RIN 0991-AB60,
through the Federal eRulemaking Portal: http://www.regulations.gov.
Instructions: For detailed information on submitting comments and
additional information on the rulemaking process, visit http://www.regulations.gov. All submissions must include the agency name and
docket number or Regulatory Information Number (RIN) for this
rulemaking. All comments received will be posted to http://www.regulations.gov, including any personal information provided.
FOR FURTHER INFORMATION CONTACT: Diana Perez-Rivera or Natarsha Wright,
Office of Global Health Affairs, Hubert H. Humphrey Building, Room
639H, 200 Independence Avenue, SW., Washington, DC 20201, Tel: 202-690-
6174, E-mail: [email protected].
SUPPLEMENTARY INFORMATION: The Preamble to this NPRM is organized as
follows:
I. Public Participation
II. Summary
III. Background
IV. Discussion of the Proposed Rule
V. Impact Analysis
I. Public Participation
Comments will be available for public inspection at http://www.regulations.gov.
Electronic Access: You can download an electronic version of the
NPRM at http://www.regulations.gov. HHS/OGHA has also posted the NPRM
and related materials to its Web site at the following Internet
address: http://www.globalhealth.gov/.
II. Summary
Statutory Authority
This proposal would amend the ``Regulation on the Organizational
Integrity of Entities That Are Implementing Programs and Activities
Under the Leadership Act,'' 73 FR 78997 (Dec. 24, 2008), which
implements subsection 7631(f) of the United States Leadership Against
HIV/AIDS, Tuberculosis and Malaria Act (``Leadership Act''), Public Law
108-25 (May 27, 2003), as amended, 22 U.S.C. 7631(f).
III. Background
Congress enacted the United States Leadership Against HIV/AIDS,
Tuberculosis and Malaria Act of 2003, 22 U.S.C. Sec. Sec. 7601-7682,
(``Leadership Act'') in May 2003. The Leadership Act contains
limitations on the use of funds provided to carry out HIV/AIDS
activities under the Act (``Leadership Act HIV/AIDS funds'').
Subsection 7631(f) prohibits the use of Leadership Act HIV/AIDS funds
``to provide assistance to any group or organization that does not have
a policy explicitly opposing prostitution and sex trafficking.''
(Subsection 7631(f) of the Leadership Act was amended in 2004 to exempt
certain public international organizations. Consolidated Appropriations
Act of 2004 and 2005, Division D--Foreign Operations, Export Financing,
and Related Programs Appropriations (``FY 04 and FY 05 Appropriations
Act''), Title II--Bilateral Economic Assistance, United States Agency
for International Development, Child Survival Health Programs Fund.
Reauthorization of the Leadership Act in 2008 did not amend Subsection
7631(f)). Tom Lantos and Henry J. Hyde United States Global Leadership
Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act of
2008, Public Law 110-293 (July 30, 2008).
During legislative debate on the Leadership Act, in response to a
question from Senator Leahy on the Senate floor regarding subsection
7631(f), Senator Frist stated that ``a statement in the contract or
grant agreement between the U.S. Government and such organization that
the organization is opposed to the practices of prostitution and sex
trafficking because of the psychological and physical risks they pose
for women * * * would satisfy the intent of the provision.'' 149 Cong.
Rec. S6457 (daily ed. May 15, 2003) (statement of Sen. Frist).
By December, 2003, HHS had begun including a requirement in all of
its grant and cooperative agreement funding announcements that required
all recipients under the Leadership Act of HIV/AIDS funds to have a
policy explicitly opposing prostitution and sex trafficking. In March,
2004, HHS exempted domestic U.S. recipients from this restriction, but
withdrew the exemption in May, 2005. On July 23, 2007, HHS published
sub-regulatory ``Organizational Integrity Guidance'' in the Federal
Register to clarify the scope of the policy requirement by stating that
Leadership Act HIV/AIDS funding recipients may have affiliates that do
not have a policy against prostitution and sex trafficking. HHS
followed the issuance of this guidance with a notice of proposed
rulemaking (NPRM) on April 17, 2008, 73 FR 29096, which initiated the
notice-and-comment rulemaking process. The final rule was published on
December 24, 2008, 73 FR 78997, corrected on January 16, 2009, 74 FR
2888 (codified at 45 CFR part 89), and took effect on January 20, 2009.
The final rule established the legal, financial, and organizational
standards for determining whether a funding recipient had objective
integrity and independence from an affiliated organization that engaged
in activities inconsistent with a policy opposing prostitution and sex
trafficking. The final rule also required all Leadership Act HIV/AIDS
funding recipients, including sub-recipients, to certify compliance
with the rule.
The proposed amendment to the present rule modifies the criteria
for evaluating the separation between recipients and affiliated
organizations, while complying with the statutory requirement regarding
opposition to prostitution and sex trafficking. It is important to
implementation of the Leadership Act that recipients of Leadership Act
funds to implement HIV/AIDS programs and activities not confuse the
U.S. Government's message opposing prostitution and sex trafficking by
undertaking activities or advocating positions that conflict with this
policy. However, HHS has determined after further study that the
objectives of the Leadership Act can be effectuated through the
application of standards that are less burdensome for funding
recipients than the standards set out in the present rule.
HHS is working in coordination with USAID to ensure consistent
administration of these programs for recipients and subrecipients.
Nothing in the proposed amendment is intended to lessen or relieve
relevant prohibitions on Federal Government funding under other
applicable Federal laws.
IV. Discussion of the Proposed Rule
These sections discuss the proposed amendment to the rule,
including changes to the regulatory separation requirements and
deletion of the requirement for certification.
Section 89.2 Organizational Integrity of Recipients
This section of the proposed rule describes the separation that
must exist between a recipient of HHS funds to
[[Page 61098]]
implement HIV/AIDS programs and activities under the Leadership Act and
an affiliated organization that engages in activities inconsistent with
a policy opposing prostitution and sex trafficking. Proposed amendments
to the criteria for evaluating separation are discussed in greater
detail below. As amended, this section would also provide that
recipients will no longer be required to submit separate documentation
certifying that they have a policy explicitly opposing prostitution.
Rather, the policy requirement will be included in the notices of
availability of funds and similar announcements, and acknowledged by
recipients in the documents awarding the funds.
Paragraph (a) states the policy to which recipients must adhere
under subsection 7631(f), and identifies the criteria that will be used
to evaluate the organizational integrity and independence of the
recipient from affiliated organizations. Under the amendment, the
recipient would agree that it is opposed to the practices of
prostitution and sex trafficking because of the psychological and
physical risks they pose for women, men and children. With respect to
criteria, the paragraph retains the prohibition against affiliated
organizations that do not satisfy subsection (f)'s requirement of
opposing prostitution and sex trafficking from receiving Leadership Act
HIV/AIDS funds. The paragraph continues to prohibit the use of
Leadership Act HIV/AIDS funds to subsidize activities inconsistent with
a policy opposing prostitution and sex trafficking. However, paragraph
(a) would no longer mandate that the affiliate must be ``a legally
separate entity,'' but would instead provide that the legal status of
the affiliate is one of the factors to be considered in deciding
whether there is adequate separation between the recipient and the
affiliate. This change recognizes the reported burden on recipients
operating overseas in satisfying this criterion in certain cases, and
the difficulty inherent in HHS's analyzing foreign legal requirements.
A similar change would be made to the factor suggesting evaluation of
``[t]he existence of separate personnel, management, and governance.''
The proposal now refers to ``[t]he existence of separate personnel or
other allocation of personnel that maintains adequate separation
between the recipient and affiliate.'' Again, this proposed change
reflects reported difficulties in meeting a requirement for fully
separate personnel in some situations. The proposed rule also deletes
the requirement for consideration of separate ``management'' and
``governance'' and for separate ``accounts'' because those elements of
the relationship are not necessary to maintain sufficient separation
between recipients and affiliated organizations to prevent confusion of
the Government's message opposing prostitution and sex trafficking.
Other factors have been simplified and relaxed. Moreover, a further and
very significant change to paragraph (a) provides that recipients must
meet the criteria for separation ``to the extent practicable in the
circumstances,'' which will permit practical factors to be taken into
account in a specific case. In sum, these changes to paragraph (a) are
intended to allow a recipient to maintain a relationship with an
affiliated organization that may engage in restricted activities,
without jeopardizing the recipient's eligibility for HIV/AIDS funding
under the Leadership Act.
Paragraph (b) requires HHS agencies to include in funding notices
and award instruments a statement that recipients of Leadership Act
HIV/AIDS funds from HHS agree that they are opposed to the practices of
prostitution and sex trafficking because of the psychological and
physical risks they pose for women, men, and children. By entering into
the award agreement and accepting Leadership Act HIV/AIDS funds,
recipients acknowledge this opposition, but are relieved from the
necessity of preparing and submitting additional documentation.
Paragraph (c) recognizes the statutory exemption for the Global
Fund to Fight AIDS, Tuberculosis and Malaria, the World Health
Organization, the International AIDS Vaccine Initiative and any United
Nations Agency from subsection 7631(f), and is not affected by this
amendment.
Section 89.3 Certifications
This proposed amendment to the rule deletes this section requiring
separate documents certifying compliance with the Leadership Act
because the materials described in subsection 89.2(b) will provide the
necessary assurances.
V. Impact Analysis
Paperwork Reduction Act
To obtain or retain Leadership Act HIV/AIDS funding, under the
December 24, 2008 final rule, HHS required recipients to submit
certifications attesting to their non-involvement in activities
supporting prostitution and human trafficking and policies to that
effect. The title of the information collection was ``Certification
Regarding the Organizational Integrity of Entities Implementing
Leadership Act Programs and Activities.''
HHS estimated that 555 respondents had to prepare documents to
validate that recipients had objective integrity and independence from
organizations that engage in activities inconsistent with policies
opposing prostitution and sex trafficking. HHS also estimates that the
average cost per hour will be $26.44, with a 0.5 hour estimated time
burden per response. In total, the estimated burden cost is
approximately $7337.10.
This proposed rule removes the certification requirements of the
December 24, 2008 rule. As a result, the burden estimate of 0.5 hours
per applicant for Leadership Act HIV/AIDS funds is removed along with
the associated costs.
Executive Order 12866--Regulatory Planning and Review
HHS has drafted and reviewed this regulation in accordance with
Executive Order 12866, section (b), Principles of regulation. HHS has
determined this rule is a ``significant regulatory action'' under
Executive Order 12866, section 3(f)(4), because it raises novel legal
or policy issues that arise out of legal mandates and the President's
priorities, and accordingly, the Office of Management and Budget has
reviewed it.
As explained above, this rule modifies a previously issued final
rule on the same subject, published on December 24, 2008 in the Federal
Register (P. 78997 to 79002). As explained earlier in this notice, the
modification does not change policy, but reduces burden in complying
with the established policy. Policy under the Leadership Act has been
consistent and clear: The U.S government is opposed to prostitution and
sex trafficking. Contractors and subcontractors cannot use Leadership
Act HIV/AIDS funds to carry out activities that call into question the
anti-trafficking/anti-prostitution policy. Enforcement of this policy
was originally through language inserted in awards at the time they
were executed. The December 24, 2008 final rule required further
statements and formal documentation from recipients before they could
receive Leadership Act HIV/AIDS funds. The Impact Analysis and the
Paperwork Reduction Act in the December 24, 2008 final rule estimated
the burden and cost of writing the additional documentation. This rule
no longer requires this additional documentation. It reestablishes the
earlier requirement contained in the funding agreement prohibiting
activities
[[Page 61099]]
and policies that support prostitution and sex trafficking in human
beings. As a result, applicants for Leadership Act HIV/AIDS funds will
no longer have to incur the costs outlined in the December 24, 2008
impact analysis and paperwork burden analysis.
The benefits of this rule are the reduction in burden and the
possible encouragement of additional applicants because of the burden
reduction.
The costs of the rule are minimal as there are no changes in policy
and we have determined that the methods of achieving compliance prior
to December 24, 2008 are fully compatible with the purposes of the Act.
We are republishing the impact table from the December 24, 2008
final rule. The burden estimate was $7337 calculated by assuming an
additional half hour of clerical work to prepare documentation on
behalf of 555 grantees at an hourly rate of $26.44.
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Number of Average burden
Instrument Number of responses per hours per Average cost Total burden Total burden
respondents respondent response per hour hours cost
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Certifications.................................... 555 1 0.5 $26.44 277.5 $7,337
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Regulatory Flexibility Act
The Secretary certifies under 5 U.S.C. 605(b), as enacted by the
Regulatory Flexibility Act (Pub. L. 96-354), that this rule will not
result in a significant impact on a substantial number of small
entities. Since enactment of the policy requirement in the Leadership
Act, HHS has required its contract solicitations and grant
announcements for Leadership Act HIV/AIDS funding to include a section
regarding ``Prostitution and Related Activities'' Furthermore, the
proposed rule proposes to remove the requirements for certification
that were imposed on recipients in the December 24, 2008 final rule.
Executive Order 13132--Federalism
Executive Order 13132 on Federalism requires Federal Departments
and agencies to consult with State and local Government officials in
the development of regulatory policies with implications for
Federalism. This rule does not have Federalism implications for State
or local Governments, as defined in the Executive Order.
Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 requires
that a covered Federal Department or agency prepare a cost-benefit
analysis before promulgating a rule that includes any Federal mandate
that could result in the expenditure by State, local, and tribal
Governments, in the aggregate, or by the private sector, of $100
million or more in any one year adjusted for inflation. The current
threshold for preparing a cost-benefit analysis is $133 million. HHS
has determined that this rule would not impose a mandate that will
result in the expenditure by State, local, and Tribal Governments, in
the aggregate, or by the private sector, of more than $133 million in
any one year.
Assessment of Federal Regulation and Policies on Families
Section 654 of the Treasury and General Government Appropriations
Act of 1999 requires Federal Departments and agencies to determine
whether a final policy or regulation could affect family well-being. If
the determination is affirmative, then the Department or agency must
prepare an impact assessment to address criteria specified in the law.
This rule will not have an impact on family well-being, as defined in
this legislation.
List of Subjects in 45 CFR Part 89
Administrative practice and procedure, Federal aid programs, Grant
programs, Grants administration.
For the reasons stated in the preamble, the Department of Health
and Human Services proposes to amend 45 CFR Part 89 as follows:
PART 89--ORGANIZATIONAL INTEGRITY OF ENTITIES IMPLEMENTING PROGRAMS
AND ACTIVITIES UNDER THE LEADERSHIP ACT.
1. The authority citation for part 89 continues to read as follows:
Authority: 22 U.S.C. 7631(f) and 5 U.S.C. 301.
2. Revise Sec. 89.2 to read as follows:
Sec. 89.2 Organizational integrity of recipients.
(a) A recipient must have objective integrity and independence from
any affiliated organization that engages in activities inconsistent
with the recipient's opposition to the practices of prostitution and
sex trafficking because of the psychological and physical risks they
pose for women, men, and children (``restricted activities''). A
recipient will be found to have objective integrity and independence
from such an organization if:
(1) The organization receives no transfer of Leadership Act HIV/
AIDS funds, and Leadership Act HIV/AIDS funds do not subsidize
restricted activities; and
(2) The recipient is, to the extent practicable in the
circumstances, legally, physically, and financially separate from the
affiliated organization. Mere bookkeeping separation of Leadership Act
HIV/AIDS funds from other funds is not sufficient. HHS will determine,
on a case-by-case basis and based on the totality of the facts, whether
sufficient legal, physical, and financial separation exists. The
presence or absence of any one or more factors will not be
determinative. Factors relevant to this determination shall include,
but will not be limited to, the following:
(i) Whether the organization is a legally separate entity;
(ii) The existence of separate personnel or other allocation of
personnel that maintains adequate separation of the activities of the
affiliated organization from the recipient;
(iii) The existence of separate accounting and timekeeping records;
(iv) The degree of separation of the recipient's facilities from
facilities in which restricted activities occur, and the extent of such
restricted activities by the affiliated organization; and
(v) The extent to which signs and other forms of identification
that distinguish the recipient from the affiliated organization are
present.
(b) HHS agencies shall include in the public announcement of the
availability of the grant, cooperative agreement, contract, or other
funding instrument involving Leadership Act HIV/AIDS funds the
requirement that recipients agree that they are opposed to the
practices of prostitution and sex trafficking because of the
psychological and physical risks they pose for women, men, and
children. This statement shall also be included in the award documents
for any grant, cooperative agreement or other funding instrument
[[Page 61100]]
involving Leadership Act HIV/AIDS funds entered into with the
recipient.
(c) This regulation applies to all recipients, including prime
recipients and sub-recipients, unless they are exempted from the policy
by statute.
Sec. 89.3 [Removed]
3. Remove Sec. 89.3.
Dated: October 29, 2009.
John Monahan,
Interim Director, Office of Global Health Affairs.
Dated: October 29, 2009.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. E9-28127 Filed 11-19-09; 4:15 pm]
BILLING CODE P