[Federal Register: April 17, 2008 (Volume 73, Number 75)]
[Proposed Rules]
[Page 20900-20904]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17ap08-28]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Part 88
RIN 0991-AB46
Office of Global Health Affairs; Regulation on the Organizational
Integrity of Entities Implementing Leadership Act Programs and
Activities
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Office of Global Health Affairs within the U.S. Department
of Health and Human Services (HHS) is issuing this Notice of Proposed
Rulemaking (NPRM) to obtain input from stakeholders and other
interested parties regarding 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 (the ``Leadership Act''), Public Law No. 108-25
(May 27, 2003), and an affiliate organization that engages in
activities that are not consistent with a policy opposing prostitution
and sex trafficking, as required under Section 301(f) of the Leadership
Act.
The proposed rule provides additional information on the policy
requirement expressed in this law for entities that receive grants,
contracts, or cooperative agreements from the U.S. Department of Health
and Human Services (``HHS'') to implement programs or projects under
the authority
[[Page 20901]]
of the Leadership Act. Specifically, it describes the legal, financial,
and organizational separation that must exist between these recipients
of HHS HIV/AIDS funds and an affiliate organization that engages in
activities that are not consistent with a policy opposing prostitution
and sex trafficking.
DATES: To be assured consideration, written comments must be received
on or before May 19, 2008.
ADDRESSES: You may submit written comments to the following address:
U.S. Department of Health and Human Services, Office of Global Health
Affairs, Room 639H, 200 Independence Avenue, SW., Washington, DC 20201.
Comments will be available for public inspection Monday through Friday,
except for legal holidays, from 9 a.m. until 5 p.m., at Room 639H, 200
Independence Avenue, SW., Washington, DC 20201. Please call ahead to 1-
202-690-6174, and ask for a representative in the Office of Global
Health Affairs to schedule your visit.
You may also submit written comments electronically via the
Internet at http://www.regulations.gov, or via e-mail to OGHA_
Regulation_Comments@hhs.gov. 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/.
FOR FURTHER INFORMATION CONTACT: William R. Steiger, PhD, Office of
Global Health Affairs, Hubert H. Humphrey Building, Room 639H, 200
Independence Avenue, SW., Washington, DC 20201.
SUPPLEMENTARY INFORMATION:
I. Statutory Authority
This proposed rule implements a provision in the Leadership Act,
section 301(f), 22 U.S.C. 7631(f), concerning restrictions on the use
of funds covered by the Leadership Act. This provision prohibits the
use of any funds made available to carry out the Leadership Act, or any
amendment made by this Act, to provide assistance to any group or
organization that does not have a policy explicitly opposing
prostitution and sex trafficking.
There is a related provision in the Leadership Act, Section 301(e),
22 U.S.C. 7631(e), that prohibits the use of funds made available to
carry out the Act, or any amendment made by the Act, to promote or
advocate the legalization or practice of prostitution or sex
trafficking. This restriction, however, does not apply to the use of
these funds for palliative care, treatment, or post-exposure
pharmaceutical prophylaxis, and necessary pharmaceuticals and
commodities, including test kits, condoms, and, when proven effective,
microbicides. Section 301(f) of the Leadership Act should be read
together with Section 301(e).
II. Background
The U.S. Government is opposed to prostitution and related
activities, which are inherently harmful and dehumanizing, and
contribute to the phenomenon of trafficking in persons. It is critical
to the effectiveness of the Leadership Act, and to the U.S.
Government's foreign policy that underlies this effort, that
organizations that receive Leadership Act funds maintain the integrity
of the Leadership Act programs and activities they implement, and not
confuse the U.S. Government's message opposing prostitution and sex
trafficking by holding positions that conflict with this policy.
This proposed rule is designed to provide additional clarity for
contracting and grant officers, contracting officers' technical
representatives, program officials and implementing partners (e.g.,
grantees, contractors) of HHS regarding the application of language in
Notices of Availability, Requests for Proposals, and other documents
pertaining to the policy requirement expressed in 22 U.S.C. 7631(f),
which provides that organizations that are receiving Leadership Act
funds must have a policy explicitly opposing prostitution and sex
trafficking.
Any entity that receives Leadership Act funds for HIV/AIDS programs
directly or indirectly (``recipient'') cannot use such U.S. Government
funds to promote or advocate the legalization or practice of
prostitution or sex trafficking. In addition, any recipient must have a
policy explicitly opposing prostitution and sex trafficking.
The U.S. Government is issuing this proposed rule on
``Organizational Integrity'' to clarify that the Government's
organizational partners that have adopted a policy opposing
prostitution and sex-trafficking may, consistent with this policy
requirement, maintain an affiliation with separate organizations that
do not have such a policy, provided such affiliations do not threaten
the integrity of the Government's programs and its message opposing
prostitution and sex trafficking, as specified in this proposed rule.
To maintain program integrity, adequate separation, as outlined in this
proposed rule, is required between an affiliate that expresses views on
prostitution and sex trafficking contrary to the Government's message
and any federally funded partner organization.
This proposed rule applies to funds used by the U.S. Department of
Health and Human Services to implement HIV/AIDS programs and activities
under the Leadership Act. The rule proposes certification language that
organizations must provide to receive grants, cooperative agreements,
contracts, and other funding instruments made available by HHS.
All prime recipients that receive U.S. Government funds (``prime
recipients'') must certify compliance with the proposed Rule on
Organizational Integrity prior to actual receipt of such funds, in a
written statement addressed to the HHS agency's grants or contract
officer. The certifications by prime recipients are prerequisites to
the payment of any U.S. Government funds in connection with an award
under the Leadership Act.
All recipients must insert provisions to implement the applicable
parts of this proposed rule in all sub-agreements under their awards.
These provisions must be express terms and conditions of the sub-
agreement; must acknowledge that compliance with this proposed rule is
a prerequisite to the receipt and expenditure of U.S. Government funds
in connection with this document; and must acknowledge that any
violation of the provisions shall be grounds for unilateral termination
of the agreement, prior to the end of its term.
Recipients must agree that HHS may, at any reasonable time, inspect
the documents and materials maintained or prepared by the recipient in
the usual course of its operations that relate to the organization's
compliance with this proposed rule.
Nothing in the regulation is intended to lessen or relieve relevant
prohibitions on Federal Government funding under other applicable
Federal laws.
III. Discussion of the Proposed Rule
These sections discuss the proposed rule by defining the terms
relevant to this proposed rule and discussing the restrictions on
organizations that receive Leadership Act funds.
Section 88.1 Definitions
This Section defines the terms that are pertinent to this rule.
Specifically, we propose the following definitions:
``Commercial sex act'' means any sex act on account of which
anything of value is given to or received by any person.
``Prime recipients'' are contractors, grantees, applicants or
awardees who receive
[[Page 20902]]
Leadership Act funds for HIV/AIDS programs directly from HHS.
``Prostitution'' means procuring or providing any commercial sex
act.
A ``recipient'' is a contractor, grantee, applicant or awardee
who receives Leadership Act funds for HIV/AIDS programs directly or
indirectly from HHS. Recipients are both prime recipients and sub-
recipients.
``Sex trafficking'' means the recruitment, harboring,
transportation, provision, or obtaining of a person for the purpose
of a commercial sex act.
``Sub-recipients'' are contractors, grantees, applicants or
awardees, other than the prime recipient, who receive Leadership Act
funds for HIV/AIDS programs indirectly from HHS through a contract,
grant or other financial agreement with a recipient.
Section 88.2 Objective Integrity of Recipients
This section of the proposed rule describes 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 (the ``Leadership Act''),
Public Law No. 108-25 (May 27, 2003), and an affiliate organization
that engages in activities that are not consistent with a policy
opposing prostitution and sex trafficking, as required under Section
301(f) of the Leadership Act.
Paragraph (a) sets forth criteria for establishing the objective
integrity and independence that a recipient must have from an affiliate
organization that engages in activities inconsistent with a policy
opposing prostitution and sex trafficking.
The criteria for affiliate independence in this proposed rule are
modeled on criteria upheld as facially constitutional by the U.S. Court
of Appeals for the Second Circuit in Velazquez v. Legal Services Corp.,
164 F.3d 757, 767 (2d Cir. 1999), and Brooklyn Legal Services Corp. v.
Legal Services Corp., 462 F.3d 219, 229-33 (2d Cir. 2006), cases
involving similar organization-wide limitations applied to recipients
of Federal funding.
This proposed rule clarifies that an independent organization
affiliated with a recipient of Leadership Act funds need not have a
policy explicitly opposing prostitution and sex trafficking for the
recipient to maintain compliance with the policy requirement. The
independent affiliate's position on these issues will have no effect on
the recipient organization's eligibility for Leadership Act funds, so
long as the affiliate satisfies the criteria for objective integrity
and independence detailed in this proposed rule. By ensuring adequate
separation between the recipient and affiliate organizations, these
criteria guard against a public perception that the affiliate's views
on prostitution and sex-trafficking may be attributed to the recipient
organization, and thus to the Government, thereby avoiding the risk of
confusing the Government's message opposing prostitution and sex
trafficking.
Under Paragraph (b) of this section, an organization is ineligible
to receive any Federal funds for HIV/AIDS programs made available under
the Leadership Act, unless it has provided the certifications required
by Sec. 88.3.
Section 88.3 Certifications
This section of the proposed rule describes the certifications
required to receive Leadership Act funding from HHS.
The required certification implements the Organizational Integrity
Section through an Organizational Integrity Certification, located at
Section 88.3(d)(1), in which a recipient of Leadership Act funds
administered by an HHS agency certifies it has objective integrity and
independence from any affiliated organization that engages in
activities inconsistent with a policy opposing prostitution and sex
trafficking.
The certification contains Acknowledgement and Sub-Recipient
Certifications at Section 88.3(d)(2) and (3). These require each
recipient to acknowledge that its provision of the certifications is a
prerequisite to receiving Federal funds; that the Federal Government
can stop or withdraw those funds if HHS finds a certification to have
been inaccurate, or that such a certification becomes inaccurate; and
that the prime recipient will ensure all its sub-recipients also
provide the required certifications. As detailed in the Certifications
Section, a sub-recipient must, at a minimum, provide the same
certifications as those provided by the prime recipient.
Paragraph (e) contains information regarding requirements for the
renewal of the certifications. HHS requires each recipient to provide
renewed certifications each Federal Fiscal Year, in alignment with the
award cycle. Additionally, current funding recipients, as of the
effective date of the regulation, must file a certification upon any
extension, amendment, or modification of the funding instrument that
extends the term of such instrument, or adds additional funds to it.
IV. Impact Analysis
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 discretionary Leadership Act funding to include a
section regarding ``Prostitution and Related Activities.'' The statute
explicitly requires certifications.
Executive Order 12866--Regulatory Planning and Review
The HHS has drafted and reviewed this regulation in accordance with
Executive Order 12866, Section 1(b), Principles of Regulation. HHS has
determined this rule is a ``significant regulatory action'' under
Executive Order 12866, Section 3(f)(4), Regulatory Planning and Review,
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.
This benefits of this rule are to ensure that an appropriate
separation exists between recipients of Leadership Act funds and
affiliated entities that engage in activities inconsistent with a
policy opposing prostitution and sex trafficking, which will prevent
confusion of the Government's message opposing prostitution and sex
trafficking in Leadership Act programs and activities.
The cost of this rule is unlikely to be significant. Since 2004,
HHS has required recipients of Emergency Plan funding to certify their
compliance with Section 301(f) of the Leadership Act, and HHS/OGHA
issued a ``Guidance on Organizational Integrity,'' similar to this
proposed regulation, on July 23, 2007. Although HHS/OGHA directed HHS
agencies to disseminate this Guidance to their contractors and grantees
that receive funding under the Leadership Act, and provided means for
the public to comment on that Guidance, including whether the document
is economically significant under definitions provided by the Office of
Management and Budget, no one has submitted comments.
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.
[[Page 20903]]
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 budgetary impact
statement 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. The HHS has determined 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 $100 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 proposed 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.
These regulations will not have an impact on family well-being, as
defined in this legislation.
Paperwork Reduction Act
To obtain or retain Leadership Act funding for HIV/AIDS programs
and activities, HHS will require recipients to submit certifications.
The title of the information collection is ``Certification Regarding
the Organizational Integrity of Entities Implementing Leadership Act
Programs and Activities.'' The documents are necessary to ensure that
recipients of Leadership Act funding have objective integrity and
independence from any affiliated organizations that engage in
activities inconsistent with a policy opposing prostitution and sex
trafficking.
HHS estimates that 555 respondents will prepare documents to
validate that recipients have objective integrity and independence from
affiliated organizations that engage in activities inconsistent with
policies opposing prostitution and sex trafficking. HHS therefore
estimates annual aggregate burden to collect the information as
follows:
Annual Burden Estimates
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Number of Average
Instrument Number of responses per burden hours Total burden
respondents respondent per response hours
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Certifications.................................. 555 1 .5 277.5
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HHS has submitted this information collection to the Office of
Management and Budget (OMB) for regular approval, and HHS will accept
comments from the public, in accordance with the Paperwork Reduction
Act of 1995. Comments received during the comment period should
primarily focus on the following: (1) Whether the proposed collection
of information is necessary for the proper performance of the functions
of the Department, including whether the information will have
practical utility; (2) the accuracy of the Department's estimate of the
burden of the proposed collection of information, including the
validity of the methodology and assumptions used; (3) how to enhance
the quality, utility, and clarity of the information to be collected;
and (4) how to minimize the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology (e.g., by
permitting the electronic submission of responses).
All comments and suggestions, or questions regarding additional
information, should go to HHS/OGHA.
List of Subjects in 45 CFR Part 88
Administrative practice and procedure, Federal aid programs, Grant
programs, Grants administration.
Dated: February 26, 2008.
William R. Steiger,
Director, Office of Global Health Affairs.
Approved: March 18, 2008.
Michael O. Leavitt,
Secretary of Health and Human Services.
For the reasons stated in the preamble, the Office of Global Health
Affairs amends 45 CFR to add part 88 as follows:
PART 88--ORGANIZATIONAL INTEGRITY OF ENTITIES IMPLEMENTING PROGRAMS
AND ACTIVITIES UNDER THE LEADERSHIP ACT
Sec.
88.1 Definitions.
88.2 Organizational integrity of recipients.
88.3 Certifications.
Authority: 22 U.S.C. 7631(f) and 5 U.S.C. 301.
Sec. 88.1 Definitions.
For the purposes of this part:
``Commercial sex act'' means any sex act on account of which
anything of value is given to or received by any person.
``Prime recipients'' are contractors, grantees, applicants or
awardees who receive Leadership Act funds for HIV/AIDS programs
directly from HHS.
``Prostitution'' means procuring or providing any commercial sex
act.
A ``recipient'' is a contractor, grantee, applicant or awardee who
receives Leadership Act funds for HIV/AIDS programs directly or
indirectly from HHS.
``Sex trafficking'' means the recruitment, harboring,
transportation, provision, or obtaining of a person for the purpose of
a commercial sex act.
``Sub-recipients'' are contractors, grantees, applicants or
awardees, other than prime recipients, who receive Leadership Act funds
for HIV/AIDS programs indirectly from HHS through a contract, grant or
other financial agreement with a recipient.
Sec. 88.2 Organizational integrity of recipients.
(a) A recipient must have objective integrity and independence from
any affiliated organization that engages in activities inconsistent
with a policy opposing prostitution and sex trafficking . Recipients
include both prime recipients and subrecipients. A recipient will be
found to have objective integrity and independence from such an
organization if:
(1) The affiliated organization is a legally separate entity;
(2) The affiliated organization receives no transfer of Leadership
Act funds, and Leadership Act funds do not subsidize activities
inconsistent with a policy opposing prostitution and sex trafficking;
and
[[Page 20904]]
(3) The recipient is physically and financially separate from the
affiliated organization. Mere bookkeeping separation of Leadership Act
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 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) The existence of separate personnel, management, and
governance;
(ii) The existence of separate accounts, accounting records, and
timekeeping records;
(iii) The degree of separation from facilities, equipment and
supplies used by the affiliated organization to conduct activities
inconsistent with a policy opposing prostitution and sex trafficking,
and the extent of such activities by the affiliate;
(iv) The extent to which signs and other forms of identification
that distinguish the recipient from the affiliated organization are
present, and signs and materials that could be associated with the
affiliated organization or activities inconsistent with a policy
opposing prostitution and sex trafficking are absent; and
(v) The extent to which HHS, the U.S. Government and the project
name are protected from public association with the affiliated
organization and its activities inconsistent with a policy opposing
prostitution and sex trafficking in materials, such as publications,
conferences and press or public statements.
(b) An organization is ineligible to receive any Leadership Act
funds unless it has provided the certifications required by Sec. 88.3.
Sec. 88.3 Certifications.
(a) HHS agencies shall include the certification requirements for
any grant, cooperative agreement, contract, or other funding instrument
in the public announcement of the availability of the grant,
cooperative agreement, contract, or other funding instrument.
(b) Unless the recipient is otherwise excepted, a person authorized
to bind the recipient shall execute the certifications for the grant,
cooperative agreement, contract, or other funding instrument.
(c) A prime recipient must submit its certifications to the grant
or contract officer of the HHS agency that will award funds. A sub-
recipient must provide its certifications to the prime recipient. The
prime recipient will submit certifications from its sub-recipients when
requested to do so by the HHS grant or contract officer.
(d) The certifications shall state as follows:
(1) Organizational Integrity Certification: ``I hereby certify that
[name of recipient], a recipient of the funds made available through
this [grant, cooperative agreement, contract, or other funding
instrument], as defined in 45 CFR part 88, from any affiliated
organization that engages in activities inconsistent with a policy
opposing prostitution and sex trafficking.''
(2) Acknowledgement Certification: ``I further certify that the
recipient acknowledges that these certifications are a prerequisite to
receipt of U.S. Government funds in connection with this [grant,
cooperative agreement, contract, or other funding instrument], and that
any violation of these certifications shall be grounds for termination
by HHS in accordance with the Federal Acquisition Regulations, part 49
for contracts, 45 CFR parts 74 or 92 for grants and cooperative
agreements, as well as any other remedies as provided by law.''
(3) Sub-Recipient Certification: ``I further certify that the
recipient will include these identical certification requirements in
any [grant, cooperative agreement, contract, or other funding
instrument] to a sub-recipient of funds made available under this
[grant, cooperative agreement, contract, or other funding instrument],
and will require such sub-recipient to provide the same certifications
that the recipient provided.''
(e) Prime recipients and sub-recipients of funds must file a
renewed certification each Fiscal Year, in alignment with the award
cycle. Prime recipients and sub-recipients that are already recipients
as of the effective date of this regulation must file a certification
upon any extension, amendment, or modification of the grant,
cooperative agreement, contract, or other funding instrument that
extends the term of such instrument, or adds additional funds to it.
[FR Doc. 08-1147 Filed 4-15-08; 10:34 am]
BILLING CODE 4150-38-P