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Legal Services Corporation: Background and Funding

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Order Code RL34016. Legal Services Corporation: Background and Funding Updated November 19, 2008 Carmen Solomon-Fears Specialist in Social Policy Domestic Social Policy Division Legal Services Corporation: Background and Funding Background and Funding Carmen Solomon-Fears Specialist in Social Policy August 5, 2009 Congressional Research Service 7-5700 www.crs.gov RL34016 CRS Report for Congress Prepared for Members and Committees of Congress c11173008 . Legal Services Corporation: Background and Funding Summary The Legal Services Corporation (LSC) is a private, nonprofit, federally funded corporation that helps provide legal assistance to low-income people in civil (i.e., non-criminal) matters. The primary responsibility of the LSC is to manage and oversee the congressionally appropriated federal funds that it distributes in the form of grants to local legal services providers, which in turn give legal assistance to lowincomelow-income clients in all 50 states, the District of Columbia, the U.S. territories of American Samoa, Guam, and the Virgin Islands, the Commonwealth of Puerto Rico, and Micronesia (including the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, and Palau). Although the authorization of appropriations for the LSC expired at the end of FY1980, the LSC has operated for the past 2829 years under annual appropriations laws. The LSC is currently funded at $350.5 at $390 million for FY2008 (P.L. 110-161). P.L. 110-329, the continuing appropriations law for FY2009, continues LSC funding at FY2008 levels ($350.5 million) through March 6, 2009. Current LSC funding remains below the LSC’s highest funding level of $400 million in FY1994 and FY1995FY2009 (P.L. 111-8). Current LSC funding remains below the LSC’s highest funding level of $400 million in FY1994 and FY1995. The Obama Administration’s FY2010 budget request included $435 million for the LSC. On June 18, 2009, the House passed legislation that would appropriate $440 million for the LSC for FY2010. On June 25, 2009, the Senate Appropriations Committee approved $400 million in funding for the LSC for FY2010. Under the LSC’s competitive process, legal services providers in every jurisdiction bid to become the LSC grantee for a designated service area in a state. During 2007, the LSC funded 138 local programs/grantees in 923 offices employing about 3,900 attorneys. Local programs establish their own eligibility criteria, in which clients served may not have income that exceeds 125% of the federal poverty guidelines. In 2007, 73% of LSC clients were females and 27% were males. The majority of LSC clients (85%) were between the ages of 18 and 59, 13% were age 60 or older, and 2% were under the age of 18. Almost 46% of LSC clients were nonHispanicnon-Hispanic white, 25% were non-Hispanic black, 8% were of other races, and 20% were Hispanic. In 2007, LSC grantees in each year closed about 907,000 cases involving issues primarily related to families (divorce, child support, etc.), housing, income maintenance, consumer finance, and individual rights. Although the LSC is the largest single source of funding for the civil legal services system in the United States, it is not the only source of funding. Local legal services programs supplement their LSC grants with funds from a variety of governmental and private sources. LSC funding accounts for about 42% of all funding for civil legal services for the poor in the United States. This report will be regularly updated. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Program Mechanics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Restrictions on Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Clients and Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Funding History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 FY1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 FY1997-FY2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 FY2002-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 FY2006-FY2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 FY2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Distribution of LSC Funds and Non-LSC Resources . . . . . . . . . . . . . . . . . . . . . 11 List of Figures Figure 1. LSC Cases Closed in 2007, by Legal Problem . . . . . . . . . . . . . . . . . . . 5 List of Tables Table 1. LSC Appropriations History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Table 2. LSC: Funding for Program Components, FY2001-FY2008 . . . . . . . . 11 Table 3. Funding for LSC and Non-LSC Programs, by Jurisdiction, FY2007 . . 12 Legal Services Corporation: Background and Funding Introduction The Legal Services Corporation (LSC) is a private, nonprofit, federally funded corporation that helps provide legal assistance to low-income people in non-criminal (i.e., civil) matters. The LSC is governed by an 11-member board appointed by the President and confirmed by the Senate, of whom no more than six members may be of the same political party. The primary responsibility of the LSC is to manage and oversee the congressionally appropriated federal funds that it distributes in the form of grants to local legal services providers, which in turn give legal assistance to lowincome clients in all 50 states, the District of Columbia, the U.S. territories of American Samoa, Guam, and the Virgin Islands, the Commonwealth of Puerto Rico, and Micronesia (including the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, and Palau). The federal government has administered a program of legal services for the poor since 1966. Originally, the program was administered through the Office of Economic Opportunity, a nowdefunct agency that had led the War on Poverty in the mid-1960s. In 1971, President Nixon proposed establishment of a separate corporation to deliver legal services to insulate the program from political pressure.1 Authorizing legislation was enacted in 1974 (P.L. 93-355), and the LSC came into existence the following year. In 1977, the LSC was extended through FY1980 (P.L. 95-222). Although Congress has not reauthorized the LSC statute since FY1980, it has continued to fund LSC every year, and has included legislative language affecting LSC activities in the annual appropriations laws. 1 regularly updated. Congressional Research Service . Legal Services Corporation: Background and Funding Contents Introduction ................................................................................................................................1 Program Mechanics ....................................................................................................................1 Restrictions on Activities.......................................................................................................2 Clients and Cases ........................................................................................................................3 Funding History ..........................................................................................................................5 FY1996.................................................................................................................................5 FY1997-FY2001...................................................................................................................6 FY2002-FY2005...................................................................................................................6 FY2006-FY2008...................................................................................................................7 FY2009.................................................................................................................................8 FY2010.................................................................................................................................9 Distribution of LSC Funds and Non-LSC Resources ................................................................. 11 Figures Figure 1. LSC Cases Closed in 2007, by Legal Problem ..............................................................4 Tables Table 1. LSC Appropriations History...........................................................................................5 Table 2. LSC: Funding for Program Components, FY2001-FY2009 .......................................... 10 Table 3. Funding for LSC and Non-LSC Programs, by Jurisdiction, FY2007 ........................... 11 Contacts Author Contact Information ...................................................................................................... 13 Congressional Research Service . Legal Services Corporation: Background and Funding Introduction The Legal Services Corporation (LSC) is a private, nonprofit, federally funded corporation that helps provide legal assistance to low-income people in non-criminal (i.e., civil) matters. The LSC is governed by an 11-member board appointed by the President and confirmed by the Senate, of whom no more than six members may be of the same political party. The primary responsibility of the LSC is to manage and oversee the congressionally appropriated federal funds that it distributes in the form of grants to local legal services providers, which in turn give legal assistance to low-income clients in all 50 states, the District of Columbia, the U.S. territories of American Samoa, Guam, and the Virgin Islands, the Commonwealth of Puerto Rico, and Micronesia (including the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, and Palau). The federal government has administered a program of legal services for the poor since 1966. Originally, the program was administered through the Office of Economic Opportunity, a now-defunct agency that had led the War on Poverty in the mid-1960s. In 1971, President Nixon proposed establishment of a separate corporation to deliver legal services to insulate the program from political pressure.1 Authorizing legislation was enacted in 1974 (P.L. 93-355), and the LSC came into existence the following year. In 1977, the LSC was extended through FY1980 (P.L. 95-222). Although Congress has not reauthorized the LSC statute since FY1980, it has continued to fund LSC every year, and has included legislative language affecting LSC activities in the annual appropriations laws. LSC Laws and Appropriations P.L. 93-355 (July 25, 1974) P.L. 95-222 (Dec. 28, 1977) P.L. 105-12 (Apr. 30, 1997) P.L. 106-185 (Apr. 25, 2000) P.L. 104-134 (Apr. 26, 1996) P.L. 104-208 (Sept. 30, 1996) P.L. 105-119 (Nov. 26, 1997) P.L. 105-277 (Oct. 21, 1998) P.L. 106-113 (Nov. 29, 1999) P.L. 106-553 (Dec. 21, 2000) Program Mechanics P.L. 107-77 (Nov. 28, 2001) P.L. 108-7 (Feb. 20, 2003) P.L. 108-199 (Jan. 23, 2004) P.L. 108-447 (Dec. 8, 2004) P.L. 109-108 (Nov. 22, 2005) P.L. 110-5 (Feb. 15, 2007) P.L. 110-161 (Dec. 26, 2007) P.L. 110-329 (Sept. 30, 2008) Center for Law and Social Policy. Securing Equal Justice for All: A Brief History of Civil Legal Assistance in the United States, by Alan W. Houseman and Linda E. Perle, November 2003, p. 17, [http://www.clasp.org/publications/Legal_Aid_History.pdf]. See also President Nixon, Special Message to the Congress Proposing Establishment of a Legal Services Corporation, May 5, 1971, [http://www.presidency.ucsb.edu/ws/print.php?pid=2998]. CRS-2 Program Mechanics The LSC does not provide legal services directly. Rather, it funds local legal services providers, referred to by the LSC as “grantees.” Grantees may include nonprofit organizations that have as a purpose the provision of legal assistance to eligible clients, private attorneys, groups of private attorneys or law firms, state or local governments, and certain sub-state regional planning and coordination agencies. During 2007, the LSC funded 138 local programs in 923 offices employing about 3,900 attorneys. These numbers are reduced from 1994, when 320 local programs employed about 4,500 attorneys. Each local program is governed by its own board of directors, of which a majority are attorneys and one-third are eligible clients. Local programs establish their own eligibility criteria, under which a client’s household income may not exceed 125% of the federal poverty guidelines.2 Each local program must spend an amount equal to at least 12.5% of its basic grant to encourage private attorneys to provide pro bono legal aid to the poor. Since April 1996 (P.L. 104-134), LSC grantees (i.e., legal services agencies/providers/programs) have been selected on a competitive basis.3 Under the LSC’s competitive process, legal services providers in every jurisdiction bid to become the LSC grantee for a designated service area in a state. Pursuant to its 1998 State Planning Initiative, the LSC has sought to streamline its delivery system. During the competition process, the LSC evaluates applications according to established quality standards and awards grants to those providers judged best qualified to provide high-quality legal services in accordance with applicable legal requirements. Federal regulations (Title 45 C.F.R. Part 1634) stipulate the procedures to be followed in awarding LSC grants. Grants are made for one to three years. Multi-year awardees must submit reports and grant renewal forms as part of the annual grant renewal process. Before the implementation of the 1998 State Planning Initiative, LSC grantees often were unaware of other LSC grantees in the state. Work and training collaborations and other cooperative endeavors were rare among LSC grantees in the same state, and practically nonexistent among LSC grantees in other states. Further, most legal services programs only had superficial relationships and minimal contact with law firms and local judges. In anticipation of reduced federal funding, the LSC first encouraged and later directed grantees to form partnerships with the judiciary, private bar associations, and with each other. The 1998 State Planning Initiative was the means by which the LSC sought to ensure that LSC funds were efficiently and effectively used to provide legal services to poor persons in all areas of the states and 2 In 2007, 125% of the federal poverty guidelines was $25,813 for a household of four (higher in Alaska and Hawaii). 3 This system supplanted the previous system of presumptive refunding for LSC grantees. The LSC is prohibited from granting any preference to current or previous grantees of LSC funds (Section 503(e) of P.L. 104-134, enacted April 26, 1996). CRS-3 jurisdictions. Pursuant to the 1998 Initiative, the LSC made participation in statewide civil legal services delivery systems a condition of receipt of LSC funding.4 It is generally agreed that poor persons in need of legal assistance have benefitted from the LSC’s statewide delivery system approach. The LSC has done this by requiring federally funded legal services providers to coordinate their work with other persons and organizations within a state, including groups historically considered funding “competitors” (other nonprofit organizations and non-LSC legal services programs) or “unlikely partners” (judges, legislators, bar leaders).5 Restrictions on Activities Since its inception, the legal services program has been controversial, and Congress has imposed restrictions on activities of local attorneys. The authorizing statute contains restrictions against lobbying, political activities, class actions except under certain conditions, and cases involving abortion, school desegregation, and draft registration or desertion from the military. Additional restrictions have been included in appropriations laws each year. Under the current appropriations law, LSC grantees may not ! ! ! ! ! ! ! ! ! ! ! ! ! engage in partisan litigation related to redistricting; attempt to influence regulatory, legislative or adjudicative action at the federal, state, or local level; attempt to influence oversight proceedings of the LSC; initiate or participate in any class action suit; represent certain categories of aliens, except that both LSC and nonLSC funds may be used to represent aliens who have been victims of domestic violence or child abuse; conduct advocacy training on a public policy issue or encourage political activities, strikes, or demonstrations; claim or collect attorneys’ fees; engage in litigation related to abortion; represent clients in eviction proceedings if the eviction was based on drug-related activities; represent federal, state, or local prisoners; participate in efforts to reform a federal or state welfare system; engage in activities related to assisted suicide, euthanasia, or mercy killing; or solicit clients. 4 Legal Services Corporation. State Planning — A Five Year Overview, 2005, pp. 1-7, [http://www.lsc.gov/pdfs/030194_sp5yrrprt.pdf]. 5 Ibid., p. 8. CRS-4 LSC grantees must establish priorities, and staff must agree in writing not to engage in activities outside these priorities. Moreover, federal law prohibits the LSC from receiving nonfederal funds, and grantees are prohibited from receiving non-LSC funds, unless the source of funds is told in writing that these funds may not be used for any activities prohibited by the LSC Act or the appropriations law. Clients and Cases Legal services provided through LSC funds are available only in civil matters to individuals with household incomes of less than 125% of the federal poverty guidelines. The LSC places primary emphasis on the provision of routine legal services. Legal services cases deal with a variety of issues, including family-related issues (divorce, separation, child custody, support, adoption, spousal abuse, child abuse or neglect); housing issues (evictions, foreclosures); welfare or other income maintenance program issues (access to health care, unemployment compensation benefit claims); consumer and finance issues (consumer fraud, debt collection); and individual rights (employment, health, juvenile, and education). During 2007, legal services attorneys closed 906,507 cases. Family issues such as divorce and separation, custody and visitation, domestic abuse, and child support were the substance of about 38% of cases handled by field offices; housing issues, including eviction cases, comprised about 25% of cases; income maintenance issues represented another 11% of cases; and consumer finance and individual rights issues comprised about 26% of cases. Most of the cases handled by LSC are resolved through advice and referral. In 2007, only about 13% of cases were resolved in court, primarily because they involved family law issues (e.g., protective orders, child support, etc.) in which court action was required by state law.6 6 LSC Cases Closed FY2002: 978,834 FY2003: 935,793 FY2004: 901,067 FY2005: 906,338 FY2006: 895,488 FY2007: 906,507 Legal Services Corporation, Legal Services Corporation Fact Book 2007, June 2008, [http://www.lsc.gov/pdfs/factbook2007.pdf]. CRS-5 Figure 1. LSC Cases Closed in 2007, by Legal Problem Other 14.3% Consumer Finance 11.5% Income Maintenance 11.4% Family 37.6% Housing 25.2% Source: Figure prepared by the Congressional Research Service. LSC grantees have closed about 1 million cases annually for the last several years. In addition, they have handled another 4 million legal service “matters” such as helping self-represented (i.e., pro se) litigants obtain the information they need to pursue their lawsuits, disseminating legal services materials in communities, referring clients to appropriate services, and providing mediation assistance. According to the LSC Fact Book for 2007, LSC clients were of all races and ethnic groups. LSC clients include the working poor, veterans, family farmers, people with disabilities, battered women, women seeking divorces or child support, Race and Ethnicity and victims of natural disasters such as of LSC Clients, 2007 Hurricane Katrina. In 2007, 73% of LSC White, not Hispanic 46.4% clients were females and 27% were males. 25.1% Black, not Hispanic Hispanic 20.3% Approximately 85% of LSC clients were Native American 2.3% between the ages of 18 and 59, 13% were Asian or Pacific Islander 2.4% age 60 or older, and 2% were under age 18. Other 3.4% In 2005, LSC staff were directed by the LSC to document the extent to which the civil legal needs of low-income persons were not being met. Based on three methodologies, the LSC found that (1) 50% of potential clients requesting legal assistance were denied assistance because the LSC did not have the resources to help them; (2) eight of nine state studies conducted in the last five years indicated that at least 80% of persons who were eligible for LSC services do not have access to such services when they need them; and (3) there is one legal services attorney for every 6,861 low-income persons — the comparable number for the general population is one attorney for every 525 persons, a difference of 13 to one.7 7 Legal Services Corporation. Documenting the Justice Gap in America — The Current Unmet Civil Legal Needs of Low-Income Americans. September 2005, available at [http://www.lsc.gov/press/documents/LSCJusticeGap_FINAL_1001.pdf]. CRS-6 Funding History When the LSC was first established, its initial goal was to provide all lowincome people with at least “minimum access” to legal services, defined as the equivalent of one legal services attorney for every 5,000 poor persons. This goal was briefly achieved in FY1980, but not maintained due to inflation and subsequent budget cuts. For example, in FY2004, the LSC estimated an appropriation of $683 million would have been needed for minimum access; however, the LSC received $335 million in appropriations that year. According to a 2005 LSC study (cited above), there is one legal services attorney for every 6,861 poor persons. Funds for the LSC are included in the annual appropriation for Science, the Departments of State, Justice, and Commerce, and Related Agencies (House) and Commerce, Justice, Science, and Related Agencies (Senate). Table 1 shows LSC appropriations for selected years from FY1976 (the first full year of LSC operations) to FY2008. Current funding remains below the LSC’s highest funding level of $400 million in FY1994 and FY1995. LSC funding accounts for less than half (42%) of all funding for civil legal services for the poor in the United States (discussed in more detail later in this report). Table 1. LSC Appropriations History ($ in millions) FY 1976 1980 1984 1988 1989 $ 92 300 275 306 309 FY 1990 1991 1992 1993 1994 $ 317 328 350 357 400 FY 1995 1996 1997 1998 1999 $ 400 278 283 283 300 FY 2000 2001 2002 2003 2004 $ 304 329 329 337 335 FY 2005 2006 2007 2008 $ 331 327 349 351 Source: Table prepared by the Congressional Research Service. FY1996 From its inception through FY1995, LSC appropriations gradually increased. However, for FY1996, Congress funded the LSC at $278 million, for a reduction of almost 31% from the previous year. In its FY1996 budget resolution, the House assumed a three-year phase-out of the LSC, recommending appropriations of $278 million in FY1996, $141 million in FY1997, and elimination by FY1998. The House Budget Committee stated in its report (H.Rept. 104-120): Too often, ... lawyers funded through federal LSC grants have focused on political causes and class action lawsuits rather than helping poor Americans solve their legal problems.... A phase out of federal funding for the LSC will not eliminate free legal aid to the poor. State and local governments, bar associations, and other organizations already provide substantial legal aid to the poor. CRS-7 The FY1996 appropriation for the LSC entirely eliminated funding for supplemental legal assistance programs, including Native American and migrant farm worker support, national and state support centers, regional training centers, and other national activities. FY1997-FY2001 The phase-out of the LSC envisioned by the House budget resolution did not occur. Instead, between FY1996 and FY2001, LSC funding was gradually increased. For FY1997, Congress funded the LSC at $283 million (P.L. 104-208). For FY1998, Congress again funded the LSC at $283 million (P.L. 105-119). For FY1999, Congress funded the LSC at $300 million (P.L. 105-277). For FY2000, Congress funded the LSC at $305 million, but also included a provision in the legislation that mandated a 0.38% government-wide rescission of discretionary budget authority for FY2000. The funding for the LSC for FY2000 was thereby decreased to $304 million (P.L. 106-113). For FY2001, the Clinton Administration requested $340 million for the LSC. The Clinton Administration had requested $340 million every year since FY1997, in an effort to partially restore the 1996 cutback in funding. P.L. 106-553 included $330 million for LSC for FY2001, and was signed by President Clinton on December 21, 2000. P.L. 106-554 mandated a 0.22% government-wide rescission of discretionary budget authority for FY2001 for almost all government agencies. Thus, the $330 million appropriation for LSC for FY2001 was reduced to $329.3 million. FY2002-FY2005 For FY2002 through FY2005, the Bush Administration requested $329.3 million in annual appropriations for the LSC. In carrying out the LSC’s vision of an effective and efficient statewide system of delivering legal services to the poor, grantees had been merging and reconfiguring their legal services programs to better use every federal dollar allocated to them.8 The House report (H.Rept. 107-139) indicated concern about the LSC overruling, without appeal, certain configurations implemented by grantees via the state planning process. The House report directed the LSC to review the state planning process and report back to the committee with a proposal that outlined the reconfiguration standards and the process for states to appeal LSC’s decisions. P.L. 107-77 included $329.3 million for LSC for FY2002. For FY2003, Congress funded the LSC at $336.6 million (P.L. 108-7); this funding level included a $9.5 million allotment to offset decennial Census funding reallocations (i.e., to partially compensate some service areas for smaller LSC funding levels for FY2003 than the area received for FY2002 as a result of the change in state poverty populations based on census data for 2000), and a mandated 0.65% government-wide rescission. 8 Legal Services Corporation, A Special Report to Congress, State Planning & Reconfiguration, September 2001, pp. 2-3, 10. CRS-8 For FY2004, Congress funded the LSC at $335.3 million (P.L. 108-199); this funding level included a 0.59% across-the-board government-wide rescission and an additional 0.465% uniform rescission applicable only to funding for the Commerce, Justice, State, and Related Agencies appropriation (which included the LSC). For FY2005, Congress funded the LSC at $330.8 million (P.L. 108-447); this funding level included a provision that allowed the LSC to spend up to $1 million of prior-year funding balances for a school student loan repayment pilot program, a 0.8% across-the-board government-wide rescission, and an additional 0.54% uniform rescission applicable only to funding for the Commerce, Justice, State, and Related Agencies appropriation (which included the LSC). FY2006-FY2008 For FY2006, the Bush Administration requested $318.3 million for the LSC. P.L. 109-108 included $330.8 million for the LSC for FY2006 — the same amount originally passed by the House, instead of $358.5 million, as passed by the Senate. P.L. 109-108 also included a general rescission equal to 0.28% of funding for the Science, State, Justice, Commerce, and Related Agencies appropriation (which includes the LSC). P.L. 109-148 included a 1% government-wide rescission on discretionary programs. Thus, the LSC appropriation for FY2006 was lowered to $326.6 million. For FY2007, the Bush Administration requested $310.9 million for the LSC. P.L. 110-5 included language that specified that the LSC would be funded at $348.6 million for FY2007. P.L. 110-5 incorporated the fourth continuing resolution for FY2007 (H.J.Res. 20), which included provisions to fund most of the government agencies, including the LSC, through FY2007. For FY2008, the Bush Administration requested $311 million for the LSC. The Administration’s budget request included $289 million for basic field programs and requires independent audits; almost $13 million for management and administration; $5 million for client self-help and information technology; and $3 million of the Office of the Inspector General. For FY2008, the Senate Appropriations Committee recommended $390 million for the LSC (S. 1745), a $41.4 million increase above the FY2007 LSC appropriation, and $79.1 million above the Administration’s FY2008 budget request for the LSC. During the Senate debate on the bill (H.R. 3093), an amendment by Senator Bingaman was passed to permit LSC-funded legal services programs to provide legal assistance to “H2B” workers — temporary foreign workers employed in the forestry industry — in matters directly related to their employment. LSCfunded programs are currently prohibited from serving H2B workers. The Senatepassed bill provided $390 million for the LSC for FY2008. For FY2008, the House Appropriations Committee recommended $377 million for the LSC, a $28.4 million increase above the FY2007 LSC appropriation, $66.1 million above the Administration’s FY2008 budget request for the LSC, and $13 million below the Senate-passed bill. The House-passed bill (H.R. 3093) included $377 million for the LSC for FY2008. CRS-9 Pursuant to a continuing appropriations resolution (H.J.Res. 52), enacted September 29, 2007, the LSC operated at FY2007 funding levels through November 16, 2007 (P.L. 110-92). Pursuant to a second continuing appropriations resolution in the FY2008 Department of Defense appropriation (H.R. 3222), enacted November 13, 2007, the LSC operated at FY2007 funding levels through December 14, 2007 (P.L. 110-116). Pursuant to a third continuing appropriations resolution (H.J.Res. 69), enacted December 14, 2007, the LSC operated at FY2007 funding levels through December 21, 2007 (P.L. 110-137). Pursuant to a fourth continuing appropriations resolution (H.J.Res. 72), the LSC operated at FY2007 funding levels through December 31, 2007 (P.L. 110-137). P.L. 110-161, the Consolidated Appropriations Act, 2008 (H.R. 2764 — enacted December 26, 2007), included $350.5 million for the LSC for FY2008. This amount is $1.9 million above the FY2007 appropriation for the LSC and $39.6 million above the Administration’s FY2008 budget request for the LSC. However, it is below the amounts that were passed by the House and the Senate. The FY2008 appropriation for the LSC includes $332.4 million for basic field programs and required independent audits, $12.5 million for management and administration, $2.1 million for client self-help and information technology, $3.0 million for the Office of the Inspector General, and $0.5 million for loan repayment assistance. According to the LSC, pursuant to P.L. 110-161, LSC-funded legal services programs can now provide limited representation to temporary forestry workers. FY2009 For FY2009, the Bush Administration requested $311.0 million for the LSC.9 The Administration’s budget request would include $290.1 million for basic field programs and required independent audits; $12.8 million for management and administration; $5.0 million for client self-help and information technology; and $3.0 million for the Office of the Inspector General. For FY2009, the House Appropriations Committee approved $390 million for the LSC. The House committee-approved draft bill would provide 11% more than the FY2008 LSC appropriation and 25% more than the FY2009 request for the LSC. It would include $367 million for basic field programs and required independent audits, $16 million for management and administration, $3 million for client self-help and information technology, $3 million for the Office of the Inspector General, and $1 million for loan repayment assistance. 9 Each year the LSC submits its own budget request to Congress. In most years, the LSC budget request is significantly higher than the amount that appears in the President’s annual budget. For FY2009, the LSC requested an appropriation of $471.4 million, a 52% increase over the President’s budget request of $311 million for the LSC. The reasons cited for the significant increase included legal problems of existing and new clients stemming from the recent crises in the mortgage and housing industries, the ongoing impact of natural disasters, and widespread domestic violence, along with recent LSC findings that there is significant unmet need among America’s poorest populations with regard to civil legal assistance. CRS-10 For FY2009, the Senate Appropriations Committee, like the House committee, also approved $390 million for the LSC. However, the Senate committee bill (S. 3182) would include $369 million for basic field programs and required independent audits, $13 million for management and administration, $3.8 million for client selfhelp and information technology, $3.2 million for the Office of the Inspector General, and $1 million for loan repayment assistance. P.L. 110-289, the Housing and Economic Recovery Act of 2008 (enacted July 30, 2008), included a provision that provides $30 million for pre-foreclosure and legal counseling through a new grant program. Under the new program, the Neighborhood Reinvestment Corporation, a congressional chartered nonprofit organization, is required to make grants to housing counselors to hire LSC attorneys to assist homeowners who have legal issues directly related to the homeowner’s foreclosure, delinquency, or short sale.10 P.L. 110-315, the College Opportunity and Affordability Act of 2008 (enacted August 14, 2008), included a provision that authorizes $10 million for the U.S. Department of Education to distribute as loan repayment assistance grants (up to $6,000 per year, $40,000 for a lifetime) to full-time civil legal aid lawyers who agree to remain employed as such for at least three years.11 Although the loan repayment program was authorized, funding for the program has not yet been appropriated. P.L. 110-329, the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 (enacted September 30, 2008), among other things, requires that the LSC continue to operate at FY2008 funding levels (i.e., $350.5 million) until March 6, 2009, or until LSC’s regular FY2009 appropriation is enacted. It is important to note that since FY1996, all of the LSC appropriations laws have included language stipulating the provisions restricting the activities of LSC grantees enacted in previous LSC appropriations laws.12 (See the earlier section titled “Restrictions on Activities.”) Table 2 shows LSC appropriations for FY2001FY2008, by component of funding. 10 See sections 2305 and 2401 of P.L. 110-289. 11 See section 431 of P.L. 110-315. 12 Although the authorizing statute contains some restrictions on LSC activities, many more restrictions were added by P.L. 104-134 in 1996. Other restrictions and modifications or clarifications were added in 1997 (P.L. 105-119) and 1998 (P.L. 105-277). All LSC appropriation laws enacted after 1996 have included language referencing the restrictions in prior appropriation laws. CRS-11 Table 2. LSC: Funding for Program Components, FY2001-FY2008 ($ in millions) LSC Program Components Basic field programs Management and administration Client self-help and information technology Office of the Inspector General Offset for census-based reallocations Student loan repayment program Total FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 309.3 310.0 308.0 316.4 312.4 308.4 330.8 332.5 10.8 12.4 13.2 13.0 12.8 12.7 12.7 12.5 6.9 4.4 3.4 1.3 1.3 1.2 2.1 2.1 2.2 2.5 2.6 2.6 2.5 2.5 3.0 3.0 0.0 0.0 9.4 1.8 1.8 1.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 329.3 329.3 336.6 335.3 330.8 326.6 348.6 350.5 Source: Table prepared by the Congressional Research Service. Note: These data reflect appropriations after all rescissions; numbers may not add to total due to rounding. Distribution of LSC Funds and Non-LSC Resources LSC funds appropriated for basic field programs are distributed to the states and jurisdictions on a per capita basis, according to U.S. Bureau of the Census data13 on the number of “poor” persons in each service area.14 Grantees within each state or jurisdiction then compete among themselves for funding. Although the LSC is the largest single source of funding for the civil legal services system in the United States, it is not the only source of funding. Local legal services programs supplement their LSC grants with funds from a variety of governmental and private sources. Non-LSC funding sources include state and local grants; state Interest on Lawyers’ Trust Accounts (IOLTAs) programs;15 federal programs such as the Title XX Social Services Block Grant, the Older Americans Act, the Violence Against Women Act, and Community Development Block Grants; and private grants from entities such as the United Way, foundations, and national, state, and local bar associations. In addition, private attorneys accept referrals to 13 The census data is based on the most recent decennial census — currently, the year 2000. 14 In other words, if a specific state has 12% of the U.S. poverty population, that state generally would receive about 12% of the LSC funding amount allocated for local legal services programs. 15 These funds represent interest earned on sums deposited by clients with attorneys for short periods of time. CRS-12 provide legal services to the poor, primarily through LSC-funded pro bono programs.16 As shown in Table 3, in 2007, LSC funding accounted for about 42% of the $844.4 million spent in the United States for civil legal services for the poor.17 Table 3. Funding for LSC and Non-LSC Programs, by Jurisdiction, FY2007 State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire 16 17 LSC Funding FY2007 6,463,907 1,271,971 9,916,097 3,808,626 45,808,829 3,609,142 2,590,894 625,739 983,988 19,152,571 9,502,812 1,598,503 1,409,850 11,699,140 5,426,207 2,369,374 2,309,399 6,185,115 8,406,311 1,420,593 3,978,010 5,468,715 9,621,410 3,695,306 5,281,120 5,832,090 1,423,153 1,470,195 1,987,552 691,432 Number of LSC Programs 1 1 3 2 11 1 1 1 1 7 2 2 1 3 1 1 1 4 4 1 1 4 6 5 2 4 1 1 1 1 Non-LSC Funding FY2007 984,747 1,741,210 4,573,845 1,699,733 45,180,132 7,414,826 149,787 518,862 407,723 17,351,369 13,048,243 5,057,743 1,074,450 16,956,750 2,536,419 4,873,282 6,823,114 12,391,043 4,785,869 4,173,143 18,483,060 1,652,312 12,907,858 14,893,503 2,331,820 10,651,490 1,843,601 492,878 503,142 150,436 Total Funding 7,448,654 3,013,181 14,489,942 5,508,359 90,988,961 11,023,968 2,740,681 1,144,601 1,391,711 36,503,940 22,551,055 6,656,246 2,484,300 28,655,890 7,962,626 7,242,656 9,132,513 18,576,158 13,192,180 5,593,736 22,461,070 7,121,027 22,529,268 18,588,809 7,612,940 16,483,580 3,266,754 1,963,073 2,490,694 841,868 LSC as a % of Total 86.8 42.2 68.4 69.1 50.3 32.7 94.5 54.7 70.7 52.5 42.1 24.0 56.8 40.8 68.1 32.7 25.3 33.3 63.7 25.4 17.7 76.8 42.7 19.9 69.4 35.4 43.6 74.9 79.8 82.1 In 2007, approximately 31,000 private attorneys accepted referrals to help LSC clients. Legal Services Corporation, Legal Services Corporation Fact Book 2007, June 2008, [http://www.lsc.gov/pdfs/factbook2007.pdf]. CRS-13 State New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming American Samoa Guam Micronesia Puerto Rico Virgin Islands Total: States and DC Total: States, DC, and Territories LSC Funding FY2007 6,684,595 3,458,198 25,651,160 9,632,153 993,516 10,857,758 5,539,055 3,658,517 11,832,331 1,073,387 5,303,683 1,781,220 7,470,959 32,201,428 1,989,701 547,546 6,229,887 7,375,225 2,830,468 5,052,482 720,493 94,627 340,818 1,600,722 16,885,393 332,208 Number of LSC Programs 6 1 7 1 1 6 2 1 8 1 1 2 4 3 1 1 6 1 1 2 1 1 1 1 2 1 Non-LSC Funding FY2007 43,744,148 2,342,217 54,178,907 11,124,691 1,424,393 46,015,263 5,631,925 4,514,758 25,630,759 2,725,225 3,972,905 1,163,818 12,136,886 19,896,888 2,619,500 34,892 8,536,770 12,967,184 3,744,827 6,170,513 50,500 0 579,928 583,139 3,790,003 974,437 Total Funding 50,428,743 5,800,415 79,830,067 20,756,844 2,417,909 56,873,021 11,170,980 8,173,275 37,463,090 3,798,612 9,276,588 2,945,038 19,607,845 52,098,316 4,609,201 582,438 14,766,657 20,342,409 6,575,295 11,222,995 770,993 94,627 920,746 2,183,861 20,675,396 1,306,645 LSC as a % of Total 13.3 59.6 32.1 46.4 41.1 19.1 49.6 44.8 31.6 28.3 57.2 60.5 38.1 61.8 43.2 94.0 42.2 36.3 43.0 45.0 93.5 100.0 37.0 73.3 81.7 25.4 334,891,813 132 484,279,359 819,171,172 40.9 354,145,581 138 490,206,866 844,352,447 41.9 Source: Table prepared by the Congressional Research Service, using data from the Legal Services Corporation, Legal Services Corporation Fact Book 2007, June 2008, [http://www. lsc.gov/pdfs/factbook2007.pdf]. Compilation of state and territory program data is based on information from the LSC website [http://www.lsc.gov/map/index.php]. The LSC does not provide legal services directly. Rather, it funds local legal services providers, referred to by the LSC as “grantees.” Grantees may include nonprofit organizations that have as a purpose the provision of legal assistance to eligible clients, private attorneys, groups of private attorneys or law firms, state or local governments, and certain sub-state regional planning and coordination agencies. P.L. 108-199 (Jan. 23, 2004) P.L. 108-447 (Dec. 8, 2004) P.L. 109-108 (Nov. 22, 2005) P.L. 110-5 (Feb. 15, 2007) P.L. 110-161 (Dec. 26, 2007) P.L. 110-329 (Sept. 30, 2008) During 2007, the LSC funded 138 local programs in 923 P.L. 111-8 (Mar. 11, 2009) offices employing about 3,900 attorneys. These numbers are reduced from 1994, when 320 local programs employed about 4,500 attorneys. Each local program is governed by its own board of directors, of which a majority are attorneys and one-third are eligible clients. Local programs establish their own 1 Center for Law and Social Policy. Securing Equal Justice for All: A Brief History of Civil Legal Assistance in the United States, by Alan W. Houseman and Linda E. Perle, November 2003, p. 17, http://www.clasp.org/publications/ Legal_Aid_History.pdf. See also President Nixon, Special Message to the Congress Proposing Establishment of a Legal Services Corporation, May 5, 1971, http://www.presidency.ucsb.edu/ws/print.php?pid=2998. Congressional Research Service 1 . Legal Services Corporation: Background and Funding eligibility criteria, under which a client’s household income may not exceed 125% of the federal poverty guidelines.2 Each local program must spend an amount equal to at least 12.5% of its basic grant to encourage private attorneys to provide pro bono legal aid to the poor. Since April 1996 (P.L. 104-134), LSC grantees (i.e., legal services agencies/providers/programs) have been selected on a competitive basis.3 Under the LSC’s competitive process, legal services providers in every jurisdiction bid to become the LSC grantee for a designated service area in a state. Pursuant to its 1998 State Planning Initiative, the LSC has sought to streamline its delivery system. During the competition process, the LSC evaluates applications according to established quality standards and awards grants to those providers judged best qualified to provide highquality legal services in accordance with applicable legal requirements. Federal regulations (Title 45 C.F.R. Part 1634) stipulate the procedures to be followed in awarding LSC grants. Grants are made for one to three years. Multi-year awardees must submit reports and grant renewal forms as part of the annual grant renewal process. Before the implementation of the 1998 State Planning Initiative, LSC grantees often were unaware of other LSC grantees in the state. Work and training collaborations and other cooperative endeavors were rare among LSC grantees in the same state, and practically nonexistent among LSC grantees in other states. Further, most legal services programs only had superficial relationships and minimal contact with law firms and local judges. In anticipation of reduced federal funding, the LSC first encouraged and later directed grantees to form partnerships with the judiciary, private bar associations, and with each other. The 1998 State Planning Initiative was the means by which the LSC sought to ensure that LSC funds were efficiently and effectively used to provide legal services to poor persons in all areas of the states and jurisdictions. Pursuant to the 1998 Initiative, the LSC made participation in statewide civil legal services delivery systems a condition of receipt of LSC funding.4 It is generally agreed that poor persons in need of legal assistance have benefitted from the LSC’s statewide delivery system approach. The LSC has done this by requiring federally funded legal services providers to coordinate their work with other persons and organizations within a state, including groups historically considered funding “competitors” (other nonprofit organizations and non-LSC legal services programs) or “unlikely partners” (judges, legislators, bar leaders).5 Restrictions on Activities Since its inception, the legal services program has been controversial, and Congress has imposed restrictions on activities of local attorneys. The authorizing statute contains restrictions against lobbying, political activities, class actions except under certain conditions, and cases involving abortion, school desegregation, and draft registration or desertion from the military. Additional restrictions have been included in appropriations laws each year. Under the current appropriations law, LSC grantees may not: 2 In 2007, 125% of the federal poverty guidelines was $25,813 for a household of four (higher in Alaska and Hawaii). This system supplanted the previous system of presumptive refunding for LSC grantees. The LSC is prohibited from granting any preference to current or previous grantees of LSC funds (Section 503(e) of P.L. 104-134, enacted April 26, 1996). 4 Legal Services Corporation. State Planning—A Five Year Overview, 2005, pp. 1-7, http://www.lsc.gov/pdfs/ 030194_sp5yrrprt.pdf. 5 Ibid., p. 8. 3 Congressional Research Service 2 . Legal Services Corporation: Background and Funding • engage in partisan litigation related to redistricting; • attempt to influence regulatory, legislative or adjudicative action at the federal, state, or local level; • attempt to influence oversight proceedings of the LSC; • initiate or participate in any class action suit; • represent certain categories of aliens, except that both LSC and non-LSC funds may be used to represent aliens who have been victims of domestic violence or child abuse; • conduct advocacy training on a public policy issue or encourage political activities, strikes, or demonstrations; • claim or collect attorneys’ fees; • engage in litigation related to abortion; • represent clients in eviction proceedings if the eviction was based on drug-related activities; • represent federal, state, or local prisoners; • participate in efforts to reform a federal or state welfare system; • engage in activities related to assisted suicide, euthanasia, or mercy killing; or • solicit clients. LSC grantees must establish priorities, and staff must agree in writing not to engage in activities outside these priorities. Moreover, federal law prohibits the LSC from receiving nonfederal funds, and grantees are prohibited from receiving non-LSC funds, unless the source of funds is told in writing that these funds may not be used for any activities prohibited by the LSC Act or the appropriations law.6 Clients and Cases Legal services provided through LSC funds are available only in civil matters to individuals with household incomes of less than 125% of the federal poverty guidelines. The LSC places primary emphasis on the provision of routine legal services. Legal services cases LSC Cases deal with a variety of issues, including family-related issues (divorce, Closed separation, child custody, support, adoption, spousal abuse, child abuse or neglect); housing issues (evictions, foreclosures); welfare or other income FY2002: 978,834 maintenance program issues (access to health care, unemployment FY2003: 935,793 compensation benefit claims); consumer and finance issues (consumer FY2004: 901,067 fraud, debt collection); and individual rights (employment, health, juvenile, FY2005: 906,338 and education). FY2006: 895,488 FY2007: 906,507 6 For additional information, see CRS Report R40679, Legal Services Corporation: Restrictions on Activities. Congressional Research Service 3 . Legal Services Corporation: Background and Funding During 2007, legal services attorneys closed 906,507 cases. Family issues such as divorce and separation, custody and visitation, domestic abuse, and child support were the substance of about 38% of cases handled by field offices; housing issues, including eviction cases, comprised about 25% of cases; income maintenance issues represented another 11% of cases; and consumer finance and individual rights issues comprised about 26% of cases. Most of the cases handled by LSC are resolved through advice and referral. In 2007, only about 13% of cases were resolved in court, primarily because they involved family law issues (e.g., protective orders, child support, etc.) in which court action was required by state law.7 Figure 1. LSC Cases Closed in 2007, by Legal Problem Other 14.3% Consumer Finance 11.5% Income Maintenanc e 11.4% Family 37.6% Housing 25.2% Source: Figure prepared by the Congressional Research Service. LSC grantees have closed about 1 million cases annually for the last several years. In addition, they have handled another 4 million legal service “matters” such as helping self-represented (i.e., pro se) litigants obtain the information they need to pursue their lawsuits, disseminating legal services materials in communities, referring clients to appropriate services, and providing mediation assistance. According to the LSC Fact Book for 2007, LSC clients were of all races and ethnic groups. LSC clients include the working poor, veterans, family farmers, people with disabilities, battered women, women seeking divorces or child support, and Race and Ethnicity victims of natural disasters such as Hurricane Katrina. In of LSC Clients, 2007 2007, 73% of LSC clients were females and 27% were males. Approximately 85% of LSC clients were between White, not Hispanic 46.4% the ages of 18 and 59, 13% were age 60 or older, and 2% Black, not Hispanic 25.1% were under age 18. Hispanic 20.3% Native American In 2005, LSC staff were directed by the LSC to document Asian or Pacific Islander the extent to which the civil legal needs of low-income Other persons were not being met. Based on three methodologies, the LSC found that (1) 50% of potential clients requesting legal assistance were denied assistance because the LSC did not have the resources to help them; (2) eight of nine state studies conducted in the last five years 2.3% 2.4% 3.4% 7 Legal Services Corporation, Legal Services Corporation Fact Book 2007, June 2008, http://www.lsc.gov/pdfs/ factbook2007.pdf. Congressional Research Service 4 . Legal Services Corporation: Background and Funding indicated that at least 80% of persons who were eligible for LSC services do not have access to such services when they need them; and (3) there is one legal services attorney for every 6,861 low-income persons—the comparable number for the general population is one attorney for every 525 persons, a difference of 13 to one.8 Funding History When the LSC was first established, its initial goal was to provide all low-income people with at least “minimum access” to legal services, defined as the equivalent of one legal services attorney for every 5,000 poor persons. This goal was briefly achieved in FY1980, but not maintained due to inflation and subsequent budget cuts. For example, in FY2004, the LSC estimated an appropriation of $683 million would have been needed for minimum access; however, the LSC received $335 million in appropriations that year. According to a 2005 LSC study (cited above), there is one legal services attorney for every 6,861 poor persons. Funds for the LSC are included in the annual appropriation for Science, the Departments of State, Justice, and Commerce, and Related Agencies (House) and Commerce, Justice, Science, and Related Agencies (Senate). Table 1 shows LSC appropriations for selected years from FY1976 (the first full year of LSC operations) to FY2009. Current funding remains below the LSC’s highest funding level of $400 million in FY1994 and FY1995. LSC funding accounts for less than half (42%) of all funding for civil legal services for the poor in the United States (discussed in more detail later in this report). Table 1. LSC Appropriations History ($ in millions) FY $ FY $ FY $ FY $ FY $ 1976 92 1990 317 1995 400 2000 304 2005 331 1980 300 1991 328 1996 278 2001 329 2006 327 1984 275 1992 350 1997 283 2002 329 2007 349 1988 306 1993 357 1998 283 2003 337 2008 351 1989 309 1994 400 1999 300 2004 335 2009 390 Source: Table prepared by the Congressional Research Service. FY1996 From its inception through FY1995, LSC appropriations gradually increased. However, for FY1996, Congress funded the LSC at $278 million, for a reduction of almost 31% from the previous year. In its FY1996 budget resolution, the House assumed a three-year phase-out of the LSC, recommending appropriations of $278 million in FY1996, $141 million in FY1997, and elimination by FY1998. The House Budget Committee stated in its report (H.Rept. 104-120): 8 Legal Services Corporation. Documenting the Justice Gap in America—The Current Unmet Civil Legal Needs of Low-Income Americans. September 2005, available at http://www.lsc.gov/press/documents/ LSCJusticeGap_FINAL_1001.pdf. Congressional Research Service 5 . Legal Services Corporation: Background and Funding Too often, ... lawyers funded through federal LSC grants have focused on political causes and class action lawsuits rather than helping poor Americans solve their legal problems.... A phase out of federal funding for the LSC will not eliminate free legal aid to the poor. State and local governments, bar associations, and other organizations already provide substantial legal aid to the poor. The FY1996 appropriation for the LSC entirely eliminated funding for supplemental legal assistance programs, including Native American and migrant farm worker support, national and state support centers, regional training centers, and other national activities. FY1997-FY2001 The phase-out of the LSC envisioned by the House budget resolution did not occur. Instead, between FY1996 and FY2001, LSC funding was gradually increased. For FY1997, Congress funded the LSC at $283 million (P.L. 104-208). For FY1998, Congress again funded the LSC at $283 million (P.L. 105-119). For FY1999, Congress funded the LSC at $300 million (P.L. 105277). For FY2000, Congress funded the LSC at $305 million, but also included a provision in the legislation that mandated a 0.38% government-wide rescission of discretionary budget authority for FY2000. The funding for the LSC for FY2000 was thereby decreased to $304 million (P.L. 106-113). For FY2001, the Clinton Administration requested $340 million for the LSC. The Clinton Administration had requested $340 million every year since FY1997, in an effort to partially restore the 1996 cutback in funding. P.L. 106-553 included $330 million for LSC for FY2001, and was signed by President Clinton on December 21, 2000. P.L. 106-554 mandated a 0.22% government-wide rescission of discretionary budget authority for FY2001 for almost all government agencies. Thus, the $330 million appropriation for LSC for FY2001 was reduced to $329.3 million. FY2002-FY2005 For FY2002 through FY2005, the Bush Administration requested $329.3 million in annual appropriations for the LSC. In carrying out the LSC’s vision of an effective and efficient statewide system of delivering legal services to the poor, grantees had been merging and reconfiguring their legal services programs to better use every federal dollar allocated to them. 9 The House report (H.Rept. 107-139) indicated concern about the LSC overruling, without appeal, certain configurations implemented by grantees via the state planning process. The House report directed the LSC to review the state planning process and report back to the committee with a proposal that outlined the reconfiguration standards and the process for states to appeal LSC’s decisions. P.L. 107-77 included $329.3 million for LSC for FY2002. For FY2003, Congress funded the LSC at $336.6 million (P.L. 108-7); this funding level included a $9.5 million allotment to offset decennial Census funding reallocations (i.e., to partially compensate some service areas for smaller LSC funding levels for FY2003 than the area received 9 Legal Services Corporation, A Special Report to Congress, State Planning & Reconfiguration, September 2001, pp. 2-3, 10. Congressional Research Service 6 . Legal Services Corporation: Background and Funding for FY2002 as a result of the change in state poverty populations based on census data for 2000), and a mandated 0.65% government-wide rescission. For FY2004, Congress funded the LSC at $335.3 million (P.L. 108-199); this funding level included a 0.59% across-the-board government-wide rescission and an additional 0.465% uniform rescission applicable only to funding for the Commerce, Justice, State, and Related Agencies appropriation (which included the LSC). For FY2005, Congress funded the LSC at $330.8 million (P.L. 108-447); this funding level included a provision that allowed the LSC to spend up to $1 million of prior-year funding balances for a school student loan repayment pilot program, a 0.8% across-the-board governmentwide rescission, and an additional 0.54% uniform rescission applicable only to funding for the Commerce, Justice, State, and Related Agencies appropriation (which included the LSC). FY2006-FY2008 For FY2006, the Bush Administration requested $318.3 million for the LSC. P.L. 109-108 included $330.8 million for the LSC for FY2006—the same amount originally passed by the House, instead of $358.5 million, as passed by the Senate. P.L. 109-108 also included a general rescission equal to 0.28% of funding for the Science, State, Justice, Commerce, and Related Agencies appropriation (which includes the LSC). P.L. 109-148 included a 1% government-wide rescission on discretionary programs. Thus, the LSC appropriation for FY2006 was lowered to $326.6 million. For FY2007, the Bush Administration requested $310.9 million for the LSC. P.L. 110-5 included language that specified that the LSC would be funded at $348.6 million for FY2007. P.L. 110-5 incorporated the fourth continuing resolution for FY2007 (H.J.Res. 20), which included provisions to fund most of the government agencies, including the LSC, through FY2007. For FY2008, the Bush Administration requested $311 million for the LSC. The Administration’s budget request included $289 million for basic field programs and requires independent audits; almost $13 million for management and administration; $5 million for client self-help and information technology; and $3 million of the Office of the Inspector General. For FY2008, the Senate Appropriations Committee recommended $390 million for the LSC (S. 1745), a $41.4 million increase above the FY2007 LSC appropriation, and $79.1 million above the Administration’s FY2008 budget request for the LSC. During the Senate debate on the bill (H.R. 3093), an amendment by Senator Bingaman was passed to permit LSC-funded legal services programs to provide legal assistance to “H2B” workers—temporary foreign workers employed in the forestry industry—in matters directly related to their employment. LSC-funded programs are currently prohibited from serving H2B workers. The Senate-passed bill provided $390 million for the LSC for FY2008. For FY2008, the House Appropriations Committee recommended $377 million for the LSC, a $28.4 million increase above the FY2007 LSC appropriation, $66.1 million above the Administration’s FY2008 budget request for the LSC, and $13 million below the Senate-passed bill. The House-passed bill (H.R. 3093) included $377 million for the LSC for FY2008. Pursuant to a continuing appropriations resolution (H.J.Res. 52), enacted September 29, 2007, the LSC operated at FY2007 funding levels through November 16, 2007 (P.L. 110-92). Pursuant to a Congressional Research Service 7 . Legal Services Corporation: Background and Funding second continuing appropriations resolution in the FY2008 Department of Defense appropriation (H.R. 3222), enacted November 13, 2007, the LSC operated at FY2007 funding levels through December 14, 2007 (P.L. 110-116). Pursuant to a third continuing appropriations resolution (H.J.Res. 69), enacted December 14, 2007, the LSC operated at FY2007 funding levels through December 21, 2007 (P.L. 110-137). Pursuant to a fourth continuing appropriations resolution (H.J.Res. 72), the LSC operated at FY2007 funding levels through December 31, 2007 (P.L. 110137). P.L. 110-161, the Consolidated Appropriations Act, 2008 (H.R. 2764—enacted December 26, 2007), included $350.5 million for the LSC for FY2008. This amount is $1.9 million above the FY2007 appropriation for the LSC and $39.6 million above the Administration’s FY2008 budget request for the LSC. However, it is below the amounts that were passed by the House and the Senate. The FY2008 appropriation for the LSC includes $332.4 million for basic field programs and required independent audits, $12.5 million for management and administration, $2.1 million for client self-help and information technology, $3.0 million for the Office of the Inspector General, and $0.5 million for loan repayment assistance. According to the LSC, pursuant to P.L. 110-161, LSC-funded legal services programs can now provide limited representation to temporary forestry workers. FY2009 For FY2009, the Bush Administration requested $311.0 million for the LSC.10 The Administration’s budget request included $290.1 million for basic field programs and required independent audits; $12.8 million for management and administration; $5.0 million for client selfhelp and information technology; and $3.0 million for the Office of the Inspector General. For FY2009, the House Appropriations Committee approved $390 million for the LSC. The House committee-approved draft bill provided 11% more than the FY2008 LSC appropriation and 25% more than the FY2009 request for the LSC. It included $367 million for basic field programs and required independent audits, $16 million for management and administration, $3 million for client self-help and information technology, $3 million for the Office of the Inspector General, and $1 million for loan repayment assistance. For FY2009, the Senate Appropriations Committee, like the House committee, also approved $390 million for the LSC. However, the Senate committee bill (S. 3182) included $369 million for basic field programs and required independent audits, $13 million for management and administration, $3.8 million for client self-help and information technology, $3.2 million for the Office of the Inspector General, and $1 million for loan repayment assistance. P.L. 110-289, the Housing and Economic Recovery Act of 2008 (enacted July 30, 2008), included a provision that provides $30 million for pre-foreclosure and legal counseling through a new grant program. Under the new program, the Neighborhood Reinvestment Corporation, a 10 Each year the LSC submits its own budget request to Congress. In most years, the LSC budget request is significantly higher than the amount that appears in the President’s annual budget. For FY2009, the LSC requested an appropriation of $471.4 million, a 52% increase over the President’s budget request of $311 million for the LSC. The reasons cited for the significant increase included legal problems of existing and new clients stemming from the recent crises in the mortgage and housing industries, the ongoing impact of natural disasters, and widespread domestic violence, along with recent LSC findings that there is significant unmet need among America’s poorest populations with regard to civil legal assistance. Congressional Research Service 8 . Legal Services Corporation: Background and Funding congressional chartered nonprofit organization, is required to make grants to housing counselors to hire LSC attorneys to assist homeowners who have legal issues directly related to the homeowner’s foreclosure, delinquency, or short sale.11 P.L. 110-315, the College Opportunity and Affordability Act of 2008 (enacted August 14, 2008), included a provision that authorizes $10 million for the U.S. Department of Education to distribute as loan repayment assistance grants (up to $6,000 per year, $40,000 for a lifetime) to full-time civil legal aid lawyers who agree to remain employed as such for at least three years.12 Although the loan repayment program was authorized, funding for the program has not yet been appropriated. P.L. 110-329, the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 (enacted September 30, 2008), among other things, required that the LSC continue to operate at FY2008 funding levels (i.e., $350.5 million) until March 6, 2009, or until LSC’s regular FY2009 appropriation is enacted. P.L. 111-8, the Omnibus Appropriations Act, 2009 (enacted March 11, 2009), includes $390.0 million for the LSC for FY2009. This amount is $39.5 million above the FY2008 appropriation for the LSC and $79.0 million above the Bush Administration’s FY2009 budget request for the LSC. The FY2009 appropriation for the LSC includes $365.8 million for basic field programs and required independent audits, $16.0 million for management and administration, $3.0 million for client self-help and information technology, $4.2 million for the Office of the Inspector General, and $1.0 million for loan repayment assistance. It is important to note that since FY1996, all of the LSC appropriations laws have included language stipulating the provisions restricting the activities of LSC grantees enacted in previous LSC appropriations laws.13 (See the earlier section titled “Restrictions on Activities.”) Table 2 shows LSC appropriations for FY2001-FY2009, by component of funding. FY2010 For FY2010, the Obama Administration requested $435 million for the LSC.14 This amount is $45 million (11.5%) above the FY2009 appropriation of $390 million for the LSC. The Administration’s budget request included $410.4 million for basic field programs and required independent audits; $17 million for management and grants oversight; $3.4 million for client selfhelp and information technology; $3.2 million for the Office of the Inspector General; and $1 11 12 See sections 2305 and 2401 of P.L. 110-289. See section 431 of P.L. 110-315. 13 Although the authorizing statute contains some restrictions on LSC activities, many more restrictions were added by P.L. 104-134 in 1996. Other restrictions and modifications or clarifications were added in 1997 (P.L. 105-119) and 1998 (P.L. 105-277). All LSC appropriation laws enacted after 1996 have included language referencing the restrictions in prior appropriation laws. 14 Each year the LSC submits its own budget request to Congress. In most years, the LSC budget request is significantly higher than the amount that appears in the President’s annual budget. For FY2010, the LSC requested an appropriation of $485.1 million, an 11.5% increase over the President’s budget request of $435 million for the LSC. The reasons cited for the significant increase included legal problems of existing and new clients stemming from the recent crises in the mortgage and housing industries, the ongoing impact of natural disasters, and widespread domestic violence, along with recent LSC findings that there is significant unmet need among America’s poorest populations with regard to civil legal assistance. Congressional Research Service 9 . Legal Services Corporation: Background and Funding million for loan repayment assistance. The Obama Administration also proposed that LSC restrictions on class action suits and attorneys’ fees be eliminated. For FY2010, the House Appropriations Committee approved $440 million for the LSC (H.Rept. 111-149). The House bill (H.R. 2847) provided almost 13% more than the FY2009 LSC appropriation and 1% more than the Administration’s FY2010 budget request for the LSC. The House approved $440 million for the LSC on June 18, 2009. The House voted to continue existing limitations on the use of LSC funds (and non-LSC funds) except for the restriction on the ability of LSC-funded programs to collect attorneys’ fees. The House bill also included funds for a loan repayment assistance program to help legal services programs recruit and retain talented attorneys. For FY2010, the Senate Appropriations Committee approved $400 million for the LSC. The Senate bill provides about 3% more than the FY2009 LCS appropriation and 8% less than the Administration’s FY2010 request for the LSC. The Senate bill would continue existing limitations on the use of federal funds but would eliminate the restrictions on the use of nonfederal funds except in litigation involving abortion and cases involving prisoners. Table 2. LSC: Funding for Program Components, FY2001-FY2009 ($ in millions) LSC Program Components FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 Basic field programs 309.3 310.0 308.0 316.4 312.4 308.4 330.8 332.5 365.8 Management and administration 10.8 12.4 13.2 13.0 12.8 12.7 12.7 12.5 16.0 Client self-help and information technology 6.9 4.4 3.4 1.3 1.3 1.2 2.1 2.1 3.0 Office of the Inspector General 2.2 2.5 2.6 2.6 2.5 2.5 3.0 3.0 4.2 Offset for census-based reallocations 0.0 0.0 9.4 1.8 1.8 1.8 0.0 0.0 0.0 Student loan repayment program 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 1.0 329.3 329.3 336.6 335.3 330.8 326.6 348.6 350.5 390.0 Total Source: Table prepared by the Congressional Research Service. Note: These data reflect appropriations after all rescissions; numbers may not add to total due to rounding. Congressional Research Service 10 . Legal Services Corporation: Background and Funding Distribution of LSC Funds and Non-LSC Resources LSC funds appropriated for basic field programs are distributed to the states and jurisdictions on a per capita basis, according to U.S. Bureau of the Census data15 on the number of “poor” persons in each service area.16 Grantees within each state or jurisdiction then compete among themselves for funding. Although the LSC is the largest single source of funding for the civil legal services system in the United States, it is not the only source of funding. Local legal services programs supplement their LSC grants with funds from a variety of governmental and private sources. Non-LSC funding sources include state and local grants; state Interest on Lawyers’ Trust Accounts (IOLTAs) programs;17 federal programs such as the Title XX Social Services Block Grant, the Older Americans Act, the Violence Against Women Act, and Community Development Block Grants; and private grants from entities such as the United Way, foundations, and national, state, and local bar associations. In addition, private attorneys accept referrals to provide legal services to the poor, primarily through LSC-funded pro bono programs.18 As shown in Table 3, in 2007, LSC funding accounted for about 42% of the $844.4 million spent in the United States for civil legal services for the poor.19 Table 3. Funding for LSC and Non-LSC Programs, by Jurisdiction, FY2007 State LSC Funding FY2007 Number of LSC Programs Non-LSC Funding FY2007 Total Funding LSC as a % of Total Alabama 6,463,907 1 984,747 7,448,654 86.8 Alaska 1,271,971 1 1,741,210 3,013,181 42.2 Arizona 9,916,097 3 4,573,845 14,489,942 68.4 Arkansas 3,808,626 2 1,699,733 5,508,359 69.1 California 45,808,829 11 45,180,132 90,988,961 50.3 Colorado 3,609,142 1 7,414,826 11,023,968 32.7 Connecticut 2,590,894 1 149,787 2,740,681 94.5 Delaware 625,739 1 518,862 1,144,601 54.7 District of Columbia 983,988 1 407,723 1,391,711 70.7 Florida 19,152,571 7 17,351,369 36,503,940 52.5 Georgia 9,502,812 2 13,048,243 22,551,055 42.1 15 The census data is based on the most recent decennial census—currently, the year 2000. 16 In other words, if a specific state has 12% of the U.S. poverty population, that state generally would receive about 12% of the LSC funding amount allocated for local legal services programs. 17 These funds represent interest earned on sums deposited by clients with attorneys for short periods of time. 18 In 2007, approximately 31,000 private attorneys accepted referrals to help LSC clients. 19 Legal Services Corporation, Legal Services Corporation Fact Book 2007, June 2008, http://www.lsc.gov/pdfs/ factbook2007.pdf. Congressional Research Service 11 . Legal Services Corporation: Background and Funding State LSC Funding FY2007 Number of LSC Programs Non-LSC Funding FY2007 Total Funding LSC as a % of Total Hawaii 1,598,503 2 5,057,743 6,656,246 24.0 Idaho 1,409,850 1 1,074,450 2,484,300 56.8 Illinois 11,699,140 3 16,956,750 28,655,890 40.8 Indiana 5,426,207 1 2,536,419 7,962,626 68.1 Iowa 2,369,374 1 4,873,282 7,242,656 32.7 Kansas 2,309,399 1 6,823,114 9,132,513 25.3 Kentucky 6,185,115 4 12,391,043 18,576,158 33.3 Louisiana 8,406,311 4 4,785,869 13,192,180 63.7 Maine 1,420,593 1 4,173,143 5,593,736 25.4 Maryland 3,978,010 1 18,483,060 22,461,070 17.7 Massachusetts 5,468,715 4 1,652,312 7,121,027 76.8 Michigan 9,621,410 6 12,907,858 22,529,268 42.7 Minnesota 3,695,306 5 14,893,503 18,588,809 19.9 Mississippi 5,281,120 2 2,331,820 7,612,940 69.4 Missouri 5,832,090 4 10,651,490 16,483,580 35.4 Montana 1,423,153 1 1,843,601 3,266,754 43.6 Nebraska 1,470,195 1 492,878 1,963,073 74.9 Nevada 1,987,552 1 503,142 2,490,694 79.8 691,432 1 150,436 841,868 82.1 New Jersey 6,684,595 6 43,744,148 50,428,743 13.3 New Mexico 3,458,198 1 2,342,217 5,800,415 59.6 New York 25,651,160 7 54,178,907 79,830,067 32.1 North Carolina 9,632,153 1 11,124,691 20,756,844 46.4 North Dakota 993,516 1 1,424,393 2,417,909 41.1 Ohio 10,857,758 6 46,015,263 56,873,021 19.1 Oklahoma 5,539,055 2 5,631,925 11,170,980 49.6 Oregon 3,658,517 1 4,514,758 8,173,275 44.8 Pennsylvania 11,832,331 8 25,630,759 37,463,090 31.6 Rhode Island 1,073,387 1 2,725,225 3,798,612 28.3 South Carolina 5,303,683 1 3,972,905 9,276,588 57.2 South Dakota 1,781,220 2 1,163,818 2,945,038 60.5 Tennessee 7,470,959 4 12,136,886 19,607,845 38.1 Texas 32,201,428 3 19,896,888 52,098,316 61.8 Utah 1,989,701 1 2,619,500 4,609,201 43.2 547,546 1 34,892 582,438 94.0 6,229,887 6 8,536,770 14,766,657 42.2 New Hampshire Vermont Virginia Congressional Research Service 12 . Legal Services Corporation: Background and Funding State LSC Funding FY2007 Number of LSC Programs Non-LSC Funding FY2007 Total Funding LSC as a % of Total Washington 7,375,225 1 12,967,184 20,342,409 36.3 West Virginia 2,830,468 1 3,744,827 6,575,295 43.0 Wisconsin 5,052,482 2 6,170,513 11,222,995 45.0 Wyoming 720,493 1 50,500 770,993 93.5 American Samoa 94,627 1 0 94,627 100.0 Guam 340,818 1 579,928 920,746 37.0 Micronesia 1,600,722 1 583,139 2,183,861 73.3 Puerto Rico 16,885,393 2 3,790,003 20,675,396 81.7 Virgin Islands 332,208 1 974,437 1,306,645 25.4 States and DC 334,891,813 132 484,279,359 819,171,172 40.9 Total: States, DC, and Territories 354,145,581 138 490,206,866 844,352,447 41.9 Total: Source: Table prepared by the Congressional Research Service, using data from the Legal Services Corporation, Legal Services Corporation Fact Book 2007, June 2008, http://www.lsc.gov/pdfs/factbook2007.pdf. Compilation of state and territory program data is based on information from the LSC website http://www.lsc.gov/map/ index.php. Author Contact Information Carmen Solomon-Fears Specialist in Social Policy csolomonfears@crs.loc.gov, 7-7306 Congressional Research Service 13