Legal Services Reform Act of 1996

Legal Services Reform Act of 1996 - Revises the Legal Services Corporation Act, including authorizing appropriations for the Legal Services Corporation for FY 1996 through 2000.

(Sec. 4) Prohibits the use of Corporation funds for redistricting activity.

(Sec. 5) Applies to the Corporation: (1) Federal criminal laws against theft, fraud, and embezzlement with respect to Corporation funds; (2) the Federal criminal statute against obstructing a Federal audit; and (3) certain provisions of the False Claims Act.

(Sec. 6) Sets forth provisions regarding: (1) restrictions on solicitation of clients; and (2) procedural safeguards for litigation.

(Sec. 8) Revises lobbying restrictions, including requiring the Corporation to ensure that Corporation funds are not used to pay for publicity or propaganda intended to support or defeat legislation.

(Sec. 9) Directs the Corporation to require each recipient of financial assistance to maintain records of time spent on cases.

(Sec. 10) Requires the board of directors of each nonprofit organization furnishing legal assistance and receiving Corporation funds to set specific priorities for the types of matters it handles.

(Sec. 11) Revises financing provisions to require that non-Federal funds received by the Corporation be accounted for and reported as receipts and disbursements separate and distinct from Corporation funds.

(Sec. 12) Prohibits the use of Corporation funds in certain cases involving eviction from public housing for drug violations.

(Sec. 13) Requires all Corporation grants and contracts to be awarded under a competitive bidding system. Sets forth provisions governing such system.

(Sec. 14) Authorizes the Corporation to provide assistance to substate regional planning and coordination agencies composed of substate areas whose governing boards are controlled by locally elected officials. Repeals provisions authorizing the Corporation to provide certain research and training and technical assistance and to serve as an information clearinghouse.

Prohibits a financial assistance recipient, or any client of such recipient, from claiming or collecting attorney fees from nongovernmental parties to litigation initiated by such client with the assistance of such recipient. Directs the Corporation to create a fund to pay defendants or clients under specified circumstances involving retaliation or harassment. Authorizes appropriations.

(Sec. 15) Sets forth restrictions on the use of Corporation funds for: (1) abortion litigation; (2) class actions against the Federal Government or any State or local government; and (3) legal assistance to aliens.

(Sec. 18) Revises provisions regarding: (1) the support or conduct of training programs; and (2) fee-generating cases.

(Sec. 19) Directs the Corporation to study the feasibility of using client copayments to assist in setting service priorities. Authorizes the Corporation to adopt a permanent system of client copayments for its legal assistance programs.

(Sec. 21) Prohibits the use of Corporation funds involving: (1) efforts to reform welfare; and (2) prisoner litigation.

(Sec. 23) Directs the President (currently, the board) to appoint the president of the Corporation.

(Sec. 24) Prohibits the creation or use of "alternative corporations."

(Sec. 25) Limits pay for officers and employees of the Corporation to the rate of level III (currently, V) of the Executive Schedule.

(Sec. 26) Requires the Corporation to maintain its principal office in the Washington, D.C. metropolitan area (currently, in the District of Columbia).

(Sec. 27) Specifies that "attorney client privilege" protects only a communication made in confidence to an attorney by a client for the purpose of seeking legal advice and does not protect from disclosure to Federal auditors.