Yes, that is the REGULATION. It is not a law and has never been passed by Congress. The previous ICA was allowed to expire, so in 1999 AG Reno promulgated the regulation you posted.
Judge Cannon found that the Regulation violated Article II, Section 2, Clause 2 which requires principal officers to be appointed by the President and confirmed by the Senate. She also found it violated Article I, Section 9, Clause 7 related to appropriations, but I don't think that has much teeth as the DOJ has leeway in spending allocated funds.
So like I said, this has been appealed to the 11th Circuit and will probably end up at SCOTUS.