Workforce Investment Act--Equal Treatment in Department of Labor
Programs for Faith-Based Community Organizations; Protection of Religious
Liberty, and Limitation on Employment of Participants; Final Rules
[7/12/2004]
[[Page 41881]]
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Part II
Department of Labor
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Employment and Training Administration
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20 CFR Parts 667 and 670
29 CFR Parts 2 and 37
Workforce Investment Act--Equal Treatment in Department of Labor
Programs for Faith-Based Community Organizations; Protection of
Religious Liberty, and Limitation on Employment of Participants; Final
Rules
[[Page 41882]]
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Parts 667 and 670
Office of the Secretary
29 CFR Parts 2 and 37
RIN 1290-AA21
Equal Treatment in Department of Labor Programs for Faith-Based
and Community Organizations; Protection of Religious Liberty of
Department of Labor Social Service Providers and Beneficiaries
AGENCY: Employment and Training Administration and the Office of the
Secretary, Labor.
ACTION: Final rule.
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SUMMARY: Consistent with constitutional guidelines, this final rule
clarifies that faith-based and community organizations may participate
in the United States Department of Labor (DOL or the Department) social
service programs without regard to the organizations' religious
character or affiliation, and are able to apply for and compete on an
equal footing with other eligible organizations to receive DOL support.
In addition, in order to consolidate the Department's regulations on
religious activities, this final rule revises the Employment and
Training Administration's (ETA) regulation on religious services at Job
Corps centers and the Department's Workforce Investment Act of 1998
(WIA) regulations relating to the use of WIA Title I financial
assistance to support employment and training in religious activities,
and employment at specified locations defined with reference to certain
religious activities. The U.S. Department of Labor supports the
participation of faith-based and community organizations in its social
service programs.
DATES: Effective Date: August 11, 2004.
FOR FURTHER INFORMATION CONTACT: On the Office of the Secretary's
general regulations, 29 CFR part 2, contact: Rhett Butler, Associate
Director for Policy Development, DOL Center for Faith-Based and
Community Initiatives (CFBCI), (202) 693-6450. On 20 CFR part 667,
contact Maria K. Flynn, Acting Administrator, Office of Policy
Development, Evaluation and Research, Employment and Training
Administration, (202) 693-3700. On 20 CFR 670.555, contact: Grace
Kilbane, Administrator of the National Office of Job Corps, (202) 693-
3000. On 29 CFR 37.6, contact Annabelle T. Lockhart, Director, Civil
Rights Center (CRC), (202) 693-6500. Please note these are not toll-
free numbers. Individuals with hearing or speech impairments may access
these telephone numbers via TTY by calling the toll-free Federal
Information Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background--The March 9, 2004 Proposed Rule
On March 9, 2004, the Department published a proposed rule (69 FR
11234) to amend the Department's general regulations to make clear that
faith-based and community organizations may participate in the
Department's social service programs, including as recipients of
Federal financial assistance. The proposed rule also set forth
conditions for seeking, receiving, and using DOL support related to DOL
programs. The proposed rule was part of the Department's effort to
fulfill its responsibilities under two Executive Orders issued by
President George W. Bush. The first of these Orders, Executive Order
13198 (66 FR 8497), published in the Federal Register on January 31,
2001, created Centers for Faith-Based and Community Initiatives in five
cabinet departments--Education, Health and Human Services, Housing and
Urban Development, Justice, and Labor--and directed these Centers to
identify and eliminate regulatory, contracting, and other programmatic
obstacles to the equal participation of faith-based and community
organizations in the provision of social services by these Departments.
The second of these Executive Orders, Executive Order 13279, published
in the Federal Register on December 16, 2002 (67 FR 77141), charged
executive branch agencies to give equal treatment to faith-based and
community groups that apply for Federal financial assistance to meet
social needs in America's communities. In the Order, President Bush
called for an end to discrimination against faith-based organizations
and ordered implementation of these policies throughout the executive
branch in a manner consistent with the First Amendment to the United
States Constitution. He further directed that faith-based organizations
be allowed to retain their religious autonomy over their internal
governance and composition of boards, and over their display of
religious art, icons, scriptures, or other religious symbols, when
participating in Federally-financed programs. The Administration
believes that there should be an equal opportunity for all
organizations--both faith-based and otherwise--to participate as
partners in Federal programs.
Consistent with the President's initiative, the Department's
proposed rule of March 9, 2004, proposed to amend the Department's
general regulations as well as the specific regulations governing Job
Corps and implementing the Workforce Investment Act. The objective of
the proposed rule was to ensure that DOL-supported social service
programs were open to all qualified organizations, regardless of their
religious character, and to establish clearly the proper uses of DOL
support and the conditions for receipt of such support. In addition,
this proposed rule was designed to ensure that the implementation of
the Department's social service programs would be conducted in a manner
consistent with the requirements of the Constitution, including the
Religion Clauses of the First Amendment. The proposed rule had the
following specific objectives:
1. Participation by faith-based organizations in the Department of
Labor's programs. The proposed rule clarified that organizations are
eligible to participate in DOL social service programs without regard
to their religious character or affiliation, and that organizations
must not be excluded from competing for DOL support simply because they
are faith-based. Specifically, the proposed rule included regulatory
provisions specifying that faith-based organizations would be eligible
to compete for DOL support on the same basis, and under the same
eligibility requirements, as all other organizations. The proposed rule
also included provisions designed to ensure that DOL, DOL social
service providers, and State and local governments administering DOL
support would be prohibited from discriminating for or against
organizations on the basis of religion, religious belief, or religious
character in the administration or distribution of DOL support,
including grants, contracts, and cooperative agreements.
2. Inherently religious activities. The proposed rule included
requirements related to inherently religious activities in DOL-
supported social service programs. Specifically, under the proposed
regulatory provisions, an organization could not use direct DOL support
\1\ for inherently religious
[[Page 41883]]
activities, such as worship, religious instruction, or proselytization.
If the organization engaged in such activities, the proposed provisions
required the organization to offer those activities separately in time
or location from the social service programs receiving direct DOL
support, and participation by program beneficiaries in any such
inherently religious activities would have to be voluntary. The
proposed requirements ensured that direct DOL support would not be used
to support inherently religious activities. Such support could not be
used, for example, to conduct prayer meetings, worship services, or any
other activity that is inherently religious.
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\1\ As in the proposed rule, the term ``direct DOL support'' is
used here to refer to DOL support provided directly to a religious
or other non-governmental organization within the meaning of the
Establishment Clause of the First Amendment. For example, direct DOL
support may occur where the Federal Government, a State or local
government administering DOL support, or a DOL intermediary social
service provider selects an organization and obtains the needed
services straight from the organization (e.g., via a grant or
cooperative agreement).
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The proposed rule clarified that this restriction would not mean
that DOL social service providers could not engage in inherently
religious activities, but only that such providers could not use direct
DOL support for these activities. Under the proposed rule, such
providers would have to take steps to separate in time or location
their inherently religious activities from the services they offer with
direct DOL support. The proposed rule further provided that these
restrictions on inherently religious activities would not apply where
DOL support was indirectly provided. The proposed rule clarified that
indirect DOL support referred to DOL support that is indirect within
the meaning of the Establishment Clause of the First Amendment to the
Constitution. An organization receives indirect support if, for
example, a program beneficiary redeems a voucher, coupon, certificate,
or similar mechanism that was provided to that individual using DOL
financial assistance under a program that was designed to give that
individual a genuine and independent private choice among providers or
program options.
In addition, the proposed rule clarified that the legal
restrictions applied to inherently religious activities in DOL social
service programs within correctional facilities would sometimes be
different from the legal restrictions that are applied to other DOL-
supported social service programs, because the degree of government
control over correctional environments sometimes warrants affirmative
steps by prison officials, in the form of chaplaincies and similar
programs, to ensure that prisoners have opportunities to exercise their
religion.
The proposed rule also recognized that the legal restrictions
applied to inherently religious activities in other DOL-supported
social service programs under extensive government control, for example
isolated residential Job Corps facilities, would sometimes be different
from the legal restrictions applied to other DOL-supported social
service programs. These restrictions would differ because the extensive
government control over the environment of these DOL social service
programs sometimes would require that affirmative steps be taken by
program officials to ensure that the beneficiaries of these programs
have the opportunity to exercise their religion. The proposed rule
emphasized that any participation in such inherently religious
activities would have to be voluntary and that nothing in the proposed
rule was intended to restrict the exercise of rights or duties
guaranteed by the Constitution. For example, the proposed rule
specified that program officials, although permitted to impose
reasonable time, place, and manner restrictions, would not be allowed
to restrict program beneficiaries' ability to freely express their
views and to exercise their right to religious freedom. In addition,
the proposed rule specified that residential facilities receiving DOL
support would be required to permit residents to engage in voluntary
religious activities, including holding religious services, at such
facilities (although reasonable time, place, and manner restrictions
would be permitted).
3. Independence of faith-based organizations. The proposed rule
also clarified that a faith-based organization that is a DOL social
service provider or that participates in DOL social service programs
would retain its independence and could continue to carry out its
mission, including the definition, development, practice, and
expressions of its religious beliefs, although no organization, faith-
based or otherwise, could use direct DOL support for any inherently
religious activities, such as worship, religious instruction, or
proselytization. Among other things, the proposed rule included
provisions that explicitly stated that a faith-based organization could
use space in its facilities to provide DOL-supported social services
without removing religious art, icons, scriptures, or other religious
symbols. In addition, under the proposed rule, a DOL-supported faith-
based organization could retain its name (even if the name made a
religious reference), select its board members and otherwise govern
itself on a religious basis, and include religious references in its
mission statements and other governing documents.
4. Nondiscrimination in providing assistance. The proposed rule
provided that DOL, DOL social service intermediary providers, DOL
social service providers in their use of direct DOL support, and State
and local governments could not, in providing social services
(including outreach for such services), discriminate for or against a
current or prospective program beneficiary on the basis of religion,
religious belief, or absence thereof. The proposed rule clarified that
organizations receiving DOL support indirectly (for example, as a
result of the genuine and independent private choice of a beneficiary
of a program offering choice among providers or program options) would
not be prohibited from offering assistance that integrates faith and
social services and requires participation in all aspects of the
organizations' programs and activities, including the religious
aspects.
5. Assurance requirements. The proposed rule also prohibited, and
directed the removal of, provisions in the Department's grant
documents, agreements, covenants, memoranda of understanding, policies,
or regulations that require only faith-based organizations applying for
or receiving DOL support to provide assurances that they would not use
such support for inherently religious activities. Under the proposed
rule, all DOL social service providers, as well as State and local
governments administering DOL support, would be required to carry out
all DOL-supported activities in accordance with all program
requirements and other applicable requirements governing the conduct of
DOL-supported activities, including those requirements prohibiting the
use of direct DOL support for inherently religious activities. In
addition, to the extent that provisions in grant documents, agreements,
covenants, memoranda of understanding, policies, or regulations used by
DOL, or by a DOL social service intermediary provider or a State or
local government administering DOL support, disqualify organizations
from participating in DOL's programs because such organizations are
motivated or influenced by religious faith to provide social services,
or because of the organizations' religious character or affiliation,
the proposed rule removed such restrictions, which are inconsistent
with governing law.
[[Page 41884]]
II. Discussion of Comments Received on the Proposed Rule
The Department received comments on the proposed rule from 7
commenters--two individuals, four civil or religious liberties
organizations, and one State agency receiving financial assistance
under the Workforce Investment Act (WIA). Some comments were generally
supportive of the proposed rule; others were critical. The following is
a summary of the comments, and the Department's responses.
Participation by Faith-Based Organizations in Department of Labor
Social Service Programs
Several commenters expressed appreciation and support for the
Department's efforts to clarify the rules governing participation of
religious organizations in its programs. Two commenters commended DOL,
in particular, for explicitly stating that DOL, DOL social service
providers, and State and local governments administering DOL-supported
social service programs may not discriminate either for or against
religious providers.
Other commenters disagreed with the proposed rule, arguing that it
would allow Federal financial assistance to be given to ``pervasively
sectarian'' organizations in violation of what the commenters described
as a constitutional principle that government may not fund programs
that are so permeated by religion that their secular side cannot be
separated from the sectarian. These commenters maintained that the rule
places no limitations on the kinds of religious organizations that can
receive financial assistance, and they requested that ``pervasively
sectarian'' organizations be barred from receiving such assistance from
the Department.
We do not agree that the Constitution requires the Department to
assess the overall religiousness of an organization and deny financial
assistance to organizations that are ``pervasively sectarian.'' Rather,
faith-based (and other) organizations that receive direct DOL support
must not use such support for inherently religious activities, and they
must ensure that such religious activities are separate in time or
location from services directly supported by the Department and that
participation in such activities by program beneficiaries is voluntary.
Furthermore, under the proposed rule, such religious organizations are
prohibited from discriminating for or against program beneficiaries on
the basis of religion or religious belief, and participating
organizations that violate these requirements are subject to applicable
sanctions and penalties. The regulations would thus ensure that direct
DOL support is not used for inherently religious activities, as
required by current case law.
Moreover, the Supreme Court's ``pervasively sectarian'' doctrine--
which held that there are certain religious institutions in which
religion is so pervasive that no government aid may be provided to
them, because their performance of even ``secular'' tasks will be
infused with religious purpose--no longer enjoys the support of a
majority of the Court. Four Justices expressly abandoned it in Mitchell
v. Helms, 530 U.S. 793, 825-29 (2000) (plurality opinion), and Justice
O'Connor's opinion in that case, joined by Justice Breyer, set forth
reasoning that is inconsistent with its underlying premises, see id. at
857-58 (O'Connor, J., concurring in judgment) (requiring proof of
``actual diversion of public support to religious uses''). Thus, six
members of the Court have rejected the view that aid provided to
religious institutions will invariably advance the institutions'
religious purposes. That view is the foundation of the ``pervasively
sectarian'' doctrine. The Department therefore believes that under
current precedent, the Department may provide DOL support to all social
service providers, without regard to religion and without criteria that
would require providers to abandon their religious expression or
character. As a result, the Department declines to make the requested
change.
Another commenter expressed concern that section 2.32(a) of the
proposed rule failed to circumscribe how and when religion could be
accommodated. Section 2.32(a) states in pertinent part: ``DOL, DOL
social service providers, as well as State and local governments
administering DOL support, must not discriminate for or against an
organization on the basis of the organization's religious character or
affiliation, although this requirement does not preclude DOL, DOL
social service providers, or State and local governments administering
DOL support from accommodating religion in a manner consistent with the
Establishment Clause.'' The commenter suggested that the Department
revise the rule to set limits on permissible accommodation, for
instance, by stating that accommodation must be handled in an even-
handed manner and not favor some faiths over others; by stating that
accommodation is permissible only if it removes a substantial burden on
religious exercise; and by ``prohibiting accommodations to religion
that would vitiate the essence of the program, or which would work a
hardship on participants.''
The Department does not agree that the requested change is
necessary. The purpose of the rule is to clarify that all
organizations, both faith-based and otherwise, are eligible to
participate in DOL social service programs without regard to their
religious character or affiliation and to establish clearly the proper
uses to which DOL support could be put and the conditions for receipt
of such support. The rule is designed to ensure that the implementation
of the Department's social service programs will be conducted in a
manner consistent with the requirements of the Constitution, including
the Religion Clauses of the First Amendment. All accommodations
provided to religious individuals or organizations must be done within
the confines of law. Such law includes statutory program requirements
as well as the conditions set forth in this rule. The statement in the
rule concerning accommodation simply clarifies that otherwise valid
religious accommodations do not violate the religious nondiscrimination
requirement of the rule.
One commenter requested that the Department revise Sec. 2.32(c) to
clarify that an organization may not be discriminated against because
it lacks a faith-based component. This section as proposed stated in
pertinent part: ``A grant document, agreement, covenant, memorandum of
understanding, policy, or regulation that is used by DOL, a State or
local government, or a DOL social service intermediary provider in
administering a DOL social service program must not disqualify
religious organizations from receiving DOL support or participating in
DOL programs on the grounds that such organizations are motivated or
influenced by religious faith to provide social services, or on the
grounds that such organizations have a religious character or
affiliation.''
We believe the commenter's concerns are already addressed by Sec.
2.32(a), which provides, inter alia, that ``DOL, DOL social service
intermediary providers, as well as State and local governments
administering DOL support, must not discriminate for or against an
organization on the basis of the organization's religious character or
affiliation'' (emphasis added). However, we have modified the language
of the final rule to further address this concern and to make even more
clear that it is impermissible to disqualify an organization from
receiving DOL
[[Page 41885]]
support based on the organization's religious faith, character, or
affiliation, or because such organization lacks a religious component.
Section 2.32(c) of the final rule reads: ``A grant document, agreement,
covenant, memorandum of understanding, policy, or regulation that is
used by DOL, a State or local government, or a DOL social service
intermediary provider in administering a DOL social service program
must not disqualify organizations from receiving DOL support or from
participating in DOL programs on the grounds that such organizations
are motivated or influenced by religious faith to provide social
services, have a religious character or affiliation, or lack a
religious component.''
Inherently Religious Activities
Some commenters suggested that the proposed rule does not
sufficiently detail the scope of religious content that must be omitted
from programs receiving DOL support. For example, two commenters
suggested that the explanation given of ``inherently religious
activities'' as ``worship, religious instruction, or proselytization''
is unclear or incomplete. Relatedly, one commenter suggested that the
proposed rule would authorize conduct that would impermissibly convey
the message that government endorses religious content. Another
commenter suggested that the Department modify the proposed rule to
make clear that the government may not disburse public funds to
organizations that convey religious messages or in any way advance
religion. Another commenter suggested that the rule define
``participation'' to provide guidance as to whether ``compelled but
passive presence at religious activities * * * constitute[s] coerced
participation.'' Finally, one commenter requested clarification whether
it would be permissible for a DOL social services provider to engage in
inherently religious activity at a beneficiary's request before or
following the provision of social services that receive direct
financial assistance.
The Department disagrees with these comments and declines to make
the requested changes. Concerning the rule's definition of ``inherently
religious activities,'' it would be difficult, if not impossible, to
establish a complete list of all inherently religious activities.
Inevitably, a regulatory definition would exclude some inherently
religious activities while including activities that arguably may not
be inherently religious. Rather than attempt to establish an exhaustive
regulatory definition, the Department has decided to retain the
language of the proposed rule, which provides examples of prohibited
activities. This approach is consistent with Supreme Court precedent,
which likewise has not comprehensively defined inherently religious
activities. In response to the suggestion that the rule will indicate
or create the appearance that the Department endorses religious
content, it again merits emphasis that the rule forbids the use of
direct government assistance for inherently religious activities and
states that any such activities must be voluntary for participants and
separated in time or location from activities directly supported by the
Department. As to the suggestion that the government must exclude from
its programs those organizations that convey religious messages or
advance religion with their own funds, the Department finds no
constitutional support for this view. As noted above, the Supreme Court
has held that the Constitution forbids the use of direct Federal
financial assistance for inherently religious activities, but the Court
has rejected the presumption that religious organizations will
inevitably divert such assistance for their own religious activities.
The Department likewise rejects the view that faith-based organizations
cannot be trusted to fulfill their written promises to adhere to grant
or contract requirements.
Moreover, for reasons similar to those articulated above regarding
``inherently religious activities,'' the Department does not believe
that it would be appropriate to provide a more detailed definition of
``participation.'' Nonetheless, we reaffirm that a beneficiary's
participation in any religious activities offered by a recipient of DOL
support must be entirely voluntary and further, that such activities
must be offered separately in time or location from social service
programs receiving direct DOL support. We recommend that DOL social
service providers, including State and local governments administering
DOL-supported programs, help to ensure that beneficiaries and
prospective beneficiaries of their programs understand their rights by
having literature available for the beneficiaries explaining their
rights.
Finally, in response to commenter's request for further
clarification of the ``separate, in time or location'' requirement, the
Department declines to revise this portion of the rule, because the
Department does not believe that it is ambiguous or necessitates
additional regulation for proper adherence. Regarding the example posed
by the commenter, the Department believes it would be permissible under
the rule for staff of a DOL-supported social services provider to
engage in inherently religious activity with a beneficiary at a
beneficiary's request before or after the provision of social service
activities directly supported by DOL. Such activity would be permitted
because it would be voluntary (because it was at the beneficiary's
request) and separate in time from any social service activity
receiving direct DOL support (because it took place before or after,
but not during, the social service activities directly supported by
DOL). Under the rule, an organization receiving direct DOL support is
responsible for maintaining a distinction between the social service
activities directly supported by DOL and any privately-supported
inherently religious activities. Of course, no direct DOL support can
be used for inherently religious activities.
Voucher-Style Programs Under the Rule
Two commenters claimed that the proposed rule would authorize the
use of voucher programs to provide assistance to faith-based
organizations without instituting adequate ``constitutional
safeguards,'' and requested that the rule be revised to comply with the
framework instituted by Zelman v. Simmons-Harris, 536 U.S. 639 (2002).
These commenters emphasized the need for program beneficiaries to have
a ``real choice'' of their social service provider and suggested there
was ``no * * * social service structure in place to ensure a real
choice.'' One commenter requested clarification whether inherently
religious activities conducted by a service provider receiving both
direct and indirect support must be separate in time and location from
DOL program services. This commenter also requested reconciliation
between, as the commenter described it, the rule's requirement that
service providers receiving vouchers must satisfy ``all legal and
programmatic requirements'' (see 2.32(c) and 2.33(c), both referring to
``all applicable legal and programmatic requirements'') and the rule's
implication that the Department may ``dispense with programmatic
requirements where doing so relieves a substantial burden on religious
practice.'' Last, one commenter requested a rule change that would make
the nondiscrimination provision of Sec. 2.33(a) applicable to service
providers receiving indirect support.
The Department respectfully declines to adopt the recommendations
of the commenters requesting incorporation of
[[Page 41886]]
additional requirements by regulation. The proposed rule clearly states
that any organization receiving indirect DOL support, whether through a
voucher-style program or other qualifying program offered by the
Department, must comply with Federal law. Such law includes
constitutional requirements. The Department thus believes that the
proposed rule adequately addresses these commenters' constitutional
concerns.
Regarding the inquiry whether inherently religious activities
conducted by a social service provider receiving both direct and
indirect support must be separate in time and location from DOL program
services, Sec. 2.33(b)(1) of the rule plainly prohibits service
providers from using direct DOL support to conduct inherently religious
activities. Using any direct support to conduct such activities would
violate this prohibition, even if the organization also received
indirect support. Religious activity need not be restricted, however,
when related to services (or part of programs) that receive only
indirect DOL support.
The Department also disagrees with the suggestion that the rule is
inconsistent in requiring faith-based organizations to meet applicable
legal and programmatic requirements but also permitting constitutional
accommodations for certain religious practices. One fundamental purpose
of this rule is to allow organizations to be eligible for Department
programs without regard to their religious character or affiliation and
to prevent the exclusion of organizations from competing for DOL
support simply because of their religious character. Thus, faith-based
organizations are eligible to compete for DOL support on the same
basis, and under the same eligibility requirements, as all other
organizations. The statement in the proposed rule that indicated
accommodations to religion may be permitted, ``in a manner consistent
with the Establishment Clause,'' does not signify that discrimination
against or preferential treatment for religion is permissible, but
rather acknowledges the special circumstances involved when DOL
provides support to religious organizations. Necessarily included
within these special circumstances are any accommodations for religious
practices that are consistent with the Free Exercise and Establishment
Clauses of the Constitution.
The Department also disagrees with the commenter's request to
extend the proposed rule's nondiscrimination provision (Sec. 2.33(a))
to religious organizations receiving indirect DOL support. As an
initial matter, this final rule does not alter any nondiscrimination
provisions of existing statutes, including statutes governing programs
providing DOL support. See section of preamble entitled Applicability
and Notice of Nondiscrimination Requirements. Thus, to the extent that
such statutes restrict the activities of indirectly funded
organizations, those restrictions remain in effect under this rule.
Questions regarding the applicability of these other statutes may be
addressed to the appropriate DOL program official or the DOL's Civil
Rights Center. See Sec. 2.35 of this final rule. Additionally, the
religious freedom of beneficiaries in a program receiving indirect
support is protected by the guarantee of genuine and independent
private choice. Officials administering public support under a program
providing indirect assistance have an obligation to ensure that every
eligible applicant receives services from some provider, and no
beneficiary may be required to receive services from a provider to
which the beneficiary has a religious objection. In other words, DOL-
supported vouchers and other mechanisms for providing indirect support
must be available to all participants regardless of their religious
belief, and those who object to a religious provider have a right to
services from some alternative provider.
Exceptions for Chaplains and Certain DOL-Supported Social Service
Programs From the Restriction on Direct Funding of ``Inherently
Religious'' Activities
Some commenters objected to the exception from the ``inherently
religious activities'' restrictions for religious or other
organizations assisting chaplains in carrying out their duties in
prisons, detention facilities, or community correction centers. Others
criticized the rule for excepting certain DOL-supported social service
programs--i.e., those that involve a high degree of government control
over the program environment--from the restriction on direct financial
assistance of inherently religious activities, asserting that there is
no legal basis for such an exception. One commenter suggested modifying
the proposed rule to clarify that religious accommodation at remote Job
Corps centers must be available to all participants and not limited to
participants of dominant religions. Still another commenter criticized
the rule for lacking clarity, and expressed concern that too much
discretion was being given to the government in determining which
programs have a high degree of government control.
The Department respectfully disagrees with these comments. As noted
in the proposed rule, the legal restrictions that apply to religious
programs within correctional facilities will sometimes be different
from legal restrictions that govern other Department programs. That is
because correctional institutions are heavily regulated, and this
extensive government control over the prison environment means that
prison officials must sometimes take affirmative steps, in the form of
chaplaincies and similar programs, to provide an opportunity for
prisoners to exercise their religion. Without such efforts, religious
freedom would not exist for Federal prisoners. See Cruz v. Beto, 450
U.S. 319, 322 n.2 (1972) (explaining that ``reasonable opportunities
must be afforded to all prisoners to exercise the religious freedom
guaranteed by the First and Fourteenth Amendments without fear of
penalty''); Abington School District v. Schempp, 374 U.S. 203, 299
(1963) (Brennan, J., concurring) (observing that ``hostility, not
neutrality, would characterize the refusal to provide chaplains and
places of worship for prisoners . . . cut off by the State from all
civilian opportunities for public communion''). Of course, religious
activities must be voluntary for the inmates.
Sometimes the activities of chaplains and those assisting them will
be inherently religious. For example, a chaplain might conduct a
voluntary worship service or administer sacraments. The rule does not
effect any change in the professional or legal responsibilities of
chaplains or those persons or organizations assisting them. Nor does it
diminish the fact that chaplains' duties often include the provision of
secular counseling. Rather, the rule is intended simply to make clear
that the rule's otherwise-applicable restrictions on the use of direct
DOL support for inherently religious activities do not apply to
chaplains in correctional facilities or those functioning in similar
roles. Accordingly, the rule as stated reflects the law and requires no
change.
For similar reasons, the legal restrictions that apply to religious
activities within some DOL-supported social service programs, such as
isolated residential Job Corps facilities, may sometimes be different
from the legal restrictions that govern other DOL programs. This is
because where there is extensive government control over the
environment of a DOL-supported social service program, like an isolated
residential Job Corps facility, program officials must sometimes take
affirmative steps, in the form of access to ministers and similar
programs, to ensure that program beneficiaries may
[[Page 41887]]
exercise their religious freedom. Cf. Katcoff v. Marsh, 755 F.2d 223,
234 (2d Cir. 1985) (finding it ``readily apparent'' that government is
obligated by the First Amendment to make religion available to members
of the Army who otherwise would not have access to their religion
because they are often in isolated areas without access to religious
opportunities). Without such efforts, religious freedom would not exist
for these DOL program beneficiaries. Of course, participation in such
activities must be voluntary. In response to the suggestion that the
rule be modified to clarify that any religious accommodation at Job
Corps centers must not be limited to participants from dominant faiths,
the Department rejects the suggestion as unnecessary. Of course,
religious activities on Job Corps Centers must be permitted for all
beneficiaries of such DOL programs regardless of faith. The rule
already provides that there can be no ``discriminat[ion] for or against
a current or prospective program beneficiary on the basis of religious
or religious belief.'' The Department believes that the proposed rule
requires no change in this regard.
Applicability and Notice of Nondiscrimination Requirements
Three commenters suggested that the rule should explain the scope
of applicable independent statutory provisions requiring grantees not
to discriminate on the basis of religion, rather than simply referring
grantees to appropriate Department program offices. One commenter
further suggested that the proposed rule be amended to provide specific
directions on which programs statutorily bar religious discrimination.
The Department understands that organizations participating in DOL
programs need to be aware of such provisions, but declines to adopt the
suggested recommendation because the Department believes such
information is most easily obtained and best explained by the
appropriate Department offices. The purpose of this rulemaking is to
eliminate undue administrative barriers that the Department has imposed
to the participation of religious organizations in Department programs;
it is not to alter existing statutory requirements, which apply to
Department programs to the same extent that they applied under the
prior rule.
State and Local Diversity Requirements and Preemption
Two commenters expressed concern that the proposed rule will exempt
religious organizations from State and local diversity and
nondiscrimination requirements. Both commenters suggested that the
proposed rule be modified to provide that State and local laws will not
be preempted by the rule. Conversely, one commenter indicated that the
rule should clearly state that it preempts all such State and local
requirements.
The requirements that govern financial assistance under the
Department programs at issue in these regulations do not address
preemption of State or local diversity or nondiscrimination laws.
Federal financial assistance, however, carries Federal obligations. The
Federal obligations continue to be applicable even when Federal
financial assistance is first given to the States or localities through
block grants and the latter are then responsible for disbursing the
Federal financial assistance. No organization is required to apply for
assistance under these programs, but organizations that apply and are
selected for assistance must comply with the applicable legal and
programmatic requirements. As discussed below, these Federal
requirements apply not only to Federal financial assistance but also to
State matching funds and to State funds that are commingled with the
Federal assistance.
Applicability of Rule to State, Local, and ``Commingled'' Funds
One commenter stated that the proposed rule was unclear on whether
it applied to funds supplied by the States. Two commenters stated that
the Department lacked the statutory or constitutional authority to
require States to waive, for their own funds, State law that is
inconsistent with the rule. A third commenter requested a rule change
that would make State matching funds that are not commingled subject to
the rule's requirements.
The Department disagrees with these objections, but has modified
the regulatory text slightly for clarification. The rule makes clear
that when States and local governments voluntarily choose to contribute
their own funds to supplement program activities, they have the option
of commingling their funds with Federal funds or to separate out their
funds from Federal funds. The rule applies to State funds in the former
instance, but not the latter. To the extent a Department program may
explicitly require that Federal rules apply to State matching funds (or
other grantee contributions) or may require State matching funds to be
part of the program grant budget, these State matching funds are
considered to be commingled and thus subject to the requirements of
this rule. The Department also disagrees that it lacks statutory or
constitutional authority to require States to comply with this rule for
commingled State funds when State law is inconsistent with the rule.
Neither States nor localities are obligated to participate in
Department programs, but should they choose to do so, they must comply
with Federal requirements. Valid Federal requirements may be imposed
through, among other means, statute or agency rulemaking, as was done
here. And, of course, where no statute requires commingling of funds,
States remain free to separate their funds from Federal funds, and
Federal requirements do not apply to segregated State funds.
Organizations' Display of Religious Art or Symbols
Three commenters objected to the provisions allowing faith-based
organizations conducting DOL-supported social service programs in their
facilities to retain religious art, icons, scriptures, or other
religious symbols in their facilities.
The Department disagrees with these comments. A number of Federal
statutes affirm the principle embodied in this rule. See, e.g., 42
U.S.C. 290kk-1(d)(2)(B). Moreover, for no other service providers do
Department regulations prescribe the types of artwork or symbols that
may be placed within the structures or room in which DOL-supported
social services are provided. In addition, a prohibition on the use of
religious icons would make it more difficult for many religious
organizations to participate in Department programs than other
organizations by forcing them to procure additional space. It would
thus be an inappropriate and excessive restriction, typical of the
types of regulatory barriers that this final rule seeks to eliminate.
Consistent with constitutional church-state guidelines, a religious
organization that participates in Department programs retains its
independence and may continue to carry out its mission, although it
must not use direct DOL support to support any inherently religious
activities. Accordingly, this final rule continues to provide that
religious organizations may use space in their facilities to provide
DOL-supported services, without removing religious art, icons,
scriptures, or other religious symbols.
Religious Freedom Restoration Act
One commenter requested that the Department include language in the
regulation stating that the Religious
[[Page 41888]]
Freedom Restoration Act (``RFRA''), 42 U.S.C. 2000bb et seq., may
provide relief from otherwise applicable statutory provisions
prohibiting employment discrimination on the basis of religion. The
commenter noted that, for example, the Department of Health and Human
Services has recognized RFRA's ability to provide relief from certain
employment nondiscrimination requirements in the final regulations it
promulgated governing its substance abuse and mental health programs
(e.g., 42 CFR 54.6).
The Department notes that RFRA, which applies to all Federal law
and its implementation, 42 U.S.C. 4000bb-3, 4000bb-2(1), is applicable
regardless of whether it is specifically mentioned in this rule.
Whether a party is entitled to an exemption or other relief under RFRA
simply depends upon whether the party satisfies the RFRA's statutory
requirements. The Department therefore declines to adopt this
recommendation at this time.
Recognition of Religious Organizations' Title VII Exemption
The Department received three comments expressing views on the
rule's provision that, absent statutory authority to the contrary,
religious organizations do not forfeit their Title VII exemption by
receiving financial assistance from the Department. One commenter
approved of the retention of the Title VII exemption, but urged
renaming the section with a more expansive title, such as ``Preserving
the Freedom of Faith-Based Organizations in Employment Decisions.'' Two
commenters stated that the rule ``improperly extends [the] Title VII''
exemption because ``Congress has never authorized [the] exemption'' for
DOL programs. These commenters further assert that providing Federal
financial assistance for the provision of social services to an
organization that considers religion in its employment decisions is
unconstitutional.
The Department disagrees with the objections to the rule's
recognition that a religious organization does not forfeit its Title
VII exemption when administering DOL-supported social services. As an
initial matter, applicable statutory nondiscrimination requirements are
not altered by this rule. Congress establishes the conditions under
which religious organizations are exempt from Title VII. This rule
simply recognizes that the Title VII exemption, including its
limitations, is fully applicable to Federally-assisted organizations
unless Congress says otherwise.
As to the suggestion that the Constitution restricts the government
from providing support for social services to religious organizations
that consider faith in hiring, that view does not accurately represent
the law. As noted below, the employment decisions of organizations that
receive extensive public financial assistance are not attributable to
the State, see Rendell-Baker v. Kohn, 457 U.S. 830 (1982), and it has
been settled for more than 100 years that the Establishment Clause does
not bar the provision of direct Federal grants to organizations that
are controlled and operated exclusively by members of a single faith.
See Bradfield v. Roberts, 175 U.S. 291 (1899); see also Bowen v.
Kendrick, 487 U.S. 589, 609 (1988). Finally, the Department notes that
allowing religious organizations to consider faith in hiring when they
receive government support is much like allowing a Federally-supported
environmental organization to hire those who share its views on
protecting the environment--both types of organization are allowed to
consider ideology and missions, which improves the organizations'
effectiveness and preserves their integrity. Thus, the Department
declines to amend the final rule to require religious organizations to
forfeit their Title VII rights.
The Department also rejects the request to give this section a more
expansive title. The section relates most directly to the retention of
the Title VII exemption, and the proposed title accurately reflects the
section's scope and purpose.
Nondiscrimination in Providing Assistance
Commenters have requested a number of rule changes that would
provide express protections for beneficiaries who object to the
religious character of an assigned service provider. One commenter
requested a revision to make clear that the right to religious freedom
includes the right to be free from religion. Other commenters have
requested provisions that would require notice to beneficiaries that
they may object to a religious service provider and obtain a secular
alternative; that participation in religious activity is voluntary, and
pressure or coercion, even subtly applied, is prohibited; and that the
failure to participate in religious activities will not impact the
receipt of social services. These commenters additionally requested the
creation of a grievance process and remedies for violations of these
rights.
The Department declines to adopt these recommendations, because it
believes that the rule's existing language prohibiting organizations
from discriminating for or against program beneficiaries on the basis
of religion or religious belief encompasses beneficiaries who hold no
religious belief or who desire to be free of religion. Such a
prohibition is straightforward and requires no further elaboration. In
addition, the rule provides that organizations may not use direct DOL
support for inherently religious activities and that any such
activities must be offered separately in time or location and must be
voluntary for program beneficiaries. These requirements further protect
the rights of program beneficiaries. The Department also declines to
adopt the recommendation that the rule create a grievance process that
is specific to the requirements contained in this rule, because
traditional channels of airing grievances or filing complaints are
already generally available.
Assurance Requirements
One commenter, in order to mitigate constitutional concerns raised
by the proposed rule, opposed the removal of any existing requirements
that faith-based organizations provide assurances that direct DOL
support will not be used for inherently religious activities. This
commenter, and one other, stated that the proposed rule should include
additional assurances and safeguards to ``prevent religious use of
[Department] funds.'' Still another commenter requested that the rule
require State and local governments to provide assurances that they
will follow the equal treatment principles of this rule.
The Department disagrees with the commenters and declines to adopt
their recommendations. Once this rule comes into effect, each
prospective DOL social service provider, including State and local
governments, must certify in its application for assistance that it
will comply with various laws applicable to recipients of Federal
financial assistance, including this final rule and its prohibitions on
the use of direct DOL support for inherently religious activities and
on discrimination either for or against religious organizations.
Additional assurances, such as those that are being removed and
prohibited by this rule, only perpetuate an unfair presumption that
program requirements applicable to all DOL providers are insufficient
to bind faith-based organizations and that additional requirements and
assurances must be imposed on these organizations.
The Department believes that no additional requirements above and
beyond those imposed on all participating organizations are needed.
[[Page 41889]]
In issuing this rule, the Department's general approach is that faith-
based organizations are not a category of applicants or service
providers that require additional requirements or oversight in order to
ensure compliance with program regulations. Rather, the Department
presumes that faith-based organizations, like other recipients of DOL
support, fully understand the restrictions on the support they receive,
including the restriction that inherently religious activities cannot
be undertaken with direct DOL support and must remain separate from the
Federally-supported activities. The requirements for use of DOL support
under a Department program apply to, and are binding on, all Department
social service providers.
One commenter requested that the proposed rule require monthly
reports and periodic site visits of all Department grantees to ensure
compliance with the Establishment Clause.
The Department respectfully declines to adopt this recommendation.
Ordinary enforcement and monitoring procedures are sufficient to ensure
that faith-based organizations, like other participating organizations,
do not violate program restrictions, including those concerning
unauthorized uses of financial assistance. The need for enforcement of
Department regulations does not increase simply because some service
providers are faith-based organizations. The Department has a
responsibility to ensure that all DOL support is used in accordance
with program-specific regulations and any government-wide requirements.
Compliance with the Establishment Clause is just one aspect of
compliance with legal and programmatic requirements. We believe the
monitoring mechanisms currently in place are sufficient to address
whatever compliance issues may arise.
Another commenter suggested that the Department amend the proposed
rule regarding assurances to clarify that Sec. 2.32(c) is not limited
to grant documents and applies equally to contracts. The commenter
noted that State and local governments frequently administer federally-
financed social service programs by issuing contracts with service
providers rather than grants.
The Department believes that no change is required. Section 2.32(c)
applies to ``a grant document, agreement, covenant, memorandum of
understanding, policy, or regulation.'' The language is broadly
sweeping and the use of the term ``agreement'' includes by definition
``contracts.'' However, in an effort to further clarify the regulation,
the Department has made the requested change.
Employment or Training Activities That Involve the Maintenance of a
Building Used for Religious Activities
One commenter objected that the proposed rule purportedly
``incorporates by reference an earlier proposed rule'' proposing
revisions to 29 CFR 37.6(f)(2). The commenter stated that the proposed
revision to 37.6(f)(2) would lead to confusion and possible
unconstitutional use of Federal funds for capital improvements to
religious buildings. The Department notes that, contrary to the
commenter's assertions, the rule proposed on March 9 did not include
proposed changes to 29 CFR 37.6(f)(2). As a result, the Department has
responded in detail to this and similar objections in its notice of
final rulemaking for 29 CFR part 37, published elsewhere in the Federal
Register today.
Definitions
The Department received several comments relating to definitions
for terms used in the proposed rule. Two comments focused on the
definition of ``social service program,'' which the Department defined
as including, inter alia, childcare services and literacy and mentoring
programs. One commenter expressed concern that the proposed rule
subsequently failed to address how a religious childcare service
provider would be able to ensure that children as young as three or
four, or perhaps even younger, would have a choice as to whether to
participate in inherently religious activities of the childcare center.
Likewise, the commenter was concerned that such children would be
unable to separate out the religious childcare center's views from the
instruction provided.
The Department disagrees that changes to the rule are necessary in
response to this comment. As with the definition of ``inherently
religious activities'' discussed earlier in this preamble, it would be
difficult, if not impossible, to craft regulatory language that would
address the specific circumstances of every activity covered by the
rule. In the Department's view, the language of the rule is
sufficiently broad to cover the circumstances suggested by the
commenter. That language requires recipients to operate their DOL-
supported programs in a manner consistent with applicable Federal law.
Such law, of course, includes the Constitution.
The same commenter questioned whether a ban on using direct DOL
support for inherently religious activities would apply to volunteer
mentors who were not paid with government money. The commenter wondered
whether such mentors could engage in religious activities with the
children they mentored in an activity receiving direct DOL support.
DOL social service providers may not use direct DOL support for
inherently religious activities. As is discussed below, DOL support
includes more than money. Thus, in a program receiving any form of
direct DOL support, a DOL social service provider--including one
staffed by volunteer mentors--must comply with this rule's restrictions
on inherently religious activities. Of course, where volunteer mentors
are acting outside the scope of a DOL-supported program, they are not
subject to such restrictions on their religious activities.
One commenter suggested that the Department provide a definition
for ``religious organization'' or ``faith-based organization,''
reasoning that a common definition across Federal programs would
maximize opportunities for these organizations. The Department declines
to adopt this suggestion. One of the objectives of this rule is to move
away from unnecessary Federal inquiry into the religious nature, or
absence of religious nature, of an organization seeking DOL support or
participation in a DOL social service program. The Department believes
the focus should always be on (1) whether the organization is eligible
as defined by the program in question; and (2) whether the organization
commits to abide, and does abide, by all legal and programmatic
requirements that govern that support.
Finally, a commenter suggested that ``Federal financial
assistance'' should be defined to include non-financial assistance that
might be provided by DOL or by State or local governments using DOL
funds. The Department declines to amend the definition. Historically,
Federal regulations have used similar, if not identical, language to
define Federal financial assistance. Through the course of time, it has
been clearly established that such assistance includes more than money.
See U.S. Dep't of Transp. v. Paralyzed Veterans, 477 U.S. 597, 607 n.11
(1986) (noting that Federal financial assistance may take non-monetary
form). Federal financial assistance may include, for example, the use
or rent of Federal land or property at below market value, Federal
training, a loan of Federal personnel, subsidies, or other arrangements
with the intention of providing assistance. See Delmonte v. Department
of Bus. & Prof'l Regulation,
[[Page 41890]]
877 F. Supp. 1563 (S.D. Fla. 1995) (training of city police officers by
Federal personnel considered to be Federal financial assistance).
Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 requires
that a covered agency prepare a budgetary impact statement before
promulgating a rule that includes any Federal mandate that may 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.
One commenter suggested that the rule met the unfunded mandate
requirement only because the rule failed to mandate that alternative
secular providers must be made available for beneficiaries who object
to the religious character of an organization. Contrary to the
commenter's suggestion, the Department has determined that this rule
would not impose a mandate that will result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of more than $100 million in any one year. This is
largely because these regulations impact only Federal financial
assistance. Although State or local governments may commingle their
funds with Federal funds, the rule does not require them to do so.
Amendments to Job Corps and WIA Regulations
Except to the extent discussed above, the Department did not
receive comments concerning the portions of the proposed rule that
proposed to amend the Job Corps and WIA regulations. The Department has
revised the language of these portions of the proposed rule to improve
their clarity and consistency with the part of the proposed rule that
is now the new subpart D of DOL's final general regulation at 29 CFR
part 2. The Department has also revised the language of the proposed
WIA regulations in order to ensure greater conformity with the language
of WIA section 188(a)(3).
II. Findings and Certifications
Executive Order 12866
The Office of Management and Budget (OMB) determined that this rule
is a ``significant regulatory action'' as defined in section 3(f) of
the Order (although not an economically significant regulatory action
under the Order). OMB reviewed this final rule under Executive Order
12866, Regulatory Planning and Review. Any changes made to the rule as
a result of that review are identified in the docket file, which is
available for public inspection in the office of the Center for Faith-
Based and Community Initiatives, U.S. Department of Labor, 200
Constitution Avenue, NW., Room S-2235, Washington, DC 20210.
Regulatory Flexibility Act
The Secretary of Labor, in accordance with the Regulatory
Flexibility Act (5 U.S.C. 605(b)), has reviewed and approved this final
rule and in so doing certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
The final rule will not impose any new costs, or modify existing costs,
applicable to recipients of DOL support. Rather, the purpose of the
rule is to clarify that DOL's social service programs are open to all
qualified organizations, regardless of their religious character, and
to establish clearly the permissible uses to which DOL support may be
put. Notwithstanding the Secretary's determination that this rule will
not have a significant economic effect on a substantial number of small
entities, the Department specifically invited comments regarding any
less burdensome alternatives to this rule that will meet the
Department's objectives as described in this preamble. No such comments
were received.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments, and on the private sector. This final rule does not impose
any Federal mandates on any State, local, or tribal governments, or the
private sector, within the meaning of the Unfunded Mandates Reform Act
of 1995.
Paperwork Reduction Act
The Paperwork Reduction Act does not apply because this rule does
not contain any information collection requirements that require the
approval of the Office of Management and Budget.
Executive Order 13132, Federalism
Executive Order 13132, Federalism, prohibits an agency from
publishing any rule that has federalism implications if the rule either
imposes substantial direct compliance costs on State and local
governments and is not required by statute, or the rule preempts State
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. Consistent with Executive Order
13132, the Department specifically solicited comments from State and
local government officials on this proposed rule, and no comments from
these entities were submitted that raised federalism concerns.
List of Subjects
20 CFR Part 667
Employment; Grant programs--labor; Reporting and recordkeeping
requirements.
20 CFR Part 670
Employment; Grant programs--labor; Job Corps; Religious
discrimination.
29 CFR Part 2
Administrative practice and procedure; Claims; Courts; Government
employees; Religious discrimination.
29 CFR Part 37
Administrative practice and procedure; Aged; Aliens; Civil rights;
Discrimination; Equal educational opportunity; Equal employment
opportunity; Grant programs-labor; Individuals with disabilities;
Investigations; Manpower training programs; Political affiliation
discrimination; Religious discrimination; Reporting and recordkeeping
requirements; Sex discrimination.
Signed at Washington, DC, this 7th day of July, 2004.
Elaine L. Chao,
Secretary of Labor.
Emily S. DeRocco,
Assistant Secretary for Employment and Training.
0
For the reasons set forth in the preamble, the Department of Labor
amends 20 CFR Part 667; 20 CFR Part 670; 29 CFR Part 2; and 29 CFR Part
37 as set forth below.
Title 20--Employees' Benefits
Chapter V--Employment and Training Administration, Department of Labor
PART 667--ADMINISTRATIVE PROVISIONS UNDER TITLE I OF THE WORKFORCE
INVESTMENT ACT
0
1. The authority citation for part 667 is revised to read as follows:
Authority: Subtitle C of Title I, Sec. 506(c), Pub. L. 105-220,
112 Stat. 936 (20 U.S.C. 9276(c)); Executive Order 13198, 66 FR
8497, 3 CFR 2001 Comp., p. 750; Executive Order 13279, 67 FR 77141,
3 CFR 2002 Comp., p. 258.
[[Page 41891]]
0
2. In Sec. 667.266, paragraph (b) and the section heading are revised
to read as follows:
Sec. 667.266 What are the limitations related to religious
activities?
* * * * *
(b)(1) 29 CFR part 2, subpart D governs the circumstances under
which DOL support, including WIA Title I financial assistance, may be
used to employ or train participants in religious activities. Under
that subpart, such assistance may be used for such employment or
training only when the assistance is provided indirectly within the
meaning of the Establishment Clause of the U.S. Constitution, and not
when the assistance is provided directly. As explained in that subpart,
assistance provided through an Individual Training Account is generally
considered indirect, and other mechanisms may also be considered
indirect. See also 20 CFR 667.275 and 29 CFR 37.6(f)(1). 29 CFR part 2,
subpart D also contains requirements related to equal treatment in
Department of Labor programs for religious organizations, and to
protecting the religious liberty of Department of Labor social service
providers and beneficiaries.
(2) Limitations on the employment of participants under WIA Title I
to carry out the construction, operation, or maintenance of any part of
any facility used or to be used for religious instruction or as a place
for religious worship are described at 29 CFR 37.6(f)(2).
0
3. In Sec. 667.275, paragraph (b) and the section heading are revised
to read as follows:
Sec. 667.275 What are a recipient's obligations to ensure
nondiscrimination and equal opportunity, and what are a recipient's
obligations with respect to religious activities?
* * * * *
(b) 29 CFR part 2, subpart D governs the circumstances under which
recipients may use DOL support, including WIA Title I financial
assistance, to employ or train participants in religious activities.
Under that subpart, such assistance may be used for such employment or
training only when the assistance is provided indirectly within the
meaning of the Establishment Clause of the U.S. Constitution, and not
when the assistance is provided directly. As explained in that subpart,
assistance provided through an Individual Training Account is generally
considered indirect, and other mechanisms may also be considered
indirect. See also 20 CFR 667.266 and 29 CFR 37.6(f)(1). 29 CFR part 2,
subpart D also contains requirements related to equal treatment of
religious organizations in Department of Labor programs, and to
protection of religious liberty of Department of Labor social service
providers and beneficiaries. Limitations on the employment of
participants under WIA Title I to carry out the construction,
operation, or maintenance of any part of any facility used or to be
used for religious instruction or as a place of religious worship are
described at 29 CFR 37.6(f)(2). See section 188(a)(3) of the Workforce
Investment Act of 1998, 29 U.S.C. 2938(a)(3).
PART 670--THE JOB CORPS UNDER TITLE I OF THE WORKFORCE INVESTMENT
ACT
0
4. The authority citation for part 670 is revised to read as follows:
Authority: Subtitle C of title I, sec. 506(c), Pub. L. 105-220,
112 Stat. 936 (20 U.S.C. 2881 et seq. and 9276(c)); 5 U.S.C. 301;
Executive Order 13198, 66 FR 8497, 3 CFR 2001 Comp., p. 750);
Executive Order 13279, 67 FR 77141, 3 CFR 2002 Comp., p. 258.
0
5. Section 670.555 is amended by removing paragraph (b), redesignating
paragraph (d) as paragraph (b), and revising paragraph (c) to read as
follows:
Sec. 670.555 What are the center's responsibilities in ensuring that
students' religious rights are respected?
* * * * *
(c) Requirements related to equal treatment of religious
organizations in Department of Labor programs, and to protection of
religious liberty of Department of Labor social service providers and
beneficiaries, are found at subpart D of 29 CFR part 2. See also
Sec. Sec. 667.266 and 667.275 of 20 CFR; 29 CFR part 37.
Title 29--Labor
Chapter I--Office of the Secretary of Labor
PART 2--GENERAL REGULATIONS
0
7. The authority citation for part 2 is revised to read as follows:
Authority: 5 U.S.C. 301; Executive Order 13198, 66 FR 8497, 3
CFR 2001 Comp., p. 750; Executive Order 13279, 67 FR 77141, 3 CFR
2002 Comp., p. 258.
0
8. Part 2 is amended by adding a new subpart D to read as follows:
PART 2--GENERAL REGULATIONS
* * * * *
Subpart D--Equal Treatment in Department of Labor Programs for
Religious Organizations; Protection of Religious Liberty of
Department of Labor Social Service Providers and Beneficiaries
Sec.
2.30 Purpose.
2.31 Definitions.
2.32 Equal participation of religious organizations.
2.33 Responsibilities of DOL, DOL social service providers and State
and local governments administering DOL support.
2.34 Application to State and local funds.
2.35 Effect of DOL support on Title VII employment nondiscrimination
requirements and on other existing statutes.
2.36 Status of nonprofit organizations.
Sec. 2.30 Purpose.
The purpose of the regulations in this subpart is to ensure that
DOL-supported social service programs are open to all qualified
organizations, regardless of the organizations' religious character,
and to establish clearly the permissible uses to which DOL support for
social service programs may be put, and the conditions for receipt of
such support. In addition, this proposed rule is designed to ensure
that the Department's social service programs are implemented in a
manner consistent with the requirements of the Constitution, including
the Religion Clauses of the First Amendment.
Sec. 2.31 Definitions.
As used in the regulations in this subpart:
(a) The term Federal financial assistance means assistance that
non-Federal entities (including State and local governments) receive or
administer in the form of grants, contracts, loans, loan guarantees,
property, cooperative agreements, direct appropriations, or other
direct or indirect assistance, but does not include a tax credit,
deduction or exemption.
(b) The term social service program means a program that is
administered or supported by the Federal Government, or by a State or
local government using Federal financial assistance, and that provides
services directed at reducing poverty, improving opportunities for low-
income children, revitalizing low-income communities, empowering low-
income families and low-income individuals to become self-sufficient,
or otherwise helping people in need. Such programs include, but are not
limited to, the following:
(1) Child care services and services to meet the special needs of
children, older individuals, and individuals with
[[Page 41892]]
disabilities (including physical, mental, or emotional disabilities);
(2) Job training and related services, and employment services;
(3) Information, referral, and counseling services;
(4) Literacy and mentoring programs; and
(5) Services for the prevention and treatment of juvenile
delinquency and substance abuse, services for the prevention of crime
and the provision of assistance to the victims and the families of
criminal offenders, and services related to intervention in, and
prevention of domestic violence.
(c) The term DOL means the U.S. Department of Labor.
(d) The term DOL-supported social service program, DOL social
service program, or DOL program means a social service program, as
defined in paragraph (b) of this section, that is administered by or
for DOL with DOL support. Such programs include, but are not limited
to, the One Stop Career Center System, the Job Corps, and other
programs supported through the Workforce Investment Act.
(e) The term DOL social service provider means any non-Federal
organization, other than a State or local government, that seeks or
receives DOL support as defined in paragraph (g) of this section, or
participates in DOL programs other than as the ultimate beneficiary of
such programs.
(f) The term DOL social service intermediary provider means any DOL
social service provider that, as part of its duties, selects
subgrantees to receive DOL support or subcontractors to provide DOL-
supported services, or has the same duties under this part as a
governmental entity.
(g) The term DOL support means Federal financial assistance, as
well as procurement funding provided to a non-Federal organization,
including a State or local government, to support the organization's
administration of or participation in a DOL social service program as
defined in paragraph (d) of this section.
Sec. 2.32 Equal participation of religious organizations.
(a) Religious organizations must be eligible, on the same basis as
any other organization, to seek DOL support or participate in DOL
programs for which they are otherwise eligible. DOL, DOL social service
intermediary providers, as well as State and local governments
administering DOL support, must not discriminate for or against an
organization on the basis of the organization's religious character or
affiliation, although this requirement does not preclude DOL, DOL
social service providers, or State and local governments administering
DOL support from accommodating religion in a manner consistent with the
Establishment Clause. In addition, because this rule does not affect
existing constitutional requirements, DOL, DOL social service providers
(insofar as they may otherwise be subject to any constitutional
requirements), and State and local governments administering DOL
support must continue to comply with otherwise applicable
constitutional principles, including, among others, those articulated
in the Establishment, Free Speech, and Free Exercise Clauses of the
First Amendment to the Constitution.
(b) A religious organization that is a DOL social service provider
retains its independence from Federal, State, and local governments and
must be permitted to continue to carry out its mission, including the
definition, practice, and expression of its religious beliefs, subject
to the provisions of Sec. 2.33 of this subpart. Among other things,
such a religious organization must be permitted to:
(1) Use its facilities to provide DOL-supported social services
without removing or altering religious art, icons, scriptures, or other
religious symbols from those facilities; and
(2) Retain its authority over its internal governance, including
retaining religious terms in its name, selecting its board members on a
religious basis, and including religious references in its mission
statements and other governing documents.
(c) A grant document, contract or other agreement, covenant,
memorandum of understanding, policy, or regulation that is used by DOL,
a State or local government administering DOL support, or a DOL social
service intermediary provider must not require only religious
organizations to provide assurances that they will not use direct DOL
support for inherently religious activities. Any such requirements must
apply equally to both religious and other organizations. All
organizations, including religious ones, that are DOL social service
providers must carry out DOL-supported activities in accordance with
all applicable legal and programmatic requirements, including those
prohibiting the use of direct DOL support for inherently religious
activities. A grant document, contract or other agreement, covenant,
memorandum of understanding, policy, or regulation that is used by DOL,
a State or local government, or a DOL social service intermediary
provider in administering a DOL social service program must not
disqualify organizations from receiving DOL support or participating in
DOL programs on the grounds that such organizations are motivated or
influenced by religious faith to provide social services, have a
religious character or affiliation, or lack a religious component.
Sec. 2.33 Responsibilities of DOL, DOL social service providers and
State and local governments administering DOL support.
(a) DOL, DOL social service intermediary providers, DOL social
service providers in their use of direct DOL support, and State and
local governments administering DOL support must not, when providing
social services, discriminate for or against a current or prospective
program beneficiary on the basis of religion or religious belief. This
requirement does not preclude DOL, DOL social service intermediary
providers, or State or local governments administering DOL support from
accommodating religion in a manner consistent with the Establishment
Clause of the First Amendment to the Constitution.
(b)(1) DOL, DOL social service providers, and State and local
governments administering DOL support must ensure that they do not use
direct DOL support for inherently religious activities such as worship,
religious instruction, or proselytization. DOL social service providers
must be permitted to offer inherently religious activities so long as
they offer those activities separately in time or location from social
services receiving direct DOL support, and participation in the
inherently religious activities is voluntary for the beneficiaries of
social service programs receiving direct DOL support. For example,
participation in an inherently religious activity must not be a
condition for participating in a directly-supported social service
program.
(2) This regulation is not intended to and does not restrict the
exercise of rights or duties guaranteed by the Constitution. For
example, program officials must not impermissibly restrict the ability
of program beneficiaries or DOL social service providers to freely
express their views and to exercise their right to religious freedom.
Additionally, subject to reasonable and permissible time, place and
manner restrictions, residential facilities that receive DOL support
must permit residents to engage in voluntary religious activities,
including holding religious services, at these facilities.
(3) Notwithstanding the requirements of paragraph (b)(1), and to
the extent
[[Page 41893]]
otherwise permitted by Federal law (including constitutional
requirements), direct DOL support may be used to support inherently
religious activities, and such activities need not be provided
separately in time or location from other DOL-supported activities,
under the following circumstances:
(i) Where DOL support is provided to chaplains to work with inmates
in prisons, detention facilities, or community correction centers
through social service programs;
(ii) Where DOL support is provided to social service programs in
prisons, detention facilities, or community correction centers, in
which social service organizations assist chaplains in carrying out
their duties; or
(iii) Where DOL-supported social service programs involve such a
degree of government control over the program environment that
religious exercise would be significantly burdened absent affirmative
steps by DOL or its social service providers.
(c) To the extent otherwise permitted by Federal law, the
restrictions set forth in this section regarding the use of direct DOL
support do not apply to social service programs where DOL support is
provided to a religious or other non-governmental organization
indirectly within the meaning of the Establishment Clause of the First
Amendment to the Constitution. Religious or other non-governmental
organizations will be considered to have received support indirectly,
for example, if as a result of a program beneficiary's genuine and
independent choice the beneficiary redeems a voucher, coupon, or
certificate that allows the beneficiary to choose the service provider,
or some other mechanism is provided to ensure that beneficiaries have a
genuine and independent choice among providers or program options. All
organizations must, however, satisfy all applicable legal and
programmatic requirements.
Sec. 2.34 Application to State and local funds.
If a State or local government voluntarily contributes its own
funds to supplement activities carried out under the applicable
programs, the State or local government has the option to separate out
the Federal funds or commingle them. If the funds are commingled, then
the provisions of this subpart apply to all of the commingled funds in
the same manner, and to the same extent, as the provisions apply to the
Federal assistance. State funds that are contributed pursuant to the
requirements of a matching or grant agreement are considered to be
commingled funds.
Sec. 2.35 Effect of DOL support on Title VII employment
nondiscrimination requirements and on other existing statutes.
A religious organization's exemption from the Federal prohibition
on employment discrimination on the basis of religion, set forth in
Sec. 702(a) of the Civil Rights Act of 1964, 42 U.S.C. Sec. 2000e-1,
is not forfeited when the organization receives direct or indirect DOL
support. Some DOL programs, however, were established through Federal
statutes containing independent statutory provisions requiring that
recipients refrain from discriminating on the basis of religion.
Accordingly, to determine the scope of any applicable requirements,
recipients and potential recipients should consult with the appropriate
DOL program official or with the Civil Rights Center, U.S. Department
of Labor, 200 Constitution Avenue, NW., Room N4123, Washington, DC
20210, (202) 693-6500. Individuals with hearing or speech impairments
may access this telephone number via TTY by calling the toll-free
Federal Information Relay Service at 1-800-877-8339.
Sec. 2.36 Status of nonprofit organizations.
(a) In general, DOL does not require that an organization,
including a religious organization, obtain tax-exempt status under
section 501(c)(3) of the Internal Revenue Code in order to be eligible
for Federal financial assistance under DOL social service programs.
Many such programs, however, do require an organization to be a
``nonprofit organization'' in order to be eligible for such support.
Individual solicitations that require organizations to have nonprofit
status must specifically so indicate in the eligibility section of the
solicitation. In addition, any solicitation for a program that requires
an organization to maintain tax-exempt status must expressly state the
statutory authority for requiring such status. For assistance with
questions about a particular solicitation, applicants should contact
the DOL program office that issued the solicitation.
(b) Unless otherwise provided by statute, in DOL programs in which
an applicant must show that it is a nonprofit organization, the
applicant must be permitted to do so by any of the following means:
(1) Proof that the Internal Revenue Service currently recognizes
the applicant as tax exempt under section 501(c)(3) of the Internal
Revenue Code;
(2) A statement from a State taxing body or the State Secretary of
State certifying that:
(i) the organization is a nonprofit organization operating within
the State; and
(ii) no part of its net earnings may lawfully benefit any private
shareholder or individual;
(3) A certified copy of the applicant's certificate of
incorporation or similar document that clearly establishes the
nonprofit status of the applicant; or
(4) Any item described in paragraphs (b)(1) through (b)(3) of this
section, if that item applies to a State or national parent
organization, together with a statement by the State or national parent
organization that the applicant is a local nonprofit affiliate of the
organization.
PART 37--IMPLEMENTATION OF THE NONDISCRIMINATION AND EQUAL
OPPORTUNITY PROVISIONS OF THE WORKFORCE INVESTMENT ACT OF 1998
(WIA)
0
9. The authority citation for part 37 is revised to read as follows:
Authority: Sections 134(b), 136(d)(2)(F), 136(e), 172(a),
183(c), 185(d)(1)(E), 186, 187 and 188 of the Workforce Investment
Act of 1998, 29 U.S.C. 2801, et seq.; Title VI of the Civil Rights
Act of 1964, as amended, 42 U.S.C. 2000d, et seq.; Section 504 of
the Rehabilitation Act of 1973, as amended, 29 U.S.C. 794; the Age
Discrimination Act of 1975, as amended, 42 U.S.C. 6101; Title IX of
the Education Amendments of 1972, as amended, 29 U.S.C. 1681;
Executive Order 13198, 66 FR 8497, 3 CFR 2001 Comp., p. 750; and
Executive Order 13279, 67 FR 77141, 3 CFR 2002 Comp., p. 258.
0
10. In Sec. 37.6, paragraph (f)(1) and the section heading are revised
to read as follows:
Sec. 37.6 What specific discriminatory actions, based on prohibited
grounds other than disability, are prohibited by this part, and what
limitations are there related to religious activities?
* * * * *
(f)(1) 29 CFR part 2, subpart D governs the circumstances under
which DOL support, including WIA Title I financial assistance, may be
used to employ or train participants in religious activities. Under
that subpart, such assistance may be used for such employment or
training only when the assistance is provided indirectly within the
meaning of the Establishment Clause of the U.S. Constitution, and not
when the assistance is provided directly. As explained in that subpart,
assistance provided through an Individual Training Account is generally
considered indirect, and other mechanisms may also be considered
indirect. See also Sec. Sec. 667.266 and 667.275 of 20 CFR. 29 CFR
part 2, subpart D also contains requirements
[[Page 41894]]
related to equal treatment of religious organizations in Department of
Labor programs, and to protection of religious liberty for Department
of Labor social service providers and beneficiaries.
* * * * *
DEPARTMENT OF LABOR
Office of the Secretary
29 CFR Part 37
RIN 1291-AA29
Limitation on Employment of Participants Under Title I of the
Workforce Investment Act of 1998
AGENCY: Office of the Secretary, Labor.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule amends the Department of Labor's (the
Department's or DOL's) regulations that implement section 188(a)(3) of
the Workforce Investment Act of 1998 (WIA). That statutory section
delimits the circumstances under which WIA title I participants may be
employed to carry out the construction, operation, or maintenance of
any part of any facility that is used, or to be used, for religious
instruction or as a place for religious worship. The amendments make
the relevant regulatory language adhere more closely to the language of
section 188(a)(3).
DATES: This rule is effective August 11, 2004.
FOR FURTHER INFORMATION CONTACT: Annabelle T. Lockhart, Director, Civil
Rights Center (CRC), (202) 693-6500. Please note that this is not a
toll-free number. Individuals who do not use voice telephones may
contact Ms. Lockhart via TTY/TDD by calling the toll-free Federal
Information Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
This section of the preamble to this final rule is organized as
follows:
I. Background.
II. Differences Between the September 30, 2003, Proposed Rule
and the Final Rule.
III. Comments Received on the Proposed Rule and DOL's Responses.
IV. Regulatory Procedure.
I. Background
A. WIA and DOL's Implementing Regulations
WIA superseded the Job Training Partnership Act (JTPA) as DOL's
primary mechanism for providing financial assistance for a
comprehensive system of employment and training services for adults and
dislocated workers, and comprehensive youth activities for eligible
youth. That system is known as the One Stop Career Center system. DOL's
Employment and Training Administration (ETA) administers the One Stop
Career Center system.
WIA section 188 contains certain nondiscrimination, equal
opportunity, and other requirements applicable to recipients of WIA
financial assistance. DOL's Civil Rights Center (CRC) administers these
requirements.
Section 188(a)(3) of WIA prohibits the employment of WIA
participants to carry out construction, operation, and maintenance at
specified locations, with a limited exception for maintenance.
Specifically, this section provides as follows:
Participants shall not be employed under this title to carry out
the construction, operation, or maintenance of any part of any
facility that is used or to be used for sectarian instruction or as
a place for religious worship (except with respect to the
maintenance of a facility that is not primarily or inherently
devoted to sectarian instruction or religious worship, in a case in
which the organization operating the facility is part of a program
or activity providing services to participants). 29 U.S.C.
2938(a)(3).
Section 188(e) of WIA authorizes the Secretary to issue regulations
necessary to implement this section. 29 U.S.C. 2938(e). Both ETA and
CRC have published rules relating to WIA section 188(a)(3).
CRC on November 12, 1999, published an Interim Final Rule (IFR)
entitled ``Implementation of the Nondiscrimination and Equal
Opportunity Provisions of the Workforce Investment Act of 1998,'' to
implement Section 188 of WIA. 64 FR 61692. That IFR, which was codified
at 29 CFR part 37 and remains in effect, generally carried over the
nondiscrimination and equal opportunity-related policies and procedures
promulgated in the JTPA regulations.
Section 37.6(f) of CRC's IFR contained several paragraphs--
specifically, paragraphs (f)(1), (2), and (3)--that related to
religious activities. Although the preamble to the IFR stated that
``[p]aragraph 37.6(f) * * * is directly based on, and implements,
section 188(a)(3) of WIA,'' the actual language of Sec. 37.6(f)
differed from the statute in several significant respects. 64 FR 61691.
First, Sec. 37.6(f)(1) carried over a prohibition on employment and
training in sectarian activities that had appeared in the JTPA
regulations at 20 CFR 627.210(b). This prohibition was not related to
the limitations in WIA section 188(a)(3) on employing participants to
carry out construction, operation, or maintenance, and was not based on
either the JTPA statute or the WIA statute. See section I(B) of this
preamble, below. Second, although paragraphs 37.6(f)(2) and (3) did
deal with the subject matter of WIA section 188(a)(3), the language of
these paragraphs departed from the statutory language and organization,
containing several ``structural, stylistic, and phrasing changes''
intended to ``enhance the readability of the rule.'' 64 FR 61691.
ETA had published on April 15, 1999, prior to CRC's IFR, an IFR
implementing WIA title I and III, including section 188(a)(3). 64 FR
18661. That IFR included a new part 667 of title 20 of the Code of
Federal Regulations, which ``assemble[d] all of the administrative
requirements from the various parts of the Act and other applicable
sources in order to facilitate the administrative management of WIA
programs.'' Id. This new part 667 included two sections--Sec. Sec.
667.266 and 667.275--that related to WIA section 188(a)(3). Section
667.266(b) tracked the language of the statutory section almost
exactly, while Sec. 667.275(b) referred only to the statute's
maintenance exception. After CRC promulgated its November 12, 1999 IFR,
ETA on August 11, 2000, published a Final Rule based on ETA's April 15,
1999 IFR. The preamble to this Final Rule noted that CRC had published
an IFR in the interim, and stated that changes had been made to ETA's
Final Rule ``for consistency with the [CRC] regulations implementing *
* * WIA Section 188.'' With respect to Sec. Sec. 667.266 and 667.275,
however, the Final Rule's preamble described only changes relating to
cross-references. Except for the addition of these cross references,
one technical change (``funds'' was changed to ``financial
assistance''), and some rearranging of phrase ordering, ETA's Final
Rule did not alter the relevant initial language of either Sec.
667.266(b) or Sec. 667.275(b).
B. The September 30, 2003, Proposed Rule
On December 12, 2002, President Bush issued Executive Order 13279,
published in the Federal Register on December 16, 2002 (67 FR 77141).
[[Page 41895]]
Executive Order 13279 charges executive branch agencies with giving
equal treatment to faith-based and community organizations that apply
for or receive Federal financial assistance to meet social needs in
America's communities. Consistent with, and to assist in implementing,
the principles underlying this Executive Order, the Department
published a Notice of Proposed Rule-Making (NPRM) on September 30,
2003. See 68 FR 56386, 56388. The NPRM proposed to amend the regulatory
provisions promulgated by CRC, codified at 29 CFR 37.6(f), as well as
the provisions promulgated by ETA, codified at 20 CFR 667.266 and
667.275, that referenced Sec. 37.6(f). The proposed amendments fell
into two main categories: first, amendments intended to eliminate
inappropriate restrictions on the use of indirect WIA financial
assistance; and second, amendments intended to clarify the language of
the various regulatory provisions related to WIA section 188(a)(3).
1. Use of Indirect Federal Financial Assistance
As explained in the preamble to the September 30, 2003, NPRM, among
the Department's primary reasons for proposing the amendments was to
eliminate inappropriate regulatory restrictions, set forth in the
original language of 29 CFR 37.6(f)(1) and referenced in original
paragraphs 20 CFR 667.266(b)(1) and 667.275(b), on the use of indirect
Federal financial assistance to employ or train participants in
religious activities. 29 CFR 37.6(f)(1) has precluded recipients from
permitting participants ``to be employed or trained in sectarian
activities,'' regardless of whether the financial assistance at issue
is direct or indirect. Similarly, 20 CFR 667.266(b)(1) has stated that
``WIA title I financial assistance may not be spent on the employment
or training of participants in sectarian activities'' (referring
readers to 29 CFR 37.6(f)(1) for further information), and 20 CFR
667.275(b) has stated, in pertinent part, that ``[u]nder 29 CFR
37.6(f)(1), the employment or training of participants in sectarian
activities is prohibited.''
These restrictions, which were carried over from the JTPA
nondiscrimination regulations, were not based on any specific statutory
authority conferred by either WIA or JTPA, and are inconsistent with
current law as articulated by the U.S. Supreme Court. 68 FR at 56387.
The Court has clarified in a number of cases issued since JTPA was
enacted that the use of indirect financial assistance to provide
religious training is permitted by the Establishment Clause of the
First Amendment to the Constitution where certain requirements are
satisfied. For example, assistance is indirect in cases in which
participants are given a genuine and independent private choice among
training providers or program options, and freely elect to receive
training in religious activities. Of course, the training offered must
otherwise satisfy the requirements of the governmental program through
which the financial assistance is provided. 68 FR at 56387-88. For this
reason, and to permit participants in WIA title I-financially assisted
programs and activities more choice and greater freedom while obtaining
essential employment and training skills, the Department proposed in
the September 30, 2003, NPRM to amend 20 CFR 667.266(b)(1), 20 CFR
667.275(b), and 29 CFR 37.6(f)(1), to add a new 29 CFR 37.6(f)(2), and
to renumber 37.6(f)(2) and (3) as (f)(3) and (4), respectively. These
proposed revisions are discussed in detail in the preamble to the
September 30, 2003, NPRM (see 68 FR at 56387-89).
2. General Prohibition on Employment of Participants for Construction,
Operation, or Maintenance at Specified Locations Defined With Reference
to Certain Religious Activities; Maintenance Exception
In the same September 30, 2003, NPRM, the Department proposed
revisions to those portions of CRC's and ETA's regulations that related
to WIA section 188(a)(3). These revisions were intended both to clarify
these paragraphs and to adhere more closely to the statute.
With regard to CRC's regulations, the NPRM proposed changes to 29
CFR 37.6(f)(2) and (3). The original language of these paragraphs broke
the language of WIA section 188(a)(3) down into separate elements in an
effort to make the statutory requirements easier to understand.
However, in the course of drafting the September 30, 2003, NPRM, DOL
determined that these paragraphs should be further revised to make them
easier to understand and to adhere more closely to the language of WIA
section 188(a)(3). See 68 FR at 56388. Therefore, in the September 30,
2003, NPRM, the Department proposed to renumber the paragraphs in
accordance with the proposed revisions described in Subsection I(B)(1)
of this preamble, and to revise the language of the paragraphs as
follows:
(3) Except under the circumstances described in paragraph (f)(4)
below, a recipient must not permit participants to engage in
employment or training activities that involve the construction,
operation, or maintenance of any facility, or any part of a
facility, that is used, or will be used, for religious instruction
or as a place of religious worship.
(4) A recipient may permit participants to engage in employment
or training activities that involve the maintenance of a facility
that is used, or will be used, for religious instruction or
religious worship,
(i) To the extent that the facility is not primarily or
inherently devoted to religious instruction or religious worship,
and
(ii) Provided that the organization operating the facility is
part of a program or activity providing services to participants.
68 FR at 56390. The proposed revisions were intended to make these
paragraphs easier to understand, and to adhere more closely to the
language of the statute. 68 FR at 56388. As explained in section II of
this preamble, however, the language of this proposal also diverged in
several respects from the language of the statute. This final rule
returns to the statutory language in order to better ensure close
adherence to the intent of Congress.
The Department also proposed to revise 20 CFR 667.266(b)(2) to
correct the cross-references contained therein. As explained in the
September 30, 2003, NPRM, the Department had determined, upon
examination, that the insertion of the cross-references in this
paragraph of ETA's August 11, 2000, Final Rule had been done
erroneously. The cross-reference in the first sentence of Sec.
667.266(b)(2), instead of referring to Sec. 37.6(f)(2), referred to
Sec. 37.6(f)(1). The cross-reference in the second sentence of Sec.
667.266(b)(2), instead of referring to Sec. 37.6(f)(3), had referred
to Sec. 37.6(f)(2). The Department proposed to correct these two
cross-references without otherwise altering the language of Sec.
667.266.
Finally, the September 30, 2003, NPRM also proposed to revise 20
CFR 667.275(b) in two respects. First, as noted in section I(B)(1) of
this preamble, the flat prohibition on the employment of participants
in ``sectarian activities'' was revised to permit such employment when
financial assistance is provided indirectly. Second, the paragraph was
revised so that it referred to the entire prohibition in section
188(a)(3), rather than just the maintenance exemption. The proposed
revisions to this paragraph contained minor language differences from
the statute and from the proposed CRC revisions to Sec. 37.6(f)(2) and
(3). These differences were not intended to alter the meaning of the
statute or to diverge from the meaning of the corresponding provisions
of the relevant ETA and CRC regulations.
[[Page 41896]]
3. Comments on the Proposed Rule
The closing date for comments on the September 30, 2003, NPRM was
December 1, 2003. 68 FR at 56386. DOL received a total of 11 sets of
comments on the proposed rule, six sets from civil or religious
liberties organizations or other stakeholders and five sets from
individual members of the public. All of the comments were received by
the closing date.
Two commenters expressed general support for the revisions proposed
in the NPRM, without reservation or suggestions for change. Seven
commenters expressed opposition to those revisions, and two commenters
either took no position on, raised questions about, or suggested
changes or alternatives to, the various proposed revisions.
The majority of comments dealt with the issue of the use of
indirect financial assistance to employ or train participants in
religious activities. As explained earlier in this section of this
preamble, however, that issue is now addressed in a separate NPRM,
published on March 9, 2004, that proposed revisions to 29 CFR part 2,
as well as conforming revisions to 29 CFR part 37 and 20 CFR part 667.
Therefore, this preamble will not address those comments. Comments on
the March 9, 2004, NPRM, which is discussed in the next section of this
preamble, were solicited separately. The final rule that addresses the
proposals made in the March 9, 2004, NPRM is published elsewhere in
today's Federal Register. The comments received that are relevant to
this final rule will be discussed below in section III of this
preamble.
C. The March 9, 2004, Proposed Rule
After the September 30, 2003, NPRM was published, the Department
determined that in order to implement more fully the principles of
Executive Order 13279, DOL would revise its general regulations at 29
CFR part 2 to clarify that faith-based and community organizations are
able both to participate in all DOL social service programs for which
they are otherwise eligible--not just those financially assisted under
WIA title I--without regard to the organizations' religious character
or affiliation, and to apply for and compete on an equal footing with
other organizations to receive DOL support. Accordingly, on March 9,
2004, DOL published an NPRM that proposed adding to 29 CFR part 2 a new
subpart D, to be entitled ``Equal Treatment in Department of Labor
Programs for Religious Organizations; Protection of Religious Liberty
of Department of Labor Social Service Providers and Beneficiaries.'' 69
FR 11234, 11235.
At the same time, the Department also determined that, in order to
ensure uniformity and consistency in implementing the principles of
these Executive Orders throughout DOL, the regulations dealing with
faith-based and community organizations, and with religious activities,
should to the extent possible be consolidated in one place. 69 FR
11234. The Department further determined that the new subpart D should
not be program-specific, but should apply to all organizations
receiving DOL support, except where the implementing statute imposed
particular requirements. Accordingly, in the March 9, 2004, NPRM, the
Department proposed new revisions to 29 CFR 37.6(f)(1), as well as to
20 CFR 667.266(b)(1) and (2) and 667.275(b). Instead of the language
proposed in the September 30, 2003, NPRM, the March 9, 2004, NPRM
proposed that each of these regulatory provisions cross-reference 29
CFR part 2, subpart D. See 69 FR at 11237, 11238, 11241. The March 9,
2004, NPRM also proposed similar revisions to the relevant provision of
the regulations governing Job Corps, at 20 CFR 670.555(c). See 69 FR at
11237, 11238.
The March 9, 2004, NPRM contained no proposals for revisions to 29
CFR 37.6(f)(2) and (3), for two reasons. First, as discussed in section
I(B)(2) of this preamble, those two paragraphs are program-specific:
they effectuate a specific paragraph of WIA section 188 that applies
only to recipients of financial assistance under WIA title I, and not
to recipients of other types of DOL support. See 29 U.S.C. 2938(a)(3);
see also 29 CFR 37.2(b)(1), ``Limitation of Application.''
Second, careful analysis reveals that the statutory and regulatory
provisions at issue do not genuinely deal with ``religious
activities.'' Instead, the ``activities'' they address are the
employment of participants in the nonreligious skills of construction,
operation, and maintenance. The provisions at issue merely limit the
physical locations in which such employment may take place:
participants may not be employed to carry out construction, operation
or maintenance of any part of any facility used or to be used for
religious instruction or as a place for religious worship, except that
participants may be employed to carry out maintenance of a facility
that is not primarily or inherently devoted to religious instruction or
worship when the organization operating the facility is part of a
program or activity providing services to participants. See 29 U.S.C.
2938(a)(3); see also new paragraphs 37.6(f)(2) and (3) below.
Therefore, it would be inappropriate for these issues to be addressed
by amendments or additions to DOL's general regulations at 29 CFR part
2.
For these reasons, the Department has chosen to publish this final
rule amending 29 CFR 37.6(f)(2) and (3). As noted in section I(C) of
this preamble, a separate final rule amending those provisions
addressed in the March 9, 2004, NPRM is published elsewhere in today's
Federal Register.
D. Proposed Amendments Dealing With Indirect Federal Financial
Assistance
The Department is withdrawing the portions of the September 30,
2003, NPRM that proposed amending 29 CFR 37.6(f)(1), as well as 20 CFR
667.266(b)(1) and 20 CFR 667.275(b), to eliminate inappropriate
restrictions on the use of indirect Federal financial assistance for
religious activities. As explained in section I(C) of this preamble,
these restrictions are now eliminated by the other final rule,
published elsewhere in today's Federal Register, that finalizes the
rules proposed in the March 9, 2004, NPRM. An additional document,
withdrawing those portions of the September 30, 2003, NPRM now dealt
with by that new rule, is published in the proposed rule section of
today's Federal Register.
II. Differences Between the September 30, 2003, Proposed Rule and This
Final Rule
As described above, the amendments to 29 CFR 37.6(f)(1), as well as
20 CFR 667.266(b)(1) and (2), and 20 CFR 667.275(b), proposed in the
September 30, 2003, NPRM were superseded by the amendments to those
paragraphs that were proposed in the March 9, 2004, NPRM. Therefore,
this final rule does not include amendments to those regulatory
provisions.
In addition, upon consideration, the Department has concluded that
the language of 29 CFR 37.6(f)(2) and (3) that was proposed in the
September 30, 2003, NPRM did not adequately track the language of WIA
section 188(a)(3). Therefore, in the final rule, these two paragraphs
have been revised to track the statutory language more closely and
thereby ensure that the meaning of WIA section 188(a)(3) is not
changed. Such revisions are necessary in order to fulfill the intent of
the September 30, 2003, NPRM, which stated that a primary purpose of
the proposed revisions was to adhere more closely to Congressional
language. Comments and responses regarding the substantive effects of
these
[[Page 41897]]
provisions are discussed in section III of this preamble.
Finally, as a result of the amendments proposed in the March 9,
2004, NPRM, the Department has decided that paragraphs 37.6(f)(2) and
(3) will retain their original numbers.
The following changes have been made to the language proposed in
the September 30, 2003, NPRM for these two paragraphs:
A. ``Permit'' vs. ``Employ''
The proposed revisions of 29 CFR 37.6(f)(2) and (3) stated that a
recipient ``must not permit'' participants to engage in the activities
prohibited by the statute. This language was different from the
language of WIA section 188(a)(3), which states that participants
``shall not be employed'' in prohibited activities. Recipients are not
expected, and this section of the statute does not authorize them, to
control the work activities of participants except when such work is
financially assisted under WIA title I. To ensure that these paragraphs
do not alter the meaning of WIA section 188(a)(3), and that they
effectuate Congressional intent more closely, we have changed the
language of the final rule to use the phrase ``must not employ.''
B. ``Engage in Employment or Training Activities That Involve'' vs.
``Employed * * * To Carry Out''
The proposed revisions of 29 CFR 37.6(f)(2) and (3) required
recipients not to permit participants to ``engage in employment or
training activities that involve'' construction, operation, or
maintenance. This language was different from the language of WIA
section 188(a)(3), which provides only that participants must not be
``employed * * * to carry out'' such construction, operation, or
maintenance. For the reasons expressed in section II(A) of this
preamble, as well as to ensure that these paragraphs do not alter the
meaning of WIA section 188(a)(3) and that they effectuate Congressional
intent more closely, we have changed the language of the final rule to
use the phrase ``employ * * * to carry out.''
C. ``Any Facility, or Any Part of a Facility'' vs. ``Any Part of Any
Facility''
Similarly, the proposed revision of 29 CFR 37.6(f)(2) used the
language ``any facility, or any part of a facility,'' to discuss which
facilities were covered by the provision. This language was different
from the language of WIA section 188(a)(3), which used the phrase ``any
part of any facility.'' To ensure that this provision of the final rule
does not alter the meaning of WIA section 188(a)(3) and that it
effectuates Congressional intent more closely, we have changed the
paragraph to use language identical to that in the statute.
D. ``Used, or Will Be Used'' vs. ``Used, or To Be Used''
In the same vein, the proposed revisions of 29 CFR 37.6(f)(2) and
(3) referred to any part of any facility that is ``used, or will be
used,'' for religious instruction or as a place for religious worship.
This language was different from the language of WIA section 188(a)(3),
which used the phrase ``used or to be used.'' To ensure that these
paragraphs do not alter the meaning of WIA section 188(a)(3) and that
they effectuate Congressional intent more closely, we have changed the
language of the final rule to employ the phrase ``used, or to be
used.''
E. ``Place of Worship'' vs. ``Place For Religious Worship''
Furthermore, the proposed revision of 29 CFR 37.6(f)(2) referred to
any part of any facility that is a place ``of worship.'' This language
was different from WIA section 188(a)(3), which referred to a place
``for religious worship.'' To ensure that this paragraph does not alter
the meaning of WIA section 188(a)(3) and that it effectuates
Congressional intent more closely, we have changed the language of the
final rule to use the phrase ``for religious worship.''
F. Separate Paragraphs vs. One Paragraph
The proposed revision of 29 CFR 37.6(f)(3) separated that paragraph
into two subparagraphs. To adhere more closely to the statute, the
final rule uses a single paragraph to set forth the relevant
requirements.
III. Comments Received on the September 30, 2003, Proposed Rule and
DOL's Responses
As noted in section II of this preamble, the amendments to 20 CFR
667.266(b)(1) and (2), 20 CFR 667.275(b), and 29 CFR 37.6(f)(1)
proposed in the September 30, 2003, NPRM were superseded by the
amendments to those paragraphs that were proposed in the NPRM published
March 9, 2004, and the Department is withdrawing the portions of the
September 30, 2003, NPRM that proposed amending those provisions to
eliminate inappropriate restrictions on the use of indirect Federal
financial assistance for religious activities. Therefore, this preamble
will not address the comments that were submitted regarding the
proposed amendments to those provisions. As noted above, the final rule
that addresses the proposals contained in the March 9, 2004, NPRM is
published elsewhere in today's Federal Register. Other comments
received are summarized and discussed below.
A. Comments and Questions Regarding ``Carry[ing] Out the Construction,
Operation, or Maintenance of Any Part of Any Facility Used or To Be
Used for Religious Instruction or as a Place for Religious Worship,''
and the Maintenance Exemption
1. Comment: The proposed rule could unconstitutionally allow
religious institutions to use public funds to make capital improvements
to structures used for religious activities.
Several commenters asserted that it would violate the Constitution
if recipients' efforts were to increase the monetary value of, or
result in an improvement to, facilities used by such institutions, ``at
least in part,'' for religious instruction or worship. Commenters
suggested that the regulation be amended to prohibit any such result.
Additionally, several commenters raised questions about the
constitutionality of the proposed maintenance exception. These
commenters contend that the exception is unconstitutional, because in
their view maintenance might result in capital improvements to
structures owned by religious institutions. In the view of these
commenters, public funds may be used by religious institutions for
capital improvements only when the improved structures are wholly and
permanently dedicated to secular use.
DOL response: We do not agree with the contention that paragraphs
Sec. 37.6(f)(2) and (3) (or WIA section 188(a)(3) itself) will allow
religious institutions to use WIA financial assistance to make
impermissible capital improvements to, or to otherwise increase the
value of, facilities used for religious activity. These statutory and
regulatory provisions may not be viewed in isolation. Rather, they must
be considered in the broader context not only of the WIA administrative
system, but also of the entire Federal system for providing and
administering domestic financial assistance.
Section 188(a)(3) clearly prohibits the employment of participants
to carry out construction, or even the operation, of ``any part of any
facility that is used or to be used for sectarian instruction or
religious worship.'' Thus, the range of activities permitted under
Section 188(a)(3), and the implementing regulation finalized today,
does not exceed constitutional boundaries.
[[Page 41898]]
With respect to maintenance, under the statutory scheme established
by Congress, the only type of work that participants may be employed
under WIA title I to carry out in any part of any facility that is used
or to be used for religious instruction or worship is ``maintenance.''
See 29 U.S.C. 2938(a)(3); see also new paragraph 37.6(f)(3) below. Even
such ``maintenance'' work is permitted only in specific, well-
delineated circumstances: the facility must not be ``primarily or
inherently devoted to religious instruction or religious worship,'' and
the organization operating the facility must be part of a program or
activity providing services to participants. Id. The provisions
relating to maintenance must be read in conjunction with the remainder
of ETA's general WIA regulations, as well as with DOL's regulations
establishing uniform administrative requirements for Federal grants and
agreements with nonprofit organizations. See 20 CFR 667.200; 29 CFR
part 95. Both of these sets of regulations require that the
allowability of costs incurred by nonprofit organizations receiving
Federal financial assistance be determined in accordance with the
provisions of Office of Management and Budget (OMB) Circular A-122,
``Cost Principles for Non-Profit Organizations.'' 20 CFR 667.200; 29
CFR 95.27.
Circular A-122 explicitly describes ``maintenance and repair
costs'' as ``costs incurred for necessary maintenance, repair, or
upkeep of buildings and equipment * * * which neither add to the
permanent value of the property nor appreciably prolong its intended
life, but keep it in an efficient operating condition.'' Circular No.
A-122, Attachment B, ``Selected Items of Cost,'' paragraph 27. The
Circular further provides that ``[c]osts incurred for improvements
which add to the permanent value of the buildings and equipment or
appreciably prolong their intended life shall be treated as capital
expenditures.'' Id.
Maintenance and repair costs, according to the Circular, are
allowable; by contrast, capital expenditures are generally unallowable
as direct costs, except with the prior approval of the awarding agency.
Circular No. A-122, Attachment B, ``Selected Items of Cost,'' paragraph
15. Thus, the administrative system is designed to ensure that a
recipient cannot receive reimbursement for capital expenditures by
attempting to characterize them as ``maintenance'' expenditures.
Because of the limitations already in place to prevent the use of
``maintenance'' work to increase capital value, there is no need to
make additional changes to the regulation to address the commenter's
concern that maintenance work might unconstitutionally increase capital
value.
Overall, then, the various regulatory and administrative
requirements described above are sufficient to make clear that no WIA
title I financial assistance will be used to employ participants to
make impermissible capital improvements to any part of any facility
used or to be used for religious instruction or as a place for
religious worship. Therefore, the Department has not revised the final
rule in response to this comment.
2. Comment: The proposed rule could result in excessive
entanglement with religion, in violation of the Establishment Clause of
the First Amendment.
One commenter noted that proposed paragraphs 37.6(f)(3) and (f)(4)
(paragraphs 37.6(f)(2) and (3) of the final rule) authorize the
employment of participants under WIA title I ``for maintenance of a
facility on the conditions that the facility is not `primarily or
inherently devoted to religious instruction or religious worship * * *'
'' This commenter was therefore concerned that the rule ``raise[s] the
specter of the government monitoring pervasively sectarian institutions
to determine on a case-by-case basis whether a facility is actually
used for sectarian purposes or whether facility usage is primarily
religious. This monitoring will put government officials in the
problematic position of determining what acts constitute religion,''
likely resulting in Establishment Clause violations on the basis of
excessive entanglement with religion.
DOL response: The Department does not agree that the rule will lead
to excessive governmental entanglement in the affairs of recipients
that are religious organizations. The existing WIA regulations--both
the nondiscrimination regulations promulgated by CRC at 29 CFR part 37
and the programmatic regulations promulgated by ETA--impose numerous
limitations on the use of WIA financial assistance. See, e.g., 20 CFR
667.260-667.270. The Department will monitor the compliance of
recipients that ``employ participants to carry out'' the activities
covered by the statute in the same way that it monitors the compliance
of other recipients. See 29 CFR 37.60, 37.62-37.66. Similarly, the
Department will investigate and resolve complaints alleging violations
of these regulatory provisions in the same manner, and following the
same procedures, that have been established for investigating
complaints alleging violations of the other nondiscrimination
provisions of WIA. See 29 CFR 37.70-37.75, 37.80-37.89. In addition,
violations of the provisions preventing maintenance expenditures from
being used for capital improvements will be investigated and resolved
in accordance with the procedures set forth in 20 CFR part 667. The
amount of oversight and monitoring needed to ensure that WIA financial
assistance is not used impermissibly is no greater than that involved
in monitoring to ensure compliance with other regulatory requirements.
Finally, the Department is already obliged, to a certain extent, to
determine ``what acts constitute religion,'' in the course of
investigating allegations of unlawful religious-based discrimination
(and, for that matter, in the course of ensuring that direct DOL
assistance is not used to support inherently religious activities). Cf.
29 CFR part 1605, Equal Employment Opportunity Commission (EEOC)
Guidelines on Discrimination Because of Religion, section 1605.1,
``Religious nature of a practice or belief.'' In the Department's view,
determinations as to ``whether a facility is actually used for
sectarian purposes'' or ``whether facility usage is primarily
religious'' will not require a greater amount of ``entanglement with
religion'' than the determination of whether a particular
participant's, applicant's, or employee's beliefs should be protected
as ``religious'' beliefs.
For these reasons, the Department has not revised the final rule in
response to this comment.
3. Comment: Violations of these provisions ``could raise difficult
remedial questions.''
The commenter who raised this issue inquired, ``Will the Department
of Labor * * * remove a structure from an offending institution? Will
it place liens on houses of worship?''
DOL response: The WIA regulations at 29 CFR part 37 provide that if
compliance is not achieved through the procedures set forth in the
regulations, the Secretary of Labor may take the following actions:
``(1) After opportunity for a hearing, suspend, terminate, deny or
discontinue the [recipient's] WIA Title I financial assistance, in
whole or in part; (2) Refer the matter to the Attorney General with a
recommendation that an appropriate civil action be instituted; or (3)
Take such action as may be provided by law.'' 29 CFR 37.110(a). The
Department does not view the ``remedial questions'' raised by the
regulatory provisions
[[Page 41899]]
amended by this final rule as any more ``difficult'' than those raised
with regard to possible violations of other regulatory provisions.
Therefore, the Department has not revised the final rule in response to
this comment.
4. Comment: Providing financial assistance under WIA to
``pervasively sectarian'' organizations or institutions violates the
Establishment Clause of the First Amendment.
The commenter that raised this issue noted that under the proposed
regulatory provisions, ``WIA Title I funds could be used for
construction, operation, or maintenance of a facility used by a
pervasively sectarian organization for non-religious purposes.'' In
this commenter's view, such use would violate the Establishment Clause.
Therefore, the commenter recommended that the provisions be amended to
``prohibit the use of WIA Title I funds for construction, operation, or
maintenance of facilities owned or operated by pervasively sectarian
institutions.''
DOL response: The Department does not agree with the commenter's
analysis. The Supreme Court's ``pervasively sectarian'' doctrine--which
held that there are certain religious institutions in which religion is
so pervasive that no government aid may be provided to them, because
their performance of even ``secular'' tasks will be infused with
religious purpose--no longer enjoys the support of a majority of the
Court. Four Justices expressly abandoned it in Mitchell v. Helms, 530
U.S. 793, 825-829 (2000) (plurality opinion), and Justice O'Connor's
opinion in that case, joined by Justice Breyer, set forth reasoning
that is inconsistent with its underlying premises, see id. at 857-858
(O'Connor, J., concurring in judgment) (requiring proof of ``actual
diversion of public support to religious uses''). Thus, six members of
the Court have rejected the view that aid provided to religious
institutions will invariably advance the institutions' religious
purposes, and that view is the foundation of the ``pervasively
sectarian'' doctrine. Therefore, under current precedent, the
Department may provide financial assistance to all service providers,
without regard to religion, so long as the providers meet eligibility
requirements and the assistance is not otherwise precluded. The
Department therefore declines to adopt the recommended change.
B. General Comments Regarding the Proposed Rule
1. Comment: The terms ``faith-based'' and ``religious
organization'' should be ``clearly defined'' in the regulations.
The commenter that made this suggestion provided no reasons for
adding these definitions to the regulations.
DOL response: The Department declines to adopt the recommended
change in this final rule. Such definitions are unnecessary, because
these terms are not used in 29 CFR part 37 as amended by this final
rule.
2. Comment: The regulations should be amended to require faith-
based organizations ``to abide by * * * state and local civil rights
laws.''
One commenter strongly suggested that the rule should make clear
that nothing in the new regulations affected state and local non-
discrimination laws covering sexual orientation and gender identity/
expression.
DOL response: In the Department's view, the recommended change is
unnecessary. The WIA regulations at 29 CFR part 37 already contain a
provision that explicitly states that the IFR ``does not preempt
consistent State and local requirements.'' 29 CFR 37.3(f). As a result,
unless specific provisions of State or local civil rights laws conflict
with the requirements set forth in the rule, those provisions will
continue to apply to recipients of WIA title I financial assistance.
The Department therefore declines to make the suggested change.
3. Comment: The regulations should be amended to bar discrimination
on the basis of sexual orientation and gender identity.
The commenter that made this suggestion stated that ``Federal
policy expanding the application of charitable choice provisions should
prohibit discrimination on the basis of religion and sexual orientation
and gender identity--discrimination against those organizations
applying for a federal grant or contract, employees of the grantee, as
well as the ultimate beneficiary of the program or service.'' (Emphases
in original.)
DOL response: The Department declines to adopt the recommended
change. The WIA regulations at 29 CFR part 37 implement section 188 of
WIA; therefore, they address only discrimination on bases prohibited by
that statutory section. Neither sexual orientation nor gender identity
is included among these bases, see 29 U.S.C. 2938(a)(2), and we decline
to impose a prohibition on such discrimination by regulation.
4. Comment: The rule should contain administrative requirements to
ensure that government funds are not used to support religious
activities.
One commenter recommended that ``faith-based and community-based
organizations * * * be held as accountable as any other non-profit
entity that receives taxpayer dollars'' and that ``firewalls * * * be
[put] in place prohibiting federal money from being used to fund
religious materials.''
Additionally, the commenter recommended that Federal funds
``supplement and not supplant existing money.'' Two additional
commenters made similar recommendations.
DOL response: In the Department's view, the Federal reporting,
financial management, and other administrative requirements that are
already in place, and that are applicable to all recipients of WIA
title I financial assistance, are sufficient to ensure that faith-based
and community organizations are held as accountable as any other
recipient of federal assistance. Some of these requirements are
described above in section II(A)(1) of this preamble. Faith-based and
community organizations are not exempt from these requirements. See 20
CFR part 667; 29 CFR part 95; OMB Circulars Nos. A-110, ``Uniform
Administrative Requirements for Grants and Other Agreements with
Institutions of Higher Education, Hospitals, and Other Nonprofit
Organizations,'' A-122, ``Cost Principles for Nonprofit
Organizations,'' and A-133, ``Audits of States, Local Governments, and
Non-Profit Organizations.'' Furthermore, the Department believes that
new subpart D to 29 CFR part 2, published in today's Federal Register,
sets up appropriate constitutional safeguards regarding the use of DOL
assistance. For example, with regard to direct financial assistance,
new subpart D makes clear that such assistance must not be used for
inherently religious activities. The Department therefore declines to
impose additional changes related to accountability.
With regard to the comments that federal funds must ``supplement
and not supplant existing money,'' we would simply note that WIA
already provides that title I financial assistance must only be used
for activities that ``are in addition to those that would otherwise be
available in the local area in the absence of such funds.'' WIA section
195(2); 29 U.S.C. 2945(2). We disagree, therefore, that any additional
such requirements must be included in this regulation.
5. Comment: The proposed rules ``fail to take any steps to prevent
government
[[Page 41900]]
money from flowing to anti-Semitic, racist and bigoted organizations.''
DOL response: The WIA regulations at 29 CFR part 37 that are
already in place contain several provisions designed to ensure that
organizations that discriminate on prohibited grounds--including race,
color, national origin, and religion--are barred from receiving
financial assistance under WIA. The regulations contain a broad
provision stating that ``[n]o individual in the United States'' may be
``excluded from participation in, denied the benefits of, subjected to
discrimination under, or denied employment in the administration of or
in connection with'' any WIA title I-financially assisted program or
activity on any prohibited basis, including race, color, national
origin, or religion. 29 CFR 37.5. In addition, the regulations
explicitly prohibit recipients from ``[a]id[ing] or perpetuat[ing]
discrimination by providing significant assistance to an agency,
organization, or person that discriminates on a prohibited ground
[including race, color, national origin, or religion] in providing any
aid, benefits, services, or training to registrants, applicants, or
participants in a WIA Title I-funded program or activity.'' 29 CFR
37.6(c)(1). This provision bars not only direct assistance to persons
or entities that discriminate, but also bars assistance provided
``through contractual, licensing, or other arrangements.'' 29 CFR
37.6(c). Recipients that provide such assistance are themselves
violating the nondiscrimination requirements, and can be subjected to
the sanctions listed in 29 CFR 37.110. These provisions contain no
exemption for religious organizations. See generally 29 CFR part 37.
Therefore, in the Department's view, no additional regulatory
provisions ``to prevent government money from flowing to anti-Semitic,
racist and bigoted organizations'' are needed.
IV. Regulatory Procedures
Executive Order 12866
The Office of Management and Budget (OMB) has reviewed this rule
under Executive Order 12866, ``Regulatory Planning and Review.'' OMB
has determined that this rule is a ``significant regulatory action'' as
defined in section 3(f) of the Order. However, this rule is not an
economically significant regulatory action under the Order, and
therefore, no regulatory impact analysis has been prepared.
Regulatory Flexibility Act
The final rule will not substantially change the existing
obligation of recipients or entities operating Federally-assisted
programs or activities to apply a policy of nondiscrimination and equal
opportunity in employment or services. The Secretary, in accordance
with the Regulatory Flexibility Act (5 U.S.C. Sec. 605(b)), has
reviewed and approved this final rule, and in so doing certifies that
this rule will not have a significant economic impact on a substantial
number of small entities. Therefore, a regulatory flexibility analysis
is not required.
Unfunded Mandates Reform
For purposes of the Unfunded Mandates Reform Act of 1995, as well
as Executive Order 12875, this final rule does not include any Federal
mandate that may result in increased expenditures by any State, local,
and tribal governments.
Paperwork Reduction Act
The final rule contains no new information collection requirements.
Therefore, it is not subject to the Paperwork Reduction Act.
Executive Order 13132
This final rule has been reviewed in accordance with Executive
Order 13132 regarding Federalism. The final rule will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government. Therefore,
the requirements of section 6 of Executive Order 13132 do not apply to
this rule.
List of Subjects in 29 CFR Part 37
Administrative practice and procedure, Discrimination, Civil
rights, Equal education opportunity, Equal employment opportunity,
Grant programs--Labor, Individuals with disabilities, Investigations,
Reporting and recordkeeping requirements.
Signed at Washington, DC, this 7th day of July.
Elaine L. Chao,
Secretary of Labor.
Title 29--Labor
0
For the reasons discussed in the preamble, Part 37, Subpart A, title 29
of the Code of Federal Regulations, is amended to read as set forth
below.
PART 37--IMPLEMENTATION OF THE NONDISCRIMINATION AND EQUAL
OPPORTUNITY PROVISIONS OF THE WORKFORCE INVESTMENT ACT OF 1998
(WIA)
0
1. The authority citation for Part 37 continues to read as follows:
Authority: Sections 134(b), 136(d)(2)(F), 136(e), 172(a),
183(c), 185(c)(2), 185(d)(1)(E), 186, 187 and 188 of the Workforce
Investment Act of 1998, 29 U.S.C. 2801, et seq.; title VI of the
Civil Rights Act of 1964, as amended, 42 U.S.C. 2000d, et seq.;
section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C.
794; the Age Discrimination Act of 1975, as amended, 42 U.S.C. 6101;
and title IX of the Education Amendments of 1972, as amended, 20
U.S.C. 1681.
0
2. In Sec. 37.6, paragraphs (f)(2) and (3) are revised to read as
follows:
Sec. 37.6 What specific discriminatory action, based on prohibited
grounds other than disability, are prohibited by this part?
* * * * *
(f)(2) Except under the circumstances described in paragraph (f)(3)
below, a recipient must not employ participants to carry out the
construction, operation, or maintenance of any part of any facility
that is used, or to be used, for religious instruction or as a place
for religious worship.
(3) A recipient may employ participants to carry out the
maintenance of a facility that is not primarily or inherently devoted
to religious instruction or religious worship if the organization
operating the facility is part of a program or activity providing
services to participants.
* * * * *
[FR Doc. 04-15708 Filed 7-8-04; 8:45 am]
BILLING CODE 4510-23-P
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