FR Doc 04-12709
[Federal Register: June 4, 2004 (Volume 69, Number 108)]
[Rules and Regulations]
[Page 31707-31715]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04jn04-11]
[[Page 31707]]
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Part III
Department of Education
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34 CFR Parts 74, 75, 76, and 80
Participation in Education Department Programs by Religious
Organizations; Providing for Equal Treatment of All Education Program
Participants; Final Rule
[[Page 31708]]
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DEPARTMENT OF EDUCATION
34 CFR Parts 74, 75, 76, and 80
RIN 1890-AA11
Participation in Education Department Programs by Religious
Organizations; Providing for Equal Treatment of All Education Program
Participants
AGENCY: Center for Faith-Based and Community Initiatives, Office of the
Secretary, U.S. Department of Education.
ACTION: Final regulations.
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SUMMARY: These final regulations implement Executive branch policy
that, within the framework of constitutional church-state guidelines,
religiously affiliated (or ``faith-based'') organizations should be
able to compete on an equal footing with other organizations for
funding by the U.S. Department of Education (Department). We are
revising Department regulations to remove barriers to the participation
of faith-based organizations in Department programs and to ensure that
these programs are implemented in a manner consistent with the
requirements of the U.S. Constitution, including the Establishment,
Free Exercise, and Free Speech Clauses of the First Amendment.
DATES: These regulations are effective July 6, 2004.
FOR FURTHER INFORMATION CONTACT: John J. Porter, Director, Center for
Faith-Based and Community Initiatives, Office of the Secretary, U.S.
Department of Education, 555 New Jersey Avenue, NW., Suite 410,
Washington, DC 20208-8300. Telephone: (202) 219-1741.
If you use a telecommunications device for the deaf (TDD), you may
call the Federal Information Relay Service (FIRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternative format (e.g., Braille, large print, audiotape, or computer
diskette) on request to the contact person listed under FOR FURTHER
INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION:
Background
Faith-based organizations make an important contribution to the
education of Americans and provide an important part of the social
services network of the United States. Faith-based organizations acting
alone or in partnership with public schools, community-based
organizations, institutions of higher education, and other private
organizations do much good work to advance the quality of education for
all Americans. Often this good work of faith-based organizations is
done despite meager resources, and, in the past, it has generally been
done without the assistance of the Federal government. The Department
seeks to facilitate the contribution of faith-based and community
organizations to increase the effectiveness of its programs and to
provide equal access to a quality education for all Americans.
President Bush has directed Federal agencies, including this
Department, to take steps to ensure that Federal policies and programs
are fully open to faith-based organizations in a manner that is
consistent with the U.S. Constitution and statutory requirements. The
Administration believes that faith-based organizations possess an
under-appreciated ability to meet the educational needs of
disadvantaged children and to strengthen our system of education. The
Administration believes that Federal agencies should ensure that there
is equal opportunity for all private organizations--faith-based and
secular--to use Federal resources to meet the needs of their
communities.
On September 30, 2003, the Secretary published a notice of proposed
rulemaking (NPRM) in the Federal Register (68 FR 56417) to amend
Department regulations that imposed unwarranted barriers to the
participation of faith-based organizations in Department programs. The
proposed regulations were part of the Department's effort to fulfill
its responsibilities under two Executive Orders issued by President
Bush.
Executive Order 13198, dated January 29, 2001, directs several
Departments to identify and eliminate regulatory and other programmatic
obstacles to the full contribution of faith-based and community
organizations in order to increase the effectiveness of their programs.
Executive Order 13279, dated December 12, 2002, directs those
Departments to review and evaluate existing policies that have
implications for faith-based and community organizations. The stated
purpose of the review and evaluation is to assess the consistency of
those policies with certain fundamental principles and policymaking
criteria designed to ensure a level playing field for religious and
nonreligious organizations. The order directs the Departments, to the
extent permitted by law, (1) to amend all such existing policies to
ensure that they are consistent with the fundamental principles and
policymaking criteria; (2) where appropriate, to implement new policies
that are consistent with and necessary to further the fundamental
principles and policymaking criteria; and (3) to implement new policies
that are necessary to ensure that the Departments collect data
regarding the participation of faith-based and community organizations
in social service programs that receive Federal financial assistance.
The NPRM proposed the following changes to the Department's
regulations:
1. Participation by faith-based organizations in Education
Department programs. The proposed regulations specifically provided
that faith-based organizations are eligible to apply for and to receive
funding under Department programs on the same basis as any other
private organization, with respect to programs for which such other
organizations are eligible. If a faith-based organization meets the
statutory and regulatory tests for eligibility, the Department
considers it eligible. The proposed regulations additionally provided
that the Department and the States shall not discriminate against a
private organization on the basis of the organization's religious
character or affiliation.
2. Inherently religious activities. The NPRM sought to clarify that
a faith-based organization that receives a grant under a program of the
Department or a subgrant from a State under a State-administered
program of the Department is subject to the existing regulatory
provisions that prohibit grantees and States and subgrantees from using
their grants and subgrants to pay for inherently religious activities,
such as religious worship, instruction, or proselytization. In
addition, the NPRM sought to clarify that such an organization is
subject to the existing regulatory provisions that prohibit grantees
and States and subgrantees from using their grants and subgrants to pay
for equipment or supplies used for religious worship, instruction, or
proselytization. If an organization engages in these religious
activities, then it must offer those services separately in time or
location from any programs or services supported by grants from the
Department or subgrants from a State under a State-administered program
of the Department. Additionally, participation in any inherently
religious activities by beneficiaries of the programs supported by the
grants or subgrants must be voluntary.
3. Independence of faith-based organizations. The proposed
regulations also clarified that a religious organization that
participated in Department programs would retain its
[[Page 31709]]
independence and could continue to carry out its mission, including the
definition, practice, and expression of its religious beliefs. Among
other things, a faith-based organization could use space in its
facilities to provide Department-funded services without removing
religious art, icons, scriptures, or other religious symbols. In
addition, a Department-funded religious organization could retain
religious terms in its organization's name, select its board members
and otherwise govern itself on a religious basis, and include religious
references in its organization's mission statements and other governing
documents.
4. Nondiscrimination in providing assistance. The NPRM provided
that an organization that received a grant from the Department or that
received a subgrant from a State under a State-administered program of
the Department would not be allowed to discriminate against a
beneficiary or prospective beneficiary of that program on the basis of
religion or religious belief.
5. Removal of prohibition on use of grants and subgrants to pay for
an activity of a school or department of divinity. The proposed
regulations clarified that the most qualified applicants will receive
funding under the Department's programs, and that the religious
character or affiliation of the private organizations that apply will
not be taken into account. For that reason, we proposed to remove the
regulation prohibiting grantees and subgrantees from using their grants
and subgrants to pay for an activity of a school or department of
divinity.
6. Technical amendment relating to the prohibition on use of grants
to pay for equipment or supplies to be used for religious worship,
instruction, or proselytization. In the NPRM, we proposed a technical
amendment to the Department's regulations, clarifying that grantees
cannot use their grants to pay for equipment or supplies used for
religious worship, instruction, or proselytization.
7. Removal of prohibition on use of grants and subgrants to pay for
construction, remodeling, repair, operation, or maintenance of any
facility or part of a facility to be used for religious worship,
instruction, or proselytization. We proposed to remove Sec. Sec.
75.532(a)(3) and 76.532(a)(3), which prohibit the use of Department
funds to pay for construction, remodeling, repair, operation, or
maintenance of any private educational facility (or part of a private
educational facility). This regulation is not necessary because there
is no statutory authority for this use of Department funds.
Accordingly, the Department has no programs that fund such capital
improvements.
8. Eligibility of faith-based organizations to contract with or
otherwise receive assistance from grantees and subgrantees, including
States, on the same basis as other private organizations, with respect
to contracts or assistance for which such organizations are eligible.
The NPRM proposed to clarify that faith-based organizations are
eligible to contract with or otherwise receive assistance from grantees
and subgrantees, including States, on the same basis as other private
organizations, with respect to contracts or assistance for which such
organizations are eligible. These faith-based organizations are subject
to the same limitations to which grantees and subgrantees are subject
regarding the use of funds for inherently religious activities, unless
the organization is selected as a result of the genuine and independent
private choices of individual beneficiaries of the program and provided
the organization otherwise satisfies the requirements of the program.
These final regulations contain several significant changes from
the NPRM. We fully explain these changes in the appendix at the end of
these final regulations.
Analysis of Comments and Changes
In response to the Secretary's invitation in the NPRM, 12 parties
submitted a total of 14 comments on the proposed regulations. An
analysis of the comments and of the changes in the regulations since
publication of the NPRM is published as an appendix at the end of these
final regulations.
We group major issues according to subject. Generally, we do not
address technical and other minor changes.
Executive Order 12866--Regulatory Planning and Review
The Office of Management and Budget (OMB) reviewed this final rule
under Executive Order 12866, Regulatory Planning and Review. OMB
determined that the 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).
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.
Executive Order 13132--Federalism
Executive Order 13132 (entitled ``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.
Regulatory Flexibility Act
The Secretary, 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
Department grantees and subgrantees. Rather, the purpose of the rule is
to remove policy prohibitions that currently restrict the equal
participation of religious or religiously affiliated organizations
(large and small) in the Department's programs.
Paperwork Reduction Act of 1995
These regulations do not contain any information collection
requirements.
Intergovernmental Review
These final regulations affect direct grant programs that are
subject to Executive Order 12372 and the regulations in 34 CFR part 79.
The objective of the Executive Order is to foster an intergovernmental
partnership and to promote federalism by relying on processes developed
by State and local governments for coordination and review of proposed
Federal financial assistance.
In accordance with the order, we intend this document to provide
early notification of our specific plans and actions for these
programs.
Assessment of Educational Impact
In the NPRM we requested comments on whether the proposed
regulations would require transmission of information that any other
agency or authority of the United States gathers or makes available.
Based on the response to the NPRM and on our review, we have
determined that these final regulations do not require transmission of
information that any other agency or authority of the
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United States gathers or makes available.
Electronic Access to This Document
You may view this document, as well as all other Department of
Education documents published in the Federal Register, in text or Adobe
Portable Document Format (PDF) on the Internet at the following site:
http://www.ed.gov/news/fedregister.
To use PDF you must have Adobe Acrobat Reader, which is available
free at this site. If you have questions about using PDF, call the U.S.
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in
the Washington, DC area at (202) 512-1530.
Note: The official version of this document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available on GPO Access at: http://www.gpoaccess.gov/nara/index.html.
(The Catalog of Federal Domestic Assistance Number
does not apply.)
List of Subjects
34 CFR Part 74
Accounting, Grant programs, Reporting and recordkeeping
requirements.
34 CFR Part 75
Accounting, Administrative practice and procedure, Education, Grant
programs-education, Private schools, Reporting and recordkeeping
requirements.
34 CFR Part 76
Administrative practice and procedure, Compliance, Eligibility,
Grant administration, Reporting and recordkeeping requirements.
34 CFR Part 80
Accounting, Grant programs, Reporting and recordkeeping
requirements.
Dated: May 28, 2004.
Rod Paige,
Secretary of Education.
0
For the reasons discussed in the preamble, the Secretary amends parts
74, 75, 76, and 80 of title 34 of the Code of Federal Regulations as
follows:
PART 74--ADMINISTRATION OF GRANTS AND AGREEMENTS WITH INSTITUTIONS
OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS
0
1. The authority citation for part 74 continues to read as follows:
Authority: 20 U.S.C. 1221e-3 and 3474; OMB Circular A-110,
unless otherwise noted.
0
2. Section 74.44 is amended by adding new paragraph (f) to read as
follows:
Sec. 74.44 Procurement procedures.
* * * * *
(f)(1)(i) A faith-based organization is eligible to contract with
recipients on the same basis as any other private organization, with
respect to contracts for which such other organizations are eligible.
(ii) In the selection of goods and services providers, recipients
shall not discriminate for or against a private organization on the
basis of the organization's religious character or affiliation.
(2) The provisions of Sec. Sec. 75.532 and 76.532 applicable to
grantees and subgrantees apply to a faith-based organization that
contracts with a recipient, unless the faith-based organization is
selected as a result of the genuine and independent private choices of
individual beneficiaries of the program and provided the organization
otherwise satisfies the requirements of the program.
(3) A private organization that engages in inherently religious
activities, such as religious worship, instruction, or proselytization,
must offer those services separately in time or location from any
programs or services supported by a contract with a recipient, and
participation in any such inherently religious activities by
beneficiaries of the programs supported by the contract must be
voluntary, unless the organization is selected as a result of the
genuine and independent private choices of individual beneficiaries of
the program and provided the organization otherwise satisfies the
requirements of the program.
(4)(i) A faith-based organization that contracts with a recipient
may retain its independence, autonomy, right of expression, religious
character, and authority over its governance.
(ii) A faith-based organization may, among other things--
(A) Retain religious terms in its name;
(B) Continue to carry out its mission, including the definition,
development, practice, and expression of its religious beliefs;
(C) Use its facilities to provide services without removing or
altering religious art, icons, scriptures, or other symbols from these
facilities;
(D) Select its board members and otherwise govern itself on a
religious basis; and
(E) Include religious references in its mission statement and other
chartering or governing documents.
(5) A private organization that contracts with a recipient shall
not discriminate against a beneficiary or prospective beneficiary in
the provision of program services on the basis of religion or religious
belief.
(6) A religious organization's exemption from the Federal
prohibition on employment discrimination on the basis of religion, in
section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is
not forfeited when the organization contracts with a recipient.
PART 75--DIRECT GRANT PROGRAMS
0
3. The authority citation for part 75 continues to read as follows:
Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.
0
4. Add Sec. 75.52 to subpart A under the undesignated center heading
``Eligibility for a Grant'' to read as follows:
Sec. 75.52 Eligibility of faith-based organizations for a grant.
(a)(1) A faith-based organization is eligible to apply for and to
receive a grant under a program of the Department on the same basis as
any other private organization, with respect to programs for which such
other organizations are eligible.
(2) In the selection of grantees, the Department shall not
discriminate for or against a private organization on the basis of the
organization's religious character or affiliation.
(b) The provisions of Sec. 75.532 apply to a faith-based
organization that receives a grant under a program of the Department.
(c) A private organization that engages in inherently religious
activities, such as religious worship, instruction, or proselytization,
must offer those services separately in time or location from any
programs or services supported by a grant from the Department, and
participation in any such inherently religious activities by
beneficiaries of the programs supported by the grant must be voluntary.
(d)(1) A faith-based organization that applies for or receives a
grant under a program of the Department may retain its independence,
autonomy, right of expression, religious character, and authority over
its governance.
(2) A faith-based organization may, among other things--
(i) Retain religious terms in its name;
(ii) Continue to carry out its mission, including the definition,
development, practice, and expression of its religious beliefs;
(iii) Use its facilities to provide services without removing or
altering religious art, icons, scriptures, or other symbols from these
facilities;
[[Page 31711]]
(iv) Select its board members and otherwise govern itself on a
religious basis; and
(v) Include religious references in its mission statement and other
chartering or governing documents.
(e) A private organization that receives a grant under a program of
the Department shall not discriminate against a beneficiary or
prospective beneficiary in the provision of program services on the
basis of religion or religious belief.
(f) If a grantee contributes its own funds in excess of those funds
required by a matching or grant agreement to supplement federally
funded activities, the grantee has the option to segregate those
additional funds or commingle them with the funds required by the
matching requirements or grant agreement. However, if the additional
funds are commingled, this section applies to all of the commingled
funds.
(g) A religious organization's exemption from the Federal
prohibition on employment discrimination on the basis of religion, in
section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is
not forfeited when the organization receives financial assistance from
the Department.
(Authority: 20 U.S.C. 1221e-3 and 3474)
0
5. In Sec. 75.532, revise paragraph (a)(2), remove paragraphs (a)(3)
and (4), and remove and reserve paragraph (b) to read as follows:
Sec. 75.532 Use of funds for religion prohibited.
(a) * * *
(2) Equipment or supplies to be used for any of the activities
specified in paragraph (a)(1) of this section.
(b) [Reserved.]
PART 76--STATE-ADMINISTERED PROGRAMS
0
6. The authority citation for part 76 continues to read as follows:
Authority: 20 U.S.C. 1221e-3, 3474, 6511(a), and 8065a, unless
otherwise noted.
0
7. Add Sec. 76.52 to subpart A under the undesignated center heading
``Eligibility for a Grant or Subgrant'' to read as follows:
Sec. 76.52 Eligibility of faith-based organizations for a subgrant.
(a)(1) A faith-based organization is eligible to apply for and to
receive a subgrant under a program of the Department on the same basis
as any other private organization, with respect to programs for which
such other organizations are eligible.
(2) In the selection of subgrantees, States shall not discriminate
for or against a private organization on the basis of the
organization's religious character or affiliation.
(b) The provisions of Sec. 76.532 apply to a faith-based
organization that receives a subgrant from a State under a State-
administered program of the Department.
(c) A private organization that engages in inherently religious
activities, such as religious worship, instruction, or proselytization,
must offer those services separately in time or location from any
programs or services supported by a subgrant from a State under a
State-administered program of the Department, and participation in any
such inherently religious activities by beneficiaries of the programs
supported by the subgrant must be voluntary.
(d)(1) A faith-based organization that applies for or receives a
subgrant from a State under a State-administered program of the
Department may retain its independence, autonomy, right of expression,
religious character, and authority over its governance.
(2) A faith-based organization may, among other things--
(i) Retain religious terms in its name;
(ii) Continue to carry out its mission, including the definition,
development, practice, and expression of its religious beliefs;
(iii) Use its facilities to provide services without removing or
altering religious art, icons, scriptures, or other symbols from these
facilities;
(iv) Select its board members and otherwise govern itself on a
religious basis; and
(v) Include religious references in its mission statement and other
chartering or governing documents.
(e) A private organization that receives a subgrant from a State
under a State-administered program of the Department shall not
discriminate against a beneficiary or prospective beneficiary in the
provision of program services on the basis of religion or religious
belief.
(f) If a State or subgrantee contributes its own funds in excess of
those funds required by a matching or grant agreement to supplement
Federally funded activities, the State or subgrantee has the option to
segregate those additional funds or commingle them with the funds
required by the matching requirements or grant agreement. However, if
the additional funds are commingled, this section applies to all of the
commingled funds.
(g) A religious organization's exemption from the Federal
prohibition on employment discrimination on the basis of religion, in
section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is
not forfeited when the organization receives financial assistance from
the Department.
(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))
Sec. 76.532 [Amended]
0
8. Section 76.532 is amended by removing paragraphs (a)(3) and (a)(4);
and removing and reserving paragraph (b).
PART 80--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND
COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS
0
9. The authority citation for part 80 is revised to read as follows:
Authority: 20 U.S.C. 1221e-3(a)(1) and 3474, OMB Circular A-102,
unless otherwise noted.
0
10. Section 80.36 is amended by adding new paragraph (j) to read as
follows:
Sec. 80.36 Procurement.
* * * * *
(j) Contracting with faith-based organizations. (1)(i) A faith-
based organization is eligible to contract with grantees and
subgrantees, including States, on the same basis as any other private
organization, with respect to contracts for which such other
organizations are eligible.
(ii) In the selection of goods and services providers, grantees and
subgrantees, including States, shall not discriminate for or against a
private organization on the basis of the organization's religious
character or affiliation.
(2) The provisions of Sec. Sec. 75.532 and 76.532 applicable to
grantees and subgrantees apply to a faith-based organization that
contracts with a grantee or subgrantee, including a State, unless the
faith-based organization is selected as a result of the genuine and
independent private choices of individual beneficiaries of the program
and provided the organization otherwise satisfies the requirements of
the program.
(3) A private organization that engages in inherently religious
activities, such as religious worship, instruction, or proselytization,
must offer those services separately in time or location from any
programs or services supported by a contract with a grantee or
subgrantee, including a State, and participation in any such inherently
religious activities by beneficiaries of
[[Page 31712]]
the programs supported by the contract must be voluntary, unless the
organization is selected as a result of the genuine and independent
private choices of individual beneficiaries of the program and provided
the organization otherwise satisfies the requirements of the program.
(4)(i) A faith-based organization that contracts with a grantee or
subgrantee, including a State, may retain its independence, autonomy,
right of expression, religious character, and authority over its
governance.
(ii) A faith-based organization may, among other things--
(A) Retain religious terms in its name;
(B) Continue to carry out its mission, including the definition,
development, practice, and expression of its religious beliefs;
(C) Use its facilities to provide services without removing or
altering religious art, icons, scriptures, or other symbols from these
facilities;
(D) Select its board members and otherwise govern itself on a
religious basis; and
(E) Include religious references in its mission statement and other
chartering or governing documents.
(5) A private organization that contracts with a grantee or
subgrantee, including a State, shall not discriminate against a
beneficiary or prospective beneficiary in the provision of program
services on the basis of religion or religious belief.
(6) A religious organization's exemption from the Federal
prohibition on employment discrimination on the basis of religion, in
section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is
not forfeited when the organization contracts with a grantee or
subgrantee.
Appendix--Analysis of Comments and Changes
Note: The following appendix will not appear in the Code of
Federal Regulations.
Participation by Faith-Based Organizations in Education Department
Programs
Comments: Several commenters expressed appreciation and support
for the Department's efforts to clarify the regulations governing
participation of faith-based organizations in its programs. Other
commenters disagreed with the proposed regulations, asserting that
they would allow Federal funds to be given to ``pervasively
sectarian'' organizations in violation of the U.S. Constitution.
These commenters maintained that the regulation places no
limitations on the kinds of religious organizations that can receive
funds, and they requested that ``pervasively sectarian''
organizations be barred from receiving Department funds. Similarly,
other commenters suggested that the proposed regulation improperly
allows grants of public funds to religious organizations in which
religious missions overpower secular functions.
Discussion: We do not agree that the U.S. Constitution requires
the Department to distinguish between different religious
organizations in providing funding for Department programs.
Organizations that receive direct Department funds may not use these
funds for inherently religious activities. These organizations must
ensure that such religious activities are separate in time or
location from services funded by the Department and must also ensure
that participation in such religious activities is voluntary.
Furthermore, program participants that violate these requirements
will be subject to applicable sanctions and penalties. The
regulations thus ensure, as required by current legal precedent,
that there is no government funding of inherently religious
activities.
In addition, 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 that
doctrine's underlying premises, see id. at 857 (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. The Department therefore believes that, under current
legal precedent, the Department may fund all service providers,
without regard to religion and free of criteria that require the
provider to abandon its religious expression or character.
To clarify that the final rule bars not only discrimination
against, but favoritism of, faith-based organizations, we have
modified it to expressly prohibit discrimination against, and
favoritism of, faith-based providers in the selection of grantees,
subgrantees, and goods and services providers. However, nothing in
the regulation precludes those administering Department-funded
programs from accommodating religious organizations in a manner
consistent with the Establishment Clause of the First Amendment to
the U.S. Constitution.
Changes: Sections 74.44(f)(1)(ii), 75.52(a)(2), 76.52(a)(2), and
80.36(j)(ii) are revised to reflect that a private organization
shall not be subjected to discrimination, either in its favor or to
its detriment, on the basis of the organization's religious
character or affiliation.
Inherently Religious Activities
Comments: Some commenters suggested that the proposed regulation
does not sufficiently detail the scope of religious content that
must be omitted from government-funded programs. For example, some
suggested that the explanation given of ``inherently religious
activities'' as ``religious worship, instruction, or
proselytization'' is unclear or incomplete. Relatedly, it was
suggested that the proposed regulation authorizes conduct that will
impermissibly convey the message that the government endorses
religious content. One commenter requested that the proposed
regulation be changed to make clear that the government may not
disburse public funds to organizations that convey religious
messages or in any way advance religion. A few commenters also
suggested that the Department could not engage in effective grant
monitoring activities without violating the First Amendment to the
U.S. Constitution.
Discussion: The Department disagrees with these comments. As the
commenters' own submissions suggest, it would be difficult to
establish an acceptable list of all ``inherently religious''
activities. Inevitably, the regulatory definition would exclude some
inherently religious activities or include certain activities that
are not inherently religious. Rather than attempt to establish an
exhaustive regulatory definition, the Department has decided to
retain the language of the proposed regulation, which provides
examples of the general types of activities that are considered
``inherently religious.'' This approach is consistent with Supreme
Court precedent, which likewise has not comprehensively defined
inherently religious activities. For example, prayer and worship are
inherently religious activities, but Department-funded activities do
not become inherently religious merely because they are conducted by
individuals who are religiously motivated to undertake them or view
the activities as a form of ``ministry.''
As for the suggestion that the regulation indicates that the
Department endorses religious content, we again emphasize that the
regulation forbids the use of government assistance for inherently
religious activities and states that any such activities must be
voluntary and separated, in time or location, from any programs or
services supported by a grant from the Department or by a subgrant
from a State under a State-administered program of the Department.
The Department believes that the term ``voluntary'' sufficiently
protects beneficiaries. Conditioning receipt of services funded by
the Federal Government upon active participation in inherently
religious activities would be one example of involuntary
participation in inherently religious activities.
Finally, there is no constitutional support for the view that
the government must exclude from its programs those organizations
that convey religious messages or advance religion with their own
funds. As noted above, the Supreme Court has held that the U.S.
Constitution forbids the use of government funds for inherently
religious activities, absent an element of genuine and
[[Page 31713]]
independent private choice, but the Court has rejected the
presumption that religious organizations will inevitably divert such
funds and use them for their own religious purposes. The Department
rejects the view that organizations with religious commitments
cannot be trusted to fulfill their written promises to adhere to
grant requirements. The Department also disagrees with commenters
that stated that the Department could not monitor faith-based
organizations without running afoul of the First Amendment to the
U.S. Constitution. The Department's monitoring of faith-based
organizations for compliance with Federal requirements will be no
different from its monitoring of other organizations, which does not
violate the First Amendment to the U.S. Constitution. We further
discuss monitoring below under ``Assurance Requirements.''
Changes: None.
Programs of Choice
Comments: Some commenters claimed that where the proposed
regulation addressed the selection of a faith-based organization as
a result of the genuine and independent private choice of the
beneficiary of the program, it did not contain sufficient safeguards
under Zelman v. Simmons-Harris, 536 U.S. 639 (2002). These
commenters stated that secular alternatives are not available in the
social services context, eliminating the possibility of real choice
by program beneficiaries. They requested that the regulation clearly
state that beneficiaries have the right to object to a religious
provider assigned to them and to receive a secular provider, and
that the beneficiaries be given notice of these rights.
Some commenters also objected to the Department's classification
of the supplemental educational services program of section 1116 of
the Elementary and Secondary Education Act of 1965, as amended by
the No Child Left Behind Act of 2001, as one that involves the
genuine and independent private choice of the beneficiary of the
program. Additionally, they objected to this classification because
payment for the services rendered may be made directly by the
government to service provider organizations. The commenters also
believe the application of the proposed regulations violates the
supplemental educational services program statute, which requires
that the instruction and content of supplemental educational
services be secular, neutral, and non-ideological.
Another commenter stated that programs in which the organization
is selected as a result of the genuine and independent private
choice of the beneficiary should be labeled as such in the
procurement contract and in any public notification regarding that
program.
Discussion: The Department declines to adopt the recommendations
of the commenters. Any programs of choice offered by the Department
must, of course, comply with Federal law (including current legal
precedent), and nothing in the proposed regulation provides
otherwise. The regulation comports with Supreme Court precedent by
requiring a ``genuine and independent private choice[].'' The
Department thus believes that the proposed regulation adequately
addresses the commenters' constitutional concerns.
With respect to the commenters' objection relating to the
supplemental educational services program, we believe that this
regulation must be read together with all applicable statutory
requirements. For example, the supplemental educational services
program requires State educational agencies, among other things, to
promote maximum participation by providers to ensure, to the extent
practicable, that parents have as many choices as possible and to
approve providers based upon objective criteria.
Furthermore, it is not dispositive for constitutional purposes
that the funds for supplemental educational services may formally
pass directly from the government to the faith-based organization,
provided there is genuine and independent private choice for the
ultimate beneficiaries and the aid follows them to the service
providers of their choice. The United States Court of Appeals for
the Seventh Circuit recently addressed this issue:
The state in effect gives eligible offenders ``vouchers'' that
they can use to purchase a place in a halfway house, whether the
halfway house is ``parochial'' or secular. We have put ``vouchers''
in scare quotes because the state has dispensed with the
intermediate step by which the recipient of the publicly funded
private service hands his voucher to the service provider. But so
far as the policy of the establishment clause is concerned, there is
no difference between giving the voucher recipient a piece of paper
that directs the public agency to pay the service provider and the
agency's asking the recipient to indicate his preference and paying
the provider whose service he prefers.
Nor does it make a difference that the state, rather than
accrediting halfway houses, enters into contracts with them.
Freedom from Religion Found., Inc. v. McCallum, 324 F.3d 880, 882
(7th Cir. 2003). The Department finds the reasoning of this decision
compelling.
As for whether application of these regulations violates the
terms of the supplemental educational services program statute, the
Department does not believe that these regulations alter in any way
those statutory requirements. The Department's non-regulatory
guidance on supplemental educational services affirms that the
instruction and content of these Federally funded services be
secular, neutral, and non-ideological, and the proposed regulation
provided that organizations, including faith-based organizations,
must satisfy the requirements of the applicable programs.
We note also that the recently enacted DC School Choice
Incentive Act of 2003 is another example of a program in which
schools are selected as the result of the genuine and independent
choices of individual beneficiaries. That Act includes a number of
provisions similar to those included in these regulations, including
provisions to preserve the identity and mission of participating
schools.
With respect to the comment regarding procurement contracts and
public notification, the Department does not believe that these
regulations are the appropriate place to categorize each of its many
programs.
Changes: None.
The ``Separately in Time or Location'' Requirement
Comments: Some commenters maintained that the proposed
regulation should be amended to clarify the ``separately in time or
location'' requirement. Specifically, one commenter requested a
prohibition on conducting inherently religious activities
immediately prior to or immediately after Federally funded
activities. Additionally, some suggested that the requirement be
strengthened to require that inherently religious activities be
``separate by both time and location.''
Discussion: The Department declines to adopt these suggestions.
As an initial matter, the Department does not believe that the
requirement is ambiguous or necessitates additional regulation for
proper adherence. If a religious organization receives government
assistance, any religious activities that the organization offers
must simply be offered separately--in time or location--from the
activities supported by government funds. As for the suggestion that
the rule must require separation in both time and location, the
Department believes that such a requirement is not legally necessary
and would impose an unnecessarily harsh burden on small faith-based
organizations, which may have access to only one location that is
suitable for the provision of Department-funded services.
Changes: None.
State and Local Diversity Requirements and Preemption
Comments: Additional commenters expressed concern that the
proposed regulations will exempt religious organizations from State
and local diversity requirements. Further, the commenters suggested
that the proposed regulations be modified to state that State and
local laws will not be preempted by the rule.
Discussion: The requirements that govern funding under the
Department programs at issue in these regulations do not address
preemption of State or local laws. Federal funds, however, carry
Federal requirements. No organization is required to apply for
funding under these programs, but organizations that apply and are
selected for funding must comply with the requirements applicable to
the program. Accordingly, the rule also provides that if a grantee,
State, or subgrantee contributes its own funds to supplement
Federally funded activities, these regulations apply to all of the
commingled funds.
Changes: None.
Religious Identity and Display of Religious Art or Symbols
Comments: Several commenters disagreed with the provisions
allowing religious organizations conducting Department-funded
programs in their facilities to retain the religious art, icons,
scriptures, or other religious symbols found in their facilities.
One commenter voiced a concern that the proposed rule was unclear in
its mention in
[[Page 31714]]
the preamble of the rule's clarification that a faith-based
organization does not have to suppress its ``religious identity'' to
qualify for a grant or subgrant.
Discussion: 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) (relating to programs of
the Substance Abuse and Mental Health Services Administration).
Moreover, the Department does not prescribe for any of the programs
it funds the types of artwork or symbols that may be placed within
the structures or rooms in which Department-funded services are
provided. In addition, a prohibition on the use of religious icons
would make it more difficult for many faith-based organizations than
other organizations to participate in Department programs 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 regulation seeks to eliminate. Consistent
with constitutional church-state guidelines, a faith-based
organization that participates in Department programs will retain
its independence and may continue to carry out its mission, provided
that it does not use Department funds to support any inherently
religious activities. Accordingly, this final regulation continues
to provide that faith-based organizations may use space in their
facilities to provide Department-funded services, without removing
religious art, icons, scriptures, or other religious symbols.
With respect to the comment regarding the clarity of the rule's
discussion of ``religious identity,'' the rule gives illustrative
examples of what is meant by religious identity in Sec. Sec.
74.44(f)(4), 75.52(d), 76.52(d), and 80.36(j)(4).
Changes: None.
Religious Freedom Restoration Act
Comments: Another commenter requested that the Department
include language in the regulation that the Religious Freedom
Restoration Act of 1993 (``RFRA''), 42 U.S.C. 2000bb et seq., may
also provide relief from otherwise applicable provisions prohibiting
employment discrimination on the basis of religion. The commenter
noted, for example, that, in the final regulations it promulgated
governing its substance abuse and mental health programs, the
Department of Health and Human Services recognized that RFRA may
provide relief from certain employment nondiscrimination
requirements.
Discussion: The Department notes that the RFRA, which applies to
all Federal law and its implementation, is applicable regardless of
whether it is specifically mentioned in these regulations. See 42
U.S.C. 4000bb-3 and 4000bb-2(1). Whether or not a party is entitled
to an exemption or other relief under the RFRA depends upon whether
the party satisfies the requirements of that statute. The
Department, therefore, declines to adopt this recommendation at this
time.
Changes: None.
Exemption Under Title VII of the Civil Rights Act of 1964
Comments: One commenter urged the Department to recognize
specifically faith-based organizations' right to hire persons who
support their sense of mission because the Department's proposed
regulation did not directly address this issue. The commenter
indicated that the hiring rights of faith-based organizations are a
matter of serious concern to those organizations and that the lack
of clarity on this issue may discourage qualified organizations from
providing services. Other commenters urged the Department to take
the position that those organizations that accept Federal funding
should forfeit their Title VII exemption. Still others urged the
Department to interpret section 9534 of the Elementary and Secondary
Education Act of 1965 to mean that faith-based organizations must
forfeit their Title VII exemption.
Discussion: The Department agrees with the commenter who
supported the religious hiring autonomy of faith-based
organizations, and it disagrees with the objections to the principle
that a religious organization does not forfeit its Title VII
exemption when administering Department-funded services. Applicable
statutory nondiscrimination requirements are not altered by this
regulation. Congress establishes the conditions under which
religious organizations are exempt from Title VII. These
requirements, including their limitations, are fully applicable to
federally funded organizations unless Congress says otherwise.
Section 9534 of the Elementary and Secondary Education Act of
1965 preserves the existing state of civil rights law. If Congress
intended to dramatically alter the status quo, it would have done so
in unmistakable terms as it has done on other occasions. As for the
suggestion that the U.S. Constitution prohibits the government from
providing funding for social services to religious organizations
that consider faith in hiring, that view does not accurately
represent the law. The employment decisions of organizations that
receive extensive public funding 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 of the
First Amendment to the U.S. Constitution does not bar the provision
of 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).
In light of these considerations, the Department believes it
would be helpful to amend the proposed regulations by adding an
explicit statement that religious organizations do not forfeit their
Title VII exemption by receiving funding from the Department,
contracting with a recipient, or contracting with a grantee or
subgrantee, as the case may be.
Changes: We are revising proposed sections 74.44(f), 75.52,
76.52, and 80.36(j) to include language that a religious
organization's exemption from the Federal prohibition on employment
discrimination on the basis of religion, in section 702(a) of the
Civil Rights Act of 1964, 20 U.S.C. 2000e-1, is not forfeited when
the organization contracts with a recipient (under part 74),
receives financial assistance from the Department (under parts 75
and 76), or contracts with a grantee or subgrantee (under part 80).
Assurance Requirements
Comments: Some commenters suggested that additional language be
added to make clear that eligibility determinations must be based on
existing statutory and regulatory requirements. Several commenters
also suggested that the proposed regulation contain additional
safeguards against the diversion of funds by faith-based
organizations to improper religious purposes.
Discussion: The Department does not believe that it is necessary
to add language to make clear that eligibility determinations must
be based on existing statutory and regulatory requirements. The
language of the proposed rule that faith-based organizations are
eligible to apply for and to receive grants and subgrants under
programs of the Department on the same basis as any other private
organization, with respect to programs for which such other
organizations are eligible, sufficiently communicates that
eligibility determinations must be based on existing statutory and
regulatory requirements.
With respect to additional safeguards to prevent a diversion of
funds, the Department notes that it imposes no comparable
requirements in any other context. It would be unfair to require
religious organizations alone to comply with additional
requirements. Further, the Department finds no basis for requiring
greater oversight and monitoring of faith-based organizations than
of other program participants simply because they are faith-based
organizations. Program participants are monitored for compliance
with program requirements, and no program participant may use
Department funds for any ineligible activity, whether that activity
is an inherently religious activity or a nonreligious activity that
is outside the scope of the program at issue.
Many secular organizations participating in Department programs
also receive funding from several sources (private, state, or local)
to carry out activities that are ineligible for funding under
Department programs. In many cases, the non-eligible activities are
secular activities but not activities eligible for funding under
Department programs. All program participants receiving funding from
various sources and carrying out a wide range of activities must
ensure through proper accounting that each set of funds is applied
only to the activities for which the funding was provided.
Applicable policies, guidelines, and regulations prescribe the cost
accounting procedures that are to be followed in using Department
funds. This system of monitoring is more than sufficient to address
the commenters' concerns, and the amount of oversight of religious
organizations necessary to accomplish these purposes is no different
than that involved in other publicly funded programs that the
Supreme Court has upheld.
Changes: None.
Removal of Construction Provisions
Comments: The Department received several comments suggesting
that the Department retain the provisions prohibiting
[[Page 31715]]
grantees and subgrantees from using grants and subgrants to pay for
construction, remodeling, repair, operation, or maintenance of any
facility or part of a facility to be used for inherently religious
activities. The commenters stated that the provisions should be
retained so that the Department will not have to revisit the issue
in the future if statutory authority is some day enacted.
Discussion: The Department disagrees that these provisions
should be retained. As stated in the preamble to the proposed rule,
there is currently no statutory authority for grantees and
subgrantees to use their grants and subgrants for construction,
remodeling, repair, operation, or maintenance of any private
educational facility or part of a private educational facility. If
and when such uses are authorized by statute, the Department will
issue program-specific regulations in accordance with the statute.
Furthermore, we believe that the provisions do not accurately convey
the state of the law in this area, which would allow grantees and
subgrantees to use their grants and subgrants to pay for
construction, remodeling, repair, operation, or maintenance of any
facility or part of a facility to the extent that such facilities
are used for eligible Department-funded activities (and not for
inherently religious activities such as religious worship,
instruction, or proselytization, or any other ineligible purpose).
Rather than regulate in that manner today, however, the Department
will simply remove the existing regulatory prohibition.
Changes: None.
Secular Alternative Providers
Comments: Some commenters stated that if the Department funds
faith-based organizations, it must offer secular alternative
providers in all situations.
Discussion: The Department does not agree with the commenters.
The regulations do not permit funding of inherently religious
activities (except when there is genuine and independent private
choice among providers), and the civil rights of beneficiaries are
protected by the prohibition on discriminating against a beneficiary
or prospective beneficiary in the provision of program services on
the basis of ``religion or religious belief'' and by the statement
that participation in inherently religious activities must be
voluntary for program beneficiaries.
Changes: None.
Establishment of Separate Legal Entities
Comments: One commenter suggested that the proposed regulations
require faith-based organizations to establish separate legal
entities as ``firewalls'' between their ``pervasively sectarian''
organization and the social service provider.
Discussion: The Department does not agree with this comment. The
prohibition on using funds for inherently religious activity, the
requirement that religious activities be offered separately--in time
or location--from the activities supported by government funds, and
the prohibition on religious discrimination against beneficiaries in
the provision of program services provide sufficient protection to
honor the constitutional boundaries.
Changes: None.
Adherence to Applicable Federal Civil Rights Laws
Comments: One commenter suggested that the proposed rule should
address whether funds should flow to organizations that are racist
and bigoted.
Discussion: The Department does not believe that a change to the
proposed regulations is necessary. Faith-based organizations that
receive Federal funding must adhere to all of the applicable Federal
civil rights laws, including, where applicable, Federal civil rights
laws that prohibit employment discrimination on the basis of race,
color, national origin, sex, age, and disability.
Changes: None.
Applicability of Rule to ``Commingled'' Funds
Comments: Another commenter recommended additional language that
would clarify operational constraints created by the provisions of
the proposed rule relating to the commingling of funds.
Discussion: The Department believes that this provision of the
rule is sufficiently clear. As the rule states, when grantees,
States, and subgrantees have the option to commingle their funds
with Federal funds or to separate their funds from Federal funds,
Federal rules apply if they choose to commingle their own funds with
Federal funds. Additionally, some Department programs may explicitly
require that Federal rules apply to State ``matching'' funds,
``maintenance of effort'' funds, or other contributions that are
commingled with Federal funds, i.e., are part of the grant budget.
In these circumstances, Federal rules, of course, remain applicable
to both the Federal and State or local funds that implement the
program.
Changes: None.
Nondiscrimination in Providing Assistance
Comments: One commenter suggested that in the proposed
regulation's nondiscrimination provisions relating to beneficiaries
or prospective beneficiaries, the phrase ``of that program'' should
be changed to ``in the provision of program services.'' The
commenter thought that the Department was inadvertently stating in
the proposed regulation that faith-based organizations cannot use
religion as a factor in facets of their operation that are separate
from programs funded by a grant or subgrant where the same people
who are beneficiaries or prospective beneficiaries of such programs
may be affected by the use of religion in those other facets.
Another commenter suggested that the proposed rule's prohibition
against discrimination ``on the basis of religion or religious
belief'' should be extended to include a prohibition against
discrimination on the basis of ``refusal to participate in a
religious practice.'' One commenter also suggested that the
protections against religious discrimination afforded beneficiaries
and prospective beneficiaries be broadened to include protections
against other types of discrimination.
Discussion: We agree that the proposed regulation could have
been clearer on the use of religion as a factor in facets of an
organization's operation that are separate from programs funded by a
grant or subgrant where the same people who are beneficiaries or
prospective beneficiaries of such programs may be affected by the
use of religion in those other facets. The rule was not intended to
preclude a faith-based organization from using religion in facets of
its operation that are separate from programs funded by a grant or
subgrant of the Department, even if the same people who are
beneficiaries or prospective beneficiaries of such programs may be
affected by the use of religion in those other facets. We have
therefore modified the language of the final regulation to address
this issue.
The Department disagrees with the suggestion to include a
prohibition against discrimination on the basis of ``refusal to
participate in a religious practice.'' The regulation already
requires private organizations that engage in inherently religious
activities, such as religious worship, instruction, or
proselytization, to offer those services separately in time or
location, and also to make participation in such activities by
beneficiaries of Department-funded programs voluntary. These
requirements are sufficient to protect program beneficiaries from
discrimination.
Finally, the Department disagrees that the protection against
religious discrimination should be broadened to cover other
categories. Grantees and subgrantees are still bound by applicable
Federal civil rights laws. Moreover, the protections afforded in the
proposed rule are consistent with the protections the President
directed Federal agencies, including this Department, to provide
beneficiaries and prospective beneficiaries in taking steps to
ensure that Federal policies and programs are fully open to faith-
based organizations in a manner that is consistent with the U.S.
Constitution and statutory requirements.
Changes: By substituting ``in the provision of program
services'' for ``of the program'' in Sec. Sec. 74.44(f)(5),
75.52(e), 76.52(e), and 80.36(j)(5), the final regulation reflects
that a faith-based organization may use religion in facets of its
operation that are separate from programs funded by a grant or
subgrant of the Department, even if the same people who are
beneficiaries or prospective beneficiaries of such programs may be
affected by the use of religion in those other facets.
[FR Doc. 04-12709 Filed 6-1-04; 3:04 pm]
BILLING CODE 4000-01-P