EDGAR Appendix B (Federal Register 6/4/04: Participation by Religious Org; Equal Treatment; Final Rule)
National Archives And Records Administration
Federal Register
Friday, June 4, 2004
Part III
Department of Education
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
Pages 31708-31715
Appendix B
31708 Federal Register / Vol. 69, No. 108 / Friday, June 4, 2004 /
Rules and Regulations
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.
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 underappreciated 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 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 Sections
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 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
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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:
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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.
_ 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
_ 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.
_ 2. Sec. 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 Sections 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
_ 3. The authority citation for part 75 continues to read as
follows:
Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.
_ 4. Add Sec. 75.52 to 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;
(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)
_ 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
_ 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.
_ 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]
_ 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
_ 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.
_ 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 Sections 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 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 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 nonideological, 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 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
Sections 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 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 Sections 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
EDGAR version June 23, 2005
