[Federal Register: July 12, 2004 (Volume 69, Number 132)]
[Rules and Regulations]
[Page 41894-41900]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12jy04-8]
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DEPARTMENT OF LABOR
Office of the Secretary
29 CFR Part 37
RIN 1291-AA29
Limitation on Employment of Participants Under Title I of the
Workforce Investment Act of 1998
AGENCY: Office of the Secretary, Labor.
ACTION: Final rule.
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SUMMARY: This final rule amends the Department of Labor's (the
Department's or DOL's) regulations that implement section 188(a)(3) of
the Workforce Investment Act of 1998 (WIA). That statutory section
delimits the circumstances under which WIA title I participants may be
employed to carry out the construction, operation, or maintenance of
any part of any facility that is used, or to be used, for religious
instruction or as a place for religious worship. The amendments make
the relevant regulatory language adhere more closely to the language of
section 188(a)(3).
DATES: This rule is effective August 11, 2004.
FOR FURTHER INFORMATION CONTACT: Annabelle T. Lockhart, Director, Civil
Rights Center (CRC), (202) 693-6500. Please note that this is not a
toll-free number. Individuals who do not use voice telephones may
contact Ms. Lockhart via TTY/TDD by calling the toll-free Federal
Information Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
This section of the preamble to this final rule is organized as
follows:
I. Background.
II. Differences Between the September 30, 2003, Proposed Rule
and the Final Rule.
III. Comments Received on the Proposed Rule and DOL's Responses.
IV. Regulatory Procedure.
I. Background
A. WIA and DOL's Implementing Regulations
WIA superseded the Job Training Partnership Act (JTPA) as DOL's
primary mechanism for providing financial assistance for a
comprehensive system of employment and training services for adults and
dislocated workers, and comprehensive youth activities for eligible
youth. That system is known as the One Stop Career Center system. DOL's
Employment and Training Administration (ETA) administers the One Stop
Career Center system.
WIA section 188 contains certain nondiscrimination, equal
opportunity, and other requirements applicable to recipients of WIA
financial assistance. DOL's Civil Rights Center (CRC) administers these
requirements.
Section 188(a)(3) of WIA prohibits the employment of WIA
participants to carry out construction, operation, and maintenance at
specified locations, with a limited exception for maintenance.
Specifically, this section provides as follows:
Participants shall not be employed under this title to carry out
the construction, operation, or maintenance of any part of any
facility that is used or to be used for sectarian instruction or as
a place for religious worship (except with respect to the
maintenance of a facility that is not primarily or inherently
devoted to sectarian instruction or religious worship, in a case in
which the organization operating the facility is part of a program
or activity providing services to participants). 29 U.S.C.
2938(a)(3).
Section 188(e) of WIA authorizes the Secretary to issue regulations
necessary to implement this section. 29 U.S.C. 2938(e). Both ETA and
CRC have published rules relating to WIA section 188(a)(3).
CRC on November 12, 1999, published an Interim Final Rule (IFR)
entitled ``Implementation of the Nondiscrimination and Equal
Opportunity Provisions of the Workforce Investment Act of 1998,'' to
implement Section 188 of WIA. 64 FR 61692. That IFR, which was codified
at 29 CFR part 37 and remains in effect, generally carried over the
nondiscrimination and equal opportunity-related policies and procedures
promulgated in the JTPA regulations.
Section 37.6(f) of CRC's IFR contained several paragraphs--
specifically, paragraphs (f)(1), (2), and (3)--that related to
religious activities. Although the preamble to the IFR stated that
``[p]aragraph 37.6(f) * * * is directly based on, and implements,
section 188(a)(3) of WIA,'' the actual language of Sec. 37.6(f)
differed from the statute in several significant respects. 64 FR 61691.
First, Sec. 37.6(f)(1) carried over a prohibition on employment and
training in sectarian activities that had appeared in the JTPA
regulations at 20 CFR 627.210(b). This prohibition was not related to
the limitations in WIA section 188(a)(3) on employing participants to
carry out construction, operation, or maintenance, and was not based on
either the JTPA statute or the WIA statute. See section I(B) of this
preamble, below. Second, although paragraphs 37.6(f)(2) and (3) did
deal with the subject matter of WIA section 188(a)(3), the language of
these paragraphs departed from the statutory language and organization,
containing several ``structural, stylistic, and phrasing changes''
intended to ``enhance the readability of the rule.'' 64 FR 61691.
ETA had published on April 15, 1999, prior to CRC's IFR, an IFR
implementing WIA title I and III, including section 188(a)(3). 64 FR
18661. That IFR included a new part 667 of title 20 of the Code of
Federal Regulations, which ``assemble[d] all of the administrative
requirements from the various parts of the Act and other applicable
sources in order to facilitate the administrative management of WIA
programs.'' Id. This new part 667 included two sections--Sec. Sec.
667.266 and 667.275--that related to WIA section 188(a)(3). Section
667.266(b) tracked the language of the statutory section almost
exactly, while Sec. 667.275(b) referred only to the statute's
maintenance exception. After CRC promulgated its November 12, 1999 IFR,
ETA on August 11, 2000, published a Final Rule based on ETA's April 15,
1999 IFR. The preamble to this Final Rule noted that CRC had published
an IFR in the interim, and stated that changes had been made to ETA's
Final Rule ``for consistency with the [CRC] regulations implementing *
* * WIA Section 188.'' With respect to Sec. Sec. 667.266 and 667.275,
however, the Final Rule's preamble described only changes relating to
cross-references. Except for the addition of these cross references,
one technical change (``funds'' was changed to ``financial
assistance''), and some rearranging of phrase ordering, ETA's Final
Rule did not alter the relevant initial language of either Sec.
667.266(b) or Sec. 667.275(b).
B. The September 30, 2003, Proposed Rule
On December 12, 2002, President Bush issued Executive Order 13279,
published in the Federal Register on December 16, 2002 (67 FR 77141).
[[Page 41895]]
Executive Order 13279 charges executive branch agencies with giving
equal treatment to faith-based and community organizations that apply
for or receive Federal financial assistance to meet social needs in
America's communities. Consistent with, and to assist in implementing,
the principles underlying this Executive Order, the Department
published a Notice of Proposed Rule-Making (NPRM) on September 30,
2003. See 68 FR 56386, 56388. The NPRM proposed to amend the regulatory
provisions promulgated by CRC, codified at 29 CFR 37.6(f), as well as
the provisions promulgated by ETA, codified at 20 CFR 667.266 and
667.275, that referenced Sec. 37.6(f). The proposed amendments fell
into two main categories: first, amendments intended to eliminate
inappropriate restrictions on the use of indirect WIA financial
assistance; and second, amendments intended to clarify the language of
the various regulatory provisions related to WIA section 188(a)(3).
1. Use of Indirect Federal Financial Assistance
As explained in the preamble to the September 30, 2003, NPRM, among
the Department's primary reasons for proposing the amendments was to
eliminate inappropriate regulatory restrictions, set forth in the
original language of 29 CFR 37.6(f)(1) and referenced in original
paragraphs 20 CFR 667.266(b)(1) and 667.275(b), on the use of indirect
Federal financial assistance to employ or train participants in
religious activities. 29 CFR 37.6(f)(1) has precluded recipients from
permitting participants ``to be employed or trained in sectarian
activities,'' regardless of whether the financial assistance at issue
is direct or indirect. Similarly, 20 CFR 667.266(b)(1) has stated that
``WIA title I financial assistance may not be spent on the employment
or training of participants in sectarian activities'' (referring
readers to 29 CFR 37.6(f)(1) for further information), and 20 CFR
667.275(b) has stated, in pertinent part, that ``[u]nder 29 CFR
37.6(f)(1), the employment or training of participants in sectarian
activities is prohibited.''
These restrictions, which were carried over from the JTPA
nondiscrimination regulations, were not based on any specific statutory
authority conferred by either WIA or JTPA, and are inconsistent with
current law as articulated by the U.S. Supreme Court. 68 FR at 56387.
The Court has clarified in a number of cases issued since JTPA was
enacted that the use of indirect financial assistance to provide
religious training is permitted by the Establishment Clause of the
First Amendment to the Constitution where certain requirements are
satisfied. For example, assistance is indirect in cases in which
participants are given a genuine and independent private choice among
training providers or program options, and freely elect to receive
training in religious activities. Of course, the training offered must
otherwise satisfy the requirements of the governmental program through
which the financial assistance is provided. 68 FR at 56387-88. For this
reason, and to permit participants in WIA title I-financially assisted
programs and activities more choice and greater freedom while obtaining
essential employment and training skills, the Department proposed in
the September 30, 2003, NPRM to amend 20 CFR 667.266(b)(1), 20 CFR
667.275(b), and 29 CFR 37.6(f)(1), to add a new 29 CFR 37.6(f)(2), and
to renumber 37.6(f)(2) and (3) as (f)(3) and (4), respectively. These
proposed revisions are discussed in detail in the preamble to the
September 30, 2003, NPRM (see 68 FR at 56387-89).
2. General Prohibition on Employment of Participants for Construction,
Operation, or Maintenance at Specified Locations Defined With Reference
to Certain Religious Activities; Maintenance Exception
In the same September 30, 2003, NPRM, the Department proposed
revisions to those portions of CRC's and ETA's regulations that related
to WIA section 188(a)(3). These revisions were intended both to clarify
these paragraphs and to adhere more closely to the statute.
With regard to CRC's regulations, the NPRM proposed changes to 29
CFR 37.6(f)(2) and (3). The original language of these paragraphs broke
the language of WIA section 188(a)(3) down into separate elements in an
effort to make the statutory requirements easier to understand.
However, in the course of drafting the September 30, 2003, NPRM, DOL
determined that these paragraphs should be further revised to make them
easier to understand and to adhere more closely to the language of WIA
section 188(a)(3). See 68 FR at 56388. Therefore, in the September 30,
2003, NPRM, the Department proposed to renumber the paragraphs in
accordance with the proposed revisions described in Subsection I(B)(1)
of this preamble, and to revise the language of the paragraphs as
follows:
(3) Except under the circumstances described in paragraph (f)(4)
below, a recipient must not permit participants to engage in
employment or training activities that involve the construction,
operation, or maintenance of any facility, or any part of a
facility, that is used, or will be used, for religious instruction
or as a place of religious worship.
(4) A recipient may permit participants to engage in employment
or training activities that involve the maintenance of a facility
that is used, or will be used, for religious instruction or
religious worship,
(i) To the extent that the facility is not primarily or
inherently devoted to religious instruction or religious worship,
and
(ii) Provided that the organization operating the facility is
part of a program or activity providing services to participants.
68 FR at 56390. The proposed revisions were intended to make these
paragraphs easier to understand, and to adhere more closely to the
language of the statute. 68 FR at 56388. As explained in section II of
this preamble, however, the language of this proposal also diverged in
several respects from the language of the statute. This final rule
returns to the statutory language in order to better ensure close
adherence to the intent of Congress.
The Department also proposed to revise 20 CFR 667.266(b)(2) to
correct the cross-references contained therein. As explained in the
September 30, 2003, NPRM, the Department had determined, upon
examination, that the insertion of the cross-references in this
paragraph of ETA's August 11, 2000, Final Rule had been done
erroneously. The cross-reference in the first sentence of Sec.
667.266(b)(2), instead of referring to Sec. 37.6(f)(2), referred to
Sec. 37.6(f)(1). The cross-reference in the second sentence of Sec.
667.266(b)(2), instead of referring to Sec. 37.6(f)(3), had referred
to Sec. 37.6(f)(2). The Department proposed to correct these two
cross-references without otherwise altering the language of Sec.
667.266.
Finally, the September 30, 2003, NPRM also proposed to revise 20
CFR 667.275(b) in two respects. First, as noted in section I(B)(1) of
this preamble, the flat prohibition on the employment of participants
in ``sectarian activities'' was revised to permit such employment when
financial assistance is provided indirectly. Second, the paragraph was
revised so that it referred to the entire prohibition in section
188(a)(3), rather than just the maintenance exemption. The proposed
revisions to this paragraph contained minor language differences from
the statute and from the proposed CRC revisions to Sec. 37.6(f)(2) and
(3). These differences were not intended to alter the meaning of the
statute or to diverge from the meaning of the corresponding provisions
of the relevant ETA and CRC regulations.
[[Page 41896]]
3. Comments on the Proposed Rule
The closing date for comments on the September 30, 2003, NPRM was
December 1, 2003. 68 FR at 56386. DOL received a total of 11 sets of
comments on the proposed rule, six sets from civil or religious
liberties organizations or other stakeholders and five sets from
individual members of the public. All of the comments were received by
the closing date.
Two commenters expressed general support for the revisions proposed
in the NPRM, without reservation or suggestions for change. Seven
commenters expressed opposition to those revisions, and two commenters
either took no position on, raised questions about, or suggested
changes or alternatives to, the various proposed revisions.
The majority of comments dealt with the issue of the use of
indirect financial assistance to employ or train participants in
religious activities. As explained earlier in this section of this
preamble, however, that issue is now addressed in a separate NPRM,
published on March 9, 2004, that proposed revisions to 29 CFR part 2,
as well as conforming revisions to 29 CFR part 37 and 20 CFR part 667.
Therefore, this preamble will not address those comments. Comments on
the March 9, 2004, NPRM, which is discussed in the next section of this
preamble, were solicited separately. The final rule that addresses the
proposals made in the March 9, 2004, NPRM is published elsewhere in
today's Federal Register. The comments received that are relevant to
this final rule will be discussed below in section III of this
preamble.
C. The March 9, 2004, Proposed Rule
After the September 30, 2003, NPRM was published, the Department
determined that in order to implement more fully the principles of
Executive Order 13279, DOL would revise its general regulations at 29
CFR part 2 to clarify that faith-based and community organizations are
able both to participate in all DOL social service programs for which
they are otherwise eligible--not just those financially assisted under
WIA title I--without regard to the organizations' religious character
or affiliation, and to apply for and compete on an equal footing with
other organizations to receive DOL support. Accordingly, on March 9,
2004, DOL published an NPRM that proposed adding to 29 CFR part 2 a new
subpart D, to be entitled ``Equal Treatment in Department of Labor
Programs for Religious Organizations; Protection of Religious Liberty
of Department of Labor Social Service Providers and Beneficiaries.'' 69
FR 11234, 11235.
At the same time, the Department also determined that, in order to
ensure uniformity and consistency in implementing the principles of
these Executive Orders throughout DOL, the regulations dealing with
faith-based and community organizations, and with religious activities,
should to the extent possible be consolidated in one place. 69 FR
11234. The Department further determined that the new subpart D should
not be program-specific, but should apply to all organizations
receiving DOL support, except where the implementing statute imposed
particular requirements. Accordingly, in the March 9, 2004, NPRM, the
Department proposed new revisions to 29 CFR 37.6(f)(1), as well as to
20 CFR 667.266(b)(1) and (2) and 667.275(b). Instead of the language
proposed in the September 30, 2003, NPRM, the March 9, 2004, NPRM
proposed that each of these regulatory provisions cross-reference 29
CFR part 2, subpart D. See 69 FR at 11237, 11238, 11241. The March 9,
2004, NPRM also proposed similar revisions to the relevant provision of
the regulations governing Job Corps, at 20 CFR 670.555(c). See 69 FR at
11237, 11238.
The March 9, 2004, NPRM contained no proposals for revisions to 29
CFR 37.6(f)(2) and (3), for two reasons. First, as discussed in section
I(B)(2) of this preamble, those two paragraphs are program-specific:
they effectuate a specific paragraph of WIA section 188 that applies
only to recipients of financial assistance under WIA title I, and not
to recipients of other types of DOL support. See 29 U.S.C. 2938(a)(3);
see also 29 CFR 37.2(b)(1), ``Limitation of Application.''
Second, careful analysis reveals that the statutory and regulatory
provisions at issue do not genuinely deal with ``religious
activities.'' Instead, the ``activities'' they address are the
employment of participants in the nonreligious skills of construction,
operation, and maintenance. The provisions at issue merely limit the
physical locations in which such employment may take place:
participants may not be employed to carry out construction, operation
or maintenance of any part of any facility used or to be used for
religious instruction or as a place for religious worship, except that
participants may be employed to carry out maintenance of a facility
that is not primarily or inherently devoted to religious instruction or
worship when the organization operating the facility is part of a
program or activity providing services to participants. See 29 U.S.C.
2938(a)(3); see also new paragraphs 37.6(f)(2) and (3) below.
Therefore, it would be inappropriate for these issues to be addressed
by amendments or additions to DOL's general regulations at 29 CFR part
2.
For these reasons, the Department has chosen to publish this final
rule amending 29 CFR 37.6(f)(2) and (3). As noted in section I(C) of
this preamble, a separate final rule amending those provisions
addressed in the March 9, 2004, NPRM is published elsewhere in today's
Federal Register.
D. Proposed Amendments Dealing With Indirect Federal Financial
Assistance
The Department is withdrawing the portions of the September 30,
2003, NPRM that proposed amending 29 CFR 37.6(f)(1), as well as 20 CFR
667.266(b)(1) and 20 CFR 667.275(b), to eliminate inappropriate
restrictions on the use of indirect Federal financial assistance for
religious activities. As explained in section I(C) of this preamble,
these restrictions are now eliminated by the other final rule,
published elsewhere in today's Federal Register, that finalizes the
rules proposed in the March 9, 2004, NPRM. An additional document,
withdrawing those portions of the September 30, 2003, NPRM now dealt
with by that new rule, is published in the proposed rule section of
today's Federal Register.
II. Differences Between the September 30, 2003, Proposed Rule and This
Final Rule
As described above, the amendments to 29 CFR 37.6(f)(1), as well as
20 CFR 667.266(b)(1) and (2), and 20 CFR 667.275(b), proposed in the
September 30, 2003, NPRM were superseded by the amendments to those
paragraphs that were proposed in the March 9, 2004, NPRM. Therefore,
this final rule does not include amendments to those regulatory
provisions.
In addition, upon consideration, the Department has concluded that
the language of 29 CFR 37.6(f)(2) and (3) that was proposed in the
September 30, 2003, NPRM did not adequately track the language of WIA
section 188(a)(3). Therefore, in the final rule, these two paragraphs
have been revised to track the statutory language more closely and
thereby ensure that the meaning of WIA section 188(a)(3) is not
changed. Such revisions are necessary in order to fulfill the intent of
the September 30, 2003, NPRM, which stated that a primary purpose of
the proposed revisions was to adhere more closely to Congressional
language. Comments and responses regarding the substantive effects of
these
[[Page 41897]]
provisions are discussed in section III of this preamble.
Finally, as a result of the amendments proposed in the March 9,
2004, NPRM, the Department has decided that paragraphs 37.6(f)(2) and
(3) will retain their original numbers.
The following changes have been made to the language proposed in
the September 30, 2003, NPRM for these two paragraphs:
A. ``Permit'' vs. ``Employ''
The proposed revisions of 29 CFR 37.6(f)(2) and (3) stated that a
recipient ``must not permit'' participants to engage in the activities
prohibited by the statute. This language was different from the
language of WIA section 188(a)(3), which states that participants
``shall not be employed'' in prohibited activities. Recipients are not
expected, and this section of the statute does not authorize them, to
control the work activities of participants except when such work is
financially assisted under WIA title I. To ensure that these paragraphs
do not alter the meaning of WIA section 188(a)(3), and that they
effectuate Congressional intent more closely, we have changed the
language of the final rule to use the phrase ``must not employ.''
B. ``Engage in Employment or Training Activities That Involve'' vs.
``Employed * * * To Carry Out''
The proposed revisions of 29 CFR 37.6(f)(2) and (3) required
recipients not to permit participants to ``engage in employment or
training activities that involve'' construction, operation, or
maintenance. This language was different from the language of WIA
section 188(a)(3), which provides only that participants must not be
``employed * * * to carry out'' such construction, operation, or
maintenance. For the reasons expressed in section II(A) of this
preamble, as well as to ensure that these paragraphs do not alter the
meaning of WIA section 188(a)(3) and that they effectuate Congressional
intent more closely, we have changed the language of the final rule to
use the phrase ``employ * * * to carry out.''
C. ``Any Facility, or Any Part of a Facility'' vs. ``Any Part of Any
Facility''
Similarly, the proposed revision of 29 CFR 37.6(f)(2) used the
language ``any facility, or any part of a facility,'' to discuss which
facilities were covered by the provision. This language was different
from the language of WIA section 188(a)(3), which used the phrase ``any
part of any facility.'' To ensure that this provision of the final rule
does not alter the meaning of WIA section 188(a)(3) and that it
effectuates Congressional intent more closely, we have changed the
paragraph to use language identical to that in the statute.
D. ``Used, or Will Be Used'' vs. ``Used, or To Be Used''
In the same vein, the proposed revisions of 29 CFR 37.6(f)(2) and
(3) referred to any part of any facility that is ``used, or will be
used,'' for religious instruction or as a place for religious worship.
This language was different from the language of WIA section 188(a)(3),
which used the phrase ``used or to be used.'' To ensure that these
paragraphs do not alter the meaning of WIA section 188(a)(3) and that
they effectuate Congressional intent more closely, we have changed the
language of the final rule to employ the phrase ``used, or to be
used.''
E. ``Place of Worship'' vs. ``Place For Religious Worship''
Furthermore, the proposed revision of 29 CFR 37.6(f)(2) referred to
any part of any facility that is a place ``of worship.'' This language
was different from WIA section 188(a)(3), which referred to a place
``for religious worship.'' To ensure that this paragraph does not alter
the meaning of WIA section 188(a)(3) and that it effectuates
Congressional intent more closely, we have changed the language of the
final rule to use the phrase ``for religious worship.''
F. Separate Paragraphs vs. One Paragraph
The proposed revision of 29 CFR 37.6(f)(3) separated that paragraph
into two subparagraphs. To adhere more closely to the statute, the
final rule uses a single paragraph to set forth the relevant
requirements.
III. Comments Received on the September 30, 2003, Proposed Rule and
DOL's Responses
As noted in section II of this preamble, the amendments to 20 CFR
667.266(b)(1) and (2), 20 CFR 667.275(b), and 29 CFR 37.6(f)(1)
proposed in the September 30, 2003, NPRM were superseded by the
amendments to those paragraphs that were proposed in the NPRM published
March 9, 2004, and the Department is withdrawing the portions of the
September 30, 2003, NPRM that proposed amending those provisions to
eliminate inappropriate restrictions on the use of indirect Federal
financial assistance for religious activities. Therefore, this preamble
will not address the comments that were submitted regarding the
proposed amendments to those provisions. As noted above, the final rule
that addresses the proposals contained in the March 9, 2004, NPRM is
published elsewhere in today's Federal Register. Other comments
received are summarized and discussed below.
A. Comments and Questions Regarding ``Carry[ing] Out the Construction,
Operation, or Maintenance of Any Part of Any Facility Used or To Be
Used for Religious Instruction or as a Place for Religious Worship,''
and the Maintenance Exemption
1. Comment: The proposed rule could unconstitutionally allow
religious institutions to use public funds to make capital improvements
to structures used for religious activities.
Several commenters asserted that it would violate the Constitution
if recipients' efforts were to increase the monetary value of, or
result in an improvement to, facilities used by such institutions, ``at
least in part,'' for religious instruction or worship. Commenters
suggested that the regulation be amended to prohibit any such result.
Additionally, several commenters raised questions about the
constitutionality of the proposed maintenance exception. These
commenters contend that the exception is unconstitutional, because in
their view maintenance might result in capital improvements to
structures owned by religious institutions. In the view of these
commenters, public funds may be used by religious institutions for
capital improvements only when the improved structures are wholly and
permanently dedicated to secular use.
DOL response: We do not agree with the contention that paragraphs
Sec. 37.6(f)(2) and (3) (or WIA section 188(a)(3) itself) will allow
religious institutions to use WIA financial assistance to make
impermissible capital improvements to, or to otherwise increase the
value of, facilities used for religious activity. These statutory and
regulatory provisions may not be viewed in isolation. Rather, they must
be considered in the broader context not only of the WIA administrative
system, but also of the entire Federal system for providing and
administering domestic financial assistance.
Section 188(a)(3) clearly prohibits the employment of participants
to carry out construction, or even the operation, of ``any part of any
facility that is used or to be used for sectarian instruction or
religious worship.'' Thus, the range of activities permitted under
Section 188(a)(3), and the implementing regulation finalized today,
does not exceed constitutional boundaries.
[[Page 41898]]
With respect to maintenance, under the statutory scheme established
by Congress, the only type of work that participants may be employed
under WIA title I to carry out in any part of any facility that is used
or to be used for religious instruction or worship is ``maintenance.''
See 29 U.S.C. 2938(a)(3); see also new paragraph 37.6(f)(3) below. Even
such ``maintenance'' work is permitted only in specific, well-
delineated circumstances: the facility must not be ``primarily or
inherently devoted to religious instruction or religious worship,'' and
the organization operating the facility must be part of a program or
activity providing services to participants. Id. The provisions
relating to maintenance must be read in conjunction with the remainder
of ETA's general WIA regulations, as well as with DOL's regulations
establishing uniform administrative requirements for Federal grants and
agreements with nonprofit organizations. See 20 CFR 667.200; 29 CFR
part 95. Both of these sets of regulations require that the
allowability of costs incurred by nonprofit organizations receiving
Federal financial assistance be determined in accordance with the
provisions of Office of Management and Budget (OMB) Circular A-122,
``Cost Principles for Non-Profit Organizations.'' 20 CFR 667.200; 29
CFR 95.27.
Circular A-122 explicitly describes ``maintenance and repair
costs'' as ``costs incurred for necessary maintenance, repair, or
upkeep of buildings and equipment * * * which neither add to the
permanent value of the property nor appreciably prolong its intended
life, but keep it in an efficient operating condition.'' Circular No.
A-122, Attachment B, ``Selected Items of Cost,'' paragraph 27. The
Circular further provides that ``[c]osts incurred for improvements
which add to the permanent value of the buildings and equipment or
appreciably prolong their intended life shall be treated as capital
expenditures.'' Id.
Maintenance and repair costs, according to the Circular, are
allowable; by contrast, capital expenditures are generally unallowable
as direct costs, except with the prior approval of the awarding agency.
Circular No. A-122, Attachment B, ``Selected Items of Cost,'' paragraph
15. Thus, the administrative system is designed to ensure that a
recipient cannot receive reimbursement for capital expenditures by
attempting to characterize them as ``maintenance'' expenditures.
Because of the limitations already in place to prevent the use of
``maintenance'' work to increase capital value, there is no need to
make additional changes to the regulation to address the commenter's
concern that maintenance work might unconstitutionally increase capital
value.
Overall, then, the various regulatory and administrative
requirements described above are sufficient to make clear that no WIA
title I financial assistance will be used to employ participants to
make impermissible capital improvements to any part of any facility
used or to be used for religious instruction or as a place for
religious worship. Therefore, the Department has not revised the final
rule in response to this comment.
2. Comment: The proposed rule could result in excessive
entanglement with religion, in violation of the Establishment Clause of
the First Amendment.
One commenter noted that proposed paragraphs 37.6(f)(3) and (f)(4)
(paragraphs 37.6(f)(2) and (3) of the final rule) authorize the
employment of participants under WIA title I ``for maintenance of a
facility on the conditions that the facility is not `primarily or
inherently devoted to religious instruction or religious worship * * *'
'' This commenter was therefore concerned that the rule ``raise[s] the
specter of the government monitoring pervasively sectarian institutions
to determine on a case-by-case basis whether a facility is actually
used for sectarian purposes or whether facility usage is primarily
religious. This monitoring will put government officials in the
problematic position of determining what acts constitute religion,''
likely resulting in Establishment Clause violations on the basis of
excessive entanglement with religion.
DOL response: The Department does not agree that the rule will lead
to excessive governmental entanglement in the affairs of recipients
that are religious organizations. The existing WIA regulations--both
the nondiscrimination regulations promulgated by CRC at 29 CFR part 37
and the programmatic regulations promulgated by ETA--impose numerous
limitations on the use of WIA financial assistance. See, e.g., 20 CFR
667.260-667.270. The Department will monitor the compliance of
recipients that ``employ participants to carry out'' the activities
covered by the statute in the same way that it monitors the compliance
of other recipients. See 29 CFR 37.60, 37.62-37.66. Similarly, the
Department will investigate and resolve complaints alleging violations
of these regulatory provisions in the same manner, and following the
same procedures, that have been established for investigating
complaints alleging violations of the other nondiscrimination
provisions of WIA. See 29 CFR 37.70-37.75, 37.80-37.89. In addition,
violations of the provisions preventing maintenance expenditures from
being used for capital improvements will be investigated and resolved
in accordance with the procedures set forth in 20 CFR part 667. The
amount of oversight and monitoring needed to ensure that WIA financial
assistance is not used impermissibly is no greater than that involved
in monitoring to ensure compliance with other regulatory requirements.
Finally, the Department is already obliged, to a certain extent, to
determine ``what acts constitute religion,'' in the course of
investigating allegations of unlawful religious-based discrimination
(and, for that matter, in the course of ensuring that direct DOL
assistance is not used to support inherently religious activities). Cf.
29 CFR part 1605, Equal Employment Opportunity Commission (EEOC)
Guidelines on Discrimination Because of Religion, section 1605.1,
``Religious nature of a practice or belief.'' In the Department's view,
determinations as to ``whether a facility is actually used for
sectarian purposes'' or ``whether facility usage is primarily
religious'' will not require a greater amount of ``entanglement with
religion'' than the determination of whether a particular
participant's, applicant's, or employee's beliefs should be protected
as ``religious'' beliefs.
For these reasons, the Department has not revised the final rule in
response to this comment.
3. Comment: Violations of these provisions ``could raise difficult
remedial questions.''
The commenter who raised this issue inquired, ``Will the Department
of Labor * * * remove a structure from an offending institution? Will
it place liens on houses of worship?''
DOL response: The WIA regulations at 29 CFR part 37 provide that if
compliance is not achieved through the procedures set forth in the
regulations, the Secretary of Labor may take the following actions:
``(1) After opportunity for a hearing, suspend, terminate, deny or
discontinue the [recipient's] WIA Title I financial assistance, in
whole or in part; (2) Refer the matter to the Attorney General with a
recommendation that an appropriate civil action be instituted; or (3)
Take such action as may be provided by law.'' 29 CFR 37.110(a). The
Department does not view the ``remedial questions'' raised by the
regulatory provisions
[[Page 41899]]
amended by this final rule as any more ``difficult'' than those raised
with regard to possible violations of other regulatory provisions.
Therefore, the Department has not revised the final rule in response to
this comment.
4. Comment: Providing financial assistance under WIA to
``pervasively sectarian'' organizations or institutions violates the
Establishment Clause of the First Amendment.
The commenter that raised this issue noted that under the proposed
regulatory provisions, ``WIA Title I funds could be used for
construction, operation, or maintenance of a facility used by a
pervasively sectarian organization for non-religious purposes.'' In
this commenter's view, such use would violate the Establishment Clause.
Therefore, the commenter recommended that the provisions be amended to
``prohibit the use of WIA Title I funds for construction, operation, or
maintenance of facilities owned or operated by pervasively sectarian
institutions.''
DOL response: The Department does not agree with the commenter's
analysis. The Supreme Court's ``pervasively sectarian'' doctrine--which
held that there are certain religious institutions in which religion is
so pervasive that no government aid may be provided to them, because
their performance of even ``secular'' tasks will be infused with
religious purpose--no longer enjoys the support of a majority of the
Court. Four Justices expressly abandoned it in Mitchell v. Helms, 530
U.S. 793, 825-829 (2000) (plurality opinion), and Justice O'Connor's
opinion in that case, joined by Justice Breyer, set forth reasoning
that is inconsistent with its underlying premises, see id. at 857-858
(O'Connor, J., concurring in judgment) (requiring proof of ``actual
diversion of public support to religious uses''). Thus, six members of
the Court have rejected the view that aid provided to religious
institutions will invariably advance the institutions' religious
purposes, and that view is the foundation of the ``pervasively
sectarian'' doctrine. Therefore, under current precedent, the
Department may provide financial assistance to all service providers,
without regard to religion, so long as the providers meet eligibility
requirements and the assistance is not otherwise precluded. The
Department therefore declines to adopt the recommended change.
B. General Comments Regarding the Proposed Rule
1. Comment: The terms ``faith-based'' and ``religious
organization'' should be ``clearly defined'' in the regulations.
The commenter that made this suggestion provided no reasons for
adding these definitions to the regulations.
DOL response: The Department declines to adopt the recommended
change in this final rule. Such definitions are unnecessary, because
these terms are not used in 29 CFR part 37 as amended by this final
rule.
2. Comment: The regulations should be amended to require faith-
based organizations ``to abide by * * * state and local civil rights
laws.''
One commenter strongly suggested that the rule should make clear
that nothing in the new regulations affected state and local non-
discrimination laws covering sexual orientation and gender identity/
expression.
DOL response: In the Department's view, the recommended change is
unnecessary. The WIA regulations at 29 CFR part 37 already contain a
provision that explicitly states that the IFR ``does not preempt
consistent State and local requirements.'' 29 CFR 37.3(f). As a result,
unless specific provisions of State or local civil rights laws conflict
with the requirements set forth in the rule, those provisions will
continue to apply to recipients of WIA title I financial assistance.
The Department therefore declines to make the suggested change.
3. Comment: The regulations should be amended to bar discrimination
on the basis of sexual orientation and gender identity.
The commenter that made this suggestion stated that ``Federal
policy expanding the application of charitable choice provisions should
prohibit discrimination on the basis of religion and sexual orientation
and gender identity--discrimination against those organizations
applying for a federal grant or contract, employees of the grantee, as
well as the ultimate beneficiary of the program or service.'' (Emphases
in original.)
DOL response: The Department declines to adopt the recommended
change. The WIA regulations at 29 CFR part 37 implement section 188 of
WIA; therefore, they address only discrimination on bases prohibited by
that statutory section. Neither sexual orientation nor gender identity
is included among these bases, see 29 U.S.C. 2938(a)(2), and we decline
to impose a prohibition on such discrimination by regulation.
4. Comment: The rule should contain administrative requirements to
ensure that government funds are not used to support religious
activities.
One commenter recommended that ``faith-based and community-based
organizations * * * be held as accountable as any other non-profit
entity that receives taxpayer dollars'' and that ``firewalls * * * be
[put] in place prohibiting federal money from being used to fund
religious materials.''
Additionally, the commenter recommended that Federal funds
``supplement and not supplant existing money.'' Two additional
commenters made similar recommendations.
DOL response: In the Department's view, the Federal reporting,
financial management, and other administrative requirements that are
already in place, and that are applicable to all recipients of WIA
title I financial assistance, are sufficient to ensure that faith-based
and community organizations are held as accountable as any other
recipient of federal assistance. Some of these requirements are
described above in section II(A)(1) of this preamble. Faith-based and
community organizations are not exempt from these requirements. See 20
CFR part 667; 29 CFR part 95; OMB Circulars Nos. A-110, ``Uniform
Administrative Requirements for Grants and Other Agreements with
Institutions of Higher Education, Hospitals, and Other Nonprofit
Organizations,'' A-122, ``Cost Principles for Nonprofit
Organizations,'' and A-133, ``Audits of States, Local Governments, and
Non-Profit Organizations.'' Furthermore, the Department believes that
new subpart D to 29 CFR part 2, published in today's Federal Register,
sets up appropriate constitutional safeguards regarding the use of DOL
assistance. For example, with regard to direct financial assistance,
new subpart D makes clear that such assistance must not be used for
inherently religious activities. The Department therefore declines to
impose additional changes related to accountability.
With regard to the comments that federal funds must ``supplement
and not supplant existing money,'' we would simply note that WIA
already provides that title I financial assistance must only be used
for activities that ``are in addition to those that would otherwise be
available in the local area in the absence of such funds.'' WIA section
195(2); 29 U.S.C. 2945(2). We disagree, therefore, that any additional
such requirements must be included in this regulation.
5. Comment: The proposed rules ``fail to take any steps to prevent
government
[[Page 41900]]
money from flowing to anti-Semitic, racist and bigoted organizations.''
DOL response: The WIA regulations at 29 CFR part 37 that are
already in place contain several provisions designed to ensure that
organizations that discriminate on prohibited grounds--including race,
color, national origin, and religion--are barred from receiving
financial assistance under WIA. The regulations contain a broad
provision stating that ``[n]o individual in the United States'' may be
``excluded from participation in, denied the benefits of, subjected to
discrimination under, or denied employment in the administration of or
in connection with'' any WIA title I-financially assisted program or
activity on any prohibited basis, including race, color, national
origin, or religion. 29 CFR 37.5. In addition, the regulations
explicitly prohibit recipients from ``[a]id[ing] or perpetuat[ing]
discrimination by providing significant assistance to an agency,
organization, or person that discriminates on a prohibited ground
[including race, color, national origin, or religion] in providing any
aid, benefits, services, or training to registrants, applicants, or
participants in a WIA Title I-funded program or activity.'' 29 CFR
37.6(c)(1). This provision bars not only direct assistance to persons
or entities that discriminate, but also bars assistance provided
``through contractual, licensing, or other arrangements.'' 29 CFR
37.6(c). Recipients that provide such assistance are themselves
violating the nondiscrimination requirements, and can be subjected to
the sanctions listed in 29 CFR 37.110. These provisions contain no
exemption for religious organizations. See generally 29 CFR part 37.
Therefore, in the Department's view, no additional regulatory
provisions ``to prevent government money from flowing to anti-Semitic,
racist and bigoted organizations'' are needed.
IV. Regulatory Procedures
Executive Order 12866
The Office of Management and Budget (OMB) has reviewed this rule
under Executive Order 12866, ``Regulatory Planning and Review.'' OMB
has determined that this rule is a ``significant regulatory action'' as
defined in section 3(f) of the Order. However, this rule is not an
economically significant regulatory action under the Order, and
therefore, no regulatory impact analysis has been prepared.
Regulatory Flexibility Act
The final rule will not substantially change the existing
obligation of recipients or entities operating Federally-assisted
programs or activities to apply a policy of nondiscrimination and equal
opportunity in employment or services. The Secretary, in accordance
with the Regulatory Flexibility Act (5 U.S.C. Sec. 605(b)), has
reviewed and approved this final rule, and in so doing certifies that
this rule will not have a significant economic impact on a substantial
number of small entities. Therefore, a regulatory flexibility analysis
is not required.
Unfunded Mandates Reform
For purposes of the Unfunded Mandates Reform Act of 1995, as well
as Executive Order 12875, this final rule does not include any Federal
mandate that may result in increased expenditures by any State, local,
and tribal governments.
Paperwork Reduction Act
The final rule contains no new information collection requirements.
Therefore, it is not subject to the Paperwork Reduction Act.
Executive Order 13132
This final rule has been reviewed in accordance with Executive
Order 13132 regarding Federalism. The final rule will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government. Therefore,
the requirements of section 6 of Executive Order 13132 do not apply to
this rule.
List of Subjects in 29 CFR Part 37
Administrative practice and procedure, Discrimination, Civil
rights, Equal education opportunity, Equal employment opportunity,
Grant programs--Labor, Individuals with disabilities, Investigations,
Reporting and recordkeeping requirements.
Signed at Washington, DC, this 7th day of July.
Elaine L. Chao,
Secretary of Labor.
Title 29--Labor
0
For the reasons discussed in the preamble, Part 37, Subpart A, title 29
of the Code of Federal Regulations, is amended to read as set forth
below.
PART 37--IMPLEMENTATION OF THE NONDISCRIMINATION AND EQUAL
OPPORTUNITY PROVISIONS OF THE WORKFORCE INVESTMENT ACT OF 1998
(WIA)
0
1. The authority citation for Part 37 continues to read as follows:
Authority: Sections 134(b), 136(d)(2)(F), 136(e), 172(a),
183(c), 185(c)(2), 185(d)(1)(E), 186, 187 and 188 of the Workforce
Investment Act of 1998, 29 U.S.C. 2801, et seq.; title VI of the
Civil Rights Act of 1964, as amended, 42 U.S.C. 2000d, et seq.;
section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C.
794; the Age Discrimination Act of 1975, as amended, 42 U.S.C. 6101;
and title IX of the Education Amendments of 1972, as amended, 20
U.S.C. 1681.
0
2. In Sec. 37.6, paragraphs (f)(2) and (3) are revised to read as
follows:
Sec. 37.6 What specific discriminatory action, based on prohibited
grounds other than disability, are prohibited by this part?
* * * * *
(f)(2) Except under the circumstances described in paragraph (f)(3)
below, a recipient must not employ participants to carry out the
construction, operation, or maintenance of any part of any facility
that is used, or to be used, for religious instruction or as a place
for religious worship.
(3) A recipient may employ participants to carry out the
maintenance of a facility that is not primarily or inherently devoted
to religious instruction or religious worship if the organization
operating the facility is part of a program or activity providing
services to participants.
* * * * *
[FR Doc. 04-15708 Filed 7-8-04; 8:45 am]
BILLING CODE 4510-23-P