Partnerships With Faith-Based and Other Neighborhood Organizations, 47315-47326 [2015-18259]
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August 6, 2015
Part XI
Department of Justice
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28 CFR Part 38
Partnerships With Faith-Based and Other Neighborhood Organizations;
Proposed Rule
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Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules
DEPARTMENT OF JUSTICE
28 CFR Part 38
[Docket No. OAG 149; AG Order No. 3541–
2015]
RIN 1105–AB45
Partnerships With Faith-Based and
Other Neighborhood Organizations
I. Posting of Public Comments
Office of the Attorney General,
Department of Justice.
ACTION: Proposed rule.
AGENCY:
The rule proposes to amend
Department of Justice (Department)
regulations on the equal treatment for
faith-based or religious organizations
and to implement Executive Order
13559 (Fundamental Principles and
Policymaking Criteria for Partnerships
With Faith-Based and Other
Neighborhood Organizations). This rule
proposes to revise Department
regulations pertaining to prohibited
religious uses of direct Federal financial
assistance to provide clarity about the
rights and obligations of faith-based and
religious groups participating in
Department programs and to provide
protections for beneficiaries of those
programs. The Department seeks public
comments only on the proposed
revisions that are being made to
implement Executive Order 13559.
DATES: Written comments must be
postmarked and electronic comments
must be submitted on or before October
5, 2015. Comments received by mail
will be considered timely if they are
postmarked on or before that date. The
electronic Federal Docket Management
System (FDMS) will accept comments
until Midnight Eastern Time at the end
of that day.
ADDRESSES: To ensure proper handling
of comments, please reference [Docket
No. OAG 149] on all electronic and
written correspondence. The
Department encourages the electronic
submission of all comments through
https://www.regulations.gov using the
electronic comment form provided on
that site. For easy reference, an
electronic copy of this document is also
available at that Web site. It is not
necessary to submit paper comments
that duplicate the electronic
submission, as all comments submitted
to https://www.regulations.gov will be
posted for public review and are part of
the official docket record. However,
should you wish to submit written
comments through regular or express
mail, they should be sent to Eugene
Schneeberg, Director, Center for FaithBased & Neighborhood Partnerships,
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SUMMARY:
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U.S. Department of Justice, Washington,
DC 20531.
FOR FURTHER INFORMATION CONTACT:
Eugene Schneeberg, Director, Center for
Faith-based & Neighborhood
Partnerships, U.S. Department of
Justice, Washington, DC 20531. Phone:
(202) 307–0588.
SUPPLEMENTARY INFORMATION:
Please note that all comments
received are considered part of the
public record and made available for
public inspection online at https://
www.regulations.gov. Information made
available for public inspection includes
personal identifying information (such
as your name, address, etc.) voluntarily
submitted by the commenter.
If you wish to submit personal
identifying information (such as your
name, address, etc.) as part of your
comment, but do not wish it to be
posted online, you must include the
phrase ‘‘PERSONAL IDENTIFYING
INFORMATION’’ in the first paragraph
of your comment. You must also locate
all the personal identifying information
that you do not want posted online in
the first paragraph of your comment and
identify what information you want the
agency to redact. Personal identifying
information identified and located as set
forth above will be placed in the
agency’s public docket file, but not
posted online.
If you wish to submit confidential
business information as part of your
comment but do not wish it to be posted
online, you must include the phrase
‘‘CONFIDENTIAL BUSINESS
INFORMATION’’ in the first paragraph
of your comment. You must also
prominently identify confidential
business information to be redacted
within the comment. If a comment has
so much confidential business
information that it cannot be effectively
redacted, the agency may choose not to
post that comment (or to post that
comment only partially) on https://
www.regulations.gov. Confidential
business information identified and
located as set forth above will not be
placed in the public docket file, nor will
it be posted online.
If you wish to inspect the agency’s
public docket file in person by
appointment, please see the FOR
FURTHER INFORMATION CONTACT
paragraph.
II. Background
On December 12, 2002, President
Bush signed Executive Order 13279,
Equal Protection of the Laws for FaithBased and Community Organizations,
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67 FR 77141. Executive Order 13279 set
forth the principles and policymaking
criteria to guide Federal agencies in
formulating and developing policies
with implications for faith-based and
other community organizations, to
ensure equal protection of the laws for
faith-based and other community
organizations, and to expand
opportunities for, and strengthen the
capacity of, faith-based and other
community organizations to meet social
needs in America’s communities. In
addition, Executive Order 13279 asked
specified agency heads to review and
evaluate existing policies relating to
Federal financial assistance for social
services programs and, where
appropriate, to implement new policies
that were consistent with and necessary
to further the fundamental principles
and policymaking criteria that have
implications for faith-based and other
community organizations.
On January 21, 2004, the Department
of Justice promulgated 28 CFR part 38.
That rule implemented the executive
branch policy that, within the
framework of constitutional churchstate guidelines, religious (or faithbased) organizations should be able to
compete on an equal footing with other
organizations for the Department’s
funding. It revised Department
regulations to remove barriers to the
participation of faith-based or religious
organizations in Department programs
and to ensure that these programs are
consistent with the requirements of the
Constitution, including the Religion
Clauses of the First Amendment.
Shortly after taking office, President
Obama signed Executive Order 13498,
Amendments to Executive Order 13199
and Establishment of the President’s
Advisory Council for Faith-Based and
Neighborhood Partnerships, 74 FR 6533
(Feb. 5, 2009). Executive Order 13498
changed the name of the White House
Office of Faith-Based and Community
Initiatives to the White House Office of
Faith-Based and Neighborhood
Partnerships and established the
President’s Advisory Council for FaithBased and Neighborhood Partnerships
(Advisory Council). The President
created the Advisory Council to bring
together experts to make, among other
things, recommendations to the
President for changes in policies,
programs, and practices that affect the
delivery of services by faith-based and
other neighborhood organizations.
The Advisory Council issued its
recommendations in a report entitled A
New Era of Partnerships: Report of
Recommendations to the President in
March 2010 (available at https://
www.whitehouse.gov/sites/default/files/
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microsites/ofbnp-council-finalreport.pdf). The Advisory Council
Report included recommendations to
amend Executive Order 13279 to
strengthen the constitutional and legal
footing of partnerships and to offer a
new set of fundamental principles to
guide agency decision-making in
administering Federal social service
programs in partnership with faithbased and other neighborhood
organizations.
President Obama signed Executive
Order 13559, Fundamental Principles
and Policymaking Criteria for
Partnerships with Faith-Based and
Other Neighborhood Organizations, on
November 17, 2010. 75 FR 71319.
Executive Order 13559 incorporated the
Advisory Council’s recommendations
by amending Executive Order 13279 to,
among other things:
• Require agencies that administer or
award Federal financial assistance for
social service programs to implement
protections for the beneficiaries or
prospective beneficiaries of those
programs (these protections include
providing referrals to alternative
providers if the beneficiary objects to
the religious character of the
organization providing services and
ensuring that written notice of these and
other protections is provided to
beneficiaries before they enroll in or
receive services from the program);
• state that decisions about awards of
Federal financial assistance must be free
from political interference or even the
appearance of such interference, and
must be made on the basis of merit, not
on the basis of the religious affiliation,
or lack of affiliation, of the recipient
organization;
• state that the Federal Government
has an obligation to monitor and enforce
all standards regarding the relationship
between religion and government in
ways that avoid excessive entanglement
between religious bodies and
governmental entities;
• clarify that organizations engaging
in explicitly religious activity must (i)
perform such activities and offer such
services outside of programs that are
supported with direct Federal financial
assistance, (ii) separate these activities
in time or location from programs
supported with direct Federal financial
assistance, and (iii) ensure that
participation in any such activities must
be voluntary for the beneficiaries of the
social service program supported with
Federal financial assistance;
• emphasize that religious providers
should be eligible to compete for social
service funding from the Government
and to participate fully in social service
programs supported with Federal
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financial assistance, and that such
organizations may do so while
maintaining their religious identities;
• require agencies that provide
Federal financial assistance for social
service programs to post online
regulations, guidance documents, and
policies that have implications for faithbased and other neighborhood
organizations and to post online a list of
entities receiving such assistance; and
• clarify that the principles set forth
apply to subawards as well as prime
awards.
In addition, Executive Order 13559
created the Interagency Working Group
on Faith-Based and Other Neighborhood
Partnerships (Working Group) to review
and evaluate existing regulations,
guidance documents, and policies, and
to submit a report to the President on
amendments, changes, or additions
necessary to ensure that regulations and
guidance documents associated with the
distribution of Federal financial
assistance for social service programs
would be consistent with the
fundamental principles set forth in the
Executive Order. The Executive Order
mandated that this report include a
model set of regulations and guidance
documents for the agencies to adopt in
a number of areas, including, among
other things, prohibited uses of direct
Federal financial assistance and
separation requirements, protections for
religious identity, the distinction
between ‘‘direct’’ and ‘‘indirect’’ Federal
financial assistance, and protections for
beneficiaries of social service programs.
The Executive Order also stated that,
following receipt of the Working
Group’s report, the Office of
Management and Budget (OMB), in
coordination with the Department of
Justice, must issue guidance to agencies
on the implementation of the order. In
August 2013, OMB issued such
guidance. In this guidance, OMB noted
the Working Group’s recommendations
and instructed specified agency heads
that Executive Order 13559 required
them to amend existing agency
regulations, guidance documents, and
policies that have implications for faithbased and religious grounds to ensure
they are consistent with the
fundamental principles set forth in the
Order. The Department is accordingly
issuing guidance on the applicability of
the Executive Order and this rule to
particular programs.
III. Overview of Proposed Rule
The regulation proposes to amend
Part 38 to implement Executive Order
13559, change the title of current Part
38, and rearrange the current regulations
to conform to the existing regulatory
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structure of the Executive Order. This
restructuring sets forth some original
text from Part 38 so that readers can
understand the overall context of the
rule, but eliminates the repetition of
language under § 38.1, Discretionary
grants, contracts, and cooperative
agreements, and § 38.2, Formula grants,
which presently have the same
provisions. Among other things, the
Department specifically proposes to
amend its regulations to replace the
term ‘‘inherently religious activities’’
with the term ‘‘explicitly religious
activities’’ and define the latter term as
‘‘including activities that involve overt
religious content such as worship,
religious instruction, or
proselytization.’’ In addition, the
proposed rule distinguishes between
‘‘direct’’ and ‘‘indirect’’ Federal
financial assistance because the
limitation on explicitly religious
activities applies to programs that are
supported with ‘‘direct’’ Federal
financial assistance but does not apply
to programs supported with ‘‘indirect’’
Federal financial assistance. The
Department also proposes regulatory
language to clarify the responsibilities of
intermediaries. The proposed rule
provides that decisions about awards of
Federal financial assistance must be free
from political interference or even the
appearance of such interference.
Finally, the proposed rule provides
protections for beneficiaries and
includes provisions for assurances and
enforcement.
Proposed amendments to Part 38.
Part 38. Partnerships With Faith-Based
and Other Neighborhood Organizations
A. Prohibited Uses of Direct Federal
Financial Assistance
Part 38 of title 28 of the Code of
Federal Regulations and Executive
Order 13279 prohibit organizations that
receive direct Federal financial
assistance from the Department (e.g.,
formula or discretionary grants,
contracts, subgrants, subcontracts, and
cooperative agreements) from engaging
in ‘‘inherently religious activities, such
as worship, religious instruction, or
proselytization, as part of the programs
or services funded with direct financial
assistance from the Department.’’ 28
CFR 38.1(b)(1). The term ‘‘inherently
religious’’ has proven confusing. In
2006, for example, the Government
Accountability Office (GAO) found that,
while all 26 of the religious social
service providers it interviewed said
they understood the prohibition on
using direct Federal financial assistance
for ‘‘inherently religious activities,’’ four
of the providers described acting in
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ways that appeared to violate that rule.
GAO, Faith-Based and Community
Initiative: Improvements in Monitoring
Grantees and Measuring Performance
Could Enhance Accountability, GAO–
06–616, at 34–35 (June 2006) (available
at https://www.gao.gov/new.items/
d06616.pdf).
Further, although the Supreme Court
has sometimes used the term
‘‘inherently religious,’’ it has never
established it as the test for what the
Government may not subsidize with
direct Federal financial assistance. If the
term is interpreted narrowly, it could
permit actions that the Constitution may
prohibit. For example, some might not
consider teaching an individual to read
the English language using the Bible or
another religious text an ‘‘inherently
religious’’ act. On the other hand, one
could also argue that the term
‘‘inherently religious’’ is too broad. For
example, some might consider the
provision of a hot meal to a needy
person to be an ‘‘inherently religious’’
act when it is undertaken from a sense
of religious motivation or obligation,
even though it has no overt religious
content.
The Supreme Court has determined
that the Government cannot subsidize
‘‘a specifically religious activity in an
otherwise substantially secular setting.’’
Hunt v. McNair, 413 U.S. 734, 743
(1973). It has also said a direct aid
program impermissibly advances
religion when the aid results in
governmental indoctrination of religion.
See Mitchell v. Helms, 530 U.S. 793, 808
(2000) (Thomas, J., joined by Rehnquist,
C.J., Scalia, and Kennedy, J.J., plurality);
id. at 845 (O’Connor, J., joined by
Breyer, J., concurring in the judgment);
Agostini v. Felton, 521 U.S. 203, 223
(1997). This terminology is fairly
interpreted to prohibit the Government
from directly subsidizing any
‘‘explicitly religious activity,’’ including
activities that involve overt religious
content. Thus, direct Federal financial
assistance may not be used to pay for
activities such as religious instruction,
devotional exercises, worship,
proselytizing, or evangelism; production
or dissemination of devotional guides or
other religious materials; or counseling
in which counselors introduce religious
content. Similarly, direct Federal
financial assistance may not be used to
pay for equipment or supplies to the
extent they are allocated to such
activities. Activities that are secular in
content, such as serving meals to the
needy or using a nonreligious text to
teach someone to read, are not
considered ‘‘explicitly religious
activities’’ merely because the provider
is religiously motivated to provide those
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services. The study or acknowledgement
of religion as a historical or cultural
reality also would not be considered an
explicitly religious activity.
Notwithstanding the general
prohibition on the use of direct Federal
financial assistance to support explicitly
religious activities, there are times when
religious activities may be federally
financed under the Establishment
Clause and not subject to the direct
Federal financial assistance restrictions,
for example, in situations where Federal
financial assistance is provided to
chaplains to work with inmates in
prisons or detention facilities through
social service programs. Where there is
extensive government control over the
environment of the federally financed
social service program, program officials
may sometimes need to take affirmative
steps to provide an opportunity for
beneficiaries of the social service
program to exercise their religion. See
Cruz v. Beto, 405 U.S. 319, 322 n.2
(1972) (per curiam) (‘‘[R]easonable
opportunities must be afforded to all
prisoners to exercise the religious
freedom guaranteed by the First and
Fourteenth Amendment without fear of
penalty.’’); Katcoff v. Marsh, 755 F.2d
223, 234 (2d Cir. 1985) (finding it
‘‘readily apparent’’ that the Government
is obligated by the First Amendment ‘‘to
make religion available to soldiers who
have been moved by the Army to areas
of the world where religion of their own
denominations is not available to
them’’). Without such efforts, religious
freedom might not exist for these
beneficiaries. Accordingly, services
such as chaplaincy services would not
be considered explicitly religious
activities that are subject to direct
financial aid restrictions.
Likewise, it is important to emphasize
that the restrictions on explicitly
religious content apply to content
generated by the administrators of the
program receiving direct Federal
financial assistance, not to spontaneous
comments made by individual
beneficiaries about their personal lives
in the context of these programs. For
example, if a person administering a
federally funded job skills program asks
beneficiaries to describe how they gain
the motivation necessary for their job
searches and some beneficiaries refer to
their faith or membership in a faith
community, these kinds of comments do
not violate the restrictions and should
not be censored. In this context, it is
clear that the administrator of the
government program did not orchestrate
or encourage such comments.
The Department, therefore, proposes
to amend its regulations to replace the
term ‘‘inherently religious activities’’
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with the term ‘‘explicitly religious
activities’’ and to define the latter term
as ‘‘including activities that involve
overt religious content such as worship,
religious instruction, or
proselytization.’’ These proposed
changes in language would provide
greater clarity and more closely match
constitutional standards as they have
been developed in case law.
These proposed restrictions would
not diminish existing regulatory
protections for the religious identity of
faith-based providers. The proposed
rule would not affect, for example,
organizations’ ability to use religious
terms in their organizational names;
select board members on a religious
basis; include religious references in
mission statements and other
organizational documents; and post
religious art, messages, scriptures, and
symbols in buildings where they deliver
federally funded services and benefits.
B. Direct and Indirect Federal Financial
Assistance
Executive Order 13559 noted that the
model regulations proposed by the
Working Group should distinguish
between ‘‘direct’’ and ‘‘indirect’’ Federal
financial assistance. This distinction is
vital because the limitation on Federal
financial assistance supporting
explicitly religious activities applies to
programs that are supported with
‘‘direct’’ Federal financial assistance but
does not apply to programs supported
with ‘‘indirect’’ Federal financial
assistance. To clarify this distinction,
the proposed rule provides definitions
of these terms. Under the proposed rule,
programs would be understood to be
supported with ‘‘direct’’ Federal
financial assistance when either the
Government or an intermediary (as
identified in this proposed rule) selects
a service provider and either purchases
services from that provider (e.g.,
through a contract) or awards funds to
that provider to carry out a social
service (e.g., through a grant or
cooperative agreement). Under these
circumstances, there are no intervening
steps in which the beneficiary’s choice
determines the provider.
‘‘Indirect’’ Federal financial assistance
is distinguishable because it places the
choice of service provider in the hands
of the beneficiary before the
Government pays for the cost of that
service through a voucher, certificate, or
other similar means. For example, the
Government could allow the beneficiary
to secure the needed service
independently. Alternatively, a
governmental agency, operating under a
neutral program of aid, could present
each beneficiary or prospective
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beneficiary with a list of all qualified
providers from which the beneficiary
could obtain services using a
Government-provided certificate. Either
way, the Government empowers the
beneficiaries to choose for themselves
whether to receive the needed services,
including those that contain explicitly
religious activities, through a faithbased or other neighborhood
organization. The Government could
then pay for the beneficiary’s choice of
provider by giving the beneficiary a
voucher or similar document.
Alternatively, the Government could
choose to pay the provider directly after
asking the beneficiary to indicate the
beneficiary’s choice. See Freedom From
Religion Found. v. McCallum, 324 F.3d
880, 882 (7th Cir. 2003).
The Supreme Court has held that if a
program meets certain criteria, the
Government may fund the program if,
among other things, it places the benefit
in the hands of individuals who in turn
have the freedom to choose the provider
to which they take their benefit and
‘‘spend’’ it, whether that provider is
public or private, non-religious or
religious. Zelman v. Simmons-Harris,
536 U.S. 639, 652–53 (2002). In these
instances, the Government does not
encourage or promote any explicitly
religious programs that may be among
the options available to beneficiaries.
Notably, the voucher scheme at issue in
the Zelman decision, which was
described by the Court as one of ‘‘true
private choice,’’ id. at 653, was also
neutral toward religion and offered
beneficiaries adequate secular options.
Accordingly, these criteria also are
included in the text of the proposed
definition of ‘‘indirect financial
assistance.’’
C. Intermediaries
The Department also proposes
regulatory language that would clarify
the responsibilities of intermediaries.
The terms ‘‘intermediary’’ and ‘‘passthrough entity’’ may be used
interchangeably. 2 CFR 200.74. An
intermediary is an entity, including a
nongovernmental organization, acting
under a contract, grant, or other
agreement with the Federal Government
or with a State or local government, that
accepts Federal financial assistance and
distributes that assistance to other
organizations that, in turn, provide
Government-funded social services.
Each intermediary must abide by all
statutory and regulatory requirements
by, for example, not engaging in any
explicitly religious activities as part of
the programs or services funded by
direct Federal financial assistance. The
intermediary also has the same duties as
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the Government to comply with these
rules by, for example, selecting any
providers to receive Federal financial
assistance in a manner that does not
favor or disfavor organizations on the
basis of religion or religious belief.
Although intermediaries may be used to
distribute Federal financial assistance to
other organizations in some programs,
intermediaries remain accountable for
the Federal financial assistance they
disburse. Accordingly, intermediaries
must ensure that any providers to which
they disburse Federal financial
assistance also comply with these rules.
If the intermediary is a
nongovernmental organization, it retains
all other rights of a nongovernmental
organization under the statutory and
regulatory provisions governing the
program.
A State’s use of intermediaries does
not relieve the State of its traditional
responsibility to monitor effectively the
actions of such organizations. States are
obligated to manage the day-to-day
operations of grant- and subgrantsupported activities to ensure
compliance with applicable Federal
requirements and performance goals.
Moreover, a State’s use of intermediaries
does not relieve the State of its
responsibility to ensure that providers
are selected, and deliver services, in a
manner consistent with the First
Amendment’s Establishment Clause.
D. Protections for Beneficiaries
Executive Order 13559 provides a
variety of valuable protections for social
service beneficiaries. These protections
are intended to ensure that programs
receiving direct Federal financial
assistance do not discriminate against,
coerce, or otherwise burden
beneficiaries on the basis of their
religious beliefs or practices, or lack
thereof, and to make beneficiaries aware
of their protections, through appropriate
notice, when potentially obtaining
services from providers with a religious
affiliation.
The Executive Order makes it clear
that all organizations that receive
Federal financial assistance for the
purpose of delivering social welfare
services are prohibited from
discriminating against beneficiaries or
potential beneficiaries of those programs
on the basis of religion, a religious
belief, refusal to hold a religious belief,
or a refusal to attend or participate in a
religious practice. It also states that
organizations offering explicitly
religious activities (including activities
that involve overt religious content such
as worship, religious instruction, or
proselytization) must not use direct
Federal financial assistance to subsidize
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or support those activities, and that any
explicitly religious activities must be
offered outside of programs that are
supported with direct Federal financial
assistance (including through prime
awards or subawards). In other words,
to the extent that an organization
provides explicitly religious activities,
those activities must be offered
separately in time or location from
programs or services supported with
direct Federal financial assistance. And,
as noted above, participation in those
religious activities must be completely
voluntary for beneficiaries of programs
supported by Federal financial
assistance.
Executive Order 13559 also requires
faith-based or religious organizations
administering a program that is
supported by direct Federal financial
assistance to give written notice in a
manner prescribed by the agency to
beneficiaries and prospective
beneficiaries of their right to be referred
to an alternative provider when
available. When the nature of the
service provided or exigent
circumstances makes it impracticable to
provide such written notice in advance
of the actual service (e.g., crisis
intervention services by hotline), service
providers must advise beneficiaries of
their protections at the earliest available
opportunity. If a beneficiary or
prospective beneficiary of a social
service program supported by direct
Federal financial assistance objects to
the religious character of an
organization that provides services
under the program, the organization
must refer the beneficiary to an
alternative provider when available.
More specifically, the proposed rule
states that, if a beneficiary or
prospective beneficiary of a social
service program supported by direct
Federal financial assistance objects to
the religious character of an
organization that provides services
under the program, that organization
shall promptly undertake reasonable
efforts to identify and refer the
beneficiary to an alternative provider to
which the prospective beneficiary has
no objection. See Appendix A for the
proposed model Written Notice of
Beneficiary Protections and Beneficiary
Referral Request.
An organization may refer the
beneficiary to another religiously
affiliated provider if the beneficiary has
no objection to that provider. But if the
beneficiary requests a secular provider,
and a secular provider that offers the
needed services is available, then the
organization must refer the beneficiary
to that provider.
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The rule proposes to specify that,
except for services provided by
telephone, Internet, or similar means,
the referral must be to an alternate
provider that is in geographic proximity
to the organization making the referral
and that offers services similar in
substance and quality to those offered
by the organization. The alternative
provider also must have the capacity to
accept additional clients. Under the
proposed rule, if a federally supported
alternative provider meets these
requirements and is acceptable to the
beneficiary, a referral should be made to
that provider. If, however, there is no
federally supported alternative provider
that meets these requirements and is
acceptable to the beneficiary, a referral
should be made to an alternative
provider that does not receive Federal
financial assistance but does meet these
requirements and is acceptable to the
beneficiary.
If an organization is unable to identify
an alternative provider, the organization
is required under the proposed rule to
notify the awarding entity, and the
awarding entity should determine
whether there are any other suitable
alternative providers to which the
beneficiary may be referred. Further,
Executive Order 13559 requires (and the
proposed rule so provides) the relevant
awarding entity to ensure that
appropriate and timely referrals are
made to an alternative provider, and
that referrals are made in a manner
consistent with applicable privacy laws
and regulations. In some instances the
awarding entity may be unable to
identify a suitable alternative provider.
E. Political or Religious Affiliation
Although this proposed rule does not
affect the existing eligibility of faithbased or religious organizations to
participate in Department programs for
which they are otherwise eligible, it
provides that decisions about awards of
Federal financial assistance must be free
from political interference or even the
appearance of such interference. The
awarding entity is required to instruct
participants in the awarding process to
refrain from taking religious affiliation
or non-religious affiliation into account
in this process (i.e., under the proposed
rule, an organization should not receive
favorable or unfavorable marks merely
because it is affiliated or unaffiliated
with a religious body, or related or
unrelated to a specific religion). When
selecting peer reviewers for the review
of grant applications, the awarding
entity should never ask about religious
affiliation or take religious affiliation
into account. But it should encourage
religious, political, and professional
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diversity among peer reviewers by
advertising for these positions in a wide
variety of venues.
IV. Regulatory Certifications
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
at 5 U.S.C. 603(a) requires agencies to
prepare and make available for public
comment an initial regulatory flexibility
analysis that describes the impact of the
proposed rule on small entities. The
RFA at 5 U.S.C. 605(b) allows an agency
not to prepare an analysis if it certifies
that the proposed rulemaking will not
have a significant economic impact on
a substantial number of small entities.
Furthermore, under the Small Business
Regulatory Enforcement Fairness Act of
1996 (SBREFA) at section 212(a), an
agency is required to produce
compliance guidance for small entities
if a final rule will have a significant
economic impact on a substantial
number of small entities. 5 U.S.C. 601
note. The RFA defines small entities as
small business concerns, small
nonprofit enterprises, or small
governmental jurisdictions. 5 U.S.C.
601(6).
The proposed rule requires a faithbased or religious organization
administering a program that is
supported by direct Federal financial
assistance to give written notice to
beneficiaries and prospective
beneficiaries of their right to be referred
to an alternative provider when
available and, when requested, to refer
the beneficiary to an alternative
provider. The provider must inform the
beneficiary or prospective beneficiary in
writing and maintain a record of where
the beneficiary is referred.
The Department has made every effort
to ensure that the disclosure and referral
requirements of the proposed rule
impose minimum burden and allow
maximum flexibility in implementation.
The proposed rule includes a model
notice with the required language,
which providers must give beneficiaries
to inform them of their rights and
protections. The Department estimates it
will take no more than two hours for
providers to familiarize themselves with
the notice requirements and print and
duplicate an adequate number of
disclosure notices for potential
beneficiaries. Relying upon the May
2013 Bureau of Labor Statistics hourly
mean wage for a staff person, such as a
Training and Development Specialist, of
$22.81 per hour, the Department
estimates that the labor cost to prepare
the notice will be approximately $45.62
per service provider. In addition, the
Department estimates an upper limit of
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$100 for the annual cost of materials
(paper, ink, and toner) to print multiple
copies of the notices. Although these
costs will be borne by faith-based or
religious organizations, some of which
may be small service providers, the
Department does not believe that a
substantial number of small entities will
be affected by this provision. Further,
the Department does not believe that a
compliance cost of less than $200 per
provider per year is a significant
percentage of a provider’s total revenue.
In addition, the Department notes that,
after the first year, the labor cost
associated with compliance will likely
decrease significantly because small
service providers will be familiar with
the requirements. Accordingly, the
Attorney General has reviewed this
regulation and by approving it certifies
that it will not have a significant
economic impact on a substantial
number of small entities.
The proposed rule requires faithbased or religious organizations that
provide social services, at the
beneficiary’s request, to make
reasonable efforts to identify and refer
the beneficiary to an alternative
provider to which the beneficiary has no
objection. Although the Department
does not have any way to determine the
number of referrals that will occur in
any one year, the Department does not
believe that referral costs will be
appreciable for small faith-based or
religious organizations. The Department
invites interested parties to provide data
on which it can formulate better
estimates of the compliance costs
associated with the disclosure and
referral requirements of this proposed
rule.
Executive Orders 12866 and 13563—
Regulatory Review
The Department has drafted and
evaluated this proposed rule in
accordance with Executive Order 12866,
Regulatory Planning and Review,
section 1(b), The Principles of
Regulation, and in accordance with
Executive Order 13563, Improving
Regulation and Regulatory Review,
section 1(b), General Principles of
Regulation. These Executive Orders
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects; distributive impacts; and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits,
reducing costs, harmonizing rules, and
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promoting flexibility. Section 3(f) of
Executive Order 12866 defines a
‘‘significant regulatory action’’ as an
action that is likely to result in a rule
that may (1) have an annual effect on
the economy of $100 million or more or
adversely and materially affect a sector
of the economy, productivity,
competition, jobs, the environment,
public health or safety, or State, local or
tribal governments or communities (also
referred to as ‘‘economically
significant’’); (2) create serious
inconsistency or otherwise interfere
with an action taken or planned by
another agency; (3) materially alter the
budgetary impacts of entitlement grants,
user fees, or loan programs or the rights
and obligations of recipients; or (4) raise
novel legal or policy issues arising out
of legal mandates, the President’s
priorities, or the principles set forth in
Executive Order 12866.
The Department believes that the only
provisions of this proposed rule likely
to impose costs on the regulated
community are (1) the requirement that
faith-based or religious recipients,
which provide services or benefits, give
beneficiaries a written notice informing
them of their religious protections when
seeking or obtaining services or benefits
supported by direct Federal financial
assistance from the Department; and (2)
the requirement that, at the beneficiary’s
request, the recipient make reasonable
efforts to refer the beneficiary to an
alternative provider to which the
beneficiary has no objection. To
minimize compliance costs on these
recipients, the proposed rule includes
the notice language. An estimate of the
cost of providing this notice to
beneficiaries is discussed in the
Paperwork Reduction Act section of this
proposed rule.
To estimate the cost of the referral
provision, the Department would need
to know the number of faith-based or
religious organizations that provide
social services or benefits that are
funded annually by the Department, the
number of beneficiaries who would ask
for a referral, and the costs of making
and notifying relevant parties of the
referral. The Department estimates that
there are approximately 150
organizations that may be affected by
the requirement, based on data
maintained by two components of the
Department. Unfortunately, the
Department has limited or no data on
the other variables and invites
interested parties to provide data on
which to base compliance cost
estimates. This regulation has been
drafted and reviewed in accordance
with Executive Order 12866, Regulatory
Planning and Review, section 1(b), The
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Principles of Regulation. The
Department of Justice has determined
that this rule is not a ‘‘significant
regulatory action’’ under Executive
Order 12866, section 3(f), and
accordingly this rule has not been
reviewed by OMB.
Executive Order 13132—Federalism
Section 6 of Executive Order 13132
requires Federal agencies to consult
with State entities when a regulation or
policy will have a substantial direct
effect on the States, the relationship
between the National Government and
the States, or the distribution of power
and responsibilities among the various
levels of government within the
meaning of the Executive Order. Section
3(b) of the Executive Order further
provides that Federal agencies may
implement a regulation limiting the
policymaking discretion of the States
only if constitutional or statutory
authority permits the regulation and the
regulation is appropriate in light of the
presence of a problem of national
significance.
This proposed rule does not have a
substantial direct effect on the States or
the relationship between the National
Government and the States, or the
distribution of power and
responsibilities among the various
levels of government, within the
meaning of Executive Order 13132.
Furthermore, constitutional and
statutory authority supports the
proposed rule, and it is appropriate in
light of the presence of a problem of
national significance.
Executive Order 12988—Civil Justice
Reform
Executive Order 12988 provides that
agencies shall draft regulations that
meet applicable standards to avoid
drafting errors and ambiguity, minimize
litigation, provide clear legal standards
for affecting conduct, and promote
simplification and burden reduction.
This proposed rule meets the applicable
standards set forth in sections 3(a) and
3(b)(2) of Executive Order 12988.
Unfunded Mandates Reform Act of 1995
Section 202(a) of the Unfunded
Mandates Reform Act of 1995 (UMRA)
requires that a Federal agency determine
whether a regulation proposes a Federal
mandate that would result in the
increased expenditures by State, local,
or tribal governments, in the aggregate,
or by the private sector, of $100 million
or more in any single year. If a
regulation would result in increased
expenditures in excess of $100 million,
UMRA requires the agency to prepare a
written statement containing, among
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other things, a qualitative and
quantitative assessment of the
anticipated costs and benefits of the
Federal mandate. The Department has
reviewed this proposed rule in
accordance with UMRA and determined
that the total cost to implement the
proposed rule in any one year will not
meet or exceed $100 million. This
proposed rule does not include any
Federal mandate that may result in
increased expenditure by State, local,
and tribal governments in the aggregate
of more than $100 million, or increased
expenditures by the private sector of
more than $100 million. Accordingly,
UMRA does not require any further
action.
Small Business Regulatory Enforcement
Fairness Act of 1996
This proposed rule is not a major rule
as defined by section 251 of the Small
Business Regulatory Enforcement
Fairness Act of 1996, 5 U.S.C. 804. This
proposed rule will not result in an
annual effect on the economy of $100
million or more; a major increase in
costs or prices; or significant adverse
effects on competition, employment,
investment, productivity, innovation, or
on the ability of United States-based
enterprises to compete with foreignbased enterprises in domestic and
export markets.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(PRA), 44 U.S.C. 3501 et seq., was
enacted to minimize the paperwork
burden on affected entities. The PRA
requires certain actions before an agency
can adopt or revise a collection of
information, including publishing a
summary of the collection of
information and a brief description of
the need for and proposed use of the
information. 44 U.S.C. 3507.
Specifically, a Federal agency may not
conduct or sponsor a collection of
information unless OMB approves the
collection of information under the
PRA, and the collection of information
must display a currently valid OMB
control number. Notwithstanding any
other provisions of law, no person will
be subject to penalty for failing to
comply with a collection of information
if the collection of information does not
display a currently valid OMB control
number. 44 U.S.C. 3512.
The proposed rule includes two new
paperwork requirements. Section 38.6(c)
would require faith-based or religious
organizations to give beneficiaries (or
prospective beneficiaries) notice
informing them of their rights and
protections under this regulation.
Section 38.6(d) would require faith-
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based or religious organizations to make
reasonable efforts to identify and refer
beneficiaries requesting referrals to
alternative service providers. The
content of the notice and the actions the
faith-based or religious organizations
must take if a beneficiary objects to the
religious character of the organization
are described in the preamble. The
burdens of providing notice to
beneficiaries and identifying and
referring a beneficiary to an alternative
service provider are estimated in this
section.
Faith-based or religious organizations
that would be subject to these
requirements would have to keep
records to show that they have met the
referral requirements in the proposed
regulations. If an organization provides
paper notice and uses the model form in
Appendix A, it can meet the
recordkeeping requirements in these
proposed regulations by retaining the
bottom portion of the form. If an
organization provides notice
electronically, the notice would have to
include a means for beneficiaries to
request an alternative provider and
follow-up, if desired—that is recorded,
so that the organizations may retain
evidence of compliance with these
proposed regulations. The Department
has not included an estimate of the
burden of maintaining the records
needed to demonstrate compliance with
the recordkeeping requirements because
the Department already uses
information-collection instruments to
comply with the recordkeeping
requirements in existing Department
programs. Those collection instruments
are approved by OMB and each
collection has an OMB-assigned
information-collection control number.
The burden that would be added by
these proposed regulations is so small as
to not be measurable, given all the
program and administrative
requirements and the existing program
collection instruments. Therefore, the
Department has not included any
estimate of recordkeeping burden in this
analysis.
In calculating the burden that the
notice and referral requirements would
impose on faith-based or religious
organizations, the Department has made
several assumptions. As indicated in the
discussion below, where there is no
source for data, the Department has
relied on conversations with other
Federal agencies that have regulations
requiring notices and referrals, for data
based on their experiences. For
example, the Department estimates that
an organization would need
approximately one minute to distribute
the required notice to a beneficiary. This
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estimate assumes that there may be
instances during which less or more
time may be necessary, depending on
the number of beneficiaries seeking the
services or benefits from the
organization. Accordingly, the
Department estimates that the amount of
time needed to give the notice (T) will
be equal to one (1) minute.
The Department acknowledges that
estimating the number of faith-based or
religious organizations that provide
services or benefits under Department
programs is challenging. To obtain this
estimate, the Department relied upon
information from two of its grantmaking
components: The Office on Violence
Against Women (OVW) and the Office
of Justice Programs (OJP). OVW
estimates that there are approximately
100 grantees and subgrantees that would
have to provide the notice to
beneficiaries. OJP estimates that there
may be fewer than 50 grantees and
subgrantees subject to the notice
requirement, based on three years of
information related to legal name,
application for funding, and use of
special conditions that is maintained in
its Grants Management System.
Accordingly, the Department estimates
that the total number of organizations
that must give notice (N) will be
approximately 150.
Under the proposed regulations, faithbased or religious organizations are
required to make reasonable efforts to
refer beneficiaries seeking a referral to
an alternate provider. We are not aware
of any instances in which a beneficiary
of a program of the Department has
objected to receiving services from a
faith-based or religious organization.
When beneficiaries start receiving
notices of their right to request referral
to an alternative service provider, more
may raise objections. Our estimate of the
number of referrals is based on the
experience of the Department of Health
and Human Services, Substance Abuse
and Mental Health Services
Administration (SAMHSA), which
administers beneficiary substance abuse
service programs under titles VI and
XIX of the Public Health Service Act, 42
U.S.C. 290aa et seq. and 42 U.S.C. 300x–
21 et seq. These programs require faithbased or religious organizations that
receive assistance under the Public
Health Service Act to provide notice to
beneficiaries of their right under statute
to request an alternative service
provider. 42 U.S.C. 290kk–1(f), 300x–
65(e); 42 CFR 54a.8. Recipients of
assistance must also report all referrals
to the appropriate Federal, State, or
local government agency that
administers the program. 42 CFR
54a.8(d). To date, SAMHSA has not
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received any reports of referral by
recipients or subrecipients.
Despite that information, the
Department will err on the high side
and estimate that the number of requests
for referrals will be one per month for
each faith-based or religious
organization. Accordingly, the
Department estimates that the number
of beneficiaries or potential
beneficiaries who request referrals (Z)
will be twelve (12) per year.
Because the Department has
presumed that each faith-based or
religious organization may receive one
request per month, it must estimate the
amount of time needed by an
organization for a reasonable effort to
identify and make a referral. Based on
other Federal agencies’ experiences, the
Department estimates that the number
of hours required for an organization to
make reasonable efforts to identify and
refer a beneficiary (R) will be two (2)
hours.
Based on the information provided,
the total estimated annual burden hours
(B) can be calculated using the
following equation:
B = T × N × Z × R,
Where
T = the time needed to give the notice = 1
minute = 1/60 hour;
N = the number of faith-based or religious
organizations = 150;
Z = the number of annual requests for a
referral = 12 per year; and
R = the number of hours needed to identify
and make a referral = 2 hours.
Accordingly, the Department estimates
that the Total Estimated Annual Burden
Hours (B) will be 1/60 × 150 × 12 × 2,
or 60 hours per year.
The Department will submit an
information-collection request (ICR) to
OMB to obtain PRA approval for the
information-collection formatting
requirements contained in this notice of
proposed rulemaking (NPRM). Draft
control number XXXX will be used for
public comment.
Title of Collection: Written Notice of
Beneficiary Protections.
OMB ICR Reference Number Control
Number: XXXX.
Affected Public: State and local
governments, nonprofit organizations.
Abstract: The recipient provider will
be required to complete a referral form,
notify the awarding entity, and maintain
information only if a beneficiary
requests a referral to an alternate
provider.
For additional information, please
contact Jerri Murray, Department
Clearance Officer, Policy and Planning
Staff, Justice Management Division, U.S.
Department of Justice, Two Constitution
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Square, 145 N Street NE., Suite 3E.405B,
Washington, DC 20530.
List of Subjects in 28 CFR Part 38
Administrative practice and
procedure, Grant programs, Reporting
and recordkeeping requirements,
Nonprofit organizations.
For the reasons stated in the
preamble, the Department proposes to
revise part 38 of title 28 of the Code of
Federal Regulations to read as follows:
PART 38—PARTNERSHIPS WITH
FAITH-BASED AND OTHER
NEIGHBORHOOD ORGANIZATIONS
Sec.
38.1
38.2
38.3
38.4
38.5
38.6
38.7
38.8
Purpose.
Applicability and scope.
Definitions.
Policy.
Responsibilities.
Procedures.
Assurances.
Enforcement.
Authority: 28 U.S.C. 509; 5 U.S.C. 301;
E.O. 13279, 67 FR 77141 (Dec. 12, 2002), 3
CFR, 2002 Comp., p. 258; 18 U.S.C. 4001,
4042, 5040; 42 U.S.C. 14045b; 21 U.S.C. 871;
25 U.S.C. 3681; Pub. L. 107–273, 116 Stat.
1758; Public Law 109–162, 119 Stat. 2960; 42
U.S.C. 3751, 3753, 3762b, 3782, 3796dd–1,
3796dd–7, 3796gg–1, 3796gg–0b, 3796gg–3,
3796h, 3796ii–2, 3797u–3, 3797w, 5611,
5672, 10604; E.O. 13559, 75 FR 71319 (Nov.
17, 2010), 3 CFR, 2010 Comp., p. 273.
§ 38.1
Purpose.
The purpose of this part is to
implement Executive Order 13279 and
Executive Order 13559.
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§ 38.2
Applicability and scope.
(a) A faith-based or religious
organization that applies for, or
participates in, a social service program
supported with Federal financial
assistance may retain its independence
and may continue to carry out its
mission, including the definition,
development, practice, and expression
of its religious beliefs, provided that it
does not use direct Federal financial
assistance, whether received through a
prime award or subaward, to support or
engage in any explicitly religious
activities, including activities that
involve overt religious content such as
worship, religious instruction, or
proselytization.
(b) The use of indirect Federal
financial assistance is not subject to this
restriction. Religious activities that can
be publicly funded under the
Establishment Clause, such as
chaplaincy services, likewise would not
be considered ‘‘explicitly religious
activities’’ that are subject to direct
Federal financial assistance restrictions.
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§ 38.3
Definitions.
As used in this part:
(a)(1) Direct Federal financial
assistance or Federal financial
assistance provided directly refers to
situations where the Government or an
intermediary (under this part) selects
the provider and either purchases
services from that provider (e.g., via a
contract) or awards funds to that
provider to carry out a service (e.g., via
a grant or cooperative agreement). In
general, and except as provided in
paragraph (a)(2) of this section, Federal
financial assistance shall be treated as
direct, unless it meets the definition of
‘‘indirect Federal financial assistance’’
or ‘‘Federal financial assistance
provided indirectly.’’
(2) Recipients of subgrants that
receive Federal financial assistance
through State administering agencies or
State-administered programs are
recipients of ‘‘direct Federal financial
assistance’’ (or recipients of ‘‘Federal
funds provided directly’’).
(b) Indirect Federal financial
assistance or Federal financial
assistance provided indirectly refers to
situations where the choice of the
service provider is placed in the hands
of the beneficiary, and the cost of that
service is paid through a voucher,
certificate, or other similar means of
government-funded payment. Federal
financial assistance provided to an
organization is considered ‘‘indirect’’
when:
(1) The government program through
which the beneficiary receives the
voucher, certificate, or other similar
means of government-funded payment
is neutral toward religion;
(2) The organization receives the
assistance as a result of a decision of the
beneficiary, not a decision of the
Government; and
(3) The beneficiary has at least one
adequate secular option for the use of
the voucher, certificate, or other similar
means of government-funded payment.
(c)(1) Intermediary or pass-through
entity means an entity, including a
nonprofit or nongovernmental
organization, acting under a contract,
grant, or other agreement with the
Federal Government or with a State or
local government, such as a State
administering agency, that accepts
Federal financial assistance as a primary
recipient or grantee and distributes that
assistance to other organizations that, in
turn, provide government-funded social
services.
(2) When an intermediary, such as a
State administering agency, distributes
Federal financial assistance to other
organizations, it replaces the
Department as the awarding entity. The
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intermediary remains accountable for
the Federal financial assistance it
disburses and, accordingly, must ensure
that any providers to which it disburses
Federal financial assistance also comply
with this part.
(d) Department program refers to a
grant, contract, or cooperative
agreement funded by a discretionary,
formula, or block grant program
administered by or from the
Department.
(e) Grantee includes a recipient of a
grant, a signatory to a cooperative
agreement, or a contracting party.
(f) The Office for Civil Rights refers to
the Office for Civil Rights in the
Department’s Office of Justice Programs.
§ 38.4
Policy.
(a) Grants (formula and
discretionary), contracts, and
cooperative agreements. Faith-based or
religious organizations are eligible, on
the same basis as any other
organization, to participate in any
Department program for which they are
otherwise eligible. Neither the
Department nor any State or local
government receiving funds under any
Department program shall, in the
selection of service providers,
discriminate for or against an
organization on the basis of the
organization’s religious character or
affiliation.
(b) Political or religious affiliation.
Decisions about awards of Federal
financial assistance must be free from
political interference or even the
appearance of such interference and
must be made on the basis of merit, not
on the basis of religion or religious
belief.
§ 38.5
Responsibilities.
(a)(1) Organizations that receive direct
financial assistance from the
Department may not engage in explicitly
religious activities, including activities
that involve overt religious content such
as worship, religious instruction, or
proselytization, as part of the programs
or services funded with direct financial
assistance from the Department. If an
organization conducts such explicitly
religious activities, the activities must
be offered separately, in time or
location, from the programs or services
funded with direct financial assistance
from the Department, and participation
must be voluntary for beneficiaries of
the programs or services funded with
such assistance.
(2) Where Department funds are
provided to chaplains to work with
inmates in prisons, detention facilities,
or community correction centers, or
where Department funds are provided to
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religious or other organizations for
programs in prisons, detention facilities,
or community correction centers, in
which such organizations assist
chaplains in carrying out their duties, or
to any other activity that can be publicly
funded under the Establishment Clause,
these activities would not be considered
‘‘explicitly religious activities’’ that are
subject to direct Federal financial
assistance restrictions.
(b) A faith-based or religious
organization that participates in the
Department-funded programs or
services will retain its independence
from Federal, State, and local
governments, and may continue to carry
out its mission, including the definition,
practice, and expression of its religious
beliefs, provided that it does not use
direct financial assistance from the
Department to support any explicitly
religious activities, including activities
that involve overt religious content such
as worship, religious instruction, or
proselytization. Among other things, a
faith-based or religious organization that
receives financial assistance from the
Department may use space in its
facilities without removing scriptures or
religious art, icons, messages, scriptures,
or symbols. In addition, a faith-based or
religious organization that receives
financial assistance from the
Department retains its authority over its
internal governance, and it may retain
religious terms in its organization’s
name, select its board members on a
religious basis, and include religious
references in its organization’s mission
statements and other governing
documents.
(c) Any organization that participates
in programs funded by direct financial
assistance from the Department shall
not, in providing services, discriminate
against a program beneficiary or
prospective program beneficiary on the
basis of religion, religious belief, a
refusal to hold a religious belief, or a
refusal to attend or participate in a
religious practice.
(d) No grant document, agreement,
covenant, memorandum of
understanding, policy, or regulation that
the Department or a State or local
government uses in administering
financial assistance from the
Department shall require only faithbased or religious organizations to
provide assurances that they will not
use monies or property for explicitly
religious activities. All organizations,
including religious ones, that participate
in Department programs must carry out
eligible activities in accordance with all
program requirements and other
applicable requirements governing the
conduct of Department-funded
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activities, including those prohibiting
the use of direct financial assistance
from the Department to engage in
explicitly religious activities. No grant
document, agreement, covenant,
memorandum of understanding, policy,
or regulation that is used by the
Department or a State or local
government in administering financial
assistance from the Department shall
disqualify faith-based or religious
organizations from participating in the
Department’s programs because such
organizations are motivated or
influenced by religious faith to provide
social services, or because of their
religious character or affiliation.
(e) Exemption from Title VII
employment discrimination
requirements. A faith-based or religious
organization’s exemption from the
Federal prohibition on employment
discrimination on the basis of religion,
set forth in section 702(a) of the Civil
Rights Act of 1964, 42 U.S.C. 2000e–
1(a), is not forfeited when the
organization receives direct or indirect
financial assistance from the
Department. Some Department
programs, however, contain
independent statutory provisions
requiring that all grantees agree not to
discriminate in employment on the
basis of religion. Accordingly, grantees
should consult with the appropriate
Department program office to determine
the scope of any applicable
requirements.
(f) If an intermediary, acting under a
contract, grant, or other agreement with
the Federal Government or with a State
or local government that is
administering a program supported by
Federal financial assistance, is given the
authority under the contract, grant, or
agreement to select organizations to
provide services funded by the Federal
Government, the intermediary must
ensure the compliance of the recipient
of a contract, grant, or agreement with
the provisions of Executive Order
13279, as amended by Executive Order
13559, and any implementing rules or
guidance. If the intermediary is a
nongovernmental organization, it retains
all other rights of a nongovernmental
organization under the program’s
statutory and regulatory provisions.
(g) In general, the Department does
not require that a grantee, including a
religious organization, obtain taxexempt status under section 501(c)(3) of
the Internal Revenue Code to be eligible
for funding under Department programs.
Many grant programs, however, do
require an organization to be a
‘‘nonprofit organization’’ in order to be
eligible for funding. Individual
solicitations that require organizations
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to have nonprofit status will specifically
so indicate in the eligibility section of
a solicitation. In addition, any
solicitation that requires an organization
to maintain tax-exempt status will
expressly state the statutory authority
for requiring such status. Grantees
should consult with the appropriate
Department program office to determine
the scope of any applicable
requirements. In Department programs
in which an applicant must show that
it is a nonprofit organization, the
applicant may do so by any of the
following means:
(1) Proof that the Internal Revenue
Service currently recognizes the
applicant as an organization to which
contributions are tax deductible under
section 501(c)(3) of the Internal Revenue
Code;
(2) A statement from a State taxing
body or the State secretary of state
certifying that:
(i) The organization is a nonprofit
organization operating within the State;
and
(ii) No part of its net earnings may
lawfully benefit any private shareholder
or individual;
(3) A certified copy of the applicant’s
certificate of incorporation or similar
document that clearly establishes the
nonprofit status of the applicant; or
(4) Any item described in paragraphs
(b)(1) through (3) of this section if that
item applies to a State or national parent
organization, together with a statement
by the State or parent organization that
the applicant is a local nonprofit
affiliate.
(h) Grantees should consult with the
appropriate Department program office
to determine the applicability of this
part in foreign countries or sovereign
lands.
§ 38.6
Procedures.
(a) Effect on State and local funds. If
a State or local government voluntarily
contributes its own funds to supplement
activities carried out under the
applicable programs, the State or local
government has the option to separate
out the Federal funds or commingle
them. If the funds are commingled, the
provisions of this section shall apply to
all of the commingled funds in the same
manner, and to the same extent, as the
provisions apply to the Federal funds.
(b) To the extent otherwise permitted
by Federal law, the restrictions on
explicitly religious activities set forth in
this section do not apply to indirect
Federal financial assistance.
(c) Beneficiary protections: Written
notice. (1) Faith-based or religious
organizations providing social services
to beneficiaries under a program
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Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules
supported by direct Federal financial
assistance from the Department must
give written notice to beneficiaries and
prospective beneficiaries of certain
protections. Such notice must be given
in a manner prescribed by the Office for
Civil Rights. This notice must state the
following:
(i) The organization may not
discriminate against beneficiaries on the
basis of religion or religious belief;
(ii) The organization may not require
beneficiaries to attend or participate in
any explicitly religious activities that
are offered by the organization, and any
participation by beneficiaries in such
activities must be purely voluntary;
(iii) The organization must separate in
time or location any privately funded
explicitly religious activities from
activities supported by direct Federal
financial assistance;
(iv) If a beneficiary objects to the
religious character of the organization,
the organization will undertake
reasonable efforts to identify and refer
the beneficiary to an alternative
provider to which the prospective
beneficiary has no objection; and
(v) Beneficiaries may report an
organization’s violation of these
protections or file a written complaint of
any denials of services or benefits by an
organization with the Office for Civil
Rights or the intermediary that awarded
funds to the organization.
(2) This written notice must be given
to beneficiaries prior to the time they
enroll in the program or receive services
from such programs. When the nature of
the service provided or exigent
circumstances make it impracticable to
provide such written notice in advance
of the actual service, service providers
must advise beneficiaries of their
protections at the earliest available
opportunity.
(3) The notice that a faith-based or
religious organization may use to notify
beneficiaries or prospective
beneficiaries of their protections under
paragraph (c)(1) of this section is
available at https://ojp.gov/fbnp/
index.htm.
(d) Beneficiary protections: Referral
requirements. (1) If a beneficiary or
prospective beneficiary of a social
service program supported by the
Department objects to the religious
character of an organization that
provides services under the program,
that organization must promptly
undertake reasonable efforts to identify
and refer the beneficiary to an
alternative provider to which the
prospective beneficiary has no objection
based on the organization’s religious
character. See Written Notice of
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Beneficiary Protections, available at
https://ojp.gov/fbnp/index.htm.
(2) An organization may refer a
beneficiary or prospective beneficiary to
another faith-based or religious
organization that provides comparable
services, if the beneficiary has no
objection to that provider. But if the
beneficiary requests a secular provider,
and a secular provider is available, then
a referral must be made to that provider.
(3) Except for services provided by
telephone, Internet, or similar means,
the referral must be to an alternative
provider that is in reasonable
geographic proximity to the
organization making the referral and
that offers services that are similar in
substance and quality to those offered
by the organization. The alternative
provider also must have the capacity to
accept additional clients.
(4) When the organization makes a
referral to an alternative provider, or
when the organization determines that it
is unable to identify an alternative
provider, the organization shall notify
and maintain a record for review by the
awarding entity. If the organization is
unable to identify an alternative
provider, the awarding entity shall
determine whether there is any other
suitable alternative provider to which
the beneficiary may be referred. An
intermediary that receives a request for
assistance in identifying an alternative
provider may request assistance from
the Department.
§ 38.7
Assurances.
(a) Every application submitted to the
Department for direct Federal financial
assistance subject to this part must
contain, as a condition of its approval
and the extension of any such
assistance, or be accompanied by, an
assurance or statement that the program
is or will be conducted in compliance
with this part.
(b) Every intermediary must provide
for such methods of administration as
are required by the Office for Civil
Rights to give reasonable assurance that
the intermediary will comply with this
part and effectively monitor the actions
of its recipients.
§ 38.8
Enforcement.
(a) The Office for Civil Rights may
review the practices of recipients of
direct Federal financial assistance to
determine whether they are in
compliance with this part.
(b) The Office for Civil Rights may
investigate any allegations of
noncompliance with this part.
(c) Recipients of direct Federal
financial assistance determined to be in
violation of any provisions of this part
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47325
are subject to the enforcement
procedures and sanctions, up to and
including suspension and termination
of funds, authorized by applicable laws.
(d) An allegation of any violation or
discrimination by an organization,
based on this part, may be filed with the
Office for Civil Rights or the
intermediary that awarded the funds to
the organization.
Dated: July 16, 2015.
Loretta E. Lynch,
Attorney General.
Note: The following Appendix will not
appear in the Code of Federal Regulations.
APPENDIX A
WRITTEN NOTICE OF BENEFICIARY
PROTECTIONS
Name of Organization:
Name of Program:
Contact Information for Program Staff
(name, phone number, and email address, if
appropriate):
Because this program is supported in
whole or in part by financial assistance from
the Federal Government, we are required to
let you know that—
• We may not discriminate against you on
the basis of religion or religious belief;
• We may not require you to attend or
participate in any explicitly religious
activities that we offer, and your
participation in these activities must be
purely voluntary;
• We must separate in time or location any
privately funded explicitly religious
activities from activities supported with
direct Federal financial assistance;
• If you object to the religious character of
our organization, we must make reasonable
efforts to identify and refer you to an
alternative provider to which you have no
objection; and
• You may report violations of these
protections to the U.S. Department of
Justice, Office of Justice Programs, Office
for Civil Rights or to [name of agency that
awarded grant].
We must give you this written notice
before you enroll in our program or receive
services from the program.
BENEFICARY REFERRAL REQUEST
If you object to receiving services from us
based on the religious character of our
organization, please complete this form and
return it to the program contact identified
above. If you object, we will make reasonable
efforts to refer you to another service
provider. We cannot guarantee, however, that
in every instance, an alternative provider will
be available. With your consent, we will
follow up with you or the organization to
which you were referred to determine
whether you contacted that organization.
Please check if applicable:
( ) I want to be referred to another service
provider.
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If you checked above that you wish to be
referred to another service provider, please
check one of the following:
( ) Please follow up with me or the service
provider to which I was referred.
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Name:
Best way to reach me (phone/address/
email):
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( ) Please do not follow up.
[FR Doc. 2015–18259 Filed 8–5–15; 8:45 am]
BILLING CODE 4410–18–P
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Agencies
[Federal Register Volume 80, Number 151 (Thursday, August 6, 2015)]
[Proposed Rules]
[Pages 47315-47326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-18259]
[[Page 47315]]
Vol. 80
Thursday,
No. 151
August 6, 2015
Part XI
Department of Justice
-----------------------------------------------------------------------
28 CFR Part 38
Partnerships With Faith-Based and Other Neighborhood Organizations;
Proposed Rule
Federal Register / Vol. 80 , No. 151 / Thursday, August 6, 2015 /
Proposed Rules
[[Page 47316]]
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DEPARTMENT OF JUSTICE
28 CFR Part 38
[Docket No. OAG 149; AG Order No. 3541-2015]
RIN 1105-AB45
Partnerships With Faith-Based and Other Neighborhood
Organizations
AGENCY: Office of the Attorney General, Department of Justice.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The rule proposes to amend Department of Justice (Department)
regulations on the equal treatment for faith-based or religious
organizations and to implement Executive Order 13559 (Fundamental
Principles and Policymaking Criteria for Partnerships With Faith-Based
and Other Neighborhood Organizations). This rule proposes to revise
Department regulations pertaining to prohibited religious uses of
direct Federal financial assistance to provide clarity about the rights
and obligations of faith-based and religious groups participating in
Department programs and to provide protections for beneficiaries of
those programs. The Department seeks public comments only on the
proposed revisions that are being made to implement Executive Order
13559.
DATES: Written comments must be postmarked and electronic comments must
be submitted on or before October 5, 2015. Comments received by mail
will be considered timely if they are postmarked on or before that
date. The electronic Federal Docket Management System (FDMS) will
accept comments until Midnight Eastern Time at the end of that day.
ADDRESSES: To ensure proper handling of comments, please reference
[Docket No. OAG 149] on all electronic and written correspondence. The
Department encourages the electronic submission of all comments through
https://www.regulations.gov using the electronic comment form provided
on that site. For easy reference, an electronic copy of this document
is also available at that Web site. It is not necessary to submit paper
comments that duplicate the electronic submission, as all comments
submitted to https://www.regulations.gov will be posted for public
review and are part of the official docket record. However, should you
wish to submit written comments through regular or express mail, they
should be sent to Eugene Schneeberg, Director, Center for Faith-Based &
Neighborhood Partnerships, U.S. Department of Justice, Washington, DC
20531.
FOR FURTHER INFORMATION CONTACT: Eugene Schneeberg, Director, Center
for Faith-based & Neighborhood Partnerships, U.S. Department of
Justice, Washington, DC 20531. Phone: (202) 307-0588.
SUPPLEMENTARY INFORMATION:
I. Posting of Public Comments
Please note that all comments received are considered part of the
public record and made available for public inspection online at https://www.regulations.gov. Information made available for public inspection
includes personal identifying information (such as your name, address,
etc.) voluntarily submitted by the commenter.
If you wish to submit personal identifying information (such as
your name, address, etc.) as part of your comment, but do not wish it
to be posted online, you must include the phrase ``PERSONAL IDENTIFYING
INFORMATION'' in the first paragraph of your comment. You must also
locate all the personal identifying information that you do not want
posted online in the first paragraph of your comment and identify what
information you want the agency to redact. Personal identifying
information identified and located as set forth above will be placed in
the agency's public docket file, but not posted online.
If you wish to submit confidential business information as part of
your comment but do not wish it to be posted online, you must include
the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first paragraph
of your comment. You must also prominently identify confidential
business information to be redacted within the comment. If a comment
has so much confidential business information that it cannot be
effectively redacted, the agency may choose not to post that comment
(or to post that comment only partially) on https://www.regulations.gov.
Confidential business information identified and located as set forth
above will not be placed in the public docket file, nor will it be
posted online.
If you wish to inspect the agency's public docket file in person by
appointment, please see the FOR FURTHER INFORMATION CONTACT paragraph.
II. Background
On December 12, 2002, President Bush signed Executive Order 13279,
Equal Protection of the Laws for Faith-Based and Community
Organizations, 67 FR 77141. Executive Order 13279 set forth the
principles and policymaking criteria to guide Federal agencies in
formulating and developing policies with implications for faith-based
and other community organizations, to ensure equal protection of the
laws for faith-based and other community organizations, and to expand
opportunities for, and strengthen the capacity of, faith-based and
other community organizations to meet social needs in America's
communities. In addition, Executive Order 13279 asked specified agency
heads to review and evaluate existing policies relating to Federal
financial assistance for social services programs and, where
appropriate, to implement new policies that were consistent with and
necessary to further the fundamental principles and policymaking
criteria that have implications for faith-based and other community
organizations.
On January 21, 2004, the Department of Justice promulgated 28 CFR
part 38. That rule implemented the executive branch policy that, within
the framework of constitutional church-state guidelines, religious (or
faith-based) organizations should be able to compete on an equal
footing with other organizations for the Department's funding. It
revised Department regulations to remove barriers to the participation
of faith-based or religious organizations in Department programs and to
ensure that these programs are consistent with the requirements of the
Constitution, including the Religion Clauses of the First Amendment.
Shortly after taking office, President Obama signed Executive Order
13498, Amendments to Executive Order 13199 and Establishment of the
President's Advisory Council for Faith-Based and Neighborhood
Partnerships, 74 FR 6533 (Feb. 5, 2009). Executive Order 13498 changed
the name of the White House Office of Faith-Based and Community
Initiatives to the White House Office of Faith-Based and Neighborhood
Partnerships and established the President's Advisory Council for
Faith-Based and Neighborhood Partnerships (Advisory Council). The
President created the Advisory Council to bring together experts to
make, among other things, recommendations to the President for changes
in policies, programs, and practices that affect the delivery of
services by faith-based and other neighborhood organizations.
The Advisory Council issued its recommendations in a report
entitled A New Era of Partnerships: Report of Recommendations to the
President in March 2010 (available at https://www.whitehouse.gov/sites/
default/files/
[[Page 47317]]
microsites/ofbnp-council-final-report.pdf). The Advisory Council Report
included recommendations to amend Executive Order 13279 to strengthen
the constitutional and legal footing of partnerships and to offer a new
set of fundamental principles to guide agency decision-making in
administering Federal social service programs in partnership with
faith-based and other neighborhood organizations.
President Obama signed Executive Order 13559, Fundamental
Principles and Policymaking Criteria for Partnerships with Faith-Based
and Other Neighborhood Organizations, on November 17, 2010. 75 FR
71319. Executive Order 13559 incorporated the Advisory Council's
recommendations by amending Executive Order 13279 to, among other
things:
Require agencies that administer or award Federal
financial assistance for social service programs to implement
protections for the beneficiaries or prospective beneficiaries of those
programs (these protections include providing referrals to alternative
providers if the beneficiary objects to the religious character of the
organization providing services and ensuring that written notice of
these and other protections is provided to beneficiaries before they
enroll in or receive services from the program);
state that decisions about awards of Federal financial
assistance must be free from political interference or even the
appearance of such interference, and must be made on the basis of
merit, not on the basis of the religious affiliation, or lack of
affiliation, of the recipient organization;
state that the Federal Government has an obligation to
monitor and enforce all standards regarding the relationship between
religion and government in ways that avoid excessive entanglement
between religious bodies and governmental entities;
clarify that organizations engaging in explicitly
religious activity must (i) perform such activities and offer such
services outside of programs that are supported with direct Federal
financial assistance, (ii) separate these activities in time or
location from programs supported with direct Federal financial
assistance, and (iii) ensure that participation in any such activities
must be voluntary for the beneficiaries of the social service program
supported with Federal financial assistance;
emphasize that religious providers should be eligible to
compete for social service funding from the Government and to
participate fully in social service programs supported with Federal
financial assistance, and that such organizations may do so while
maintaining their religious identities;
require agencies that provide Federal financial assistance
for social service programs to post online regulations, guidance
documents, and policies that have implications for faith-based and
other neighborhood organizations and to post online a list of entities
receiving such assistance; and
clarify that the principles set forth apply to subawards
as well as prime awards.
In addition, Executive Order 13559 created the Interagency Working
Group on Faith-Based and Other Neighborhood Partnerships (Working
Group) to review and evaluate existing regulations, guidance documents,
and policies, and to submit a report to the President on amendments,
changes, or additions necessary to ensure that regulations and guidance
documents associated with the distribution of Federal financial
assistance for social service programs would be consistent with the
fundamental principles set forth in the Executive Order. The Executive
Order mandated that this report include a model set of regulations and
guidance documents for the agencies to adopt in a number of areas,
including, among other things, prohibited uses of direct Federal
financial assistance and separation requirements, protections for
religious identity, the distinction between ``direct'' and ``indirect''
Federal financial assistance, and protections for beneficiaries of
social service programs.
The Executive Order also stated that, following receipt of the
Working Group's report, the Office of Management and Budget (OMB), in
coordination with the Department of Justice, must issue guidance to
agencies on the implementation of the order. In August 2013, OMB issued
such guidance. In this guidance, OMB noted the Working Group's
recommendations and instructed specified agency heads that Executive
Order 13559 required them to amend existing agency regulations,
guidance documents, and policies that have implications for faith-based
and religious grounds to ensure they are consistent with the
fundamental principles set forth in the Order. The Department is
accordingly issuing guidance on the applicability of the Executive
Order and this rule to particular programs.
III. Overview of Proposed Rule
The regulation proposes to amend Part 38 to implement Executive
Order 13559, change the title of current Part 38, and rearrange the
current regulations to conform to the existing regulatory structure of
the Executive Order. This restructuring sets forth some original text
from Part 38 so that readers can understand the overall context of the
rule, but eliminates the repetition of language under Sec. 38.1,
Discretionary grants, contracts, and cooperative agreements, and Sec.
38.2, Formula grants, which presently have the same provisions. Among
other things, the Department specifically proposes to amend its
regulations to replace the term ``inherently religious activities''
with the term ``explicitly religious activities'' and define the latter
term as ``including activities that involve overt religious content
such as worship, religious instruction, or proselytization.'' In
addition, the proposed rule distinguishes between ``direct'' and
``indirect'' Federal financial assistance because the limitation on
explicitly religious activities applies to programs that are supported
with ``direct'' Federal financial assistance but does not apply to
programs supported with ``indirect'' Federal financial assistance. The
Department also proposes regulatory language to clarify the
responsibilities of intermediaries. The proposed rule provides that
decisions about awards of Federal financial assistance must be free
from political interference or even the appearance of such
interference. Finally, the proposed rule provides protections for
beneficiaries and includes provisions for assurances and enforcement.
Proposed amendments to Part 38.
Part 38. Partnerships With Faith-Based and Other Neighborhood
Organizations
A. Prohibited Uses of Direct Federal Financial Assistance
Part 38 of title 28 of the Code of Federal Regulations and
Executive Order 13279 prohibit organizations that receive direct
Federal financial assistance from the Department (e.g., formula or
discretionary grants, contracts, subgrants, subcontracts, and
cooperative agreements) from engaging in ``inherently religious
activities, such as worship, religious instruction, or proselytization,
as part of the programs or services funded with direct financial
assistance from the Department.'' 28 CFR 38.1(b)(1). The term
``inherently religious'' has proven confusing. In 2006, for example,
the Government Accountability Office (GAO) found that, while all 26 of
the religious social service providers it interviewed said they
understood the prohibition on using direct Federal financial assistance
for ``inherently religious activities,'' four of the providers
described acting in
[[Page 47318]]
ways that appeared to violate that rule. GAO, Faith-Based and Community
Initiative: Improvements in Monitoring Grantees and Measuring
Performance Could Enhance Accountability, GAO-06-616, at 34-35 (June
2006) (available at https://www.gao.gov/new.items/d06616.pdf).
Further, although the Supreme Court has sometimes used the term
``inherently religious,'' it has never established it as the test for
what the Government may not subsidize with direct Federal financial
assistance. If the term is interpreted narrowly, it could permit
actions that the Constitution may prohibit. For example, some might not
consider teaching an individual to read the English language using the
Bible or another religious text an ``inherently religious'' act. On the
other hand, one could also argue that the term ``inherently religious''
is too broad. For example, some might consider the provision of a hot
meal to a needy person to be an ``inherently religious'' act when it is
undertaken from a sense of religious motivation or obligation, even
though it has no overt religious content.
The Supreme Court has determined that the Government cannot
subsidize ``a specifically religious activity in an otherwise
substantially secular setting.'' Hunt v. McNair, 413 U.S. 734, 743
(1973). It has also said a direct aid program impermissibly advances
religion when the aid results in governmental indoctrination of
religion. See Mitchell v. Helms, 530 U.S. 793, 808 (2000) (Thomas, J.,
joined by Rehnquist, C.J., Scalia, and Kennedy, J.J., plurality); id.
at 845 (O'Connor, J., joined by Breyer, J., concurring in the
judgment); Agostini v. Felton, 521 U.S. 203, 223 (1997). This
terminology is fairly interpreted to prohibit the Government from
directly subsidizing any ``explicitly religious activity,'' including
activities that involve overt religious content. Thus, direct Federal
financial assistance may not be used to pay for activities such as
religious instruction, devotional exercises, worship, proselytizing, or
evangelism; production or dissemination of devotional guides or other
religious materials; or counseling in which counselors introduce
religious content. Similarly, direct Federal financial assistance may
not be used to pay for equipment or supplies to the extent they are
allocated to such activities. Activities that are secular in content,
such as serving meals to the needy or using a nonreligious text to
teach someone to read, are not considered ``explicitly religious
activities'' merely because the provider is religiously motivated to
provide those services. The study or acknowledgement of religion as a
historical or cultural reality also would not be considered an
explicitly religious activity.
Notwithstanding the general prohibition on the use of direct
Federal financial assistance to support explicitly religious
activities, there are times when religious activities may be federally
financed under the Establishment Clause and not subject to the direct
Federal financial assistance restrictions, for example, in situations
where Federal financial assistance is provided to chaplains to work
with inmates in prisons or detention facilities through social service
programs. Where there is extensive government control over the
environment of the federally financed social service program, program
officials may sometimes need to take affirmative steps to provide an
opportunity for beneficiaries of the social service program to exercise
their religion. See Cruz v. Beto, 405 U.S. 319, 322 n.2 (1972) (per
curiam) (``[R]easonable opportunities must be afforded to all prisoners
to exercise the religious freedom guaranteed by the First and
Fourteenth Amendment without fear of penalty.''); Katcoff v. Marsh, 755
F.2d 223, 234 (2d Cir. 1985) (finding it ``readily apparent'' that the
Government is obligated by the First Amendment ``to make religion
available to soldiers who have been moved by the Army to areas of the
world where religion of their own denominations is not available to
them''). Without such efforts, religious freedom might not exist for
these beneficiaries. Accordingly, services such as chaplaincy services
would not be considered explicitly religious activities that are
subject to direct financial aid restrictions.
Likewise, it is important to emphasize that the restrictions on
explicitly religious content apply to content generated by the
administrators of the program receiving direct Federal financial
assistance, not to spontaneous comments made by individual
beneficiaries about their personal lives in the context of these
programs. For example, if a person administering a federally funded job
skills program asks beneficiaries to describe how they gain the
motivation necessary for their job searches and some beneficiaries
refer to their faith or membership in a faith community, these kinds of
comments do not violate the restrictions and should not be censored. In
this context, it is clear that the administrator of the government
program did not orchestrate or encourage such comments.
The Department, therefore, proposes to amend its regulations to
replace the term ``inherently religious activities'' with the term
``explicitly religious activities'' and to define the latter term as
``including activities that involve overt religious content such as
worship, religious instruction, or proselytization.'' These proposed
changes in language would provide greater clarity and more closely
match constitutional standards as they have been developed in case law.
These proposed restrictions would not diminish existing regulatory
protections for the religious identity of faith-based providers. The
proposed rule would not affect, for example, organizations' ability to
use religious terms in their organizational names; select board members
on a religious basis; include religious references in mission
statements and other organizational documents; and post religious art,
messages, scriptures, and symbols in buildings where they deliver
federally funded services and benefits.
B. Direct and Indirect Federal Financial Assistance
Executive Order 13559 noted that the model regulations proposed by
the Working Group should distinguish between ``direct'' and
``indirect'' Federal financial assistance. This distinction is vital
because the limitation on Federal financial assistance supporting
explicitly religious activities applies to programs that are supported
with ``direct'' Federal financial assistance but does not apply to
programs supported with ``indirect'' Federal financial assistance. To
clarify this distinction, the proposed rule provides definitions of
these terms. Under the proposed rule, programs would be understood to
be supported with ``direct'' Federal financial assistance when either
the Government or an intermediary (as identified in this proposed rule)
selects a service provider and either purchases services from that
provider (e.g., through a contract) or awards funds to that provider to
carry out a social service (e.g., through a grant or cooperative
agreement). Under these circumstances, there are no intervening steps
in which the beneficiary's choice determines the provider.
``Indirect'' Federal financial assistance is distinguishable
because it places the choice of service provider in the hands of the
beneficiary before the Government pays for the cost of that service
through a voucher, certificate, or other similar means. For example,
the Government could allow the beneficiary to secure the needed service
independently. Alternatively, a governmental agency, operating under a
neutral program of aid, could present each beneficiary or prospective
[[Page 47319]]
beneficiary with a list of all qualified providers from which the
beneficiary could obtain services using a Government-provided
certificate. Either way, the Government empowers the beneficiaries to
choose for themselves whether to receive the needed services, including
those that contain explicitly religious activities, through a faith-
based or other neighborhood organization. The Government could then pay
for the beneficiary's choice of provider by giving the beneficiary a
voucher or similar document. Alternatively, the Government could choose
to pay the provider directly after asking the beneficiary to indicate
the beneficiary's choice. See Freedom From Religion Found. v. McCallum,
324 F.3d 880, 882 (7th Cir. 2003).
The Supreme Court has held that if a program meets certain
criteria, the Government may fund the program if, among other things,
it places the benefit in the hands of individuals who in turn have the
freedom to choose the provider to which they take their benefit and
``spend'' it, whether that provider is public or private, non-religious
or religious. Zelman v. Simmons-Harris, 536 U.S. 639, 652-53 (2002). In
these instances, the Government does not encourage or promote any
explicitly religious programs that may be among the options available
to beneficiaries. Notably, the voucher scheme at issue in the Zelman
decision, which was described by the Court as one of ``true private
choice,'' id. at 653, was also neutral toward religion and offered
beneficiaries adequate secular options. Accordingly, these criteria
also are included in the text of the proposed definition of ``indirect
financial assistance.''
C. Intermediaries
The Department also proposes regulatory language that would clarify
the responsibilities of intermediaries. The terms ``intermediary'' and
``pass-through entity'' may be used interchangeably. 2 CFR 200.74. An
intermediary is an entity, including a nongovernmental organization,
acting under a contract, grant, or other agreement with the Federal
Government or with a State or local government, that accepts Federal
financial assistance and distributes that assistance to other
organizations that, in turn, provide Government-funded social services.
Each intermediary must abide by all statutory and regulatory
requirements by, for example, not engaging in any explicitly religious
activities as part of the programs or services funded by direct Federal
financial assistance. The intermediary also has the same duties as the
Government to comply with these rules by, for example, selecting any
providers to receive Federal financial assistance in a manner that does
not favor or disfavor organizations on the basis of religion or
religious belief. Although intermediaries may be used to distribute
Federal financial assistance to other organizations in some programs,
intermediaries remain accountable for the Federal financial assistance
they disburse. Accordingly, intermediaries must ensure that any
providers to which they disburse Federal financial assistance also
comply with these rules. If the intermediary is a nongovernmental
organization, it retains all other rights of a nongovernmental
organization under the statutory and regulatory provisions governing
the program.
A State's use of intermediaries does not relieve the State of its
traditional responsibility to monitor effectively the actions of such
organizations. States are obligated to manage the day-to-day operations
of grant- and subgrant-supported activities to ensure compliance with
applicable Federal requirements and performance goals. Moreover, a
State's use of intermediaries does not relieve the State of its
responsibility to ensure that providers are selected, and deliver
services, in a manner consistent with the First Amendment's
Establishment Clause.
D. Protections for Beneficiaries
Executive Order 13559 provides a variety of valuable protections
for social service beneficiaries. These protections are intended to
ensure that programs receiving direct Federal financial assistance do
not discriminate against, coerce, or otherwise burden beneficiaries on
the basis of their religious beliefs or practices, or lack thereof, and
to make beneficiaries aware of their protections, through appropriate
notice, when potentially obtaining services from providers with a
religious affiliation.
The Executive Order makes it clear that all organizations that
receive Federal financial assistance for the purpose of delivering
social welfare services are prohibited from discriminating against
beneficiaries or potential beneficiaries of those programs on the basis
of religion, a religious belief, refusal to hold a religious belief, or
a refusal to attend or participate in a religious practice. It also
states that organizations offering explicitly religious activities
(including activities that involve overt religious content such as
worship, religious instruction, or proselytization) must not use direct
Federal financial assistance to subsidize or support those activities,
and that any explicitly religious activities must be offered outside of
programs that are supported with direct Federal financial assistance
(including through prime awards or subawards). In other words, to the
extent that an organization provides explicitly religious activities,
those activities must be offered separately in time or location from
programs or services supported with direct Federal financial
assistance. And, as noted above, participation in those religious
activities must be completely voluntary for beneficiaries of programs
supported by Federal financial assistance.
Executive Order 13559 also requires faith-based or religious
organizations administering a program that is supported by direct
Federal financial assistance to give written notice in a manner
prescribed by the agency to beneficiaries and prospective beneficiaries
of their right to be referred to an alternative provider when
available. When the nature of the service provided or exigent
circumstances makes it impracticable to provide such written notice in
advance of the actual service (e.g., crisis intervention services by
hotline), service providers must advise beneficiaries of their
protections at the earliest available opportunity. If a beneficiary or
prospective beneficiary of a social service program supported by direct
Federal financial assistance objects to the religious character of an
organization that provides services under the program, the organization
must refer the beneficiary to an alternative provider when available.
More specifically, the proposed rule states that, if a beneficiary or
prospective beneficiary of a social service program supported by direct
Federal financial assistance objects to the religious character of an
organization that provides services under the program, that
organization shall promptly undertake reasonable efforts to identify
and refer the beneficiary to an alternative provider to which the
prospective beneficiary has no objection. See Appendix A for the
proposed model Written Notice of Beneficiary Protections and
Beneficiary Referral Request.
An organization may refer the beneficiary to another religiously
affiliated provider if the beneficiary has no objection to that
provider. But if the beneficiary requests a secular provider, and a
secular provider that offers the needed services is available, then the
organization must refer the beneficiary to that provider.
[[Page 47320]]
The rule proposes to specify that, except for services provided by
telephone, Internet, or similar means, the referral must be to an
alternate provider that is in geographic proximity to the organization
making the referral and that offers services similar in substance and
quality to those offered by the organization. The alternative provider
also must have the capacity to accept additional clients. Under the
proposed rule, if a federally supported alternative provider meets
these requirements and is acceptable to the beneficiary, a referral
should be made to that provider. If, however, there is no federally
supported alternative provider that meets these requirements and is
acceptable to the beneficiary, a referral should be made to an
alternative provider that does not receive Federal financial assistance
but does meet these requirements and is acceptable to the beneficiary.
If an organization is unable to identify an alternative provider,
the organization is required under the proposed rule to notify the
awarding entity, and the awarding entity should determine whether there
are any other suitable alternative providers to which the beneficiary
may be referred. Further, Executive Order 13559 requires (and the
proposed rule so provides) the relevant awarding entity to ensure that
appropriate and timely referrals are made to an alternative provider,
and that referrals are made in a manner consistent with applicable
privacy laws and regulations. In some instances the awarding entity may
be unable to identify a suitable alternative provider.
E. Political or Religious Affiliation
Although this proposed rule does not affect the existing
eligibility of faith-based or religious organizations to participate in
Department programs for which they are otherwise eligible, it provides
that decisions about awards of Federal financial assistance must be
free from political interference or even the appearance of such
interference. The awarding entity is required to instruct participants
in the awarding process to refrain from taking religious affiliation or
non-religious affiliation into account in this process (i.e., under the
proposed rule, an organization should not receive favorable or
unfavorable marks merely because it is affiliated or unaffiliated with
a religious body, or related or unrelated to a specific religion). When
selecting peer reviewers for the review of grant applications, the
awarding entity should never ask about religious affiliation or take
religious affiliation into account. But it should encourage religious,
political, and professional diversity among peer reviewers by
advertising for these positions in a wide variety of venues.
IV. Regulatory Certifications
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) at 5 U.S.C. 603(a) requires
agencies to prepare and make available for public comment an initial
regulatory flexibility analysis that describes the impact of the
proposed rule on small entities. The RFA at 5 U.S.C. 605(b) allows an
agency not to prepare an analysis if it certifies that the proposed
rulemaking will not have a significant economic impact on a substantial
number of small entities. Furthermore, under the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA) at section 212(a),
an agency is required to produce compliance guidance for small entities
if a final rule will have a significant economic impact on a
substantial number of small entities. 5 U.S.C. 601 note. The RFA
defines small entities as small business concerns, small nonprofit
enterprises, or small governmental jurisdictions. 5 U.S.C. 601(6).
The proposed rule requires a faith-based or religious organization
administering a program that is supported by direct Federal financial
assistance to give written notice to beneficiaries and prospective
beneficiaries of their right to be referred to an alternative provider
when available and, when requested, to refer the beneficiary to an
alternative provider. The provider must inform the beneficiary or
prospective beneficiary in writing and maintain a record of where the
beneficiary is referred.
The Department has made every effort to ensure that the disclosure
and referral requirements of the proposed rule impose minimum burden
and allow maximum flexibility in implementation. The proposed rule
includes a model notice with the required language, which providers
must give beneficiaries to inform them of their rights and protections.
The Department estimates it will take no more than two hours for
providers to familiarize themselves with the notice requirements and
print and duplicate an adequate number of disclosure notices for
potential beneficiaries. Relying upon the May 2013 Bureau of Labor
Statistics hourly mean wage for a staff person, such as a Training and
Development Specialist, of $22.81 per hour, the Department estimates
that the labor cost to prepare the notice will be approximately $45.62
per service provider. In addition, the Department estimates an upper
limit of $100 for the annual cost of materials (paper, ink, and toner)
to print multiple copies of the notices. Although these costs will be
borne by faith-based or religious organizations, some of which may be
small service providers, the Department does not believe that a
substantial number of small entities will be affected by this
provision. Further, the Department does not believe that a compliance
cost of less than $200 per provider per year is a significant
percentage of a provider's total revenue. In addition, the Department
notes that, after the first year, the labor cost associated with
compliance will likely decrease significantly because small service
providers will be familiar with the requirements. Accordingly, the
Attorney General has reviewed this regulation and by approving it
certifies that it will not have a significant economic impact on a
substantial number of small entities.
The proposed rule requires faith-based or religious organizations
that provide social services, at the beneficiary's request, to make
reasonable efforts to identify and refer the beneficiary to an
alternative provider to which the beneficiary has no objection.
Although the Department does not have any way to determine the number
of referrals that will occur in any one year, the Department does not
believe that referral costs will be appreciable for small faith-based
or religious organizations. The Department invites interested parties
to provide data on which it can formulate better estimates of the
compliance costs associated with the disclosure and referral
requirements of this proposed rule.
Executive Orders 12866 and 13563--Regulatory Review
The Department has drafted and evaluated this proposed rule in
accordance with Executive Order 12866, Regulatory Planning and Review,
section 1(b), The Principles of Regulation, and in accordance with
Executive Order 13563, Improving Regulation and Regulatory Review,
section 1(b), General Principles of Regulation. These Executive Orders
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects; distributive
impacts; and equity). Executive Order 13563 emphasizes the importance
of quantifying both costs and benefits, reducing costs, harmonizing
rules, and
[[Page 47321]]
promoting flexibility. Section 3(f) of Executive Order 12866 defines a
``significant regulatory action'' as an action that is likely to result
in a rule that may (1) have an annual effect on the economy of $100
million or more or adversely and materially affect a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local or tribal governments or communities
(also referred to as ``economically significant''); (2) create serious
inconsistency or otherwise interfere with an action taken or planned by
another agency; (3) materially alter the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients; or (4) raise novel legal or policy issues
arising out of legal mandates, the President's priorities, or the
principles set forth in Executive Order 12866.
The Department believes that the only provisions of this proposed
rule likely to impose costs on the regulated community are (1) the
requirement that faith-based or religious recipients, which provide
services or benefits, give beneficiaries a written notice informing
them of their religious protections when seeking or obtaining services
or benefits supported by direct Federal financial assistance from the
Department; and (2) the requirement that, at the beneficiary's request,
the recipient make reasonable efforts to refer the beneficiary to an
alternative provider to which the beneficiary has no objection. To
minimize compliance costs on these recipients, the proposed rule
includes the notice language. An estimate of the cost of providing this
notice to beneficiaries is discussed in the Paperwork Reduction Act
section of this proposed rule.
To estimate the cost of the referral provision, the Department
would need to know the number of faith-based or religious organizations
that provide social services or benefits that are funded annually by
the Department, the number of beneficiaries who would ask for a
referral, and the costs of making and notifying relevant parties of the
referral. The Department estimates that there are approximately 150
organizations that may be affected by the requirement, based on data
maintained by two components of the Department. Unfortunately, the
Department has limited or no data on the other variables and invites
interested parties to provide data on which to base compliance cost
estimates. This regulation has been drafted and reviewed in accordance
with Executive Order 12866, Regulatory Planning and Review, section
1(b), The Principles of Regulation. The Department of Justice has
determined that this rule is not a ``significant regulatory action''
under Executive Order 12866, section 3(f), and accordingly this rule
has not been reviewed by OMB.
Executive Order 13132--Federalism
Section 6 of Executive Order 13132 requires Federal agencies to
consult with State entities when a regulation or policy will have a
substantial direct effect on the States, the relationship between the
National Government and the States, or the distribution of power and
responsibilities among the various levels of government within the
meaning of the Executive Order. Section 3(b) of the Executive Order
further provides that Federal agencies may implement a regulation
limiting the policymaking discretion of the States only if
constitutional or statutory authority permits the regulation and the
regulation is appropriate in light of the presence of a problem of
national significance.
This proposed rule does not have a substantial direct effect on the
States or the relationship between the National Government and the
States, or the distribution of power and responsibilities among the
various levels of government, within the meaning of Executive Order
13132. Furthermore, constitutional and statutory authority supports the
proposed rule, and it is appropriate in light of the presence of a
problem of national significance.
Executive Order 12988--Civil Justice Reform
Executive Order 12988 provides that agencies shall draft
regulations that meet applicable standards to avoid drafting errors and
ambiguity, minimize litigation, provide clear legal standards for
affecting conduct, and promote simplification and burden reduction.
This proposed rule meets the applicable standards set forth in sections
3(a) and 3(b)(2) of Executive Order 12988.
Unfunded Mandates Reform Act of 1995
Section 202(a) of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires that a Federal agency determine whether a regulation proposes
a Federal mandate that would result in the increased expenditures by
State, local, or tribal governments, in the aggregate, or by the
private sector, of $100 million or more in any single year. If a
regulation would result in increased expenditures in excess of $100
million, UMRA requires the agency to prepare a written statement
containing, among other things, a qualitative and quantitative
assessment of the anticipated costs and benefits of the Federal
mandate. The Department has reviewed this proposed rule in accordance
with UMRA and determined that the total cost to implement the proposed
rule in any one year will not meet or exceed $100 million. This
proposed rule does not include any Federal mandate that may result in
increased expenditure by State, local, and tribal governments in the
aggregate of more than $100 million, or increased expenditures by the
private sector of more than $100 million. Accordingly, UMRA does not
require any further action.
Small Business Regulatory Enforcement Fairness Act of 1996
This proposed rule is not a major rule as defined by section 251 of
the Small Business Regulatory Enforcement Fairness Act of 1996, 5
U.S.C. 804. This proposed rule will not result in an annual effect on
the economy of $100 million or more; a major increase in costs or
prices; or significant adverse effects on competition, employment,
investment, productivity, innovation, or on the ability of United
States-based enterprises to compete with foreign-based enterprises in
domestic and export markets.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq.,
was enacted to minimize the paperwork burden on affected entities. The
PRA requires certain actions before an agency can adopt or revise a
collection of information, including publishing a summary of the
collection of information and a brief description of the need for and
proposed use of the information. 44 U.S.C. 3507. Specifically, a
Federal agency may not conduct or sponsor a collection of information
unless OMB approves the collection of information under the PRA, and
the collection of information must display a currently valid OMB
control number. Notwithstanding any other provisions of law, no person
will be subject to penalty for failing to comply with a collection of
information if the collection of information does not display a
currently valid OMB control number. 44 U.S.C. 3512.
The proposed rule includes two new paperwork requirements. Section
38.6(c) would require faith-based or religious organizations to give
beneficiaries (or prospective beneficiaries) notice informing them of
their rights and protections under this regulation. Section 38.6(d)
would require faith-
[[Page 47322]]
based or religious organizations to make reasonable efforts to identify
and refer beneficiaries requesting referrals to alternative service
providers. The content of the notice and the actions the faith-based or
religious organizations must take if a beneficiary objects to the
religious character of the organization are described in the preamble.
The burdens of providing notice to beneficiaries and identifying and
referring a beneficiary to an alternative service provider are
estimated in this section.
Faith-based or religious organizations that would be subject to
these requirements would have to keep records to show that they have
met the referral requirements in the proposed regulations. If an
organization provides paper notice and uses the model form in Appendix
A, it can meet the recordkeeping requirements in these proposed
regulations by retaining the bottom portion of the form. If an
organization provides notice electronically, the notice would have to
include a means for beneficiaries to request an alternative provider
and follow-up, if desired--that is recorded, so that the organizations
may retain evidence of compliance with these proposed regulations. The
Department has not included an estimate of the burden of maintaining
the records needed to demonstrate compliance with the recordkeeping
requirements because the Department already uses information-collection
instruments to comply with the recordkeeping requirements in existing
Department programs. Those collection instruments are approved by OMB
and each collection has an OMB-assigned information-collection control
number. The burden that would be added by these proposed regulations is
so small as to not be measurable, given all the program and
administrative requirements and the existing program collection
instruments. Therefore, the Department has not included any estimate of
recordkeeping burden in this analysis.
In calculating the burden that the notice and referral requirements
would impose on faith-based or religious organizations, the Department
has made several assumptions. As indicated in the discussion below,
where there is no source for data, the Department has relied on
conversations with other Federal agencies that have regulations
requiring notices and referrals, for data based on their experiences.
For example, the Department estimates that an organization would need
approximately one minute to distribute the required notice to a
beneficiary. This estimate assumes that there may be instances during
which less or more time may be necessary, depending on the number of
beneficiaries seeking the services or benefits from the organization.
Accordingly, the Department estimates that the amount of time needed to
give the notice (T) will be equal to one (1) minute.
The Department acknowledges that estimating the number of faith-
based or religious organizations that provide services or benefits
under Department programs is challenging. To obtain this estimate, the
Department relied upon information from two of its grantmaking
components: The Office on Violence Against Women (OVW) and the Office
of Justice Programs (OJP). OVW estimates that there are approximately
100 grantees and subgrantees that would have to provide the notice to
beneficiaries. OJP estimates that there may be fewer than 50 grantees
and subgrantees subject to the notice requirement, based on three years
of information related to legal name, application for funding, and use
of special conditions that is maintained in its Grants Management
System. Accordingly, the Department estimates that the total number of
organizations that must give notice (N) will be approximately 150.
Under the proposed regulations, faith-based or religious
organizations are required to make reasonable efforts to refer
beneficiaries seeking a referral to an alternate provider. We are not
aware of any instances in which a beneficiary of a program of the
Department has objected to receiving services from a faith-based or
religious organization. When beneficiaries start receiving notices of
their right to request referral to an alternative service provider,
more may raise objections. Our estimate of the number of referrals is
based on the experience of the Department of Health and Human Services,
Substance Abuse and Mental Health Services Administration (SAMHSA),
which administers beneficiary substance abuse service programs under
titles VI and XIX of the Public Health Service Act, 42 U.S.C. 290aa et
seq. and 42 U.S.C. 300x-21 et seq. These programs require faith-based
or religious organizations that receive assistance under the Public
Health Service Act to provide notice to beneficiaries of their right
under statute to request an alternative service provider. 42 U.S.C.
290kk-1(f), 300x-65(e); 42 CFR 54a.8. Recipients of assistance must
also report all referrals to the appropriate Federal, State, or local
government agency that administers the program. 42 CFR 54a.8(d). To
date, SAMHSA has not received any reports of referral by recipients or
subrecipients.
Despite that information, the Department will err on the high side
and estimate that the number of requests for referrals will be one per
month for each faith-based or religious organization. Accordingly, the
Department estimates that the number of beneficiaries or potential
beneficiaries who request referrals (Z) will be twelve (12) per year.
Because the Department has presumed that each faith-based or
religious organization may receive one request per month, it must
estimate the amount of time needed by an organization for a reasonable
effort to identify and make a referral. Based on other Federal
agencies' experiences, the Department estimates that the number of
hours required for an organization to make reasonable efforts to
identify and refer a beneficiary (R) will be two (2) hours.
Based on the information provided, the total estimated annual
burden hours (B) can be calculated using the following equation:
B = T x N x Z x R,
Where
T = the time needed to give the notice = 1 minute = 1/60 hour;
N = the number of faith-based or religious organizations = 150;
Z = the number of annual requests for a referral = 12 per year; and
R = the number of hours needed to identify and make a referral = 2
hours.
Accordingly, the Department estimates that the Total Estimated Annual
Burden Hours (B) will be 1/60 x 150 x 12 x 2, or 60 hours per year.
The Department will submit an information-collection request (ICR)
to OMB to obtain PRA approval for the information-collection formatting
requirements contained in this notice of proposed rulemaking (NPRM).
Draft control number XXXX will be used for public comment.
Title of Collection: Written Notice of Beneficiary Protections.
OMB ICR Reference Number Control Number: XXXX.
Affected Public: State and local governments, nonprofit
organizations.
Abstract: The recipient provider will be required to complete a
referral form, notify the awarding entity, and maintain information
only if a beneficiary requests a referral to an alternate provider.
For additional information, please contact Jerri Murray, Department
Clearance Officer, Policy and Planning Staff, Justice Management
Division, U.S. Department of Justice, Two Constitution
[[Page 47323]]
Square, 145 N Street NE., Suite 3E.405B, Washington, DC 20530.
List of Subjects in 28 CFR Part 38
Administrative practice and procedure, Grant programs, Reporting
and recordkeeping requirements, Nonprofit organizations.
For the reasons stated in the preamble, the Department proposes to
revise part 38 of title 28 of the Code of Federal Regulations to read
as follows:
PART 38--PARTNERSHIPS WITH FAITH-BASED AND OTHER NEIGHBORHOOD
ORGANIZATIONS
Sec.
38.1 Purpose.
38.2 Applicability and scope.
38.3 Definitions.
38.4 Policy.
38.5 Responsibilities.
38.6 Procedures.
38.7 Assurances.
38.8 Enforcement.
Authority: 28 U.S.C. 509; 5 U.S.C. 301; E.O. 13279, 67 FR 77141
(Dec. 12, 2002), 3 CFR, 2002 Comp., p. 258; 18 U.S.C. 4001, 4042,
5040; 42 U.S.C. 14045b; 21 U.S.C. 871; 25 U.S.C. 3681; Pub. L. 107-
273, 116 Stat. 1758; Public Law 109-162, 119 Stat. 2960; 42 U.S.C.
3751, 3753, 3762b, 3782, 3796dd-1, 3796dd-7, 3796gg-1, 3796gg-0b,
3796gg-3, 3796h, 3796ii-2, 3797u-3, 3797w, 5611, 5672, 10604; E.O.
13559, 75 FR 71319 (Nov. 17, 2010), 3 CFR, 2010 Comp., p. 273.
Sec. 38.1 Purpose.
The purpose of this part is to implement Executive Order 13279 and
Executive Order 13559.
Sec. 38.2 Applicability and scope.
(a) A faith-based or religious organization that applies for, or
participates in, a social service program supported with Federal
financial assistance may retain its independence and may continue to
carry out its mission, including the definition, development, practice,
and expression of its religious beliefs, provided that it does not use
direct Federal financial assistance, whether received through a prime
award or subaward, to support or engage in any explicitly religious
activities, including activities that involve overt religious content
such as worship, religious instruction, or proselytization.
(b) The use of indirect Federal financial assistance is not subject
to this restriction. Religious activities that can be publicly funded
under the Establishment Clause, such as chaplaincy services, likewise
would not be considered ``explicitly religious activities'' that are
subject to direct Federal financial assistance restrictions.
Sec. 38.3 Definitions.
As used in this part:
(a)(1) Direct Federal financial assistance or Federal financial
assistance provided directly refers to situations where the Government
or an intermediary (under this part) selects the provider and either
purchases services from that provider (e.g., via a contract) or awards
funds to that provider to carry out a service (e.g., via a grant or
cooperative agreement). In general, and except as provided in paragraph
(a)(2) of this section, Federal financial assistance shall be treated
as direct, unless it meets the definition of ``indirect Federal
financial assistance'' or ``Federal financial assistance provided
indirectly.''
(2) Recipients of subgrants that receive Federal financial
assistance through State administering agencies or State-administered
programs are recipients of ``direct Federal financial assistance'' (or
recipients of ``Federal funds provided directly'').
(b) Indirect Federal financial assistance or Federal financial
assistance provided indirectly refers to situations where the choice of
the service provider is placed in the hands of the beneficiary, and the
cost of that service is paid through a voucher, certificate, or other
similar means of government-funded payment. Federal financial
assistance provided to an organization is considered ``indirect'' when:
(1) The government program through which the beneficiary receives
the voucher, certificate, or other similar means of government-funded
payment is neutral toward religion;
(2) The organization receives the assistance as a result of a
decision of the beneficiary, not a decision of the Government; and
(3) The beneficiary has at least one adequate secular option for
the use of the voucher, certificate, or other similar means of
government-funded payment.
(c)(1) Intermediary or pass-through entity means an entity,
including a nonprofit or nongovernmental organization, acting under a
contract, grant, or other agreement with the Federal Government or with
a State or local government, such as a State administering agency, that
accepts Federal financial assistance as a primary recipient or grantee
and distributes that assistance to other organizations that, in turn,
provide government-funded social services.
(2) When an intermediary, such as a State administering agency,
distributes Federal financial assistance to other organizations, it
replaces the Department as the awarding entity. The intermediary
remains accountable for the Federal financial assistance it disburses
and, accordingly, must ensure that any providers to which it disburses
Federal financial assistance also comply with this part.
(d) Department program refers to a grant, contract, or cooperative
agreement funded by a discretionary, formula, or block grant program
administered by or from the Department.
(e) Grantee includes a recipient of a grant, a signatory to a
cooperative agreement, or a contracting party.
(f) The Office for Civil Rights refers to the Office for Civil
Rights in the Department's Office of Justice Programs.
Sec. 38.4 Policy.
(a) Grants (formula and discretionary), contracts, and cooperative
agreements. Faith-based or religious organizations are eligible, on the
same basis as any other organization, to participate in any Department
program for which they are otherwise eligible. Neither the Department
nor any State or local government receiving funds under any Department
program shall, in the selection of service providers, discriminate for
or against an organization on the basis of the organization's religious
character or affiliation.
(b) Political or religious affiliation. Decisions about awards of
Federal financial assistance must be free from political interference
or even the appearance of such interference and must be made on the
basis of merit, not on the basis of religion or religious belief.
Sec. 38.5 Responsibilities.
(a)(1) Organizations that receive direct financial assistance from
the Department may not engage in explicitly religious activities,
including activities that involve overt religious content such as
worship, religious instruction, or proselytization, as part of the
programs or services funded with direct financial assistance from the
Department. If an organization conducts such explicitly religious
activities, the activities must be offered separately, in time or
location, from the programs or services funded with direct financial
assistance from the Department, and participation must be voluntary for
beneficiaries of the programs or services funded with such assistance.
(2) Where Department funds are provided to chaplains to work with
inmates in prisons, detention facilities, or community correction
centers, or where Department funds are provided to
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religious or other organizations for programs in prisons, detention
facilities, or community correction centers, in which such
organizations assist chaplains in carrying out their duties, or to any
other activity that can be publicly funded under the Establishment
Clause, these activities would not be considered ``explicitly religious
activities'' that are subject to direct Federal financial assistance
restrictions.
(b) A faith-based or religious organization that participates in
the Department-funded programs or services will retain its independence
from Federal, State, and local governments, and may continue to carry
out its mission, including the definition, practice, and expression of
its religious beliefs, provided that it does not use direct financial
assistance from the Department to support any explicitly religious
activities, including activities that involve overt religious content
such as worship, religious instruction, or proselytization. Among other
things, a faith-based or religious organization that receives financial
assistance from the Department may use space in its facilities without
removing scriptures or religious art, icons, messages, scriptures, or
symbols. In addition, a faith-based or religious organization that
receives financial assistance from the Department retains its authority
over its internal governance, and it may retain religious terms in its
organization's name, select its board members on a religious basis, and
include religious references in its organization's mission statements
and other governing documents.
(c) Any organization that participates in programs funded by direct
financial assistance from the Department shall not, in providing
services, discriminate against a program beneficiary or prospective
program beneficiary on the basis of religion, religious belief, a
refusal to hold a religious belief, or a refusal to attend or
participate in a religious practice.
(d) No grant document, agreement, covenant, memorandum of
understanding, policy, or regulation that the Department or a State or
local government uses in administering financial assistance from the
Department shall require only faith-based or religious organizations to
provide assurances that they will not use monies or property for
explicitly religious activities. All organizations, including religious
ones, that participate in Department programs must carry out eligible
activities in accordance with all program requirements and other
applicable requirements governing the conduct of Department-funded
activities, including those prohibiting the use of direct financial
assistance from the Department to engage in explicitly religious
activities. No grant document, agreement, covenant, memorandum of
understanding, policy, or regulation that is used by the Department or
a State or local government in administering financial assistance from
the Department shall disqualify faith-based or religious organizations
from participating in the Department's programs because such
organizations are motivated or influenced by religious faith to provide
social services, or because of their religious character or
affiliation.
(e) Exemption from Title VII employment discrimination
requirements. A faith-based or religious organization's exemption from
the Federal prohibition on employment discrimination on the basis of
religion, set forth in section 702(a) of the Civil Rights Act of 1964,
42 U.S.C. 2000e-1(a), is not forfeited when the organization receives
direct or indirect financial assistance from the Department. Some
Department programs, however, contain independent statutory provisions
requiring that all grantees agree not to discriminate in employment on
the basis of religion. Accordingly, grantees should consult with the
appropriate Department program office to determine the scope of any
applicable requirements.
(f) If an intermediary, acting under a contract, grant, or other
agreement with the Federal Government or with a State or local
government that is administering a program supported by Federal
financial assistance, is given the authority under the contract, grant,
or agreement to select organizations to provide services funded by the
Federal Government, the intermediary must ensure the compliance of the
recipient of a contract, grant, or agreement with the provisions of
Executive Order 13279, as amended by Executive Order 13559, and any
implementing rules or guidance. If the intermediary is a
nongovernmental organization, it retains all other rights of a
nongovernmental organization under the program's statutory and
regulatory provisions.
(g) In general, the Department does not require that a grantee,
including a religious organization, obtain tax-exempt status under
section 501(c)(3) of the Internal Revenue Code to be eligible for
funding under Department programs. Many grant programs, however, do
require an organization to be a ``nonprofit organization'' in order to
be eligible for funding. Individual solicitations that require
organizations to have nonprofit status will specifically so indicate in
the eligibility section of a solicitation. In addition, any
solicitation that requires an organization to maintain tax-exempt
status will expressly state the statutory authority for requiring such
status. Grantees should consult with the appropriate Department program
office to determine the scope of any applicable requirements. In
Department programs in which an applicant must show that it is a
nonprofit organization, the applicant may do so by any of the following
means:
(1) Proof that the Internal Revenue Service currently recognizes
the applicant as an organization to which contributions are tax
deductible under section 501(c)(3) of the Internal Revenue Code;
(2) A statement from a State taxing body or the State secretary of
state certifying that:
(i) The organization is a nonprofit organization operating within
the State; and
(ii) No part of its net earnings may lawfully benefit any private
shareholder or individual;
(3) A certified copy of the applicant's certificate of
incorporation or similar document that clearly establishes the
nonprofit status of the applicant; or
(4) Any item described in paragraphs (b)(1) through (3) of this
section if that item applies to a State or national parent
organization, together with a statement by the State or parent
organization that the applicant is a local nonprofit affiliate.
(h) Grantees should consult with the appropriate Department program
office to determine the applicability of this part in foreign countries
or sovereign lands.
Sec. 38.6 Procedures.
(a) Effect on State and local funds. If a State or local government
voluntarily contributes its own funds to supplement activities carried
out under the applicable programs, the State or local government has
the option to separate out the Federal funds or commingle them. If the
funds are commingled, the provisions of this section shall apply to all
of the commingled funds in the same manner, and to the same extent, as
the provisions apply to the Federal funds.
(b) To the extent otherwise permitted by Federal law, the
restrictions on explicitly religious activities set forth in this
section do not apply to indirect Federal financial assistance.
(c) Beneficiary protections: Written notice. (1) Faith-based or
religious organizations providing social services to beneficiaries
under a program
[[Page 47325]]
supported by direct Federal financial assistance from the Department
must give written notice to beneficiaries and prospective beneficiaries
of certain protections. Such notice must be given in a manner
prescribed by the Office for Civil Rights. This notice must state the
following:
(i) The organization may not discriminate against beneficiaries on
the basis of religion or religious belief;
(ii) The organization may not require beneficiaries to attend or
participate in any explicitly religious activities that are offered by
the organization, and any participation by beneficiaries in such
activities must be purely voluntary;
(iii) The organization must separate in time or location any
privately funded explicitly religious activities from activities
supported by direct Federal financial assistance;
(iv) If a beneficiary objects to the religious character of the
organization, the organization will undertake reasonable efforts to
identify and refer the beneficiary to an alternative provider to which
the prospective beneficiary has no objection; and
(v) Beneficiaries may report an organization's violation of these
protections or file a written complaint of any denials of services or
benefits by an organization with the Office for Civil Rights or the
intermediary that awarded funds to the organization.
(2) This written notice must be given to beneficiaries prior to the
time they enroll in the program or receive services from such programs.
When the nature of the service provided or exigent circumstances make
it impracticable to provide such written notice in advance of the
actual service, service providers must advise beneficiaries of their
protections at the earliest available opportunity.
(3) The notice that a faith-based or religious organization may use
to notify beneficiaries or prospective beneficiaries of their
protections under paragraph (c)(1) of this section is available at
https://ojp.gov/fbnp/index.htm.
(d) Beneficiary protections: Referral requirements. (1) If a
beneficiary or prospective beneficiary of a social service program
supported by the Department objects to the religious character of an
organization that provides services under the program, that
organization must promptly undertake reasonable efforts to identify and
refer the beneficiary to an alternative provider to which the
prospective beneficiary has no objection based on the organization's
religious character. See Written Notice of Beneficiary Protections,
available at https://ojp.gov/fbnp/index.htm.
(2) An organization may refer a beneficiary or prospective
beneficiary to another faith-based or religious organization that
provides comparable services, if the beneficiary has no objection to
that provider. But if the beneficiary requests a secular provider, and
a secular provider is available, then a referral must be made to that
provider.
(3) Except for services provided by telephone, Internet, or similar
means, the referral must be to an alternative provider that is in
reasonable geographic proximity to the organization making the referral
and that offers services that are similar in substance and quality to
those offered by the organization. The alternative provider also must
have the capacity to accept additional clients.
(4) When the organization makes a referral to an alternative
provider, or when the organization determines that it is unable to
identify an alternative provider, the organization shall notify and
maintain a record for review by the awarding entity. If the
organization is unable to identify an alternative provider, the
awarding entity shall determine whether there is any other suitable
alternative provider to which the beneficiary may be referred. An
intermediary that receives a request for assistance in identifying an
alternative provider may request assistance from the Department.
Sec. 38.7 Assurances.
(a) Every application submitted to the Department for direct
Federal financial assistance subject to this part must contain, as a
condition of its approval and the extension of any such assistance, or
be accompanied by, an assurance or statement that the program is or
will be conducted in compliance with this part.
(b) Every intermediary must provide for such methods of
administration as are required by the Office for Civil Rights to give
reasonable assurance that the intermediary will comply with this part
and effectively monitor the actions of its recipients.
Sec. 38.8 Enforcement.
(a) The Office for Civil Rights may review the practices of
recipients of direct Federal financial assistance to determine whether
they are in compliance with this part.
(b) The Office for Civil Rights may investigate any allegations of
noncompliance with this part.
(c) Recipients of direct Federal financial assistance determined to
be in violation of any provisions of this part are subject to the
enforcement procedures and sanctions, up to and including suspension
and termination of funds, authorized by applicable laws.
(d) An allegation of any violation or discrimination by an
organization, based on this part, may be filed with the Office for
Civil Rights or the intermediary that awarded the funds to the
organization.
Dated: July 16, 2015.
Loretta E. Lynch,
Attorney General.
Note: The following Appendix will not appear in the Code of
Federal Regulations.
APPENDIX A
WRITTEN NOTICE OF BENEFICIARY PROTECTIONS
Name of Organization:
Name of Program:
Contact Information for Program Staff (name, phone number, and
email address, if appropriate):
Because this program is supported in whole or in part by
financial assistance from the Federal Government, we are required to
let you know that--
We may not discriminate against you on the basis of
religion or religious belief;
We may not require you to attend or participate in any
explicitly religious activities that we offer, and your
participation in these activities must be purely voluntary;
We must separate in time or location any privately funded
explicitly religious activities from activities supported with
direct Federal financial assistance;
If you object to the religious character of our
organization, we must make reasonable efforts to identify and refer
you to an alternative provider to which you have no objection; and
You may report violations of these protections to the U.S.
Department of Justice, Office of Justice Programs, Office for Civil
Rights or to [name of agency that awarded grant].
We must give you this written notice before you enroll in our
program or receive services from the program.
BENEFICARY REFERRAL REQUEST
If you object to receiving services from us based on the
religious character of our organization, please complete this form
and return it to the program contact identified above. If you
object, we will make reasonable efforts to refer you to another
service provider. We cannot guarantee, however, that in every
instance, an alternative provider will be available. With your
consent, we will follow up with you or the organization to which you
were referred to determine whether you contacted that organization.
Please check if applicable:
( ) I want to be referred to another service provider.
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If you checked above that you wish to be referred to another
service provider, please check one of the following:
( ) Please follow up with me or the service provider to which I
was referred.
Name:
Best way to reach me (phone/address/email):
( ) Please do not follow up.
[FR Doc. 2015-18259 Filed 8-5-15; 8:45 am]
BILLING CODE 4410-18-P