Equal Participation of Faith-Based Organizations in DHS's Programs and Activities: Implementation of Executive Order 13831, 2889-2897 [2019-28142]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• Office of the Secretary

[Federal Register Volume 85, Number 12 (Friday, January 17, 2020)]
[Proposed Rules]
[Pages 2889-2897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-28142]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 85, No. 12 / Friday, January 17, 2020 / 
Proposed Rules

[[Page 2889]]



DEPARTMENT OF HOMELAND SECURITY

Office of the Secretary

6 CFR Part 19

[Docket No. DHS-2019-0049]
RIN 1601-AA93


Equal Participation of Faith-Based Organizations in DHS's 
Programs and Activities: Implementation of Executive Order 13831

AGENCY: Office of the Secretary, DHS.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The rule proposes to amend Department of Homeland Security 
(Department or DHS) regulations to implement Executive Order 13831 
(Establishment of a White House Faith and Opportunity Initiative). 
Among other changes, this rule proposes changes to provide clarity 
about the rights and obligations of faith-based organizations 
participating in Department programs, to clarify the Department's 
guidance documents for financial assistance in regard to faith-based 
organizations, and to eliminate certain requirements for faith-based 
organizations that no longer reflect executive branch guidance. This 
proposed rulemaking is intended to ensure that the Department's social 
service programs are implemented in a manner consistent with the 
requirements of Federal law, including the First Amendment to the 
Constitution, and the Religious Freedom Restoration Act.

DATES: Comments must be received by DHS on or before February 18, 2020.

ADDRESSES: You may submit comments identified by docket DHS-2019-0049. 
See the ``Public Participation and Request for Comments'' portion of 
the SUPPLEMENTARY INFORMATION section for further instructions on 
submitting comments.

FOR FURTHER INFORMATION CONTACT: Peter Mina, Deputy Officer for 
Programs and Compliance, Office for Civil Rights and Civil Liberties, 
Department of Homeland Security, Washington, DC 20528, 202-401-1474 
(phone), 202-401-0470 (TTY).

SUPPLEMENTARY INFORMATION:

I. Public Participation and Request for Comments

    DHS encourages you to submit comments through the Federal 
eRulemaking Portal at https://www.regulations.gov. If you cannot submit 
your material by using https://www.regulations.gov, contact the person 
in the FOR FURTHER INFORMATION CONTACT section of this notice of 
proposed rulemaking for alternate instructions. Also, if you visit the 
online docket and sign up for email alerts, you will be notified when 
comments are posted or if a final rule is published.
    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.

II. Background

    Shortly after taking office in 2001, President George W. Bush 
signed Executive Order 13199, Establishment of White House Office of 
Faith-based and Community Initiatives, 66 FR 8499 (January 29, 2001). 
That Executive Order sought to ensure that ``private and charitable 
groups, including religious ones, . . . have the fullest opportunity 
permitted by law to compete on a level playing field'' in the delivery 
of social services. To do so, it created an office within the White 
House, the White House Office of Faith-Based and Community Initiatives, 
with primary responsibility to ``establish policies, priorities, and 
objectives for the Federal Government's comprehensive effort to enlist, 
equip, enable, empower, and expand the work of faith-based and other 
community organizations to the extent permitted by law.''
    On December 12, 2002, President Bush signed Executive Order 13279, 
Equal Protection of the Laws for Faith-Based and Community 
Organizations, 67 FR 77141 (Dec. 12, 2002). Executive Order 13279 set 
forth the principles and policymaking criteria to guide Federal 
agencies in formulating and implementing policies with implications for 
faith-based organizations and other community organizations, to ensure 
equal protection of the laws for faith-based and 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 directed specified agency heads to review and evaluate existing 
policies that had implications for faith-based and community 
organizations relating to their eligibility for Federal financial 
assistance for social service programs and, where appropriate, to 
implement new policies that were consistent with and necessary to 
further the fundamental principles and policymaking criteria 
articulated in the Order.
    Consistent with Executive Order 13279, the Department issued a 
notice of proposed rulemaking, Nondiscrimination in Matters Pertaining 
to Faith-Based Organizations, 73 FR 2187 (Jan. 14, 2008); however, the 
Department did not issue a final rule related to the participation of 
faith-based organizations in the Department's programs prior to 2016.
    President Obama maintained President Bush's program but modified it 
in certain respects. 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. 9, 2009). This Executive 
Order 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 it created an Advisory Council that 
subsequently submitted recommendations regarding the work of the 
Office.
    On November 17, 2010, President Obama signed Executive Order 13559, 
Fundamental Principles and Policymaking Criteria for Partnerships with 
Faith-Based and Other Neighborhood Organizations, 75 FR 71319 (Nov. 17, 
2010). Executive Order 13559 made various changes to Executive Order 
13279 including: Making minor and substantive textual

[[Page 2890]]

changes to the fundamental principles; adding a provision requiring 
that any religious social service provider refer potential 
beneficiaries to an alternative provider if the beneficiaries object to 
the first provider's religious character; adding a provision requiring 
that the faith-based provider give notice of potential referral to the 
potential beneficiaries; and adding a provision that awards must be 
free of political interference and not be based on religious 
affiliation or lack thereof. An interagency working group was tasked 
with developing model regulatory changes to implement Executive Order 
13279 as amended by Executive Order 13559, including provisions that 
clarified the prohibited uses of direct financial assistance, allowed 
religious social service providers to maintain their religious 
identities, and distinguished between direct and indirect assistance. 
These efforts eventually resulted in amendments to agency regulations, 
defining ``indirect assistance'' as government aid to a beneficiary, 
such as a voucher, that flows to a religious provider only through the 
genuine and independent choice of the beneficiary.
    Unlike most of the other agencies affected by the Executive Orders, 
the Department did not issue final regulations related to the 
participation of faith-based organizations in the Department programs 
prior to 2016. In 2015, the Department issued a supplemental notice of 
proposed rulemaking (SNPRM), Nondiscrimination in Matters Pertaining to 
Faith-Based Organizations, 80 FR 47284 (Aug. 6, 2015), in concert with 
other agencies. The SNPRM addressed comments received in response to 
the 2008 notice of proposed rulemaking and proposed additional changes 
to address Executive Order 13559.
    In 2016, the Department in concert with eight other Federal 
agencies, published its final rule, Nondiscrimination in Matters 
Pertaining to Faith-based Organizations, 81 FR 19353 (April 4, 2016), 
codified at 6 CFR part 19, which established regulations to implement 
Executive Order 13279, as amended by Executive Order 13559. The rules 
required not only that faith-based providers give the notice of the 
right to an alternative provider specified in Executive Order 13559, 
but also required faith-based providers, but not other providers, to 
give written notice to beneficiaries and potential beneficiaries of 
programs funded with direct Federal financial assistance of various 
rights, including nondiscrimination based on religion, the requirement 
that participation in any religious activities must be voluntary and 
that they must be provided separately from the federally funded 
activity, and that beneficiaries may report violations.
    Following issuance of the final rule in 2016, the Department 
provided guidance and resources to assist faith-based and other 
neighborhood organizations receiving financial assistance to support 
social service programs, as well as intermediaries (such as State 
administering agencies), in understanding and complying with the 
regulation, including but not limited to model notices of beneficiary 
rights and beneficiary referral request forms.
    President Trump has given new direction to the program established 
by President Bush and continued by President Obama. On May 4, 2017, 
President Trump issued Executive Order 13798, Presidential Executive 
Order Promoting Free Speech and Religious Liberty, 82 FR 21675 (May 4, 
2017). Executive Order 13798 states that ``[f]ederal law protects the 
freedom of Americans and their organizations to exercise religion and 
participate fully in civic life without undue interference by the 
Federal Government. The executive branch will honor and enforce those 
protections.'' It directed the Attorney General to ``issue guidance 
interpreting religious liberty protections in Federal law.''
    Pursuant to this instruction, the Attorney General, on October 6, 
2017, issued the Memorandum for All Executive Departments and Agencies, 
``Federal Law Protections for Religious Liberty,'' 82 FR 49668 (Oct. 
26, 2017) (the ``Attorney General's Memorandum on Religious Liberty''). 
The Attorney General's Memorandum on Religious Liberty emphasized that 
individuals and organizations do not give up religious liberty 
protections by providing government-funded social services, and that 
``government may not exclude religious organizations as such from 
secular aid programs . . . when the aid is not being used for 
explicitly religious activities such as worship or proselytization.''
    On May 3, 2018, President Trump signed Executive Order 13831, 
Executive Order on the Establishment of a White House Faith and 
Opportunity Initiative, 83 FR 20715 (May 3, 2018), amending Executive 
Order 13279 as amended by Executive Order 13559, and other related 
Executive Orders. Among other things, Executive Order 13831 changed the 
name of the ``White House Office of Faith-Based and Neighborhood 
Partnerships'' in those previous Orders to the ``White House Faith and 
Opportunity Initiative;'' changed the way that initiative is to 
operate; directed departments and agencies with ``Centers for Faith-
Based and Community Initiatives'' to change those names to ``Centers 
for Faith and Opportunity Initiatives;'' and ordered that departments 
and agencies without a Center for Faith and Opportunity Initiatives 
designate a ``Liaison for Faith and Opportunity Initiatives.'' 
Executive Order 13831 also eliminated the alternative provider 
requirement and requirement of notice thereof in Executive Order 13559 
described above.

Alternative Provider and Alternative Provider Notice Requirement

    Executive Order 13831 deleted the requirement in Executive Order 
13559 that faith-based social services providers refer beneficiaries 
who object to receiving services from them to an alternative provider. 
Section 1(b) of Executive Order 13559 had amended section 2 of 
Executive Order 13279, entitled ``Fundamental Principles,'' by, in 
pertinent part, adding a new subsection (h) to section 2. As amended, 
section 2(h)(i) provided: ``If a beneficiary or a prospective 
beneficiary of a social service program supported by Federal financial 
assistance objects to the religious character of an organization that 
provides services under the program, that organization shall, within a 
reasonable time after the date of the objection, refer the beneficiary 
to an alternative provider.'' Section 2(h)(ii) directed agencies to 
establish policies and procedures to ensure that referrals are timely 
and follow privacy laws and regulations; that providers notify agencies 
of and track referrals; and that each beneficiary ``receives written 
notice of the protections set forth in this subsection prior to 
enrolling on or receiving services from such program'' (emphasis 
added). The reference to ``this subsection'' rather than to ``this 
Section'' indicated that the notice requirement of section 2(h)(ii) was 
referring only to the alternative provider provisions in subsection 
(h), not all of the protections in section 2. The Department has 
revised its regulations to conform to these provisions. 6 CFR 19.6, 
19.7.
    The alternative provider provisions of Executive Order 13559, which 
Executive Order 13831 removed, were not required by the Constitution or 
any applicable law. Indeed, they are in tension with more recent 
Supreme Court precedent regarding nondiscrimination against religious 
organizations and with the Attorney General's Memorandum on Religious 
Liberty.

[[Page 2891]]

    As the Supreme Court recently clarified in Trinity Lutheran Church 
of Columbia, Inc. v. Comer, 137 S. Ct. 2012, 2019 (2017) (quoting 
Church of Lukumi Babalu Aye, Inc. v. Hialeah, 508 U.S. 520, 533 (1993) 
(alteration is original)): ``The Free Exercise Clause `protect[s] 
religious observers against unequal treatment' and subjects to the 
strictest scrutiny laws that target the religious for `special 
disabilities' based on their `religious status.' '' The Court in 
Trinity Lutheran added: ``[T]his Court has repeatedly confirmed that 
denying a generally available benefit solely on account of religious 
identity imposes a penalty on the free exercise of religion that can be 
justified only by a state interest `of the highest order.''' Id. at 
2019 (quoting McDaniel v. Paty, 435 U.S. 618 (1978) (plurality opinion) 
(internal citations omitted); see also Mitchell v. Helms, 530 U.S. 793, 
827 (2000) (plurality opinion) (``The religious nature of a recipient 
should not matter to the constitutional analysis, so long as the 
recipient adequately furthers the government's secular purpose.''); 
Attorney General's Memorandum on Religious Liberty, principle 6 
(``Government may not target religious individuals or entities for 
special disabilities based on their religion.'').
    Applying the alternative provider requirement categorically to all 
faith-based providers and not to other providers of federally funded 
social services is thus in tension with the nondiscrimination principle 
articulated in Trinity Lutheran and the Attorney General's Memorandum 
on Religious Liberty.
    In addition, the alternative provider requirement could in certain 
circumstances raise concerns under the Religious Freedom Restoration 
Act of 1993 (RFRA), 42 U.S.C. 2000bb et seq. Under RFRA, where the 
government substantially burdens an entity's exercise of religion, the 
government must prove that the burden is in furtherance of a compelling 
government interest and is the least restrictive means of furthering 
that interest. 42 U.S.C. 2000bb-1(b). The World Vision OLC opinion 
makes clear that when a faith-based grant recipient carries out its 
social service programs, it may engage in an exercise of religion 
protected by RFRA and certain conditions on receiving those grants may 
substantially burden the religious exercise of the recipient. See 
Application of the Religious Freedom Restoration Act to the Award of a 
Grant Pursuant to a Juvenile Justice and Delinquency Prevention Act, 31 
O.L.C. 162, 169-71, 174-83 (June 29, 2007).
    Requiring faith-based organizations to comply with the alternative 
provider requirement could impose such a burden, such as in a case in 
which a faith-based organization has a religious objection to referring 
the beneficiary to an alternative provider that provided services in a 
manner that violated the organization's religious tenets. See Burwell 
v. Hobby Lobby Stores, Inc., 573 U.S. 682, 720-26 (2014). And it is far 
from clear that this requirement would meet the strict scrutiny that 
RFRA requires of laws that substantially burden religious practice. The 
Department is not aware of any instance in which a beneficiary has 
actually sought an alternative provider, undermining the suggestion 
that the interests this requirement serves are in fact important, much 
less compelling enough to outweigh a substantial burden on religious 
exercise.
    Executive Order 13831 chose to eliminate the alternative provider 
requirement for good reason. This decision avoids tension with the 
nondiscrimination principle articulated in Trinity Lutheran and the 
Attorney General's Memorandum on Religious Liberty, avoids problems 
with RFRA that may arise, and fits within the Administration's broader 
deregulatory agenda.

Other Notice Requirements

    As noted above, Executive Order 13559 amended Executive Order 13279 
by adding a right to an alternative provider and notice of this right.
    While Executive Order 13559's requirement of notice to 
beneficiaries was limited to notice of the alternative provider 
requirement, Part 19 as most recently amended goes further than 
Executive Order 13559 by requiring that faith-based social service 
providers of services funded with direct Federal funds provide a much 
broader notice to beneficiaries and potential beneficiaries. This 
requirement applies only to faith-based providers and not to other 
providers. In addition to the notice of the right to an alternative 
provider, the rule requires notice of nondiscrimination based on 
religion; that participation in any explicitly religious activities 
must be voluntary and separate in time or space from activities funded 
with direct Federal funds; and that beneficiaries or potential 
beneficiaries may report violations.
    Separate and apart from these notice requirements, the Orders 
clearly set forth the underlying requirements of nondiscrimination, 
voluntariness, the holding of religious activities separate in time or 
place from any federally funded activity, and the right to file 
complaints of violations. Faith-based providers of social services, 
like other providers of social services, are required to sign 
assurances that they will follow the law and the requirements of grants 
and contracts they receive. See, e.g., 28 CFR 38.7. There is no basis 
on which to presume that they are less likely than other social service 
providers to follow the law. See Mitchell v. Helms, 530 U.S. 793, 856-
57 (2000) (O'Connor, J., concurring in judgment) (noting that in Tilton 
v. Richardson, 403 U.S. 672 (1971), the Court's upholding of grants to 
universities for construction of buildings with the limitation that 
they only be used for secular educational purposes ``demonstrate[d] our 
willingness to presume that the university would abide by the secular 
content restriction.''). There is thus no need for prophylactic 
protections that create administrative burdens on faith-based providers 
and that are not imposed on other providers.

Definition of Indirect Federal Financial Assistance

    Executive Order 13559 directed its Interagency Working Group on 
Faith-Based and Other Neighborhood Partnerships to propose model 
regulations and guidance documents regarding, among other things, ``the 
distinction between `direct' and `indirect' Federal financial 
assistance[.] '' 75 FR 71319, 71321 (Nov. 22, 2010). Following issuance 
of the Working Group's report, a final rule was issued to amend 
existing regulations to make that distinction, and to clarify that 
``organizations that participate in programs funded by indirect 
financial assistance need not modify their program activities to 
accommodate beneficiaries who choose to expend the indirect aid on 
those organizations' programs,'' need not provide notices or referrals 
to beneficiaries, and need not separate their religious activities from 
supported programs. 81 FR 19355, 19358 (Apr. 4, 2016). In so doing, the 
final rule attempted to accurately capture the definition of 
``indirect'' aid that the U.S. Supreme Court employed in Zelman v. 
Simmons-Harris, 536 U.S. 639 (2002). See 81 FR 19355, 19361-62 (Apr. 4, 
2016).
    In Zelman, the Court concluded that a government funding program is 
``one of true private choice''--i.e., an indirect-aid program--where 
there is ``no evidence that the State deliberately skewed incentives 
toward religious'' providers. Id. at 650. The Court upheld the 
challenged school-choice program because it conferred assistance 
``directly to a broad class of individuals defined without reference to 
religion'' (i.e.,

[[Page 2892]]

parents of schoolchildren); it permitted participation by both 
religious and nonreligious educational providers; it allocated aid ``on 
the basis of neutral, secular criteria that neither favor nor disfavor 
religion''; and it made aid available ``to both religious and secular 
beneficiaries on a nondiscriminatory basis.'' Id. at 653-54 (quotation 
marks omitted). While the Court noted the availability of secular 
providers, it specifically declined to make its definition of indirect 
aid hinge on the ``preponderance of religiously affiliated private'' 
providers in the city, as that preponderance arose apart from the 
program; doing otherwise, the Court concluded, ``would lead to the 
absurd result that a neutral school-choice program might be permissible 
in some parts of Ohio, . . . but not in'' others. Id. at 656-58. In 
short, the Court concluded that ``[t]he constitutionality of a neutral 
. . . aid program simply does not turn on whether and why, in a 
particular area, at a particular time, most [providers] are run by 
religious organizations, or most recipients choose to use the aid at a 
religious [provider].'' Id. at 658.
    The final rule issued after the Working Group's report included, 
among its criteria for indirect Federal financial assistance, a 
requirement that beneficiaries have ``at least one adequate secular 
option'' for use of the Federal financial assistance. See 81 FR 19355, 
19407-19426 (Apr. 4, 2016). In other words, the rule amended 
regulations to make the definition of ``indirect'' aid hinge on the 
availability of secular providers. A regulation defining ``indirect 
Federal financial assistance'' to require the availability of secular 
providers is in tension with the Supreme Court's choice not to make the 
definition of indirect aid hinge on the geographically varying 
availability of secular providers. Thus, it is appropriate to amend 
existing regulations to bring the definition of ``indirect'' aid more 
closely into line with the Supreme Court's definition in Zelman.

Overview of Proposed Rule

    The Department proposes to amend Part 19 to implement Executive 
Order 13831 and conform more closely to the Supreme Court's current 
First Amendment jurisprudence; relevant Federal statutes such as RFRA; 
Executive Order 13279, as amended by Executive Orders 13559 and 13831, 
and the Attorney General's Memorandum on Religious Liberty.
    Consistent with these authorities, this proposed rule would amend 
Part 19 to conform to Executive Order 13279, as amended, by deleting 
the requirement that faith-based social services providers refer 
beneficiaries objecting to receiving services from them to an 
alternative provider.
    This proposed rule would also make clear that a faith-based 
organization that participates in Department-funded programs or 
services shall retain its autonomy; right of expression; religious 
character; and independence from Federal, State, and local governments. 
It would further clarify that none of the guidance documents that the 
Department or any State or local government uses in administering the 
Department's financial assistance shall require faith-based 
organizations to provide assurances or notices where similar 
requirements are not imposed on non-faith-based organizations, and that 
any restrictions on the use of grant funds shall apply equally to 
faith-based and non-faith-based organizations.
    This proposed rule would additionally require that the Department's 
notices or announcements of award opportunities and notices of awards 
or contracts include language clarifying the rights and obligations of 
faith-based organizations that apply for and receive Federal funding. 
The language would clarify that, among other things, faith-based 
organizations may apply for awards on the same basis as any other 
organization; that the Department will not, in the selection of 
recipients, discriminate against an organization on the basis of the 
organization's religious exercise or affiliation; and that a faith-
based organization that participates in a federally funded program 
retains its independence from the government and may continue to carry 
out its mission consistent with religious freedom protections in 
Federal law, including the Free Speech and Free Exercise Clauses of the 
Constitution.
    Finally, the proposed rule would directly refer to the definition 
of ``religious exercise'' incorporated in RFRA and would amend the 
definition of ``indirect Federal Financial assistance'' to align more 
closely with the Supreme Court's definition in Zelman.

Explanations for Proposed Amendments to 6 CFR Part 19

Sec.  19.2 Definitions
    Section 19.2 ``Direct Federal financial assistance or Federal 
financial assistance provided directly'' is proposed to be changed in 
order to provide clarity.
    Section 19.2 ``Financial assistance'' is proposed to be changed in 
accordance with Exec. Order No. 13279, 67 FR 77141 (Dec. 12, 2002).
    Section 19.2 ``Indirect Federal financial assistance or Federal 
financial assistance provided indirectly'' (2) is proposed to be 
changed in order to clarify the text by eliminating extraneous language 
and to align the text more closely with the First Amendment. See, e.g., 
Zelman v. Simmons-Harris, 536 U.S. 639 (2002); Trinity Lutheran Church 
of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017).
    A new definition of ``religious exercise'' is proposed to be added 
to Section 19.2 to explain that such term has the meaning given to the 
term in 42 U.S.C. 2000cc-5(7)(A),'' thereby aligning the text with the 
definition used RFRA and with the Religious Land Use and Individualized 
Persons Act of 2000 (RLUIPA), 42 U.S.C. 2000cc-5(7)(A). See, e.g., 
principles 10-15 of the Attorney General's Memorandum on Religious 
Liberty, 82 FR 49668 (Oct. 26, 2017).
Sec.  19.3 Equal Ability for Faith-Based Organizations To Seek and 
Receive Financial Assistance Through DHS Social Service Programs
    Section 19.3(a) is proposed to be changed in order to align it more 
closely with RFRA by recognizing that a reasonable accommodation may be 
appropriate or required for faith-based organizations participating in 
DHS social service programs. See, e.g., principles 6, 10-15, and 20 of 
the Attorney General's Memorandum on Religious Liberty, 82 FR 49668 
(Oct. 26, 2017); Application of the Religious Freedom Restoration Act 
to the Award of a Grant Pursuant to the Juvenile Justice and 
Delinquency Prevention Act, 31 Op. O.L.C. 162 (2007) (World Vision 
Opinion).
    Section 19.3(b) is proposed to be changed to align the text more 
closely with the First Amendment and with RFRA by recognizing that the 
government may not discriminate for or against an organization because 
of that organization's religious exercise any more than it can do so 
based on the organization's religious character or affiliation. See, 
e.g., Zelman v. Simmons-Harris, 536 U.S. 639 (2002), Trinity Lutheran 
Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017)); principles 
2, 3, 5-7, 9-17, 19, and 20 of the Attorney General's Memorandum on 
Religious Liberty, 82 FR 49668 (Oct. 26, 2017); Exec. Order No. 13279, 
67 FR 77141 (Dec. 12, 2002), as amended by Exec. Order No. 13559, 75 FR 
71319 (Nov. 17, 2010), and Exec. Order No. 13831, 83 FR 20715 (May 8, 
2018). It also will require certain notices or

[[Page 2893]]

announcements of award opportunities, awards, or contracts.
    Section 19.3(e) is proposed to be changed in order to clarify the 
text by eliminating extraneous language and to align it more closely 
with RFRA by recognizing the possibility of a reasonable religious 
accommodation. See, e.g., principles 6, 10-15, and 20 of the Attorney 
General's Memorandum on Religious Liberty, 82 FR 49668 (Oct. 26, 2017); 
Application of the Religious Freedom Restoration Act to the Award of a 
Grant Pursuant to the Juvenile Justice and Delinquency Prevention Act, 
31 Op. O.L.C. 162 (2007) (World Vision Opinion). To be reasonable, of 
course, any such accommodation must comply with the applicable 
requirements of federal law, including the Establishment Clause.
    Section 19.3(f) is proposed to be added in order to align the text 
more closely with the First Amendment and with RFRA by recognizing that 
faith-based providers shall not be required to provide notices or 
assurances where they are not required of non-faith-based providers. 
See, e.g., Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. 
Ct. 2012 (2017); principles 5, 6, 7, 8, 10-15, and 20 of the Attorney 
General's Memorandum on Religious Liberty, 82 FR 49668 (Oct. 26, 2017).
Sec.  19.4 Explicitly Religious Activities
    Section 19.4(b) is proposed to be changed in order to clarify the 
text by eliminating extraneous language, and to align it more closely 
with Exec. Order No. 13559, 75 FR 71319 (Nov. 22, 2010). It is not 
clear what import the requirement that explicitly religious activities 
be ``[c]learly distinct from programs specifically supported by direct 
financial assistance'' would have given the requirement that they must 
be offered separately, in time or location, from the programs, 
activities, or services supported by direct DHS financial assistance. 
DHS accordingly thinks it better to simply align the text with the 
requirements in the Executive Order.
    Section 19.4(c) is proposed to be changed in order to clarify the 
text and align it more closely with the First Amendment and with RFRA 
by once again recognizing the possibility of a reasonable accommodation 
for faith-based organizations participating in DHS social service 
programs. See, e.g., Trinity Lutheran Church of Columbia, Inc. v. 
Comer, 137 S. Ct. 2012 (2017); principles 5, 6, 7, 8, 10-15, and 20 of 
the Attorney General's Memorandum on Religious Liberty, 82 FR 49668 
(Oct. 26, 2017).
Sec.  19.5 Nondiscrimination Requirements
    Section 19.5 is proposed to be changed in order to align the text 
more closely with the First Amendment and with RFRA by making clear 
that an organization receiving indirect financial assistance is not 
required to make the attendance requirements of its program optional 
for a beneficiary who has chosen to expend indirect aid on that 
program. See, e.g., Zelman v. Simmons-Harris, 536 U.S. 639 (2002)); 
principles 10-15 of the Attorney General's Memorandum on Religious 
Liberty, 82 FR 49668 (Oct. 26, 2017).
Sec.  19.6 How To Prove Nonprofit Status
    Section 19.6 is proposed to be changed in order to align the text 
more closely with the First Amendment and with RFRA by deleting the 
notice requirement. See, e.g., See, e.g., Zelman v. Simmons-Harris, 536 
U.S. 639 (2002), Trinity Lutheran Church of Columbia, Inc. v. Comer, 
137 S. Ct. 2012 (2017); principles 2, 3, 6-7, 9-17, 19, and 20 of the 
Attorney General's Memorandum on Religious Liberty, 82 FR 49668 (Oct. 
26, 2017); Exec. Order No. 13279, 67 FR 77141 (Dec. 12, 2002), as 
amended by Exec. Order No. 13559, 75 FR 71319 (Nov. 17, 2010), and 
Exec. Order No. 13831, 83 FR 20715 (May 8, 2018). In its place, DHS is 
inserting a new provision that identifies how nonprofit status may be 
determined when such status is required for participation in its 
programs. This new provision includes an accommodates for organizations 
that would qualify as 501(c)(3) nonprofit organizations but that have a 
sincere religious objection to so registering, allowing such 
organizations to provide evidence that they would so qualify. If an 
entity has a sincerely-held religious belief that it cannot apply for 
status as a 501(c)(3) tax-exempt entity, it may provide evidence 
sufficient to establish that the entity would otherwise qualify as a 
nonprofit organization under the Department's criteria.
Sec.  19.7 Beneficiary Protections: Referral Requirements
    Section 19.7 is proposed to be changed in order to align the text 
more closely with the First Amendment and with RFRA by eliminating the 
referral requirement. See, e.g., See, e.g., Zelman v. Simmons-Harris, 
536 U.S. 639 (2002), Trinity Lutheran Church of Columbia, Inc. v. 
Comer, 137 S. Ct. 2012 (2017); principles 2, 3, 6-7, 9-17, 19, and 20 
of the Attorney General's Memorandum on Religious Liberty, 82 FR 49668 
(Oct. 26, 2017); Exec. Order No. 13279, 67 FR 77141 (Dec. 12, 2002), as 
amended by Exec. Order No. 13559, 75 FR 71319 (Nov. 17, 2010), and 
Exec. Order No. 13831, 83 FR 20715 (May 8, 2018).
Sec.  19.8 Independence of Faith-Based Organizations
    Section 19.8 is proposed to be changed in order to clarify the text 
by eliminating extraneous language, and to align it more closely with 
the First Amendment and with RFRA by providing more detail about the 
autonomy from government that a faith-based organization retains while 
participating in government programming. See, e.g., Exec. Order No. 
13279, 67 FR 77141 (Dec. 12, 2002), as amended by Exec. Order No. 
13831, 83 FR 20715 (May 8, 2018); principles 9-15, 19, and 20 of the 
Attorney General's Memorandum on Religious Liberty, 82 FR 49668 (Oct. 
26, 2017).
Sec.  19.11 Nondiscrimination Among Faith-Based Organizations
    Section 19.11 is proposed to be added in order to align the text 
more closely with the First Amendment by making clear that these 
provisions relating to nondiscrimination toward faith-based 
organizations should not be construed to advantage or disadvantage 
historically recognized religions or sects over other religions or 
sects. See, e.g., Larson v. Valente, 456 U.S. 228 (1982); principle 8 
of the Attorney General's Memorandum on Religious Liberty, 82 FR 49668 
(Oct. 26, 2017).
Appendix A and Appendix B
    The Department proposes that Appendix A be changed and that 
Appendix B be added to align the text more closely with the First 
Amendment and with RFRA by deleting the notice and referral 
requirements that solely burdened faith-based organizations and instead 
requiring notices of the terms on which faith-based organizations may 
generally participate in DHS funded programs. See, e.g., Zelman v. 
Simmons-Harris, 536 U.S. 639 (2002), Trinity Lutheran Church of 
Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017)); principles 2, 3, 6-7, 
9-17, 19, and 20 of the Attorney General's Memorandum on Religious 
Liberty, 82 FR 49668 (October 26, 2017); Exec. Order No. 13279, 67 FR 
77141 (Dec. 12, 2002), as amended by Exec. Order No. 13559, 75 FR 71319 
(Nov. 17, 2010), and Exec. Order No. 13831, 83 FR 20715 (May 8, 2018).

[[Page 2894]]

III. Regulatory Certifications

Executive Order 12866 and 13563--Regulatory Planning and Review

    This NPRM has been drafted in accordance with Executive Order 13563 
of January 18, 2011 (76 FR 3821, Jan. 21, 2011), Improving Regulation 
and Regulatory Review, and Executive Order 12866 of September 30, 1993 
(58 FR 51735, Oct. 4, 1993), Regulatory Planning and Review. Executive 
Order 13563 directs agencies, to the extent permitted by law, to 
propose or adopt a regulation only upon a reasoned determination that 
its benefits justify its costs; tailor the regulation to impose the 
least burden on society, consistent with obtaining the regulatory 
objectives; and, in choosing among alternative regulatory approaches, 
select those approaches that maximize net benefits. Executive Order 
13563 recognizes that some benefits and costs are difficult to quantify 
and provides that, where appropriate and permitted by law, agencies may 
consider and discuss qualitatively values that are difficult or 
impossible to quantify, including equity, human dignity, fairness, and 
distributive impacts.
    Under Executive Order 12866, the Office of Information and 
Regulatory Affairs (OIRA) must determine whether this regulatory action 
is ``significant'' and, therefore, subject to the requirements of the 
executive order and subject to review by the Office of Management and 
Budget (OMB). Section 3(f) of Executive Order 12866 defines a 
``significant regulatory action'' as an action likely to result in a 
regulation that may
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, 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 an ``economically significant'' regulation);
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impacts of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles stated in 
Executive Order 12866.
    This proposed regulatory action is a significant regulatory action 
subject to review by OMB under section 3(f) of Executive Order 12866.
    The Department has also reviewed these regulations under Executive 
Order 13563, which supplements and reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, section 1(b) of 
Executive Order 13563 requires that an agency:
    (1) Propose or adopt regulations only upon a reasoned determination 
that their benefits justify their costs (recognizing that some benefits 
and costs are difficult to quantify);
    (2) Tailor its regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives, and taking into 
account--among other things and to the extent practicable--the costs of 
cumulative regulations;
    (3) In choosing among alternative regulatory approaches, select 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than the behavior or manner of compliance that regulated entities must 
adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including providing economic incentives--such as user fees 
or marketable permits--to encourage the desired behavior, or providing 
information that enables the public to make choices. 76 FR 3821, 3821 
(Jan. 21, 2011). Section 1(c) of Executive Order 13563 also requires an 
agency ``to use the best available techniques to quantify anticipated 
present and future benefits and costs as accurately as possible.'' Id. 
OIRA of OMB has emphasized that these techniques may include 
``identifying changing future compliance costs that might result from 
technological innovation or anticipated behavioral changes.'' 
Memorandum for the Heads of Executive Departments and Agencies, and of 
Independent Regulatory Agencies, from Cass R. Sunstein, Administrator, 
OIRA, Re: Executive Order 13563, ``Improving Regulation and Regulatory 
Review,'' at 1 (Feb. 2, 2011), available at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2011/m11-10.pdf.
    The Department is issuing this proposed regulation upon a reasoned 
determination that its benefits justify its costs. In choosing among 
alternative regulatory approaches, the Department selected the approach 
that it believes maximizes net benefits. Based on the analysis that 
follows, the Department believes that the proposed regulation is 
consistent with the principles in Executive Order 13563. It is the 
reasoned determination of the Department that this proposed action 
would, to a significant degree, eliminate costs that have been incurred 
by faith-based organizations as they complied with the requirements of 
section 2(b) of Executive Order 13559, while not adding any other 
requirements on those organizations. The Department has determined in 
addition that this proposed action would result in benefits to 
beneficiaries, described in more detail below.
    The Department also has determined that this regulatory action does 
not unduly interfere with State, local, or tribal governments in the 
exercise of their governmental functions.
    In accordance with Executive Orders 12866 and 13563, the Department 
has assessed the potential costs and benefits, both quantitative and 
qualitative, of this regulatory action. The potential costs and cost 
savings associated with this regulatory action are those resulting from 
the removal of the notification and referral requirements of Executive 
Order 13279, as amended by Executive Order 13559, and those determined 
to be necessary for administering the Department's programs and 
activities. For example, the Department recognizes that the removal of 
the notice and referral requirements could impose some costs on 
beneficiaries who may now need to investigate alternative providers on 
their own if they object to the religious character of a potential 
social service provider. The Department invites comment on any 
information that it could use to quantify this potential cost. The 
Department also notes a quantifiable cost savings of the removal of the 
notice and referral requirements, which the Department previously 
estimated as imposing a cost of no more than $200 per organization per 
year. 81 FR 19379 (Apr. 4, 2016). The Department invites comment on any 
data by which it could assess the actual implementation costs of the 
notice and referral requirement--including any estimates of staff time 
spent on compliance with the requirement, in addition to the printing 
costs for the notices referenced above--and thereby accurately quantify 
the cost savings of removing these requirements.
    In terms of benefits, the Department recognizes a non-quantified 
benefit to religious liberty that comes from removing requirements 
imposed solely on faith-based organizations, in tension with the 
principles of free exercise articulated in Trinity Lutheran. The 
Department also recognizes a non-quantified benefit to grant recipients 
and beneficiaries alike that comes from

[[Page 2895]]

increased clarity in the regulatory requirements that apply to faith-
based organizations operating social-service programs funded by the 
Federal Government. Beneficiaries may also benefit from the increased 
capacity of faith-based social-service providers to provide services, 
both because these providers will be able to shift resources otherwise 
spent fulfilling the notice and referral requirements to provision of 
services, and because more faith-based social service providers may 
participate in the marketplace once relieved of the concern of 
excessive governmental involvement.

Executive Order 13771, Reducing Regulation and Controlling Regulatory 
Costs

    Executive Order 13771, titled ``Reducing Regulation and Controlling 
Regulatory Costs,'' was issued on January 30, 2017 (82 FR 9339, Feb. 3, 
2017). Section 2(a) of Executive Order 13771 requires an agency, unless 
prohibited by law, to identify at least two existing regulations to be 
repealed when the agency publicly proposes for notice and comment, or 
otherwise promulgates, a new regulation. In furtherance of this 
requirement, section 2(c) of Executive Order 13771 requires that the 
new incremental costs associated with new regulations shall, to the 
extent permitted by law, be offset by the elimination of existing costs 
associated with at least two prior regulations. OMB's interim guidance, 
issued on April 5, 2017, https://www.whitehouse.gov/the-press-office/2017/04/05/memorandum-implementing-executive-order-13771-titled-reducing-regulation explains that for Fiscal Year 2017 the above 
requirements only apply to each new ``significant regulatory action 
that imposes costs.'' This proposed rule is expected to be an E.O. 
13771 deregulatory action.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996, 
generally requires an agency to prepare a regulatory flexibility 
analysis of any rule subject to the notice and comment rulemaking 
requirements under the Administrative Procedure Act (5 U.S.C. 553) or 
any other statute, unless the agency certifies that the rule will not 
have a significant economic impact on a substantial number of small 
entities.
    The Department has determined that this rule will not have a 
significant economic impact on a substantial number of small entities. 
Consequently, the Department has not prepared a regulatory flexibility 
analysis.

Executive Order 12988: Civil Justice Reform

    This proposed rule has been reviewed in accordance with Executive 
Order 12988, ``Civil Justice Reform.'' The provisions of this proposed 
rule will not have preemptive effect with respect to any State or local 
laws, regulations, or policies that conflict with such provision or 
which otherwise impede their full implementation. The rule will not 
have retroactive effect.

Executive Order 13175: Consultation and Coordination With Indian Tribal 
Governments

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with tribes on a government-to-government 
basis on policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.
    The Department has assessed the impact of this rule on Indian 
tribes and determined that this rule does not, to our knowledge, have 
tribal implications that require tribal consultation under Executive 
Order 13175.

Executive Order 13132: Federalism

    Executive Order 13132 directs that, to the extent practicable and 
permitted by law, an agency shall not promulgate any regulation that 
has federalism implications, that imposes substantial direct compliance 
costs on State and local governments, that is not required by statute, 
or that preempts State law, unless the agency meets the consultation 
and funding requirements of section 6 of the Executive Order. Because 
each change proposed by this rule does not have federalism implications 
as defined in the Executive Order, does not impose direct compliance 
costs on State and local governments, is required by statute, or does 
not preempt State law within the meaning of the Executive Order, the 
Department has concluded that compliance with the requirements of 
section 6 is not necessary.

Plain Language Instructions

    The Department makes every effort to promote clarity and 
transparency in its rulemaking. In any regulation, there is a tension 
between drafting language that is simple and straightforward and 
drafting language that gives full effect to issues of legal 
interpretation. The Department is proposing a number of changes to this 
regulation to enhance its clarity and satisfy the plain language 
requirements, including revising the organizational scheme and adding 
headings to make it more user-friendly. If any commenter has 
suggestions for how the regulation could be written more clearly, 
please provide comments with the suggestions.

Paperwork Reduction Act

    This proposed rule does not contain any new or revised 
``collection[s] of information'' as defined by the Paperwork Reduction 
Act of 1995. 44 U.S.C. 3501 et seq.

Unfunded Mandates Reform Act

    Section 4(2) of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 
1503(2), excludes from coverage under that Act any proposed or final 
Federal regulation that ``establishes or enforces any statutory rights 
that prohibit discrimination on the basis of race, color, religion, 
sex, national origin, age, handicap, or disability.'' Accordingly, this 
rulemaking is not subject to the provisions of the Unfunded Mandates 
Reform Act.

List of Subjects in 6 CFR Part 19

    Civil rights, Government contracts, Grant programs, Nonprofit 
organizations, Reporting and recordkeeping requirements.

    For the reasons stated in the preamble, DHS proposes to revise part 
19 of chapter I of Title 6 of the Code of Federal Regulations to read 
as follows:

PART 19--NONDISCRIMINATION IN MATTERS PERTAINING TO FAITH-BASED 
ORGANIZATIONS

0
1. The authority citation for part 19 is revised to read as follows:

    Authority: 5 U.S.C. 301; Pub. L. 107-296; E.O. 13279, 67 FR 
77141; E.O. 13403, 71 FR 28543; E.O. 13498, 74 FR 6533; E.O. 13559, 
75 FR 71319; and E.O. 13831, 83 FR 20715.

0
2. Amend Sec.  19.2 by:
0
a. Revising the definition of ``Direct Federal financial assistance or 
Federal financial assistance provided directly''.
0
b. Amending the definition of ``Financial assistance'' by adding a 
sentence to the end of the definition.
0
c. Revising the definition of ``Indirect Federal financial assistance 
or Federal

[[Page 2896]]

financial assistance provided indirectly''.
0
d. Adding the definitions ``Intermediary'' and ``Religious exercise'' 
in alphabetical order.
    The revisions and additions read as follows:


Sec.  19.2  Definitions.

* * * * *
    Direct Federal financial assistance or Federal financial assistance 
provided directly means financial assistance received by an entity 
selected by the government or an intermediary (under this part) to 
carry out a service (e.g., by contract, grant, or cooperative 
agreement). References to ``Federal financial assistance'' will be 
deemed to be references to direct Federal financial assistance, unless 
the referenced assistance meets the definition of ``indirect Federal 
financial assistance'' or ``Federal financial assistance provided 
indirectly''.
* * * * *

Financial Assistance * * *

    Financial assistance does not include a tax credit, deduction, 
exemption, guaranty contract, or the use of any assistance by any 
individual who is the ultimate beneficiary under any such program.
    Indirect Federal financial assistance or Federal financial 
assistance provided indirectly means financial assistance received by a 
service provider when the service provider is paid for services 
rendered by means of a voucher, certificate, or other means of 
government-funded payment provided to a beneficiary who is able to make 
a choice of a service provider. 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; and
    (2) The organization receives the assistance as a result of a 
genuine, independent choice of the beneficiary.
* * * * *
    Religious exercise has the meaning given to the term in 42 U.S.C. 
2000cc-5(7)(A).
0
3. Amend Sec.  19.3 by:
0
a. In paragraph (a), remove ``other organization,'' and in its place 
``other organization and considering any religious accommodations 
appropriate under the Constitution or other provisions of federal law, 
including but not limited to 42 U.S.C. 2000bb et seq., 42 U.S.C. 238n, 
42 U.S.C. 18113, 42 U.S.C. 2000e-1(a) and 2000e-2(e), 42 U.S.C. 
12113(d), and the Weldon Amendment'' ''
0
b. In paragraph (b), remove ``character, or affiliation.'' and in its 
place ``character, affiliation, or exercise. Notices or announcements 
of award opportunities and notices of award or contracts shall include 
language substantially similar to that in Appendices A and B, 
respectively, to this part.''.
0
c. Revise paragraph (e).
0
d. Add paragraph (f).


Sec.  19.3  Equal ability for faith-based organizations to seek and 
receive financial assistance through DHS social service programs.

* * * * *
    (e) All organizations that participate in DHS social service 
programs, including faith-based organizations, must carry out eligible 
activities in accordance with all program requirements, subject to any 
reasonable religious accommodation, and other applicable requirements 
governing the conduct of DHS-funded activities, including those 
prohibiting the use of direct financial assistance from DHS to engage 
in explicitly religious activities. No grant document, agreement, 
covenant, memorandum of understanding, policy, or regulation that is 
used by DHS or an intermediary in administering financial assistance 
from DHS shall disqualify a faith-based organization from participating 
in DHS's social service programs because such organization is motivated 
or influenced by religious faith to provide social services or because 
of its religious exercise or affiliation.
* * * * *
    (f) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation used by DHS or an intermediary in 
administering financial assistance from DHS shall require faith-based 
organizations to provide assurances or notices where they are not 
required of non-faith-based organizations. Any restrictions on the use 
of grant funds shall apply equally to faith-based and non-faith-based 
organizations.
0
4. Amend Sec.  19.4 by revising paragraphs (b) and (c) to read as 
follows:


Sec.  19.4   Explicitly religious activities.

* * * * *
    (b) Organizations receiving direct financial assistance from DHS 
for social service programs are free to engage in explicitly religious 
activities, but such activities must be offered separately, in time or 
location, from the programs or services funded with direct financial 
assistance from DHS, and participation must be voluntary for 
beneficiaries of the programs or services funded with such assistance.
    (c) All organizations that participate in DHS social service 
programs, including faith-based organizations, must carry out eligible 
activities in accordance with all program requirements, subject to any 
religious accommodations appropriate under the Constitution or other 
provisions of federal law, including but not limited to 42 U.S.C. 
2000bb et seq., 42 U.S.C. 238n, 42 U.S.C. 18113, 42 U.S.C. 2000e-1(a) 
and 2000e-2(e), 42 U.S.C. 12113(d), and the Weldon Amendment reasonable 
religious accommodation, and in accordance with all other applicable 
requirements governing the conduct of DHS-funded activities, including 
those prohibiting the use of direct financial assistance from DHS to 
engage in explicitly religious activities. No grant document, 
agreement, covenant, memorandum of understanding, policy, or regulation 
that is used by DHS or a State or local government in administering 
financial assistance from DHS shall disqualify a faith-based 
organization from participating in DHS's social service programs 
because such organization is motivated or influenced by religious faith 
to provide social services or because of its religious exercise or 
affiliation.


Sec.  19.5   [Amended]

0
5. Amend Sec.  19.5 by removing ``organization's program.'' and adding 
in its place ``organization's program and may require attendance at all 
activities that are fundamental to the program.''.
0
6. Revise Sec.  19.6 to read as follows:


Sec.  19.6  How to prove nonprofit status.

    In general, DHS does not require that a recipient, including a 
faith-based organization, obtain tax-exempt status under section 
501(c)(3) of the Internal Revenue Code to be eligible for funding under 
DHS social service programs. Many grant programs, however, do require 
an organization to be a nonprofit organization in order to be eligible 
for funding. Funding announcements and other grant application 
solicitations that require organizations to have nonprofit status will 
specifically so indicate in the eligibility section of the 
solicitation. In addition, any solicitation that requires an 
organization to maintain tax-exempt status will expressly state the 
statutory authority for requiring such status. Recipients should 
consult with the appropriate DHS program office to determine the scope 
of any applicable requirements. In DHS social service programs in which 
an applicant for funding must show that it is a nonprofit

[[Page 2897]]

organization, the applicant may do so by any of the following means:
    (a) 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;
    (b) A statement from a State or other governmental taxing body or 
the State secretary of State certifying that:
    (1) The organization is a nonprofit organization operating within 
the State; and
    (2) No part of its net earnings may benefit any private shareholder 
or individual;
    (c) A certified copy of the applicant's certificate of 
incorporation or similar document that clearly establishes the 
nonprofit status of the applicant;
    (d) Any item described in paragraphs (a) through (c) 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; or
    (e) For an entity that holds a sincerely-held religious belief that 
it cannot apply for a determination as an entity that is tax-exempt 
under section 501(c)(3) of the Internal Revenue Code, evidence 
sufficient to establish that the entity would otherwise qualify as a 
nonprofit organization under paragraphs (a) through (d) of this 
section.


Sec.  19.7  [Removed and Reserved]

0
7. Remove and reserve Sec.  19.7:
0
8. Revise Sec.  19.8 to read as follows:


Sec.  19.8   Independence of faith-based organizations.

    (a) A faith-based organization that applies for, or participates 
in, a social service program supported with Federal financial 
assistance will retain its autonomy; right of expression; religious 
character; authority over its governance; and independence from 
Federal, State, and local governments; 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 contrary to Sec.  19.4.
    (b) Faith-based organizations may use space in their facilities to 
provide social services using financial assistance from DHS without 
removing, concealing, or altering religious articles, texts, art, or 
symbols.
    (c) A faith-based organization using financial assistance from DHS 
for social service programs retains its authority over its internal 
governance, and it may retain religious terms in its organization's 
name, select its board members on the basis of their acceptance of or 
adherence to the religious tenets of the organization, and include 
religious references in its organization's mission statements and other 
governing documents.
0
9. Add a new Sec.  19.11 to read as follows:


Sec.  19.11  Nondiscrimination Among Faith-Based Organizations

    Neither DHS nor any State or local government or other intermediary 
receiving funds under any DHS social service program shall construe 
these provisions in such a way as to advantage or disadvantage faith-
based organizations affiliated with historic or well-established 
religions or sects in comparison with other religions or sects.
0
10. Revise Appendix A to Part 19 to read as follows:

Appendix A to Part 19--Notice or Announcement of Award Opportunities

    Faith-based organizations may apply for this award on the same 
basis as any other organization, as set forth at and subject to the 
protections and requirements of part 19 of Title 6 of the CFR and 42 
U.S.C. 2000bb et seq. DHS will not, in the selection of recipients, 
discriminate against an organization on the basis of the 
organization's religious exercise or affiliation.
    A faith-based organization that participates in this program 
will retain its independence from the government and may continue to 
carry out its mission consistent with religious freedom protections 
in federal law, including the Free Speech and Free Exercise Clauses 
of the Constitution, 42 U.S.C. 2000bb et seq., 42 U.S.C. 238n, 42 
U.S.C. 18113, 42 U.S.C. 2000e-1(a) and 2000e-2(e), 42 U.S.C. 
12113(d), and the Weldon Amendment, among others. Religious 
accommodations may also be sought under many of these religious 
freedom protection laws.
    A faith-based organization may not use direct financial 
assistance from DHS to support or engage in any explicitly religious 
activities except where consistent with the Establishment Clause and 
any other applicable requirements. Such an organization also may 
not, in providing services funded by DHS, discriminate against a 
program beneficiary or prospective program beneficiary on the basis 
of religion, a religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious 
practice.

0
11. Add Appendix B to Part 19 to read as follows:

Appendix B to Part 19: Notice of Award or Contract

    A faith-based organization that participates in this program 
retains its independence from the government and may continue to 
carry out its mission consistent with religious freedom protections 
in federal law, including the Free Speech and Free Exercise Clauses 
of the Constitution, 42 U.S.C. 2000bb et seq., 42 U.S.C. 238n, 42 
U.S.C. 18113, 42 U.S.C. 2000e-1(a) and 2000e-2(e), 42 U.S.C. 
12113(d), and the Weldon Amendment, among others. Religious 
accommodations may also be sought under many of these religious 
freedom protection laws.
    A faith-based organization may not use direct financial 
assistance from DHS to support or engage in any explicitly religious 
activities except when consistent with the Establishment Clause and 
any other applicable requirements. Such an organization also may 
not, in providing services funded by DHS, discriminate against a 
program beneficiary or prospective program beneficiary on the basis 
of religion, a religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious 
practice.

Chad F. Wolf,
Acting Secretary of Homeland Security.
[FR Doc. 2019-28142 Filed 1-16-20; 8:45 am]
 BILLING CODE 9112-FH-P