Health and Human Services Grants Regulation, 44750-44760 [2023-14600]
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significant takings implications. This
proposed rule makes only minor
changes to 43 CFR part 2. A takings
implication assessment is not required.
that would require further analysis
under NEPA.
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
10. Effects on Energy Supply (E.O.
13211)
Office of the Secretary
5. Federalism (E.O. 13132)
This proposed rule is not a significant
energy action under the definition in
Executive Order 13211. A statement of
energy effects is not required.
45 CFR Parts 75
In accordance with Executive Order
13132, this proposed rule does not have
any federalism implications to warrant
the preparation of a federalism
assessment. The proposed rule is not
associated with, nor will it have
substantial direct effects on the States,
on the relationship between the
National Government and the States, or
on the distribution of power and
responsibilities among the various
levels of Government. A federalism
assessment is not required.
6. Civil Justice Reform (E.O. 12988)
This proposed rule complies with the
requirements of Executive Order 12988.
Specifically, this rule:
(a) Does not unduly burden the
Federal judicial system.
(b) Meets the criteria of section 3(a)
requiring that all regulations be
reviewed to eliminate errors and
ambiguity and be written to minimize
litigation; and
(c) Meets the criteria of section 3(b)(2)
requiring that all regulations be written
in clear language and contain clear legal
standards.
7. Consultation With Indian Tribes (E.O.
13175)
In accordance with Executive Order
13175, the Department of the Interior
has evaluated this proposed rule and
determined that it would have no
substantial effects on Federally
Recognized Indian Tribes.
8. Paperwork Reduction Act
This proposed rule does not require
an information collection from 10 or
more parties and a submission under
the Paperwork Reduction Act (44 U.S.C.
3501, et seq.) is not required.
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9. National Environmental Policy Act
16:27 Jul 12, 2023
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We are required by Executive Order
12866 and 12988, the Plain Writing Act
of 2010 (Pub. L. 111–274), and the
Presidential Memorandum of June 1,
1998, to write all rules in plain
language. This means each proposed
rule we publish must:
—Be logically organized;
—Use the active voice to address
readers directly;
—Use clear language rather than jargon;
—Be divided into short sections and
sentences; and
—Use lists and table wherever possible.
List of Subjects in 43 CFR Part 2
Administrative practice and
procedure, Confidential information,
Courts, Freedom of Information Act,
Privacy Act.
For the reasons stated in the
preamble, the Department of the Interior
proposes to amend 43 CFR part 2 as
follows:
PART 2—FREEDOM OF INFORMATION
ACT; RECORDS AND TESTIMONY
1. The authority citation for part 2
continues to read as follows:
■
Authority: 5 U.S.C. 301, 552, 552a, 553;
31 U.S.C. 3717; 43 U.S.C. 1460, 1461, the
Social Security Number Fraud Prevention
Act of 2017, Pub. L. 115–59, September 15,
2017.
2. Amend § 2.254 by adding
paragraphs (b)(3), (d)(3), and (e)(8) to
read as follows:
■
§ 2.254
Exemptions.
*
This proposed rule does not
constitute a major Federal action
significantly affecting the quality for the
human environment. A detailed
statement under the National
Environmental Policy Act of 1969
(NEPA), 42 U.S.C. 4321, et seq., is not
required because the proposed rule is
covered by a categorical exclusion. We
have determined the proposed rule is
categorically excluded under 43 CFR
46.210(i) because it is administrative,
legal, and technical in nature. We also
have determined the proposed rule does
not involve any of the extraordinary
circumstances listed in 43 CFR 46.215
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11. Clarity of This Regulation
*
*
*
*
(b) * * *
(3) INTERIOR/OIG–02, Investigative
Records.
(d) * * *
(3) INTERIOR/OIG–02, Investigative
Records.
(e) * * *
(8) INTERIOR/OIG–02, Investigative
Records.
*
*
*
*
*
Teri Barnett,
Departmental Privacy Officer, Department of
the Interior.
[FR Doc. 2023–14881 Filed 7–12–23; 8:45 am]
BILLING CODE 4334–63–P
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RIN 0945–AA19
Health and Human Services Grants
Regulation
Office for Civil Rights (OCR),
Office of the Assistant Secretary for
Financial Resources (ASFR),
Department of Health and Human
Services (HHS).
ACTION: Notice of proposed rulemaking.
AGENCY:
This is a notice of proposed
rulemaking (NPRM) to repromulgate
and revise certain regulatory provisions
of the HHS, Uniform Administrative
Rule Requirements, Cost Principles, and
Audit Requirements for HHS Awards,
previously set forth in a final rule
published in the Federal Register.
DATES: Comments: Submit comments on
or before September 11, 2023.
ADDRESSES: You may submit comments,
identified by the Regulation Identifier
Number (RIN) 0945–AA19, by any of the
following methods. Please do not
submit duplicate comments.
Federal Rulemaking Portal: You may
submit electronic comments at https://
regulations.gov by searching for the
Docket ID number HHS–OCR–2023–
0011. Follow the instructions for
submitting electronic comments. If you
are submitting comments electronically,
the Department strongly encourages you
to submit any comments or attachments
in Microsoft Word format. If you must
submit a comment in Adobe Portable
Document Format (PDF), the
Department strongly encourages you to
convert the PDF to ‘‘print-to-PDF’’
format, or to use some other commonly
used searchable text format. Please do
not submit the PDF in scanned format.
Using a print-to-PDF allows the
Department to electronically search and
copy certain portions of your
submissions to assist in the rulemaking
process.
Regular, Express, or Overnight Mail:
You may mail written comments to the
following address only: U.S. Department
of Health and Human Services, Office
for Civil Rights, Attention: HHS Grants
Rulemaking (RIN–0945–AA19),
Washington, DC 20201.
All comments received by the
methods and due date specified above
may be posted without change to
content to https://www.regulations.gov,
which may include personal
information provided about the
SUMMARY:
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commenter, and such posting may occur
after the closing of the comment period.
However, the Department may redact
certain non-substantive content from
comments before posting, including
threats, hate speech, profanity, graphic
images, or individually identifiable
information about a third-party
individual other than the commenter. In
addition, comments or material
designated as confidential or not to be
disclosed to the public will not be
accepted. Comments may be redacted or
rejected as described above without
notice to the commenter, and the
Department will not consider in
rulemaking any redacted or rejected
content that would not be made
available to the public as part of the
administrative record.
Because of the large number of public
comments normally received on Federal
Register documents, OCR is not able to
provide individual acknowledgements
of receipt.
Please allow sufficient time for mailed
comments to be received timely in the
event of delivery or security delays.
Please note that comments submitted
by fax or email and those submitted
after the comment period will not be
accepted.
Docket: For complete access to
background documents or posted
comments, go to https://
www.regulations.gov and search for
Docket ID number HHS–OCR–2023–
0011.
FOR FURTHER INFORMATION CONTACT:
Office for Civil Rights, Daniel Shieh,
Associate Deputy Director, HHS Office
for Civil Rights, (202) 240–3110 or (800)
537–7697 (TDD), or via email at
hhsocrgrants@hhs.gov for matters
related to the HHS Grants Rulemaking.
SUPPLEMENTARY INFORMATION: This is an
NPRM proposing to repromulgate
provisions of the Uniform
Administrative Requirements, 45 CFR
part 75, set forth in the rule published
in the Federal Register at 81 FR 89393
(December 12, 2016). (2016 Rule). The
2016 Rule is currently subject to a
Notice of Nonenforcement, 84 FR 63809
(November 19, 2019), which states that
the Department will rely upon its
enforcement discretion to not enforce
the regulatory provisions adopted or
amended by the 2016 Rule. On the same
day that the Department issued the
Notice of Nonenforcement, it also issued
an NPRM proposing revisions to the
2016 Rule. After a 30-day comment
period, during which the Department
received over 100,000 comments, a final
rule was published in January 2021. 86
FR 2257 (January 12, 2021) (2021 Rule).
The 2021 Rule was challenged in the
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U.S. District Court for the District of
Columbia, Facing Foster Care et al. v.
HHS, 21–cv–00308 (D.D.C. filed Feb. 2,
2021). The 2021 Rule was to be effective
on February 11, 2021, but the effective
date was extended via several
postponements by the court in Facing
Foster Care under 5 U.S.C. 705. On June
29, 2022, the court granted the
Department’s motion for remand with
vacatur, and ‘‘ordered that those
portions of the U.S. Department of
Health and Human Services (‘HHS’)
regulation entitled Health and Human
Services Grants Regulation, 86 FR 2257
(Jan. 12, 2021), that amend 45 CFR
75.101(f), 75.300(c), and 75.300(d), are
hereby VACATED and REMANDED to
HHS.’’ 1 Through this NPRM, the
Department now proposes to
repromulgate with certain exceptions
and revisions those provisions of the
2021 Rule that were vacated and
remanded to the Department.
Table of Contents
I. Background
A. Background and Rulemaking
B. Additional Background
C. Summary of the Proposed Rule
1. Applicability (45 CFR 75.101)
2. Statutory and National Policy
Requirements (45 CFR 75.300)
3. Notification of Views Regarding
Application of Federal Religious
Freedom Laws
II. Reasons for the Proposed Rulemaking
A. The 2016 Rule and the Scope of 5 U.S.C.
301
B. Effect on the Notice of Nonenforcement
III. Executive Order 12866 and Related
Executive Orders on Regulatory Review
A. Executive Order 12866 Determination
B. Regulatory Flexibility Analysis—Initial
Small Entity Analysis
C. Executive Order 13132: Federalism
D. Executive Order 12250 on Leadership
and Coordination of Nondiscrimination
Laws
E. Paperwork Reduction Act
IV. Request for Comment
I. Background
A. Background and Rulemaking
On December 26, 2013, the Office of
Management and Budget (OMB) issued
the Uniform Administrative
Requirements, Cost Principles, and
Audit Requirements for Federal Awards
(UAR or uniform regulations) that ‘‘set
standard requirements for financial
management of Federal awards across
the entire federal government.’’ 78 FR
78590 (Dec. 26, 2013). On December 19,
2014, OMB and other Federal awardmaking agencies, including the
Department, issued an interim final rule
to implement the UAR. 79 FR 75867
1 See Order, Facing Foster Care et al. v. HHS, No.
21–cv–00308 (D.D.C. June 29, 2022), ECF No. 44.
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(Dec. 19, 2014). OMB’s purpose in
promulgating the uniform regulations
was to (1) streamline guidance in
making Federal awards to ease
administrative burden and (2)
strengthen financial oversight over
Federal funds to reduce risks of fraud,
waste, and abuse.2
On July 13, 2016, the Department
issued an NPRM proposing changes to
its adoption of the 2014 UAR Interim
Final Rule.3 The 2016 Rule was
promulgated pursuant to OMB’s
uniform regulations that ‘‘set standard
requirements for financial management
of Federal awards across the entire
federal government,’’ 2 CFR part 200; 5
U.S.C. 301; and the Chief Financial
Officers Act of 1990, Public Law 101–
576, now at 31 U.S.C. 503.4 The NPRM,
entitled the ‘‘Health and Human
Services Grants Rule,’’ proposed
changes to:
• Section 75.102, concerning
requirements related to the Indian SelfDetermination and Education
Assistance Act (ISDEAA);
• Section 75.300, concerning certain
public policy requirements and
Supreme Court cases, and § 75.101,
concerning the applicability of those
provisions to the Temporary Assistance
for Needy Families Program (Title IV–A
of the Social Security Act, 42 U.S.C.
601–19);
• Section 75.305, concerning the
applicability to states of certain
payment provisions;
• Section 75.365, concerning certain
restrictions on public access to records;
• Section 75.414, concerning indirect
cost rates for certain grants; and
• Section 75.477, concerning shared
responsibility payments and payments
for failure to offer health coverage to
employees.
On December 12, 2016, the
Department finalized all of these
provisions with the exception of
proposed § 75.102. See 81 FR 89393.5
The 2016 Rule went into effect on
January 11, 2017.
On February 27, 2018, the State of
South Carolina sent a letter to the
Department’s Administration for
Children and Families (ACF) on behalf
of the state’s faith-based organizations,
seeking a waiver from the 2016 Rule’s
religious nondiscrimination
requirements. On January 23, 2019, ACF
sent South Carolina a letter approving
2 78 FR 78590 (Dec. 26, 2013); 85 FR 3766 (Jan.
22, 2020).
3 81 FR 45270 (July 13, 2016).
4 78 FR 78590 (Dec. 26, 2013).
5 The 2016 Rule also made a technical change not
set forth in the proposed rule, amending § 75.110(a)
by removing ‘‘75.355’’ and adding, in its place,
‘‘75.335.’’
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the state’s waiver request from the
religious nondiscrimination
requirement of 45 CFR 75.300(c).
On November 19, 2019, the
Department issued a Notice of
Nonenforcement, 84 FR 63809, which
stated that the Department would rely
upon its enforcement discretion to not
enforce the regulatory provisions
adopted or amended by the 2016 Rule.
The Department stated that such
nonenforcement was due to issues
regarding the 2016 Rule’s compliance
with the requirements of the Regulatory
Flexibility Act, 5 U.S.C. 601–12 (RFA).
The 2019 Notice of Nonenforcement
stated that the Department was
concerned over whether the 2016 Rule
provided a sufficient rationale and
certification that the rule would not
have a significant economic impact on
a substantial number of small entities,
or a sufficient final regulatory flexibility
analysis at the time of publication. The
2019 Notice of Nonenforcement was
challenged in the U.S. District Court for
the Southern District of New York in
Family Equality v. Azar, 20–cv–02403
(S.D.N.Y. filed Mar. 19, 2020); the suit
was dismissed on March 30, 2022, for
lack of subject-matter jurisdiction.6 The
case is on appeal in the Second Circuit,
while the 2019 Notice of
Nonenforcement remains in effect.7
On March 5, 2020, in response to a
lawsuit filed by the State of Texas
against the Department challenging the
2016 Rule, Texas v. Azar, 3:19–cv–
00365 (S.D. Tex. Oct. 31, 2019), OCR
sent a letter informing Texas of OCR’s
conclusion that the Religious Freedom
Restoration Act of 1993 (RFRA), 42
U.S.C. 2000bb et seq., prohibited the
Department from applying 45 CFR
75.300(c) and (d) against Texas with
respect to the Archdiocese of GalvestonHouston, a religious foster-care service
provider, and ‘‘other similarly situated
entities.’’
On November 3, 2020, in response to
a separate lawsuit filed against the
Department, Buck v. Gordon, 1:19–cv–
00286 (W.D. Mich. Apr. 15, 2019), OCR
sent the Michigan Department of Health
and Human Services a letter informing
them of OCR’s conclusion that RFRA
likewise prohibited the Department
from applying 45 CFR 75.300(c) against
Michigan with respect to the St. Vincent
Catholic Charities, a religious foster-care
service provider, and ‘‘other similarly
situated entities.’’
On the same day the Department
issued the 2019 Notice of
6 See Order, Family Equality v. Azar, No. 20–cv–
02403 (S.D.N.Y. Mar. 30, 2022), ECF No. 62.
7 Family Equality v. Becerra, No. 22–1174 (2d Cir.
filed May 27, 2022).
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Nonenforcement, it published an NPRM
proposing to ‘‘repromulgate some of the
provisions of the [2016] Final Rule, not
to repromulgate others, and to replace or
modify certain provisions that were
included in the Final Rule with other
provisions.’’ 84 FR 63831 (Nov. 19,
2019). After a 30-day comment period
and receipt of over 100,000 comments,
on January 12, 2021, the Department
repromulgated portions of and issued
amendments to the 2016 Rule, 86 FR
2257 (2021 Rule). Specifically, from the
2016 Rule, the 2021 Rule repromulgated
provisions of 45 CFR part 75 and made
amendments to 45 CFR 75.300(c) and
(d). Section 75.300(c) previously
prohibited discrimination in the
administration of programs supported
by HHS awards ‘‘based on non-merit
factors such as age, disability, sex, race,
color, national origin, religion, gender
identity, or sexual orientation.’’ The
2021 Rule amended § 75.300(c) to
prohibit discrimination in these
programs ‘‘to the extent doing so is
prohibited by federal statute.’’
Section 75.300(d) had previously
stated that ‘‘all recipients must treat as
valid the marriages of same-sex
couples’’ consistent with the Supreme
Court decisions in United States v.
Windsor and Obergefell v. Hodges. The
2021 Rule amended § 75.300(d) to state
that ‘‘HHS will follow all applicable
Supreme Court decisions.’’
Shortly after the 2021 Rule’s issuance,
portions of the amendments to § 75.300
and a conforming amendment at
§ 75.101(f) were challenged in the U.S.
District Court for the District of
Columbia. Facing Foster Care v. HHS,
21–cv–00308 (D.D.C. Feb. 2, 2021). On
June 17, 2022, the Department filed a
motion for remand with vacatur the
challenged portions of the 2021 Rule.
The Department noted that because
HHS had ‘‘reviewed only a small
fraction of the non-duplicative
comments, did not employ a sampling
methodology likely to produce an
adequate sample of the comment
received, and did not explain its use of
sampling in the final rule, Defendants
have concluded, in the circumstances of
this case, that the 2021 Rule was
promulgated in violation of the
[Administrative Procedure Act].’’ 8 On
June 29, 2022, the court ordered that the
challenged portions of 45 CFR 75.101(f),
75.300(c), and 75.300(d) be vacated and
remanded to HHS.9
8 Facing Foster Care et al. v. HHS, No. 21–cv–
00308 (D.D.C. June 17, 2022), ECF No. 41.
9 See id., Order (June 29, 2022), ECF No. 44.
Because they were not subject to the order of
vacatur, certain provisions previously adopted in
the 2021 Rule remain in effect. These provisions
are: 45 CFR 75.305, 75.365, 75.414, and 75.417.
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On November 18, 2021, HHS issued
letters to South Carolina, Michigan, and
Texas with respect to previously granted
waivers under RFRA for participation in
the Title IV–E program (the HHSadministered adoption and foster care
program). The letters noted that because
HHS had issued the 2019 Notification of
Nonenforcement, which stated that HHS
would not enforce the nondiscrimination requirements under the
2016 Rule, the RFRA waivers were
unnecessary, and thus, rescinded. The
letters further explained that the
previously granted waivers had
misapplied the applicable RFRA
standards and were therefore
withdrawn.
B. Additional Background
On June 15, 2020, the U.S. Supreme
Court held that Title VII of the Civil
Rights Act of 1964, 42 U.S.C. 2000e–
2(a)(1) (Title VII), prohibits
discrimination on the basis of sex,
which includes discrimination based on
sexual orientation and gender identity.
Bostock v. Clayton County, 140 S. Ct.
1731 (2020). Bostock concluded that the
plain meaning of ‘‘because of . . . sex’’
in Title VII necessarily included
discrimination because of sexual
orientation and gender identity. Id. at
1753–54. After Bostock, circuit courts
concluded that the plain language of the
Title IX of the Education Amendments
of 1972, 20 U.S.C. 1681(a), prohibition
on sex discrimination must be read
similarly. See Grimm v. Gloucester Cty.
Sch. Bd., 972 F.3d 586 (4th Cir. 2020),
cert. denied, 141 S. Ct. 2878 (2021); see
also Doe v. Snyder, 28 F.4th 103, 114
(9th Cir. 2022) (applying Bostock’s
reasoning to the prohibitions on sex
discrimination in Title IX and Section
1557 of the Affordable Care Act, 42
U.S.C. 18116). But cf. Adams v. School
Bd. of St. Johns Co., 57 F.4th 791, 811–
15 (11th Cir. 2022) (en banc)
(recognizing that Bostock instructs that
the exclusion of a transgender student
from the bathroom consistent with his
gender identity was exclusion on the
basis of ‘‘sex,’’ but that such exclusion
was permitted by Title IX’s ‘‘express
statutory and regulatory carve-outs’’ for
living and bathroom facilities).
On January 20, 2021, President Biden
issued Executive Order (E.O.) 13988, 86
FR 7023, 7023–24, which directed
Federal agencies to review all agency
actions, including regulations, ‘‘as
necessary to fully implement statutes
that prohibit sex discrimination,’’ and
determine if they were inconsistent with
Bostock reasoning.10
10 In Neese v. Becerra, No. 2:21–cv–00163 (N.D.
Tex., Nov. 10, 2022), the U.S. District Court for the
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C. Summary of the Proposed Rule
Because the 2021 Rule’s amendments
to 45 CFR 75.101(f), 75.300(c), and
75.300(d) were vacated and remanded to
HHS, the Department proposes to
repromulgate some provisions from the
2016 Rule as well as other provisions
with changes. Specifically, the
Department is proposing not to reinstate
former § 75.101(f), as found in both the
2016 and 2021 Rules; is proposing
revisions to § 75.300(c) and (d) from the
2016 Rule; and is proposing to add new
§ 75.300(e) and (f), not found in either
the 2016 or the 2021 Rules.
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1. Applicability (§ 75.101)
Proposed section 75.101 provides for
the applicability of the 2014 UAR Rule.
The 2016 Rule included a provision at
§ 75.101(f) providing that § 75.300(c)
(prohibiting discrimination on a range
of bases in the administration of
programs supported by HHS awards)
would ‘‘not apply to the Temporary
Assistance for Needy Families Program
(title IV–A of the Social Security Act, 42
U.S.C. 601–619).’’ This was
repromulgated in the 2021 Rule and is
subject to the order of vacatur.
The Department does not propose to
add paragraph (f) in § 75.101, which was
included in the 2016 Rule to ensure that
the specific statutory requirements of
the Temporary Assistance for Needy
Families Program (Title IV–A of the
Social Security Act, 42 U.S.C. 601–619)
(TANF) governed applicable grants.
This language is not necessary under the
proposed language of 45 CFR 75.300,
because the latter is already limited to
applicable statutory nondiscrimination
requirements and the TANF statute, 42
U.S.C. 608(d), already identifies the
nondiscrimination provisions that apply
to TANF.
2. Statutory and National Policy
Requirements (§ 75.300)
Section 75.300 provides the statutory
and policy requirements for the 2014
UAR Rule. The Department proposes to
keep paragraphs (a) and (b) of § 75.300
unchanged from the 2016 Rule, which
provides: ‘‘(a) The Federal awarding
agency must manage and administer the
Federal award in a manner so as to
ensure that Federal funding is expended
and associated programs are
implemented in full accordance with
Northern District of Texas declared unlawful a May
10, 2021 notification titled, ‘‘Notification of
Interpretation and Enforcement of Section 1557 of
the Affordable Care Act and Title IX of the
Education Amendments of 1972,’’ which applied
Bostock to Title IX and Section 1557. On January
20, 2023, the Department appealed that decision to
the Fifth Circuit Court of Appeals. That appeal is
pending.
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U.S. statutory and public policy
requirements: Including, but not limited
to, those protecting public welfare, the
environment, and prohibiting
discrimination. The Federal awarding
agency must communicate to the nonFederal entity all relevant public policy
requirements, including those in general
appropriations provisions, and
incorporate them either directly or by
reference in the terms and conditions of
the Federal award. (b) The non-Federal
entity is responsible for complying with
all requirements of the Federal award.
For all Federal awards, this includes the
provisions of FFATA, which includes
requirements on executive
compensation, and also requirements
implementing the Act for the nonFederal entity at 2 CFR part 25 and 2
CFR part 170. See also statutory
requirements for whistleblower
protections at 10 U.S.C. 2324 and 2409,
and 41 U.S.C. 4304, 4310, and 4712.’’
This NPRM proposes to repromulgate
§ 75.300(c) from the 2021 Rule to
provide: ‘‘It is a public policy
requirement of HHS that no person
otherwise eligible will be excluded from
participation in, denied the benefits of,
or subjected to discrimination in the
administration of HHS programs and
services, to the extent doing so is
prohibited by federal statute.’’ This
revises the 2016 Rule, which provided
at 45 CFR 75.300(c), in relevant part, ‘‘It
is a public policy requirement of HHS
that no person otherwise eligible will be
excluded from participation in, denied
the benefits of, or subjected to
discrimination in the administration of
HHS programs and services based on
non-merit factors such as age, disability,
sex, race, color, national origin, religion,
gender identity, or sexual orientation.’’
The Department also proposes to
repromulgate § 75.300(d) from the 2021
Rule to provide, ‘‘HHS will follow all
applicable Supreme Court decisions in
administering its award programs.’’ This
revises the 2016 Rule, which provided
at 45 CFR 75.300(d), ‘‘In accordance
with the Supreme Court decisions in
United States v. Windsor and in
Obergefell v. Hodges, all recipients must
treat as valid the marriages of same-sex
couples. This does not apply to
registered domestic partnerships, civil
unions or similar formal relationships
recognized under state law as something
other than a marriage.’’ As discussed
more fully below in Part II, Section A,
the Department’s proposals reflect its
reconsideration in light of arguments
concerning the Housekeeping Statute, 5
U.S.C. 301, raised in litigation
challenging a different HHS rule, and
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HHS’s desire to provide stability and
clarity in its programs.
Finally, the Department proposes to
add a § 75.300(e), which clarifies the
Department interpretation of the
prohibition of discrimination on the
basis of sex to include (1)
discrimination on the basis of sexual
orientation and (2) discrimination on
the basis of gender identity, consistent
with the Supreme Court’s decision in
Bostock v. Clayton County, 140 S. Ct.
1731 (2020)), and other Federal court
precedent applying Bostock’s reasoning
that sex discrimination includes
discrimination based on sexual
orientation and gender identity.11
Proposed § 75.300(e) applies to 13 HHS
authorities that prohibit discrimination
on the basis of sex in health and human
services programs.
The Department seeks comment on
whether the Department administers
other statutes prohibiting sex
discrimination that are not set forth in
proposed § 75.300(e) or whether the
Department should include language or
guidance in § 75.300(e) to cover current
or future laws that prohibit sex
discrimination that are not set forth
above.
Bostock held that a plain reading of
Title VII’s prohibition on discrimination
‘‘because of . . . sex’’ encompassed
discrimination based on sexual
orientation or transgender status.
According to the Court, a
straightforward application of the terms
‘‘discriminate,’’ ‘‘because of,’’ and ‘‘sex’’
means that ‘‘it is impossible to
discriminate against a person’’ for being
gay or transgender ‘‘without
11 Bostock’s reasoning applies with equal force to
claims alleging discrimination on the basis of sex
characteristics, including intersex traits, because
discrimination based on anatomical or
physiological sex characteristics (such as genitals,
gonads, chromosomes, hormone function, and brain
development/anatomy) is inherently sex-based.
Discrimination on the basis of intersex traits,
therefore, is prohibited sex discrimination because
the individual is being discriminated against based
on their sex characteristics. If their sex
characteristics were different—i.e., traditionally
‘‘male’’ or ‘‘female’’—the intersex person would be
treated differently. Moreover, like gender identity
and sexual orientation, intersex traits are
‘‘inextricably bound up with’’ sex, and ‘‘cannot be
stated without referencing sex.’’ Bostock, 140 S. Ct.
at 1742; see also Grimm, 972 F.3d at 608 (quoting
Whitaker v. Kenosha Unified Sch. Dist. No. 1 Bd.
of Educ., 858 F.3d 1034, 1051 (7th Cir. 2017)).
In addition to Bostock, the Department continues
to interpret sex discrimination to prohibit
discrimination on the basis of sex stereotypes,
which can include stereotypes regarding sex
characteristics and intersex traits, consistent with
longstanding Supreme Court precedent. See Los
Angeles, Dep’t of Water & Power v. Manhart, 435
U.S. 702 (1978); Price Waterhouse v. Hopkins, 490
U.S. 228 (1989)).
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discriminating against that individual
based on sex.’’ 12
The 13 statutes listed in proposed
§ 75.300(e) each contain prohibitions on
sex discrimination. None of the 13
statutes contain any indicia—such as
statute-specific definitions, or any other
criteria—to suggest that these
prohibitions on sex discrimination
should be construed differently than
Title VII’s sex discrimination
prohibition. Nor is the Department
aware of reported case law requiring
such a construction. Accordingly, this
rule proposes to interpret the
prohibition on sex discrimination by
applying Bostock’s reasoning that sex
discrimination includes discrimination
on the basis of sexual orientation and
gender identity with respect to
programs, activities, projects, assistance,
and services that receive Federal
financial assistance under these statutes
which the Department administers 13
and over which OCR maintains civil
rights enforcement authority.14
As described further below, the 13
listed statutes contain minor variations
in the language used to prohibit sex
discrimination, sometimes within the
same statute, but the Department does
not believe any of the variations can be
reasonably understood to distinguish
the various statutes from Bostock’s
reasoning.
Nine of the statutes listed in proposed
§ 75.300(e) prohibit discrimination ‘‘on
the basis of’’ sex, using language
identical to the sex discrimination
prohibition in Title IX.15 For example,
the Public Health Service Act, prohibits
the Secretary from providing certain
funding to nursing schools unless the
school ‘‘furnishes assurances . . . that it
will not discriminate on the basis of
sex.’’ 16 Seven of the statutes identified
in proposed 75.300(e) prohibit
discrimination ‘‘on the ground of . . .
sex.’’ 17 For example, the Preventive
Health and Health Services Block Grant
provides that ‘‘no person shall on the
ground of sex . . . be excluded from
participation in, or be denied the
12 140
S. Ct. at 1742.
by the Omnibus Budget
Reconciliation Act of 1981 (OBRA), Public Law 97–
35.
14 See 47 FR 4348–02 (January 29, 1982)
(delegating to the OCR Director ‘‘civil rights
enforcement authority contained in the Health and
Human Services Block Grants prescribed by the
Omnibus Budget Reconciliation Act of 1981.’’).
15 42 U.S.C. 290ff–1; 42 U.S.C. 290cc–33; 42
U.S.C. 295m; 42 U.S.C. 296g; 42 U.S.C. 300w–7; 42
U.S.C. 300x–57; 42 U.S.C. 708; 42 U.S.C. 9918; 42
U.S.C. 10406.
16 42 U.S.C. 296g.
17 42 U.S.C. 290cc–33(a)(2); 42 U.S.C. 300w–7; 42
U.S.C. 300x–57(a)(2); 42 U.S.C. 708(a)(2); 42 U.S.C.
5151(a); 42 U.S.C. 8625; 42 U.S.C. 10406(c)(2)(B).
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benefits of, or be subjected to
discrimination under, any program or
activity funded in whole or in part with
funds made available under this
part.’’ 18 One statute states that a grant
or contract must provide that the
recipient of financial assistance will not
‘‘discriminate . . . because of . . .
sex,’’ 19 the same language from Title VII
that the Supreme Court analyzed in
Bostock. Finally, two of the statutes
identified in proposed § 75.300(e)
require services to be provided ‘‘without
regard to . . . sex.’’ 20 For the purposes
of this rulemaking, the Department does
not believe that any of these variations
are legally significant, or that these
statutes should be interpreted in a way
that diverges from the Court’s
interpretation of Title VII’s language
‘‘because of . . . sex’’ in Bostock.21
Based on this statutory construction,
it is logical in this context to apply
Bostock’s reasoning that sex
discrimination includes discrimination
on the basis of sexual orientation and
gender identity to each of these
independent nondiscrimination
provisions. Many courts, including the
Supreme Court, have concluded that
varied verbal formulations in
antidiscrimination statutes should be
interpreted consistently with one
another.22 In Bostock itself, for example,
18 42 U.S.C. 300w–7; see also OBRA, Public Law
97–35, 47 FR 4348–02.
19 48 U.S.C. 9849(a).
20 42 U.S.C. 295m; 8 U.S.C. 1522.
21 Five of the listed statutes contain separate
provisions prohibiting discrimination both ‘‘on the
basis of sex under Title IX’’ and ‘‘on the grounds
of sex.’’ One statute contains separate provisions
prohibiting discrimination ‘‘on the basis of sex’’ and
requiring services to be provide ‘‘without regard to
. . . sex.’’ 42 U.S.C. 295m. Another statute contains
separate provisions prohibiting discrimination
‘‘because of . . . sex’’ and ‘‘on the ground of sex.’’
42 U.S.C. 9849. Another statute contains a
provision with the heading ‘‘Prohibition on
discrimination on the basis of sex, religion,’’ which
states, ‘‘[n]o person shall on the ground of sex or
religion be excluded.’’ 42 U.S.C. 10406(c)(2)(B).
22 See, e.g., Franklin v. Gwinnett Cnty. Pub. Sch.,
503 U.S. 60, 75 (1992) (Title IX imposes ‘‘the duty
not to discriminate on the basis of sex, and ‘when
a supervisor sexually harasses a subordinate
because of the subordinate’s sex, that supervisor
‘‘discriminate[s]’’ on the basis of sex’ ’’) (quoting
Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 64
(1986)) (emphases added); Grimm v. Gloucester
Cnty. Sch. Bd., 972 F.3d 586, 616–17 (4th Cir. 2020)
(holding that Bostock’s reasoning applies to Title
IX, which prohibits discrimination ‘‘on the basis of
sex,’’ explaining that ‘‘[a]lthough Bostock interprets
Title VII . . . , it guides our evaluation of claims
under Title IX’’); Gentry v. E. W. Partners Club
Mgmt. Co. Inc., 816 F.3d 228, 235–36 (4th Cir. 2016)
(‘‘The ADA prohibits discrimination ‘on the basis
of’ disability. We see no ‘meaningful textual
difference’ between this language and the terms
‘because of,’ ‘by reason of,’ or ‘based on’ ’’); Lakoski
v. James, 66 F.3d 751, 757 (5th Cir. 1995)
(explaining that even though Title IX uses the
phrase ‘‘on the basis of sex’’ and Title VII uses the
phrase ‘‘because of . . . sex,’’ ‘‘the prohibitions of
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the Court used both ‘‘on the basis of’’
and ‘‘because of’’ throughout the
decision to describe the unlawful
discrimination at issue.23
Discriminating against individuals in
any of the programs, activities, projects,
assistance, and services covered by the
statutes in § 75.300(e) on the basis of
sexual orientation or gender identity
necessarily involves discriminating
against them on the basis of sex. Section
75.300(e) makes this interpretation clear
to the public.
The Department seeks comments on
whether there is anything about any of
the statutes referenced in proposed
§ 75.300(e), such as their language,
legislative history, or purpose, that
would provide a legal basis for
distinguishing them from Bostock’s
interpretation of Title VII, that sex
discrimination includes discrimination
on the basis of sexual orientation and
gender identity.
3. Notification of Views Regarding
Application of Federal Religious
Freedom Laws
The Department takes seriously its
obligations to comply with Federal
religious freedom laws, including the
First Amendment and RFRA, and it will
continue to comply with these legal
obligations. The Department is fully
committed to respecting religious
freedom laws and to thoroughly
considering any organization’s assertion
that the provisions of this rule conflict
with their rights under those laws.24 In
determining whether an action is
‘‘prohibited by federal statute’’ under
proposed § 75.300(c), the Department
will consider RFRA in its analysis when
applicable. This proposal is similar to
the process laid out in the Section 1557
NPRM under proposed § 92.302, 87 FR
47885–47886, which is consistent with
the Department’s broader commitment
to abiding by the First Amendment and
RFRA.
In applying RFRA, exemptions from
the nondiscrimination requirements of
this rule would depend on application
of RFRA’s test, which provides that the
government may substantially burden a
person’s exercise of religion only if it
demonstrates that application of the
burden to the person is in furtherance
of a compelling governmental interest
and is the least restrictive means of
discrimination on the basis of sex of Title IX and
Title VII are the same’’).
23 See, e.g., Bostock, 140 S. Ct. at 1738 (‘‘on the
basis of sex.’’); id. at 1741 (‘‘because of sex’’).
24 No religious liberty claim was before the Court
in Bostock. The Court said the interaction of
doctrines protecting religious liberty with statutory
nondiscrimination prohibitions were ‘‘questions for
future cases.’’ 140 S. Ct. at 1754.
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furthering that compelling governmental
interest. 42 U.S.C. 2000bb–1(b). The
U.S. Supreme Court has recognized that
a fact-sensitive, case-by-case analysis of
such burdens and interests is needed
under RFRA,25 and the Department
applies RFRA accordingly.
In proposed § 75.300(f), the
Department specifically addresses the
application of Federal religious freedom
protections. This proposed provision is
new, as neither the 2016 nor 2021 Rules
provided a specific, optional means for
recipients to notify the Department of
their views regarding the application of
Federal religious freedom laws.26
Proposed § 75.300(f) provides that, at
any time, a recipient may raise with the
Department, their belief that the
application of a specific provision or
provisions of this regulation as applied
to the recipient would violate Federal
religious freedom protections. Such
laws include, but are not limited to, the
First Amendment and RFRA. Upon
receipt of a notification, the Department
first assesses whether there is a
sufficient, concrete factual basis for
making a determination based on the
request.
Proposed § 75.300(f) provides that
once the awarding agency, working
jointly with ASFR or OCR (in the course
of investigating a civil rights complaint
or compliance review), receives a
notification from a recipient seeking a
religious exemption, the awarding
agency, working jointly with either
25 See, e.g., Gonzales v. O Centro Espı´rita
Beneficente Unia˜o do Vegetal, 546 U.S. 418, 430–
31 (2006) (when applying RFRA, courts look
‘‘beyond broadly formulated interests justifying the
general applicability of government mandates and
scrutinized the asserted harm of granting specific
exemptions to particular religious claimants’’); cf.
Ramirez v. Collier, 142 S. Ct. 1264, 1281 (2022)
(holding that the Religious Land Use and
Institutionalized Persons Act, which applies
RFRA’s test for religious exemptions in the prison
context, ‘‘requires that courts take cases one at a
time, considering only ‘the particular claimant
whose sincere exercise of religion is being
substantially burdened’ ’’) (quoting Holt v. Hobbs,
574 U.S. 352, 363 (2015)).
26 While 45 CFR 75.102 allows for exceptions on
a case-by-case basis to part 75, which the
Department had previously used to issue the RFRA
waivers to South Carolina, Michigan, and Texas, it
is best read to, and has been historically used to,
address requests for exceptions that pertain to
financial and administrative management of federal
grants, such as deviations from normal allowable
costs, requirements applicable to for-profit
subrecipients, costs requiring prior approval, or
computation of depreciation, rather than providing
exemptions from civil rights or anti-discrimination
laws. See, e.g., https://www.cfo.gov/assets/files/
2CFR-FrequentlyAskedQuestions_2021050321.pdf
(guidance from the Office of Management and
Budget indicating waivers under 45 CFR75.102 are
primarily fiscal in nature); https://www.hhs.gov/
conscience/religious-freedom/state-letter-to-texaswithdrawing-exception-from-non-discriminationrequirements/ (rescission letter of RFRA
waiver).
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ASFR or OCR, would promptly consider
the recipient’s views that they are
entitled to an exemption in (1)
responding to any complaints or (2)
otherwise determining whether to
proceed with any investigation or
enforcement activity regarding that
recipient’s compliance with the relevant
provisions of this regulation, in legal
consultation with the Office of the
General Counsel (OGC).27 A recipient
may also on their own initiative, before
a complaint is filed or an investigation
opened, seek an exemption based upon
the application of a religious freedom
law, and the Department would assess
whether there is a sufficient, concrete
factual basis prior to making any
determination. Any relevant ongoing
investigation or enforcement activity
regarding the recipient would be held in
abeyance until a determination has been
made. Considering recipients’ specific
religious-based concerns in the context
of an open case or a claim raised in the
first instance by a particular recipient
(i.e., when the Department first has
cause to consider the recipient’s
compliance, whether through a
complaint filed against the recipient, or
through the recipient raising the
exemption on their own initiative),
would allow the awarding agency,
working with ASFR, or OCR, in legal
consultation with OGC, to make an
informed, case-by-case decision and,
where required by law, protect a
recipient’s religious freedom rights and
minimize any harm an exemption could
have on third parties. As the Supreme
Court noted in Gonzales v. O Centro
Espı´rita Beneficente Unia˜o do Vegetal,
‘‘[C]ourts should strike sensible
balances, pursuant to a compelling
interest test that requires the
Government to address the particular
practice at issue.’’ 546 U.S. 418, 439
(2006) (emphasis added). The
Department believes that the process set
forth under proposed § 75.300(f)
properly strikes that balance. Similarly,
holding ongoing investigations and
enforcement activity in abeyance
alleviates the burden of a recipient
having to respond to an investigation or
enforcement action until a recipient’s
objection has been considered.
Further, proposed § 75.300(f) makes
clear the awarding agency’s, ASFR’s,
and OCR’s discretion to determine at
27 See 86 FR 67067 (Nov. 24, 2021) (the HHS
Secretary ‘‘delegate[s] responsibility to Department
components to ensure full compliance with RFRA
and other constitutional requirements’’ and
‘‘Department components must consult with OGC
on such matters and provide appropriate
consideration to RFRA- or Constitution-based
objections or requests, as well as take any actions
that may be appropriate.’’).
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44755
any time whether a recipient is wholly
or partially exempt from certain
provisions of this part under Federal
religious liberty protections, whether:
(1) after a complaint is raised against the
recipient or (2) raised by the recipient
before a complaint is filed (provided the
Department has a sufficient, concrete
factual basis for determining whether
the recipient is entitled to an
exemption). Proposed § 75.300(f)
requires that, in determining whether a
recipient is exempt from the application
of the specific provision or provisions
raised in its notification, ASFR or OCR,
in consultation with OGC, must assess
whether there is a sufficient, concrete
factual basis for making a determination
and apply the applicable legal standards
of the religious freedom statute at issue.
Proposed § 75.300(f) also provides
that, upon making a determination
regarding whether a particular recipient
is exempt from—or subject to a
modified requirement under—a specific
provision of this part, the awarding
agency, working with ASFR or OCR,
will communicate that determination to
the recipient in writing. The written
notification will clearly set forth the
scope, applicable issues, duration, and
all other relevant terms of any
exemption.
Proposed § 75.300(f) provides that if
the awarding agency, working with
ASFR or OCR, in legal consultation with
OGC, determines that a recipient is
entitled to an exemption or modification
of the application of certain provisions
of this rule based on the application of
religious liberty protections, that
determination does not otherwise limit
the application of any other Federal law
to the recipient.
HHS maintains an important civil
rights interest in the proper application
of Federal religious freedom protections.
HHS is thus committed to complying
with RFRA and all other applicable
legal requirements. The Department
believes that this proposed approach
will assist the Department in fulfilling
that commitment by providing the
opportunity for recipients to raise
concerns with the Department, such that
the Department can determine whether
an exemption or modification of the
application of certain provisions is
appropriate under the corresponding
Federal religious freedom law. As noted
above, the Department also maintains a
strong interest in taking a case-by-case
approach to such determinations that
will allow it to account for and
minimize any harm an exemption could
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have on third parties 28 and, in the
context of RFRA, to consider whether
the application of any substantial
burden imposed on a person’s exercise
of religion is in furtherance of a
compelling interest and is the least
restrictive means of advancing that
compelling interest.29
The Department seeks comment on
this proposed approach, including
whether such a provision should
include additional procedures, the
potential burdens of such a provision on
recipients and potential third parties,
and additional factors that the
Department should take into account
when considering the relationship
between Federal statutory and
constitutional rights to religious
freedom and this rule’s other civil rights
protections. We also seek comment on
what alternatives, if any, the
Department should consider.
Finally, proposed § 75.300(g) provides
that if any provision of this part is held
to be invalid or unenforceable by its
terms, or as applied to any person or
circumstance, it shall be severable from
this part and not affect the remainder
thereof or the application of the
provision to other persons not similarly
situated or to other, dissimilar
circumstances.
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II. Reasons for the Proposed
Rulemaking
A. The 2016 Rule and the Scope of 5
U.S.C. 301
HHS proposes to amend the language
in 45 CFR 75.300(c) and (d) of the 2016
Rule in light of arguments raised
concerning HHS’s statutory authority
under the Housekeeping Statute, 5
U.S.C. 301, and the financial
management statutes cited in 2 CFR
200.103 and 45 CFR 75.103, including
the Chief Financial Officer’s Act, 31
U.S.C. 503; the Budget and Accounting
Act, 31 U.S.C. 1101–1125; and the
Single Audit Act, 31 U.S.C. 6101–6106.
After considering those arguments, HHS
is now of the view that its reliance on
the Housekeeping Statute to promulgate
§ 75.300(c) and (d) of the 2016 Rule may
have resulted in uncertainty about
Department programs. We are
accordingly proposing revisions to those
paragraphs to explain more clearly to
grantees and beneficiaries where and
28 See Cutter v. Wilkinson, 544 U.S. 709, 720
(2005) (in addressing religious accommodation
requests, ‘‘courts must take adequate account of the
burdens a requested accommodation may impose
on nonbeneficiaries’’).
29 Cf. O Centro, 546 U.S. at 439 (‘‘[C]ourts should
strike sensible balances, pursuant to a compelling
interest test that requires the Government to
address the particular practice at issue.’’) (emphasis
added).
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how nondiscrimination protections
apply.
The Department has statutory
authority to issue regulations to enforce
certain government-wide statutory civil
rights statutes, such as Title VI of the
Civil Rights Act of 1964, 42 U.S.C.
2000d et seq. (prohibiting
discrimination on the basis of race,
color, or national origin in programs or
activities receiving Federal financial
assistance); Title IX of the Education
Amendments of 1972, 20 U.S.C. 1681
(prohibiting discrimination on the basis
of sex in education programs or
activities receiving Federal financial
assistance), Section 504 of the
Rehabilitation Act of 1973, 29 U.S.C.
794 (prohibiting discrimination on the
basis of disability in programs and
activities conducted by, or receiving
financial assistance from, Federal
agencies), and the Age Discrimination
Act, 42 U.S.C. 6101 et seq. (prohibiting
discrimination on the basis of age in
programs and activities receiving
Federal financial assistance). There are
also certain program-specific statutory
nondiscrimination provisions that
provide the Department with the
authority to issue enforcement
regulations. These include section
471(a)(18) of the Social Security Act
(SSA), 42 U.S.C. 671(a)(18) (prohibiting
discrimination on the basis of race,
color, or national origin in Title IV–E
adoption and foster care programs) and
section 508 of the SSA, 42 U.S.C. 708
(prohibiting discrimination on the basis
of age, race, color, national origin,
disability, sex, or religion in Maternal
and Child Health Services Block Grant
programs).30
Section 75.300(c) and (d) in the 2016
Rule, however, were promulgated under
authority granted by the Housekeeping
Statute, 5 U.S.C. 301. The Housekeeping
Statute provides in relevant part: ‘‘The
head of an Executive department or
military department may prescribe
regulations for the government of his
department, the conduct of its
employees, the distribution and
performance of its business, and the
custody, use, and preservation of its
records, papers, and property.’’
Section 75.300(c) and (d) were issued
to provide uniformity in Departmental
non-discrimination requirements by
‘‘codif[ying] for all HHS service grants
what is already applicable for all HHS
service contracts, as required by the
HHS Acquisition Regulation (HHSAR)
352.237–74’’ and which ‘‘makes explicit
30 The Department is authorized to issue
regulations for the efficient administration of its
functions in the Social Security Act programs for
which it is responsible. See SSA § 1102(a), 42
U.S.C. 1302(a).
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HHS’s non-discrimination policy when
obligating appropriations for
solicitations, contracts and orders that
deliver service under HHS’s programs
directly to the public.’’ 81 FR 45271.
The Supreme Court has explained
that the Housekeeping Statute is ‘‘a
grant of authority to the agency to
regulate its own affairs . . . authorizing
what the [Administrative Procedure
Act] terms ‘rules of agency organization,
procedure or practice’ as opposed to
‘substantive rules.’’’ Chrysler Corp. v.
Brown, 441 U.S. 281, 309–10 (1979). In
2019, a Federal district court vacated a
different regulation the Department had
promulgated, in part, under the
Housekeeping Statute. see New York v.
HHS, 414 F. Supp. 3d 475 (S.D.N.Y.
2019) (vacating ‘‘Protecting Statutory
Conscience Rights in Health Care;
Delegations of Authority,’’ 84 FR 23170
(May 21, 2019) (codified at 45 CFR pt.
88)). That regulation interpreted and
implemented Federal statutory
provisions that ‘‘recognize[d] the right
of an individual or entity to abstain
from participation in medical
procedures, programs, services, or
research activities on account of a
religious or moral objection.’’ Id. at 496.
The court vacated the rule because it
was substantive rather than a
housekeeping measure, noting that ‘‘[a]
rule that announces new rights and
imposes new duties—one that shapes
the primary conduct of regulated
entities—is substantive.’’ Id. at 522.
After considering the arguments
raised in New York concerning the
Department’s authority under 5 U.S.C.
301 and how they might apply here, the
Department has reconsidered § 75.300(c)
and (d) of the 2016 Rule. Pursuant to,
and consistent with, its authority under
5 U.S.C. 301, the Department proposes
to revise § 75.300(c) to recognize the
public policy requirement that
otherwise eligible persons not be
excluded from participation in, denied
the benefits of, or subjected to
discrimination in the administration of
programs, activities, projects, assistance,
and services where such actions are
prohibited by Federal statute. The
Department considers the proposed
language for paragraph (c) appropriate
because it affirms that HHS grants
programs will be administered
consistent with the Federal statutes that
govern the programs, including the
nondiscrimination statutes that
Congress has adopted and made
applicable to the Department’s
programs. The adoption of regulatory
language that makes compliance simpler
and more predictable for Federal grant
recipients is generally consistent with
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the concept of controlling regulatory
costs and relieving regulatory burdens.
The Department also proposes to
revise § 75.300(d) to state that the
Department will follow all applicable
Supreme Court decisions in the
administration of the Department’s
award programs. Section 75.300(d)
notes that HHS will comply with
Supreme Court decisions generally,
rather than referencing specific
Supreme Court cases. This approach
simplifies compliance for federal grant
recipients.
The Department believes the
proposed language of § 75.300(c) and (d)
confirms that its programs must comply
with all applicable laws and Supreme
Court decisions, and allows its programs
to minimize disputes and litigation,
provide greater stability and certainty,
and to remove regulatory barriers.
OMB’s UAR at 2 CFR 200.300 does not
impose specific public policy
requirements beyond federal statutory
requirements. The Department
considers it appropriate for § 75.300(c)
to similarly focus on statutory
requirements and for § 75.300(d) to
inform grant recipients that the
Department complies with applicable
Supreme Court decisions in
administering its grant programs.
The Department also proposes to add
paragraph (e) to 45 CFR 75.300 to clarify
the Department interprets preexisting
prohibition against discrimination on
the basis of sex to include
discrimination on the basis of sexual
orientation and gender identity. The
Department believes that absent
contrary statutory text, legislative
history, or Supreme Court case law, the
best way to understand statutory sex
discrimination prohibitions is to apply
the Supreme Court’s reasoning in
Bostock v. Clayton County, 140 S. Ct.
1731 (2020), which issued after the 2021
rulemaking was already underway.
Section 75.300(e) provides regulatory
clarity to the public and helps facilitate
the efficient and equitable
administration of HHS grants.
The Department proposes to add
paragraph (f) to 45 CFR 75.300 to state
that it will comply with all federal
religious freedom laws, including RFRA
and the First Amendment. As explained
above, the Department is fully
committed to respecting religious
freedom laws when applying this rule,
including when an organization asserts
that the application of the provisions of
this rule conflict with their rights under
those laws. Further, the Department
proposes a workable exemption process,
described above, that will assist the
Department in fulfilling that
commitment by providing the
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opportunity for recipients to raise
recipient-specific concerns with the
Department; allowing the Department to
evaluate exemption requests on a caseby-case basis while accounting for third
party harms; and providing written
notification to provide a recipient
certainty in its receipt of HHS grants.
Finally, as noted above, the
Department proposes to add paragraph
(g) to 45 CFR 75.300 to evidence the
Department’s intent that, should any of
the provisions of this rule as finalized
by invalidated, the rest remain intact.
B. Effect on the Notice of
Nonenforcement
While this rulemaking process is
ongoing, the 2019 Notice of
Nonenforcement remains in effect.
III. Executive Order 12866 and Related
Executive Orders on Regulatory Review
A. Executive Order 12866 Determination
We have examined the impacts of the
proposed rule under Executive Order
12866, Executive Order 13563, the
Regulatory Flexibility Act (5 U.S.C.
601–612), and the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104–4).
Executive Orders 12866 and 13563
direct us to assess all costs and benefits
of available regulatory alternatives and,
when regulation is necessary, to select
regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety, and other advantages;
distributive impacts; and equity). The
proposed rule states that grant
recipients may not discriminate to the
extent prohibited by federal statutory
nondiscrimination provisions, would
provide that HHS complies with
applicable Supreme Court decisions in
administering its grant programs, and
codifies in regulation Supreme Court
precedent related to sex discrimination.
We believe that this proposed rule is
unlikely to result in economic impacts
that exceed the threshold for significant
effects as defined in section 3(1)(f) of
Executive Order 12866, as amended by
Executive Order 14094, because it does
not impose new requirements but rather
adds clarity for regulated entities.
The Unfunded Mandates Reform Act
of 1995 (section 202(a)) requires the
Department to prepare a written
statement, which includes an
assessment of anticipated costs and
benefits, before proposing ‘‘any rule that
includes any Federal mandate that may
result in the expenditure by State, local,
and tribal governments, in the aggregate,
or by the private sector, of $100,000,000
or more (adjusted annually for inflation)
in any one year.’’ The current threshold
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44757
after adjustment for inflation is $177
million, using the most current (2022)
Implicit Price Deflator for the Gross
Domestic Product. This proposed rule
would not result in an expenditure in
any year that meets or exceeds this
amount.
1. Alternatives Considered
The Department carefully considered
several alternatives, but rejected them
for the reasons explained below. The
first alternative considered was to make
no changes to the 2016 Rule. The
Department concluded that this
alternative would potentially lead to
legal challenges, in part over the scope
of the Department’s authority under 5
U.S.C. 301, as discussed above. The
second alternative considered was to
maintain the text of the 2016 Rule, but
also promulgate a regulatory exemption
for faith-based organizations as
provided under proposed 75.300(f). This
alternative could address the religious
exemption issues raised by the 2016
Rule’s application to certain faith-based
organizations that participate in, or seek
to participate in, Department-funded
programs or activities. However, the
provisions of the 2016 Rule would be
subject to the same legal challenges
under 5 U.S.C. 301. The third
alternative considered was to enumerate
applicable nondiscrimination
provisions and the programs and
recipients/subrecipients to which the
nondiscrimination provisions would
apply, as set forth in 75.300(e) without
including a religious exemption process.
However, Federal religious freedom
laws, such as the First Amendment and
RFRA, generally apply to these
nondiscrimination provisions, and
providing a process by which such
claims can be raised by recipients on a
case-by-case basis helps ensure that the
Department complies with its
obligations under all these authorities.
2. Benefits
The benefits of the proposed rule help
ensure that HHS grants programs will be
administered fairly and consistently
with Supreme Court precedent, Federal
statutes that govern the programs
covered in this rule, including the
nondiscrimination statutes that
Congress has adopted and made
applicable to the Department’s
programs, and the U.S. Constitution.
Proposed 45 CFR 75.300(c) makes
compliance simpler and more
predictable for federal grant recipients.
Likewise, proposed 45 CFR 75.300(d)
notes that HHS will comply with
Supreme Court decisions, which also
simplifies compliance for federal grant
recipients. Proposed 45 CFR 75.300(e)
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clarifies the Department’s interpretation
of prohibition of discrimination on the
basis of sex includes discrimination on
the basis of sexual orientation and
gender identity, consistent with Bostock
v. Clayton County, 140 S. Ct. 1731
(2020), which provides additional
regulatory clarity to the public and
helps facilitate the efficient and
equitable administration of HHS grants.
This also provides the benefit of
ensuring that individuals are not
discriminated against on the basis of
sexual orientation or gender identity,
which while difficult to quantify, is of
considerable value. Finally, proposed 45
CFR 75.300(f) states that the Department
will comply with all federal religious
freedom laws, including RFRA and the
First Amendment, which will assist the
Department in fulfilling that
commitment by providing the
opportunity for recipients to raise
concerns with the Department and for
those concerns to be evaluated on a
case-by-case basis. These benefits for the
fair and nondiscriminatory enforcement
of the programs covered by this rule are
not quantified.
3. Costs
Consistent with the 2021 Rule, OCR
identifies potential costs associated with
grantees becoming familiar with this
proposed rule, and follows the analytic
approach contained in its analysis. The
Department issues many grants on an
annual basis, and many recipients
receive multiple grants. Based on
information in the Department’s
Tracking Accountability in Government
Grant Spending (TAGGS) system, the
Department estimates that it has a total
of 12,202 grantees.31 Depending on the
grantee, the task of familiarization could
potentially fall to the following
occupation categories: (1) lawyers, with
a $65.26 median hourly wage; (2)
general and operations managers, with a
$47.16 median hourly wage; (3) medical
and health services managers, with a
$50.40 median hourly wage; (4)
compliance officers, with a $34.47
median hourly wage; or (5) social and
community service manager, with a
$35.69 median hourly wage.32 Across
all grantees, we adopt a pre-tax hourly
wage that is the average across the
median hourly wage rates for these 5
categories, or $46.60 per hour. To
compute the value of time for on thejob-activities, we adopt a fully loaded
wage rate that accounts for wages,
31 86
FR 2257 at 2274.
Bureau of Labor Statistics. Occupational
Employment and Wage Statistics. May 2022
National Occupational Employment and Wage
Estimates. https://www.bls.gov/oes/current/oes_
nat.htm. Accessed on June 13, 2022.
32 U.S.
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benefits, and other indirect costs of
labor that is equal to 200% of the pretax wage rate, or $93.19 per hour. The
Department anticipates that professional
organizations, trade associations and
other interested groups may prepare
summaries of the proposed rule, if it is
finalized. Accordingly, the Department
estimates that it would take a typical
grantee approximately one hour to
become familiar with the proposed
requirements. Thus, we expect that the
average cost for each grantee would be
$93.19. Across all 12,202 grantees, the
cost of grantee familiarization would be
approximately $1.1 million.
OCR considered additional potential
sources of costs that would be
attributable to the proposed rule. Parts
(c)–(e) of the rule codifies for all covered
grant what is already required by law.
Some covered entities may bear the
transaction costs associated with
notifying the Department that they are
seeking an exemption under proposed
45 CFR 75.300(f). However, there is no
filing fee to seek an exemption with
OCR, ASFR, or the awarding agency and
the costs would only be those a covered
entity chooses to expend.
Finally, to further quantity the costs
associated with this proposed rule, the
Department has attempted to estimate
whether the number and composition of
recipients changed in response to the
prior two rulemakings and how those
costs will impact this proposed rule.
The 2016 Rule has never been enforced
since it was promulgated on December
12, 2016, 81 FR 89383. The Department
also issued a Notice of Nonenforcement
in 2019, 84 FR 63831, that it would not
enforce the 2016 Rule. And the 2021
Rule, 86 FR 2257, never went into effect.
Because of this, the Department does
not have any data with regard to
whether the number and composition of
recipients changed in response to prior
rulemakings, as there was no change in
the enforcement of these rules which
would impact those grants.
However, the Department believes
that its recipients generally fall into one
of the following three categories in how
they have been impacted by the prior
two rulemakings.
The first category includes recipients
that adopted the nondiscrimination
practices prior to the 2016 Rule,
whether voluntarily or as a result of
state and/or local law. Their observance
of nondiscrimination requirements is
not the result of the 2016 Rule and thus,
these recipients are not impacted by this
proposed rule.
The second category includes
recipients that had not adopted
nondiscrimination practices prior to the
2016 Rule, but that complied since the
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2016 Rule, including after the 2019
Notice of Nonenforcement was issued,
84 FR 63831, and until now. However,
because the 2016 Rule did not contain
any procedural enforcement
mechanisms such as an assurance of
compliance or adoption of a grievance
process, it is difficult to quantity the
costs, if any, incurred by this second
category of recipients. These recipients
would likely continue to follow such
nondiscrimination practices voluntarily
or because of new or newly enforced
state and/or local laws, given that they
could have declined to comply with the
2016 Rule requirements after the 2019
Notice of Nonenforcement issued, and
yet have continued to comply with
those requirements notwithstanding that
notice. Thus, these recipients are
similarly situated to the first category of
recipients insofar as they are not
impacted by whether or not the 2016
Rule is in effect.
The third category includes recipients
that had not followed, and continue to
not follow, the 2016 Rule. However,
their practice was likely not impacted
by the 2016 Rule, as the rule was not
enforced, and the Department issued
waivers under RFRA to South Carolina,
Texas, and Michigan in 2019 and 2020
exempting those recipients from the
2016 Rule. Further, the Department
issued the 2019 Notice of
Nonenforcement which applied to all
recipients covered by the 2016 Rule.
Moreover, these recipients could not
have relied upon the 2021 Rule, since
that rule never went into effect. Since
this proposed rule removes the 2016
Rule’s requirements, and adds a
religious exemption process, the
Department expects that these grantees
will continue their current practice
75.300(e) does not apply to the foster
care programs at issue in the South
Carolina, Texas, and Michigan cases,
though they may additionally seek a
religious exemption under 75.300(f) of
the proposed rule, which will not
materially bear on additional costs.
Thus, the Department believes that
apart from familiarization costs and
costs associated with filing a religious
exemption request, there will be little to
no economic impact associated with
§ 75.300(c) through(f). The Department
solicits comments and additional data
on the estimated costs of compliance.
3. Comparison of Costs and Benefits
In summary, the Department expects
the benefits of regulatory clarity will
simplify compliance and ensure fair and
nondiscriminatory administration of
covered programs under this rule. Costs
associated with implementing this
administrative change include costs for
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some covered entities who may seek an
exemption. The Department solicits
comments regarding this assessment of
impacts.
comment on this analysis of the impact
of the proposed rule on small entities,
and the assumptions that underlie this
analysis.
B. RFA—Initial Small Entity Analysis
The Department has examined the
economic implications of this proposed
rule as required by the RFA (5 U.S.C.
601–612). The RFA requires an agency
to describe the impact of a proposed
rulemaking on small entities by
providing an initial regulatory flexibility
analysis unless the agency expects that
the proposed rule will not have a
significant impact on a substantial
number of small entities, provides a
factual basis for this determination, and
proposes to certify the statement. 5
U.S.C. 603(a), 605(b). If an agency must
provide an initial regulatory flexibility
analysis, this analysis must address the
consideration of regulatory options that
would lessen the economic effect of the
rule on small entities. For purposes of
the RFA, small entities include small
businesses, nonprofit organizations, and
small governmental jurisdictions. HHS
generally considers a rule to have a
significant impact on a substantial
number of small entities if it has at least
a three percent impact on revenue on at
least five percent of small entities.
As discussed, the proposed rule
would:
• Require grant recipients to comply
with applicable Federal statutory
nondiscrimination provisions.
• Provide that HHS complies with
applicable Supreme Court decisions in
administering its grant programs.
Affected small entities include all
small entities which may apply for HHS
grants; these small entities operate in a
wide range of sections involved in the
delivery of health and human services.
Grant recipients are required to comply
with applicable Federal statutory
nondiscrimination provisions by
operation of such laws and pursuant to
45 CFR 75.300(a); HHS is required to
comply with applicable Supreme Court
decisions. Thus, there would be no
additional economic impact associated
with proposed sections 75.300(c)–(e).
The Department anticipates that this
rulemaking, if finalized, would
primarily serve to provide information
to the public. The Department
anticipates that this information will
allow affected entities to better deploy
resources in line with established
requirements for HHS grant recipients.
As a result, HHS has determined, and
the Secretary proposes to certify, that
this proposed rule, if finalized, will not
have a significant impact on the
operations of a substantial number of
small entities. The Department seeks
C. Executive Order 13132: Federalism
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a rule
that imposes substantial direct
requirement costs on State and local
governments or has Federalism
implications. The Department has
determined that this proposed rule does
not impose such costs or have any
Federalism implications.
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D. E.O. 12250 on Leadership and
Coordination of Nondiscrimination
Laws
Pursuant to E.O. 12250, the Attorney
General has the responsibility to
‘‘review . . . proposed rules . . . of the
Executive agencies’’ implementing
nondiscrimination statutes such as Title
IX ‘‘in order to identify those which are
inadequate, unclear or unnecessarily
inconsistent.’’ The Attorney General has
delegated that function to the Assistant
Attorney General for the Civil Rights
Division for purposes of reviewing and
approving proposed rules. 28 CFR 0.51.
The Department has coordinated with
the Department of Justice to review and
approve this proposed rule prior to
publication in the Federal Register.
E. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. ch.
3506; 5 CFR part 1320 appendix A.1),
the Department has reviewed this
proposed rule and has determined that
there are no new collections of
information contained therein.
IV. Request for Comment
The Department seeks comment on
this proposed rule, including its likely
impacts as compared to the 2016 Rule.
As noted above, the Department also
seeks comment on whether the
Department administers other statutes
prohibiting sex discrimination that are
not set forth in proposed § 75.300(e).
Finally, the Department seeks comments
from the public on whether there is
anything about any of the statutes
referenced in proposed § 75.300(e), such
as their language, legislative history, or
purpose, that would provide a legal
basis for distinguishing them from
Bostock’s reasoning for Title VII.
List of Subjects in 45 CFR Part 75
Accounting, Administrative practice
and procedure, Cost principles, Grant
programs, Grant programs—health,
Grants Administration, Hospitals,
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44759
Nonprofit Organizations reporting and
recordkeeping requirements, and State
and local governments.
For the reasons stated in the
preamble, the Department of Health and
Human Services proposes to amend 45
CFR part 75 as follows:
PART 75—UNIFORM ADMINISTRATIVE
REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR HHS
AWARDS
1. The authority citation for 45 CFR
part 75 continues to read as follows:
■
Authority: 5 U.S.C. 301, 2 CFR part 200.
2. Amend § 75.300 by revising
paragraphs (c) and (d), and adding
paragraphs (e), (f), and (g) to read as
follows:
■
§ 75.300 Statutory and national policy
requirements.
*
*
*
*
*
(c) It is a public policy requirement of
HHS that no person otherwise eligible
will be excluded from participation in,
denied the benefits of, or subjected to
discrimination in the administration of
HHS programs, activities, projects,
assistance, and services, to the extent
doing so is prohibited by federal statute.
(d) HHS will follow all applicable
Supreme Court decisions in
administering its award programs.
(e) In statutes that HHS administers
which prohibit discrimination on the
basis of sex, the Department interprets
those provisions to include a
prohibition against discrimination on
the basis of sexual orientation and
gender identity, consistent with the
Supreme Court’s decision in Bostock v.
Clayton County, 140 S. Ct. 1731 (2020),
and other federal court precedent
applying Bostock’s reasoning that sex
discrimination includes discrimination
based on sexual orientation and gender
identity. Paragraph (e) applies to the
following HHS authorities that prohibit
discrimination on the basis of sex: 8
U.S.C. 1522, Authorization for programs
for domestic resettlement of and
assistance to refugees; 42 U.S.C. 290cc–
33, Projects for Assistance in Transition
from Homelessness; 42 U.S.C. 290ff–1,
Children with Serious Emotional
Disturbances; 42 U.S.C. 295m, Title VII
Health Workforce Programs; 42 U.S.C.
296g. Nursing Workforce Development;
42 U.S.C. 300w–7, Preventive Health
Services Block Grant; 42 U.S.C. 300x–
57, Substance Abuse Treatment and
Prevention Block Grant; Community
Mental Health Services Block Grant; 42
U.S.C. 708, Maternal and Child Health
Block Grant; 42 U.S.C. 5151, Disaster
relief; 42 U.S.C. 8625, Low Income
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Home Energy Assistance Program; 42
U.S.C. 9849, Head Start; 42 U.S.C. 9918,
Community Services Block Grant
Program; and 42 U.S.C. 10406, Family
Violence Prevention and Services.
(f)(1) At any time, a recipient may
notify the HHS awarding agency, the
Office of the Assistant Secretary for
Financial Resources (ASFR), or the
Office for Civil Rights (OCR) of the
recipient’s view that it is exempt from,
or requires modified application of,
certain provisions of this part due to the
application of a federal religious
freedom law, including the Religious
Freedom Restoration Act (RFRA) and
the First Amendment.
(2) Once the awarding agency,
working jointly with ASFR or OCR,
receives such notification from a
particular recipient, they shall promptly
consider those views in responding to
any complaints, determining whether to
proceed with any investigation or
enforcement activity regarding that
recipient’s compliance with the relevant
provisions of this part, or in responding
to a claim raised by the recipient in the
first instance, in legal consultation with
the HHS Office of the General Counsel
(OGC). Any relevant ongoing
compliance activity regarding the
recipient shall be held in abeyance until
a determination has been made on
whether the recipient is exempt from
the application of certain provisions of
this part, or whether modified
application of the provision is required
as applied to specific contexts,
procedures, or services, based on a
federal religious freedom law.
(3) The awarding agency, working
jointly with ASFR or OCR, will, in legal
consultation with OGC, assess whether
there is a sufficient, concrete factual
basis for making a determination and
will apply the applicable legal standards
of the relevant law, and will
communicate their determination to the
recipient in writing. The written
notification will clearly set forth the
scope, applicable issues, duration, and
all other relevant terms of the
exemption request.
(4) If the awarding agency, working
jointly with ASFR or OCR, and in legal
consultation with OGC, determines that
a recipient is exempt from the
application of certain provisions of this
part or that modified application of
certain provisions is required as applied
to specific contexts, procedures, or
services, that determination does not
otherwise limit the application of any
other provision of this part to the
recipient or to other contexts,
procedures, or services.
(g) Any provision of this part held to
be invalid or unenforceable by its terms,
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or as applied to any person or
circumstance, shall be severable from
this part and shall not affect the
remainder thereof or the application of
the provision to other persons not
similarly situated or to other, dissimilar
circumstances.
Dated: July 6, 2023.
Xavier Becerra,
Secretary, Department of Health and Human
Services.
[FR Doc. 2023–14600 Filed 7–11–23; 11:15 am]
BILLING CODE 4153–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Administration for Children and
Families
45 CFR Part 305
RIN 0970–AC95
Modifications to Performance
Standards During Natural Disasters
and Other Calamities
Office of Child Support
Services (OCSS), Administration for
Children and Families (ACF),
Department of Health and Human
Services (HHS or the Department).
ACTION: Notice of proposed rulemaking.
AGENCY:
OCSS proposes to provide
temporary relief to states from certain
child support program performance
requirements and penalties during
natural disasters and other calamities
which have a negative impact on state
child support program operations. The
proposed rule would provide ACF with
ongoing authority to modify
performance measure requirements
when states are affected by natural
disasters and other calamities that have
resulted, or are expected to result, in the
failure of state child support programs
to achieve performance standards for
paternity establishment, support order
establishment, and current collections.
The proposed rule will enable states to
avoid the imposition of penalties due to
adverse data reliability audit findings
during, and subsequent to, natural
disasters and other calamities, including
pandemics and declared public health
emergencies.
DATES: Consideration will be given to
written comments on this notice of
proposed rulemaking (NPRM) received
on or before September 11, 2023.
ADDRESSES: You may submit comments,
identified by [docket number and/or
Regulatory Information Number (RIN)
number (0970–AC95)], by one of the
following methods:
SUMMARY:
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• Federal e-Rulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: Written comments may be
submitted to: Office of Child Support
Services, Attention: Director of Policy
and Training, 330 C Street SW,
Washington, DC 20201.
Instructions: All submissions received
must include the agency name and
docket number or RIN for this
rulemaking. All comments received will
be posted without change to https://
www.regulations.gov, including any
personal information provided.
FOR FURTHER INFORMATION CONTACT:
Tricia John, Division of Policy and
Training, OCSS, telephone (202) 260–
7143. Email inquiries to ocse.dpt@
acf.hhs.gov. Deaf and hearing-impaired
individuals may call the Federal Dual
Party Relay Service at 1–800–877–8339
between 8 a.m. and 7 p.m. Eastern Time.
SUPPLEMENTARY INFORMATION:
Submission of Comments
Comments should be specific, address
issues raised by the proposed rule, and
explain reasons for any objections or
recommended changes. Additionally,
we will be interested in comments that
indicate agreement with the proposal.
We will not acknowledge receipt of the
comments we receive. However, we will
review and consider all comments that
are relevant and are received during the
comment period. We will respond to
these comments in the preamble to the
final rule.
Statutory Authority
This NPRM is published under the
authority granted to the Secretary of
Health and Human Services by section
1102 of the Social Security Act (the Act)
(42 U.S.C. 1302). Section 1102 of the
Act authorizes the Secretary to publish
regulations, not inconsistent with the
Act, as may be necessary for the
efficient administration of the functions
with which the Secretary is responsible
under the Act. The proposed relief from
the support order establishment and
current support collections performance
measures may be waived, modified, or
suspended through rulemaking under
section 409(a)(8)(A)(i)(I) of the Act (42
U.S.C. 609(a)(8)(A)(i)(I)). The proposed
relief from the paternity establishment
percentage (PEP) performance measure
and data reliability audit requirements
related to the PEP under this NPRM is
based on statutory authority granted
under section 452(g)(3)(A) of the Act (42
U.S.C. 652(g)(3)(A)).
Justification
The purpose of this proposed rule is
to authorize the Secretary to provide
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Agencies
[Federal Register Volume 88, Number 133 (Thursday, July 13, 2023)]
[Proposed Rules]
[Pages 44750-44760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14600]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of the Secretary
45 CFR Parts 75
RIN 0945-AA19
Health and Human Services Grants Regulation
AGENCY: Office for Civil Rights (OCR), Office of the Assistant
Secretary for Financial Resources (ASFR), Department of Health and
Human Services (HHS).
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This is a notice of proposed rulemaking (NPRM) to
repromulgate and revise certain regulatory provisions of the HHS,
Uniform Administrative Rule Requirements, Cost Principles, and Audit
Requirements for HHS Awards, previously set forth in a final rule
published in the Federal Register.
DATES: Comments: Submit comments on or before September 11, 2023.
ADDRESSES: You may submit comments, identified by the Regulation
Identifier Number (RIN) 0945-AA19, by any of the following methods.
Please do not submit duplicate comments.
Federal Rulemaking Portal: You may submit electronic comments at
https://regulations.gov by searching for the Docket ID number HHS-OCR-
2023-0011. Follow the instructions for submitting electronic comments.
If you are submitting comments electronically, the Department strongly
encourages you to submit any comments or attachments in Microsoft Word
format. If you must submit a comment in Adobe Portable Document Format
(PDF), the Department strongly encourages you to convert the PDF to
``print-to-PDF'' format, or to use some other commonly used searchable
text format. Please do not submit the PDF in scanned format. Using a
print-to-PDF allows the Department to electronically search and copy
certain portions of your submissions to assist in the rulemaking
process.
Regular, Express, or Overnight Mail: You may mail written comments
to the following address only: U.S. Department of Health and Human
Services, Office for Civil Rights, Attention: HHS Grants Rulemaking
(RIN-0945-AA19), Washington, DC 20201.
All comments received by the methods and due date specified above
may be posted without change to content to https://www.regulations.gov,
which may include personal information provided about the
[[Page 44751]]
commenter, and such posting may occur after the closing of the comment
period. However, the Department may redact certain non-substantive
content from comments before posting, including threats, hate speech,
profanity, graphic images, or individually identifiable information
about a third-party individual other than the commenter. In addition,
comments or material designated as confidential or not to be disclosed
to the public will not be accepted. Comments may be redacted or
rejected as described above without notice to the commenter, and the
Department will not consider in rulemaking any redacted or rejected
content that would not be made available to the public as part of the
administrative record.
Because of the large number of public comments normally received on
Federal Register documents, OCR is not able to provide individual
acknowledgements of receipt.
Please allow sufficient time for mailed comments to be received
timely in the event of delivery or security delays.
Please note that comments submitted by fax or email and those
submitted after the comment period will not be accepted.
Docket: For complete access to background documents or posted
comments, go to https://www.regulations.gov and search for Docket ID
number HHS-OCR-2023-0011.
FOR FURTHER INFORMATION CONTACT: Office for Civil Rights, Daniel Shieh,
Associate Deputy Director, HHS Office for Civil Rights, (202) 240-3110
or (800) 537-7697 (TDD), or via email at [email protected] for
matters related to the HHS Grants Rulemaking.
SUPPLEMENTARY INFORMATION: This is an NPRM proposing to repromulgate
provisions of the Uniform Administrative Requirements, 45 CFR part 75,
set forth in the rule published in the Federal Register at 81 FR 89393
(December 12, 2016). (2016 Rule). The 2016 Rule is currently subject to
a Notice of Nonenforcement, 84 FR 63809 (November 19, 2019), which
states that the Department will rely upon its enforcement discretion to
not enforce the regulatory provisions adopted or amended by the 2016
Rule. On the same day that the Department issued the Notice of
Nonenforcement, it also issued an NPRM proposing revisions to the 2016
Rule. After a 30-day comment period, during which the Department
received over 100,000 comments, a final rule was published in January
2021. 86 FR 2257 (January 12, 2021) (2021 Rule). The 2021 Rule was
challenged in the U.S. District Court for the District of Columbia,
Facing Foster Care et al. v. HHS, 21-cv-00308 (D.D.C. filed Feb. 2,
2021). The 2021 Rule was to be effective on February 11, 2021, but the
effective date was extended via several postponements by the court in
Facing Foster Care under 5 U.S.C. 705. On June 29, 2022, the court
granted the Department's motion for remand with vacatur, and ``ordered
that those portions of the U.S. Department of Health and Human Services
(`HHS') regulation entitled Health and Human Services Grants
Regulation, 86 FR 2257 (Jan. 12, 2021), that amend 45 CFR 75.101(f),
75.300(c), and 75.300(d), are hereby VACATED and REMANDED to HHS.'' \1\
Through this NPRM, the Department now proposes to repromulgate with
certain exceptions and revisions those provisions of the 2021 Rule that
were vacated and remanded to the Department.
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\1\ See Order, Facing Foster Care et al. v. HHS, No. 21-cv-00308
(D.D.C. June 29, 2022), ECF No. 44.
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Table of Contents
I. Background
A. Background and Rulemaking
B. Additional Background
C. Summary of the Proposed Rule
1. Applicability (45 CFR 75.101)
2. Statutory and National Policy Requirements (45 CFR 75.300)
3. Notification of Views Regarding Application of Federal
Religious Freedom Laws
II. Reasons for the Proposed Rulemaking
A. The 2016 Rule and the Scope of 5 U.S.C. 301
B. Effect on the Notice of Nonenforcement
III. Executive Order 12866 and Related Executive Orders on
Regulatory Review
A. Executive Order 12866 Determination
B. Regulatory Flexibility Analysis--Initial Small Entity
Analysis
C. Executive Order 13132: Federalism
D. Executive Order 12250 on Leadership and Coordination of
Nondiscrimination Laws
E. Paperwork Reduction Act
IV. Request for Comment
I. Background
A. Background and Rulemaking
On December 26, 2013, the Office of Management and Budget (OMB)
issued the Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards (UAR or uniform regulations) that
``set standard requirements for financial management of Federal awards
across the entire federal government.'' 78 FR 78590 (Dec. 26, 2013). On
December 19, 2014, OMB and other Federal award-making agencies,
including the Department, issued an interim final rule to implement the
UAR. 79 FR 75867 (Dec. 19, 2014). OMB's purpose in promulgating the
uniform regulations was to (1) streamline guidance in making Federal
awards to ease administrative burden and (2) strengthen financial
oversight over Federal funds to reduce risks of fraud, waste, and
abuse.\2\
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\2\ 78 FR 78590 (Dec. 26, 2013); 85 FR 3766 (Jan. 22, 2020).
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On July 13, 2016, the Department issued an NPRM proposing changes
to its adoption of the 2014 UAR Interim Final Rule.\3\ The 2016 Rule
was promulgated pursuant to OMB's uniform regulations that ``set
standard requirements for financial management of Federal awards across
the entire federal government,'' 2 CFR part 200; 5 U.S.C. 301; and the
Chief Financial Officers Act of 1990, Public Law 101-576, now at 31
U.S.C. 503.\4\ The NPRM, entitled the ``Health and Human Services
Grants Rule,'' proposed changes to:
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\3\ 81 FR 45270 (July 13, 2016).
\4\ 78 FR 78590 (Dec. 26, 2013).
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Section 75.102, concerning requirements related to the
Indian Self-Determination and Education Assistance Act (ISDEAA);
Section 75.300, concerning certain public policy
requirements and Supreme Court cases, and Sec. 75.101, concerning the
applicability of those provisions to the Temporary Assistance for Needy
Families Program (Title IV-A of the Social Security Act, 42 U.S.C. 601-
19);
Section 75.305, concerning the applicability to states of
certain payment provisions;
Section 75.365, concerning certain restrictions on public
access to records;
Section 75.414, concerning indirect cost rates for certain
grants; and
Section 75.477, concerning shared responsibility payments
and payments for failure to offer health coverage to employees.
On December 12, 2016, the Department finalized all of these
provisions with the exception of proposed Sec. 75.102. See 81 FR
89393.\5\ The 2016 Rule went into effect on January 11, 2017.
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\5\ The 2016 Rule also made a technical change not set forth in
the proposed rule, amending Sec. 75.110(a) by removing ``75.355''
and adding, in its place, ``75.335.''
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On February 27, 2018, the State of South Carolina sent a letter to
the Department's Administration for Children and Families (ACF) on
behalf of the state's faith-based organizations, seeking a waiver from
the 2016 Rule's religious nondiscrimination requirements. On January
23, 2019, ACF sent South Carolina a letter approving
[[Page 44752]]
the state's waiver request from the religious nondiscrimination
requirement of 45 CFR 75.300(c).
On November 19, 2019, the Department issued a Notice of
Nonenforcement, 84 FR 63809, which stated that the Department would
rely upon its enforcement discretion to not enforce the regulatory
provisions adopted or amended by the 2016 Rule. The Department stated
that such nonenforcement was due to issues regarding the 2016 Rule's
compliance with the requirements of the Regulatory Flexibility Act, 5
U.S.C. 601-12 (RFA). The 2019 Notice of Nonenforcement stated that the
Department was concerned over whether the 2016 Rule provided a
sufficient rationale and certification that the rule would not have a
significant economic impact on a substantial number of small entities,
or a sufficient final regulatory flexibility analysis at the time of
publication. The 2019 Notice of Nonenforcement was challenged in the
U.S. District Court for the Southern District of New York in Family
Equality v. Azar, 20-cv-02403 (S.D.N.Y. filed Mar. 19, 2020); the suit
was dismissed on March 30, 2022, for lack of subject-matter
jurisdiction.\6\ The case is on appeal in the Second Circuit, while the
2019 Notice of Nonenforcement remains in effect.\7\
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\6\ See Order, Family Equality v. Azar, No. 20-cv-02403
(S.D.N.Y. Mar. 30, 2022), ECF No. 62.
\7\ Family Equality v. Becerra, No. 22-1174 (2d Cir. filed May
27, 2022).
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On March 5, 2020, in response to a lawsuit filed by the State of
Texas against the Department challenging the 2016 Rule, Texas v. Azar,
3:19-cv-00365 (S.D. Tex. Oct. 31, 2019), OCR sent a letter informing
Texas of OCR's conclusion that the Religious Freedom Restoration Act of
1993 (RFRA), 42 U.S.C. 2000bb et seq., prohibited the Department from
applying 45 CFR 75.300(c) and (d) against Texas with respect to the
Archdiocese of Galveston-Houston, a religious foster-care service
provider, and ``other similarly situated entities.''
On November 3, 2020, in response to a separate lawsuit filed
against the Department, Buck v. Gordon, 1:19-cv-00286 (W.D. Mich. Apr.
15, 2019), OCR sent the Michigan Department of Health and Human
Services a letter informing them of OCR's conclusion that RFRA likewise
prohibited the Department from applying 45 CFR 75.300(c) against
Michigan with respect to the St. Vincent Catholic Charities, a
religious foster-care service provider, and ``other similarly situated
entities.''
On the same day the Department issued the 2019 Notice of
Nonenforcement, it published an NPRM proposing to ``repromulgate some
of the provisions of the [2016] Final Rule, not to repromulgate others,
and to replace or modify certain provisions that were included in the
Final Rule with other provisions.'' 84 FR 63831 (Nov. 19, 2019). After
a 30-day comment period and receipt of over 100,000 comments, on
January 12, 2021, the Department repromulgated portions of and issued
amendments to the 2016 Rule, 86 FR 2257 (2021 Rule). Specifically, from
the 2016 Rule, the 2021 Rule repromulgated provisions of 45 CFR part 75
and made amendments to 45 CFR 75.300(c) and (d). Section 75.300(c)
previously prohibited discrimination in the administration of programs
supported by HHS awards ``based on non-merit factors such as age,
disability, sex, race, color, national origin, religion, gender
identity, or sexual orientation.'' The 2021 Rule amended Sec.
75.300(c) to prohibit discrimination in these programs ``to the extent
doing so is prohibited by federal statute.''
Section 75.300(d) had previously stated that ``all recipients must
treat as valid the marriages of same-sex couples'' consistent with the
Supreme Court decisions in United States v. Windsor and Obergefell v.
Hodges. The 2021 Rule amended Sec. 75.300(d) to state that ``HHS will
follow all applicable Supreme Court decisions.''
Shortly after the 2021 Rule's issuance, portions of the amendments
to Sec. 75.300 and a conforming amendment at Sec. 75.101(f) were
challenged in the U.S. District Court for the District of Columbia.
Facing Foster Care v. HHS, 21-cv-00308 (D.D.C. Feb. 2, 2021). On June
17, 2022, the Department filed a motion for remand with vacatur the
challenged portions of the 2021 Rule. The Department noted that because
HHS had ``reviewed only a small fraction of the non-duplicative
comments, did not employ a sampling methodology likely to produce an
adequate sample of the comment received, and did not explain its use of
sampling in the final rule, Defendants have concluded, in the
circumstances of this case, that the 2021 Rule was promulgated in
violation of the [Administrative Procedure Act].'' \8\ On June 29,
2022, the court ordered that the challenged portions of 45 CFR
75.101(f), 75.300(c), and 75.300(d) be vacated and remanded to HHS.\9\
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\8\ Facing Foster Care et al. v. HHS, No. 21-cv-00308 (D.D.C.
June 17, 2022), ECF No. 41.
\9\ See id., Order (June 29, 2022), ECF No. 44. Because they
were not subject to the order of vacatur, certain provisions
previously adopted in the 2021 Rule remain in effect. These
provisions are: 45 CFR 75.305, 75.365, 75.414, and 75.417.
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On November 18, 2021, HHS issued letters to South Carolina,
Michigan, and Texas with respect to previously granted waivers under
RFRA for participation in the Title IV-E program (the HHS-administered
adoption and foster care program). The letters noted that because HHS
had issued the 2019 Notification of Nonenforcement, which stated that
HHS would not enforce the non-discrimination requirements under the
2016 Rule, the RFRA waivers were unnecessary, and thus, rescinded. The
letters further explained that the previously granted waivers had
misapplied the applicable RFRA standards and were therefore withdrawn.
B. Additional Background
On June 15, 2020, the U.S. Supreme Court held that Title VII of the
Civil Rights Act of 1964, 42 U.S.C. 2000e-2(a)(1) (Title VII),
prohibits discrimination on the basis of sex, which includes
discrimination based on sexual orientation and gender identity. Bostock
v. Clayton County, 140 S. Ct. 1731 (2020). Bostock concluded that the
plain meaning of ``because of . . . sex'' in Title VII necessarily
included discrimination because of sexual orientation and gender
identity. Id. at 1753-54. After Bostock, circuit courts concluded that
the plain language of the Title IX of the Education Amendments of 1972,
20 U.S.C. 1681(a), prohibition on sex discrimination must be read
similarly. See Grimm v. Gloucester Cty. Sch. Bd., 972 F.3d 586 (4th
Cir. 2020), cert. denied, 141 S. Ct. 2878 (2021); see also Doe v.
Snyder, 28 F.4th 103, 114 (9th Cir. 2022) (applying Bostock's reasoning
to the prohibitions on sex discrimination in Title IX and Section 1557
of the Affordable Care Act, 42 U.S.C. 18116). But cf. Adams v. School
Bd. of St. Johns Co., 57 F.4th 791, 811-15 (11th Cir. 2022) (en banc)
(recognizing that Bostock instructs that the exclusion of a transgender
student from the bathroom consistent with his gender identity was
exclusion on the basis of ``sex,'' but that such exclusion was
permitted by Title IX's ``express statutory and regulatory carve-outs''
for living and bathroom facilities).
On January 20, 2021, President Biden issued Executive Order (E.O.)
13988, 86 FR 7023, 7023-24, which directed Federal agencies to review
all agency actions, including regulations, ``as necessary to fully
implement statutes that prohibit sex discrimination,'' and determine if
they were inconsistent with Bostock reasoning.\10\
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\10\ In Neese v. Becerra, No. 2:21-cv-00163 (N.D. Tex., Nov. 10,
2022), the U.S. District Court for the Northern District of Texas
declared unlawful a May 10, 2021 notification titled, ``Notification
of Interpretation and Enforcement of Section 1557 of the Affordable
Care Act and Title IX of the Education Amendments of 1972,'' which
applied Bostock to Title IX and Section 1557. On January 20, 2023,
the Department appealed that decision to the Fifth Circuit Court of
Appeals. That appeal is pending.
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[[Page 44753]]
C. Summary of the Proposed Rule
Because the 2021 Rule's amendments to 45 CFR 75.101(f), 75.300(c),
and 75.300(d) were vacated and remanded to HHS, the Department proposes
to repromulgate some provisions from the 2016 Rule as well as other
provisions with changes. Specifically, the Department is proposing not
to reinstate former Sec. 75.101(f), as found in both the 2016 and 2021
Rules; is proposing revisions to Sec. 75.300(c) and (d) from the 2016
Rule; and is proposing to add new Sec. 75.300(e) and (f), not found in
either the 2016 or the 2021 Rules.
1. Applicability (Sec. 75.101)
Proposed section 75.101 provides for the applicability of the 2014
UAR Rule. The 2016 Rule included a provision at Sec. 75.101(f)
providing that Sec. 75.300(c) (prohibiting discrimination on a range
of bases in the administration of programs supported by HHS awards)
would ``not apply to the Temporary Assistance for Needy Families
Program (title IV-A of the Social Security Act, 42 U.S.C. 601-619).''
This was repromulgated in the 2021 Rule and is subject to the order of
vacatur.
The Department does not propose to add paragraph (f) in Sec.
75.101, which was included in the 2016 Rule to ensure that the specific
statutory requirements of the Temporary Assistance for Needy Families
Program (Title IV-A of the Social Security Act, 42 U.S.C. 601-619)
(TANF) governed applicable grants. This language is not necessary under
the proposed language of 45 CFR 75.300, because the latter is already
limited to applicable statutory nondiscrimination requirements and the
TANF statute, 42 U.S.C. 608(d), already identifies the
nondiscrimination provisions that apply to TANF.
2. Statutory and National Policy Requirements (Sec. 75.300)
Section 75.300 provides the statutory and policy requirements for
the 2014 UAR Rule. The Department proposes to keep paragraphs (a) and
(b) of Sec. 75.300 unchanged from the 2016 Rule, which provides: ``(a)
The Federal awarding agency must manage and administer the Federal
award in a manner so as to ensure that Federal funding is expended and
associated programs are implemented in full accordance with U.S.
statutory and public policy requirements: Including, but not limited
to, those protecting public welfare, the environment, and prohibiting
discrimination. The Federal awarding agency must communicate to the
non-Federal entity all relevant public policy requirements, including
those in general appropriations provisions, and incorporate them either
directly or by reference in the terms and conditions of the Federal
award. (b) The non-Federal entity is responsible for complying with all
requirements of the Federal award. For all Federal awards, this
includes the provisions of FFATA, which includes requirements on
executive compensation, and also requirements implementing the Act for
the non-Federal entity at 2 CFR part 25 and 2 CFR part 170. See also
statutory requirements for whistleblower protections at 10 U.S.C. 2324
and 2409, and 41 U.S.C. 4304, 4310, and 4712.''
This NPRM proposes to repromulgate Sec. 75.300(c) from the 2021
Rule to provide: ``It is a public policy requirement of HHS that no
person otherwise eligible will be excluded from participation in,
denied the benefits of, or subjected to discrimination in the
administration of HHS programs and services, to the extent doing so is
prohibited by federal statute.'' This revises the 2016 Rule, which
provided at 45 CFR 75.300(c), in relevant part, ``It is a public policy
requirement of HHS that no person otherwise eligible will be excluded
from participation in, denied the benefits of, or subjected to
discrimination in the administration of HHS programs and services based
on non-merit factors such as age, disability, sex, race, color,
national origin, religion, gender identity, or sexual orientation.''
The Department also proposes to repromulgate Sec. 75.300(d) from the
2021 Rule to provide, ``HHS will follow all applicable Supreme Court
decisions in administering its award programs.'' This revises the 2016
Rule, which provided at 45 CFR 75.300(d), ``In accordance with the
Supreme Court decisions in United States v. Windsor and in Obergefell
v. Hodges, all recipients must treat as valid the marriages of same-sex
couples. This does not apply to registered domestic partnerships, civil
unions or similar formal relationships recognized under state law as
something other than a marriage.'' As discussed more fully below in
Part II, Section A, the Department's proposals reflect its
reconsideration in light of arguments concerning the Housekeeping
Statute, 5 U.S.C. 301, raised in litigation challenging a different HHS
rule, and HHS's desire to provide stability and clarity in its
programs.
Finally, the Department proposes to add a Sec. 75.300(e), which
clarifies the Department interpretation of the prohibition of
discrimination on the basis of sex to include (1) discrimination on the
basis of sexual orientation and (2) discrimination on the basis of
gender identity, consistent with the Supreme Court's decision in
Bostock v. Clayton County, 140 S. Ct. 1731 (2020)), and other Federal
court precedent applying Bostock's reasoning that sex discrimination
includes discrimination based on sexual orientation and gender
identity.\11\ Proposed Sec. 75.300(e) applies to 13 HHS authorities
that prohibit discrimination on the basis of sex in health and human
services programs.
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\11\ Bostock's reasoning applies with equal force to claims
alleging discrimination on the basis of sex characteristics,
including intersex traits, because discrimination based on
anatomical or physiological sex characteristics (such as genitals,
gonads, chromosomes, hormone function, and brain development/
anatomy) is inherently sex-based. Discrimination on the basis of
intersex traits, therefore, is prohibited sex discrimination because
the individual is being discriminated against based on their sex
characteristics. If their sex characteristics were different--i.e.,
traditionally ``male'' or ``female''--the intersex person would be
treated differently. Moreover, like gender identity and sexual
orientation, intersex traits are ``inextricably bound up with'' sex,
and ``cannot be stated without referencing sex.'' Bostock, 140 S.
Ct. at 1742; see also Grimm, 972 F.3d at 608 (quoting Whitaker v.
Kenosha Unified Sch. Dist. No. 1 Bd. of Educ., 858 F.3d 1034, 1051
(7th Cir. 2017)).
In addition to Bostock, the Department continues to interpret
sex discrimination to prohibit discrimination on the basis of sex
stereotypes, which can include stereotypes regarding sex
characteristics and intersex traits, consistent with longstanding
Supreme Court precedent. See Los Angeles, Dep't of Water & Power v.
Manhart, 435 U.S. 702 (1978); Price Waterhouse v. Hopkins, 490 U.S.
228 (1989)).
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The Department seeks comment on whether the Department administers
other statutes prohibiting sex discrimination that are not set forth in
proposed Sec. 75.300(e) or whether the Department should include
language or guidance in Sec. 75.300(e) to cover current or future laws
that prohibit sex discrimination that are not set forth above.
Bostock held that a plain reading of Title VII's prohibition on
discrimination ``because of . . . sex'' encompassed discrimination
based on sexual orientation or transgender status. According to the
Court, a straightforward application of the terms ``discriminate,''
``because of,'' and ``sex'' means that ``it is impossible to
discriminate against a person'' for being gay or transgender ``without
[[Page 44754]]
discriminating against that individual based on sex.'' \12\
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\12\ 140 S. Ct. at 1742.
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The 13 statutes listed in proposed Sec. 75.300(e) each contain
prohibitions on sex discrimination. None of the 13 statutes contain any
indicia--such as statute-specific definitions, or any other criteria--
to suggest that these prohibitions on sex discrimination should be
construed differently than Title VII's sex discrimination prohibition.
Nor is the Department aware of reported case law requiring such a
construction. Accordingly, this rule proposes to interpret the
prohibition on sex discrimination by applying Bostock's reasoning that
sex discrimination includes discrimination on the basis of sexual
orientation and gender identity with respect to programs, activities,
projects, assistance, and services that receive Federal financial
assistance under these statutes which the Department administers \13\
and over which OCR maintains civil rights enforcement authority.\14\
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\13\ Authorized by the Omnibus Budget Reconciliation Act of 1981
(OBRA), Public Law 97-35.
\14\ See 47 FR 4348-02 (January 29, 1982) (delegating to the OCR
Director ``civil rights enforcement authority contained in the
Health and Human Services Block Grants prescribed by the Omnibus
Budget Reconciliation Act of 1981.'').
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As described further below, the 13 listed statutes contain minor
variations in the language used to prohibit sex discrimination,
sometimes within the same statute, but the Department does not believe
any of the variations can be reasonably understood to distinguish the
various statutes from Bostock's reasoning.
Nine of the statutes listed in proposed Sec. 75.300(e) prohibit
discrimination ``on the basis of'' sex, using language identical to the
sex discrimination prohibition in Title IX.\15\ For example, the Public
Health Service Act, prohibits the Secretary from providing certain
funding to nursing schools unless the school ``furnishes assurances . .
. that it will not discriminate on the basis of sex.'' \16\ Seven of
the statutes identified in proposed 75.300(e) prohibit discrimination
``on the ground of . . . sex.'' \17\ For example, the Preventive Health
and Health Services Block Grant provides that ``no person shall on the
ground of sex . . . be excluded from participation in, or be denied the
benefits of, or be subjected to discrimination under, any program or
activity funded in whole or in part with funds made available under
this part.'' \18\ One statute states that a grant or contract must
provide that the recipient of financial assistance will not
``discriminate . . . because of . . . sex,'' \19\ the same language
from Title VII that the Supreme Court analyzed in Bostock. Finally, two
of the statutes identified in proposed Sec. 75.300(e) require services
to be provided ``without regard to . . . sex.'' \20\ For the purposes
of this rulemaking, the Department does not believe that any of these
variations are legally significant, or that these statutes should be
interpreted in a way that diverges from the Court's interpretation of
Title VII's language ``because of . . . sex'' in Bostock.\21\
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\15\ 42 U.S.C. 290ff-1; 42 U.S.C. 290cc-33; 42 U.S.C. 295m; 42
U.S.C. 296g; 42 U.S.C. 300w-7; 42 U.S.C. 300x-57; 42 U.S.C. 708; 42
U.S.C. 9918; 42 U.S.C. 10406.
\16\ 42 U.S.C. 296g.
\17\ 42 U.S.C. 290cc-33(a)(2); 42 U.S.C. 300w-7; 42 U.S.C. 300x-
57(a)(2); 42 U.S.C. 708(a)(2); 42 U.S.C. 5151(a); 42 U.S.C. 8625; 42
U.S.C. 10406(c)(2)(B).
\18\ 42 U.S.C. 300w-7; see also OBRA, Public Law 97-35, 47 FR
4348-02.
\19\ 48 U.S.C. 9849(a).
\20\ 42 U.S.C. 295m; 8 U.S.C. 1522.
\21\ Five of the listed statutes contain separate provisions
prohibiting discrimination both ``on the basis of sex under Title
IX'' and ``on the grounds of sex.'' One statute contains separate
provisions prohibiting discrimination ``on the basis of sex'' and
requiring services to be provide ``without regard to . . . sex.'' 42
U.S.C. 295m. Another statute contains separate provisions
prohibiting discrimination ``because of . . . sex'' and ``on the
ground of sex.'' 42 U.S.C. 9849. Another statute contains a
provision with the heading ``Prohibition on discrimination on the
basis of sex, religion,'' which states, ``[n]o person shall on the
ground of sex or religion be excluded.'' 42 U.S.C. 10406(c)(2)(B).
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Based on this statutory construction, it is logical in this context
to apply Bostock's reasoning that sex discrimination includes
discrimination on the basis of sexual orientation and gender identity
to each of these independent nondiscrimination provisions. Many courts,
including the Supreme Court, have concluded that varied verbal
formulations in antidiscrimination statutes should be interpreted
consistently with one another.\22\ In Bostock itself, for example, the
Court used both ``on the basis of'' and ``because of'' throughout the
decision to describe the unlawful discrimination at issue.\23\
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\22\ See, e.g., Franklin v. Gwinnett Cnty. Pub. Sch., 503 U.S.
60, 75 (1992) (Title IX imposes ``the duty not to discriminate on
the basis of sex, and `when a supervisor sexually harasses a
subordinate because of the subordinate's sex, that supervisor
``discriminate[s]'' on the basis of sex' '') (quoting Meritor Sav.
Bank, FSB v. Vinson, 477 U.S. 57, 64 (1986)) (emphases added); Grimm
v. Gloucester Cnty. Sch. Bd., 972 F.3d 586, 616-17 (4th Cir. 2020)
(holding that Bostock's reasoning applies to Title IX, which
prohibits discrimination ``on the basis of sex,'' explaining that
``[a]lthough Bostock interprets Title VII . . . , it guides our
evaluation of claims under Title IX''); Gentry v. E. W. Partners
Club Mgmt. Co. Inc., 816 F.3d 228, 235-36 (4th Cir. 2016) (``The ADA
prohibits discrimination `on the basis of' disability. We see no
`meaningful textual difference' between this language and the terms
`because of,' `by reason of,' or `based on' ''); Lakoski v. James,
66 F.3d 751, 757 (5th Cir. 1995) (explaining that even though Title
IX uses the phrase ``on the basis of sex'' and Title VII uses the
phrase ``because of . . . sex,'' ``the prohibitions of
discrimination on the basis of sex of Title IX and Title VII are the
same'').
\23\ See, e.g., Bostock, 140 S. Ct. at 1738 (``on the basis of
sex.''); id. at 1741 (``because of sex'').
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Discriminating against individuals in any of the programs,
activities, projects, assistance, and services covered by the statutes
in Sec. 75.300(e) on the basis of sexual orientation or gender
identity necessarily involves discriminating against them on the basis
of sex. Section 75.300(e) makes this interpretation clear to the
public.
The Department seeks comments on whether there is anything about
any of the statutes referenced in proposed Sec. 75.300(e), such as
their language, legislative history, or purpose, that would provide a
legal basis for distinguishing them from Bostock's interpretation of
Title VII, that sex discrimination includes discrimination on the basis
of sexual orientation and gender identity.
3. Notification of Views Regarding Application of Federal Religious
Freedom Laws
The Department takes seriously its obligations to comply with
Federal religious freedom laws, including the First Amendment and RFRA,
and it will continue to comply with these legal obligations. The
Department is fully committed to respecting religious freedom laws and
to thoroughly considering any organization's assertion that the
provisions of this rule conflict with their rights under those
laws.\24\ In determining whether an action is ``prohibited by federal
statute'' under proposed Sec. 75.300(c), the Department will consider
RFRA in its analysis when applicable. This proposal is similar to the
process laid out in the Section 1557 NPRM under proposed Sec. 92.302,
87 FR 47885-47886, which is consistent with the Department's broader
commitment to abiding by the First Amendment and RFRA.
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\24\ No religious liberty claim was before the Court in Bostock.
The Court said the interaction of doctrines protecting religious
liberty with statutory nondiscrimination prohibitions were
``questions for future cases.'' 140 S. Ct. at 1754.
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In applying RFRA, exemptions from the nondiscrimination
requirements of this rule would depend on application of RFRA's test,
which provides that the government may substantially burden a person's
exercise of religion only if it demonstrates that application of the
burden to the person is in furtherance of a compelling governmental
interest and is the least restrictive means of
[[Page 44755]]
furthering that compelling governmental interest. 42 U.S.C. 2000bb-
1(b). The U.S. Supreme Court has recognized that a fact-sensitive,
case-by-case analysis of such burdens and interests is needed under
RFRA,\25\ and the Department applies RFRA accordingly.
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\25\ See, e.g., Gonzales v. O Centro Esp[iacute]rita Beneficente
Uni[atilde]o do Vegetal, 546 U.S. 418, 430-31 (2006) (when applying
RFRA, courts look ``beyond broadly formulated interests justifying
the general applicability of government mandates and scrutinized the
asserted harm of granting specific exemptions to particular
religious claimants''); cf. Ramirez v. Collier, 142 S. Ct. 1264,
1281 (2022) (holding that the Religious Land Use and
Institutionalized Persons Act, which applies RFRA's test for
religious exemptions in the prison context, ``requires that courts
take cases one at a time, considering only `the particular claimant
whose sincere exercise of religion is being substantially burdened'
'') (quoting Holt v. Hobbs, 574 U.S. 352, 363 (2015)).
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In proposed Sec. 75.300(f), the Department specifically addresses
the application of Federal religious freedom protections. This proposed
provision is new, as neither the 2016 nor 2021 Rules provided a
specific, optional means for recipients to notify the Department of
their views regarding the application of Federal religious freedom
laws.\26\ Proposed Sec. 75.300(f) provides that, at any time, a
recipient may raise with the Department, their belief that the
application of a specific provision or provisions of this regulation as
applied to the recipient would violate Federal religious freedom
protections. Such laws include, but are not limited to, the First
Amendment and RFRA. Upon receipt of a notification, the Department
first assesses whether there is a sufficient, concrete factual basis
for making a determination based on the request.
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\26\ While 45 CFR 75.102 allows for exceptions on a case-by-case
basis to part 75, which the Department had previously used to issue
the RFRA waivers to South Carolina, Michigan, and Texas, it is best
read to, and has been historically used to, address requests for
exceptions that pertain to financial and administrative management
of federal grants, such as deviations from normal allowable costs,
requirements applicable to for-profit subrecipients, costs requiring
prior approval, or computation of depreciation, rather than
providing exemptions from civil rights or anti-discrimination laws.
See, e.g., https://www.cfo.gov/assets/files/2CFR-FrequentlyAskedQuestions_2021050321.pdf (guidance from the Office of
Management and Budget indicating waivers under 45 CFR75.102 are
primarily fiscal in nature); https://www.hhs.gov/conscience/religious-freedom/state-letter-to-texas-withdrawing-exception-from-non-discrimination-requirements/ (rescission letter of
RFRA waiver).
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Proposed Sec. 75.300(f) provides that once the awarding agency,
working jointly with ASFR or OCR (in the course of investigating a
civil rights complaint or compliance review), receives a notification
from a recipient seeking a religious exemption, the awarding agency,
working jointly with either ASFR or OCR, would promptly consider the
recipient's views that they are entitled to an exemption in (1)
responding to any complaints or (2) otherwise determining whether to
proceed with any investigation or enforcement activity regarding that
recipient's compliance with the relevant provisions of this regulation,
in legal consultation with the Office of the General Counsel (OGC).\27\
A recipient may also on their own initiative, before a complaint is
filed or an investigation opened, seek an exemption based upon the
application of a religious freedom law, and the Department would assess
whether there is a sufficient, concrete factual basis prior to making
any determination. Any relevant ongoing investigation or enforcement
activity regarding the recipient would be held in abeyance until a
determination has been made. Considering recipients' specific
religious-based concerns in the context of an open case or a claim
raised in the first instance by a particular recipient (i.e., when the
Department first has cause to consider the recipient's compliance,
whether through a complaint filed against the recipient, or through the
recipient raising the exemption on their own initiative), would allow
the awarding agency, working with ASFR, or OCR, in legal consultation
with OGC, to make an informed, case-by-case decision and, where
required by law, protect a recipient's religious freedom rights and
minimize any harm an exemption could have on third parties. As the
Supreme Court noted in Gonzales v. O Centro Esp[iacute]rita Beneficente
Uni[atilde]o do Vegetal, ``[C]ourts should strike sensible balances,
pursuant to a compelling interest test that requires the Government to
address the particular practice at issue.'' 546 U.S. 418, 439 (2006)
(emphasis added). The Department believes that the process set forth
under proposed Sec. 75.300(f) properly strikes that balance.
Similarly, holding ongoing investigations and enforcement activity in
abeyance alleviates the burden of a recipient having to respond to an
investigation or enforcement action until a recipient's objection has
been considered.
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\27\ See 86 FR 67067 (Nov. 24, 2021) (the HHS Secretary
``delegate[s] responsibility to Department components to ensure full
compliance with RFRA and other constitutional requirements'' and
``Department components must consult with OGC on such matters and
provide appropriate consideration to RFRA- or Constitution-based
objections or requests, as well as take any actions that may be
appropriate.'').
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Further, proposed Sec. 75.300(f) makes clear the awarding
agency's, ASFR's, and OCR's discretion to determine at any time whether
a recipient is wholly or partially exempt from certain provisions of
this part under Federal religious liberty protections, whether: (1)
after a complaint is raised against the recipient or (2) raised by the
recipient before a complaint is filed (provided the Department has a
sufficient, concrete factual basis for determining whether the
recipient is entitled to an exemption). Proposed Sec. 75.300(f)
requires that, in determining whether a recipient is exempt from the
application of the specific provision or provisions raised in its
notification, ASFR or OCR, in consultation with OGC, must assess
whether there is a sufficient, concrete factual basis for making a
determination and apply the applicable legal standards of the religious
freedom statute at issue.
Proposed Sec. 75.300(f) also provides that, upon making a
determination regarding whether a particular recipient is exempt from--
or subject to a modified requirement under--a specific provision of
this part, the awarding agency, working with ASFR or OCR, will
communicate that determination to the recipient in writing. The written
notification will clearly set forth the scope, applicable issues,
duration, and all other relevant terms of any exemption.
Proposed Sec. 75.300(f) provides that if the awarding agency,
working with ASFR or OCR, in legal consultation with OGC, determines
that a recipient is entitled to an exemption or modification of the
application of certain provisions of this rule based on the application
of religious liberty protections, that determination does not otherwise
limit the application of any other Federal law to the recipient.
HHS maintains an important civil rights interest in the proper
application of Federal religious freedom protections. HHS is thus
committed to complying with RFRA and all other applicable legal
requirements. The Department believes that this proposed approach will
assist the Department in fulfilling that commitment by providing the
opportunity for recipients to raise concerns with the Department, such
that the Department can determine whether an exemption or modification
of the application of certain provisions is appropriate under the
corresponding Federal religious freedom law. As noted above, the
Department also maintains a strong interest in taking a case-by-case
approach to such determinations that will allow it to account for and
minimize any harm an exemption could
[[Page 44756]]
have on third parties \28\ and, in the context of RFRA, to consider
whether the application of any substantial burden imposed on a person's
exercise of religion is in furtherance of a compelling interest and is
the least restrictive means of advancing that compelling interest.\29\
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\28\ See Cutter v. Wilkinson, 544 U.S. 709, 720 (2005) (in
addressing religious accommodation requests, ``courts must take
adequate account of the burdens a requested accommodation may impose
on nonbeneficiaries'').
\29\ Cf. O Centro, 546 U.S. at 439 (``[C]ourts should strike
sensible balances, pursuant to a compelling interest test that
requires the Government to address the particular practice at
issue.'') (emphasis added).
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The Department seeks comment on this proposed approach, including
whether such a provision should include additional procedures, the
potential burdens of such a provision on recipients and potential third
parties, and additional factors that the Department should take into
account when considering the relationship between Federal statutory and
constitutional rights to religious freedom and this rule's other civil
rights protections. We also seek comment on what alternatives, if any,
the Department should consider.
Finally, proposed Sec. 75.300(g) provides that if any provision of
this part is held to be invalid or unenforceable by its terms, or as
applied to any person or circumstance, it shall be severable from this
part and not affect the remainder thereof or the application of the
provision to other persons not similarly situated or to other,
dissimilar circumstances.
II. Reasons for the Proposed Rulemaking
A. The 2016 Rule and the Scope of 5 U.S.C. 301
HHS proposes to amend the language in 45 CFR 75.300(c) and (d) of
the 2016 Rule in light of arguments raised concerning HHS's statutory
authority under the Housekeeping Statute, 5 U.S.C. 301, and the
financial management statutes cited in 2 CFR 200.103 and 45 CFR 75.103,
including the Chief Financial Officer's Act, 31 U.S.C. 503; the Budget
and Accounting Act, 31 U.S.C. 1101-1125; and the Single Audit Act, 31
U.S.C. 6101-6106. After considering those arguments, HHS is now of the
view that its reliance on the Housekeeping Statute to promulgate Sec.
75.300(c) and (d) of the 2016 Rule may have resulted in uncertainty
about Department programs. We are accordingly proposing revisions to
those paragraphs to explain more clearly to grantees and beneficiaries
where and how nondiscrimination protections apply.
The Department has statutory authority to issue regulations to
enforce certain government-wide statutory civil rights statutes, such
as Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d et seq.
(prohibiting discrimination on the basis of race, color, or national
origin in programs or activities receiving Federal financial
assistance); Title IX of the Education Amendments of 1972, 20 U.S.C.
1681 (prohibiting discrimination on the basis of sex in education
programs or activities receiving Federal financial assistance), Section
504 of the Rehabilitation Act of 1973, 29 U.S.C. 794 (prohibiting
discrimination on the basis of disability in programs and activities
conducted by, or receiving financial assistance from, Federal
agencies), and the Age Discrimination Act, 42 U.S.C. 6101 et seq.
(prohibiting discrimination on the basis of age in programs and
activities receiving Federal financial assistance). There are also
certain program-specific statutory nondiscrimination provisions that
provide the Department with the authority to issue enforcement
regulations. These include section 471(a)(18) of the Social Security
Act (SSA), 42 U.S.C. 671(a)(18) (prohibiting discrimination on the
basis of race, color, or national origin in Title IV-E adoption and
foster care programs) and section 508 of the SSA, 42 U.S.C. 708
(prohibiting discrimination on the basis of age, race, color, national
origin, disability, sex, or religion in Maternal and Child Health
Services Block Grant programs).\30\
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\30\ The Department is authorized to issue regulations for the
efficient administration of its functions in the Social Security Act
programs for which it is responsible. See SSA Sec. 1102(a), 42
U.S.C. 1302(a).
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Section 75.300(c) and (d) in the 2016 Rule, however, were
promulgated under authority granted by the Housekeeping Statute, 5
U.S.C. 301. The Housekeeping Statute provides in relevant part: ``The
head of an Executive department or military department may prescribe
regulations for the government of his department, the conduct of its
employees, the distribution and performance of its business, and the
custody, use, and preservation of its records, papers, and property.''
Section 75.300(c) and (d) were issued to provide uniformity in
Departmental non-discrimination requirements by ``codif[ying] for all
HHS service grants what is already applicable for all HHS service
contracts, as required by the HHS Acquisition Regulation (HHSAR)
352.237-74'' and which ``makes explicit HHS's non-discrimination policy
when obligating appropriations for solicitations, contracts and orders
that deliver service under HHS's programs directly to the public.'' 81
FR 45271.
The Supreme Court has explained that the Housekeeping Statute is
``a grant of authority to the agency to regulate its own affairs . . .
authorizing what the [Administrative Procedure Act] terms `rules of
agency organization, procedure or practice' as opposed to `substantive
rules.''' Chrysler Corp. v. Brown, 441 U.S. 281, 309-10 (1979). In
2019, a Federal district court vacated a different regulation the
Department had promulgated, in part, under the Housekeeping Statute.
see New York v. HHS, 414 F. Supp. 3d 475 (S.D.N.Y. 2019) (vacating
``Protecting Statutory Conscience Rights in Health Care; Delegations of
Authority,'' 84 FR 23170 (May 21, 2019) (codified at 45 CFR pt. 88)).
That regulation interpreted and implemented Federal statutory
provisions that ``recognize[d] the right of an individual or entity to
abstain from participation in medical procedures, programs, services,
or research activities on account of a religious or moral objection.''
Id. at 496. The court vacated the rule because it was substantive
rather than a housekeeping measure, noting that ``[a] rule that
announces new rights and imposes new duties--one that shapes the
primary conduct of regulated entities--is substantive.'' Id. at 522.
After considering the arguments raised in New York concerning the
Department's authority under 5 U.S.C. 301 and how they might apply
here, the Department has reconsidered Sec. 75.300(c) and (d) of the
2016 Rule. Pursuant to, and consistent with, its authority under 5
U.S.C. 301, the Department proposes to revise Sec. 75.300(c) to
recognize the public policy requirement that otherwise eligible persons
not be excluded from participation in, denied the benefits of, or
subjected to discrimination in the administration of programs,
activities, projects, assistance, and services where such actions are
prohibited by Federal statute. The Department considers the proposed
language for paragraph (c) appropriate because it affirms that HHS
grants programs will be administered consistent with the Federal
statutes that govern the programs, including the nondiscrimination
statutes that Congress has adopted and made applicable to the
Department's programs. The adoption of regulatory language that makes
compliance simpler and more predictable for Federal grant recipients is
generally consistent with
[[Page 44757]]
the concept of controlling regulatory costs and relieving regulatory
burdens.
The Department also proposes to revise Sec. 75.300(d) to state
that the Department will follow all applicable Supreme Court decisions
in the administration of the Department's award programs. Section
75.300(d) notes that HHS will comply with Supreme Court decisions
generally, rather than referencing specific Supreme Court cases. This
approach simplifies compliance for federal grant recipients.
The Department believes the proposed language of Sec. 75.300(c)
and (d) confirms that its programs must comply with all applicable laws
and Supreme Court decisions, and allows its programs to minimize
disputes and litigation, provide greater stability and certainty, and
to remove regulatory barriers. OMB's UAR at 2 CFR 200.300 does not
impose specific public policy requirements beyond federal statutory
requirements. The Department considers it appropriate for Sec.
75.300(c) to similarly focus on statutory requirements and for Sec.
75.300(d) to inform grant recipients that the Department complies with
applicable Supreme Court decisions in administering its grant programs.
The Department also proposes to add paragraph (e) to 45 CFR 75.300
to clarify the Department interprets preexisting prohibition against
discrimination on the basis of sex to include discrimination on the
basis of sexual orientation and gender identity. The Department
believes that absent contrary statutory text, legislative history, or
Supreme Court case law, the best way to understand statutory sex
discrimination prohibitions is to apply the Supreme Court's reasoning
in Bostock v. Clayton County, 140 S. Ct. 1731 (2020), which issued
after the 2021 rulemaking was already underway. Section 75.300(e)
provides regulatory clarity to the public and helps facilitate the
efficient and equitable administration of HHS grants.
The Department proposes to add paragraph (f) to 45 CFR 75.300 to
state that it will comply with all federal religious freedom laws,
including RFRA and the First Amendment. As explained above, the
Department is fully committed to respecting religious freedom laws when
applying this rule, including when an organization asserts that the
application of the provisions of this rule conflict with their rights
under those laws. Further, the Department proposes a workable exemption
process, described above, that will assist the Department in fulfilling
that commitment by providing the opportunity for recipients to raise
recipient-specific concerns with the Department; allowing the
Department to evaluate exemption requests on a case-by-case basis while
accounting for third party harms; and providing written notification to
provide a recipient certainty in its receipt of HHS grants.
Finally, as noted above, the Department proposes to add paragraph
(g) to 45 CFR 75.300 to evidence the Department's intent that, should
any of the provisions of this rule as finalized by invalidated, the
rest remain intact.
B. Effect on the Notice of Nonenforcement
While this rulemaking process is ongoing, the 2019 Notice of
Nonenforcement remains in effect.
III. Executive Order 12866 and Related Executive Orders on Regulatory
Review
A. Executive Order 12866 Determination
We have examined the impacts of the proposed rule under Executive
Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5
U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4). Executive Orders 12866 and 13563 direct us to assess all costs
and benefits of available regulatory alternatives and, when regulation
is necessary, to select regulatory approaches that maximize net
benefits (including potential economic, environmental, public health
and safety, and other advantages; distributive impacts; and equity).
The proposed rule states that grant recipients may not discriminate to
the extent prohibited by federal statutory nondiscrimination
provisions, would provide that HHS complies with applicable Supreme
Court decisions in administering its grant programs, and codifies in
regulation Supreme Court precedent related to sex discrimination. We
believe that this proposed rule is unlikely to result in economic
impacts that exceed the threshold for significant effects as defined in
section 3(1)(f) of Executive Order 12866, as amended by Executive Order
14094, because it does not impose new requirements but rather adds
clarity for regulated entities.
The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires
the Department to prepare a written statement, which includes an
assessment of anticipated costs and benefits, before proposing ``any
rule that includes any Federal mandate that may result in the
expenditure by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100,000,000 or more (adjusted annually
for inflation) in any one year.'' The current threshold after
adjustment for inflation is $177 million, using the most current (2022)
Implicit Price Deflator for the Gross Domestic Product. This proposed
rule would not result in an expenditure in any year that meets or
exceeds this amount.
1. Alternatives Considered
The Department carefully considered several alternatives, but
rejected them for the reasons explained below. The first alternative
considered was to make no changes to the 2016 Rule. The Department
concluded that this alternative would potentially lead to legal
challenges, in part over the scope of the Department's authority under
5 U.S.C. 301, as discussed above. The second alternative considered was
to maintain the text of the 2016 Rule, but also promulgate a regulatory
exemption for faith-based organizations as provided under proposed
75.300(f). This alternative could address the religious exemption
issues raised by the 2016 Rule's application to certain faith-based
organizations that participate in, or seek to participate in,
Department-funded programs or activities. However, the provisions of
the 2016 Rule would be subject to the same legal challenges under 5
U.S.C. 301. The third alternative considered was to enumerate
applicable nondiscrimination provisions and the programs and
recipients/subrecipients to which the nondiscrimination provisions
would apply, as set forth in 75.300(e) without including a religious
exemption process. However, Federal religious freedom laws, such as the
First Amendment and RFRA, generally apply to these nondiscrimination
provisions, and providing a process by which such claims can be raised
by recipients on a case-by-case basis helps ensure that the Department
complies with its obligations under all these authorities.
2. Benefits
The benefits of the proposed rule help ensure that HHS grants
programs will be administered fairly and consistently with Supreme
Court precedent, Federal statutes that govern the programs covered in
this rule, including the nondiscrimination statutes that Congress has
adopted and made applicable to the Department's programs, and the U.S.
Constitution. Proposed 45 CFR 75.300(c) makes compliance simpler and
more predictable for federal grant recipients. Likewise, proposed 45
CFR 75.300(d) notes that HHS will comply with Supreme Court decisions,
which also simplifies compliance for federal grant recipients. Proposed
45 CFR 75.300(e)
[[Page 44758]]
clarifies the Department's interpretation of prohibition of
discrimination on the basis of sex includes discrimination on the basis
of sexual orientation and gender identity, consistent with Bostock v.
Clayton County, 140 S. Ct. 1731 (2020), which provides additional
regulatory clarity to the public and helps facilitate the efficient and
equitable administration of HHS grants. This also provides the benefit
of ensuring that individuals are not discriminated against on the basis
of sexual orientation or gender identity, which while difficult to
quantify, is of considerable value. Finally, proposed 45 CFR 75.300(f)
states that the Department will comply with all federal religious
freedom laws, including RFRA and the First Amendment, which will assist
the Department in fulfilling that commitment by providing the
opportunity for recipients to raise concerns with the Department and
for those concerns to be evaluated on a case-by-case basis. These
benefits for the fair and nondiscriminatory enforcement of the programs
covered by this rule are not quantified.
3. Costs
Consistent with the 2021 Rule, OCR identifies potential costs
associated with grantees becoming familiar with this proposed rule, and
follows the analytic approach contained in its analysis. The Department
issues many grants on an annual basis, and many recipients receive
multiple grants. Based on information in the Department's Tracking
Accountability in Government Grant Spending (TAGGS) system, the
Department estimates that it has a total of 12,202 grantees.\31\
Depending on the grantee, the task of familiarization could potentially
fall to the following occupation categories: (1) lawyers, with a $65.26
median hourly wage; (2) general and operations managers, with a $47.16
median hourly wage; (3) medical and health services managers, with a
$50.40 median hourly wage; (4) compliance officers, with a $34.47
median hourly wage; or (5) social and community service manager, with a
$35.69 median hourly wage.\32\ Across all grantees, we adopt a pre-tax
hourly wage that is the average across the median hourly wage rates for
these 5 categories, or $46.60 per hour. To compute the value of time
for on the-job-activities, we adopt a fully loaded wage rate that
accounts for wages, benefits, and other indirect costs of labor that is
equal to 200% of the pre-tax wage rate, or $93.19 per hour. The
Department anticipates that professional organizations, trade
associations and other interested groups may prepare summaries of the
proposed rule, if it is finalized. Accordingly, the Department
estimates that it would take a typical grantee approximately one hour
to become familiar with the proposed requirements. Thus, we expect that
the average cost for each grantee would be $93.19. Across all 12,202
grantees, the cost of grantee familiarization would be approximately
$1.1 million.
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\31\ 86 FR 2257 at 2274.
\32\ U.S. Bureau of Labor Statistics. Occupational Employment
and Wage Statistics. May 2022 National Occupational Employment and
Wage Estimates. https://www.bls.gov/oes/current/oes_nat.htm.
Accessed on June 13, 2022.
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OCR considered additional potential sources of costs that would be
attributable to the proposed rule. Parts (c)-(e) of the rule codifies
for all covered grant what is already required by law. Some covered
entities may bear the transaction costs associated with notifying the
Department that they are seeking an exemption under proposed 45 CFR
75.300(f). However, there is no filing fee to seek an exemption with
OCR, ASFR, or the awarding agency and the costs would only be those a
covered entity chooses to expend.
Finally, to further quantity the costs associated with this
proposed rule, the Department has attempted to estimate whether the
number and composition of recipients changed in response to the prior
two rulemakings and how those costs will impact this proposed rule. The
2016 Rule has never been enforced since it was promulgated on December
12, 2016, 81 FR 89383. The Department also issued a Notice of
Nonenforcement in 2019, 84 FR 63831, that it would not enforce the 2016
Rule. And the 2021 Rule, 86 FR 2257, never went into effect. Because of
this, the Department does not have any data with regard to whether the
number and composition of recipients changed in response to prior
rulemakings, as there was no change in the enforcement of these rules
which would impact those grants.
However, the Department believes that its recipients generally fall
into one of the following three categories in how they have been
impacted by the prior two rulemakings.
The first category includes recipients that adopted the
nondiscrimination practices prior to the 2016 Rule, whether voluntarily
or as a result of state and/or local law. Their observance of
nondiscrimination requirements is not the result of the 2016 Rule and
thus, these recipients are not impacted by this proposed rule.
The second category includes recipients that had not adopted
nondiscrimination practices prior to the 2016 Rule, but that complied
since the 2016 Rule, including after the 2019 Notice of Nonenforcement
was issued, 84 FR 63831, and until now. However, because the 2016 Rule
did not contain any procedural enforcement mechanisms such as an
assurance of compliance or adoption of a grievance process, it is
difficult to quantity the costs, if any, incurred by this second
category of recipients. These recipients would likely continue to
follow such nondiscrimination practices voluntarily or because of new
or newly enforced state and/or local laws, given that they could have
declined to comply with the 2016 Rule requirements after the 2019
Notice of Nonenforcement issued, and yet have continued to comply with
those requirements notwithstanding that notice. Thus, these recipients
are similarly situated to the first category of recipients insofar as
they are not impacted by whether or not the 2016 Rule is in effect.
The third category includes recipients that had not followed, and
continue to not follow, the 2016 Rule. However, their practice was
likely not impacted by the 2016 Rule, as the rule was not enforced, and
the Department issued waivers under RFRA to South Carolina, Texas, and
Michigan in 2019 and 2020 exempting those recipients from the 2016
Rule. Further, the Department issued the 2019 Notice of Nonenforcement
which applied to all recipients covered by the 2016 Rule. Moreover,
these recipients could not have relied upon the 2021 Rule, since that
rule never went into effect. Since this proposed rule removes the 2016
Rule's requirements, and adds a religious exemption process, the
Department expects that these grantees will continue their current
practice 75.300(e) does not apply to the foster care programs at issue
in the South Carolina, Texas, and Michigan cases, though they may
additionally seek a religious exemption under 75.300(f) of the proposed
rule, which will not materially bear on additional costs.
Thus, the Department believes that apart from familiarization costs
and costs associated with filing a religious exemption request, there
will be little to no economic impact associated with Sec. 75.300(c)
through(f). The Department solicits comments and additional data on the
estimated costs of compliance.
3. Comparison of Costs and Benefits
In summary, the Department expects the benefits of regulatory
clarity will simplify compliance and ensure fair and nondiscriminatory
administration of covered programs under this rule. Costs associated
with implementing this administrative change include costs for
[[Page 44759]]
some covered entities who may seek an exemption. The Department
solicits comments regarding this assessment of impacts.
B. RFA--Initial Small Entity Analysis
The Department has examined the economic implications of this
proposed rule as required by the RFA (5 U.S.C. 601-612). The RFA
requires an agency to describe the impact of a proposed rulemaking on
small entities by providing an initial regulatory flexibility analysis
unless the agency expects that the proposed rule will not have a
significant impact on a substantial number of small entities, provides
a factual basis for this determination, and proposes to certify the
statement. 5 U.S.C. 603(a), 605(b). If an agency must provide an
initial regulatory flexibility analysis, this analysis must address the
consideration of regulatory options that would lessen the economic
effect of the rule on small entities. For purposes of the RFA, small
entities include small businesses, nonprofit organizations, and small
governmental jurisdictions. HHS generally considers a rule to have a
significant impact on a substantial number of small entities if it has
at least a three percent impact on revenue on at least five percent of
small entities.
As discussed, the proposed rule would:
Require grant recipients to comply with applicable Federal
statutory nondiscrimination provisions.
Provide that HHS complies with applicable Supreme Court
decisions in administering its grant programs.
Affected small entities include all small entities which may apply
for HHS grants; these small entities operate in a wide range of
sections involved in the delivery of health and human services. Grant
recipients are required to comply with applicable Federal statutory
nondiscrimination provisions by operation of such laws and pursuant to
45 CFR 75.300(a); HHS is required to comply with applicable Supreme
Court decisions. Thus, there would be no additional economic impact
associated with proposed sections 75.300(c)-(e). The Department
anticipates that this rulemaking, if finalized, would primarily serve
to provide information to the public. The Department anticipates that
this information will allow affected entities to better deploy
resources in line with established requirements for HHS grant
recipients. As a result, HHS has determined, and the Secretary proposes
to certify, that this proposed rule, if finalized, will not have a
significant impact on the operations of a substantial number of small
entities. The Department seeks comment on this analysis of the impact
of the proposed rule on small entities, and the assumptions that
underlie this analysis.
C. Executive Order 13132: Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a rule that imposes substantial
direct requirement costs on State and local governments or has
Federalism implications. The Department has determined that this
proposed rule does not impose such costs or have any Federalism
implications.
D. E.O. 12250 on Leadership and Coordination of Nondiscrimination Laws
Pursuant to E.O. 12250, the Attorney General has the responsibility
to ``review . . . proposed rules . . . of the Executive agencies''
implementing nondiscrimination statutes such as Title IX ``in order to
identify those which are inadequate, unclear or unnecessarily
inconsistent.'' The Attorney General has delegated that function to the
Assistant Attorney General for the Civil Rights Division for purposes
of reviewing and approving proposed rules. 28 CFR 0.51. The Department
has coordinated with the Department of Justice to review and approve
this proposed rule prior to publication in the Federal Register.
E. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
ch. 3506; 5 CFR part 1320 appendix A.1), the Department has reviewed
this proposed rule and has determined that there are no new collections
of information contained therein.
IV. Request for Comment
The Department seeks comment on this proposed rule, including its
likely impacts as compared to the 2016 Rule. As noted above, the
Department also seeks comment on whether the Department administers
other statutes prohibiting sex discrimination that are not set forth in
proposed Sec. 75.300(e). Finally, the Department seeks comments from
the public on whether there is anything about any of the statutes
referenced in proposed Sec. 75.300(e), such as their language,
legislative history, or purpose, that would provide a legal basis for
distinguishing them from Bostock's reasoning for Title VII.
List of Subjects in 45 CFR Part 75
Accounting, Administrative practice and procedure, Cost principles,
Grant programs, Grant programs--health, Grants Administration,
Hospitals, Nonprofit Organizations reporting and recordkeeping
requirements, and State and local governments.
For the reasons stated in the preamble, the Department of Health
and Human Services proposes to amend 45 CFR part 75 as follows:
PART 75--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR HHS AWARDS
0
1. The authority citation for 45 CFR part 75 continues to read as
follows:
Authority: 5 U.S.C. 301, 2 CFR part 200.
0
2. Amend Sec. 75.300 by revising paragraphs (c) and (d), and adding
paragraphs (e), (f), and (g) to read as follows:
Sec. 75.300 Statutory and national policy requirements.
* * * * *
(c) It is a public policy requirement of HHS that no person
otherwise eligible will be excluded from participation in, denied the
benefits of, or subjected to discrimination in the administration of
HHS programs, activities, projects, assistance, and services, to the
extent doing so is prohibited by federal statute.
(d) HHS will follow all applicable Supreme Court decisions in
administering its award programs.
(e) In statutes that HHS administers which prohibit discrimination
on the basis of sex, the Department interprets those provisions to
include a prohibition against discrimination on the basis of sexual
orientation and gender identity, consistent with the Supreme Court's
decision in Bostock v. Clayton County, 140 S. Ct. 1731 (2020), and
other federal court precedent applying Bostock's reasoning that sex
discrimination includes discrimination based on sexual orientation and
gender identity. Paragraph (e) applies to the following HHS authorities
that prohibit discrimination on the basis of sex: 8 U.S.C. 1522,
Authorization for programs for domestic resettlement of and assistance
to refugees; 42 U.S.C. 290cc-33, Projects for Assistance in Transition
from Homelessness; 42 U.S.C. 290ff-1, Children with Serious Emotional
Disturbances; 42 U.S.C. 295m, Title VII Health Workforce Programs; 42
U.S.C. 296g. Nursing Workforce Development; 42 U.S.C. 300w-7,
Preventive Health Services Block Grant; 42 U.S.C. 300x-57, Substance
Abuse Treatment and Prevention Block Grant; Community Mental Health
Services Block Grant; 42 U.S.C. 708, Maternal and Child Health Block
Grant; 42 U.S.C. 5151, Disaster relief; 42 U.S.C. 8625, Low Income
[[Page 44760]]
Home Energy Assistance Program; 42 U.S.C. 9849, Head Start; 42 U.S.C.
9918, Community Services Block Grant Program; and 42 U.S.C. 10406,
Family Violence Prevention and Services.
(f)(1) At any time, a recipient may notify the HHS awarding agency,
the Office of the Assistant Secretary for Financial Resources (ASFR),
or the Office for Civil Rights (OCR) of the recipient's view that it is
exempt from, or requires modified application of, certain provisions of
this part due to the application of a federal religious freedom law,
including the Religious Freedom Restoration Act (RFRA) and the First
Amendment.
(2) Once the awarding agency, working jointly with ASFR or OCR,
receives such notification from a particular recipient, they shall
promptly consider those views in responding to any complaints,
determining whether to proceed with any investigation or enforcement
activity regarding that recipient's compliance with the relevant
provisions of this part, or in responding to a claim raised by the
recipient in the first instance, in legal consultation with the HHS
Office of the General Counsel (OGC). Any relevant ongoing compliance
activity regarding the recipient shall be held in abeyance until a
determination has been made on whether the recipient is exempt from the
application of certain provisions of this part, or whether modified
application of the provision is required as applied to specific
contexts, procedures, or services, based on a federal religious freedom
law.
(3) The awarding agency, working jointly with ASFR or OCR, will, in
legal consultation with OGC, assess whether there is a sufficient,
concrete factual basis for making a determination and will apply the
applicable legal standards of the relevant law, and will communicate
their determination to the recipient in writing. The written
notification will clearly set forth the scope, applicable issues,
duration, and all other relevant terms of the exemption request.
(4) If the awarding agency, working jointly with ASFR or OCR, and
in legal consultation with OGC, determines that a recipient is exempt
from the application of certain provisions of this part or that
modified application of certain provisions is required as applied to
specific contexts, procedures, or services, that determination does not
otherwise limit the application of any other provision of this part to
the recipient or to other contexts, procedures, or services.
(g) Any provision of this part held to be invalid or unenforceable
by its terms, or as applied to any person or circumstance, shall be
severable from this part and shall not affect the remainder thereof or
the application of the provision to other persons not similarly
situated or to other, dissimilar circumstances.
Dated: July 6, 2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-14600 Filed 7-11-23; 11:15 am]
BILLING CODE 4153-01-P