Partnerships With Faith-Based and Neighborhood Organizations, 15671-15723 [2024-03869]

Download as PDF Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations ACTION: 2 CFR Part 3474 SUMMARY: This final rule amends the regulations of the agencies listed above (the ‘‘Agencies’’) to clarify protections for beneficiaries and prospective beneficiaries of federally funded social services and the rights and obligations of organizations providing such services. In accordance with the Executive order of February 14, 2021, Establishment of the White House Office of Faith-Based and Neighborhood Partnerships, this clarification should promote maximum participation by beneficiaries and providers in the Agencies’ covered programs and activities and ensure consistency in the implementation of those programs and activities. 34 CFR Parts 75 and 76 RIN 1840–AD467 DEPARTMENT OF HOMELAND SECURITY 6 CFR Part 19 RIN 1601–AB02 DEPARTMENT OF AGRICULTURE 7 CFR Part 16 RIN 0503–AA73 AGENCY FOR INTERNATIONAL DEVELOPMENT DATES: 22 CFR Part 205 RIN 0412–AB10 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Part 5 RIN 2501–AD91 DEPARTMENT OF JUSTICE 28 CFR Part 38 [A.G. Order No. 5874–2024] RIN 1105–AB64 DEPARTMENT OF LABOR 29 CFR Part 2 RIN 1290–AA45 DEPARTMENT OF VETERANS AFFAIRS 38 CFR Parts 50, 61, and 62 RIN 2900–AR23 DEPARTMENT OF HEALTH AND HUMAN SERVICES 45 CFR Part 87 RIN 0991–AC13 Partnerships With Faith-Based and Neighborhood Organizations Department of Education, Department of Homeland Security, Department of Agriculture, Agency for International Development, Department of Housing and Urban Development, Department of Justice, Department of Labor, Department of Veterans Affairs, Department of Health and Human Services. AGENCY: khammond on DSKJM1Z7X2PROD with RULES3 Final rule. DEPARTMENT OF EDUCATION VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 Effective date: This rule is effective on April 3, 2024. Compliance date: Recipients of Federal financial assistance required by these regulations to provide written notice to beneficiaries must do so by July 2, 2024. FOR FURTHER INFORMATION CONTACT: For information regarding each Agency’s implementation of this final rule, the contact information for that Agency follows. If you use a telecommunications device for the deaf (‘‘TDD’’) or a text telephone (‘‘TTY’’), call the Telecommunications Relay Service at 7–1–1. Department of Justice: Michael L. Alston, Director, Office for Civil Rights, Office of Justice Programs, 202–307– 0690, askOCR@ojp.usdoj.gov. Department of Agriculture: Samantha Joseph, Director, Center for Faith-Based and Neighborhood Partnerships, center@usda.gov. Department of Labor: Elena S. Goldstein, Deputy Solicitor of Labor, Office of the Solicitor of Labor, 202– 878–9471, goldstein.elena@dol.gov. Department of Health and Human Services: Que English, Director, Center for Faith-Based and Neighborhood Partnerships, 202–260–6501, partnerships@hhs.gov. Department of Housing and Urban Development: BJ Douglass, Director of the Center for Faith-Based and Neighborhood Partnerships, Office of the Secretary, 451 7th Street SW, Washington, DC 20410, 202–708–2404. Department of Education: Maggie Siddiqi, Director, Center for Faith-Based and Neighborhood Partnerships, 202– 453–7443, EDpartners@ed.gov. Department of Veterans Affairs: Conrad Washington, Director, Center for Faith-Based and Neighborhood Partnerships, Office of Public and PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 15671 Intergovernmental Affairs, 202–461– 7865. Department of Homeland Security: Peter Mina, Deputy Officer for Civil Rights and Civil Liberties, Office for Civil Rights and Civil Liberties, 202– 401–1474 (phone), 202–401–0470 (TTY). Agency for International Development: Amanda Vigneaud, Acting Director, Center for Faith-Based and Neighborhood Partnerships, 202– 297–8165, avigneaud@usaid.gov. SUPPLEMENTARY INFORMATION: This joint final rule amends regulations of all the Agencies in a single document. The Agencies decided to publish a joint final rule because most of the comments received by the Agencies in response to their proposed regulations addressed issues that were relevant to all of the Agencies’ proposals. This final rule addresses cross-cutting issues first, followed by separate Agency-specific discussions of issues particular to each of those Agencies. Following the preamble, each Agency makes final amendments to its regulations, in order to implement the requirements in Executive Order 14015, Establishment of the White House Office of FaithBased and Neighborhood Partnerships. The SUPPLEMENTARY INFORMATION is broken up into four major parts, organized as follows: I. Background A. Prior Rulemakings B. The Agencies’ Social Service Programs C. The Present Joint Rulemaking II. Cross-Cutting Public Comments A. Beneficiary Protections B. Prohibition on Using Direct Federal Financial Assistance for Explicitly Religious Activities C. Definition of ‘‘Indirect Federal Financial Assistance’’ D. Eligibility of Faith-Based Organizations and Availability of Accommodations E. Title VII F. Definition of ‘‘Federal Financial Assistance’’ G. Other Issues III. Agency-Specific Issues IV. General Regulatory Certifications I. Background A. Prior Rulemakings On December 12, 2002, President George W. Bush signed Executive Order 13279, Equal Protection of the Laws for Faith-Based and Community Organizations, 67 FR 77141. Executive Order 13279 set forth the principles and policymaking criteria to guide Federal agencies in formulating and implementing policies for the delivery of social services with implications for faith-based and other community organizations, to ensure equal protection of the laws for faith-based E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15672 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations and community organizations, and to expand opportunities for, and strengthen the capacity of, faith-based and other community organizations to meet social needs in communities across the United States. In addition, Executive Order 13279 directed specified agency heads to review and evaluate existing policies that had implications for faith-based and community organizations relating to their eligibility for Federal financial assistance for social service programs and, where appropriate, to implement new policies that were consistent with and necessary to further the fundamental principles and policymaking criteria articulated in the Executive order. Several of the Agencies proceeded to promulgate regulations to implement Executive Order 13279. For example: • In 2004, the Department of Veterans Affairs (‘‘VA’’) promulgated a final rule consistent with Executive Order 13279. See VA Homeless Providers Grant and Per Diem Program; Religious Organizations, 69 FR 31883 (June 8, 2004). • Also in 2004, the Department of Education (‘‘ED’’) promulgated regulations in conformance with Executive Order 13279. See Participation in Education Department Programs by Religious Organizations; Providing for Equal Treatment of All Education Program Participants, 69 FR 31708 (June 4, 2004). • In 2003 and 2004, the Department of Housing and Urban Development (‘‘HUD’’) promulgated three final rules consistent with Executive Order 13279. See Participation in HUD’s Native American Programs by Religious Organizations; Providing for Equal Treatment of All Program Participants, 69 FR 62164 (Oct. 22, 2004); Equal Participation of Faith-Based Organizations, 69 FR 41712 (July 9, 2004); and Participation in HUD Programs by Faith-Based Organizations; Providing for Equal Treatment of all HUD Program Participants, 68 FR 56396 (Sept. 30, 2003). • In 2004, the Department of Justice (‘‘DOJ’’), Department of Agriculture (‘‘USDA’’), Department of Labor (‘‘DOL’’), Department of Health and Human Services (‘‘HHS’’), and Agency for International Development (‘‘USAID’’) issued final rules implementing Executive Order 13279. See Participation in Justice Department Programs by Religious Organizations; Providing for Equal Treatment of All Justice Department Program Participants, 69 FR 2832 (Jan. 21, 2004); Equal Opportunity for Religious Organizations, 69 FR 41375 (July 9, VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 2004); Equal Treatment in Department of Labor Programs for Faith-Based and Community Organizations; Protection of Religious Liberty of Department of Labor Social Service Providers and Beneficiaries, 69 FR 41882 (July 12, 2004); Participation in Department of Health and Human Services Programs by Religious Organizations; Providing for Equal Treatment of All Department of Health and Human Services Program Participants, 69 FR 42586 (July 16, 2004); and Participation by Religious Organizations in USAID Programs, 69 FR 61716 (Oct. 20, 2004). • The Department of Homeland Security (‘‘DHS’’) issued a notice of proposed rulemaking (‘‘NPRM’’ or ‘‘proposed rule’’) related to Executive Order 13279 in 2008, see Nondiscrimination in Matters Pertaining to Faith-Based Organizations, 73 FR 2187 (Jan. 14, 2008); DHS did not, however, issue a final rule related to the participation of faith-based organizations in its programs prior to the 2016 rulemaking discussed in detail below. Shortly after taking office, President Barack Obama signed Executive Order 13498, Amendments to Executive Order 13199 and Establishment of the President’s Advisory Council for FaithBased and Neighborhood Partnerships, 74 FR 6533 (Feb. 5, 2009). Executive Order 13498 changed the name of the White House Office of Faith-Based and Community Initiatives to the White House Office of Faith-Based and Neighborhood Partnerships, and it created the President’s Advisory Council on Faith-Based and Neighborhood Partnerships, which subsequently submitted recommendations regarding the work of that White House office. On November 17, 2010, President Obama signed Executive Order 13559, Fundamental Principles and Policymaking Criteria for Partnerships With Faith-Based and Other Neighborhood Organizations, 75 FR 71319. Based on recommendations made by the Advisory Council, Executive Order 13559 made various changes to Executive Order 13279, including: • requiring agencies that administer or award Federal financial assistance for social service programs to ensure the implementation of additional protections for the beneficiaries and prospective beneficiaries of those programs, including (i) referrals to alternative providers when beneficiaries objected to the religious character of the organizations providing services, and (ii) written notice to beneficiaries of that referral requirement and other PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 protections before they enrolled in or received services from the program; • stating that decisions about awards of Federal financial assistance must be free from political interference or even the appearance of such interference, and must be made on the basis of merit, not on the basis of religious affiliation, or lack of affiliation, of recipient organizations; • stating that the Federal Government has an obligation to monitor and enforce all standards regarding the relationship between religion and Government in ways that avoid excessive entanglement between religious bodies and governmental entities; • providing further clarifications concerning certain requirements, including under Executive Order 13279, that organizations engaging in explicitly religious activities must (i) perform such activities and offer such services outside of programs that are supported with direct Federal financial assistance, (ii) separate those activities in time or location from programs or services supported with direct Federal financial assistance, and (iii) ensure that participation in any such activities is voluntary for the beneficiaries of social service programs supported with Federal financial assistance; • emphasizing again that religious providers should be eligible to compete for social service funding from the Federal Government and to participate fully in social service programs supported with Federal financial assistance, and that such organizations may do so while maintaining their religious identities; • requiring agencies that provide Federal financial assistance for social service programs to post online regulations, guidance documents, and policies that have implications for faithbased and other neighborhood organizations, and to post online a list of entities receiving such assistance; and • clarifying that the principles set forth apply to subawards as well as prime awards. An interagency working group was tasked with developing model regulatory changes to implement Executive Order 13279, as amended by Executive Order 13559, including provisions that clarified beneficiary protections and the prohibited uses of direct Federal financial assistance, allowed religious social service providers to maintain their religious identities, and distinguished between direct and indirect Federal financial assistance. These efforts eventually resulted in DHS promulgating regulations and the other Agencies promulgating E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations amendments to their regulations. In April 2016, following notice and comment, the Agencies published a joint final rule to ensure consistency between their regulations and Executive Order 13279, as amended by Executive Order 13559. See Federal Agency Final Regulations Implementing Executive Order 13559: Fundamental Principles and Policymaking Criteria for Partnerships With Faith-Based and Other Neighborhood Organizations, 81 FR 19355 (Apr. 4, 2016). These revised regulations—referred to hereinafter as the ‘‘2016 Rule’’—incorporated the principles from Executive Order 13559 detailed above. On May 3, 2018, President Donald J. Trump signed Executive Order 13831, Establishment of a White House Faith and Opportunity Initiative, 83 FR 20715, amending Executive Order 13279, as amended by Executive Order 13559, and other related Executive orders. Among other things, Executive Order 13831 changed references to the White House Office of Faith-Based and Neighborhood Partnerships, established in Executive Order 13498, to the White House Faith and Opportunity Initiative; specified ways that the initiative was to operate; directed departments and agencies with Centers for Faith-Based and Community Initiatives to change the names of those centers to Centers for Faith and Opportunity Initiatives; and directed departments and agencies without a Center for Faith and Opportunity Initiatives to designate a Liaison for Faith and Opportunity Initiatives. Executive Order 13831 also eliminated the requirements to refer beneficiaries to alternative providers upon request and to notify beneficiaries of the protections in Executive Order 13559 described above. Consistent with Executive Order 13831, in December 2020, the Agencies, following notice and comment, promulgated a final rule amending the 2016 Rule. See Equal Participation of Faith-Based Organizations in the Federal Agencies’ Programs and Activities, 85 FR 82037 (Dec. 17, 2020). That joint final rule—referred to hereinafter as the ‘‘2020 Rule’’—made various changes to the 2016 Rule, including: • eliminating a requirement that faith-based providers receiving direct Federal financial assistance provide notice to beneficiaries and prospective beneficiaries of certain protections, including protection from discrimination on the basis of religion; • eliminating requirements that, if a beneficiary objected to the religious character of a faith-based provider, the provider would undertake reasonable VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 efforts to identify and refer the beneficiary to an alternative provider, and that providers inform beneficiaries of this alternative provider requirement in the notice to them; • eliminating a requirement that beneficiaries of indirect Federal financial assistance (such as vouchers, certificates, or other Governmentfunded means that the beneficiaries might use to obtain services at providers of their choosing) must have at least one adequate secular option for the use of the indirect Federal financial assistance; • adding a provision allowing providers receiving indirect Federal financial assistance to require beneficiaries to attend ‘‘all activities that are fundamental to the program’’; • adding a definition of the term ‘‘religious exercise’’; • adding a requirement that notices or announcements of award opportunities and notices of awards or contracts include language regarding certain protections for faith-based organizations’ independence from Government and providers’ obligations not to use direct Federal financial assistance for any explicitly religious activities and not to discriminate against current or prospective program beneficiaries on the basis of religion; • adding a provision stating that, if an awarding agency program required an applicant to show nonprofit status and the applicant has a sincerely held religious belief that it cannot apply for a determination as an entity that it is tax-exempt under section 501(c)(3) of the Internal Revenue Code, the applicant could submit evidence sufficient to establish that it otherwise qualified as a nonprofit organization; • adding a provision stating that neither the awarding agency nor any State or local government or other passthrough entity receiving funds under any Federal awarding agency program or service shall construe the Agencies’ regulations ‘‘in such a way as to advantage or disadvantage faith-based organizations affiliated with historic or well-established religions or sects in comparison with other religions or sects’’; and • adding language to preexisting requirements regarding the Government’s obligation to accommodate religion and regarding the religious-employer exemption from the Federal prohibition on employment discrimination on the basis of religion. B. The Agencies’ Social Service Programs The Agencies achieve their missions in part through the administration of Federal financial assistance. Funds are PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 15673 distributed via a wide range of social service programs, including the following: • Workforce Innovation and Opportunity Act (‘‘WIOA’’) Adult and Dislocated Worker Programs: DOL’s Employment and Training Administration provides job search assistance and training to adult and dislocated workers through State formula grants authorized under WIOA, Public Law 113–128, 128 Stat. 1425. This funding area includes individualized training accounts through which program participants can choose from a statewide list of providers to access training. • Homeless Veterans Reintegration Program: This grant program, administered by DOL’s Veterans’ Employment and Training Service, provides services that assist in reintegrating homeless veterans into meaningful employment within the labor force and supports the development of delivery systems that address the complex problems facing homeless veterans. • Healthy Marriage and Responsible Fatherhood Programs: HHS’s Office of Family Assistance competitively awards Healthy Marriage and Responsible Fatherhood grants to States, local governments, Tribal entities, and community-based organizations (both for profit and not-for-profit, including faith-based) that help participants build and sustain healthy relationships and marriages and strengthen positive father-child interaction. • Nita M. Lowey 21st Century Community Learning Centers: This program, administered by ED’s Office of Elementary and Secondary Education, supports the creation of community learning centers that provide academic enrichment opportunities during nonschool hours for children, particularly students who attend high-poverty and low-performing schools. The program helps children meet State and local student standards in core academic subjects, such as reading and math; offers students a broad array of enrichment activities that can complement their regular academic programs; and provides literacy and other educational services to the families of participating children. • Gaining Early Awareness and Readiness for Undergraduate Programs (‘‘GEAR UP’’): Under the GEAR UP program, ED’s Office of Postsecondary Education awards discretionary grants to States and partnerships of local educational agencies and institutions of higher education, which may also include community organizations or entities as additional partners, to E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15674 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations provide services at high-poverty middle and high schools to increase the number of low-income students who are prepared to enter and succeed in postsecondary education. • Citizenship and Integration Grant Program: Administered by DHS’s U.S. Citizenship and Immigration Services (‘‘USCIS’’), the Citizenship and Integration Grant Program has helped more than 300,000 lawful permanent residents (‘‘LPRs’’) prepare for U.S. citizenship. See USCIS, Fiscal Year 2023 Citizenship & Integration Grant Program (Sept. 28, 2023), https:// www.uscis.gov/citizenship-resourcecenter/civic-integration/fiscal-year2023-citizenship-and-integration-grantprogram. The program assists nonprofit organizations in providing citizenship instruction and application assistance to LPRs. • VA Homeless Providers Grant and Per Diem Program: VA’s Homeless Programs Office administers this program, which awards grants to community organizations providing services to veterans experiencing homelessness to ensure the availability of supportive housing and services, with the goal of helping homeless veterans achieve residential stability. • Supportive Services for Veteran Families: This program, also administered by VA’s Homeless Programs Office, awards grants to selected private nonprofit organizations and consumer cooperatives to assist very low-income veteran families residing in or transitioning to permanent housing. Grantees provide a range of supportive services to eligible veteran families that are designed to promote housing stability. Under these and other federally funded social service programs, Federal funds are not distributed directly to beneficiaries, but rather are distributed to recipients—for example, State and local governments, school districts, nonprofit organizations, institutions of higher education, and other entities— that use the Federal funds to provide services to the programs’ intended beneficiaries. This final rule generally refers to these recipients as ‘‘providers’’ or ‘‘grantees,’’ and to those whom they serve, either directly or through subrecipients, as ‘‘beneficiaries.’’ In administering federally funded social service programs, providers must comply both with applicable Federal law and with the terms and conditions under which they receive Federal funding from the Agencies. For example, applicants for Federal funds through the Office of Justice Programs at DOJ must certify that in administering any Federal award they will comply VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 with all relevant Federal civil rights and nondiscrimination laws. C. The Present Joint Rulemaking On February 14, 2021, President Joseph R. Biden, Jr., signed Executive Order 14015, Establishment of the White House Office of Faith-Based and Neighborhood Partnerships, 86 FR 10007. Executive Order 14015 sought to ‘‘organiz[e] more effective efforts to serve people in need across the country and around the world, in partnership with civil society, including faith-based and secular organizations.’’ Id. at 10007. The Executive order further emphasized the importance of strengthening the ability of such organizations to deliver services in partnership with Federal, State, and local governments and with other private organizations, while adhering to all governing law. Id. Executive Order 14015 also revoked Executive Order 13831, see id. at 10008, which had prompted the 2020 Rule. On January 13, 2023—following the issuance of Executive Order 14015 and the revocation of Executive Order 13831—the Agencies issued a joint NPRM proposing regulatory amendments to the 2020 Rule. Partnerships With Faith-Based and Neighborhood Organizations; Notice of Proposed Rulemaking, 88 FR 2395 (‘‘Joint NPRM’’). As the Joint NPRM explained, ‘‘it is central to the Agencies’ missions that federally funded services and programs . . . reach the widest possible eligible population, including historically marginalized communities.’’ Id. at 2398. Thus, with their proposed rulemaking, the Agencies sought to ‘‘ensure full access to and comprehensive delivery of federally funded social services, in keeping with governing law and with the policies articulated in Executive Order 14015.’’ Id. at 2397. The Agencies also sought to advance the policies set out in Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, 86 FR 7009 (Jan. 20, 2021), and Executive Order 14058, Transforming Federal Customer Experience and Service Delivery To Rebuild Trust in Government, 86 FR 71357 (Dec. 13, 2021). 88 FR 2397. In addition, the Agencies sought to ‘‘address and correct inconsistencies and confusion raised by the 2020 Rule.’’ Id. at 2398. Accordingly, the Agencies proposed the following changes in the Joint NPRM: 1 1 As the Agencies explained in the Joint NPRM, USAID’s proposed regulations differed somewhat from those of the other Agencies because ‘‘unique PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 • All Agencies that previously required organizations providing social services under Agencies’ direct Federal financial assistance programs to give written notice to beneficiaries and prospective beneficiaries of certain nondiscrimination protections proposed to reinstate that requirement, and to further apply this notice requirement to all such recipients, whether they are faith-based or secular. See id. at 2398– 99. • All Agencies except USAID proposed a modified version of the 2016 Rule’s referral procedure to encourage Agencies, or State agencies and other entities that might be administering a federally funded social service program, to provide notice, when appropriate and feasible, to beneficiaries and prospective beneficiaries regarding how to obtain information about other available federally funded service providers. See id. at 2399. • All Agencies except USAID proposed changes to their definitions of ‘‘indirect Federal financial assistance’’ to clarify that the potential availability to beneficiaries of a practical option to use indirect aid for services that do not involve explicitly religious activities is a significant factor in determining whether a program affords beneficiaries of indirect aid a ‘‘genuine and independent private choice.’’ See Zelman v. Simmons-Harris, 536 U.S. 639, 652 (2002); 88 FR 2401. These revised definitions more closely track the distinction between direct and indirect aid that the Supreme Court has drawn in a series of cases culminating in Zelman. See 536 U.S. at 655–56. • The Agencies proposed changes to their regulations to state more directly that they will not, in their selection of service providers, discriminate on the basis of an organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization such as one that has the same capacity to effectively provide services. See 88 FR 2402. • The Agencies proposed changes to their regulations to make clear that they will continue to consider organizations’ requests for accommodations, on a caseby-case basis, in accordance with the U.S. Constitution and Federal statutes, and will not disqualify any organization from participating in a program simply because that organization has indicated it may request an accommodation. Id. characteristics of USAID-funded programs implemented abroad in foreign countries’’ made certain policies adopted by other Agencies ‘‘unworkable and impractical’’ for USAID. See 88 FR 2398 n.3. E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations • With respect to religious organizations’ limited exemption from the Federal prohibition on employment discrimination on the basis of religion, set forth in section 702(a) of the Civil Rights Act of 1964 (‘‘Title VII’’), 42 U.S.C. 2000e–1(a), the Agencies proposed to remove regulatory language added by the 2020 Rule that could mistakenly suggest that Title VII permits religious organizations that qualify for the Title VII religious-employer exemption to insist upon tenets-based employment conditions that would otherwise violate Title VII or the particular underlying funding statute in question. See 88 FR 2402–03. The Agencies also sought public comment on whether their regulations should adopt any definition of ‘‘Federal financial assistance’’ other than that in Executive Order 13279. The Agencies received numerous public comments in response to the Joint NPRM. Following consideration of those comments, the Agencies have reached the following decisions regarding the proposed changes listed above: • All Agencies except USAID 2 adopt the proposed requirement that organizations, whether faith-based or secular, providing social services under Agencies’ direct Federal financial assistance programs give written notice to beneficiaries and prospective beneficiaries of their rights. Æ Some Agencies’ final rules also require that beneficiaries and prospective beneficiaries of programs receiving indirect Federal financial assistance be provided with a written notice of certain nondiscrimination protections. Æ All Agencies administering domestic social service programs now include a model beneficiary notice as an appendix to their regulations. Æ All Agencies’ beneficiary notices, or the follow-on guidance they plan to issue to providers, will specify the office that beneficiaries and prospective beneficiaries may contact if they experience discrimination. • The Agencies that proposed language regarding the provision of notice to beneficiaries and prospective beneficiaries about how to obtain information on alternative providers adopt that language. • The Agencies that proposed changes to their definitions of ‘‘indirect Federal financial assistance’’ generally adopt their proposed language. Some Agencies make technical edits to the text of their final regulations to better align with the policy intent expressed in the Joint NPRM and to promote consistency among the Agencies’ definitions of the term. • The Agencies generally adopt their proposed language stating that they will not, in their selection of service providers, discriminate on the basis of an organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. Some Agencies make technical edits to their proposed language to promote consistency among the Agencies’ regulatory text and model provider notices. • The Agencies adopt their proposed language regarding organizations’ requests for accommodations. • As proposed, the Agencies remove from their regulations certain text on tenets-based employment conditions added in the 2020 Rule, thus restoring the longstanding text of those regulatory provisions. • The Agencies adopt the definition of ‘‘Federal financial assistance’’ set forth in Executive Order 13279. The changes listed above, as well as the Agencies’ responses to the other substantive, cross-cutting issues raised in public comments, are discussed in detail in Part II of this joint preamble. Unless otherwise noted in response to a particular comment, the responses in the joint preamble are adopted by all Agencies. Comments that raised issues specific to an Agency or that required an explanation of how a cross-cutting issue affects a particular Agency are addressed in the Agency-specific preambles in Part III of this preamble. The Agencies generally consider each of the provisions promulgated here to be severable. Were any element of any of these final regulations to be stayed or invalidated by a reviewing court, the Agencies’ intent is to otherwise preserve the rules promulgated herein to the fullest possible extent. Further, the Agencies believe that the elements that remained would generally be able to function sensibly and should remain in effect. II. Cross-Cutting Public Comments A. Beneficiary Protections 2 As explained above, USAID’s final regulations differ somewhat from those of the other Agencies because ‘‘unique characteristics of USAID-funded programs implemented abroad in foreign countries’’ make certain policies adopted by the other Agencies ‘‘unworkable and impractical’’ for USAID. See 88 FR 2398 n.3. VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 1. Definition of ‘‘Beneficiary’’ Comments: Commenters requested that the Agencies clarify who is covered by the regulations’ beneficiary protections. One commenter suggested PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 15675 that this could be done either by amending the definition of ‘‘beneficiary’’ to explain that it covers all actual and prospective program participants, or by expressly stating that the protections apply to ‘‘program participants’’ instead of beneficiaries. Response: Although the precise terminology varies, each Agency’s proposed regulations make clear that the beneficiary protections apply to both current and prospective beneficiaries. The Agencies believe that the use of ‘‘beneficiary’’ is sufficiently clear to encompass program participants and therefore decline to make any changes based on these comments. Changes: None. 2. Application of Beneficiary Protections to Direct and Indirect Aid Programs Comments: Commenters suggested that the Agencies explicitly state that all beneficiaries, whether participating in programs funded by direct or indirect Federal financial assistance, are protected from discrimination, with USDA’s provision serving as a model. Commenters also requested that the Agencies eliminate any language regarding indirect aid programs that appears to require participation in religious activities as part of such programs. Response: Both the 2016 Rule and the 2020 Rule contained provisions prohibiting providers from discriminating against a program beneficiary or prospective beneficiary ‘‘on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.’’ See 81 FR 19361; 85 FR 82082. As explained in the Joint NPRM, ‘‘[t]hose prohibitions against religious discrimination apply in direct and indirect aid programs alike, and they reflect one of the fundamental principles set forth in section 2(d) of Executive Order 13279, as amended by section 1(b) of Executive Order 13559.’’ 88 FR 2398 (footnote omitted). The Agencies are thus retaining those regulatory provisions. See 2 CFR 3474.15(f) (ED); 6 CFR 19.5 (DHS); 7 CFR 16.4(a) (USDA); 22 CFR 205.1(h) (USAID); 24 CFR 5.109(g) (HUD); 28 CFR 38.5(c) (DOJ); 29 CFR 2.33(a) (DOL); 34 CFR 75.52(e), 76.52(e) (ED); 38 CFR 50.2(d) (VA); 45 CFR 87.3(f) (HHS). With the exception of USAID, the Agencies proposed to remove language added by the 2020 Rule stating that indirect aid providers may require attendance at all activities that are fundamental to the program. 88 FR 2399. As the Joint NPRM explained, E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15676 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations ‘‘[t]his additional language, which was not added by USAID in the 2020 Rule, created a confusing tension with the first sentence of the same provision and with the language of the Executive order on which it is based.’’ Id. The Executive order provides that social service providers receiving Federal financial assistance ‘‘should not be allowed to discriminate against current or prospective program beneficiaries on the basis of . . . a refusal to attend or participate in a religious practice.’’ E.O. 13279, sec. 2(d), 67 FR 77142, as amended by E.O. 13559, sec. 1(b), 75 FR 71320. The Agencies continue to believe that the removal of this language allays unnecessary confusion and therefore are not changing course in the final rule. Changes: None. Comments: One comment, submitted on behalf of three organizations, endorsed the Agencies’ proposed rule text continuing to protect beneficiaries and prospective beneficiaries in federally funded programs from discrimination on the basis of religion or lack of religion. The comment, however, opposed additional text in that nondiscrimination provision that the comment described as enabling beneficiaries and prospective beneficiaries to select an indirectly funded program with explicitly religious content and then refuse to participate in those portions of the program. The comment maintained that this change lacks a reasoned basis for two reasons. First, the comment submitted, the Agencies’ regulations anticipate that indirectly funded programs may include religious content, which, the comment surmised, could constitute a very large part of the social services offered. Second, the comment indicated that a prospective beneficiary should be required to exercise any option to enroll in an adequate secular alternative program before enrolling in a religious one and objecting to its content. For these same reasons, the comment also recommended that the Agencies retain language added by the 2020 Rule stating that providers at which beneficiaries choose to expend indirect aid ‘‘may require attendance at all activities that are fundamental to the program.’’ See 88 FR 2399. Response: As explained in the Joint NPRM, the Agencies remain committed to ensuring that all beneficiaries and prospective beneficiaries have access to federally funded services and programs without unnecessary barriers and free from discrimination, in both directly and indirectly funded programs. See id. at 2398. The Agencies continue to believe that protecting beneficiaries and prospective beneficiaries from VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 discrimination on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice is consistent with this goal. The Agencies disagree with the comment’s view that prohibiting indirectly funded social service providers from discriminating on the basis of a refusal to attend or participate in a religious practice is inconsistent with allowing such providers to include explicitly religious content in their programs. Indeed, with the exception of USAID, which does not administer any indirect Federal financial assistance programs, the Agencies have retained regulatory text specifying that a provider receiving indirect Federal financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. See 2 CFR 3474.15(f) (ED); 6 CFR 19.5 (DHS); 7 CFR 16.4(a) (USDA); 24 CFR 5.109(g) (HUD); 28 CFR 38.5(c) (DOJ); 29 CFR 2.33(a) (DOL); 34 CFR 75.52(e), 76.52(e) (ED); 38 CFR 50.2(d) (VA); 45 CFR 87.3(d) (HHS). The comment also suggested that it would be impracticable for a beneficiary to object to participating in explicitly religious activities that are a very large part of the social service that is offered. As explained above, however, beneficiaries and prospective beneficiaries may decide whether to attend religious components. And in the Agencies’ experience, indirectly funded social service providers can vary considerably with respect to the proportion of their programming that may be explicitly religious. The Agencies decline to require that beneficiaries who object to participating in a program’s explicitly religious activities instead enroll in an alternative program that does not include religious content. As explained, beneficiaries who do not wish to engage in explicitly religious activities have the option not to participate in such activities. And as discussed in the Joint NPRM, if an Agency ‘‘determines that ‘genuine and independent private choice’ is absent for particular beneficiaries, including because providers that offer secular programs are as a practical matter unavailable,’’ the Agency would ‘‘need to take other appropriate steps to remedy the problem.’’ 88 FR 2400. Those steps may include ‘‘expanding the universe of reasonably available providers to include secular options’’ or ‘‘requiring existing providers to observe the same conditions that the rule attaches to direct aid.’’ Id. at 2400–01. ‘‘These remedies would ensure that beneficiaries are not effectively required PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 to participate in religious activities in order to receive the benefits of the federally funded program and that the Government is not responsible for the use of the aid to support explicitly religious activities.’’ Id. at 2401. For these reasons, the Agencies decline to adopt the comment’s recommendations. Changes: None. 3. Nondiscrimination in Outreach Activities Comments: One commenter expressed concern that the proposed nondiscrimination regulations of four of the Agencies (DOJ, HHS, HUD, and USAID) applied only to program services and not also to outreach related to those services. Those nondiscrimination rules, as proposed, would prohibit federally funded social service programs from discriminating against beneficiaries or prospective beneficiaries on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice when they provide federally funded services. The commenter requested that the four Agencies revise their rules so that they also prohibit providers from engaging in such discrimination when they conduct outreach activities related to their federally funded programs. Doing so, the commenter explained, would ensure consistency with the other five Agencies’ regulations, as well as with Executive Order 13279, as amended, which likewise prohibits discrimination in outreach activities. See E.O. 13279, sec. 2(d), 67 FR 77142, as amended by E.O. 13559, sec. 1(b), 75 FR 71320. Response: DOJ, HHS, HUD, and USAID agree with the commenter and adopt the recommended change in this final rule. As explained in the Joint NPRM, the Agencies’ regulations prohibiting religious discrimination are designed to implement Executive Order 13279, as amended. 88 FR 2398. Section 2(d) of that Executive order provides that organizations, both ‘‘in providing services supported in whole or in part with Federal financial assistance,’’ and ‘‘in their outreach activities related to such services,’’ should not be allowed to discriminate against program beneficiaries on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 75 FR 71320. Moreover, five of the Agencies already include similar language in their nondiscrimination provisions. Therefore, to promote consistency with Executive Order 13279 and with the other Agencies’ rules, DOJ, HHS, HUD, and USAID agree that their nondiscrimination regulations should E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations likewise apply not only to federally funded social services, but also to outreach activities related to those services. The Agencies have long expressed an intention to promote consistency with Executive Order 13279 and among their regulations. In 2016, for example, five of the Agencies (DOL, HHS, ED, VA, and DHS) amended their nondiscrimination provisions so that they applied to outreach activities. While the remaining four Agencies (DOJ, USDA, HUD, and USAID) did not include that phrase in their regulations, the joint preamble to the 2016 Rule stated that all of the Agencies’ nondiscrimination provisions were intended to ‘‘closely track’’ Executive Order 13279, as amended. 81 FR 19361. The Agencies likewise acknowledged in the 2020 Rule that Executive Order 13279 prohibits discrimination in outreach related to federally funded services, and concluded that the ‘‘final rule maintains the regulatory prohibition on such religious discrimination.’’ 85 FR 82044. In the 2020 Rule, USDA also amended its nondiscrimination provision to apply to outreach activities. Id. at 82134. In contrast, HHS removed the word ‘‘outreach’’ from its nondiscrimination regulation, see id. at 82146, explaining that this change was offered because, in HHS’s view, the text might otherwise be read to prohibit an organization from circulating information about its programs in contexts that have primarily religious audiences, such as a church newsletter. Ensuring Equal Treatment of Faith-Based Organizations, 85 FR 2974, 2980–81 (Jan. 17, 2020). These distinctions are resolved in this final rule, which ensures greater consistency with Executive Order 13279 and among the Agencies’ regulations by revising the beneficiary nondiscrimination provisions in DOJ, HHS, HUD, and USAID’s rules to apply to outreach activities. See 22 CFR 205.1(h) (USAID); 24 CFR 5.109(g) (HUD); 28 CFR 38.5(c) (DOJ); 45 CFR 87.3(f) (HHS). The Agencies do not believe that this change will cause federally funded social service providers to mistakenly read the nondiscrimination clauses as prohibiting them from providing information about their social service programs in contexts that have primarily religious audiences, such as a church newsletter. The Agencies are unaware of any instance in which a service provider or interested party has expressed that concern, and do not believe it follows from a plain reading of the provisions. Rather, the Agencies think it is clear that the VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 nondiscrimination protection prohibits outreach activities that favor or disfavor prospective beneficiaries on the basis of religion, such as when a federally funded social service provider limits its outreach or advertising of the program services to target or avoid populations based on religion. Additionally, USDA and VA have revised their nondiscrimination provisions to apply to outreach activities related to services supported in whole or in part with Federal financial assistance, irrespective of whether the outreach itself is paid for with Federal or private funds. This change, too, is consistent with Executive Order 13279, which does not limit the scope of its nondiscrimination protections to outreach that is federally funded, see E.O. 13279, sec. 2(d), 75 FR 71320, as well as with the regulations of the other Agencies. Changes: DOJ, HHS, HUD, and USAID amend 28 CFR 38.5(c), 45 CFR 87.3(f), 24 CFR 5.109(g), and 22 CFR 205.1(h), respectively, to add ‘‘outreach activities’’ to the beneficiary nondiscrimination provisions of their final regulations, consistent with the regulations previously adopted by USDA, DOL, ED, VA, and DHS. USDA and VA likewise remove language from their regulations that would preclude their nondiscrimination clauses from applying to outreach activities that are paid for with non-Federal funds. See 7 CFR 16.4(a) (USDA); 38 CFR 50.2(d) (VA). 4. Beneficiary Notice Requirements In this part of the joint preamble, the Agencies address comments related to the requirement that, under particular circumstances, recipients of Federal financial assistance must give written notice to beneficiaries and prospective beneficiaries of certain nondiscrimination protections. The Agencies recognize that recipients of Federal financial assistance may need additional time to implement any notice requirements to which they are subject under this rule. Accordingly, as indicated in the DATES section above, the Agencies have agreed to provide recipients with a period of 120 days in which to comply with the written beneficiary notice requirements, if applicable. The Agencies nonetheless encourage recipients to comply with those requirements as soon as possible. Comments: Several commenters urged the Agencies to require that beneficiaries be provided notice of how they might obtain information on alternative providers. The commenters expressed concern that the Joint NPRM’s approach—stating only that PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 15677 beneficiary notices ‘‘may’’ give beneficiaries the option to seek information on alternative providers— placed an undue burden on beneficiaries, who, the commenters said, are often not as well-positioned to find alternative providers as are the awarding Agencies or social service providers themselves. By contrast, other commenters worried that the Agencies’ proposed approach improperly imposed a burden on providers to locate alternatives. Some commenters likewise contended that the Joint NPRM’s proposed notice procedure would place a unique and unfair burden on faithbased organizations, in particular. Response: The Agencies recognize that it will sometimes be appropriate and beneficial to include information in a beneficiary notice about beneficiaries’ option to seek alternative providers. The Agencies believe, however, that the suitability and utility of including this information will vary across programs. For example, such information may be less helpful to beneficiaries where there is only one federally funded program in the region. In other cases, providing such information might impose an unreasonable burden on Agencies or their governmental partners. For instance, certain providers may offer social services on an emergency or oneoff basis outside of normal business hours and without a fixed location, making it difficult if not impossible for the Agencies to respond to a prospective beneficiary’s request for alternative provider information in a sufficiently timely fashion. Accordingly, the Agencies that state that beneficiary notices ‘‘may’’ include information about how to identify alternative providers will retain this language to allow these Agencies greater flexibility in determining when it would be appropriate to include such information in the notice. See 6 CFR 19.12(c) (DHS); 7 CFR 16.4(c)(2) (USDA); 24 CFR 5.109(g)(4) (HUD); 28 CFR 38.6(d) (DOJ); 38 CFR 50.3(c) (VA); 45 CFR 87.3(m) (HHS). ED will likewise retain its language from the Joint NPRM, which, although phrased slightly differently, also enables ED to make a case-by-case determination regarding the programs to which the alternative provider information requirement should apply, taking into account the specific facts and circumstances of a particular program. See 34 CFR 75.712(c), 76.712(c). The Agencies emphasize that in neither the Joint NPRM nor this final rule do they require any provider, faithbased or secular, to refer beneficiaries to or provide notice about any other organizations. Instead, the regulatory E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15678 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations text authorizes the Agencies to require that the beneficiary notice include contact information for a Federal office, or in some instances a State agency or other governmental entity that might be administering a federally funded social service program, should a beneficiary want additional information about other federally funded programs in their area. Thus, under this rule, only governmental entities, not nongovernmental providers, will be responsible for sharing information about alternative providers. The Agencies believe it is also important to highlight that whether a faith-based organization may participate in a federally funded program is not dependent on the availability of a secular entity providing the same or similar services nearby. Changes: None. Comments: Some commenters took issue with the regulations’ requirement that service providers receiving direct Federal financial assistance must notify beneficiaries and prospective beneficiaries that providers cannot discriminate against a beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. The commenters asserted that the requirement is unnecessary and singles out and reflects animus towards faith-based providers in violation of the First Amendment. One commenter further suggested that the President and the Agencies lack legal authority to impose the underlying nondiscrimination conditions themselves. Response: The Agencies decline to eliminate their regulations’ longstanding nondiscrimination requirements or their reinstatement of the beneficiary notice requirement. Contrary to the suggestions of some commenters, the Agencies’ regulations require that all direct aid recipients, whether religious or secular, must give beneficiaries and prospective beneficiaries information about their rights and protections. In accordance with section 2(d) of Executive Order 13279, 67 FR 77142, the Agencies’ regulations have long provided that an organization that participates in programs funded by Federal financial assistance may not, in providing such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. President Bush promulgated the Executive order’s nondiscrimination requirement in 2002 pursuant to, among other things, the VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 power vested in him by the Constitution as the head of the executive branch, just as many other Presidents have exercised supervisory authority over how Executive officers carry out their responsibilities. See id. at 77141. The nondiscrimination requirement, moreover, is appropriate to, among other things, help guarantee the equal protection of the laws, protect religious free exercise, and prevent an unconstitutional establishment of religion. See 88 FR 2398. Exercising their existing statutory authorities, it is entirely permissible for the Agencies to promulgate regulations implementing the Executive order and the fundamental legal principles on which it is based. See id. at 2395–98. That is why, as the Joint NPRM explained, both the 2016 and 2020 Rules included such nondiscrimination provisions, as had prior iterations of the Agencies’ regulations. Id. at 2398. The Agencies believe the provisions likewise can and should be retained in their regulations here, reflecting, as they do, fundamental principles embodied in a Presidential directive. See id. The Agencies also respectfully disagree that this rule’s notice procedure—requiring an organization providing social services under a program supported by direct Federal financial assistance to give written notice of these and other protections to beneficiaries and prospective beneficiaries, including in some cases the right to receive information about alternative providers—should or must be eliminated. As explained in the Joint NPRM, all beneficiaries and prospective beneficiaries should have access to federally funded social services without unnecessary barriers and in a manner that is free from discrimination. Id. The Agencies continue to believe that the rule’s notice procedure is critical to that goal because it helps ensure that beneficiaries are aware of their rights and protections, thereby removing certain barriers to their participation and facilitating access to federally funded services and programs. Id. at 2398–99. Indeed, in part for that reason, and as noted above, the rule applies the notice procedure to all direct aid recipients, whether secular or religious. See id. at 2399 (emphasizing that the requirement will be applied ‘‘to all . . . providers’’ receiving direct Federal financial assistance, ‘‘whether they are faith-based or secular’’). Nor have commenters pointed to anything else establishing that the Agencies’ effort to protect beneficiaries’ rights, or any other aspect of this rule, reflects an intent to discriminate against or hostility towards PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 religious providers. To the contrary, as the Agencies emphasized in the Joint NPRM, ‘‘it has long been Federal policy that faith-based organizations are eligible to participate in Agencies’ grantmaking programs on the same basis as any other organizations,’’ and the Agencies remain committed to preventing discrimination against faithbased organizations in the selection and regulation of service providers. Id. at 2401. Just as providers should be notified about their rights and protections, so should beneficiaries. Changes: None. Comments: Some commenters recommended that the Agencies require providers to give written notice to beneficiaries of programs receiving indirect Federal financial assistance. The commenters recognized that such indirect aid beneficiaries are not entitled to all of the protections identified in the direct-aid-beneficiary notice. For instance, the regulations’ requirement that providers separate explicitly religious activities from Government-funded programming applies only to programs supported with direct Federal financial assistance. But the commenters argued that there was no good reason why indirect aid beneficiaries should not receive notice of their particular set of protections. Response: The Agencies agree that the rationale for adopting the beneficiary notice requirement—improving beneficiaries’ access to federally funded services by informing them of their rights and protections, and thereby removing certain barriers arising from discrimination—applies equally to all beneficiaries, regardless of whether they are participating in programs receiving direct or indirect Federal financial assistance. The Agencies also note that, for most Agencies, their cost analysis in the proposed rule already calculated the annual cost of the notice requirement as if it applied to both direct and indirect aid programs, because data limitations made it impossible to differentiate direct recipients from indirect recipients in that context. Extending the beneficiary notice requirement to most indirect aid programs would, therefore, increase the expected benefits of the rule without increasing its expected costs, which the Agencies have already determined to be justified by the benefit of the notice requirement as proposed. As the Joint NPRM indicated, however, certain Agencies’ estimates did not reflect the cost of the notice requirement for subrecipients of Federal financial assistance. The Agencies also note that there may be significant administrative difficulties in providing written notice to all beneficiaries in E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations certain indirect aid programs. For example, as the Agencies explained in the 2016 Rule, ‘‘there are more than a quarter million stores, farmers’ markets, direct marketing farmers, homeless meal providers, treatment centers, group homes, and other participants across the nation that are authorized Supplemental Nutrition Assistance Program (‘SNAP’) retailers.’’ 81 FR 19363. If all providers receiving indirect aid were required to give written notice to beneficiaries, these retailers would always need to have notices ready to provide to any person using SNAP benefits. Id. The Agencies have therefore tailored the beneficiary notice requirement to the realities of certain indirect aid programs—for example, by requiring that the notice be provided by entities that administer the indirect Federal financial assistance, or by electing not to impose the beneficiary notice requirement in certain indirect aid programs where the administrative difficulties present insurmountable obstacles. These Agency-specific decisions are explained in the Agencies’ individual preambles below. The Agencies recognize that programs receiving indirect Federal financial assistance are not subject to the requirement to separate explicitly religious activities from Governmentfunded ones and that this difference must be reflected in the beneficiary notices given to indirect aid beneficiaries. As elaborated in the Agency-specific preambles below, the Agencies that have indirect aid programs address this difference by specifying in their respective model beneficiary notices which protections apply only to programs supported by direct Federal financial assistance. It is important to note, moreover, that the proposed regulations of the Agencies that reinstate the beneficiary notice requirement already specify that the directive to separate explicitly religious activities applies only to programs supported by direct Federal financial assistance. See 6 CFR 19.4(b) (DHS) (requiring that explicitly religious activities be ‘‘separate in time or location’’ from ‘‘activities supported by direct Federal financial assistance’’); 7 CFR 16.4(c)(1)(iii) (USDA) (same); 24 CFR 5.109(g)(2)(ii) (HUD) (same); 28 CFR 38.6(b)(3) (DOJ) (same); 29 CFR 2.34(a)(3) (DOL) (same); 34 CFR 75.712(a)(3), 76.712(a)(3) (ED) (same); 38 CFR 50.3(a)(3) (VA) (same); 45 CFR 87.3(k)(1)(iii) (HHS) (same). Changes: The Agencies that administer domestic social service programs now generally require that beneficiaries and prospective beneficiaries of such programs receiving VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 indirect Federal financial assistance be provided with a written beneficiary notice, subject to certain variations elaborated in the Agency-specific preambles below. The regulations affected are 6 CFR 19.12(a) (DHS), 7 CFR 16.4(c) (USDA), 24 CFR 5.109(g) (HUD), 28 CFR 38.6(b) (DOJ), 29 CFR 2.34(c) (DOL), 38 CFR 50.3(a) (VA), and 45 CFR 87.3(k) (HHS). Comments: One commenter expressed concern about the Joint NPRM’s statement that the Agencies might, ‘‘as appropriate, require providers to include [the beneficiary] notice as part of a broader and more general notice of nondiscrimination on additional grounds.’’ 88 FR 2399. The commenter was particularly troubled by the phrase ‘‘on additional grounds,’’ which the commenter said was vague and potentially burdensome to providers. The commenter seemed to believe that the Joint NPRM’s preamble text would enable the Agencies to require more than one notice be provided to beneficiaries—one specific notice regarding the protections under this rule, and another combined with notification of other protections. Response: In making these statements in the Joint NPRM preamble, the Agencies’ intent was to relieve potential burdens on providers, not to create them. The Agencies will allow providers to notify beneficiaries of the protections in this rule as part of a broader nondiscrimination notice, but the Agencies will not require providers to do so. This is clear on the face of many of the Agencies’ regulations. For clarity and consistency with the other Agencies, however, VA has amended its relevant regulation (38 CFR 50.3) to make it clear that providers may, but need not, combine materials for beneficiary notices. Changes: VA revises 38 CFR 50.3(a) to replace the phrase ‘‘including by incorporating the notice into materials that are otherwise provided to beneficiaries’’ with the phrase ‘‘in a manner and form prescribed by the VA program.’’ Comments: Several commenters suggested that the Agencies should, as they had previously, provide model notices to help providers comply with their obligation to notify beneficiaries and prospective beneficiaries of their rights. According to the commenters, model notices will help the Agencies ensure that beneficiaries do not encounter discrimination when accessing critical services. Response: The Agencies administering domestic social service programs agree that providing model beneficiary notices will further the PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 15679 Agencies’ goal of ensuring that beneficiaries are aware of their rights and protections, and thereby removing certain barriers to their participation and facilitating access to federally funded services and programs. Those Agencies have accordingly all added model beneficiary notices to their regulations in this final rule. Changes: DOJ, USDA, DOL, HHS, HUD, ED, VA, and DHS have all added an appendix C containing model language for written notice to beneficiaries and prospective beneficiaries. Those model notices are located at 6 CFR part 19, appendix C (DHS); 7 CFR part 16, appendix C (USDA); 24 CFR part 5, subpart A, appendix C (HUD); 28 CFR part 38, appendix C (DOJ); 29 CFR part 2, subpart D, appendix C (DOL); 34 CFR part 75, appendix C (ED); 38 CFR part 50, appendix C (VA); and 45 CFR part 87, appendix C (HHS). B. Prohibition on Using Direct Federal Financial Assistance for Explicitly Religious Activities Comments: Several commenters suggested that, with this rule, the Agencies should repeal their longstanding regulations prohibiting organizations that receive direct Federal financial assistance from engaging in explicitly religious activities as part of the social services funded with that financial assistance and requiring that religious activities be separated in time or location from the federally funded services. According to these commenters, recent Supreme Court cases, including primarily Carson v. Makin, 596 U.S. 767 (2022), and Trinity Lutheran Church of Columbia, Inc. v. Comer, 582 U.S. 449 (2017), have established that such regulations are not only no longer required by the Establishment Clause, but also now prohibited by the Free Exercise Clause. Response: The Agencies decline to repeal the regulatory provisions in question, which appropriately implement an Executive order and are consistent with the Supreme Court’s First Amendment jurisprudence. See 2 CFR 3474.15(d)(1) (ED); 6 CFR 19.4(a) and (b) (DHS); 7 CFR 16.2, 16.4(b) (USDA); 22 CFR 205.1(e) (USAID); 24 CFR 5.109(e) (HUD); 28 CFR 38.5(a) and (b) (DOJ); 29 CFR 2.33(b)(1) (DOL); 34 CFR 75.52(c)(1), 76.52(c)(1) (ED); 38 CFR 50.2(b), 61.64(c), 62.62(c) (VA); 45 CFR 87.3(d) (HHS). Executive Order 13279—which President Bush promulgated in 2002, and which, in amended form, remains operative today—specifies that Federal agencies must implement social service programs ‘‘in accordance with the E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15680 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations Establishment Clause and the Free Exercise Clause of the First Amendment to the Constitution’’ and that, ‘‘[t]herefore, organizations that engage in explicitly religious activities, such as worship, religious instruction, and proselytization, must offer those services separately in time or location from any programs or services supported with direct Federal financial assistance.’’ E.O. 13279, sec. 2(e), 67 FR 77142, as amended by E.O. 13559, sec. 1(b), 75 FR 71320; see also E.O. 13279, sec. 3(b), 67 FR 77143 (requiring specified agency heads to ensure that all agency policies with implications for faith-based and community organizations are consistent with the aforementioned policy and the other ‘‘fundamental principles’’ articulated in section 2 of the order). The Agencies’ regulations have long implemented this directive. Most of the Agencies have imposed such conditions since shortly after President Bush promulgated Executive Order 13279 in 2002, see 88 FR 2399–2400, and all of the Agencies maintained the conditions in connection with the 2020 Rule, 85 FR 82041–43, 82109. The regulations, moreover, are consistent with the Supreme Court’s First Amendment caselaw. As explained in the Joint NPRM, 88 FR 2401 n.8, the Court has unanimously held—in the context of direct governmental aid to private organizations to perform social service programming or engage in social welfare activities—that although the Establishment Clause does not preclude religious organizations from receiving such funds, they may not use aid they receive directly from a government to advance ‘‘ ‘specifically religious activit[ies] in an otherwise substantially secular setting.’ ’’ Bowen v. Kendrick, 487 U.S. 589, 621 (1988) (quoting Hunt v. McNair, 413 U.S. 734, 743 (1973)); see also Mitchell v. Helms, 530 U.S. 793, 840, 865 (2000) (O’Connor, J., concurring in the judgment) (controlling opinion explaining that the Court’s decisions emphasizing religious neutrality ‘‘provide no precedent for the use of public funds to finance religious activities’’ and reaffirming that the principle that ‘‘any use of public funds to promote religious doctrines violates the Establishment Clause’’ ‘‘of course remains good law’’ (quotation marks and emphasis omitted)). That longstanding Supreme Court doctrine informed President Bush’s inclusion of section 2(e) in Executive Order 13279, 67 FR 77142, which in turn compelled the promulgation and repromulgation of the relevant provisions of the Agencies’ regulations. VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 The Supreme Court’s more recent decisions have not overruled Bowen v. Kendrick, Mitchell v. Helms, or any of the other cases in which the Court has affirmed the ‘no religious uses of direct aid’ Establishment Clause rule. It is true that the Court in Carson wrote that discrimination on the basis of a school’s religious activities was no ‘‘less offensive to the Free Exercise Clause’’ than discrimination on the basis of a school’s religious character. 596 U.S. at 787. The Court, however, made that statement in the context of a ‘‘neutral benefit program in which public funds flow[ed] to religious organizations through the independent choices of private benefit recipients.’’ Id. at 781 (emphasis added); see also Me. Rev. Stat. Ann. tit. 20–a, sec. 5204(4) (2008) (providing that the State of Maine would ‘‘pay the tuition . . . at the public school or the approved private school of the parent’s choice at which the student is accepted’’). The school aid program in Carson, in other words, was a voucher-like program, i.e., what the Agencies’ regulations here refer to as providing indirect aid. The Court noted that there was no Establishment Clause problem with respect to beneficiaries using government aid for religious education in such a program. 596 U.S. at 781 (citing Zelman, 536 U.S. at 652– 53). This rule makes clear that the Agencies’ regulatory restrictions regarding explicitly religious activities do not apply in such indirect aid cases, where governmental financial assistance flows to private organizations wholly as a result of a genuinely independent and private choice of the beneficiary. See, e.g., 88 FR 2423 (citing proposed rule 38 CFR 50.2(b), stating that ‘‘[t]he use of indirect Federal financial assistance is not subject to’’ VA’s explicitly-religiousactivity restrictions). Nothing in Carson, however, affects the Court’s wellestablished doctrine that the Establishment Clause generally prohibits the use of financial aid received directly from a government for ‘‘specifically’’ or ‘‘inherently’’ religious activities, particularly in the context of aid to private organizations to provide social services to beneficiaries, as in Kendrick. Nor did the Court in Carson hold that statutory and regulatory restrictions on such religious uses of direct aid violate the Free Exercise Clause. Contrary to commenters’ suggestions, the Court’s decision in Trinity Lutheran does not require amendment of the Agencies’ regulations either. Trinity Lutheran involved a program in which a Missouri agency provided grants directly to entities for playground PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 resurfacing. Although the Court in Trinity Lutheran held that Missouri could not disqualify a church from eligibility for the grant on the basis of its religious identity, the Court did not address a separate condition under Missouri law mandating that the grants not be used for sectarian purposes. See 582 U.S. at 465 n.3. Indeed, the Court specifically noted that ‘‘[t]his case involves express discrimination based on religious identity with respect to playground resurfacing,’’ and the Court ‘‘d[id] not address religious uses of funding.’’ Id. The Court in Trinity Lutheran did not purport to overrule Establishment Clause precedents such as Kendrick and Mitchell, and no President has amended section 2(e) of Executive Order 13279 after Trinity Lutheran, nor did the Agencies eliminate the restriction on religious uses of direct aid from their regulations as part of the 2020 Rule. The Supreme Court has counseled that ‘‘it is th[e] Court’s prerogative alone to overrule one of its precedents,’’ United States v. Hatter, 532 U.S. 557, 567 (2001) (quotation marks omitted), and has emphasized that its ‘‘decisions remain binding precedent until [the Court] see[s] fit to reconsider them, regardless of whether subsequent cases have raised doubts about their continuing vitality,’’ Hohn v. United States, 524 U.S. 236, 252–53 (1998); see also Agostini v. Felton, 521 U.S. 203, 237 (1997) (‘‘We reaffirm that ‘[i]f a precedent of this Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the Court of Appeals should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions.’ ’’ (quoting Rodriguez de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. 477, 484 (1989))). The Agencies must follow the Court’s existing precedents rather than try to predict whether the Court might overturn them in a future case. In short, neither section 2(e) of Executive Order 13279 nor the Agencies’ regulations implementing that extant Presidential directive are unconstitutional. The Agencies therefore maintain their regulations prohibiting organizations that receive direct Federal financial assistance from engaging in explicitly religious activities as part of the social services funded with that financial assistance and requiring that religious activities be separated in time or location from the federally funded services. Changes: None. E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations C. Definition of ‘‘Indirect Federal Financial Assistance’’ Comments: Various commenters weighed in on the rule’s definition of ‘‘indirect Federal financial assistance.’’ Numerous commenters strongly supported the Agencies’ approach to the term. A few commenters, however, contended that under current Supreme Court caselaw it is inappropriate for the Agencies to distinguish between direct and indirect Federal aid. Commenters also raised concerns about specific language in the definition, including primarily the rule’s statement that the availability of adequate secular alternatives is a significant factor in determining whether a program qualifies as indirect. For example, one commenter asserted that Federal financial assistance may qualify as indirect, even where particular beneficiaries lack any practical secular alternatives, so long as the Government itself is not responsible for the lack of such alternatives. Relatedly, some commenters took issue with the possibility that the absence of a ‘‘genuine and independent private choice’’ to participate in religious programs might require an Agency to impose some of the conditions on a recipient of indirect aid that would normally be associated with direct Federal financial assistance programs. Response: The Agencies decline to eliminate the rule’s distinction between direct and indirect aid or to revise its general approach to defining ‘‘indirect Federal financial assistance.’’ Nevertheless, as elaborated below, a few of the Agencies have made some technical edits to their regulations to promote consistency among the Agencies’ definitions of the term. As explained above in Part II.A.4 of this joint preamble, the Agencies’ regulations have long provided that their restrictions on explicitly religious activities in federally funded social service programs apply only where the governmental aid is given to private organizations ‘‘directly.’’ The Joint NPRM proposed to amend the regulations’ definition of indirect aid programs—i.e., those that are not subject to such conditions—to clarify that they are limited to cases in which a service provider receives assistance ‘‘wholly as a result of’’ a ‘‘genuine and independent private choice’’ of the beneficiary, ‘‘not a choice of the Government.’’ 88 FR 2401 (quotation marks omitted). As noted in the Joint NPRM, such language or its equivalent has appeared in at least some of the Agencies’ regulations as far back as 2004. Id. at 2399. The rule here further provides that ‘‘the availability of VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 adequate secular alternatives is a significant factor in determining whether a program affords’’ a genuinely independent and private choice to beneficiaries and prospective beneficiaries. Id. at 2401. These amendments are designed to more closely track the distinction between direct and indirect aid that the Supreme Court has drawn in a series of cases culminating in Zelman v. SimmonsHarris, 536 U.S. 639 (2002). See 88 FR 2401. Contrary to some commenters’ suggestions, the Supreme Court has not abandoned the distinction between direct and indirect aid that has been central to many of its Establishment Clause decisions. Indeed, in Carson, the Court specifically noted, citing Zelman, that because the Maine program there was ‘‘a neutral benefit program in which public funds flow to religious organizations through the independent choices of private benefit recipients,’’ it ‘‘d[id] not offend the Establishment Clause.’’ Carson, 142 S. Ct. at 1997. It thus remains the case that, for Federal financial assistance to qualify as indirect under the Court’s jurisprudence, a service provider must receive the assistance as a result of a genuine and independent private choice of the beneficiary. See 88 FR 2401. The Agencies also decline to amend the rule’s statement that the ‘‘availability of adequate secular alternatives’’ is a ‘‘significant factor’’ in determining whether a program affords beneficiaries genuinely independent and private choices. The vast majority of commenters who weighed in on the statement agreed that the availability of such alternatives is relevant to the distinction between direct and indirect aid. That is consistent with the Supreme Court’s jurisprudence on this subject. As the Court explained in Zelman, the Establishment Clause determination of whether aid is direct or indirect ‘‘must be answered by evaluating all options,’’ religious or secular, available to beneficiaries in a Government-funded social service program. 536 U.S. at 655– 56. The inquiry, in other words, is a holistic one, in which courts comprehensively consider the nature of and factual backdrop for the program in question. Moreover, contrary to the suggestions of one commenter, it is both permissible and administrable for an agency to conduct that inquiry, including by considering the availability of adequate secular alternatives. In fact, that is precisely what the Supreme Court itself did in Zelman and what lower courts have done in applying Zelman’s distinction between direct and indirect aid to various factual scenarios. PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 15681 Therefore, it is appropriate for the Agencies to do likewise when taking actions that might implicate constitutional concerns. Nor do the Agencies agree that a lack of secular alternatives is relevant only where the Government is responsible for their absence. As just noted, Zelman makes clear that the ultimate question requires an assessment of ‘‘all options’’ available to beneficiaries. See id. at 656. And the Agencies do not believe it is necessary for the regulations to address any hypothetical cases. As noted, some commenters also took issue with certain statements in the Joint NPRM preamble regarding what a governmental entity offering aid can or must do where beneficiaries are, as a practical matter, unable to make an independent choice to use the aid in a program that does not include specifically religious elements. See 88 FR 2400–01. The Joint NPRM’s preamble explained that if an Agency responsible for selecting service providers determines that a limited array of federally funded programs in a particular area precludes beneficiaries’ practical ability to make a ‘‘genuine and independent private choice,’’ Zelman would not require the Agency to terminate the indirect aid program or disallow beneficiaries from redeeming their vouchers or certificates at religious providers; the Agency could instead take other appropriate steps to remedy the problem, such as expanding the universe of reasonably available providers to include secular options or requiring existing providers to observe the same conditions that the regulations attach to direct aid. Id. The Agencies need not take any action with respect to these comments because the regulatory text itself does not address what, if any, steps the Government should or must take in such circumstances. Because such cases may be very rare and will likely differ widely in terms of their facts and contexts, the Agencies do not believe that their regulations ought to specifically address any hypothetical remedial choices. Nevertheless, the Agencies continue to believe that the possibilities mentioned in the Joint NPRM preamble will be legally available in some or all such cases. For example, it is unlikely that an Agency’s efforts to identify and recruit secular providers in order to guarantee genuine beneficiary choice would be subject to heightened constitutional scrutiny—and even if they were, that scrutiny would likely be satisfied because such efforts would be undertaken in order to satisfy the Establishment Clause’s requirements and because such recruiting would not E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15682 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations disqualify or disfavor the participation of any religious providers. Further, the Agencies decline to amend the rule to treat the availability of secular alternatives as a necessary condition (as opposed to merely a significant factor) to a determination that the program affords beneficiaries a genuinely independent and private choice of providers. It may be the case that, under certain facts and circumstances, Zelman would require a secular choice be available for the governmental aid program to qualify as indirect. But indirect aid programs can and do vary widely, and it is possible that in some contexts a court could deem a beneficiary’s decision to use financial assistance in a program that includes religious elements to be genuinely independent even where there are few or no secular options in a given area. For example, a particular beneficiary might be indifferent to whether a provider or a program is in some respects religious, or might prefer a religious provider. Finally, although the Agencies decline to change their overall approach to defining ‘‘indirect Federal financial assistance,’’ certain of the Agencies have made technical edits to their definitions of the term, so as to more closely track the language of Zelman, as discussed in the Joint NPRM, and to promote consistency among the nine Agencies’ regulations. Also, previously, some Agencies referred to the plural ‘‘adequate secular alternatives,’’ while others referred to the singular ‘‘adequate secular alternative.’’ To advance consistency among the Agencies’ regulations, the Agencies have now uniformly adopted the plural construction. In doing so, they do not express any view as to whether one secular alternative could be adequate in some circumstances, which would depend on the specific facts at issue. Changes: The Agencies have made the aforementioned technical changes in the relevant regulations in accordance with Zelman and the Joint NPRM and to promote consistency among the Agencies’ regulatory text. The regulations modified are 6 CFR 19.2 (DHS); 7 CFR 16.2 (USDA); 24 CFR 5.109(b) (HUD); 28 CFR 38.3(c)(2) (DOJ); 29 CFR 2.31(a)(2)(ii) (DOL); 34 CFR 75.52(c)(3)(ii)(B) and 76.52(c)(3)(ii)(B) (ED); 38 CFR 50.1(b)(2), 61.64(b)(2), and 62.62(b)(2) (VA); and 45 CFR 87.1(c)(2) (HHS). VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 D. Eligibility of Faith-Based Organizations and Availability of Accommodations 1. Religious Motives Comments: In the Joint NPRM, the Agencies made clear that their proposed regulations would preserve the Agencies’ longstanding policy of prohibiting discrimination against an organization on the basis of religion. 88 FR 2402. But, rather than keeping the 2020 Rule’s formulation of that principle, the Agencies proposed rewording their regulations for clarity and to state the prohibition more plainly. Id. In particular, the Joint NPRM expressed that the Agencies’ regulations would provide that the Agencies would not, in their selection of service providers, discriminate ‘‘on the basis of an organization’s religious character, motives, or affiliation, or lack thereof.’’ Id. Commenters pointed out, however, that some of the Agencies (namely, DOJ, DOL, HHS, HUD, VA, DHS, and USAID) had, in certain of their proposed regulations, retained the ‘‘motivated or influenced by religious faith’’ language of the 2020 Rule, rather than the ‘‘motives’’ language set out in the Joint NPRM’s preamble. The commenters urged those Agencies to change their regulatory text to consistently adopt the ‘‘motives’’ formulation prescribed in the Joint NPRM preamble and used elsewhere in the proposed regulations. Response: The Agencies agree that their regulations should consistently prohibit discrimination on the basis of an organization’s ‘‘religious character, motives, or affiliation, or lack thereof,’’ instead of preserving the religiousmotivation phrasing used in the 2020 Rule. As explained in the Joint NPRM, the ‘‘motives’’ language maintains the Agencies’ longstanding prohibition on such discrimination, but ‘‘states it more plainly’’ and ‘‘would further guarantee that the Agencies will not discriminate against providers on grounds that would violate the First Amendment.’’ Id. The Agencies, moreover, believe there is value in ensuring that their regulations are consistent in describing the prohibition on discriminating against an organization based on its religion. Accordingly, in this final rule, the Agencies have uniformly adopted the ‘‘motives’’ language in all of the relevant regulatory provisions. This and the other wording changes regarding the protections the law affords to faith-based organizations and others do not substantively alter the Agencies’ longstanding commitment to ensuring that faith-based organizations are not discriminated against in the selection of PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 service providers. Instead, the changes simply address confusion introduced by the 2020 Rule regarding protections the law affords to faith-based organizations and others. Changes: DOJ, DOL, HHS, HUD, VA, DHS, and USAID have revised their regulations and associated appendices in order to align their regulatory text with that appearing elsewhere in the relevant regulations. The final regulations reflecting these revisions are 6 CFR 19.3(b), 19.4(c), and appendix A to part 19 (DHS); 22 CFR 205.1(b) (USAID); 24 CFR 5.109(c) and appendix A to subpart A of part 5 (HUD); 28 CFR 38.4(a), 38.5(d), and appendix A to part 38 (DOJ); 29 CFR 2.32(a)(1) and appendix A to subpart D of part 2 (DOL); 38 CFR 50.2(a) and appendix A to part 50 (VA); and 45 CFR 87.3(a) and appendix B to part 87 (HHS). 2. Religious Accommodations Comments: In the Joint NPRM, the Agencies stated that they would continue to consider requests for accommodations on a case-by-case basis in accordance with the U.S. Constitution and other Federal law. 88 FR 2402. Some commenters generally supported this approach, but urged the Agencies to provide further information about how such determinations would be made. For instance, one commenter requested that the Agencies explain how they will decide requests for accommodations and who will make those determinations. The commenter also argued that the Agencies should institute an expedited procedure for appealing accommodation denials, before the provider-selection process is completed, so as to ensure that religious organizations are provided appropriate accommodations and are not excluded from participating in the Agencies’ programs. And another commenter urged the Agencies to make clear that their case-by-case determinations would consider, among other factors, the potential impacts of proposed accommodations on beneficiaries or other third parties. Response: As explained in the Joint NPRM, the Agencies remain committed to considering providers’ requests for accommodations on a case-by-case basis in accordance with all Federal law, and to ensuring faith-based and other organizations are not dissuaded from participating in the Agencies’ programs. Consistent with the Agencies’ commitment to taking a case-by-case approach, the Agencies do not establish in this final rule precisely how or by whom such case-by-case determinations will be made because such details are beyond the scope of this rulemaking and E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations could vary depending on the particular program implicated or the facts and circumstances of a particular request for accommodation. Changes: None. Comments: Several commenters supported the Agencies’ ongoing commitment to considering requests for accommodations on a case-by-case basis in accordance with the U.S. Constitution and Federal statutes, as reflected in standalone provisions of the Agencies’ regulations. At the same time, however, the commenters suggested that the Agencies remove similar language from the regulations’ provisions describing program requirements. According to the commenters, because the exemption language in those provisions immediately follows the constitutionally required prohibition on using direct governmental funding for explicitly religious activities, that language could be misread to suggest that a religious exemption could be given to that requirement. In the commenters’ view, including such language in the program requirement provisions could thus engender confusion. Responses: The Agencies have carefully reviewed the language regarding accommodations included throughout this rule, and they do not believe it suggests, regardless of its placement, that unconstitutional accommodations can or should be made. The Agencies agree, however, that the accommodation language is clearer and easier to find if it appears as a standalone statement in each Agency’s regulations, rather than if it is subsumed in more general provisions. Changes: The Agencies that did not already include a standalone provision in their proposed regulations have accordingly revised their regulations to do so. The provisions that have been revised or added are 6 CFR 19.3(c) (DHS); 7 CFR 16.3(h) (USDA); 22 CFR 205.1(c) (USAID); 24 CFR 5.109(c) (HUD); 28 CFR 38.4(b) (DOJ); 29 CFR 2.32(e)(1) (DOL); 38 CFR 50.2(e) (VA); and 45 CFR 87.3(b) (HHS). Comments: One commenter faulted the Joint NPRM for supposedly adopting an ‘‘accommodation-denying position’’ that could result in violations of the Religious Freedom Restoration Act (‘‘RFRA’’), in particular. The commenter pointed out, for example, that the Joint NPRM’s discussion of Title VII did not address the impact of RFRA on the application of that statute, and argued that there are instances where RFRA compels accommodations to the requirements of nondiscrimination laws. VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 Response: The Agencies disagree that, either in the Joint NPRM or this final rule, they are taking an ‘‘accommodation-denying position.’’ To the contrary, in both documents, the Agencies have specifically reaffirmed that they will continue to consider faithbased and other organizations’ requests for accommodations on a case-by-case basis in accordance with the U.S. Constitution and Federal statutes. RFRA is one Federal law that may require the Agencies to grant such an accommodation in an appropriate case. Specifically, where a provider shows that application of a regulatory requirement ‘‘substantially burden[s]’’ its exercise of religion, RFRA states that the Agency may impose the requirement only if it demonstrates that application of the burden to the organization ‘‘is in furtherance of a compelling governmental interest’’ and ‘‘is the least restrictive means’’ of furthering that interest. 42 U.S.C. 2000bb–1(a) through (b). Changes: None. 3. Provider Notices Comments: The regulations of all the Agencies except USAID include appendices containing language for provider notices—that is, notices or announcements of award opportunities and notices of award or contracts— stating that faith-based organizations are eligible for the awards on the same basis as any other organization and are subject to relevant protections and requirements of Federal law. (While USAID’s regulations do not include this appendix, they do require that notices or announcements of funding opportunities include such language. See 22 CFR 205.1(b).) The Agencies proposed certain changes to these provider notice appendices in order to conform the appendices to proposed changes to other parts of their regulations. As some commenters pointed out, however, several of the Agencies’ proposed provider notice appendices did not incorporate all of the changes described elsewhere in the Joint NPRM. For example, the Joint NPRM asserted that this rule was intended to state more clearly that Agencies would not, in selecting service providers, discriminate on the basis of an organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. 88 FR 2402. But, in an oversight, several Agencies (USDA, DOL, HUD, VA, and DHS) did not fully incorporate the intended new language in their provider notice appendices, PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 15683 although they generally did so elsewhere in their proposed regulations. Commenters recommended that the Agencies revise their provider notice appendices to be consistent both with the remainder of the proposed regulatory text and with one another. One particular set of proposed changes to the provider notice appendices drew both support and criticism, namely, the removal of a list of examples of religious freedom and conscience protection laws, along with a sentence stating that religious accommodations may be sought under many of those laws. The proposal sought to clarify the nature of the protections for faith-based organizations by decoupling the rule’s religious nondiscrimination protections from the question of accommodations. See id. Although the NPRM preamble indicated that such changes would be made throughout the rule, the proposed changes were inadvertently omitted from USDA and DOL’s proposals. A commenter that supported the proposed changes urged USDA and DOL to join the other Agencies in eliminating the illustrative list of Federal laws. Some other commenters, by contrast, recommended that all of the Agencies restore the language, because, in the commenters’ view, it makes clear which laws require an accommodation. Response: The Agencies agree that all of their provider notice appendices should be revised as necessary to reflect fully the changes proposed elsewhere in the rule. Doing so will help ensure that faith-based and other organizations are accurately informed of their eligibility, protections, and requirements. The Agencies also agree that the provider notice appendices should be consistent with one another except where Agencyspecific language is required. To accomplish these goals, in this final rule, the Agencies have generally adopted the language of the provider notice appendices in DOJ’s proposed regulation, which most thoroughly incorporated the intended changes. As explained in the Joint NPRM, 88 FR 2402, these changes do not substantively change providers’ rights, but rather make clearer that the Agencies will not discriminate against providers in violation of the U.S. Constitution or Federal statutes, and that the Agencies will continue to consider providers’ requests for accommodations on a case-by-case basis in accordance with all applicable Federal law. These changes also avoid any unintended implications introduced by citing to some, but not all, statutes containing religious freedom protections. E:\FR\FM\04MRR3.SGM 04MRR3 15684 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES3 Changes: DOJ—28 CFR part 38, appendix A: amend paragraph (c) for consistency with proposed 28 CFR part 38; appendix B: amend paragraph (b) for consistency with proposed 28 CFR part 38 Other Agencies— DHS—6 CFR part 19, appendices A and B: revise language to match DOJ’s revised 28 CFR part 38, appendices A and B USDA—7 CFR part 16, appendices A and B: revise language to match DOJ’s revised 28 CFR part 38, appendices A and B HUD—24 CFR part 5, subpart A, appendix A: revise language to match DOJ’s revised 28 CFR part 38, appendix A (except retain heading ‘‘Notice of Funding Opportunity’’); add new appendix B modeled on revised 28 CFR part 38, appendix B DOL—29 CFR part 2, subpart D, appendices A and B: revise language to match DOJ’s revised 28 CFR part 38, appendices A and B ED—34 CFR part 75, appendices A and B: revise language to match DOJ’s revised 28 CFR part 38, appendices A and B VA—38 CFR part 50, appendices A and B: revise language to match DOJ’s revised 28 CFR part 38, appendices A and B HHS—45 CFR part 87, appendices A and B: revise language to match DOJ’s revised 28 CFR part 38, appendices A and B 4. Merit-Based Considerations in GrantMaking Comments: One commenter requested that the Agencies include language in their regulations ensuring that Agency decisions about awards of Federal financial assistance will be made on the basis of merit, and stating that such merit-based decisionmaking will include objective consideration of whether an organization will serve all beneficiaries and perform all services that are necessary to fulfill the program’s objectives. Response: The Agencies agree that decisions about awards of Federal financial assistance must be free from political interference or the appearance of such interference, and must be made on the basis of merit, not on the basis of religion or lack thereof. The Agencies do not, however, adopt the commenter’s suggestion that they elaborate upon the merit-based decisionmaking processes in their regulations. Such additional details are beyond the scope of this rulemaking. The Agencies therefore decline to make any changes to their regulations based on these comments. VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 Changes: None. 5. Burdens on Faith-Based Grantees Comments: According to some commenters, certain of the rule’s notice requirements are, but should not be, imposed exclusively on faith-based providers. Other commenters similarly contended that the regulations’ requirement that a provider’s explicitly religious activities, if any, be separated from ones supported by direct Federal financial assistance is unduly burdensome for religious service providers. And another commenter contended that the rule discriminates against faith-based organizations based on their religious status, due to certain of the rule’s beneficiary protections. Response: Neither the Joint NPRM nor this final rule imposes any requirements exclusively on faith-based providers. Rather, the regulations apply equally to both faith-based and secular organizations. As explained above in Part II.B of this joint preamble, the Agencies likewise decline to repeal their regulatory provisions requiring the separation of explicitly religious activities from those supported by direct Federal financial assistance. That requirement applies to all types of providers, not just religious organizations, and it appropriately implements an Executive order and is consistent with the Supreme Court’s First Amendment jurisprudence. Nor does this final rule discriminate against faith-based providers in any other way. To the contrary, the rule is designed, in significant part, to protect providers from discrimination based on religion. Changes: None. E. Title VII Comments: Section 703(a) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e–2(a), generally prohibits employers from engaging in employment discrimination on the basis of an individual’s race, color, religion, sex, or national origin. Another subsection of Title VII, however, exempts certain religious organizations with respect to a particular application of that prohibition. Specifically, section 702(a) of Title VII, 42 U.S.C. 2000e–1(a), provides that ‘‘[t]his subchapter shall not apply . . . to a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.’’ Most of the Agencies’ regulations have long provided that a religious organization that qualifies for that Title PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 VII religious-employer exemption is not precluded from invoking it even in programs funded by Federal financial assistance. In the 2020 Rule, VA joined the other Agencies by adding such language. 88 FR 2402. Also in 2020, five of the Agencies (DOL, HHS, ED, VA, and USAID) added text to their regulations indicating that the Title VII religious-employer exemption allows a qualifying organization to hire persons on the basis of their ‘‘acceptance of or adherence to religious tenets of the organization.’’ Id. (quotation marks omitted). HUD did not add a similar employment-related tenets sentence to its regulation, but another provision in HUD’s rules (24 CFR 5.109(d)(2)) already stated that ‘‘a faith-based organization participating in a HUD program or activity . . . may . . . select its . . . employees on the basis of their acceptance of or adherence to the religious tenets of the organization consistent with’’ the Title VII religiousemployer exemption. The Joint NPRM proposed to remove the sentence about tenets-based employment conditions added by the 2020 Rule from DOL, HHS, ED, VA, and USAID’s regulations on the ground that the sentence is unnecessary and potentially misleading. 88 FR 2402. As the Joint NPRM explained, the sentence could mistakenly be read to suggest that Title VII permits religious organizations that qualify for the Title VII religiousemployer exemption to insist upon tenets-based employment conditions that would otherwise violate Title VII or the particular underlying funding statute in question. Id. Several commenters argued that the Agencies should not remove the tenetsbased employment conditions sentence because, they said, the scope of the Title VII religious-employer exemption permits a qualifying organization to require employees to conform to religious tenets even where application of such a requirement would consist of another form of discrimination (e.g., sex discrimination) that Title VII prohibits. Some of those commenters also contended that the sentence reflects what the First Amendment requires. Other commenters, by contrast, urged HUD to remove the sentence in its regulation about tenets-based employment conditions in order to conform to the regulatory text of the other eight Agencies. And other commenters suggested that the Agencies should repeal the provisions in their regulations stating that qualifying organizations retain their Title VII religious-employer exemption with respect to federally funded programs, because, the commenters argued, E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations application of the exemption in such cases would violate the Establishment Clause. Response: The Agencies decline to remove the longstanding provisions in their regulations about the continued application of the Title VII religiousemployer exemption for religious organizations that qualify for it. DOJ’s Office of Legal Counsel has concluded that the Title VII exemption is a permissible religious accommodation for qualifying religious organizations even in the context of at least some Government-funded social service programs. See Direct Aid to Faith-Based Organizations Under the Charitable Choice Provisions of the Community Solutions Act of 2001, 25 Op. O.L.C. 129, 131–33 (2001) (‘‘Direct Aid to Faith-Based Organizations’’); see also Memorandum for William P. Marshall, Deputy Counsel to the President, from Randolph D. Moss, Assistant Attorney General, Office of Legal Counsel, Re: Application of the Coreligionists Exemption in Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e–1(a), to Religious Organizations That Would Directly Receive Substance Abuse and Mental Health Services Administration Funds Pursuant to Section 704 of H.R. 4923, the ‘‘Community Renewal and New Markets Act of 2000’’, at 26–30 (Oct. 12, 2000) (‘‘2000 OLC Opinion’’); but cf. id. at 22–25 (explaining that there might be as-applied situations in which a constitutional issue could be raised if and when an agency knowingly chooses to provide aid to fund employment positions for which the employer applies a religious test). While recognizing that the Title VII religious-employer exemption may apply, DOL, HHS, ED, VA, and USAID disagree that the language added to their regulations in 2020 about tenets-based employment conditions is necessary or clarifying, given the limiting principles on the Title VII exemption that courts have recognized. Specifically, Federal courts of appeals have long held that the Title VII religious-employer exemption allows a qualifying religious organization generally to require employees to conform their conduct to the organization’s religious tenets. Nevertheless, as DOL recently explained in another rulemaking, see Rescission of Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption Rule, 88 FR 12842, 12848–54 (Mar. 1, 2023), the weight of Title VII case law has determined that qualifying religious employers may only impose such a requirement where the employment condition does not violate the other VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 nondiscrimination provisions of Title VII, apart from the prohibition on religious discrimination. See, e.g., Kennedy v. St. Joseph’s Ministries, Inc., 657 F.3d 189, 192 (4th Cir. 2011) (Title VII religious-employer exemption ‘‘does not exempt religious organizations from Title VII’s provisions barring discrimination on the basis of race, gender, or national origin’’); Boyd v. Harding Acad. of Memphis, Inc., 88 F.3d 410, 413 (6th Cir. 1996) (the exemption ‘‘does not . . . exempt’’ religious institutions ‘‘with respect to all discrimination’’ and ‘‘Title VII still applies’’ to, for example, ‘‘a religious institution charged with sex discrimination’’); see also 2000 OLC Opinion at 30–31 (explaining that Congress did not intend to afford qualifying religious organizations an exemption from such other forms of discrimination, even where the discrimination is a function of their sincere religious tenets); Direct Aid to Faith-Based Organizations, 25 Op. O.L.C. at 131 n.4 (same). For example, even if a qualifying religious organization had a religious tenet prohibiting interracial marriage, it could not invoke the Title VII religiousemployer exemption to refuse to employ an applicant with a spouse of a different race. Likewise, an organization that believes a husband is the head of a household and should provide for his family but that a woman’s place is in the home could not refuse to hire women or offer higher benefits to male employees. See, e.g., EEOC v. Fremont Christian Sch., 781 F.2d 1362 (9th Cir. 1986). The Agencies recognize that a few judges have recently suggested otherwise. See 88 FR 12852. As the Joint NPRM made clear, however, the applicability of the Title VII exemption in any given case will be ‘‘governed by the text of that statute, any other applicable laws . . . , and the caselaw interpreting these authorities.’’ 88 FR 2402. This rule does not purport to alter or otherwise affect the scope of the statutory exemption. The Agencies’ goal with respect to the tenets-based employment condition regulatory text is simply to avoid any language that might be misconstrued as resolving that question against the weight of judicial and executive branch authority. Accordingly, as proposed, ED, DOL, HHS, VA, and USAID are, in this final rule, removing the sentence about tenets-based employment conditions that they added in 2020. And for the same reasons, HUD is removing language regarding the Title VII religious-employer exemption from its regulations. PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 15685 As noted in the Joint NPRM, the Agencies reemphasize that constitutional doctrines might also be implicated in some cases. See id. at 2402–03. For example, antidiscrimination laws, including Title VII, are subject to constitutional limitations as applied to certain decisions by some religious organizations concerning a subset of their employees, under what is known as the ‘‘ministerial exception.’’ See, e.g., Our Lady of Guadalupe Sch. v. Morrissey-Berru, 140 S. Ct. 2049 (2020); Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171 (2012). And the Agencies must be careful not to unduly interrogate the plausibility of a religious justification in assessing whether a religious-tenets claim is a pretext for some other, impermissible form of employment discrimination. In addition, as the Supreme Court recently recognized, ‘‘how these doctrines protecting religious liberty interact with Title VII are questions for future cases.’’ Bostock v. Clayton Cnty., 140 S. Ct. 1731, 1754 (2020). Changes: HUD has removed the phrase ‘‘and employees’’ from the revised version of 24 CFR 5.109(d)(2). F. Definition of ‘‘Federal Financial Assistance’’ Comments: In the Joint NPRM, the Agencies sought public comment on whether and how they should define the term ‘‘Federal financial assistance’’ in their regulations. 88 FR 2403–04. In particular, the Agencies asked whether an Agency that adopts a definition of ‘‘Federal financial assistance’’ in its regulations should use the definition set out in Executive Order 13279. Id. at 2403. The Agencies also inquired about the impact of provisions adopted by some Agencies in the 2020 Rule specifying that certain forms of assistance are not ‘‘Federal financial assistance,’’ such that the Agencies’ definitions of that term ‘‘might be read to be materially different from the definition in Executive Order 13279.’’ Id. One commenter urged the Agencies to consistently adopt the definition of ‘‘Federal financial assistance’’ set forth in Executive Order 13279, explaining that doing so would promote uniformity and avoid confusion. Another commenter contended that the term should not include indirect aid, and that the Agencies should specify that the term does not encompass mere nonprofit or tax-exempt status. And another commenter argued that the request for comments was insufficiently specific and so the Agencies must provide a separate notice with E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15686 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations additional opportunity for public comment before adopting or reformulating a definition of ‘‘Federal financial assistance.’’ Response: The Agencies conclude that their regulations should expressly adopt the definition of ‘‘Federal financial assistance’’ articulated in Executive Order 13279. The regulations seek to implement that Executive order and, as the Joint NPRM explained, the provisions of the Order ‘‘at issue in this rulemaking[ ] turn on the conveyance or receipt of ‘Federal financial assistance.’ ’’ 88 FR 2403. To ensure consistency and prevent misunderstandings, the Agencies are thus amending their regulations to uniformly adopt the definition of the term set forth in Executive Order 13279, which encompasses both direct and indirect aid. (The Agencies have explained elsewhere why they are declining to depart from their proposed treatment of indirect aid in this rulemaking. See Part II.C of the joint preamble.) Consistent with section 1(a) of Executive Order 13279, the Agencies will therefore all define ‘‘Federal financial assistance’’ to mean ‘‘assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption.’’ See 67 FR 77141. Importantly, this definition encompasses the Agencyspecific forms of assistance that certain Agencies expressly referenced in their prior definitions of the term. A tax exemption, whether or not on the basis of nonprofit status, however, does not qualify as Federal financial assistance under this definition. The Agencies disagree that further notice and an additional opportunity to comment are required. The Joint NPRM’s presentation of this issue provided more than ‘‘fair notice’’ of the changes adopted here. Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 174 (2007). The Joint NPRM stated expressly that the Agencies were considering whether to adopt the definition of the term ‘‘Federal financial assistance’’ established in Executive Order 13279. The Joint NPRM also described the Agencies’ prior and current approaches to defining the term, and specifically requested input on whether the Agencies should adopt a different definition than the Executive order did. 88 FR 2403–04. It was thus entirely foreseeable that the Agencies would adopt that definition in this final rule. As a result, the Agencies need not institute a separate notice-and-comment VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 process to adopt the definition of ‘‘Federal financial assistance’’ found in Executive Order 13279. Changes: All of the Agencies have included in their final regulations the definition of ‘‘Federal financial assistance’’ set forth in Executive Order 13279. The provisions to be modified or added are 6 CFR 19.2 (DHS); 7 CFR 16.2 (USDA); 22 CFR 205.1(a) (USAID); 28 CFR 38.3(a) (DOJ); 29 CFR 2.31(a) (DOL); 34 CFR 75.52(c) and 76.52(c) (ED); 38 CFR 50.1(c) (VA); and 45 CFR 87.1(d) (HHS). G. Other Issues 1. Monitoring Requirements Comments: Commenters suggested that, in the final rule, the Agencies adopt or clarify their procedures for monitoring grantees’ compliance with these regulations. To further this goal, some commenters requested that the rule provide that Federal staff will be trained on how to oversee and enforce the regulations, and that grantees will be trained on their rights and responsibilities under the rule. Specifically, one commenter suggested that the Agencies should clarify how they will meet their obligations to monitor constitutional, statutory, and regulatory requirements. Another commenter similarly requested that the Agencies take additional steps to monitor and enforce their regulations. Response: These concerns were also expressed with respect to the 2016 Rule, and the Agencies agreed with them at that time. See 81 FR 19370. As the Agencies then explained, the Agencies must guard against inappropriate uses of Federal financial assistance by monitoring and enforcing all constitutional, statutory, and regulatory standards governing such assistance, particularly in light of the monitoring obligations in Executive Order 13279, as amended by Executive Order 13559. Id. The Agencies agree with the commenters that organizations that receive Federal financial assistance need to be aware of these new regulatory requirements, and that Agencies must train appropriate individuals on applicable regulations and vigorously monitor and enforce those regulatory requirements. The specific procedures to be adopted, however, are beyond the scope of this rulemaking. In addition, those procedures will vary among the Agencies and their programs because each Agency has its own organizational structure, available resources, legal authority, and statutory enforcement requirements. Moreover, experience implementing these regulations and PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 seeing them in operation may provide insights that aid development of appropriate training, monitoring, and oversight mechanisms. Consequently, the Agencies have decided not to prescribe a single uniform approach to these issues in the present rule. Instead, each Agency will adopt its own measures to train staff and grantees, and will monitor projects in a manner that is appropriate for each program and award that is subject to this rule. Appropriate training and oversight measures may include, for example, Federal staff or grantee conferences or workshops, site visits, monitoring phone calls, and reviews of grant documents, audits, and progress reports. Each Agency will devote appropriate resources to ensure that its program staff understand their responsibilities to ensure that grantees, subgrantees, and contractors that provide social services to beneficiaries under programs of Federal financial assistance comply with these final regulations. Changes: None. 2. Data Collection Comments: Several commenters suggested that the Agencies should implement and improve their existing data collection processes to understand whether the safeguards in the regulations are sufficient and to inform how Agencies can improve award outcomes and delivery of services. Commenters stated that doing this will ensure fidelity to constitutional principles and programmatic goals, and ultimately, to serving beneficiaries in the most equitable, effective, and efficient way. Response: The Agencies are committed to using data to monitor compliance with all award conditions, and they will comply with all applicable requirements regarding data collection, including Government-wide standards such as Office of Management and Budget (‘‘OMB’’) Memorandum M– 14–06, Guidance for Providing and Using Administrative Data for Statistical Purposes. Modifying the Agencies’ data collection processes or imposing additional requirements for such collection, however, is beyond the scope of this rulemaking. Moreover, because of the unique organizational structure and context of each Federal financial assistance program, mandating a single data collection approach would be infeasible. The Agencies thus decline to make any changes to their regulations in response to the comments about data collection. Changes: None. E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES3 3. Point of Contact for Complaints Comments: Commenters requested that the Agencies modify their regulations to include a point of contact for beneficiaries of federally funded social service programs should they need to report any complaints of discrimination. Several of these commenters provided DOJ and DOL’s regulations as potential models because DOJ designates its Office for Civil Rights as the office with which beneficiaries may file complaints and DOL’s regulations provide specific contact information for reporting violations. Three commenters recommended that all the Agencies designate their Offices for Civil Rights, or an equivalent entity, to receive any complaints because, in the commenters’ view, those offices are best equipped to investigate and respond to reports of discrimination. Response: The Agencies understand the need for beneficiaries of Federal financial assistance to have an avenue for enforcement of their rights enumerated in the beneficiary notice. Because of differences in Agency structures, however, it is best left to each Agency to determine which of its offices will handle complaints. Some Agencies (HUD and VA) do not have an Office for Civil Rights. And other Agencies may have some other office better placed to receive reports of violations of this rule. Additionally, for federally funded social service programs operated by intermediaries, the intermediary may be the entity best positioned to receive and act on complaints of discrimination from beneficiaries. Similarly, each Agency is best poised to determine whether putting specific contact information for filing complaints in the Agency regulation text would serve the interests of beneficiaries of federally funded social service programs. For instance, DOL has a longstanding, single point of contact whose information can be placed in its regulation text without significant risk of becoming outdated. For other Agencies without a static point of contact, placing a specific person’s contact information in regulation text is not feasible and could result in beneficiaries attempting to use outdated contact information to file complaints. In acknowledgement that beneficiaries of federally funded social service programs need clarity about what office to contact if they experience discrimination in violation of these regulations, the Agencies agree that, at minimum, either their regulatory texts or follow-on guidance should specify VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 whom a beneficiary may contact if they experience discrimination. Changes: USDA amends its regulation text to specify that its Office of the Assistant Secretary for Civil Rights will receive reports of violations of this rule. DHS amends its regulation text to state that beneficiaries should report such violations to its Office for Civil Rights and Civil Liberties. The other Agencies make no changes to their regulatory text in the Joint NPRM. Those other Agencies, with the exception of USAID, have, however, agreed to include a model beneficiary notice as an appendix to their regulations, and the model notices include a space for the awarding entity to include contact information for the appropriate office to which beneficiaries may direct complaints. 4. Need for Rulemaking Comments: One commenter stated that the Agencies had insufficiently established the need for this rulemaking. According to the commenter, the Agencies failed to provide evidence of inconsistencies or confusion raised by the 2020 Rule. The commenter also contended that the Agencies did not explain how the 2020 Rule limited the reach of federally funded services and programs, or how the proposed rule would better achieve the Agencies’ stated goal of reaching the widest possible eligible population, including historically marginalized communities. Response: The Agencies disagree that the Joint NPRM contained inadequate justification for the proposed changes and, furthermore, note that numerous commenters agreed that this rulemaking is necessary. For example, two commenters stated that they found the 2020 Rule confusing because it contained language suggesting that the Agencies would grant religious exemptions to providers even when the exemptions were not justified or required by Federal law. Another commenter agreed with the Agencies that the 2020 Rule’s language allowing indirect aid providers to require beneficiaries to attend all activities that are fundamental to the program created a confusing tension with the prohibition on discriminating against beneficiaries because they refuse to attend or participate in religious practices. The commenter explained that eliminating this language is an important step to protect the religious freedom of beneficiaries of Government-funded social services. For the reasons stated in the Joint NPRM, and having considered these and other comments, the Agencies have determined that the 2020 Rule did, PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 15687 in fact, create confusion, thus necessitating the current rulemaking. Many commenters also agreed with the Agencies that this rulemaking is necessary to ensure that federally funded services and programs reach the widest possible eligible population, including historically marginalized communities. For example, one commenter stated that the 2020 Rule removed protections for populations that are at particular risk of being economically insecure and are discriminated against, such as LGBTQI+ people, single mothers and their children, and immigrants. The commenter stated that strong protections are needed to ensure that members of these vulnerable populations are not purposefully or inadvertently excluded from federally funded social services. Another commenter provided evidence that women, people of color, LGBTQI+ people, people with disabilities, immigrants, people living with HIV, religious minorities, and other marginalized populations are particularly vulnerable to discrimination when seeking such services. These and other comments support the Agencies’ conclusion that changes to their regulations are necessary for federally funded services and programs to reach the widest possible eligible population. For the reasons explained both in the Joint NPRM and in this final rule, and in light of the public comments supporting the Agencies’ proposals, the Agencies believe that the need for this rulemaking is well established. Changes: None. 5. Executive Orders 13985 and 14058 Comments: One commenter expressed concern that this rule deprioritizes the funding of faith-based groups. As the purported basis for that worry, the commenter referred to the Agencies’ reliance on Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, 86 FR 7009 (Jan. 20, 2021), and Executive Order 14058, Transforming Federal Customer Experience and Service Delivery To Rebuild Trust in Government, 86 FR 71357 (Dec. 13, 2021). Response: As indicated in the Joint NPRM, the primary goal of this rulemaking is to ensure full access to and comprehensive delivery of federally funded social services, in keeping with governing law and with the policies articulated in Executive Order 14015. The Joint NPRM also acknowledged that the rulemaking sought to advance the policies set out in Executive Orders E:\FR\FM\04MRR3.SGM 04MRR3 15688 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES3 13985 and 14058. In neither the Joint NPRM nor this final rule, however, do any of the Agencies’ regulations set forth any requirements unique to those Executive orders, and the Agencies have not deprioritized funding for faith-based organizations. To the contrary, as the Agencies emphasized in the Joint NPRM preamble, it is important to strengthen the ability of both faith-based and secular organizations to deliver services in partnership with Federal, State, and local governments and with other private organizations, while adhering to all governing law. 88 FR 2397. Indeed, ‘‘it has long been Federal policy that faith-based organizations are eligible to participate in Agencies’ grant-making programs on the same basis as any other organizations,’’ and the Agencies remain committed to preventing discrimination against faith-based organizations in the selection and regulation of service providers. Id. at 2401. Changes: None. 6. Regulatory Impact Analysis Comments: Several commenters suggested that the Agencies had not adequately assessed the potential burdens of this rule on faith-based providers and therefore on beneficiaries who rely on those providers’ services. In particular, one commenter urged the Agencies to analyze the regulations’ effect on faith-based providers leaving the Agencies’ programs or not joining them in the future; the availability of alternative providers to fill any gaps in service; the harms to beneficiaries who are unable to receive services from a provider; any irreparable harm associated with the loss of First Amendment and religious free exercise rights due to an incorrectly denied accommodation or lack of appeal process; and any distributional effects of Federal funds transferring from faithbased providers that leave the program under the regulations to new providers. Another commenter expressed concern that the regulations would likely disproportionately burden service providers in regions where alternatives are scarcest, and thus most needed, resulting in fewer service providers in those underserved regions and greater barriers to access for beneficiaries. Response: The Agencies believe that this final rule will not have any impact on existing faith-based providers’ decisions to participate in federally funded social service programs or discourage new faith-based providers from joining such programs in the future. As indicated in the Joint NPRM, the rule’s compliance cost per covered provider is minimal, however figured: the ‘‘upper bound’’ estimate cited in the VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 Joint NPRM was $240 per year, and the ‘‘central estimate’’ was $211.25 per year plus a one-time cost of $17.72; the Agencies have updated the ‘‘central estimate’’ to $223.03 plus a one-time cost of $18. See id. at 2405–06 & tbls. 1 & 3; Part IV.A.1 of the joint preamble. All of these estimates are modest. The Agencies do not expect this insignificant cost burden to affect existing faith-based providers’ participation or to discourage new faithbased providers from joining in the future. Accordingly, the Agencies do not anticipate that the rule’s regulatory requirements will reduce the participation of faith-based providers, nor do they expect that the rule will have disproportionate effects in underserved regions. Finally, as the final rule makes clear, the Agencies remain committed to providing any religious accommodations required by applicable Federal law, including the First Amendment. Changes: None. Comments: One commenter stated that the Joint NPRM’s regulatory impact analysis (‘‘RIA’’) failed to properly assess the benefits of faith-based providers and the burdens on them and ignored the economic as well as qualitative costs of the rule’s proposed changes. Response: The Agencies believe that the Joint NPRM’s RIA was appropriate and sufficient. The commenter, moreover, did not specify which impacts supposedly were not properly assessed or provide any data or analysis to allow for quantification of such impacts. The Agencies have appropriately assessed the potential costs, cost savings, and benefits, both quantitative and qualitative, of this regulatory action. Changes: None. Comments: One commenter stated that it supports the proposal to withdraw and replace the 2020 Rule because the 2020 Rule’s mandatory costbenefit analysis improperly assessed the costs and other harms to beneficiaries to be negligible, despite what the commenter viewed as ample evidence of religion-based denials of service, discrimination, and other harmful treatment of LGBTQI+ people, people of color, people of other faiths, and others by service providers. Response: The Agencies agree that the 2020 Rule’s analysis did not adequately consider the costs it imposed on beneficiaries. In the present rulemaking, the Agencies believe that they have properly assessed both the costs and benefits of the regulations, and they have qualitatively shown the benefits to beneficiaries in several important ways. PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 Specifically, the final notice requirement will improve beneficiaries’ access to federally funded services by informing them of their rights and thus removing certain barriers arising from discrimination. Additionally, the final referral option will make it more likely that beneficiaries who object to receiving services from one provider will be able to learn about alternative providers. Changes: None. III. Agency-Specific Issues 3 A. Department of Agriculture In sections (1) through (4) below, USDA addresses the few USDA-specific comments not addressed in Part II of the joint preamble. In section (5) below, USDA provides its specific response to comments discussed in Part II.A.4 of the joint preamble recommending that the Agencies generally require that a written notice of rights be provided to beneficiaries of programs receiving indirect Federal financial assistance. All other comments received by USDA or otherwise affecting USDA’s regulations are addressed fully in Part II of the joint preamble, and USDA adopts those responses. 1. Unnecessary Definition Comments: Two commenters recommended that USDA delete the definition of the phrase ‘‘[d]iscriminate against an organization on the basis of the organization’s religious exercise’’ found in its proposed rule. According to the commenters, the definition is not necessary, since the phrase does not appear anywhere else in USDA’s regulations and changes elsewhere in the rule spell out the prohibition contained in the definition. Response: USDA agrees that the definition is not necessary because this phrase does not appear elsewhere in USDA’s regulations. Moreover, USDA’s obligation not to discriminate for or against organizations on the basis of enumerated religious considerations is explicitly set forth in 7 CFR 16.3(a) and in appendix A to 7 CFR part 16. In this final rule, USDA has accordingly deleted the definition in question from 7 CFR 16.2. Changes: The regulation at 7 CFR 16.2 is amended by deleting the definition of the phrase ‘‘[d]iscriminate against an organization on the basis of the organization’s religious exercise.’’ 3 All of the comments that were directed to DOJ or that affect DOJ’s regulations were adequately addressed in the joint preamble above. DOJ accordingly does not include an Agency-specific preamble in this final rule. E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations 2. Unnecessary Citations Comments: One commenter recommended that USDA, in its appendices A and B, follow the lead of other Agencies and eliminate the list of citations to Federal laws that provide for religious exemptions. Response: USDA agrees that the list of citations in its Appendices A and B in the proposed rule is unnecessary. USDA remains committed to ensuring that faith-based organizations retain their independence from the Government and enjoy all the religious freedom and conscience protections to which they are entitled under the U.S. Constitution and Federal statutes. The removal of the list of citations, providing examples of such Federal laws, will have no substantive effect. Moreover, this approach aligns with that of the other Agencies, so USDA’s making this change will promote consistency among the Agencies’ regulations. Changes: In this final rule, USDA amends appendices A and B to 7 CFR part 16 by removing the illustrative citations to Federal laws. khammond on DSKJM1Z7X2PROD with RULES3 3. Handling of Complaints Comments: As discussed in Part II of the joint preamble, various commenters urged the Agencies to designate a point of contact for receiving civil rights complaints. In a similar vein, one commenter also specifically recommended that USDA’s provision on written notice to beneficiaries include information on where complaints of religious discrimination, in particular, can be filed. Response: USDA agrees with this recommendation, and the final rule provides for the filing of written complaints by beneficiaries in programs supported by direct Federal financial assistance from USDA, and also for written notice to be given to such beneficiaries on how and where to file complaints. Given the structure and particular context of the Federal financial assistance programs it administers, USDA agrees with commenters that beneficiaries’ religious freedom protections would be strengthened by more clearly notifying beneficiaries of their right to file complaints and of how to exercise that right. To achieve that purpose, USDA has made revisions both in its regulatory text and in its model beneficiary notice. In addition, in the final rule, USDA has added language to the regulatory text in 7 CFR 16.4(d) to make clear that beneficiaries and prospective beneficiaries in programs supported by indirect Federal financial assistance from USDA may file written complaints VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 with USDA alleging violations of the rule’s religious freedom protections. USDA’s inclusion of the language about the right to file complaints is also consistent with other Agencies’ regulations, as explained above in Part II.G.3 of the joint preamble. Further, USDA’s added language on how and where to file complaints mirrors USDA’s existing processes for filing program discrimination complaints. Changes: In this final rule, USDA amends 7 CFR 16.4(c) and appendix C to 7 CFR part 16 by adding language to reflect the right of beneficiaries in programs supported by direct Federal financial assistance to file complaints; adds a new 7 CFR 16.4(d) to reflect the right of beneficiaries in programs supported by indirect Federal financial assistance to file complaints; and redesignates the current 7 CFR 16.4(d) as 7 CFR 16.4(e). 4. Consistency Between Regulatory Text and Appendices Comments: One commenter observed that USDA’s model provider notice in appendix A did not match USDA’s regulatory text, because the notice did not reflect the regulation’s statement that USDA may not favor or disfavor religious organizations for receipt of Federal financial assistance. Response: USDA agrees that it is important to include regulatory language making plain that an Agency may not favor or disfavor religious organizations for the receipt of Federal financial assistance. In the final rule, USDA likewise adds language to its provider notice found at 7 CFR part 16, appendix A, consistent with USDA’s regulatory text, making express that USDA may not favor or disfavor religious organizations for receipt of Federal financial assistance. Changes: Appendix A to 7 CFR part 16 is amended by adding explicit language about the prohibition on favoring or disfavoring organizations on the basis of religious affiliation in disbursing Federal financial assistance. 5. Notice to Beneficiaries of Indirect Federal Financial Assistance Comments: As explained in Part II.A.4 of the joint preamble, some comments urged the Agencies to adopt notice requirements for beneficiaries of indirect Federal financial assistance. Response: USDA funds several programs through indirect Federal financial assistance, including SNAP, the Special Supplemental Nutrition Program for Women, Infants, and Children, the Farmers Market Nutrition Program, the Seniors Farmers Market Nutrition Program, and the Rural PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 15689 Development Voucher Program. USDA, like the other Agencies, recognizes the importance of indirect aid beneficiaries being protected against religious and other forms of discrimination. For example, USDA requires that State agencies that distribute program benefits or services in the SNAP program provide notice of the right to be free from discrimination, including religious discrimination, by displaying And Justice for All posters in their facilities where the poster can be viewed by program applicants and participants. The poster includes the prohibition against discrimination based on ‘‘religious creed,’’ information on how to file a discrimination complaint, and is available in English, Spanish, and a number of other languages. Moreover, USDA has added into this final rule, at 7 CFR 16.4(d), language affirming that beneficiaries in USDA programs supported by indirect Federal financial assistance have the right to file a complaint of religious discrimination. Nevertheless, USDA has determined that its regulations should not require that beneficiaries of all indirect aid programs be provided a notice about religious nondiscrimination rights, because requiring such a notice would not be administratively feasible. Due to the vast number of participants and provider locations in USDA’s indirect aid programs, there would be significant administrative burdens in requiring written notice to all beneficiaries. As explained in the 2016 Rule, ‘‘there are more than a quarter million stores, farmers’ markets, direct marketing farmers, homeless meal providers, treatment centers, group homes, and other participants across the nation that are authorized [SNAP] retailers.’’ 81 FR 19363. If providers receiving indirect aid were required to give written notice to beneficiaries, all of these retailers, for example, would have to have the notices ready at all times to provide to any person using SNAP benefits. Instead of requiring that notice be provided to beneficiaries in all indirect aid programs, USDA intends to utilize a more flexible and program-specific approach to providing such notice. Based on program-specific assessments, USDA will, when warranted, require notice in programs consistent with risk and programmatic experience. For example, USDA may require notice in programs or specific program activities if there is a history of findings of religious discrimination, of government unduly limiting provider choices, or of beneficiaries’ choices for using indirect aid being limited for some other reason. For the reasons previously explained in Part II.A.4 of the joint preamble, E:\FR\FM\04MRR3.SGM 04MRR3 15690 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations USDA will not revise its regulatory language to require that notice of rights be provided to beneficiaries in all programs supported by indirect USDA financial assistance. As described above, however, in certain circumstances, USDA may determine that providing such notice is appropriate and administratively feasible and require that notice of protections to indirect aid beneficiaries be provided. Changes: None. khammond on DSKJM1Z7X2PROD with RULES3 B. Department of Labor In Part III.B.1 below, DOL explains additional changes it is making to one provision of its regulations in response to comments discussed above in Part II.D.1 of the joint preamble. In Part III.B.2 below, DOL provides its specific response to comments addressed in Part II.A.4 of the joint preamble recommending that the Agencies require that a written notice of rights be provided to beneficiaries of programs receiving indirect Federal financial assistance. All other comments received by DOL or otherwise affecting DOL’s regulations are addressed fully in Part II of the joint preamble above, and DOL adopts those responses. 1. Revision and Reorganization of 29 CFR 2.32 Comments: As discussed above, the Agencies received comments suggesting that they revise or reorganize the religious accommodations language in their program requirements provisions, as well as in the provisions that bar disqualification of providers based on religious character, motives, or affiliation, or lack thereof. These provisions appear in DOL’s regulations at 29 CFR 2.32. Response: In addition to prompting the changes to 29 CFR 2.32 described above in Part II.D.1 of the joint preamble, the suggestions from these commenters indicated to DOL that the organization of 29 CFR 2.32 made the provision as a whole difficult to follow. For instance, some elements (such as the accommodations language noted by the commenters) were unintentionally repeated, and other elements that were similar to one another were separated into different paragraphs. Changes: In the final rule, DOL revises and reorganizes 29 CFR 2.32 to make it easier to understand. The contents of the section are now ordered so that each paragraph addresses only one subject, as follows: paragraph (a) contains the prohibition on discriminating for or against organizations based on religious character, motives, or affiliation, or lack thereof; paragraph (b) sets forth VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 requirements regarding grant documents, agreements, covenants, memoranda of understanding, policies, and regulations; paragraph (c) describes rights retained by faith-based organizations that are DOL social service providers; paragraph (d) lists restrictions on the use of Federal financial assistance; and paragraph (e) makes clear that accommodations for organizations will be considered on a case-by-case basis and explains the effect of an accommodation on an eligible organization’s qualification to participate in a DOL program. These revisions are made only for clarity and do not alter the substance of DOL’s regulations. 2. Notice to Beneficiaries of Indirect Aid Comments: As described in Part II.A.4 of the joint preamble, several commenters recommended that the Agencies require that a written notice of rights be provided to beneficiaries of programs receiving indirect Federal financial assistance. Response: DOL incorporates all of the reasons previously explained above in Part II.A.4 of the joint preamble for expanding its notice requirement to cover beneficiaries and prospective beneficiaries of indirect Federal financial assistance. DOL has determined that, in the context of its programs, most of which are subject to similar written beneficiary notice requirements regardless of whether they are funded by what this rule defines as direct or indirect aid, providing written notice to all beneficiaries and prospective beneficiaries of programs receiving indirect Federal financial assistance is feasible and appropriate. Changes: DOL revises 29 CFR 2.34 to require that beneficiaries and prospective beneficiaries of programs receiving indirect Federal financial assistance from DOL be provided with the written beneficiary notice that appears in appendix C to subpart D of 29 CFR part 2. As revised, 29 CFR 2.34 states that notice to these beneficiaries will be provided by the entity that disburses the Federal funds to the beneficiary’s chosen provider. For example, in the case of WIOA programs, the Local Workforce Development Board will be responsible for providing the notice to beneficiaries and prospective beneficiaries of programs receiving indirect Federal financial assistance. DOL also adds subheadings to 29 CFR 2.34 to make the components of the revised paragraph easier to understand. Finally, DOL revises the heading of the written beneficiary notice to include a designation of the type of Federal PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 financial assistance (direct or indirect) the program receives. C. Department of Health and Human Services In Part III.C.1 below, HHS provides its Agency-specific response to a crosscutting public comment identified in Part II.A.4 of the joint preamble, recommending that the Agencies require written notice be provided not only to beneficiaries of programs receiving direct Federal financial assistance but also to beneficiaries of indirect aid programs. In Part III.C.2 below, HHS provides its Agency-specific response to a comment recommending that DHS, HUD, and HHS remove language from their proposed regulations stating that faith-based organizations are eligible to participate in federally funded programs ‘‘on the same basis as any other organization and considering a religious accommodation.’’ In Part III.C.3 below, HHS responds to a comment that concerns language in HHS’s proposed regulation referencing the application of the Americans with Disabilities Act to religious organizations receiving Federal financial assistance. In Part III.C.4 below, HHS responds to a comment about HHS’s procedures for receiving complaints of alleged violations of its regulations and for otherwise enforcing this rule. All other comments received by HHS, or that affect HHS’s regulations, are addressed fully in Part II of the joint preamble, and HHS adopts those responses.4 1. Notice to Beneficiaries of Indirect Aid Comments: As described in Part II.A.4 of the joint preamble, a cross-cutting public comment recommended that the Agencies require written notice be provided not only to beneficiaries of programs receiving direct Federal financial assistance but also to beneficiaries of indirect aid programs. Response: For the reasons explained in Part II.A.4 of the joint preamble, and as elaborated here, HHS revises the beneficiary notice requirement that was proposed in 45 CFR 87.3(k) by removing the term ‘‘direct’’ from the phrase ‘‘direct Federal financial assistance.’’ With this change, HHS’s regulation will require that the notice to beneficiaries and prospective beneficiaries be provided in covered social services 4 HHS also corrects a technical error that appeared in the Joint NPRM. In the listing of agency headings, HHS’s regulations at 45 CFR part 87 are mistakenly identified with a Regulation Identifier Number (‘‘RIN’’) of ‘‘0991–AC13.’’ See 88 FR 2395. The correct RIN is ‘‘0991–AA31.’’ This correction is of no substantive effect. E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES3 programs whether they receive Federal funding directly or indirectly.5 While the change to 45 CFR 87.3(k) could potentially affect any future indirectly funded HHS program that Congress authorizes, HHS notes the impact of this change on an existing HHS program that explicitly authorizes indirect funding, known as the Chafee Educational and Training Vouchers (‘‘ETV’’) program. In the ETV program, authorized in section 677(i) of the Social Security Act, 42 U.S.C. 677(i), HHS awards grants to States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and participating Tribes (known as ‘‘pass-through entities’’) to help young adults who have experienced foster care after age 14 meet their postsecondary education and training needs. By requiring that a beneficiary notice be provided in indirect aid programs, this final rule will ensure that ETV program voucher holders applying for or attending any educational institution that receives ETV vouchers are informed of prohibitions on their being discriminated against on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice, as provided in 45 CFR 87.3(f) of the final rule. Because any indirectly funded programs that are subject to this rule may vary in significant respects, HHS will consider how certain protections identified in the beneficiary notice should apply in the context of each specific indirect aid program. For example, HHS may consider the proportion of explicitly religious programming involved in each program’s federally funded projects in deciding whether to allow recipients of indirect Federal financial assistance to refrain from modifying their program activities to accommodate a beneficiary who chooses to expend the indirect aid on their organization’s program. Passthrough entities that administer indirectly funded HHS programs will have the discretion to tailor the notice of beneficiary protections to address 5 This final rule also includes technical corrections to the Applicability section at § 87.2(a) of the proposed rule and § 87.2(b) of the 2020 Rule that provide that the written notice to beneficiaries in § 87.3(k) through (m), and the requirement that funding decisions be free from political interference in § 87.3(o) as redesignated, apply to discretionary and block grants governed by the Community Services Block Grant (‘‘CSBG’’) Charitable Choice regulations at 45 CFR part 1050. The sections of the rule that addressed those subjects applied to discretionary and block grants governed by the CSBG Charitable Choice regulations prior to the 2020 Rule, but the 2020 Rule did not revise the Applicability section to accurately identify those paragraphs as removed or redesignated. This final rule corrects those technical errors. VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 such matters on a program-specific basis, as provided in § 87.3(k) as revised in this final rule, and HHS intends to provide pass-through entities that administer ETV program funds with guidance on developing that program’s notice. When administering indirectly funded programs, HHS will work to ensure that beneficiaries have a genuine and independent choice of providers— for example, where necessary and appropriate, by making an adequate secular alternative reasonably available or by requiring each existing provider to comply with the same conditions that apply to direct aid programs. See 88 FR 2400–01; Part II.4.C of the joint preamble. The final rule also identifies protections that must be included in the notice when it is provided in an indirectly funded program context, thereby ensuring that the notice addresses cross-cutting rights that apply to both directly and indirectly funded services. Specifically, the notice must address the protections that concern nondiscrimination on the basis of religion in 45 CFR 87.3(f), attendance or participation in any explicitly religious activities in 45 CFR 87.3(k)(1)(ii), and complaints in 45 CFR 87.3(k)(1)(iv). The notice must also identify the HHS awarding entity or the pass-through entity to which any complaints may be directed. In addition, in HHS mandatory formula, block, or entitlement grant programs (such as the ETV program), 45 CFR 87.3(k) of the final rule provides that the pass-through entity that receives HHS funds, rather than the service provider, is obligated to ensure that beneficiaries and prospective beneficiaries receive the written notice of beneficiary protections. This clause enables the pass-through entity to identify the public or private sector organization that will incur the obligation to provide the notice. This discretion is consistent with the role of pass-through entities as primary administrators of HHS mandatory formula, block, or entitlement grant programs, and enables those entities to identify the public or private sector organization that can most efficiently and effectively provide the notice in view of the way in which the program is administered. HHS notes that while the text of 45 CFR 87.3(k)(1) requires that the notice of beneficiary protections in directly funded programs identify certain protections in a manner that is ‘‘substantially similar’’ to the model in its appendix A to part 87, some HHS programs will make changes to the model notice to ensure that social PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 15691 service providers may continue to provide explicitly religious activities that are lawfully part of the program services. These changes will be consistent with the discretion retained by HHS under 45 CFR 87.3(d), as redesignated by this rule. That subsection provides that ‘‘[n]othing in this part restricts HHS’ authority under applicable Federal law to fund activities, such as the provision of chaplaincy services, that can be directly funded by the Government consistent with the Establishment Clause.’’ As the Agencies recognized in the 2016 Rule, there may be limited instances in which religious activities in some federally funded program contexts are not subject to certain restrictions in these rules, such as the requirement that explicitly religious activity be separate in time or location from activities supported with direct Federal financial assistance. 81 FR 19359–60. HHS will determine on a case-by-case basis whether religious activities in specific program contexts should be subject to this restriction. See id. For example, care provider facilities in the HHS-funded Unaccompanied Children (‘‘UC’’) Program, see 6 U.S.C. 279, may lawfully provide religious services to unaccompanied children to meet their obligations to the children receiving services in that program. HHS anticipates that in the UC Program and other similar program contexts, HHS will revise the model notice to remove any inconsistency between the care providers’ obligation to provide an unaccompanied child with access to religious services of the child’s choice whenever possible, and the model notice’s provision that explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) be separate from activities supported with direct Federal financial assistance. Changes: HHS amends 45 CFR 87.3(k) to remove text limiting the beneficiary notice to directly funded social service programs, and to require that the passthrough entities administering mandatory formula, block, or entitlement grant programs ensure that the notice is provided. A new § 87.3(k)(1) is also added to require that the notice in directly funded programs be substantially similar to that set forth in appendix A. And a new § 87.3(k)(2) is added to require that the notice in indirectly funded programs address beneficiary protections identified in that section, while giving pass-through entities discretion to tailor certain other aspects of the requisite notice as appropriate. E:\FR\FM\04MRR3.SGM 04MRR3 15692 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES3 2. Religious Accommodations Comments: As alluded to above in Part II.D.1 of the joint preamble, commenters requested that HHS remove language from its regulation stating that faith-based organizations are eligible to participate in Federally funded programs ‘‘on the same basis as any other organization and considering a religious accommodation.’’ The commenter suggested that HHS do so in order to promote consistency among the Agencies’ regulations. Response: In this final rule, HHS deletes the clause ‘‘and considering any permissible accommodation’’ from 45 CFR 87.3(a). HHS believes that this change promotes clarity and avoids redundancy in the regulatory text. In addition, HHS makes this change to ensure consistency with other Agencies’ rule texts, as recommended by the commenter. This clause was added in the 2020 Rule and retained in the Joint NPRM. Upon reflection, however, HHS believes the clause is now unnecessary because the obligation to consider religious accommodations consistent with applicable Federal law is already separately addressed in the final rule at 45 CFR 87.3(b), (c), and (g), as well as in its appendices B and C. HHS emphasizes that the removal of the clause in question is not a substantive change. Nor does it represent any departure from HHS’s strong commitment to its obligations to comply with the Free Speech and Free Exercise Clauses of the First Amendment to the U.S. Constitution and with Federal laws that support and protect religious exercise and freedom of conscience, including RFRA. HHS remains fully committed to thoroughly considering any organization’s assertion that an obligation imposed upon it conflicts with its rights under those authorities, and will provide any accommodations required by Federal law. At the same time, HHS disagrees with the recommendation that it rescind the clause ‘‘on the same basis as any other organization’’ from 45 CFR 87.3(a). That clause has long been a part of HHS’s regulation and reflects HHS’s deepseated dedication to ensuring that faithbased organizations are not discriminated against in HHS’s selection of service providers. Moreover, that clause is not redundant in the full context of the final rule and remains consistent with other Agencies’ final regulations. Changes: HHS deletes the clause ‘‘and considering any permissible accommodation’’ from the regulatory VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 text that was proposed in 45 CFR 87.3(a). Act, 42 U.S.C. 12113(d)(2)’’ from 45 CFR 87.3(h). 3. The Americans With Disabilities Act Comments: Three commenters requested that HHS strike a reference to the Americans with Disabilities Act (‘‘ADA’’) from HHS’s proposed rule at 45 CFR 87.3(h) so that the clause is consistent with those of the other Agencies. All of the Agencies’ proposed rules, including HHS’s, include a parallel clause stating that faith-based organizations do not forfeit their religious exemptions under Title VII of the Civil Rights Act of 1964 when participating in Federal programs. HHS’s clause is unique in including an additional reference to an exemption in the ADA. All three commenters recommended that HHS remove the reference to the ADA to promote consistency with the other Agencies. Two of the commenters also based their recommendation on a belief that religious exemptions to nondiscrimination laws should not apply to faith-based organizations that are federally funded social service providers. Response: HHS agrees that it should remove the reference to the ADA from HHS’s employment discrimination provision, because that reference is inaccurate and confusing in the way it describes the ADA. HHS added the ADA reference in 45 CFR 87.3(h) (previously found at 45 CFR 87.3(f)) in the 2020 Rule. That provision refers to a faithbased organization’s right to retain its exemption from the Federal prohibition on employment discrimination ‘‘on the basis of religion.’’ The ADA preserves religious organizations’ right to engage in hiring on the basis of religion by limiting its disability-discrimination provisions. But the ADA does not authorize hiring on the basis of religion; the Civil Rights Act of 1964 does that. Consequently, HHS believes its regulation would be clearer if it removed the ADA reference. By removing the ADA reference, HHS will also help ensure that its rule is consistent with the other Agencies’ regulations. This change does not alter the substantive effect of the ADA or any other nondiscrimination statute. As noted above, HHS remains committed to ensuring that faith-based organizations are not discriminated against in HHS’s selection of service providers, and to affording faith-based and other organizations accommodations from program requirements in accordance with Federal law. Changes: HHS removes the phrase ‘‘and the Americans with Disabilities 4. Complaint and Enforcement Procedures Comments: As discussed in Part II.G.3 of the joint preamble, various commenters recommended that the proposed rule be revised to identify a point of contact for complaints in the regulatory text. One commenter additionally suggested that HHS, in particular, specify its enforcement procedures in its regulation. The commenter also maintained that the HHS Office for Civil Rights (‘‘OCR’’) may not know how to investigate complaints and verify compliance with the regulation, and accordingly recommended that, in the final rule, HHS clarify how complaints for violations of its regulation may be filed and specify the procedures for enforcement as well as consequences for violations. Response: HHS declines to change 45 CFR 87.3(k)(4) to identify the process for filing complaints concerning violations of the rule and to make clear HHS’s enforcement procedures. Supplementing the proposed rule language with greater detail on those topics is beyond the scope of this rulemaking. Doing so is also unnecessary because HHS enforcement procedures for violations of applicable civil rights statutes are already set forth elsewhere in 45 CFR part 80, and enforcement procedures for any other violations of this rule are set forth in 45 CFR part 75. Further, 45 CFR 87.3(k)(4) already makes clear that any complaint concerning violations of this rule may be filed with ‘‘either the HHS awarding entity or the pass-through entity that awarded funds to the organization, which must promptly report the complaint to the HHS awarding entity.’’ The provision adds that the HHS awarding entity will address the complaint in consultation with HHS’s OCR. This process is consistent with HHS’s organizational structure and delegations of authority. On January 15, 2021, the Secretary delegated to OCR the authority to investigate allegations of violations of the nondiscrimination provisions in this rule. Also, the individual program offices that administer each grant program (‘‘awarding entities’’) have authority to review and enforce other kinds of potential violations of this rule, among other regulations and award terms and conditions that are applicable to the specific grant program at issue. The enforcement remedies that OCR and the awarding entities may adopt in PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations the event of any violation of these rules vary according to several factors, such as the facts underlying the alleged violation, any prior corrective action opportunities, and any other applicable program authorities. For example, while awarding entities that administer a given program may be bound by a program-specific authority that addresses enforcement of program requirements, most HHS programs are governed by HHS-wide regulations that address enforcement of program requirements at 45 CFR 75.371 (‘‘Remedies for noncompliance’’) and 75.372 (‘‘Termination’’). HHS believes that integrating these enforcement remedies into this rule text would be unnecessary and, in any event, is beyond the scope of this rulemaking. As indicated in Part II.G.3 of the joint preamble above, all of the Agencies, including HHS, acknowledge that beneficiaries of federally funded social service programs need clarity about what office to contact if they experience discrimination in violation of these regulations. At the same time, HHS has determined that it is not feasible to identify a single address or phone number to which all complaints concerning this rule may be directed because the awarding entity will vary according to the program. Consequently, consistent with the approach of other Agencies, as described in Part II.A.4 of the joint preamble, HHS revises the model notice of beneficiary protections proposed in the Joint NPRM to require the awarding entity to identify a point of contact to which complaints can be directed. To help ensure that this information is included in notices to beneficiaries, HHS includes a requirement at 45 CFR 87.3(k)(1) of this final rule that the notice of beneficiary protections in directly funded programs be substantially similar to the model notice in its appendix A. As to indirectly funded social service programs, a new 45 CFR 87.3(k)(2) of this final rule requires that the notice of beneficiary protections in indirectly funded programs include similar contact information. That notice must also identify the protections regarding nondiscrimination on the basis of religion in 45 CFR 87.3(f), and attendance or participation in any explicitly religious activities in 45 CFR 87.3(k)(1)(ii). With these changes, the notice to beneficiaries will serve as a resource, in both direct and indirect funding contexts, in which a point of contact for any complaints can be found. Finally, HHS notes that the name of the HHS program office that has awarded a project, and contact VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 information for that office, is also typically made available on HHS’s website. Changes: The regulation at 45 CFR 87.3(k)(1) is revised to require that the notice of beneficiary protections in directly funded programs adopt language that is substantially similar to that in appendix A, which includes a point of contact for any complaints. A new § 87.3(k)(2) is added to require that beneficiaries and prospective beneficiaries in indirectly funded programs receive a notice of protections that also includes a point of contact for complaints. Section 87.3(k)(4) is unchanged. D. Department of Housing and Urban Development Unless specified below, all comments received by HUD are addressed fully in the discussion of cross-cutting issues in Part II of the joint preamble, and those responses are adopted by HUD. HUD here provides additional HUD-specific responses to comments. This Agencyspecific discussion is organized in the same manner as the joint preamble. 1. Handling Complaints Comments: A commenter recommended that HUD charge its Office of Fair Housing and Equal Opportunity (‘‘FHEO’’) with handling complaints implicating this rule’s beneficiary protections. The commenter expressed that doing so would be consistent with HUD’s current practice for handling complaints under its HUDwide Equal Access Rule, as well as complaints under the Violence Against Women Act’s (‘‘VAWA’s’’) housing protections. Response: HUD recipients must comply with all applicable programmatic requirements and Federal civil rights laws and their implementing regulations. Program violations will likewise be handled in accordance with applicable statutes and regulations. Individuals who believe they have experienced—or are about to experience—a program violation while accessing or attempting to access programs and activities assisted by HUD may complain to the responsible program office or to HUD’s Center for Faith-Based and Neighborhood Partnerships (‘‘CFBNP’’). CFBNP has the resources and technical assistance experience to work with faith-based and community partners and HUD’s program offices in ensuring equal participation of faith-based organizations in HUD programs and activities. Furthermore, because a complaint may allege violations of multiple authorities, CFBNP will work PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 15693 with FHEO when a complaint alleges discrimination that is potentially cognizable under the Fair Housing Act, Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act, VAWA, the Age Discrimination Act of 1975, or any of the other civil rights requirements enforced by FHEO. In addition, if a person believes that they are the victim of discrimination prohibited under a different Federal civil rights statute or requirement enforced by HUD other than those discussed in this rule, they may also file a complaint with FHEO. To the extent a recipient is found to have violated a program requirement or an applicable civil rights statute, they may be subject to sanctions and penalties for such violations as provided for under the applicable statutes or regulations. Changes: None. 2. Removal of the Reference to Tenets Comments: One commenter objected to the extension of the Title VII religious-employer exemption to Government-funded positions, and said that the 2020 Rule exacerbated this problem by suggesting that Title VII permits religious organizations that qualify for the Title VII religiousemployer exemption to insist upon tenets-based employment conditions that would otherwise violate Title VII or the particular underlying funding statute in question. The commenter noted that while most of the Agencies proposed removing the ‘‘tenets’’ related language in their proposed regulations, HUD did not. The commenter urged HUD to likewise remove the reference to tenets-based employment conditions in its regulations. Response: For the reasons elaborated in Part II.E of the joint preamble, and for consistency with the other Agencies, HUD will remove the text on tenetsbased employment conditions from its regulations as it is unnecessary and potentially misleading. Changes: HUD removes language stating that organizations may select their employees on the basis of their acceptance of or adherence to religious tenets in 24 CFR 5.109(d)(2). 3. Eligibility and Program Requirements Comments: One commenter supported the Agencies’ proposal to remove the phrase ‘‘on the same basis as any other organization and considering a religious accommodation’’ from their regulations’ provisions regarding organizations’ eligibility for program participation. The commenter contended, however, that HUD had failed to remove that language from its E:\FR\FM\04MRR3.SGM 04MRR3 15694 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES3 proposed regulation and so should do so in the final rule. Response: In this final rule, HUD deletes the clause ‘‘and considering any permissible accommodation on a caseby-case basis in accordance with the Constitution and laws of the United States’’ from 24 CFR 5.109(c)(1). HUD believes that this change promotes clarity and avoids redundancy in the regulatory text. In addition, HUD makes this change to promote consistency with other Agencies’ rule texts, as recommended by the commenter. HUD emphasizes that the removal of the clause in question is not a substantive change, nor does it represent any departure from HUD’s strong commitment to its obligations to comply with the Free Speech and Free Exercise Clauses of the First Amendment to the U.S. Constitution and Federal laws that support and protect religious exercise and freedom of conscience, including RFRA. HUD remains fully committed to thoroughly considering any organization’s assertion that an obligation imposed upon it conflicts with its rights under those authorities, and will provide such accommodations in accordance with Federal law. At the same time, HUD disagrees with the recommendation that it rescind the clause ‘‘on the same basis as any other organization’’ from 24 CFR 5.109(c)(1). That clause has long been a part of HUD’s regulation and reflects HUD’s dedication to ensuring that faith-based organizations are not discriminated against in HUD’s selection of service providers. Moreover, HUD has decided to keep that clause so that it remains consistent with other Agencies’ final regulations. Changes: HUD deletes the clause ‘‘and considering any permissible accommodation on a case-by-case basis in accordance with the Constitution and laws of the United States’’ from 24 CFR 5.109(c)(1) as proposed. 4. Beneficiary Notice for Indirect Aid Recipients Comments: As described in Part II.A.4 of the joint preamble, some commenters recommended that the Agencies require that written notice be provided to beneficiaries of programs receiving indirect Federal financial assistance. While recognizing that those beneficiaries are not entitled to all of the protections identified in the notice—in particular, the requirement to separate explicitly religious activities applies only to activities supported with direct Federal financial assistance—the commenters asserted that beneficiaries of indirectly funded programs should be VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 notified of the rights to which they are entitled. Response: HUD agrees with the other Agencies that the rationale for adopting the beneficiary notice requirement— improving beneficiaries’ access to federally funded services by informing them of their rights, and thereby removing certain barriers arising from discrimination—applies equally to all beneficiaries, regardless of whether they are participating in programs receiving direct or indirect Federal financial assistance. HUD provides indirect Federal financial assistance through various programs, including its Housing Choice Voucher (‘‘HCV’’) program, Project-Based Voucher (‘‘PBV’’) program, Section 8 Moderate Rehabilitation programs, Housing Opportunities for Persons with AIDS (‘‘HOPWA’’) program, Continuum of Care (‘‘CoC’’) program, and Emergency Solution Grants (‘‘ESG’’) program. Due to the structure of HUD’s programs, HUD has determined that the indirect aid beneficiary notice will be provided by Public Housing Agencies (‘‘PHAs’’) for the HCV, PBV, and Section 8 Moderate Rehabilitation programs, by the grantees or project sponsors responsible for making eligibility determinations for the HOPWA program, and the recipients or subrecipients that are responsible for determining the eligibility of each family or individual for the CoC and ESG programs. The final rule further clarifies that the entities that receive indirect Federal financial assistance are not responsible for providing the beneficiary notice, to ensure that this requirement does not impose a burden that negatively affects private provider participation in HUD-funded programs. Changes: HUD revises its regulations to add 24 CFR 5.109(g)(2)(ii). 5. Model Written Notice Comments: A commenter suggested that HUD follow the example of DOL and HHS by providing a model written beneficiary notice as an appendix to ensure beneficiaries consistently receive adequate notice of their rights. The commenter opined that a model notice will not only help ensure beneficiary rights are respected, but also assist Federal awardees and minimize administrative burdens. Further, the commenter stated that by offering a model notice, the Agencies can help ensure the nondiscrimination and noncoercion requirements of the rule are effective in minimizing the risk that beneficiaries will encounter discrimination when accessing critical services. PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 Response: HUD agrees with the commenter that providing a model beneficiary notice will ensure that beneficiaries are aware of their rights and that the notice will minimize the risk that beneficiaries will encounter discrimination. Under the final rule, the model written notice will ensure beneficiaries consistently receive adequate notice and will provide clarity for beneficiaries regarding protections for them. Accordingly, HUD incorporates a model beneficiary notice in this final rule. Changes: HUD adds a model beneficiary notice to accompany this final rule in 24 CFR part 5, appendix C. E. Department of Education Unless otherwise specified, all comments received by ED are addressed fully in the discussion of cross-cutting issues in Part II of the joint preamble, and those responses are adopted by ED. ED addresses in this part of the preamble the ED-specific comments not fully addressed in Part II of this preamble. ED does not discuss in this part of the preamble minor or technical changes that were made to provide greater consistency or simplify the language in its regulations. 1. Beneficiary Protections Comments: One commenter recommended that ED charge its Office for Civil Rights (‘‘OCR’’) with responsibility for addressing complaints regarding compliance with the beneficiary protections set forth in this rule. Response: ED does not address in this rule which of its components will handle complaints regarding compliance with the rule’s beneficiary protections because the ED components involved in addressing any alleged violation of the rule could vary according to multiple factors, such as the facts underlying the alleged violation or the existence of a dispute resolution system under the applicable program. Changes: None. Comments: As described in Part II.A.4 of the joint preamble, some commenters recommended that, in addition to requiring that the written notice of beneficiary rights be provided to beneficiaries of programs receiving direct Federal financial assistance, the Agencies should require that the notice be provided to beneficiaries of indirect Federal financial assistance. Response: ED declines to extend its beneficiary notice requirement to programs involving indirect Federal financial assistance. Currently, ED operates only one such program, the E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES3 District of Columbia Opportunity Scholarship Program authorized under the Scholarships for Opportunity and Results (‘‘SOAR’’) Act, which provides scholarships to enable students from low-income families in the District of Columbia to attend a participating private elementary or secondary school of their choice. Under this program, a student’s family must apply and gain admission to a participating private school while separately applying for the scholarship. Participating private schools from which a student’s family may choose include both religious and secular schools. The SOAR Act includes independent requirements governing religious discrimination and participation of religiously affiliated schools. Specifically, Congress prohibited a participating private school from discriminating against program participants or applicants on the basis of religion, as well as race, color, national, origin, or sex. D.C. Code 38–1853.08(a). ED’s grantee administering the program provides a notice of these nondiscrimination requirements as part of the scholarship application that parents complete. Given the structure of ED’s sole indirect aid program and considering that a notice of nondiscrimination, including religious nondiscrimination, is already provided to applicants for that program, ED believes it is unnecessary to adopt additional notice requirements for programs providing indirect Federal financial assistance at this time. Changes: None. 2. Eligibility of Faith-Based Organizations Comments: One commenter noted that, unlike most other Agencies, ED does not include in its provider notice appendices (appendices A and B to 34 CFR part 75) language indicating that an organization may not use direct Federal financial assistance to ‘‘support or engage in explicitly religious activities.’’ The commenter recommended that ED add this language to its appendices. Response: ED agrees with the commenter that inclusion of this language would be helpful to maintain consistency with other Agencies’ corresponding appendices. Changes: ED has revised appendices A and B to 34 CFR part 75 to make clear that an organization may not use direct Federal financial assistance to ‘‘support or engage in explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements.’’ VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 F. Department of Veterans Affairs In this section, VA addresses the few VA-specific comments not addressed in the joint preamble above. All other comments received by VA or otherwise affecting VA’s regulations are addressed fully in Part II of the joint preamble, and VA adopts those responses. 1. Religion or Religious Belief Comments: One commenter suggested that VA update two of its nondiscrimination provisions, 38 CFR 61.64(e) and 62.62(e), to replace ‘‘religion or religious belief’’ with ‘‘religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.’’ The commenter explained that the inclusion of this language would further strengthen VA’s commitment to ensuring that all beneficiaries and prospective beneficiaries have access to federally funded services and programs without unnecessary barriers and free from discrimination. Response: VA agrees with the commenter’s suggestion. VA’s proposed regulation text at 38 CFR 50.2(d) already stated that ‘‘[a]ny organization that participates in programs funded by Federal financial assistance from the department shall not . . . discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.’’ In an oversight, however, VA used different phrasing in the proposed versions of 38 CFR 61.64(e) and 62.62(e). For consistency within its own regulations and with those of the other Agencies, VA has revised the text in 38 CFR 61.64(e) and 62.62(e) of this final rule to likewise use the phrase ‘‘religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.’’ Changes: VA revises 38 CFR 61.64(e) and 62.62(e) to incorporate the phrase ‘‘religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.’’ 2. Participation in VA Programs or Services Comments: The regulation at 38 CFR 50.2(e) prohibits several forms of discrimination against providers participating in VA programs or services. One commenter suggested deleting the first sentence of that provision, which reads as follows: ‘‘A faith-based organization is not rendered PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 15695 ineligible by its religious exercise or affiliation to access and participate in Department programs.’’ The commenter suggested that the sentence is repetitive of the substantive prohibitions stated elsewhere in 38 CFR 50.2(e), and urged that deleting it would avoid confusion and advance consistency. Response: VA agrees that the first sentence of 38 CFR 50.2(e) is repetitive of the other language in that provision guaranteeing equal access to VA programming for faith-based organizations and so removes that sentence in this final rule. Changes: VA revises 38 CFR 50.2(e) to remove the first sentence. G. Department of Homeland Security DHS received several public comments that specifically addressed DHS’s proposed regulatory changes. The majority of the comments requested that DHS revise its regulations for consistency in regulatory language with the other Agencies, and several commenters also suggested specific revisions to provide clarity and avoid confusion. DHS addresses these comments below. All other comments received by DHS, or that affect DHS’s regulations, are addressed in Part II of the joint preamble, and DHS adopts those responses. Comments: One commenter recommended that DHS amend its definition of ‘‘indirect Federal financial assistance’’ in 6 CFR 19.2 to be consistent with the language used by the majority of the Agencies. Specifically, the commenter recommended that DHS add ‘‘not a choice of the Government’’ after ‘‘genuinely independent and private choice of a beneficiary.’’ Response: DHS agrees that its omitting this additional phrase could be confusing and would hinder the goal of maximizing consistency across the Agencies’ regulations. Accordingly, DHS amends the text of 6 CFR 19.2 to add that phrase, and thereby to maintain consistency of language among the Agencies. Changes: DHS amends 6 CFR 19.2 by adding the phrase ‘‘and not a choice of the Government’’ to the definition of ‘‘indirect Federal financial assistance.’’ Comments: Several commenters suggested that DHS amend 6 CFR 19.3 and 19.4 and its appendix A to clarify DHS’s regulatory language prohibiting discrimination against religious organizations. In particular, commenters suggested that DHS change the phrase ‘‘because such organization is motivated or influenced by religious faith to provide social services’’ to ‘‘because of such organization’s religious character, motives, or affiliation, or lack thereof,’’ E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15696 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations which the commenter asserts is much clearer. Finally, another commenter recommended that DHS amend its appendix A to add ‘‘or lack thereof’’ after ‘‘religious character, motives, or affiliation’’ in § 19.3. Response: DHS agrees with the commenters that it should amend 6 CFR 19.3 and 19.4 and its appendix A in the manner suggested. As explained in Part II.D.1 of the joint preamble, the suggested formulation makes the scope of the prohibition on discrimination clearer. This change will also promote consistency among the Agencies’ regulations. Changes: DHS amends the text of 6 CFR 19.3(g)(1) and 19.4(c) and appendix A to 6 CFR part 19 as suggested by commenters. Comments: Commenters observed that DHS and a couple of other Agencies proposed rule text in the Joint NPRM that included a religious accommodations clause not found in the remaining Agencies’ rule text. Specifically, the commenters noted that DHS proposed that 6 CFR 19.3 state: ‘‘Faith-based organizations are eligible, on the same basis as any other organization, and considering any permissible accommodation appropriate under the Constitution and other provisions of Federal law, to seek and receive direct financial assistance from DHS for social service programs or to participate in social service programs administered or financed by DHS.’’ See 88 FR 2412. By contrast, other Agencies omitted the reference to ‘‘any permissible accommodation’’ in their nondiscrimination provisions. Apart from language consistency, the commenters also asserted that the accommodations clause in DHS’s regulations is confusing. Response: DHS agrees with the commenters’ suggestion and removes the ‘‘any permissible accommodation’’ language from its final regulations. That language was not intended to have any substantive effect, so its removal likewise effects no substantive change. DHS is fully committed to granting constitutionally and statutorily required accommodations, as it must, irrespective of whether that commitment is restated in this context. DHS recognizes, however, that including such accommodations language, in deviation from other Agencies’ regulatory text, could invite readers to infer a substantive difference in meaning, contrary to DHS’s regulatory intent. DHS therefore deletes the ‘‘any permissible accommodation’’ language in this final rule. VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 Changes: DHS removes the phrase ‘‘any permissible accommodation’’ from 6 CFR 19.3(a). H. Agency for International Development Unless otherwise specified, those comments received by USAID or affecting USAID’s regulations are addressed fully in Part II of the joint preamble, and USAID adopts those responses except where noted. In the Joint NPRM, USAID inadvertently removed its existing regulatory language related to accommodations without replacing it with the intended new language. USAID adopts the discussion of accommodations in Part II of the joint preamble and has updated its amendatory text accordingly. USAID addresses in this part of the preamble the USAID-specific comments not addressed in the joint preamble and provides USAID-specific findings and certifications. USAID does not discuss in this part of the preamble minor or technical changes that were made to provide greater consistency or simplify the language in the regulations. 1. Beneficiary Notice Requirement As explained in the Joint NPRM, and in footnotes 1 and 2 of the joint preamble, as a result of several distinctive characteristics of its programs, USAID does not adopt the discussion of the cross-cutting comments related to the beneficiary notice requirements in Part II.A.4 of the joint preamble. Instead, USAID addresses the comments it received on that topic in the following discussion. Comments: USAID received three comments regarding its proposal to refrain from adopting a written beneficiary notice requirement. One commenter urged USAID to require written notice to beneficiaries of their right to be free from religious discrimination in all relevant local languages, arguing that, if USAID failed to do so, beneficiaries of USAID-funded programs would have fewer protections than beneficiaries of other federally funded programs. Another commenter acknowledged that the unique international context in which USAID operates may warrant some adjustment to the beneficiary notices provided by other Agencies, but argued that some form of notice should still be required. Another commenter, by contrast, contended that while the beneficiary notice should be universally required by domestic agencies, it should not apply to USAID’s programs. Response: At this time, USAID declines to adopt a requirement that all beneficiaries of USAID-funded programs PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 receive written notice of a right to be free from religious discrimination. USAID is, however, exploring ways to effectively address current challenges associated with written notices in order to potentially disseminate information about beneficiary protections more broadly in the future. USAID acknowledges commenters’ suggestions that the value of religious nondiscrimination protections for beneficiaries is strengthened when beneficiaries are aware that they have such protections. As another commenter explained, however, USAID’s global programming means USAID operates under different circumstances than the eight other domestically focused Agencies. USAID funds assistance in more than 100 countries, many of which have multiple official or national languages, often in addition to countless local languages that are the actual primary language of USAID beneficiaries. See USAID, Fiscal Year 2023 Agency Financial Report at iii (Nov. 14, 2023), https://www.usaid.gov/ sites/default/files/2023-11/USAID_ 2023AFR_508.pdf. USAID-funded assistance also often targets some of the most vulnerable populations in the world, and many of these communities have varying degrees of literacy, making other-than-written forms of communication necessary. While language and literacy obstacles can also affect U.S. domestic programs administered by the other Agencies, these issues affect USAID programs on a much wider scale and highlight some of the challenges that impede meaningful dissemination of a written beneficiary notice throughout USAIDfunded programs. USAID does not concur with the comment that the Agency lacks adequate religious nondiscrimination protections for beneficiaries. USAID’s existing regulations and award terms make explicit that an organization that participates in programs funded by financial assistance from USAID, including through an award or subaward, must not, in providing services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. Changes: None. 2. Alternative Provider Requirements USAID does not adopt the discussion of the cross-cutting comments related to the alternative provider requirements in Part II.A.4 of the joint preamble. Instead, USAID addresses the comments it E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations received on that topic in the following discussion. Comments: USAID received two comments regarding its proposal to refrain from adopting an alternative provider referral requirement. The first commenter urged USAID to adopt an alternative provider referral requirement akin to what the other Agencies adopted in the 2016 Rule. In the alternative, the commenter encouraged USAID to consider adopting the modified referral requirement that the rest of the domestically focused Agencies proposed in the Joint NPRM, under which USAID would attempt to identify an alternative provider if a beneficiary were to object to the nature of a service provider, regardless of whether that provider was religious or secular. The second commenter, in contrast, argued that USAID should not adopt an alternative provider requirement due to the different circumstances in which USAID operates. Response: USAID declines to adopt an alternative provider referral requirement at this time. USAID agrees with the second commenter that it operates under different circumstances than the other eight domestically focused agencies. As explained above, USAID funds activities in more than 100 countries, often in some of the hardestto-reach places on earth, where social services are often not readily available. Furthermore, it may be difficult to locate alternatives depending on the cultural and religious context of the country in which USAID is operating. USAID also notes that it communicates and promotes important religious freedom messages through separate, targeted programs, such as its democracy, rights, and government initiatives. Changes: None. khammond on DSKJM1Z7X2PROD with RULES3 3. Appendices A and B Comments: USAID received one comment urging it to adopt an appendix A (Notice or Announcement of Award Opportunities) and an appendix B (Notice of Award or Contract). Response: USAID declines to adopt model language similar to that found in other Agencies’ appendix A or B. USAID already includes this information in its notices of funding opportunities and awards through inclusion or incorporation by reference of USAID’s standard award provisions. Changes: None. VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 IV. General Regulatory Certifications A. Regulatory Planning and Review (Executive Order 12866); Improving Regulation and Regulatory Review (Executive Order 13563); Modernizing Regulatory Review (Executive Order 14094) Under section 6(a) of Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 (Sept. 30, 1993), the Office of Management and Budget (‘‘OMB’’) Office of Information and Regulatory Affairs (‘‘OIRA’’) determines whether a regulatory action is significant and, therefore, subject to the requirements of the Executive order and review by OMB. Section 3(f) of Executive Order 12866, as amended by section 1(b) of Executive Order 14094, Modernizing Regulatory Review, 88 FR 21879 (Apr. 6, 2023), defines a ‘‘significant regulatory action’’ as an action that is likely to result in a rule that may: (1) have an annual effect on the economy of $200 million or more, or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or Tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impacts of entitlement grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) raise legal or policy issues for which centralized review would meaningfully further the President’s priorities or the principles set forth in the Executive order. OIRA has determined that this final rule is a significant regulatory action under section 3(f) of Executive Order 12866, as amended by Executive Order 14094. Executive Order 13563, Improving Regulation and Regulatory Review, 76 FR 3821 (Jan. 18, 2011), directs agencies to propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; the regulation is tailored to impose the least burden on society, consistent with achieving the regulatory objectives; and in choosing among alternative regulatory approaches, the agency has selected those approaches that maximize net benefits. Executive Order 13563 recognizes that some benefits are difficult to quantify and provides that, where appropriate and permitted by law, agencies may consider and discuss qualitatively values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts. The Agencies are issuing this final rule upon a reasoned determination that PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 15697 its benefits justify its costs. In choosing among alternative regulatory approaches, the Agencies selected those approaches that maximize net benefits. Based on the analysis that follows, the Agencies believe that this final rule is consistent with the principles in Executive Order 13563. The Agencies also have determined that this regulatory action does not unduly interfere with State, local, or Tribal governments in the exercise of their governmental functions. In accordance with Executive Orders 12866 and 13563, the Agencies have assessed the potential costs, cost savings, and benefits, both quantitative and qualitative, of this final rule. 1. Costs The potential costs of this final rule are those resulting from implementing the beneficiary notice requirements and regulatory familiarization. DOL previously estimated the cost of imposing a similar beneficiary notice requirement, reporting an upper-bound estimate of $200 per organization per year (in 2013 dollars). 81 FR 19395. This cost estimate was based on the expectation that it would take up to $100 in annual material costs and no more than two annual burden hours for a Training and Development Specialist to print, duplicate, and distribute notices to beneficiaries. Id. For this final rule, the Agencies adjusted the estimate to $251.22 (in 2022) to produce an upper-bound estimate, and also replicated this methodology to generate a central estimate of the cost per organization per year. For the replication, the Agencies adjusted the annual materials cost to $125.61 (in 2022 dollars) using the consumer price index (‘‘CPI’’).6 The Agencies calculated the cost of labor by multiplying the estimated time burden by the hourly compensation of a Training and Development Specialist (SOC Code 13–1151). According to the Bureau of Labor Statistics (‘‘BLS’’), the mean hourly wage rate for a Training and Development Specialist in May 2022 was $33.59.7 For this analysis, the Agencies used a fringe benefits rate of 6 To calculate this figure, as well as the adjusted upper-bound estimate, the Agencies used the data on annual averages of the CPI available at BLS, CPI Inflation Calculator, https://www.bls.gov/data/ inflation_calculator.htm. The average CPI for 2013 was $232.957; the average CPI for 2022 was $292.613. Using this ratio, the materials cost of $100 in 2013 dollars became $125.61 in 2022 dollars [= $100 × (292.613/232.957)]. 7 BLS, Occupational Employment and Wage Statistics, May 2022, https://www.bls.gov/oes/ current/oes131151.htm. E:\FR\FM\04MRR3.SGM 04MRR3 15698 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations 45 percent,8 resulting in a fully loaded hourly compensation rate for Training and Development Specialists of $48.71 [= $33.59 + ($33.59 × 0.45)]. The Agencies estimated that a Training and Development Specialist will spend on average two hours ($97.42) printing, duplicating, and distributing notices to beneficiaries. The Agencies combined these estimates to generate a primary cost per organization of the beneficiary notice requirement of $223.03 [= $125.61 + $97.42]. As shown in Table 1, the Agencies estimated the total annual cost resulting from the beneficiary notice requirement by multiplying the number of covered providers of social service programs receiving Federal financial assistance by the annual compliance cost of the notice requirement, namely their potential central estimate of $223.03. All providers receiving direct Federal financial assistance, as well as some providers receiving indirect Federal financial assistance, are subject to the beneficiary notice requirement in this final rule. The Agencies could not, however, differentiate direct recipients from indirect recipients in calculating the annual cost of the notice requirement, and thus the cost is overstated to the extent that it includes indirect recipients who may not be subject to the notice requirement, depending on each Agency’s determination under its revised regulations. On the other hand, for some Agencies, the number of providers of social service programs does not include subrecipients due to data limitations. This results in an underestimation of the annual cost of the beneficiary notice requirement. Overall, the annual cost of the final notice requirement is likely to be underestimated in this analysis, but not enough to change the determination of the Agencies that the benefits justify the costs. TABLE 1—ANNUAL COST OF FINAL BENEFICIARY NOTICE REQUIREMENT BY AGENCY Agencies Number of social service providers receiving federal financial assistance Cost per entity Annual cost (A) 9 (B) 10 (C = A × B) 11 18,152 DOJ ................................................................................................................ USDA ............................................................................................................. DOL ................................................................................................................ HHS ............................................................................................................... HUD ............................................................................................................... ED .................................................................................................................. VA .................................................................................................................. DHS ............................................................................................................... USAID ............................................................................................................ khammond on DSKJM1Z7X2PROD with RULES3 Total ........................................................................................................ 19 1,251 $223.03 223.03 223.03 223.03 223.03 223.03 223.03 223.03 0 $4,048,441 53,707,854 8,916,962 2,294,310 10,107,943 2,440,171 229,052 2,374,823 20 0 ................................................ .............................. 84,119,556 12 240,810 13 39,981 14 10,287 15 45,321 16 10,941 17 1,027 18 10,648 The process of regulatory familiarization, or reviewing the final rule to determine how it applies, will impose a one-time direct cost on all covered providers of social service programs in the first year. The Agencies calculated this cost by multiplying the estimated time to review the rule by the hourly compensation of a Community and Social Service Specialist (SOC Code 21–1099). According to the BLS, the mean hourly wage rate for a Community and Social Service Specialist in May 2022 was $24.82.21 For this analysis, the Agencies used a fringe benefits rate of 45 percent,22 resulting in a fully loaded hourly compensation rate for Community and Social Service 8 BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. Wages and salaries averaged $28.31 per hour worked in June 2022, while benefit costs averaged $12.72, which is a benefits rate of 45 percent. BLS, Employer Costs for Employee Compensation Archived News Releases, https://www.bls.gov/bls/ news-release/ecec.htm#2022. 9 Most Agencies provided their numbers of recipients of financial assistance, and the averages over three years (fiscal year (‘‘FY’’) 2019 to FY2021), where available, are presented in Table 1. 10 See the discussion preceding Table 1 for the derivation of a $223.03 estimate. 11 Average number of recipients of DOJ financial assistance from the Office on Violence Against Women and Office of Justice Programs in FY2019, FY2020, and FY2021. 12 Average number of recipients of USDA financial assistance from the National Institute of Food and Agriculture Program, Community Facilities Program, Single Family Housing Preservation Grant Program, Multifamily Housing Programs, and nutrition assistance programs in FY2019, FY2020, and FY2021. All other USDA programs, including via State partners, States and territories of the United States, and Tribal organizations, are estimates for the current fiscal year. 13 Number of recipients of DOL financial assistance under various programs authorized by title I of the Workforce Innovation and Opportunity Act in FY2019, FY2020, or FY2021. 14 Average number of prime recipients of HHS financial assistance in affected programs in FY2019, FY2020, and FY2021. 15 Average number of recipients of HUD financial assistance from the Community Development Block Grant Program, HOME Investment Partnerships, Public Housing Agency, Office of Native American Programs, Office of Special Needs, Multifamily Assisted Property Owners Program, Office of Rural Housing and Economic Development, and Comprehensive Housing Counseling Grant Program in FY2019, FY2020, and FY2021. 16 Average number of recipients of ED financial assistance from discretionary grant programs and formula grant programs in FY2019, FY2020, and FY2021. 17 Average number of recipients of VA financial assistance from the Supportive Services for Veteran Families and Grant and Per Diem Programs in FY2019, FY2020, and FY2021. In addition, at the time of the proposed rule, VA estimated that the Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program would fund 90 grantees in each of FY2022 and FY2023. The Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program has awarded funding to 80 grantees in each of FY2022 and FY2023, resulting in a lower annual cost than estimated. 18 Average number of recipients of DHS financial assistance from USCIS’s Citizenship and Integration Grant Program and the Federal Emergency Management Agency’s Disaster Case Management, Crisis Counseling Assistance and Training Program and Emergency Food and Shelter Program in FY2019, FY2020, and FY2021. 19 Average number of prime recipients of USAID financial assistance in FY2019, FY2020, and FY2021. 20 USAID is not adopting the beneficiary notice requirement, so this final rule will not result in any cost to recipients of financial assistance from USAID. 21 BLS, Occupational Employment and Wage Statistics, May 2022, https://www.bls.gov/oes/ current/oes211099.htm. 22 BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. Wages and salaries averaged $26.22 per hour worked in 2020, while benefit costs averaged $11.99, which is a benefits rate of 46 percent. VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations Specialists of $35.99 [= $24.82 + ($24.82 × 0.45)]. The Agencies estimated that a Community and Social Service Specialist will spend on average 30 minutes reviewing the rule ($18). Table 2 shows the one-time regulatory 15699 familiarization cost by Agency in the first year. TABLE 2—ONE-TIME REGULATORY FAMILIARIZATION COST BY AGENCY Agencies Number of social service providers Cost per entity Cost in the first year (A) (B) (C = A × B) DOJ ................................................................................................................ USDA ............................................................................................................. DOL ................................................................................................................ HHS ............................................................................................................... HUD ............................................................................................................... ED .................................................................................................................. VA .................................................................................................................. DHS ............................................................................................................... USAID ............................................................................................................ 18,152 240,810 39,981 10,287 45,321 10,941 1,027 10,648 1,251 $18 18 18 18 18 18 18 18 18 $326,736 4,334,580 719,658 185,166 815,778 196,938 18,486 191,664 22,518 Total ........................................................................................................ ................................................ .............................. 6,811,524 Table 3 shows the total annualized cost at a seven percent and a three percent discounting for the final beneficiary notice requirement and the one-time regulatory familiarization cost. For example, the annualized cost for DOL-regulated entities is $9,018,626 at a seven percent discounting. The total annualized cost for all nine Agencies is $85,081,821 at a seven percent discounting. This total cost estimate is likely to be understated because some subrecipients are not included in the analysis, but not enough to change the determination of the Agencies that the benefits of the beneficiary notice requirement justify its costs. TABLE 3—TOTAL COST OF FINAL BENEFICIARY NOTICE REQUIREMENT AND REGULATORY FAMILIARIZATION BY AGENCY Annual cost of final beneficiary notice requirement Agencies Total annualized cost at a 7 percent discounting Total annualized cost at a 3 percent discounting DOJ ................................................ USDA ............................................. DOL ................................................ HHS ............................................... HUD ............................................... ED .................................................. VA .................................................. DHS ............................................... USAID ............................................ $4,048,078 53,703,038 8,916,163 2,294,104 10,107,036 2,439,952 229,031 2,374,610 0 $326,736 4,334,580 719,658 185,166 815,778 196,938 18,486 191,664 22,518 $4,094,597 54,320,185 9,018,626 2,320,467 10,223,185 2,467,992 231,663 2,401,899 3,206 $4,086,381 54,211,183 9,000,529 2,315,811 10,202,670 2,463,040 231,198 2,397,079 2,640 Total ........................................ ........................................ .............................................. 85,081,821 84,910,532 2. Cost Savings khammond on DSKJM1Z7X2PROD with RULES3 The one-time regulatory familiarization cost The final beneficiary notice requirement could provide some cost savings to beneficiaries who may be able to receive free information about alternative providers in their area and therefore may no longer need to investigate alternative providers on their own. While the Agencies cannot quantify this cost savings with a reasonable degree of confidence, the Agencies expect this cost savings to be insignificant because the number of beneficiaries who incur costs to identify alternative providers is likely very small. 3. Benefits As noted above, section 1(c) of Executive Order 13563 recognizes that some benefits and costs are difficult to VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 quantify and provides that, where appropriate and permitted by law, agencies may consider and discuss qualitative values that are difficult or impossible to quantify, including equity, human dignity, and distributive impacts. 76 FR 3821. The Agencies recognize a non-quantified benefit to social service providers in the form of increased clarity, consistency, and fairness that will result from imposing uniform notice requirements on faithbased and secular organizations alike, in accordance with the longstanding Federal policy that faith-based organizations are eligible to participate in grant-making programs on the same basis as other organizations. The final rule may also benefit providers in that it would provide information, where the Agencies determine appropriate, that could ultimately connect them with PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 beneficiaries who are in need of their services. Additionally, in situations in which beneficiaries lack true private choice, the final rule will benefit faithbased organizations by enabling them to continue operating indirect aid programs, consistent with Executive Order 14015’s recognition that faithbased organizations are essential to the delivery of social services. The final rule will also benefit beneficiaries in several important ways. Specifically, the final beneficiary notice requirement will result both in tangible benefits for beneficiaries, as the reduction of certain barriers due to discrimination improves access to federally funded services, and in unquantifiable dignitary benefits associated with avoiding discrimination. Additionally, the final referral option will make it easier for E:\FR\FM\04MRR3.SGM 04MRR3 15700 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations beneficiaries who object to receiving services from one provider to learn about alternative providers. And, where such alternatives are unavailable as a practical matter, the final rule will allow an Agency to ensure that beneficiaries are not effectively required to participate in religious activities in order to receive the benefits of federally funded programs. Finally, the final rule will benefit all beneficiaries, including those who would freely choose faithbased providers, by expanding the universe of providers reasonably available to them. khammond on DSKJM1Z7X2PROD with RULES3 B. Regulatory Flexibility Analysis The Regulatory Flexibility Act of 1980 (‘‘RFA’’), 5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104–121, tit. II, 110 Stat. 847, 857, requires Federal agencies engaged in rulemaking to assess the impact of their proposals on small entities, consider alternatives to minimize that impact, and solicit public comment on their analyses. The RFA requires the assessment of the impact of a regulation on a wide range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions. Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. 5 U.S.C. 603, 604. The Agencies believe that the ‘‘central estimate’’ cost of $241.03 per provider in the first year is far less than one percent of the annual revenue of even the smallest providers of social services. Therefore, the Agencies certify that this final rule will not have a significant economic impact on a substantial number of small entities. C. Civil Justice Reform (Executive Order 12988) Executive Order 12988, Civil Justice Reform, 61 FR 4729 (Feb. 5, 1996), provides that agencies shall draft regulations that meet applicable standards to avoid drafting errors and ambiguity, minimize litigation, provide clear legal standards for affecting conduct, and promote simplification and burden reduction. This final rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988, 61 FR 4731–32. D. Consultation and Coordination With Indian Tribal Governments (Executive Order 13175) The Agencies have reviewed this final rule in accordance with Executive Order 13175, Consultation and Coordination VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 With Indian Tribal Governments, 65 FR 67249 (Nov. 6, 2000). Tribal sovereignty and self-governance will not be affected by this final rule, consistent with existing protections for Indian Tribes under Federal law, including the Indian Civil Rights Act. As nothing in this rule affects the existing prerogatives and authority of Indian Tribes, no interagency consultation with Indian Tribes was conducted regarding the rule. The Agencies may, however, conduct Agency-specific Tribal consultations should the implementation of an Agency’s particular program merit further Tribal consultation or coordination. E. Federalism Section 6 of Executive Order 13132, Federalism, 64 FR 43255, 43257–58 (Aug. 4, 1999), requires Federal agencies to consult with State entities when a regulation or policy will have a substantial direct effect on the States, the relationship between the National Government and the States, or the distribution of power and responsibilities among the various levels of government within the meaning of the Executive order. Section 3(b) of the Executive order further provides that Federal agencies may implement a regulation limiting the policymaking discretion of the States only if constitutional or statutory authority permits the regulation and the regulation is appropriate in light of the presence of a problem of national significance. Id. at 43256. The final rule does not have a substantial direct effect on the States, the relationship between the National Government and the States, or the distribution of power and responsibilities among the various levels of government, within the meaning of Executive Order 13132. Furthermore, relevant constitutional and statutory authority supports the final rule, and it is appropriate in light of the presence of a problem of national significance. F. Paperwork Reduction Act This final rule does not contain any new or revised ‘‘collection[s] of information’’ as defined by the Paperwork Reduction Act of 1995 (‘‘PRA’’), 44 U.S.C. 3502(3). The Agencies have determined in consultation with OIRA that the requirement to provide written notice to beneficiaries of certain nondiscrimination protections is not a collection of information subject to the PRA because the Federal Government has provided or will provide the information that a provider must use. See 5 CFR 1320.3(c)(2). PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 G. Unfunded Mandates Reform Act Section 202(a) of the Unfunded Mandates Reform Act of 1995 (‘‘UMRA’’), 2 U.S.C. 1532(a), requires that a Federal agency determine whether a regulation proposes a Federal mandate that may result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector, of $100 million or more in a single year (adjusted annually for inflation). The inflation-adjusted value of $100 million in 1995 was approximately $178 million in 2021 based on the CPI for All Urban Consumers.23 If a Federal mandate would result in expenditures in excess of the threshold, UMRA requires the agency to prepare a written statement containing, among other things, a qualitative and quantitative assessment of the anticipated costs and benefits of the Federal mandate. 2 U.S.C. 1532(a). The Agencies have reviewed this final rule in accordance with UMRA and determined that the total cost to implement the rule in any one year will not meet or exceed the threshold. The final rule does not include any Federal mandate that may result in increased expenditure by State, local, and Tribal governments in the aggregate of more than the threshold, or increased expenditures by the private sector of more than the threshold.24 Accordingly, UMRA does not require any further action. H. Assessment of Educational Impact In the Joint NPRM, the Secretary of Education requested comments on whether the proposed regulations would require transmission of information that any other agency or authority of the United States gathers or makes available. Based on the responses to the Joint NPRM and the Agencies’ review, the Agencies have determined that these final regulations do not require transmission of information that any other agency or authority of the United States gathers or makes available. 23 The Agencies again derived this figure from the data on annual averages of the CPI available at BLS, CPI Inflation Calculator, https://www.bls.gov/data/ inflation_calculator.htm. The average CPI for 1995 was $152.40; the average CPI for 2021 was $270.97. Using this ratio, $100 million in 1995 dollars became $178 million in 2021 dollars [= $100,000,000 × (270.970/152.40)]. 24 See also 2 U.S.C. 1503 (excluding from UMRA’s ambit any provision in a proposed or final regulation that, among other things, enforces constitutional rights of individuals; establishes or enforces any statutory rights that prohibit discrimination on the basis of race, color, religion, sex, national origin, age, handicap, or disability; or provides for emergency assistance or relief at the request of any State, local, or Tribal government or any official of a State, local, or Tribal government). E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations List of Subjects 2 CFR Part 3474 Accounting, Administrative practice and procedure, Adult education, Aged, Agriculture, American Samoa, Bilingual education, Blind, Business and industry, Civil rights, Colleges and universities, Communications, Community development, Community facilities, Copyright, Credit, Cultural exchange programs, Educational facilities, Educational research, Education, Education of disadvantaged, Education of individuals with disabilities, Educational study programs, Electric power, Electric power rates, Electric utilities, Elementary and secondary education, Energy conservation, Equal educational opportunity, Federally affected areas, Government contracts, Grant programs, Grants administration, Guam, Home improvement, Homeless, Hospitals, Housing, Human research subjects, Indians, Indians—education, Infants and children, Insurance, Intergovernmental relations, International organizations, Inventions and patents, Loan programs, Manpower training programs, Migrant labor, Mortgage insurance, Nonprofit organizations, Northern Mariana Islands, Pacific Islands Trust Territories, Privacy, Renewable energy, Reporting and recordkeeping requirements, Rural areas, Scholarships and fellowships, School construction, Schools, Science and technology, Securities, Small businesses, State and local governments, Student aid, Teachers, Telecommunications, Telephone, Urban areas, Veterans, Virgin Islands, Vocational education, Vocational rehabilitation, Waste treatment and disposal, Water pollution control, Water resources, Water supply, Watersheds, Women. 6 CFR Part 19 Civil rights, Government contracts, Grant programs, Nonprofit organizations, Reporting and recordkeeping requirements. khammond on DSKJM1Z7X2PROD with RULES3 7 CFR Part 16 Administrative practice and procedure, Grant programs. 22 CFR Part 205 Foreign aid, Grant programs, Nonprofit organizations. 24 CFR Part 5 Administrative practice and procedure, Aged, Claims, Crime, Government contracts, Grant programs—housing and community development, Individuals with VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 disabilities, Intergovernmental relations, Loan programs—housing and community development, Low and moderate income housing, Mortgage insurance, Penalties, Pets, Public housing, Rent subsidies, Reporting and recordkeeping requirements, Social security, Unemployment compensation, Wages. 28 CFR Part 38 Administrative practice and procedure, Grant programs, Reporting and recordkeeping requirements. 29 CFR Part 2 Administrative practice and procedure, Grant programs, Religious discrimination, Reporting and recordkeeping requirements. 34 CFR Part 75 programs—health, Grant programs— housing and community development, Grant programs—Veterans, Health care, Homeless, Housing, Indians—lands, Individuals with disabilities, Low and moderate income housing, Manpower training programs, Medicaid, Medicare, Public assistance programs, Public housing, Relocation assistance, Rent subsidies, Reporting and recordkeeping requirements, Rural areas, Social security, Supplemental Security Income (SSI), Travel and transportation expenses, Unemployment compensation. 45 CFR Part 87 Administrative practice and procedure, Grant programs—social programs, Nonprofit organizations, Public assistance programs. Accounting, Copyright, Education, Grant programs—education, Indemnity payments, Inventions and patents, Private schools, Reporting and recordkeeping requirements, Youth organizations. DEPARTMENT OF EDUCATION 34 CFR Part 76 Title 2—Grants and Agreements Accounting, Administrative practice and procedure, American Samoa, Education, Grant programs—education, Guam, Northern Mariana Islands, Pacific Islands Trust Territory, Prisons, Private schools, Reporting and recordkeeping requirements, Virgin Islands, Youth organizations. 38 CFR Part 50 Administrative practice and procedure, Alcohol abuse, Alcoholism, Day care, Dental health, Drug abuse, Government contracts, Grant programs—health, Grant programs— veterans, Health care, Health facilities, Health professions, Health records, Homeless, Mental health programs, Per diem program, Reporting and recordkeeping requirements, Travel and transportation expenses, Veterans. 38 CFR Part 61 Administrative practice and procedure, Alcohol abuse, Alcoholism, Day care, Dental health, Drug abuse, Government contracts, Grant programs—health, Grant programs— veterans, Health care, Health facilities, Health professions, Health records, Homeless, Mental health programs, Per diem program, Reporting and recordkeeping requirements, Travel and transportation expenses, Veterans. 38 CFR Part 62 Administrative practice and procedure, Day care, Disability benefits, Government contracts, Grant PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 15701 For the reasons set forth in the preamble, the Secretary of Education amends part 3474 of title 2 of the CFR and parts 75 and 76 of title 34 of the CFR, respectively, as follows: PART 3474—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS 1. Revise the authority citation for part 3474 to read as follows: ■ Authority: 20 U.S.C. 1221e–3, 3474; 42 U.S.C. 2000bb et seq.; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 13831, 83 FR 20715, 3 CFR, 2018 Comp., p. 806; and 2 CFR part 200, unless otherwise noted. 2. Amend § 3474.15 by: a. Revising paragraph (b). b. Removing note 1 to paragraph (e)(1). ■ c. Revising paragraph (f). ■ d. In paragraph (g), removing the second sentence. The revisions read as follows: ■ ■ ■ § 3474.15 Contracting with faith-based organizations and nondiscrimination. * * * * * (b)(1) A faith-based organization is eligible to contract with grantees and subgrantees, including States, on the same basis as any other private organization. (2)(i) In selecting providers of goods and services, grantees and subgrantees, including States— (A) May not discriminate for or against a private organization on the basis of the organization’s religious character, motives, or affiliation, or lack E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15702 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization; and (B) Must ensure that the award of contracts is free from political interference, or even the appearance of such interference, and is done on the basis of merit, not on the basis of religion or religious belief, or lack thereof. (ii) Notices or announcements of award opportunities and notices of award or contracts must include language substantially similar to that in appendices A and B, respectively, to 34 CFR part 75. (3) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by a grantee or subgrantee in administering Federal financial services from the Department may require faithbased organizations to provide assurances or notices if they are not required of non-faith-based organizations. Any restrictions on the use of grant funds must apply equally to faith-based and non-faith-based organizations. All organizations that participate in Department programs or services, including organizations with religious character, motives, or affiliation, must carry out eligible activities in accordance with all program requirements, including those prohibiting the use of direct Federal financial assistance to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws. (4) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by a grantee or subgrantee may disqualify faith-based organizations from participating in Departmentfunded programs or services on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. (5) Nothing in this section may be construed to preclude the Department from making an accommodation with respect to one or more program requirements on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws. (6) Neither a State nor the Department may disqualify an organization from participating in any Department program for which it is otherwise VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and the Department has determined that it would deny the accommodation. * * * * * (f) A private organization that contracts with a grantee or subgrantee, including a State, may not discriminate against a beneficiary or prospective beneficiary in the provision of program goods or services, or in outreach activities related to such goods or services, on the basis of religion or religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization that participates in a program funded by indirect Federal financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. * * * * * Title 34—Education PART 75—DIRECT GRANT PROGRAMS 3. Revise the authority citation for part 75 to read as follows: ■ Authority: 20 U.S.C. 1221e–3 and 3474; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; and E.O. 13831, 83 FR 20715, 3 CFR, 2018 Comp., p. 806, unless otherwise noted. § 75.51 [Amended] 4. Amend § 75.51 by: a. In paragraph (b)(3), adding ‘‘or’’ at the end of the paragraph. ■ b. In paragraph (b)(4), removing ‘‘; or’’ and adding, in its place, a period. ■ c. Removing paragraph (b)(5). ■ 5. Amend § 75.52 by: ■ a. Revising paragraphs (a), (c)(3) introductory text, (c)(3)(ii)(B), and (c)(3)(iii). ■ b. Removing paragraph (c)(3)(vi) and note 1 to paragraph (d)(1). ■ c. In paragraph (d)(2)(iv), removing the words ‘‘and employees.’’ ■ d. Revising paragraph (e). ■ e. In paragraph (g), removing the second sentence. The revisions read as follows: ■ ■ § 75.52 Eligibility of faith-based organizations for a grant and nondiscrimination against those organizations. (a)(1) A faith-based organization is eligible to apply for and to receive a PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 grant under a program of the Department on the same basis as any other private organization. (2)(i) In the selection of grantees, the Department— (A) May not discriminate for or against a private organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization; and (B) Must ensure that all decisions about grant awards are free from political interference, or even the appearance of such interference, and are made on the basis of merit, not on the basis of religion or religious belief, or the lack thereof. (ii) Notices or announcements of award opportunities and notices of award or contracts must include language substantially similar to that in appendices A and B, respectively, to this part. (3) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by the Department may require faith-based organizations to provide assurances or notices if they are not required of non-faith-based organizations. Any restrictions on the use of grant funds must apply equally to faith-based and non-faith-based organizations. All organizations that receive grants under a Department program, including organizations with religious character, motives, or affiliation, must carry out eligible activities in accordance with all program requirements, including those prohibiting the use of direct Federal financial assistance to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws. (4) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by the Department may disqualify faith-based organizations from applying for or receiving grants under a Department program on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. (5) Nothing in this section may be construed to preclude the Department from making an accommodation, including for religious exercise, with respect to one or more program E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations requirements on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws. (6) The Department may not disqualify an organization from participating in any Department program for which it is eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and the Department has determined that it would deny the accommodation. * * * * * (c) * * * (3) For purposes of 2 CFR 3474.15, this section, §§ 75.712 and 75.714, and appendices A and B to this part, the following definitions apply: (ii) * * * (B) The organization receives the assistance wholly as the result of the genuine and independent private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords a genuinely independent and private choice. (iii) Federal financial assistance means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption. * * * * * (e) An organization that receives any Federal financial assistance under a program of the Department shall not discriminate against a beneficiary or prospective beneficiary in the provision of program services, or in outreach activities related to such services, on the basis of religion or religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization that participates in a program funded by indirect Federal financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. * * * * * ■ 6. Add § 75.712 to read as follows: § 75.712 notice. Beneficiary protections: Written (a) An organization providing social services to beneficiaries under a Department program supported by VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 direct Federal financial assistance must give written notice to a beneficiary or prospective beneficiary of certain protections. Such notice must be given in the manner and form prescribed by the Department. This notice must state that— (1) The organization may not discriminate against a beneficiary or prospective beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) The organization may not require a beneficiary or prospective beneficiary to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by a beneficiary in such activities must be purely voluntary; (3) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance; and (4) A beneficiary or prospective beneficiary may report an organization’s violation of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the Department. (b) The written notice described in paragraph (a) of this section must be given to a prospective beneficiary prior to the time they enroll in the program or receive services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, an organization must provide the notice at the earliest available opportunity. (c) The Department may determine that the notice described in paragraph (a) of this section must inform each beneficiary or prospective beneficiary of the option to seek information from the Department as to whether there are any other federally funded organizations in their area that provide the services available under the applicable program. (d) The notice that an organization uses to notify beneficiaries or prospective beneficiaries of the rights under paragraphs (a) through (c) of this section must include language substantially similar to that in appendix C to this part. ■ 7. Revise appendix A to part 75 to read as follows: Appendix A to Part 75—Notice or Announcement of Award Opportunities (a) Faith-based organizations may apply for this award on the same basis as any other private organization, as set forth at, and subject to the protections and requirements of, this part and any applicable constitutional PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 15703 and statutory requirements, including 42 U.S.C. 2000bb et seq. The Department will not, in the selection of grantees, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (c) A faith-based organization may not use direct Federal financial assistance from the Department to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. Such an organization also may not, in providing services funded by the Department, or in outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 8. Revise appendix B to part 75 to read as follows: ■ Appendix B to Part 75—Notice of Award or Contract (a) A faith-based organization that participates in this program retains its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (b) A faith-based organization may not use direct Federal financial assistance from the Department to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. Such an organization also may not, in providing services funded by the Department, or in outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 9. Add appendix C to part 75 to read as follows: ■ Appendix C to Part 75—Written Notice of Beneficiary Protections Name of Organization: Name of Program: Contact Information for Program Staff: [provide name, phone number, and email address, if appropriate] Because this program is supported in whole or in part by financial assistance from the U.S. Department of Education, we are required to provide you the following information: (1) We may not discriminate against you on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. E:\FR\FM\04MRR3.SGM 04MRR3 15704 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations (2) We may not require you to attend or participate in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) that may be offered by our organization, and any participation by you in such activities must be purely voluntary. (3) We must separate in time or location any privately funded explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) from activities supported with direct Federal financial assistance. (4) You may report violations of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the U.S. Department of Education at [insert applicable contact information]. [When required by the Department, the notice must also state:] (5) If you would like information about whether there are any other federally funded organizations that provide the services available under this program in your area, please contact the awarding agency. This written notice must be given to you before you enroll in the program or receive services from the program, unless the nature of the service provided or exigent circumstances make it impracticable to provide such notice before we provide the actual service. In such an instance, this notice must be given to you at the earliest available opportunity. PART 76—STATE-ADMINISTERED PROGRAMS 10. Revise the authority citation for part 76 to read as follows: ■ Authority: 20 U.S.C. 1221e–3 and 3474; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; and E.O. 13831, 83 FR 20715, 3 CFR, 2018 Comp., p. 806, unless otherwise noted. 11. Amend § 76.52 by: a. Revising paragraphs (a), (c)(3) introductory text, (c)(3)(ii)(B), and (c)(3)(iii). ■ b. Removing paragraph (c)(3)(vi) and note 1 to paragraph (d)(1). ■ c. In paragraph (d)(2)(iv), removing the words ‘‘and employees.’’ ■ d. Revising paragraph (e). ■ e. In paragraph (g), removing the second sentence. The revisions read as follows: khammond on DSKJM1Z7X2PROD with RULES3 ■ ■ § 76.52 Eligibility of faith-based organizations for a subgrant and nondiscrimination against those organizations. (a)(1) A faith-based organization is eligible to apply for and to receive a subgrant under a program of the Department on the same basis as any other private organization. (2)(i) In the selection of subgrantees, States— VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 (A) May not discriminate for or against a private organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization; and (B) Must ensure that all decisions about subgrants are free from political interference, or even the appearance of such interference, and are made on the basis of merit, not on the basis of religion or religious belief, or a lack thereof. (ii) Notices or announcements of award opportunities and notices of award or contracts must include language substantially similar to that in appendices A and B, respectively, to 34 CFR part 75. (3) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by States in administering a Department program may require faithbased organizations to provide assurances or notices if they are not required of non-faith-based organizations. Any restrictions on the use of subgrant funds must apply equally to faith-based and non-faithbased organizations. All organizations that receive a subgrant from a State under a State-Administered Formula Grant program of the Department, including organizations with religious character, motives, or affiliation, must carry out eligible activities in accordance with all program requirements, including those prohibiting the use of direct Federal financial assistance to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws. (4) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by States may disqualify faithbased organizations from applying for or receiving subgrants under a StateAdministered Formula Grant program of the Department on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. (5) Nothing in this section may be construed to preclude the Department from making an accommodation, including for religious exercise, with respect to one or more program requirements on a case-by-case basis in accordance with the Constitution and PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 laws of the United States, including Federal civil rights laws. (6) Neither a State nor the Department may disqualify an organization from participating in any Department program for which it is eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and the Department has determined that it would deny the accommodation. * * * * * (c) * * * (3) For purposes of 2 CFR 3474.15, this section, and §§ 76.712 and 76.714, the following definitions apply: (ii) * * * (B) The organization receives the assistance wholly as the result of the genuine and independent private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords a genuinely independent and private choice. (iii) Federal financial assistance means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption. * * * * * (e) An organization that receives any Federal financial assistance under a program of the Department shall not discriminate against a beneficiary or prospective beneficiary in the provision of program services, or in outreach activities related to such services, on the basis of religion or religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization that participates in a program funded by indirect Federal financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. * * * * * ■ 12. Add § 76.712 to read as follows: § 76.712 notice. Beneficiary protections: Written (a) An organization providing social services to beneficiaries under a Department program supported by direct Federal financial assistance must give written notice to a beneficiary or prospective beneficiary of certain E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations protections. Such notice must be given in the manner and form prescribed by the Department. This notice must state that— (1) The organization may not discriminate against a beneficiary or prospective beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) The organization may not require a beneficiary or prospective beneficiary to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by a beneficiary in such activities must be purely voluntary; (3) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance; and (4) A beneficiary or prospective beneficiary may report an organization’s violation of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the Department. (b) The written notice described in paragraph (a) of this section must be given to a prospective beneficiary prior to the time they enroll in the program or receive services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, an organization must provide the notice at the earliest available opportunity. (c) The Department may determine that the notice described in paragraph (a) of this section must inform each beneficiary or prospective beneficiary of the option to seek information from the Department, or a State agency or other entity administering the applicable program, as to whether there are any other federally funded organizations in their area that provide the services available under the applicable program. (d) The notice that an organization uses to notify beneficiaries or prospective beneficiaries of the rights under paragraphs (a) through (c) of this section must include language substantially similar to that in appendix C to 34 CFR part 75. DEPARTMENT OF HOMELAND SECURITY For the reasons set forth in the preamble, DHS amends part 19 of title 6 of the CFR as follows: VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 Title 6—Domestic Security PART 19—NONDISCRIMINATION IN MATTERS PERTAINING TO FAITHBASED ORGANIZATIONS 13. Revise the authority citation for part 19 to read as follows: ■ Authority: 5 U.S.C. 301; 6 U.S.C. 101 et seq.; 8 U.S.C. 1101 et seq.; 42 U.S.C. 5164, 5183, 5189d; 42 U.S.C. 2000bb et seq.; 42 U.S.C. 11331 et seq.; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13403, 71 FR 28543, 3 CFR, 2006 Comp., p. 228; E.O. 13498, 74 FR 6533, 3 CFR, 2009 Comp., p. 219; and E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273. ■ 14. Revise § 19.1 to read as follows: § 19.1 Purpose. It is the policy of the Department of Homeland Security (DHS) to ensure the equal treatment of faith-based and other organizations in social service programs administered or supported by DHS or its component agencies, enabling those organizations to participate in providing important social services to beneficiaries. The equal treatment policies and requirements contained in this part are generally applicable to faith-based and other organizations participating or seeking to participate in any such programs. More specific policies and requirements regarding the participation of faith-based and other organizations in individual programs may be provided in the statutes, regulations, or guidance governing those programs, such as regulations in title 44 of the Code of Federal Regulations. DHS or its components may issue policy guidance and reference materials at a future time with respect to the applicability of this policy and this part to particular programs. ■ 15. Amend § 19.2 by: ■ a. Adding a definition of ‘‘Federal financial assistance’’ in alphabetical order. ■ b. Removing the definition of ‘‘Financial assistance’’. ■ c. In the definition of ‘‘Indirect Federal financial assistance or Federal financial assistance provided indirectly’’, revising paragraph (2). ■ d. Revising the definition of ‘‘Intermediary’’. The addition and revisions read as follows: § 19.2 Definitions. * * * * * Federal financial assistance means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 15705 other assistance, but does not include a tax credit, deduction, or exemption. * * * * * Indirect Federal financial assistance or Federal financial assistance provided indirectly * * * (2) The organization receives the assistance wholly as a result of a genuinely independent and private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords true private choice. Intermediary means an entity, including a non-governmental organization, acting under a contract, grant, or other agreement with the Federal Government or with a State or local government, that accepts Federal financial assistance and distributes that assistance to other organizations that, in turn, provide government-funded social services. If an intermediary, acting under a contract, grant, or other agreement with the Federal Government or with a State or local government that is administering a program supported by Federal financial assistance, is given the authority under the contract, grant, or agreement to select non-governmental organizations to provide services supported by the Federal Government, the intermediary must ensure compliance with the provisions of this part by the recipient of a contract, grant, or agreement. If the intermediary is a non-governmental organization, it retains all other rights of a nongovernmental organization under the program’s statutory and regulatory provisions. * * * * * ■ 16. Revise § 19.3 to read as follows: § 19.3 Equal ability for faith-based organizations to seek and receive financial assistance through DHS social service programs. (a) Faith-based organizations are eligible on the same basis as any other organization to seek and receive direct financial assistance from DHS for social service programs or to participate in social service programs administered or financed by DHS. (b) Neither DHS, nor a State or local government, nor any other entity that administers any social service program supported by direct financial assistance from DHS, shall discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15706 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations (c) Nothing in this part shall be construed to preclude DHS from making an accommodation, including for religious exercise, with respect to one or more program requirements on a caseby-case basis in accordance with the Constitution and laws of the United States. (d) DHS shall not disqualify an organization from participating in any DHS program for which it is otherwise eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and DHS has determined that it would deny the accommodation. (e) Decisions about awards of Federal financial assistance must be free from political interference, or even the appearance of such interference, and must be made on the basis of merit, not on the basis of religion or religious belief or lack thereof, or on the basis of religious or political affiliation. (f) All organizations that participate in DHS social service programs, including faith-based organizations, must carry out eligible activities in accordance with all program requirements, including those prohibiting the use of direct financial assistance from DHS to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States. (g) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by DHS or an intermediary in administering financial assistance from DHS shall disqualify a faith-based organization from participating in DHS’s social service programs: (1) On the basis of such organization’s religious character, motives, or affiliation, or lack thereof; or (2) On the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. (h) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation used by DHS or an intermediary in administering financial assistance from DHS shall require faith-based organizations to provide assurances or notices where they are not required of non-faith-based organizations. Any restrictions on the use of grant funds shall apply equally to faith-based and non-faith-based organizations. ■ 17. Amend § 19.4 by revising paragraph (c) and adding paragraph (f) to read as follows: VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 § 19.4 Explicitly religious activities. * * * * * (c) All organizations that participate in DHS social service programs, including faith-based organizations, must carry out eligible activities in accordance with all program requirements, and in accordance with all other applicable requirements governing the conduct of DHS-funded activities, including those prohibiting the use of direct financial assistance from DHS to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States. No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by DHS or a State or local government in administering financial assistance from DHS shall disqualify a faith-based organization from participating in DHS’s social service programs because of such organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. * * * * * (f) To the extent that any provision of this part is declared invalid by a court of competent jurisdiction, the Department intends for all other provisions that are capable of operating in the absence of the specific provision that has been invalidated to remain in effect. ■ 18. Revise § 19.5 to read as follows: § 19.5 Nondiscrimination requirements. An organization that receives financial assistance from DHS for a social service program shall not, in providing services or in outreach activities related to such services, favor or discriminate against a beneficiary of said program or activity on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. Organizations that favor or discriminate against a beneficiary will be subject to applicable sanctions and penalties, as established by the requirements of the particular DHS social service program or activity. However, an organization that participates in a program funded by indirect financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. ■ 19. Amend § 19.6 by revising paragraph (e) to read as follows: PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 § 19.6 How to prove nonprofit status. * * * * * (e) Evidence that the DHS awarding agency determines to be sufficient to establish that the entity would otherwise qualify as a nonprofit organization. ■ 20. Amend § 19.9 by revising paragraph (b) to read as follows: § 19.9 Exemption from Title VII employment discrimination requirements. * * * * * (b) Where a DHS program contains independent statutory or regulatory provisions that impose nondiscrimination requirements on all grantees, those provisions are not waived or mitigated by this part. In this case, grantees should consult with the appropriate DHS program office to determine the scope of any applicable requirements. ■ 21. Add § 19.12 to read as follows: § 19.12 Notifications to beneficiaries and applicants. (a) Organizations providing social services to beneficiaries under a program supported by direct Federal financial assistance from DHS must give written notice to beneficiaries and prospective beneficiaries of certain protections. Such notice must be given in a manner and form prescribed by DHS’s Office for Civil Rights and Civil Liberties, including by incorporating the notice into materials that are otherwise provided to beneficiaries. This written notice shall include language substantially similar to that in appendix C to this part. (b) The written notice described in paragraph (a) of this section must be given to prospective beneficiaries prior to the time the prospective beneficiary enrolls in the program or receives services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, organizations must advise beneficiaries of their protections at the earliest available opportunity. (c) DHS may determine that the notice described in paragraph (a) of this section must inform each beneficiary or prospective beneficiary of the option to seek information from DHS, or a State agency or other entity administering the program, as to whether there are any other federally funded organizations in the area that provide the services available under the applicable program. (d) Notices or announcements of award opportunities and notices of award or contracts shall include language substantially similar to that in E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations appendices A and B, respectively, to this part. ■ 22. Revise appendix A to part 19 to read as follows: Appendix A to Part 19—Notice or Announcement of Award Opportunity (a) Faith-based organizations may apply for this award on the same basis as any other organization, as set forth at, and subject to the protections and requirements of, this part and any applicable constitutional and statutory requirements, including 42 U.S.C. 2000bb et seq. DHS will not, in the selection of recipients, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (c) A faith-based organization may not use direct Federal financial assistance from DHS to support or engage in any explicitly religious activities except where consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by DHS, or in outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 23. Revise appendix B to part 19 to read as follows: ■ khammond on DSKJM1Z7X2PROD with RULES3 Appendix B to Part 19—Notice of Award or Contract (a) A faith-based organization that participates in this program retains its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (b) A faith-based organization may not use direct Federal financial assistance from DHS to support or engage in any explicitly religious activities except where consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by DHS, or in outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 24. Add appendix C to part 19 to read as follows: ■ Appendix C to Part 19—Written Notice of Beneficiary Protections Name of Organization: VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 Name of Program: Contact Information for Program Staff: [provide name, phone number, and email address, if appropriate] Because this program is supported in whole or in part by financial assistance from the Federal Government, we are required to let you know that: (1) We may not discriminate against you on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) We may not require you to attend or participate in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) that may be offered by our organization, and any participation by you in such activities must be purely voluntary; (3) We must separate in time or location any privately funded explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) from activities supported with direct Federal financial assistance; (4) You may report violations of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the Department of Homeland Security’s Office for Civil Rights and Civil Liberties, [address]; and [When required by DHS, the notice must also state:] (5) If you would like to seek information about whether there are any other federally funded organizations that provide these kinds of services in your area, please use the contact information set forth above. This written notice must be given to you before you enroll in the program or receive services from the program, unless the nature of the service provided or exigent circumstances make it impracticable to provide such notice before we provide the actual service. In such an instance, this notice must be given to you at the earliest available opportunity. DEPARTMENT OF AGRICULTURE For the reasons set forth in the preamble, USDA amends part 16 of title 7 of the CFR as follows: Title 7—Agriculture PART 16—EQUAL OPPORTUNITY FOR FAITH-BASED ORGANIZATIONS 25. Revise the authority citation for part 16 to read as follows: ■ Authority: 5 U.S.C. 301; 42 U.S.C. 2000bb et seq.; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13280, 67 FR 77145, 3 CFR, 2002 Comp., p. 262; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 13831, 83 FR 20715, 3 CFR, 2018 Comp., p. 806; E.O. 14015, 86 FR 10007, 3 CFR, 2021 Comp., p. 517. ■ 26. Revise § 16.1 to read as follows: § 16.1 Purpose and applicability. (a) The purpose of this part is to set forth Department of Agriculture (USDA) PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 15707 policy regarding equal opportunity for faith-based organizations to participate in USDA assistance programs for which other private organizations are eligible. (b) Except as otherwise specifically provided in this part, the policy outlined in this part applies to all recipients and subrecipients of USDA assistance to which 2 CFR part 400 applies, and to recipients and subrecipients of Commodity Credit Corporation assistance that is administered by agencies of USDA. ■ 27. Amend § 16.2 by: ■ a. Removing the definition of ‘‘Discriminate against an organization on the basis of the organization’s religious exercise.’’ ■ b. Revising the definitions of ‘‘Federal financial assistance’’ and ‘‘Indirect Federal financial assistance or Federal financial assistance provided indirectly.’’ The revisions read as follows: § 16.2 Definitions. * * * * * Federal financial assistance means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption. Federal financial assistance may be direct or indirect. Indirect Federal financial assistance or Federal financial assistance provided indirectly refers to situations where the service provider receives the assistance wholly as a result of a genuine and independent private choice of the beneficiary, not a choice of the Government, and the cost of that service is paid through a voucher, certificate, or other similar means of Governmentfunded payment. The availability of adequate secular alternatives is a significant factor in determining whether a program affords a genuine and independent private choice. * * * * * ■ 28. Amend § 16.3 by: ■ a. Revising the section heading and paragraph (a). ■ b. In paragraph (b) introductory text, removing ‘‘or religious’’ wherever it appears. ■ c. Revising paragraphs (c), (d), and (f). ■ d. Adding paragraph (h). The revisions and addition read as follows: § 16.3 Faith-based organizations and Federal financial assistance. (a) A faith-based organization is eligible, on the same basis as any other organization, to access and participate E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15708 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations in any USDA assistance programs for which it is otherwise eligible. Neither the USDA awarding agency nor any State or local government or other intermediary receiving funds under any USDA awarding agency program or service shall, in the selection of service providers, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. Decisions about awards of USDA direct assistance or USDA indirect assistance must also be free from political interference, or even the appearance of such interference, and must be made on the basis of merit, not on the basis of religion or religious belief, or lack thereof. Notices or announcements of award opportunities and notices of award or contracts shall include language substantially similar to that in appendices A and B to this part. * * * * * (c) A faith-based organization’s exemption from the Federal prohibition on employment discrimination on the basis of religion, set forth in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e–1, is not forfeited when an organization participates in a USDA assistance program. (d) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by a USDA awarding agency or a State or local government in administering Federal financial assistance from the USDA awarding agency shall require faith-based organizations to provide assurances or notices where they are not required of non-faith-based organizations. (1) Any restrictions on the use of grant funds shall apply equally to faith-based organizations and non-faith-based organizations. (2) All organizations that participate in USDA awarding agency programs or services, including organizations with religious character, motives, or affiliation, must carry out eligible activities in accordance with all program requirements and other applicable requirements governing the conduct of USDA awarding agencyfunded activities, including those prohibiting the use of direct financial assistance to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States. (3) No grant document, agreement, covenant, memorandum of VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 understanding, policy, or regulation that is used by the USDA awarding agency or a State or local government in administering financial assistance from the USDA awarding agency shall disqualify faith-based organizations from participating in the USDA awarding agency’s programs or services on the basis of the organizations’ religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. * * * * * (f) USDA direct financial assistance may be used for the acquisition, construction, or rehabilitation of structures to the extent authorized by the applicable program statutes and regulations. USDA direct assistance may not be used for the acquisition, construction, or rehabilitation of structures to the extent that those structures are used by the USDA funding recipients for explicitly religious activities. Where a structure is used for both eligible and ineligible purposes, USDA direct financial assistance may not exceed the cost of those portions of the acquisition, construction, or rehabilitation that are attributable to eligible activities in accordance with the cost accounting requirements applicable to USDA funds. Sanctuaries, chapels, or other rooms that an organization receiving direct assistance from USDA uses as its principal place of worship, however, are ineligible for USDA-funded improvements. Disposition of real property after the term of the grant or any change in use of the property during the term of the grant is subject to government-wide regulations governing real property disposition (see 2 CFR part 400). (1) Any use of USDA direct financial assistance for equipment, supplies, labor, indirect costs, and the like shall be prorated between the USDA program or activity and any ineligible purposes by the faith-based organization in accordance with applicable laws, regulations, and guidance. (2) Nothing in this section shall be construed to prevent the residents of housing who are receiving USDA direct assistance funds from engaging in religious exercise within such housing. * * * * * (h) Nothing in this part shall be construed to preclude a USDA awarding agency or any State or local government or other intermediary from accommodating religion or making an accommodation for religious exercise with respect to one or more program PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 requirements on a case-by-case basis in accordance with the Constitution and laws of the United States. A USDA awarding agency, State or local government, or other intermediary shall not disqualify an organization from participating in any USDA assistance program for which it is eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and the USDA awarding agency, State or local government, or other intermediary has determined that it would deny the accommodation. ■ 29. Amend § 16.4 by: ■ a. Revising paragraph (a). ■ b. Redesignating paragraph (c) as paragraph (e). ■ c. Adding new paragraphs (c) and (d). ■ d. Revising newly redesignated paragraph (e). The revisions and additions read as follows: § 16.4 Responsibilities of participating organizations. (a) Any organization that receives direct or indirect Federal financial assistance shall not, with respect to services supported in whole or in part with Federal financial assistance, or in their outreach activities related to such services, discriminate against a current or prospective program beneficiary on the basis of religion, religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization that participates in a program funded by indirect financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. * * * * * (c)(1) All organizations that receive USDA direct assistance under any domestic USDA program must give written notice to all beneficiaries and prospective beneficiaries of certain protections in a manner and form prescribed by USDA. The required language for this written notice to beneficiaries is set forth in appendix C to this part. This notice must include the following information: (i) The organization may not discriminate against beneficiaries or prospective beneficiaries on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (ii) The organization may not require beneficiaries or prospective E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations beneficiaries to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by beneficiaries or prospective beneficiaries in such activities must be purely voluntary; (iii) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance; and (iv) Beneficiaries or prospective beneficiaries may report violations of these protections (including denials of services or benefits) by an organization by contacting or filing a written complaint with USDA’s Office of the Assistant Secretary for Civil Rights. (2) The USDA awarding agency may determine that this written notice must also inform beneficiaries and prospective beneficiaries about how to obtain information from the awarding agency about other federally funded service providers in their area that provide the services available under the applicable program. (3) This written notice must be given to beneficiaries prior to the time they enroll in the program or receive services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, service providers must advise beneficiaries of their protections at the earliest available opportunity. (d) A beneficiary or prospective beneficiary in a program supported by indirect Federal financial assistance may report an organization’s violation of the religious protections in this part, including any denials of services or benefits by an organization, by contacting or filing a written complaint with USDA’s Office of the Assistant Secretary for Civil Rights. (e) Nothing in paragraphs (a) through (c) of this section shall be construed to prevent faith-based organizations that receive USDA assistance under the Richard B. Russell National School Lunch Act, 42 U.S.C. 1751 et seq., the Child Nutrition Act of 1966, 42 U.S.C. 1771 et seq., or USDA international school feeding programs from considering religion in their admissions practices or from imposing religious attendance or curricular requirements at their schools. ■ 30. Add § 16.6 to read as follows: § 16.6 Compliance. USDA agencies will monitor compliance with this part in the course of regular oversight of USDA programs. ■ 31. Revise appendix A to part 16 to read as follows: VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 15709 Appendix A to Part 16—Notice or Announcement of Award Opportunities Appendix C to Part 16—Written Notice of Beneficiary Protections (a) Faith-based organizations may apply for this award on the same basis as any other organization, as set forth at, and subject to the protections and requirements of, this part and any applicable constitutional and statutory requirements, including 42 U.S.C. 2000bb et seq. USDA will not, in the selection of recipients, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. Religious accommodations may also be sought under many of these religious freedom and conscience protection laws. (c) A faith-based organization may not use direct Federal financial assistance from USDA to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by USDA, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. Name of Organization: Name of Program: Contact Information for Program Staff: [provide name, phone number, and email address, if appropriate] Because this program is supported in whole or in part by financial assistance from the Federal Government, we are required to let you know that: (1) We may not discriminate against you on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) We may not require you to attend or participate in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) that are offered by our organization, and any participation by you in such activities must be purely voluntary; (3) We must separate in time or location any privately funded explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) from activities supported with direct Federal financial assistance; and (4) You may report violations of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, Executive Director, Center for Civil Rights Enforcement, 1400 Independence Avenue SW, Washington, DC 20250–9410, or by email to program.intake@usda.gov. [When required by the Department, the notice must also state:] (5) If you would like to seek information about whether there are any other federally funded organizations that provide these kinds of services in your area, please contact [insert appropriate point of contact]. This written notice must be given to you before you enroll in the program or receive services from the program, unless the nature of the service provided or exigent circumstances make it impracticable to provide such notice before we provide the actual service. In such an instance, this notice must be given to you at the earliest available opportunity. 32. Revise appendix B to part 16 to read as follows: ■ Appendix B to Part 16—Notice of Award or Contract (a) A faith-based organization that participates in this program retains its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. Religious accommodations may also be sought under many of these religious freedom and conscience protection laws. (b) A faith-based organization may not use direct Federal financial assistance from USDA to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by USDA, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 33. Add appendix C to part 16 to read as follows: AGENCY FOR INTERNATIONAL DEVELOPMENT For the reasons set forth in the preamble, USAID amends part 205 of title 22 of the CFR as follows: Title 22—Foreign Relations PART 205—PARTICIPATION BY RELIGIOUS ORGANIZATIONS IN USAID PROGRAMS 34. The authority citation for part 205 continues to read as follows: ■ Authority: 22 U.S.C. 2381(a). ■ PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 ■ 35. Revise § 205.1 to read as follows: E:\FR\FM\04MRR3.SGM 04MRR3 15710 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES3 § 205.1 Grants and cooperative agreements. (a) As used in this section, the term ‘‘award’’ has the definition in 2 CFR 700.1 and the term ‘‘Federal financial assistance’’ has the definition in Executive Order 13279 (signed by President Bush on December 12, 2002). As used in this section, the following terms have the definitions in 2 CFR 200.1: ‘‘pass-through entity,’’ ‘‘recipient,’’ ‘‘subaward,’’ and ‘‘subrecipient’’ as modified by 2 CFR 700.3 to apply to both nonprofit and forprofit entities. (b) Faith-based organizations are eligible on the same basis as any other organization to receive any U.S. Agency for International Development (USAID) award for which they are otherwise eligible. In the selection of recipients by USAID and subrecipients by passthrough entities, neither USAID nor pass-through entities shall discriminate for, or against, an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. Notices or announcements of award opportunities shall include language to indicate that faith-based organizations are eligible on the same basis as any other organization and subject to the protections and requirements of Federal law. (c) Nothing in this part shall be construed to preclude USAID from making an accommodation, including for religious exercise, with respect to one or more award requirements on a case-by-case basis in accordance with the Constitution and laws of the United States. (d) USAID shall not disqualify an organization from participating in any USAID award for which it is eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more award requirements, unless the organization has made clear that the accommodation is necessary to its participation and USAID has determined that it would deny the accommodation. (e) Organizations that receive direct Federal financial assistance from USAID under any USAID award or subaward may not engage in explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) as part of the programs or services directly funded with direct Federal financial assistance from USAID. If an organization conducts such activities, the activities must be offered separately, in time or location, VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 from the programs or services funded with direct Federal financial assistance from USAID, and participation must be voluntary for beneficiaries of the programs or services funded with such assistance. Nothing in this part restricts USAID’s authority under applicable Federal law to fund activities, such as the provision of chaplaincy services, that can be directly funded by the Government consistent with the Establishment Clause. (f) A faith-based organization that applies for, or participates in, USAIDfunded awards or subawards will retain its autonomy, religious character, and independence, and may continue to carry out its mission consistent with religious freedom protections in Federal law, including the definition, development, practice, and expression of its religious beliefs, provided that it does not use direct Federal financial assistance from USAID to support or engage in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization), or in any other manner prohibited by law. Among other things, a faith-based organization that receives Federal financial assistance from USAID may use space in its facilities, without concealing, altering, or removing religious art, icons, scriptures, or other religious symbols. In addition, a faithbased organization that receives Federal financial assistance from USAID retains its authority over its internal governance, and it may retain religious terms in its organization’s name, select its board members on a religious basis, and include religious references in its organization’s mission statement and other governing documents. (g) USAID must implement its awards in accordance with the Establishment Clause. Nothing in this part shall be construed as authorizing the use of USAID funds for activities that are not permitted by Establishment Clause jurisprudence or otherwise by law. USAID will consult with the U.S. Department of Justice if, in implementing a specific program involving overseas acquisition, rehabilitation, or construction of structures used for explicitly religious activities, there is any question about whether such funding is consistent with the Establishment Clause. USAID will describe any program implemented after such consultation on its website. (h) An organization that receives a USAID-funded award or subaward shall not, in providing services or outreach activities related to such services, discriminate against a program beneficiary or potential program PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. (i) No grant document, contract, agreement, covenant, memorandum of understanding, policy, or regulation used by USAID shall require faith-based organizations to provide assurances or notices where the Agency does not require them of secular organizations. Any restrictions on the use of award or subaward funds shall apply equally to faith-based and secular organizations. All organizations that receive USAID awards and subawards, including faithbased organizations, must carry out eligible activities in accordance with all award requirements and other applicable requirements that govern the conduct of USAID-funded activities, including those that prohibit the use of direct Federal financial assistance from USAID to engage in explicitly religious activities. No grant document, contract, agreement, covenant, memorandum of understanding, policy, or regulation used by USAID shall disqualify faithbased organizations from receiving USAID awards on the basis of the organization’s religious character, motives, or affiliation, or lack thereof. (j) A religious organization does not forfeit its exemption from the Federal prohibition on employment discrimination on the basis of religion, set forth in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e–1, when the organization receives Federal financial assistance from USAID. (k) If a USAID award requires an organization to be a ‘‘nonprofit organization’’ in order to be eligible for funding, the individual solicitation will specifically indicate the requirement for nonprofit status in the eligibility section of the solicitation. Potential applicants should consult with the appropriate USAID program office to determine the scope of any applicable requirements. In USAID awards in which an applicant must show that it is a nonprofit organization, other than programs which are limited to registered Private and Voluntary Organizations, the applicant may do so by any of the following means: (1) Proof that the Internal Revenue Service currently recognizes the applicant as an organization to which contributions are tax deductible under section 501(c)(3) of the Internal Revenue Code; (2) A statement from a state taxing body or the State secretary of state certifying that: (i) The organization is a nonprofit organization operating within the State; and E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations (ii) No part of its net earnings may lawfully benefit any private shareholder or individual; (3) A certified copy of the applicant’s certificate of incorporation or similar document that clearly establishes the nonprofit status of the applicant; or (4) Any item described in paragraphs (k)(1) through (3) of this section if that item applies to a State or national parent organization, together with a statement by the State or national parent organization that the applicant is a local nonprofit affiliate. (l) Decisions about awards of USAID Federal financial assistance must be free from political interference, or even the appearance of such interference, and must be made on the basis of merit, not on the basis of religion or religious belief, or lack thereof. (m) Nothing in this part shall be construed as authorizing the use of USAID funds for the acquisition, construction, or rehabilitation of religious structures inside the United States. (n) The Secretary of State may waive the requirements of this section in whole or in part, on a case-by-case basis, where the Secretary determines that such waiver is necessary to further the national security or foreign policy interests of the United States. (o) Nothing in this section shall be construed in such a way as to advantage, or disadvantage, faith-based organizations affiliated with historic or well-established religions or sects in comparison with other religions or sects. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the reasons set forth in the preamble, HUD amends part 5 of title 24 of the CFR as follows: PART 5—GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS 36. Revise the authority citation for part 5 to read as follows: ■ khammond on DSKJM1Z7X2PROD with RULES3 Authority: 12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437f, 1437n, 3535(d); 42 U.S.C. 2000bb et seq.; 34 U.S.C. 12471 et seq.; Sec. 327, Pub. L. 109–115, 119 Stat. 2396; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 14015, 86 FR 10007, 3 CFR, 2021 Comp., p. 517. 37. Amend § 5.109 by: a. In paragraph (a), removing the words ‘‘Executive Order 13831, entitled ‘‘Establishment of a White House Faith and Opportunity Initiative,’’ ’’ and adding, in their place, the words ‘‘Executive Order 14015, entitled ‘‘Establishment of the White House ■ ■ VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 Office of Faith-Based and Neighborhood Partnerships,’’ ’’. ■ b. In paragraph (b), revising the definition of ‘‘Indirect Federal financial assistance’’. ■ c. Removing the introductory text of paragraph (c). ■ d. Revising paragraphs (c)(1) through (3). ■ e. In paragraph (c)(4), removing the word ‘‘availability’’ and adding, in its place, the word ‘‘opportunity’’. ■ f. Revising paragraphs (d)(1) and (2), (g), and (h). ■ g. In paragraph (l)(3), adding an ‘‘or’’ at the end of the paragraph. ■ h. In paragraph (l)(4), removing ‘‘; or’’ and adding, in its place, a period. ■ i. Removing paragraph (l)(5). The revisions read as follows: § 5.109 Equal participation of faith-based organizations in HUD programs and activities. * * * * * (b) * * * Indirect Federal financial assistance means Federal financial assistance provided when the choice of the provider is placed in the hands of the beneficiary, and the cost of that service is paid through a voucher, certificate, or other similar means of Governmentfunded payment. Federal financial assistance provided to an organization is considered indirect when the Government program through which the beneficiary receives the voucher, certificate, or other similar means of Government-funded payment is neutral toward religion meaning that it is available to providers without regard to the religious or non-religious nature of the institution and there are no program incentives that deliberately skew for or against religious or secular providers; and the organization receives the assistance wholly as a result of a genuine and independent private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords true private choice. * * * * * (c) Equal participation of faith-based organizations in HUD programs and activities.(1) Faith-based organizations are eligible, on the same basis as any other organization, to participate in any HUD program or activity for which they are otherwise eligible. Neither the Federal Government, nor a State, Tribal, or local government, nor any other entity that administers any HUD program or activity, shall discriminate for or against an organization on the basis of the organization’s religious PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 15711 character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (2) Nothing in this section shall be construed to preclude HUD from making an accommodation, including for religious exercise, with respect to one or more program requirements on a case-by-case basis in accordance with the Constitution and laws of the United States. (3) HUD shall not disqualify an organization from participating in any HUD program for which it is eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and, in accordance with the Constitution and laws of the United States, HUD has determined that it would deny the accommodation. * * * * * (d) * * * (1) A faith-based organization that applies for, or participates in, a HUD program or activity supported with Federal financial assistance retains its autonomy, right of expression, religious character, authority over its governance, and independence, and may continue to carry out its mission, including the definition, development, practice, and expression of its religious beliefs; provided that, it does not use direct Federal financial assistance, whether received through a prime award or subaward, to support or engage in any explicitly religious activities, including activities that involve overt religious content such as worship, religious instruction, or proselytization. (2) A faith-based organization that receives direct Federal financial assistance may use space (including a sanctuary, chapel, prayer hall, or other space) in its facilities (including a temple, synagogue, church, mosque, or other place of worship) to carry out activities under a HUD program without concealing, altering, or removing religious art, icons, scriptures, or other religious symbols. In addition, a faithbased organization participating in a HUD program or activity retains its authority over its internal governance, and may retain religious terms in its organization’s name, select its board members on the basis of their acceptance of or adherence to the religious tenets of the organization consistent with paragraph (i) of this section, and include religious references E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15712 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations in its organization’s mission statements and other governing documents. * * * * * (g) Nondiscrimination and beneficiary notice requirements—(1) Nondiscrimination. Any organization that receives Federal financial assistance under a HUD program or activity shall not, in providing services supported in whole or in part with Federal financial assistance, or in their outreach activities related to such services, discriminate against a beneficiary or prospective beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization that participates in a program funded by indirect Federal financial assistance need not modify its program or activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. (2) Beneficiary notice. (i) An organization providing services under a program supported by direct Federal financial assistance from HUD, or an entity that administers indirect Federal financial assistance from HUD, must give written notice to beneficiaries and prospective beneficiaries of certain protections in a manner and form prescribed by HUD, including by incorporating the notice into materials that are otherwise provided to beneficiaries. The required language for this written notice to beneficiaries is set forth in appendix C to this subpart. (ii) For the Housing Choice Voucher (HCV), Project-Based Voucher (PBV), and Section 8 Moderate Rehabilitation programs, the respective recipient (i.e., Public Housing Agency) is required to provide the written beneficiary notice. For the Housing Opportunities for Persons with AIDS (HOPWA) program, the grantee or project sponsor that is responsible for making eligibility determinations is required to provide the written beneficiary notice. For the Continuum of Care (CoC) and Emergency Solutions Grants (ESG) programs, the recipient or subrecipient that is responsible for determining the eligibility of each family or individual is required to provide the written beneficiary notice. The participating or prospective providers (landlords) are not responsible for providing the written beneficiary notice for indirect aid recipients. The notice must include the following information: (A) Nondiscrimination requirements of paragraph (g)(1) of this section; (B) Notification that a beneficiary or prospective beneficiary may report an VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 organization’s violation of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the Center for FaithBased and Neighborhood Partnerships or the intermediary that awarded funds to the organization; and (C) For direct Federal financial assistance only, prohibitions with respect to explicitly religious activities as set forth in paragraph (e) of this section. (3) Notice timing. The written notice described in paragraph (g)(2) of this section must be given to a prospective beneficiary prior to the time the prospective beneficiary enrolls in the program or receives services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, an organization must advise beneficiaries of their protections at the earliest available opportunity. (4) Alternative option information. HUD may determine that the notice described in paragraph (g)(2) of this section must inform each beneficiary or prospective beneficiary about how to obtain information from HUD, or a State agency or other entity administering the applicable program, about other federally funded service providers in their area that provide the services available under the applicable program. (h) No additional assurances from faith-based organizations. A faith-based organization is not rendered ineligible by its religious nature to access and participate in HUD programs. Absent regulatory or statutory authority, no notice of funding opportunity, grant agreement, cooperative agreement, covenant, memorandum of understanding, policy, or regulation that is used by HUD or a recipient or intermediary in administering Federal financial assistance from HUD shall require otherwise eligible faith-based organizations to provide assurances or notices where they are not required of similarly situated secular organizations. All organizations that participate in HUD programs or activities, including organizations with religious character, motives, or affiliation, must carry out eligible activities in accordance with all program requirements, including those prohibiting the use of direct financial assistance to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States. No notice of funding opportunity, grant agreement, cooperative agreement, covenant, PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 memorandum of understanding, policy, or regulation that is used by HUD or a recipient or intermediary in administering financial assistance from HUD shall disqualify otherwise eligible faith-based organizations from participating in HUD’s programs or activities on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. * * * * * ■ 38. Revise appendix A to subpart A of part 5 to read as follows: Appendix A to Subpart A of Part 5— Notice of Funding Opportunity (a) Faith-based organizations may apply for this award on the same basis as any other organization, as set forth at § 5.109, and subject to the protections and requirements of any applicable constitutional and statutory requirements, including 42 U.S.C. 2000bb et seq. HUD will not, in the selection of recipients, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (c) A faith-based organization may not use direct financial assistance from HUD to support or engage in any explicitly religious activities except where consistent with the Establishment Clause of the First Amendment and any other applicable requirements. Such an organization also may not, in providing services funded by HUD, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 39. Add appendix B to subpart A of part 5 to read as follows: ■ Appendix B to Subpart A of Part 5— Notice of Award or Contract (a) A faith-based organization that participates in this program retains its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (b) A faith-based organization may not use direct Federal financial assistance from HUD to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations Federal financial assistance also may not, in providing services funded by HUD, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 40. Add appendix C to subpart A of part 5 to read as follows: ■ khammond on DSKJM1Z7X2PROD with RULES3 Appendix C to Subpart A of Part 5— Department of Housing and Urban Development Model Written Notice of Beneficiary Rights Name of Organization: Name of Program: Contact Information for Program Staff: [provide name, phone number, and email address, if appropriate] Because this program is supported in whole or in part by financial assistance from the Federal Government, we are required to let you know that: (1) We may not discriminate against you on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) We may not require you to attend or participate in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) that are offered by our organization, and any participation by you in such activities must be purely voluntary; (3) We must separate in time or location any privately funded explicitly religious activities from activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) from activities supported with direct Federal financial assistance; (4) You may report an organization’s violations of these protections, including any denial of services or benefits by an organization, by contacting or filing a written complaint with HUD’s Center for Faith-Based and Neighborhood Partnership, 451 7th Street SW, Washington, DC 20410, or by email to partnerships@hud.gov; and (5) If you would like to seek information about whether there are any other federally funded organizations that provide these kinds of services in your area, please use the contact information set forth above. This written notice must be given to you before you enroll in the program or receive services from the program, unless the nature of the service provided or exigent circumstances make it impracticable to provide such notice before we provide the actual service. In such an instance, this notice must be given to you at the earliest available opportunity. DEPARTMENT OF JUSTICE For the reasons set forth in the preamble, the Attorney General amends part 38 of title 28 of the CFR as follows: VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 Title 28—Judicial Administration PART 38—PARTNERSHIPS WITH FAITH-BASED AND OTHER NEIGHBORHOOD ORGANIZATIONS 41. Revise the authority citation for part 38 to read as follows: ■ Authority: 28 U.S.C. 509; 5 U.S.C. 301; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; 18 U.S.C. 4001, 4042, 5040; 21 U.S.C. 871; 25 U.S.C. 3681; Pub. L. 107–273, 116 Stat. 1758; Pub. L. 109–162, 119 Stat. 2960; 34 U.S.C. 10152, 10154, 10172, 10221, 10382, 10388, 10444, 10446, 10448, 10473, 10614, 10631, 11111, 11182, 20110, 20125; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 13831, 83 FR 20715, 3 CFR, 2018 Comp., p. 806; 42 U.S.C. 2000bb et seq.; E.O. 14015, 86 FR 10007, 3 CFR, 2021 Comp., p. 517. ■ 42. Revise § 38.1 to read as follows: § 38.1 Purpose. The purpose of this part is to implement Executive Order 13279, Executive Order 13559, and Executive Order 14015. ■ 43. Amend § 38.3 by: ■ a. Redesignating paragraphs (a) through (g) as paragraphs (b) through (h). ■ b. Adding a new paragraph (a). ■ c. Revising newly redesignated paragraphs (b), (c)(2), (e), and (g). The addition and revisions read as follows: § 38.3 Definitions. * * * * * (a) ‘‘Federal financial assistance’’ means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption. (b) ‘‘Direct Federal financial assistance’’ or ‘‘Federal financial assistance provided directly’’ refers to situations in which the Government or an intermediary (under this part) selects the provider and either purchases services from that provider (e.g., via a contract) or awards funds to that provider to carry out a service (e.g., via a grant or cooperative agreement). This includes recipients of subawards that receive Federal financial assistance through State administering agencies or State-administered programs. In general, Federal financial assistance shall be treated as direct, unless it meets the definition of ‘‘indirect Federal financial assistance’’ or ‘‘Federal financial assistance provided indirectly.’’ (c) * * * (2) The service provider receives the assistance wholly as a result of a PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 15713 genuine and independent private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords a genuinely independent and private choice. * * * * * (e) ‘‘Department program’’ refers to a discretionary, formula, or block grant program administered by or from the Department. * * * * * (g) The ‘‘Office for Civil Rights’’ refers to the Office for Civil Rights of the Department’s Office of Justice Programs. * * * * * ■ 44. Revise § 38.4 to read as follows: § 38.4 Policy. (a) Faith-based organizations are eligible, on the same basis as any other organization, to participate in any Department program for which they are otherwise eligible. Neither the Department nor any State or local government receiving funds under any Department program shall, in the selection of service providers, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) Nothing in this part shall be construed to preclude the Department from making an accommodation, including for religious exercise, with respect to one or more program requirements on a case-by-case basis in accordance with the Constitution and laws of the United States. (c) The Department shall not disqualify an organization from participating in any Department program for which it is eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and the Department has determined that it would deny the accommodation. (d) Decisions about awards of Federal financial assistance must be free from political interference or even the appearance of such interference and must be made on the basis of merit, not on the basis of religion or a religious belief, or lack thereof. ■ 45. Amend § 38.5 by: ■ a. Revising paragraphs (c) through (f). ■ b. In paragraph (g)(3), adding the word ‘‘or’’ at the end of the paragraph. E:\FR\FM\04MRR3.SGM 04MRR3 15714 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations c. In paragraph (g)(4), removing ‘‘; or’’ and adding, in its place, a period. ■ d. Removing paragraph (g)(5). The revisions read as follows: ■ § 38.5 Responsibilities. khammond on DSKJM1Z7X2PROD with RULES3 * * * * * (c) Any organization that participates in programs funded by Federal financial assistance from the Department shall not, in providing services supported in whole or in part with Federal financial assistance, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization that receives indirect Federal financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. (d) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that the Department or a State or local government uses in administering Federal financial assistance from the Department shall require faith-based or religious organizations to provide assurances or notices where they are not required of non-faith-based organizations. Any restrictions on the use of grant funds shall apply equally to faith-based and non-faith-based organizations. All organizations, including religious ones, that participate in Department programs must carry out all eligible activities in accordance with all program requirements, including those prohibiting the use of direct Federal financial assistance from the Department to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States. No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by the Department or a State or local government in administering Federal financial assistance from the Department shall disqualify faith-based or religious organizations from participating in the Department’s programs on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. (e) A faith-based organization’s exemption from the Federal prohibition VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 on employment discrimination on the basis of religion, set forth in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e–1(a), is not forfeited when the organization receives direct or indirect Federal financial assistance from the Department. Some Department programs, however, contain independent statutory provisions requiring that all grantees agree not to discriminate in employment on the basis of religion. Grantees receiving Federal financial assistance from such programs should consult with the appropriate Department program office to determine the scope of any applicable requirements. (f) If an intermediary, acting under a contract, grant, or other agreement with the Federal Government or with a State or local government that is administering a program supported by Federal financial assistance, is given the authority under the contract, grant, or agreement to select organizations to provide services funded by the Federal Government, the intermediary must ensure the compliance of the recipient of a contract, grant, or agreement with the provisions of Executive Order 13279, as amended by Executive Order 13559, and any implementing rules or guidance. If the intermediary is a nongovernmental organization, it retains all other rights of a nongovernmental organization under the program’s statutory and regulatory provisions. * * * * * ■ 46. Revise § 38.6 to read as follows: § 38.6 Procedures. (a) If a State or local government voluntarily contributes its own funds to supplement activities carried out under the applicable programs, the State or local government has the option to separate out the Federal funds or commingle them. If the funds are commingled, the provisions of this section shall apply to all of the commingled funds in the same manner, and to the same extent, as the provisions apply to the Federal funds. (b) An organization providing social services under a program of the Department supported by Federal financial assistance must give written notice to beneficiaries and prospective beneficiaries of certain protections in a manner and form prescribed by the Office for Civil Rights, including by incorporating the notice into materials that are otherwise provided to beneficiaries. This written notice shall include language substantially similar to that in appendix C to this part. The notice must include the following information: PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 (1) The organization may not discriminate against a beneficiary or prospective beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) The organization may not require a beneficiary or prospective beneficiary to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by a beneficiary in such activities must be purely voluntary; (3) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance; and (4) A beneficiary or prospective beneficiary may report an organization’s violation of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the Office for Civil Rights or the intermediary that awarded funds to the organization. (c) The written notice described in paragraph (b) of this section must be given to a prospective beneficiary prior to the time the prospective beneficiary enrolls in the program or receives services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, an organization must advise beneficiaries of their protections at the earliest available opportunity. (d) The Department may determine that the notice described in paragraph (b) of this section must inform each beneficiary or prospective beneficiary of the option to seek information from the Department, or a State agency or other entity administering the applicable program, as to whether there are any other federally funded organizations in their area that provide the kind of services available under the applicable program. (e) Notices or announcements of award opportunities and notices of award or contracts shall include language substantially similar to that in appendices A and B, respectively, to this part. ■ 47. Revise appendix A to part 38 to read as follows: Appendix A to Part 38—Notice or Announcement of Award Opportunities (a) Faith-based organizations may apply for this award on the same basis as any other organization, as set forth at, and subject to the protections and requirements of, this part and any applicable constitutional and statutory requirements, including 42 U.S.C. E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations 2000bb et seq. The Department of Justice will not, in the selection of recipients, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (c) An organization may not use direct Federal financial assistance from the Department of Justice to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by the Department of Justice, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 48. Revise appendix B to part 38 to read as follows: ■ Appendix B to Part 38—Notice of Award or Contract (a) A faith-based organization that participates in this program retains its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (b) An organization may not use direct Federal financial assistance from the Department of Justice to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by the Department of Justice, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 49. Add appendix C to part 38 to read as follows: khammond on DSKJM1Z7X2PROD with RULES3 ■ Appendix C to Part 38—Written Notice of Beneficiary Protections Name of Organization: Name of Program: Contact Information for Program Staff: [provide name, phone number, and email address, if appropriate] Because this program is supported in whole or in part by financial assistance from the Federal Government, we are required to let you know that: (1) We may not discriminate against you on the basis of religion, a religious belief, a VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) We may not require you to attend or participate in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) that may be offered by our organization, and any participation by you in such activities must be purely voluntary; (3) We must separate in time or location any privately funded explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) from activities supported with direct Federal financial assistance; (4) You may report violations of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the Department of Justice’s Office for Civil Rights, 810 7th Street NW, Washington, DC 20531, or by email to AskOCR@usdoj.gov; and [When required by the Department, the notice must also state:] (5) If you would like to seek information about whether there are any other federally funded organizations that provide these kinds of services in your area, please use the contact information for the Department’s Office for Civil Rights set forth above. We are required to give this written notice to you before you enroll in the program or receive services from the program, unless the nature of the service provided or exigent circumstances make it impracticable for us to provide such notice before we provide the actual service. In such an instance, we must give this notice to you at the earliest available opportunity. DEPARTMENT OF LABOR For the reasons set forth in the preamble, DOL amends part 2 of title 29 of the CFR as follows: Title 29—Labor PART 2—GENERAL REGULATIONS 50. Revise the authority citation for part 2 to read as follows: ■ Authority: 5 U.S.C. 301; E.O. 13198, 66 FR 8497, 3 CFR, 2001 Comp., p. 750; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 14015, 86 FR 10007, 3 CFR, 2021 Comp., p. 517. 51. Revise the heading for subpart D to read as follows: ■ Subpart D—Equal Treatment in Department of Labor Programs for Faith-Based and Community Organizations; Protection of Religious Liberty of Department of Labor Social Service Providers and Beneficiaries 52. Amend § 2.31 by revising paragraph (a) and the second sentence of paragraph (d) to read as follows: ■ PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 § 2.31 15715 Definitions. * * * * * (a) The term Federal financial assistance means assistance that nonFederal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, a deduction, or an exemption. Federal financial assistance may be direct or indirect. (1) The term direct Federal financial assistance or Federal financial assistance provided directly means that the Government or a DOL social service intermediary provider under this part selects the provider and either purchases services from that provider (e.g., via a contract) or awards funds to that provider to carry out a service (e.g., via a grant or cooperative agreement). In general, Federal financial assistance shall be treated as direct, unless it meets the definition of indirect Federal financial assistance or Federal financial assistance provided indirectly. (2) The term indirect Federal financial assistance or Federal financial assistance provided indirectly means that the choice of the service provider is placed in the hands of the beneficiary, and the cost of that service is paid through a voucher, certificate, or other similar means of Government-funded payment. Federal financial assistance provided to an organization is indirect when: (i) The Government program through which the beneficiary receives the voucher, certificate, or other similar means of Government-funded payment is neutral toward religion; and (ii) The organization receives the assistance wholly as a result of a genuine and independent private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords a genuinely independent and private choice. (3) The recipient of sub-awards received through programs administered by States or other intermediaries that are themselves recipients of Federal financial assistance (e.g., local areas that receive within-state allocations to provide workforce services under title I of the Workforce Innovation and Opportunity Act) are not considered recipients of indirect Federal financial assistance or recipients of Federal financial assistance provided indirectly as those terms are used in Executive Order 13559. These recipients of sub- E:\FR\FM\04MRR3.SGM 04MRR3 15716 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations awards are considered recipients of direct Federal financial assistance. * * * * * (d) * * * Such programs include, but are not limited to, the one-stop delivery system, Job Corps, and other programs supported through the Workforce Innovation and Opportunity Act. * * * * * ■ 53. Revise § 2.32 to read as follows: khammond on DSKJM1Z7X2PROD with RULES3 § 2.32 Equal participation of faith-based organizations. (a)(1) Faith-based organizations are eligible, on the same basis as any other organization, to seek DOL support or participate in DOL programs for which they are otherwise eligible. DOL and DOL social service intermediary providers, as well as State and local governments administering DOL support, must not discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (2) Notices and announcements of award opportunities, and notices of awards and contracts, shall include language substantially similar to that in appendices A and B to this subpart, respectively. (b)(1) A grant document, contract or other agreement, covenant, memorandum of understanding, policy, or regulation that is used by DOL, a State or local government administering DOL support, or a DOL social service intermediary provider must not require faith-based organizations to provide assurances or notices where they are not required of non-faith-based organizations. (2) No grant document, contract or other agreement, covenant, memorandum of understanding, policy, or regulation that is used by DOL, a State or local government, or a DOL social service intermediary provider in administering a DOL social service program shall disqualify faith-based or religious organizations from receiving DOL support or participating in DOL programs on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. (c)(1) A faith-based organization that is a DOL social service provider retains its autonomy; right of expression; religious character; and independence from Federal, State, and local governments and must be permitted to VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 continue to carry out its mission, including the definition, development, practice, and expression of its religious beliefs, provided that it does not use direct Federal financial assistance, whether received through a prime award or sub-award, to support or engage in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization). (2) Among other things, a faith-based organization must be permitted to: (i) Use its facilities to provide DOLsupported social services without concealing, removing, or altering religious art, icons, scriptures, or other religious symbols from those facilities; and (ii) Retain its authority over its internal governance, including retaining religious terms in its name, selecting its board members on the basis of their acceptance of or adherence to the religious requirements or standards of the organization, and including religious references in its mission statements and other governing documents. (d)(1) Any restrictions on the use of financial assistance under a grant shall apply equally to faith-based and nonfaith-based organizations. (2) All organizations, including religious ones, that are DOL social service providers must carry out DOLsupported activities in accordance with all program requirements, including those prohibiting the use of direct Federal financial assistance for explicitly religious activities (including worship, religious instruction, or proselytization). (e)(1) Nothing in this subpart shall be construed to preclude DOL from making an accommodation, including for religious exercise, with respect to one or more program requirements on a caseby-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws. (2) DOL shall not disqualify an organization from participating in any DOL program for which it is eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and DOL has determined that it would deny the accommodation. ■ 54. Amend § 2.33 by revising the section heading, the first two sentences of paragraph (a), and paragraphs (b)(1) and (c) to read as follows: PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 § 2.33 Responsibilities of DOL, DOL social service providers, and State and local governments administering DOL support. (a) Any organization that participates in a program funded by Federal financial assistance shall not, in providing services supported in whole or in part with Federal financial assistance, or in conducting outreach activities related to such services, discriminate against a current or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization that participates in a program funded by indirect Federal financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. * * * (b)(1) Organizations that receive direct Federal financial assistance may not engage in explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) as part of the programs or services funded with direct Federal financial assistance. If an organization conducts such explicitly religious activities, the activities must be offered separately, in time or location, from the programs or services funded with direct Federal financial assistance, and participation must be voluntary for beneficiaries of the programs and services funded with such assistance. * * * * * (c) If a DOL social service intermediary provider, acting under a contract, grant, or other agreement with the Federal Government or with a State or local government that is administering a program supported by Federal financial assistance, is given the authority under the contract, grant, or agreement to select non-governmental organizations to provide services funded by the Federal Government, the DOL social service intermediary provider must ensure the recipient’s compliance with the provisions of Executive Order 13279, as amended by Executive Order 13559, and any implementing rules or guidance. If the DOL social service intermediary provider is a nongovernmental organization, it retains all other rights of a non-governmental organization under the program’s statutory and regulatory provisions. ■ 55. Add § 2.34 to read as follows: § 2.34 Written notice to beneficiaries. (a) Notice to beneficiaries of programs supported by direct Federal financial assistance. Organizations providing E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations social services to beneficiaries under programs supported by direct Federal financial assistance from DOL must give the written notice described in paragraph (c) of this section to beneficiaries and prospective beneficiaries. (b) Notice to beneficiaries of programs supported by indirect Federal financial assistance. The entity responsible for disbursing Federal funds as part of a program of indirect Federal financial assistance administered by DOL must give the written notice described in paragraph (c) of this section to beneficiaries and prospective beneficiaries. (c) Contents of the notice. The required language for the written notice to beneficiaries and prospective beneficiaries is set forth in appendix C to this subpart. The notice includes the following: (1) The organization may not discriminate against beneficiaries or prospective beneficiaries on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) The organization may not require beneficiaries or prospective beneficiaries to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by beneficiaries in such activities must be purely voluntary; (3) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance; (4) Beneficiaries and prospective beneficiaries may report an organization’s violation of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with DOL’s Civil Rights Center, 200 Constitution Avenue NW, Room N–4123, Washington, DC 20210, or by email to CRCExternalComplaints@ dol.gov; and (5) Beneficiaries and potential beneficiaries may seek information about whether there are any other federally funded organizations that provide these kinds of services in their area by calling DOL’s US2–JOBS helpline toll-free at 1–877–US2–JOBS (1–877–872–5627) or TTY 1–877–889– 5627. (d) Timing. The written notice set forth in appendix C to this subpart must be given to prospective beneficiaries before they enroll in the program or receive services from the program. The written notice may be incorporated into materials that are otherwise provided to VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 prospective beneficiaries. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, organizations must advise beneficiaries of their protections at the earliest available opportunity. ■ 56. Revise § 2.37 to read as follows: § 2.37 Effect of DOL support on Title VII employment nondiscrimination requirements and on other existing statutes. A religious organization’s exemption from the Federal prohibition on employment discrimination on the basis of religion, set forth in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e–1, is not forfeited when the organization receives direct or indirect Federal financial assistance from DOL. Some DOL programs, however, were established through Federal statutes containing independent statutory provisions requiring that recipients refrain from discriminating on the basis of religion. In this case, to determine the scope of any applicable requirements, recipients and potential recipients should consult with the appropriate DOL program office or with the Civil Rights Center, U.S. Department of Labor, 200 Constitution Avenue NW, Room N– 4123, Washington, DC 20210, (202) 693– 6500. If you are deaf, hard of hearing, or have a speech disability, please dial 7–1–1 to reach the number in the preceding sentence through telecommunications relay services. ■ 57. Amend § 2.38 by: ■ a. Revising paragraphs (b)(3) and (4). ■ b. Removing paragraph (b)(5). The revisions read as follows: § 2.38 Status of nonprofit organizations. * * * * * (b) * * * (3) A certified copy of the applicant’s certificate of incorporation or similar document that clearly establishes the nonprofit status of the applicant; or (4) Any item described in paragraphs (b)(1) through (3) of this section, if that item applies to a State or national parent organization, together with a statement by the State or national parent organization that the applicant is a local nonprofit affiliate of the organization. ■ 58. Add appendix A to subpart D to read as follows: Appendix A to Subpart D of Part 2— Notice or Announcement of Award Opportunities (a) Faith-based organizations may apply for this award on the same basis as any other organization, subject to the protections and requirements of this subpart and any applicable constitutional and statutory PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 15717 requirements, including 42 U.S.C. 2000bb et seq. DOL will not, in the selection of recipients, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (c) A faith-based organization may not use direct Federal financial assistance to support or engage in any explicitly religious activities except where consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by DOL, or in conducting outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 59. Add appendix B to subpart D to read as follows: ■ Appendix B to Subpart D of Part 2— Notice of Award or Contract (a) A faith-based organization that participates in this program retains its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (b) A faith-based organization may not use direct Federal financial assistance to support or engage in any explicitly religious activities except where consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by DOL, or in conducting outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 60. Add appendix C to subpart D to read as follows: ■ Appendix C to Subpart D of Part 2— Written Notice of Beneficiary Protections Name of Organization: Name of Program: Type of Federal Financial Assistance: [specify DIRECT Federal financial assistance or INDIRECT Federal financial assistance] Contact Information for Program Staff: [provide name, phone number, and email address, if appropriate] Because this program is supported in whole or in part by financial assistance from E:\FR\FM\04MRR3.SGM 04MRR3 15718 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations the Federal Government, we are required to let you know that: (1) We may not discriminate against you on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) We may not require you to attend or participate in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) that are offered by our organization, and any participation by you in such activities must be purely voluntary; (3) We must separate in time or location any privately funded explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) from activities supported with direct Federal financial assistance; (4) You may report violations of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the U.S. Department of Labor’s Civil Rights Center, 200 Constitution Avenue NW, Room N–4123, Washington, DC 20210, or by email to CRCExternalComplaints@dol.gov; and (5) If you would like to seek information about whether there are any other federally funded organizations that provide these kinds of services in your area, please call tollfree 1–877–US2–JOBS (1–877–872–5627) or TTY 1–877–889–5627. This written notice must be given to you before you enroll in the program or receive services from the program, unless the nature of the service provided or exigent circumstances make it impracticable to provide such notice before we provide the actual service. In such an instance, this notice must be given to you at the earliest available opportunity. Appendix A to Part 2 [Removed] ■ 61. Remove appendix A to part 2. Appendix B to Part 2 [Removed] ■ 62. Remove appendix B to part 2. DEPARTMENT OF VETERANS AFFAIRS For the reasons set forth in the preamble, VA amends 38 CFR parts 50, 61, and 62 as follows: Title 38—Pensions, Bonuses, and Veterans’ Relief PART 50—EQUAL TREATMENT OF FAITH-BASED ORGANIZATIONS 63. The authority citation for part 50 continues to read as follows: khammond on DSKJM1Z7X2PROD with RULES3 ■ Authority: 38 U.S.C. 501 and as noted in specific sections. 64. Amend § 50.1 by revising paragraphs (b)(2) and (c) to read as follows: ■ § 50.1 * Definitions. * * (b) * * * VerDate Sep<11>2014 * * 17:57 Mar 01, 2024 Jkt 262001 (2) The organization receives the assistance wholly as a result of a genuine and independent private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords a genuine and independent private choice. (c) Federal financial assistance means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption. * * * * * ■ 65. Revise § 50.2 to read as follows: § 50.2 Faith-based organizations and Federal financial assistance. (a) Faith-based organizations are eligible, on the same basis as any other organization, to participate in any VA program or service for which they are otherwise eligible. Neither the VA program nor any State or local government or other pass-through entity receiving funds under any VA program shall, in the selection of service providers, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) Organizations that receive direct Federal financial assistance from a VA program may not engage in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) as part of the programs or services funded with direct Federal financial assistance from the VA program, or in any other manner prohibited by law. If an organization conducts such activities, the activities must be offered separately, in time or location, from the programs or services funded with direct Federal financial assistance from the VA program, and participation must be voluntary for beneficiaries of the programs or services funded with such assistance. The use of indirect Federal financial assistance is not subject to this restriction. Nothing in this part restricts VA’s authority under applicable Federal law to fund activities, such as the provision of chaplaincy services, that can be directly funded by the Government consistent with the Establishment Clause. (c) A faith-based organization that participates in programs or services funded by a VA program will retain its PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 autonomy; right of expression; religious character; and independence from Federal, State, and local governments, and may continue to carry out its mission, including the definition, development, practice, and expression of its religious beliefs. A faith-based organization that receives direct Federal financial assistance may use space in its facilities to provide programs or services funded with financial assistance from the VA program without concealing, removing, or altering religious art, icons, scriptures, or other religious symbols. In addition, a faith-based organization that receives Federal financial assistance from a VA program does not lose the protections of law. Such a faith-based organization retains its authority over its internal governance, and it may retain religious terms in its name, select its board members on the basis of their acceptance of or adherence to the religious tenets of the organization, and include religious references in its mission statements and other governing documents. (d) Any organization that participates in programs funded by Federal financial assistance from the VA shall not, in providing services supported in whole or in part with Federal financial assistance, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization receiving indirect Federal financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. (e) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by a VA program or a State or local government in administering Federal financial assistance from any VA program shall require faith-based organizations to provide assurances or notices where they are not required of non-faith-based organizations. Any restrictions on the use of grant funds shall apply equally to faith-based and non-faith-based organizations. All organizations that participate in VA programs or services, including faithbased ones, must carry out eligible activities in accordance with all program requirements, including those prohibiting the use of direct financial assistance to engage in explicitly religious activities, subject to any accommodations that are granted on a case-by-case basis in accordance with E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations the Constitution and laws of the United States. No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by VA or a State or local government in administering financial assistance from VA shall disqualify faith-based organizations from participating in the VA programs or services on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. (f) Nothing in this part shall be construed to preclude VA from making an accommodation, including for religious exercise, with respect to one or more program requirements on a caseby-case basis in accordance with the Constitution and laws of the United States. (g) VA shall not disqualify an organization from participating in any VA program for which it is eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and VA has determined that it would deny the accommodation. (h) A faith-based organization’s exemption from the Federal prohibition on employment discrimination on the basis of religion, set forth in section 702(a) of the Civil Rights Act of 1964 (42 U.S.C. 2000e–1), is not forfeited when the organization receives direct or indirect Federal financial assistance from a VA program. Some VA programs, however, contain independent statutory provisions affecting a recipient’s ability to discriminate on the basis of religion in employment. In this case, recipients should consult with the appropriate VA program office if they have questions about the scope of any applicable requirements. (i) In general, VA programs do not require that a recipient, including a faith-based organization, obtain taxexempt status under section 501(c)(3) of the Internal Revenue Code to be eligible for funding under VA programs. Some grant programs, however, do require an organization to be a nonprofit organization in order to be eligible for funding. Funding announcements and other grant application solicitations that require organizations to have nonprofit status will specifically so indicate in the eligibility section of the solicitation. In addition, any solicitation that requires an organization to maintain tax-exempt status will expressly state the statutory authority for requiring such status. VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 Recipients should consult with the appropriate VA program office to determine the scope of any applicable requirements. In VA programs in which an applicant must show that it is a nonprofit organization, the applicant may do so by any of the following means: (1) Proof that the Internal Revenue Service currently recognizes the applicant as an organization to which contributions are tax deductible under section 501(c)(3) of the Internal Revenue Code; (2) A statement from a State or other governmental taxing body or the State secretary of State certifying that: (i) The organization is a nonprofit organization operating within the State; and (ii) No part of its net earnings may benefit any private shareholder or individual; (3) A certified copy of the applicant’s certificate of incorporation or similar document that clearly establishes the nonprofit status of the applicant; or (4) Any item described in paragraphs (i)(1) through (3) of this section if that item applies to a State or national parent organization, together with a statement by the State or parent organization that the applicant is a local nonprofit affiliate. (j) If a recipient contributes its own funds in excess of those funds required by a matching or grant agreement to supplement VA program-supported activities, the recipient has the option to segregate those additional funds or commingle them with the Federal award funds. If the funds are commingled, the provision of this part shall apply to all of the commingled funds in the same manner, and to the same extent, as the provisions apply to the Federal funds. With respect to the matching funds, the provisions of this part apply irrespective of whether such funds are commingled with Federal funds or segregated. (k) Decisions about awards of Federal financial assistance must be made on the basis of merit, not on the basis of the religious affiliation, or lack thereof, of a recipient organization, and must be free from political interference or even the appearance of such interference. (l) Neither VA nor any State or local government or other pass-through entity receiving funds under any VA program or service shall construe these provisions in such a way as to advantage or disadvantage faith-based organizations affiliated with historic or well-established religions or sects in comparison with other religions or sects. (m) If a pass-through entity, acting under a contract, grant, or other PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 15719 agreement with the Federal Government or with a State or local government that is administering a program supported by Federal financial assistance, is given the authority under the contract, grant, or agreement to select non-governmental organizations to provide services funded by the Federal Government, the passthrough entity must ensure compliance by the subrecipient with the provisions of this part and any implementing regulations or guidance. If the passthrough entity is a non-governmental organization, it retains all other rights of a non-governmental organization under the program’s statutory and regulatory provisions. ■ 66. Add § 50.3 to read as follows: § 50.3 Notice requirements. (a) An organization providing social services under a program of VA supported by Federal financial assistance must give written notice to beneficiaries and prospective beneficiaries of certain protections in a manner and form prescribed by the VA program. The language for this written notice to beneficiaries must be substantially similar to the text set forth in appendix C to this part. Specifically, the notice must include the following: (1) The organization may not discriminate against a beneficiary or prospective beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) The organization may not require a beneficiary or prospective beneficiary to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by a beneficiary in such activities must be purely voluntary; (3) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance; and (4) A beneficiary or prospective beneficiary may report an organization’s violation of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the VA program or the intermediary that awarded funds to the organization. (b) The written notice described in paragraph (a) of this section must be given to a prospective beneficiary prior to the time the prospective beneficiary enrolls in the program or receives services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, an organization E:\FR\FM\04MRR3.SGM 04MRR3 15720 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations must advise beneficiaries of their protections at the earliest available opportunity. (c) VA may determine that the notice described in paragraph (a) of this section must inform each beneficiary or prospective beneficiary of the option to seek information from VA, or another entity administering the program, as to whether there are any other federally funded organizations in their area that provide the services available under the applicable program. (d) Notices or announcements of award opportunities and notices of award or contracts shall include language substantially similar to that in appendices A and B, respectively, to this part. ■ 67. Revise appendix A to part 50 to read as follows: Appendix A to Part 50—Notice or Announcement of Award Opportunities (a) Faith-based organizations may apply for this award on the same basis as any other organization, as set forth at, and subject to the protections and requirements of, this part and any applicable constitutional and statutory requirements, including 42 U.S.C. 2000bb et seq. VA will not, in the selection of recipients, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (c) A faith-based organization may not use direct financial assistance from VA to support or engage in any explicitly religious activities except where consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by VA, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 68. Revise appendix B to part 50 to read as follows: khammond on DSKJM1Z7X2PROD with RULES3 ■ Appendix B to Part 50—Notice of Award or Contract (a) A faith-based organization that participates in this program retains its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. (b) A faith-based organization may not use direct Federal financial assistance from VA to VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 support or engage in any explicitly religious activities except when consistent with the Establishment Clause and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by VA, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 69. Add appendix C to part 50 to read as follows: ■ Appendix C to Part 50—Written Notice of Beneficiary Protections Name of Organization: Name of Program: Contact Information for VA Grant Program Office (name, phone number, and email address, if appropriate): Because this program is supported in whole or in part by financial assistance from the Federal Government, we are required to let you know that: (1) We may not discriminate against you on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) We may not require you to attend or participate in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) that may be offered by our organization, and any participation by you in such activities must be purely voluntary; (3) We must separate in time or location any privately funded explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) from activities supported with direct Federal financial assistance; (4) You may report violations of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the grant program office using the contact information set forth above; and [When required by VA, the notice must also state:] (5) If you would like to seek information about whether there are any other federally funded organizations that provide these kinds of services in your area, please use the contact information set forth above. This written notice must be given to you before you enroll in the program or receive services from the program, unless the nature of the service provided or exigent circumstances make it impracticable to provide such notice before we provide the actual service. In such an instance, this notice must be given to you at the earliest available opportunity. PART 61—VA HOMELESS PROVIDERS GRANT AND PER DIEM PROGRAM 70. The authority citation for part 61 continues to read as follows: ■ PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 Authority: 38 U.S.C. 501, 2001, 2002, 2011, 2012, 2013, 2061, 2064. 71. Amend § 61.64 by revising paragraphs (b)(2), (e), and (g) to read as follows: ■ § 61.64 Faith-based organizations. * * * * * (b) * * * (2) For purposes of this section, ‘‘indirect Federal financial assistance’’ means Federal financial assistance in which a service provider receives program funds through a voucher, certificate, agreement, or other form of disbursement, wholly as a result of the genuinely independent and private choice of a beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords true private choice. ‘‘Direct Federal financial assistance’’ means Federal financial assistance received by an entity selected by the Government or a pass-through entity as defined in 38 CFR 50.1(d) to provide or carry out a service (e.g., by contract, grant, or cooperative agreement). References to ‘‘financial assistance’’ will be deemed to be references to direct Federal financial assistance, unless the referenced assistance meets the definition of ‘‘indirect Federal financial assistance’’ in this paragraph (b)(2). * * * * * (e) An organization that participates in a VA program under this part shall not, in providing direct program assistance, discriminate against a program beneficiary or prospective program beneficiary regarding housing, supportive services, or technical assistance, on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. * * * * * (g) To the extent otherwise permitted by Federal law, the restrictions on explicitly religious activities set forth in this section do not apply where VA funds are provided to faith-based organizations through indirect assistance wholly as a result of a genuinely independent and private choice of a beneficiary, provided the faith-based organizations otherwise satisfy the requirements of this part. A faith-based organization may receive such funds as the result of a beneficiary’s genuine and independent choice if, for example, a beneficiary redeems a voucher, coupon, or certificate, allowing the beneficiary to direct where funds are to be paid, or a similar funding mechanism provided to E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations that beneficiary and designed to give that beneficiary a choice among providers. PART 62—SUPPORTIVE SERVICES FOR VETERAN FAMILIES PROGRAM 72. The authority citation for part 62 continues to read as follows: ■ Authority: 38 U.S.C. 501, 2044, and as noted in specific sections. 73. Amend § 62.62 by revising paragraphs (b)(2), (e), and (g) to read as follows: ■ § 62.62 Faith-based organizations. khammond on DSKJM1Z7X2PROD with RULES3 * * * * * (b) * * * (2) For purposes of this section, ‘‘indirect Federal financial assistance’’ means Federal financial assistance in which a service provider receives program funds through a voucher, certificate, agreement, or other form of disbursement, wholly as a result of the genuinely independent and private choice of a beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords true private choice. ‘‘Direct Federal financial assistance’’ means Federal financial assistance received by an entity selected by the Government or a pass-through entity as defined in 38 CFR 50.1(d) to provide or carry out a service (e.g., by contract, grant, or cooperative agreement). References to ‘‘financial assistance’’ will be deemed to be references to direct Federal financial assistance, unless the referenced assistance meets the definition of ‘‘indirect Federal financial assistance’’ in this paragraph (b)(2). * * * * * (e) An organization that participates in a VA program under this part shall not, in providing direct program assistance, discriminate against a program beneficiary or prospective program beneficiary regarding housing, supportive services, or technical assistance, on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. * * * * * (g) To the extent otherwise permitted by Federal law, the restrictions on explicitly religious activities set forth in this section do not apply where VA funds are provided to faith-based organizations through indirect assistance wholly as a result of a genuinely independent and private choice of a beneficiary, provided the faith-based organizations otherwise VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 satisfy the requirements of this part. A faith-based organization may receive such funds as the result of a beneficiary’s genuine and independent choice if, for example, a beneficiary redeems a voucher, coupon, or certificate, allowing the beneficiary to direct where funds are to be paid, or a similar funding mechanism provided to that beneficiary and designed to give that beneficiary a choice among providers. DEPARTMENT OF HEALTH AND HUMAN SERVICES For the reasons set forth in the preamble, HHS amends part 87 of title 45 of the CFR as follows: Title 45—Public Welfare PART 87—EQUAL TREATMENT FOR FAITH-BASED ORGANIZATIONS 74. The authority citation for part 87 continues to read as follows: ■ Authority: 5 U.S.C. 301; 42 U.S.C. 2000bb et seq. 75. Amend § 87.1 by revising paragraphs (c) and (d) to read as follows: ■ § 87.1 Definitions. * * * * * (c) Indirect Federal financial assistance or Federal financial assistance provided indirectly means Federal financial assistance received by a service provider when the service provider is paid for services rendered by means of a voucher, certificate, or other means of Government-funded payment provided to a beneficiary who is able to make a choice of a service provider, and: (1) The Government program through which the beneficiary receives the voucher, certificate, or other similar means of Government-funded payment is neutral toward religion; and (2) The service provider receives the assistance wholly as a result of a genuine and independent private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords true private choice. (d) Federal financial assistance means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption. Federal financial assistance may be direct or indirect. * * * * * PO 00000 Frm 00053 Fmt 4701 Sfmt 4700 15721 76. Amend § 87.2 by revising paragraphs (a) and (b) to read as follows: ■ § 87.2 Applicability. * * * * * (a) Discretionary grants. This part is not applicable to the discretionary grant programs that are governed by the Substance Abuse and Mental Health Services Administration (SAMHSA) Charitable Choice regulations found at 42 CFR part 54a. This part is also not applicable to discretionary grant programs that are governed by the Community Services Block Grant (CSBG) Charitable Choice regulations at 45 CFR part 1050, with the exception of §§ 87.1 and 87.3(k) through (m) and (o), which do apply to such CSBG discretionary grants. Discretionary grants authorized by the Child Care and Development Block Grant Act are also not governed by this part. (b) Formula and block grants. This part does not apply to non-discretionary and block grant programs governed by the SAMHSA Charitable Choice regulations found at 42 CFR part 54, or the Temporary Assistance for Needy Families (TANF) Charitable Choice regulations at 45 CFR part 260. Block grants governed by the CSBG Charitable Choice regulations at 45 CFR part 1050 are not subject to this part, with the exception of §§ 87.1 and 87.3(k) through (m) and (o), which do apply to such CSBG block grants. This part is not applicable to Child Care and Development Block Grants governed by 45 CFR part 98. ■ 77. Amend § 87.3 by: ■ a. Revising paragraph (a). ■ b. Redesignating paragraphs (b) through (h) and (i) through (k) as paragraphs (d) through (j) and (o) through (q), respectively. ■ c. Adding new paragraphs (b) and (c). ■ d. Removing note 1 following newly redesignated paragraph (e). ■ e. Revising newly redesignated paragraphs (f) through (h) and (i)(3) and (4). ■ f. Removing newly redesignated paragraph (i)(5). ■ g. Adding a new paragraph (k) and paragraphs (l) through (n). The revisions and additions read as follows: § 87.3 Faith-based organizations and Federal financial assistance. (a) Faith-based organizations are eligible, on the same basis as any other organization, to participate in any HHS awarding agency program or service for which they are otherwise eligible. Neither the HHS awarding agency nor any State or local government or other pass-through entity receiving funds E:\FR\FM\04MRR3.SGM 04MRR3 khammond on DSKJM1Z7X2PROD with RULES3 15722 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations under any HHS awarding agency program or service shall, in the selection of service providers, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) Nothing in this part shall be construed to preclude HHS from making an accommodation, including for religious exercise, with respect to one or more program requirements on a caseby-case basis in accordance with the Constitution and laws of the United States. (c) HHS shall not disqualify an organization from participating in any HHS program for which it is eligible on the basis of the organization’s indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and HHS has determined that it would deny the accommodation. * * * * * (f) An organization, whether faithbased or not, that receives Federal financial assistance from HHS shall not, in providing services supported in whole or in part with Federal financial assistance, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, a faithbased organization receiving indirect Federal financial assistance need not modify any religious components or integration with respect to its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization’s program. (g) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation used by an HHS awarding agency or a State or local government in administering Federal financial assistance from the HHS awarding agency shall require faith-based organizations to provide assurances or notices where they are not required of non-faith-based organizations. Any restrictions on the use of grant funds shall apply equally to faith-based and non-faith-based organizations. All organizations, whether faith-based or not, that participate in HHS awarding agency programs or services must carry out eligible activities in accordance with VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 all program requirements, including those prohibiting the use of direct Federal financial assistance to engage in explicitly religious activities, subject to any accommodations that HHS grants to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States. No grant document, agreement, covenant, memorandum of understanding, policy, or regulation used by an HHS awarding agency or a State or local government in administering Federal financial assistance from the HHS awarding agency shall disqualify faith-based organizations from participating in the HHS awarding agency’s programs or services on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization. (h) A faith-based organization’s exemption from the Federal prohibition on employment discrimination on the basis of religion, set forth in the Civil Rights Act of 1964, 42 U.S.C. 2000e–1, is not forfeited when the faith-based organization receives direct or indirect Federal financial assistance from an HHS awarding agency. Some HHS awarding agency programs, however, contain independent statutory provisions requiring that all grantees agree not to discriminate in employment on the basis of religion. In this case, grantees should consult with the appropriate HHS awarding agency program office to determine the scope of any applicable requirements. (i) * * * (3) A certified copy of the applicant’s certificate of incorporation or similar document that clearly establishes the nonprofit status of the applicant; or (4) Any item described in paragraphs (i)(1) through (3) of this section, if that item applies to a State or national parent organization, together with a statement by the State or parent organization that the applicant is a local nonprofit affiliate. * * * * * (k) An organization providing social services under a discretionary grant program of HHS that is supported by Federal financial assistance must give written notice to beneficiaries and prospective beneficiaries of certain protections. A pass-through entity administering social service programs under a mandatory formula, block or entitlement grant of HHS that is supported by Federal financial assistance shall ensure that beneficiaries and prospective beneficiaries receive written notice of certain protections. PO 00000 Frm 00054 Fmt 4701 Sfmt 4700 (1) The written notice to beneficiaries and prospective beneficiaries of directly funded social services shall include language substantially similar to that found in appendix A to this part. The notice must include the following information: (i) The organization may not discriminate against a beneficiary or prospective beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (ii) The organization may not require a beneficiary or prospective beneficiary to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by a beneficiary in such activities must be purely voluntary; (iii) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance; and (iv) A beneficiary or prospective beneficiary may report an organization’s violation of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with either the HHS awarding entity or the pass-through entity that awarded funds to the organization, which must promptly report the complaint to the HHS awarding entity. The HHS awarding entity will address the complaint in consultation with the HHS Office for Civil Rights. (2) The written notice to beneficiaries of indirectly funded social services must identify the protections in paragraphs (f) and (k)(1)(ii) and (iv) of this section; it must also provide the contact information of the HHS awarding entity or the pass-through entity that administers the program. (l) The written notice described in paragraph (k) of this section must be given to a prospective beneficiary prior to the time the prospective beneficiary enrolls in the program or receives services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, an organization must advise beneficiaries of their protections and provide the notice at the earliest available opportunity. (m) The written notice described in paragraph (k) of this section must be given in a manner prescribed by the HHS awarding agency in consultation with the HHS Office for Civil Rights, such as by incorporating the notice into materials that are otherwise provided to beneficiaries. The HHS awarding E:\FR\FM\04MRR3.SGM 04MRR3 Federal Register / Vol. 89, No. 43 / Monday, March 4, 2024 / Rules and Regulations agency, in consultation with the HHS Office for Civil Rights, may determine that the notice must inform each beneficiary or prospective beneficiary of the option to seek information from the HHS awarding agency, or another entity administering the applicable program, about other federally funded organizations in their area, if any, that provide the services available under the applicable program. (n) Notices or announcements of award opportunities and notices of award or contracts shall include language substantially similar to that in appendices B and C to this part. * * * * * ■ 78. Revise § 87.4 to read as follows: § 87.4 Severability. To the extent that any provision of this part is declared invalid by a court of competent jurisdiction, the Department intends for all other provisions that are capable of operating in the absence of the specific provision that has been invalidated to remain in effect. Appendices A and B to Part 87 [Redesignated as Appendices B and C to Part 87] 79. Redesignate appendices A and B to part 87 as appendices B and C to part 87, respectively. ■ 80. Add a new appendix A to part 87 to read as follows: ■ khammond on DSKJM1Z7X2PROD with RULES3 Appendix A to Part 87—Direct Aid Programs: Written Notice of Beneficiary Protections Name of Organization: Name of Program: Contact Information for Program Staff: [provide name, phone number, and email address, if appropriate] Because this program is supported in whole or in part by financial assistance from the Federal Government, we are required to let you know that— (1) We may not discriminate against you on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice; (2) We may not require you to attend or participate in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction or proselytization) that may be offered by our organization, and any participation by you in such activities must be purely voluntary; (3) We must separate in time or location any privately funded explicitly religious VerDate Sep<11>2014 17:57 Mar 01, 2024 Jkt 262001 activities (including activities that involve overt religious content such as worship, religious instruction or proselytization) from activities supported with direct Federal financial assistance; (4) You may report violations of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with [identify the HHS awarding entity, or the pass-through entity that awarded funds to your organization, and the phone number and physical street and/or email address of the identified office]. The HHS awarding entity will address the complaint in consultation with the HHS Office for Civil Rights; [When required by the HHS awarding agency, the notice must also state:] (5) If you would like to seek information about whether there are any other federally funded organizations that provide these kinds of services in your area, please use the contact information set forth above. We must give you this notice before you enroll in or receive services from the program, unless the nature of the service provided or exigent circumstances make advanced notice impracticable. In that case, this notice must be given to you at the earliest available opportunity. 81. Revise newly redesignated appendix B to part 87 to read as follows: ■ Appendix B to Part 87—Notice or Announcement of Award Opportunities (a) Faith-based organizations may apply for this award on the same basis as any other organization, as set forth at, and subject to the protections and requirements of, this part and any applicable constitutional and statutory requirements, including 42 U.S.C. 2000bb et seq. HHS will not, in the selection of recipients, discriminate for or against an organization on the basis of the organization’s religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization. (b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom, nondiscrimination, and conscience protections in Federal law. (c) A faith-based organization may not use direct Federal financial assistance from HHS to support or engage in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. Such an organization also may not, in providing services funded by HHS, or in their outreach activities related to such services, discriminate against a program PO 00000 Frm 00055 Fmt 4701 Sfmt 9990 15723 beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. 82. Revise newly redesignated appendix C to part 87 to read as follows: ■ Appendix C to Part 87—Notice of Award or Contract (a) A faith-based organization that participates in this program retains its independence from the Government and may continue to carry out its mission consistent with religious freedom, nondiscrimination, and conscience protections in Federal law. (b) A faith-based organization may not use direct Federal financial assistance from HHS to support or engage in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. Such an organization also may not, in providing services funded by the Department, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. Miguel A. Cardona, Secretary, U.S. Department of Education. Alejandro N. Mayorkas, Secretary, U.S. Department of Homeland Security. Dated: February 21, 2024. Thomas J. Vilsack, Secretary, U.S. Department of Agriculture. Colleen R. Allen, Assistant Administrator, Bureau for Management, U.S. Agency for International Development. Marcia L. Fudge, Secretary, U.S. Department of Housing and Urban Development. Dated: February 12, 2024. Merrick B. Garland, Attorney General, U.S. Department of Justice. Julie A. Su, Acting Secretary, U.S. Department of Labor. Denis McDonough, Secretary, U.S. Department of Veterans Affairs. Xavier Becerra, Secretary, U.S. Department of Health and Human Services. [FR Doc. 2024–03869 Filed 3–1–24; 8:45 am] BILLING CODE P E:\FR\FM\04MRR3.SGM 04MRR3

Agencies

[Federal Register Volume 89, Number 43 (Monday, March 4, 2024)]
[Rules and Regulations]
[Pages 15671-15723]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03869]



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Vol. 89

Monday,

No. 43

March 4, 2024

Part III





Department of Education





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2 CFR Part 3474

34 CFR Parts 75 and 76





Department of Homeland Security





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6 CFR Part 19





Department of Agriculture





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7 CFR Part 16





Agency for International Development





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22 CFR Part 205





Department of Housing and Urban Development





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24 CFR Part 5





Department of Justice





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28 CFR Part 38

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Department of Labor





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29 CFR Part 2





Department of Veterans Affairs





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38 CFR Parts 50, 61, and 62





Department of Health and Human Services





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45 CFR Part 87





Partnerships With Faith-Based and Neighborhood Organizations; Final 
Rule

Federal Register / Vol. 89 , No. 43 / Monday, March 4, 2024 / Rules 
and Regulations

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DEPARTMENT OF EDUCATION

2 CFR Part 3474

34 CFR Parts 75 and 76

RIN 1840-AD467

DEPARTMENT OF HOMELAND SECURITY

6 CFR Part 19

RIN 1601-AB02

DEPARTMENT OF AGRICULTURE

7 CFR Part 16

RIN 0503-AA73

AGENCY FOR INTERNATIONAL DEVELOPMENT

22 CFR Part 205

RIN 0412-AB10

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 5

RIN 2501-AD91

DEPARTMENT OF JUSTICE

28 CFR Part 38

[A.G. Order No. 5874-2024]
RIN 1105-AB64

DEPARTMENT OF LABOR

29 CFR Part 2

RIN 1290-AA45

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 50, 61, and 62

RIN 2900-AR23

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 87

RIN 0991-AC13


Partnerships With Faith-Based and Neighborhood Organizations

AGENCY: Department of Education, Department of Homeland Security, 
Department of Agriculture, Agency for International Development, 
Department of Housing and Urban Development, Department of Justice, 
Department of Labor, Department of Veterans Affairs, Department of 
Health and Human Services.

ACTION: Final rule.

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SUMMARY: This final rule amends the regulations of the agencies listed 
above (the ``Agencies'') to clarify protections for beneficiaries and 
prospective beneficiaries of federally funded social services and the 
rights and obligations of organizations providing such services. In 
accordance with the Executive order of February 14, 2021, Establishment 
of the White House Office of Faith-Based and Neighborhood Partnerships, 
this clarification should promote maximum participation by 
beneficiaries and providers in the Agencies' covered programs and 
activities and ensure consistency in the implementation of those 
programs and activities.

DATES: 
    Effective date: This rule is effective on April 3, 2024.
    Compliance date: Recipients of Federal financial assistance 
required by these regulations to provide written notice to 
beneficiaries must do so by July 2, 2024.

FOR FURTHER INFORMATION CONTACT: For information regarding each 
Agency's implementation of this final rule, the contact information for 
that Agency follows. If you use a telecommunications device for the 
deaf (``TDD'') or a text telephone (``TTY''), call the 
Telecommunications Relay Service at 7-1-1.
    Department of Justice: Michael L. Alston, Director, Office for 
Civil Rights, Office of Justice Programs, 202-307-0690, 
[email protected].
    Department of Agriculture: Samantha Joseph, Director, Center for 
Faith-Based and Neighborhood Partnerships, [email protected].
    Department of Labor: Elena S. Goldstein, Deputy Solicitor of Labor, 
Office of the Solicitor of Labor, 202-878-9471, 
[email protected].
    Department of Health and Human Services: Que English, Director, 
Center for Faith-Based and Neighborhood Partnerships, 202-260-6501, 
[email protected].
    Department of Housing and Urban Development: BJ Douglass, Director 
of the Center for Faith-Based and Neighborhood Partnerships, Office of 
the Secretary, 451 7th Street SW, Washington, DC 20410, 202-708-2404.
    Department of Education: Maggie Siddiqi, Director, Center for 
Faith-Based and Neighborhood Partnerships, 202-453-7443, 
[email protected].
    Department of Veterans Affairs: Conrad Washington, Director, Center 
for Faith-Based and Neighborhood Partnerships, Office of Public and 
Intergovernmental Affairs, 202-461-7865.
    Department of Homeland Security: Peter Mina, Deputy Officer for 
Civil Rights and Civil Liberties, Office for Civil Rights and Civil 
Liberties, 202-401-1474 (phone), 202-401-0470 (TTY).
    Agency for International Development: Amanda Vigneaud, Acting 
Director, Center for Faith-Based and Neighborhood Partnerships, 202-
297-8165, [email protected].

SUPPLEMENTARY INFORMATION: This joint final rule amends regulations of 
all the Agencies in a single document. The Agencies decided to publish 
a joint final rule because most of the comments received by the 
Agencies in response to their proposed regulations addressed issues 
that were relevant to all of the Agencies' proposals. This final rule 
addresses cross-cutting issues first, followed by separate Agency-
specific discussions of issues particular to each of those Agencies. 
Following the preamble, each Agency makes final amendments to its 
regulations, in order to implement the requirements in Executive Order 
14015, Establishment of the White House Office of Faith-Based and 
Neighborhood Partnerships. The SUPPLEMENTARY INFORMATION is broken up 
into four major parts, organized as follows:

I. Background
    A. Prior Rulemakings
    B. The Agencies' Social Service Programs
    C. The Present Joint Rulemaking
II. Cross-Cutting Public Comments
    A. Beneficiary Protections
    B. Prohibition on Using Direct Federal Financial Assistance for 
Explicitly Religious Activities
    C. Definition of ``Indirect Federal Financial Assistance''
    D. Eligibility of Faith-Based Organizations and Availability of 
Accommodations
    E. Title VII
    F. Definition of ``Federal Financial Assistance''
    G. Other Issues
III. Agency-Specific Issues
IV. General Regulatory Certifications

I. Background

A. Prior Rulemakings

    On December 12, 2002, President George W. Bush signed Executive 
Order 13279, Equal Protection of the Laws for Faith-Based and Community 
Organizations, 67 FR 77141. Executive Order 13279 set forth the 
principles and policymaking criteria to guide Federal agencies in 
formulating and implementing policies for the delivery of social 
services with implications for faith-based and other community 
organizations, to ensure equal protection of the laws for faith-based

[[Page 15672]]

and community organizations, and to expand opportunities for, and 
strengthen the capacity of, faith-based and other community 
organizations to meet social needs in communities across the United 
States. In addition, Executive Order 13279 directed specified agency 
heads to review and evaluate existing policies that had implications 
for faith-based and community organizations relating to their 
eligibility for Federal financial assistance for social service 
programs and, where appropriate, to implement new policies that were 
consistent with and necessary to further the fundamental principles and 
policymaking criteria articulated in the Executive order.
    Several of the Agencies proceeded to promulgate regulations to 
implement Executive Order 13279. For example:
     In 2004, the Department of Veterans Affairs (``VA'') 
promulgated a final rule consistent with Executive Order 13279. See VA 
Homeless Providers Grant and Per Diem Program; Religious Organizations, 
69 FR 31883 (June 8, 2004).
     Also in 2004, the Department of Education (``ED'') 
promulgated regulations in conformance with Executive Order 13279. See 
Participation in Education Department Programs by Religious 
Organizations; Providing for Equal Treatment of All Education Program 
Participants, 69 FR 31708 (June 4, 2004).
     In 2003 and 2004, the Department of Housing and Urban 
Development (``HUD'') promulgated three final rules consistent with 
Executive Order 13279. See Participation in HUD's Native American 
Programs by Religious Organizations; Providing for Equal Treatment of 
All Program Participants, 69 FR 62164 (Oct. 22, 2004); Equal 
Participation of Faith-Based Organizations, 69 FR 41712 (July 9, 2004); 
and Participation in HUD Programs by Faith-Based Organizations; 
Providing for Equal Treatment of all HUD Program Participants, 68 FR 
56396 (Sept. 30, 2003).
     In 2004, the Department of Justice (``DOJ''), Department 
of Agriculture (``USDA''), Department of Labor (``DOL''), Department of 
Health and Human Services (``HHS''), and Agency for International 
Development (``USAID'') issued final rules implementing Executive Order 
13279. See Participation in Justice Department Programs by Religious 
Organizations; Providing for Equal Treatment of All Justice Department 
Program Participants, 69 FR 2832 (Jan. 21, 2004); Equal Opportunity for 
Religious Organizations, 69 FR 41375 (July 9, 2004); Equal Treatment in 
Department of Labor Programs for Faith-Based and Community 
Organizations; Protection of Religious Liberty of Department of Labor 
Social Service Providers and Beneficiaries, 69 FR 41882 (July 12, 
2004); Participation in Department of Health and Human Services 
Programs by Religious Organizations; Providing for Equal Treatment of 
All Department of Health and Human Services Program Participants, 69 FR 
42586 (July 16, 2004); and Participation by Religious Organizations in 
USAID Programs, 69 FR 61716 (Oct. 20, 2004).
     The Department of Homeland Security (``DHS'') issued a 
notice of proposed rulemaking (``NPRM'' or ``proposed rule'') related 
to Executive Order 13279 in 2008, see Nondiscrimination in Matters 
Pertaining to Faith-Based Organizations, 73 FR 2187 (Jan. 14, 2008); 
DHS did not, however, issue a final rule related to the participation 
of faith-based organizations in its programs prior to the 2016 
rulemaking discussed in detail below.
    Shortly after taking office, President Barack Obama signed 
Executive Order 13498, Amendments to Executive Order 13199 and 
Establishment of the President's Advisory Council for Faith-Based and 
Neighborhood Partnerships, 74 FR 6533 (Feb. 5, 2009). Executive Order 
13498 changed the name of the White House Office of Faith-Based and 
Community Initiatives to the White House Office of Faith-Based and 
Neighborhood Partnerships, and it created the President's Advisory 
Council on Faith-Based and Neighborhood Partnerships, which 
subsequently submitted recommendations regarding the work of that White 
House office.
    On November 17, 2010, President Obama signed Executive Order 13559, 
Fundamental Principles and Policymaking Criteria for Partnerships With 
Faith-Based and Other Neighborhood Organizations, 75 FR 71319. Based on 
recommendations made by the Advisory Council, Executive Order 13559 
made various changes to Executive Order 13279, including:
     requiring agencies that administer or award Federal 
financial assistance for social service programs to ensure the 
implementation of additional protections for the beneficiaries and 
prospective beneficiaries of those programs, including (i) referrals to 
alternative providers when beneficiaries objected to the religious 
character of the organizations providing services, and (ii) written 
notice to beneficiaries of that referral requirement and other 
protections before they enrolled in or received services from the 
program;
     stating that decisions about awards of Federal financial 
assistance must be free from political interference or even the 
appearance of such interference, and must be made on the basis of 
merit, not on the basis of religious affiliation, or lack of 
affiliation, of recipient organizations;
     stating that the Federal Government has an obligation to 
monitor and enforce all standards regarding the relationship between 
religion and Government in ways that avoid excessive entanglement 
between religious bodies and governmental entities;
     providing further clarifications concerning certain 
requirements, including under Executive Order 13279, that organizations 
engaging in explicitly religious activities must (i) perform such 
activities and offer such services outside of programs that are 
supported with direct Federal financial assistance, (ii) separate those 
activities in time or location from programs or services supported with 
direct Federal financial assistance, and (iii) ensure that 
participation in any such activities is voluntary for the beneficiaries 
of social service programs supported with Federal financial assistance;
     emphasizing again that religious providers should be 
eligible to compete for social service funding from the Federal 
Government and to participate fully in social service programs 
supported with Federal financial assistance, and that such 
organizations may do so while maintaining their religious identities;
     requiring agencies that provide Federal financial 
assistance for social service programs to post online regulations, 
guidance documents, and policies that have implications for faith-based 
and other neighborhood organizations, and to post online a list of 
entities receiving such assistance; and
     clarifying that the principles set forth apply to 
subawards as well as prime awards.
    An interagency working group was tasked with developing model 
regulatory changes to implement Executive Order 13279, as amended by 
Executive Order 13559, including provisions that clarified beneficiary 
protections and the prohibited uses of direct Federal financial 
assistance, allowed religious social service providers to maintain 
their religious identities, and distinguished between direct and 
indirect Federal financial assistance.
    These efforts eventually resulted in DHS promulgating regulations 
and the other Agencies promulgating

[[Page 15673]]

amendments to their regulations. In April 2016, following notice and 
comment, the Agencies published a joint final rule to ensure 
consistency between their regulations and Executive Order 13279, as 
amended by Executive Order 13559. See Federal Agency Final Regulations 
Implementing Executive Order 13559: Fundamental Principles and 
Policymaking Criteria for Partnerships With Faith-Based and Other 
Neighborhood Organizations, 81 FR 19355 (Apr. 4, 2016). These revised 
regulations--referred to hereinafter as the ``2016 Rule''--incorporated 
the principles from Executive Order 13559 detailed above.
    On May 3, 2018, President Donald J. Trump signed Executive Order 
13831, Establishment of a White House Faith and Opportunity Initiative, 
83 FR 20715, amending Executive Order 13279, as amended by Executive 
Order 13559, and other related Executive orders. Among other things, 
Executive Order 13831 changed references to the White House Office of 
Faith-Based and Neighborhood Partnerships, established in Executive 
Order 13498, to the White House Faith and Opportunity Initiative; 
specified ways that the initiative was to operate; directed departments 
and agencies with Centers for Faith-Based and Community Initiatives to 
change the names of those centers to Centers for Faith and Opportunity 
Initiatives; and directed departments and agencies without a Center for 
Faith and Opportunity Initiatives to designate a Liaison for Faith and 
Opportunity Initiatives. Executive Order 13831 also eliminated the 
requirements to refer beneficiaries to alternative providers upon 
request and to notify beneficiaries of the protections in Executive 
Order 13559 described above.
    Consistent with Executive Order 13831, in December 2020, the 
Agencies, following notice and comment, promulgated a final rule 
amending the 2016 Rule. See Equal Participation of Faith-Based 
Organizations in the Federal Agencies' Programs and Activities, 85 FR 
82037 (Dec. 17, 2020). That joint final rule--referred to hereinafter 
as the ``2020 Rule''--made various changes to the 2016 Rule, including:
     eliminating a requirement that faith-based providers 
receiving direct Federal financial assistance provide notice to 
beneficiaries and prospective beneficiaries of certain protections, 
including protection from discrimination on the basis of religion;
     eliminating requirements that, if a beneficiary objected 
to the religious character of a faith-based provider, the provider 
would undertake reasonable efforts to identify and refer the 
beneficiary to an alternative provider, and that providers inform 
beneficiaries of this alternative provider requirement in the notice to 
them;
     eliminating a requirement that beneficiaries of indirect 
Federal financial assistance (such as vouchers, certificates, or other 
Government-funded means that the beneficiaries might use to obtain 
services at providers of their choosing) must have at least one 
adequate secular option for the use of the indirect Federal financial 
assistance;
     adding a provision allowing providers receiving indirect 
Federal financial assistance to require beneficiaries to attend ``all 
activities that are fundamental to the program'';
     adding a definition of the term ``religious exercise'';
     adding a requirement that notices or announcements of 
award opportunities and notices of awards or contracts include language 
regarding certain protections for faith-based organizations' 
independence from Government and providers' obligations not to use 
direct Federal financial assistance for any explicitly religious 
activities and not to discriminate against current or prospective 
program beneficiaries on the basis of religion;
     adding a provision stating that, if an awarding agency 
program required an applicant to show nonprofit status and the 
applicant has a sincerely held religious belief that it cannot apply 
for a determination as an entity that it is tax-exempt under section 
501(c)(3) of the Internal Revenue Code, the applicant could submit 
evidence sufficient to establish that it otherwise qualified as a 
nonprofit organization;
     adding a provision stating that neither the awarding 
agency nor any State or local government or other pass-through entity 
receiving funds under any Federal awarding agency program or service 
shall construe the Agencies' regulations ``in such a way as to 
advantage or disadvantage faith-based organizations affiliated with 
historic or well-established religions or sects in comparison with 
other religions or sects''; and
     adding language to preexisting requirements regarding the 
Government's obligation to accommodate religion and regarding the 
religious-employer exemption from the Federal prohibition on employment 
discrimination on the basis of religion.

B. The Agencies' Social Service Programs

    The Agencies achieve their missions in part through the 
administration of Federal financial assistance. Funds are distributed 
via a wide range of social service programs, including the following:
     Workforce Innovation and Opportunity Act (``WIOA'') Adult 
and Dislocated Worker Programs: DOL's Employment and Training 
Administration provides job search assistance and training to adult and 
dislocated workers through State formula grants authorized under WIOA, 
Public Law 113-128, 128 Stat. 1425. This funding area includes 
individualized training accounts through which program participants can 
choose from a statewide list of providers to access training.
     Homeless Veterans Reintegration Program: This grant 
program, administered by DOL's Veterans' Employment and Training 
Service, provides services that assist in reintegrating homeless 
veterans into meaningful employment within the labor force and supports 
the development of delivery systems that address the complex problems 
facing homeless veterans.
     Healthy Marriage and Responsible Fatherhood Programs: 
HHS's Office of Family Assistance competitively awards Healthy Marriage 
and Responsible Fatherhood grants to States, local governments, Tribal 
entities, and community-based organizations (both for profit and not-
for-profit, including faith-based) that help participants build and 
sustain healthy relationships and marriages and strengthen positive 
father-child interaction.
     Nita M. Lowey 21st Century Community Learning Centers: 
This program, administered by ED's Office of Elementary and Secondary 
Education, supports the creation of community learning centers that 
provide academic enrichment opportunities during non-school hours for 
children, particularly students who attend high-poverty and low-
performing schools. The program helps children meet State and local 
student standards in core academic subjects, such as reading and math; 
offers students a broad array of enrichment activities that can 
complement their regular academic programs; and provides literacy and 
other educational services to the families of participating children.
     Gaining Early Awareness and Readiness for Undergraduate 
Programs (``GEAR UP''): Under the GEAR UP program, ED's Office of 
Postsecondary Education awards discretionary grants to States and 
partnerships of local educational agencies and institutions of higher 
education, which may also include community organizations or entities 
as additional partners, to

[[Page 15674]]

provide services at high-poverty middle and high schools to increase 
the number of low-income students who are prepared to enter and succeed 
in postsecondary education.
     Citizenship and Integration Grant Program: Administered by 
DHS's U.S. Citizenship and Immigration Services (``USCIS''), the 
Citizenship and Integration Grant Program has helped more than 300,000 
lawful permanent residents (``LPRs'') prepare for U.S. citizenship. See 
USCIS, Fiscal Year 2023 Citizenship & Integration Grant Program (Sept. 
28, 2023), https://www.uscis.gov/citizenship-resource-center/civic-integration/fiscal-year-2023-citizenship-and-integration-grant-program. 
The program assists nonprofit organizations in providing citizenship 
instruction and application assistance to LPRs.
     VA Homeless Providers Grant and Per Diem Program: VA's 
Homeless Programs Office administers this program, which awards grants 
to community organizations providing services to veterans experiencing 
homelessness to ensure the availability of supportive housing and 
services, with the goal of helping homeless veterans achieve 
residential stability.
     Supportive Services for Veteran Families: This program, 
also administered by VA's Homeless Programs Office, awards grants to 
selected private nonprofit organizations and consumer cooperatives to 
assist very low-income veteran families residing in or transitioning to 
permanent housing. Grantees provide a range of supportive services to 
eligible veteran families that are designed to promote housing 
stability.
    Under these and other federally funded social service programs, 
Federal funds are not distributed directly to beneficiaries, but rather 
are distributed to recipients--for example, State and local 
governments, school districts, nonprofit organizations, institutions of 
higher education, and other entities--that use the Federal funds to 
provide services to the programs' intended beneficiaries. This final 
rule generally refers to these recipients as ``providers'' or 
``grantees,'' and to those whom they serve, either directly or through 
subrecipients, as ``beneficiaries.'' In administering federally funded 
social service programs, providers must comply both with applicable 
Federal law and with the terms and conditions under which they receive 
Federal funding from the Agencies. For example, applicants for Federal 
funds through the Office of Justice Programs at DOJ must certify that 
in administering any Federal award they will comply with all relevant 
Federal civil rights and nondiscrimination laws.

C. The Present Joint Rulemaking

    On February 14, 2021, President Joseph R. Biden, Jr., signed 
Executive Order 14015, Establishment of the White House Office of 
Faith-Based and Neighborhood Partnerships, 86 FR 10007. Executive Order 
14015 sought to ``organiz[e] more effective efforts to serve people in 
need across the country and around the world, in partnership with civil 
society, including faith-based and secular organizations.'' Id. at 
10007. The Executive order further emphasized the importance of 
strengthening the ability of such organizations to deliver services in 
partnership with Federal, State, and local governments and with other 
private organizations, while adhering to all governing law. Id. 
Executive Order 14015 also revoked Executive Order 13831, see id. at 
10008, which had prompted the 2020 Rule.
    On January 13, 2023--following the issuance of Executive Order 
14015 and the revocation of Executive Order 13831--the Agencies issued 
a joint NPRM proposing regulatory amendments to the 2020 Rule. 
Partnerships With Faith-Based and Neighborhood Organizations; Notice of 
Proposed Rulemaking, 88 FR 2395 (``Joint NPRM''). As the Joint NPRM 
explained, ``it is central to the Agencies' missions that federally 
funded services and programs . . . reach the widest possible eligible 
population, including historically marginalized communities.'' Id. at 
2398. Thus, with their proposed rulemaking, the Agencies sought to 
``ensure full access to and comprehensive delivery of federally funded 
social services, in keeping with governing law and with the policies 
articulated in Executive Order 14015.'' Id. at 2397. The Agencies also 
sought to advance the policies set out in Executive Order 13985, 
Advancing Racial Equity and Support for Underserved Communities Through 
the Federal Government, 86 FR 7009 (Jan. 20, 2021), and Executive Order 
14058, Transforming Federal Customer Experience and Service Delivery To 
Rebuild Trust in Government, 86 FR 71357 (Dec. 13, 2021). 88 FR 2397. 
In addition, the Agencies sought to ``address and correct 
inconsistencies and confusion raised by the 2020 Rule.'' Id. at 2398.
    Accordingly, the Agencies proposed the following changes in the 
Joint NPRM: \1\
---------------------------------------------------------------------------

    \1\ As the Agencies explained in the Joint NPRM, USAID's 
proposed regulations differed somewhat from those of the other 
Agencies because ``unique characteristics of USAID-funded programs 
implemented abroad in foreign countries'' made certain policies 
adopted by other Agencies ``unworkable and impractical'' for USAID. 
See 88 FR 2398 n.3.
---------------------------------------------------------------------------

     All Agencies that previously required organizations 
providing social services under Agencies' direct Federal financial 
assistance programs to give written notice to beneficiaries and 
prospective beneficiaries of certain nondiscrimination protections 
proposed to reinstate that requirement, and to further apply this 
notice requirement to all such recipients, whether they are faith-based 
or secular. See id. at 2398-99.
     All Agencies except USAID proposed a modified version of 
the 2016 Rule's referral procedure to encourage Agencies, or State 
agencies and other entities that might be administering a federally 
funded social service program, to provide notice, when appropriate and 
feasible, to beneficiaries and prospective beneficiaries regarding how 
to obtain information about other available federally funded service 
providers. See id. at 2399.
     All Agencies except USAID proposed changes to their 
definitions of ``indirect Federal financial assistance'' to clarify 
that the potential availability to beneficiaries of a practical option 
to use indirect aid for services that do not involve explicitly 
religious activities is a significant factor in determining whether a 
program affords beneficiaries of indirect aid a ``genuine and 
independent private choice.'' See Zelman v. Simmons-Harris, 536 U.S. 
639, 652 (2002); 88 FR 2401. These revised definitions more closely 
track the distinction between direct and indirect aid that the Supreme 
Court has drawn in a series of cases culminating in Zelman. See 536 
U.S. at 655-56.
     The Agencies proposed changes to their regulations to 
state more directly that they will not, in their selection of service 
providers, discriminate on the basis of an organization's religious 
character, motives, or affiliation, or lack thereof, or on the basis of 
conduct that would not be considered grounds to favor or disfavor a 
similarly situated secular organization such as one that has the same 
capacity to effectively provide services. See 88 FR 2402.
     The Agencies proposed changes to their regulations to make 
clear that they will continue to consider organizations' requests for 
accommodations, on a case-by-case basis, in accordance with the U.S. 
Constitution and Federal statutes, and will not disqualify any 
organization from participating in a program simply because that 
organization has indicated it may request an accommodation. Id.

[[Page 15675]]

     With respect to religious organizations' limited exemption 
from the Federal prohibition on employment discrimination on the basis 
of religion, set forth in section 702(a) of the Civil Rights Act of 
1964 (``Title VII''), 42 U.S.C. 2000e-1(a), the Agencies proposed to 
remove regulatory language added by the 2020 Rule that could mistakenly 
suggest that Title VII permits religious organizations that qualify for 
the Title VII religious-employer exemption to insist upon tenets-based 
employment conditions that would otherwise violate Title VII or the 
particular underlying funding statute in question. See 88 FR 2402-03.
    The Agencies also sought public comment on whether their 
regulations should adopt any definition of ``Federal financial 
assistance'' other than that in Executive Order 13279.
    The Agencies received numerous public comments in response to the 
Joint NPRM. Following consideration of those comments, the Agencies 
have reached the following decisions regarding the proposed changes 
listed above:
     All Agencies except USAID \2\ adopt the proposed 
requirement that organizations, whether faith-based or secular, 
providing social services under Agencies' direct Federal financial 
assistance programs give written notice to beneficiaries and 
prospective beneficiaries of their rights.
---------------------------------------------------------------------------

    \2\ As explained above, USAID's final regulations differ 
somewhat from those of the other Agencies because ``unique 
characteristics of USAID-funded programs implemented abroad in 
foreign countries'' make certain policies adopted by the other 
Agencies ``unworkable and impractical'' for USAID. See 88 FR 2398 
n.3.
---------------------------------------------------------------------------

    [cir] Some Agencies' final rules also require that beneficiaries 
and prospective beneficiaries of programs receiving indirect Federal 
financial assistance be provided with a written notice of certain 
nondiscrimination protections.
    [cir] All Agencies administering domestic social service programs 
now include a model beneficiary notice as an appendix to their 
regulations.
    [cir] All Agencies' beneficiary notices, or the follow-on guidance 
they plan to issue to providers, will specify the office that 
beneficiaries and prospective beneficiaries may contact if they 
experience discrimination.
     The Agencies that proposed language regarding the 
provision of notice to beneficiaries and prospective beneficiaries 
about how to obtain information on alternative providers adopt that 
language.
     The Agencies that proposed changes to their definitions of 
``indirect Federal financial assistance'' generally adopt their 
proposed language. Some Agencies make technical edits to the text of 
their final regulations to better align with the policy intent 
expressed in the Joint NPRM and to promote consistency among the 
Agencies' definitions of the term.
     The Agencies generally adopt their proposed language 
stating that they will not, in their selection of service providers, 
discriminate on the basis of an organization's religious character, 
motives, or affiliation, or lack thereof, or on the basis of conduct 
that would not be considered grounds to favor or disfavor a similarly 
situated secular organization. Some Agencies make technical edits to 
their proposed language to promote consistency among the Agencies' 
regulatory text and model provider notices.
     The Agencies adopt their proposed language regarding 
organizations' requests for accommodations.
     As proposed, the Agencies remove from their regulations 
certain text on tenets-based employment conditions added in the 2020 
Rule, thus restoring the longstanding text of those regulatory 
provisions.
     The Agencies adopt the definition of ``Federal financial 
assistance'' set forth in Executive Order 13279.
    The changes listed above, as well as the Agencies' responses to the 
other substantive, cross-cutting issues raised in public comments, are 
discussed in detail in Part II of this joint preamble. Unless otherwise 
noted in response to a particular comment, the responses in the joint 
preamble are adopted by all Agencies. Comments that raised issues 
specific to an Agency or that required an explanation of how a cross-
cutting issue affects a particular Agency are addressed in the Agency-
specific preambles in Part III of this preamble.
    The Agencies generally consider each of the provisions promulgated 
here to be severable. Were any element of any of these final 
regulations to be stayed or invalidated by a reviewing court, the 
Agencies' intent is to otherwise preserve the rules promulgated herein 
to the fullest possible extent. Further, the Agencies believe that the 
elements that remained would generally be able to function sensibly and 
should remain in effect.

II. Cross-Cutting Public Comments

A. Beneficiary Protections

1. Definition of ``Beneficiary''
    Comments: Commenters requested that the Agencies clarify who is 
covered by the regulations' beneficiary protections. One commenter 
suggested that this could be done either by amending the definition of 
``beneficiary'' to explain that it covers all actual and prospective 
program participants, or by expressly stating that the protections 
apply to ``program participants'' instead of beneficiaries.
    Response: Although the precise terminology varies, each Agency's 
proposed regulations make clear that the beneficiary protections apply 
to both current and prospective beneficiaries. The Agencies believe 
that the use of ``beneficiary'' is sufficiently clear to encompass 
program participants and therefore decline to make any changes based on 
these comments.
    Changes: None.
2. Application of Beneficiary Protections to Direct and Indirect Aid 
Programs
    Comments: Commenters suggested that the Agencies explicitly state 
that all beneficiaries, whether participating in programs funded by 
direct or indirect Federal financial assistance, are protected from 
discrimination, with USDA's provision serving as a model. Commenters 
also requested that the Agencies eliminate any language regarding 
indirect aid programs that appears to require participation in 
religious activities as part of such programs.
    Response: Both the 2016 Rule and the 2020 Rule contained provisions 
prohibiting providers from discriminating against a program beneficiary 
or prospective beneficiary ``on the basis of religion, a religious 
belief, a refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice.'' See 81 FR 19361; 85 FR 82082. As 
explained in the Joint NPRM, ``[t]hose prohibitions against religious 
discrimination apply in direct and indirect aid programs alike, and 
they reflect one of the fundamental principles set forth in section 
2(d) of Executive Order 13279, as amended by section 1(b) of Executive 
Order 13559.'' 88 FR 2398 (footnote omitted). The Agencies are thus 
retaining those regulatory provisions. See 2 CFR 3474.15(f) (ED); 6 CFR 
19.5 (DHS); 7 CFR 16.4(a) (USDA); 22 CFR 205.1(h) (USAID); 24 CFR 
5.109(g) (HUD); 28 CFR 38.5(c) (DOJ); 29 CFR 2.33(a) (DOL); 34 CFR 
75.52(e), 76.52(e) (ED); 38 CFR 50.2(d) (VA); 45 CFR 87.3(f) (HHS).
    With the exception of USAID, the Agencies proposed to remove 
language added by the 2020 Rule stating that indirect aid providers may 
require attendance at all activities that are fundamental to the 
program. 88 FR 2399. As the Joint NPRM explained,

[[Page 15676]]

``[t]his additional language, which was not added by USAID in the 2020 
Rule, created a confusing tension with the first sentence of the same 
provision and with the language of the Executive order on which it is 
based.'' Id. The Executive order provides that social service providers 
receiving Federal financial assistance ``should not be allowed to 
discriminate against current or prospective program beneficiaries on 
the basis of . . . a refusal to attend or participate in a religious 
practice.'' E.O. 13279, sec. 2(d), 67 FR 77142, as amended by E.O. 
13559, sec. 1(b), 75 FR 71320. The Agencies continue to believe that 
the removal of this language allays unnecessary confusion and therefore 
are not changing course in the final rule.
    Changes: None.
    Comments: One comment, submitted on behalf of three organizations, 
endorsed the Agencies' proposed rule text continuing to protect 
beneficiaries and prospective beneficiaries in federally funded 
programs from discrimination on the basis of religion or lack of 
religion. The comment, however, opposed additional text in that 
nondiscrimination provision that the comment described as enabling 
beneficiaries and prospective beneficiaries to select an indirectly 
funded program with explicitly religious content and then refuse to 
participate in those portions of the program. The comment maintained 
that this change lacks a reasoned basis for two reasons. First, the 
comment submitted, the Agencies' regulations anticipate that indirectly 
funded programs may include religious content, which, the comment 
surmised, could constitute a very large part of the social services 
offered. Second, the comment indicated that a prospective beneficiary 
should be required to exercise any option to enroll in an adequate 
secular alternative program before enrolling in a religious one and 
objecting to its content. For these same reasons, the comment also 
recommended that the Agencies retain language added by the 2020 Rule 
stating that providers at which beneficiaries choose to expend indirect 
aid ``may require attendance at all activities that are fundamental to 
the program.'' See 88 FR 2399.
    Response: As explained in the Joint NPRM, the Agencies remain 
committed to ensuring that all beneficiaries and prospective 
beneficiaries have access to federally funded services and programs 
without unnecessary barriers and free from discrimination, in both 
directly and indirectly funded programs. See id. at 2398. The Agencies 
continue to believe that protecting beneficiaries and prospective 
beneficiaries from discrimination on the basis of religion, a religious 
belief, a refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice is consistent with this goal.
    The Agencies disagree with the comment's view that prohibiting 
indirectly funded social service providers from discriminating on the 
basis of a refusal to attend or participate in a religious practice is 
inconsistent with allowing such providers to include explicitly 
religious content in their programs. Indeed, with the exception of 
USAID, which does not administer any indirect Federal financial 
assistance programs, the Agencies have retained regulatory text 
specifying that a provider receiving indirect Federal financial 
assistance need not modify its program activities to accommodate a 
beneficiary who chooses to expend the indirect aid on the 
organization's program. See 2 CFR 3474.15(f) (ED); 6 CFR 19.5 (DHS); 7 
CFR 16.4(a) (USDA); 24 CFR 5.109(g) (HUD); 28 CFR 38.5(c) (DOJ); 29 CFR 
2.33(a) (DOL); 34 CFR 75.52(e), 76.52(e) (ED); 38 CFR 50.2(d) (VA); 45 
CFR 87.3(d) (HHS).
    The comment also suggested that it would be impracticable for a 
beneficiary to object to participating in explicitly religious 
activities that are a very large part of the social service that is 
offered. As explained above, however, beneficiaries and prospective 
beneficiaries may decide whether to attend religious components. And in 
the Agencies' experience, indirectly funded social service providers 
can vary considerably with respect to the proportion of their 
programming that may be explicitly religious.
    The Agencies decline to require that beneficiaries who object to 
participating in a program's explicitly religious activities instead 
enroll in an alternative program that does not include religious 
content. As explained, beneficiaries who do not wish to engage in 
explicitly religious activities have the option not to participate in 
such activities. And as discussed in the Joint NPRM, if an Agency 
``determines that `genuine and independent private choice' is absent 
for particular beneficiaries, including because providers that offer 
secular programs are as a practical matter unavailable,'' the Agency 
would ``need to take other appropriate steps to remedy the problem.'' 
88 FR 2400. Those steps may include ``expanding the universe of 
reasonably available providers to include secular options'' or 
``requiring existing providers to observe the same conditions that the 
rule attaches to direct aid.'' Id. at 2400-01. ``These remedies would 
ensure that beneficiaries are not effectively required to participate 
in religious activities in order to receive the benefits of the 
federally funded program and that the Government is not responsible for 
the use of the aid to support explicitly religious activities.'' Id. at 
2401. For these reasons, the Agencies decline to adopt the comment's 
recommendations.
    Changes: None.
3. Nondiscrimination in Outreach Activities
    Comments: One commenter expressed concern that the proposed 
nondiscrimination regulations of four of the Agencies (DOJ, HHS, HUD, 
and USAID) applied only to program services and not also to outreach 
related to those services. Those nondiscrimination rules, as proposed, 
would prohibit federally funded social service programs from 
discriminating against beneficiaries or prospective beneficiaries on 
the basis of religion, a religious belief, a refusal to hold a 
religious belief, or a refusal to attend or participate in a religious 
practice when they provide federally funded services. The commenter 
requested that the four Agencies revise their rules so that they also 
prohibit providers from engaging in such discrimination when they 
conduct outreach activities related to their federally funded programs. 
Doing so, the commenter explained, would ensure consistency with the 
other five Agencies' regulations, as well as with Executive Order 
13279, as amended, which likewise prohibits discrimination in outreach 
activities. See E.O. 13279, sec. 2(d), 67 FR 77142, as amended by E.O. 
13559, sec. 1(b), 75 FR 71320.
    Response: DOJ, HHS, HUD, and USAID agree with the commenter and 
adopt the recommended change in this final rule. As explained in the 
Joint NPRM, the Agencies' regulations prohibiting religious 
discrimination are designed to implement Executive Order 13279, as 
amended. 88 FR 2398. Section 2(d) of that Executive order provides that 
organizations, both ``in providing services supported in whole or in 
part with Federal financial assistance,'' and ``in their outreach 
activities related to such services,'' should not be allowed to 
discriminate against program beneficiaries on the basis of religion, a 
religious belief, a refusal to hold a religious belief, or a refusal to 
attend or participate in a religious practice. 75 FR 71320. Moreover, 
five of the Agencies already include similar language in their 
nondiscrimination provisions. Therefore, to promote consistency with 
Executive Order 13279 and with the other Agencies' rules, DOJ, HHS, 
HUD, and USAID agree that their nondiscrimination regulations should

[[Page 15677]]

likewise apply not only to federally funded social services, but also 
to outreach activities related to those services.
    The Agencies have long expressed an intention to promote 
consistency with Executive Order 13279 and among their regulations. In 
2016, for example, five of the Agencies (DOL, HHS, ED, VA, and DHS) 
amended their nondiscrimination provisions so that they applied to 
outreach activities. While the remaining four Agencies (DOJ, USDA, HUD, 
and USAID) did not include that phrase in their regulations, the joint 
preamble to the 2016 Rule stated that all of the Agencies' 
nondiscrimination provisions were intended to ``closely track'' 
Executive Order 13279, as amended. 81 FR 19361.
    The Agencies likewise acknowledged in the 2020 Rule that Executive 
Order 13279 prohibits discrimination in outreach related to federally 
funded services, and concluded that the ``final rule maintains the 
regulatory prohibition on such religious discrimination.'' 85 FR 82044. 
In the 2020 Rule, USDA also amended its nondiscrimination provision to 
apply to outreach activities. Id. at 82134. In contrast, HHS removed 
the word ``outreach'' from its nondiscrimination regulation, see id. at 
82146, explaining that this change was offered because, in HHS's view, 
the text might otherwise be read to prohibit an organization from 
circulating information about its programs in contexts that have 
primarily religious audiences, such as a church newsletter. Ensuring 
Equal Treatment of Faith-Based Organizations, 85 FR 2974, 2980-81 (Jan. 
17, 2020). These distinctions are resolved in this final rule, which 
ensures greater consistency with Executive Order 13279 and among the 
Agencies' regulations by revising the beneficiary nondiscrimination 
provisions in DOJ, HHS, HUD, and USAID's rules to apply to outreach 
activities. See 22 CFR 205.1(h) (USAID); 24 CFR 5.109(g) (HUD); 28 CFR 
38.5(c) (DOJ); 45 CFR 87.3(f) (HHS).
    The Agencies do not believe that this change will cause federally 
funded social service providers to mistakenly read the 
nondiscrimination clauses as prohibiting them from providing 
information about their social service programs in contexts that have 
primarily religious audiences, such as a church newsletter. The 
Agencies are unaware of any instance in which a service provider or 
interested party has expressed that concern, and do not believe it 
follows from a plain reading of the provisions. Rather, the Agencies 
think it is clear that the nondiscrimination protection prohibits 
outreach activities that favor or disfavor prospective beneficiaries on 
the basis of religion, such as when a federally funded social service 
provider limits its outreach or advertising of the program services to 
target or avoid populations based on religion.
    Additionally, USDA and VA have revised their nondiscrimination 
provisions to apply to outreach activities related to services 
supported in whole or in part with Federal financial assistance, 
irrespective of whether the outreach itself is paid for with Federal or 
private funds. This change, too, is consistent with Executive Order 
13279, which does not limit the scope of its nondiscrimination 
protections to outreach that is federally funded, see E.O. 13279, sec. 
2(d), 75 FR 71320, as well as with the regulations of the other 
Agencies.
    Changes: DOJ, HHS, HUD, and USAID amend 28 CFR 38.5(c), 45 CFR 
87.3(f), 24 CFR 5.109(g), and 22 CFR 205.1(h), respectively, to add 
``outreach activities'' to the beneficiary nondiscrimination provisions 
of their final regulations, consistent with the regulations previously 
adopted by USDA, DOL, ED, VA, and DHS. USDA and VA likewise remove 
language from their regulations that would preclude their 
nondiscrimination clauses from applying to outreach activities that are 
paid for with non-Federal funds. See 7 CFR 16.4(a) (USDA); 38 CFR 
50.2(d) (VA).
4. Beneficiary Notice Requirements
    In this part of the joint preamble, the Agencies address comments 
related to the requirement that, under particular circumstances, 
recipients of Federal financial assistance must give written notice to 
beneficiaries and prospective beneficiaries of certain 
nondiscrimination protections. The Agencies recognize that recipients 
of Federal financial assistance may need additional time to implement 
any notice requirements to which they are subject under this rule. 
Accordingly, as indicated in the DATES section above, the Agencies have 
agreed to provide recipients with a period of 120 days in which to 
comply with the written beneficiary notice requirements, if applicable. 
The Agencies nonetheless encourage recipients to comply with those 
requirements as soon as possible.
    Comments: Several commenters urged the Agencies to require that 
beneficiaries be provided notice of how they might obtain information 
on alternative providers. The commenters expressed concern that the 
Joint NPRM's approach--stating only that beneficiary notices ``may'' 
give beneficiaries the option to seek information on alternative 
providers--placed an undue burden on beneficiaries, who, the commenters 
said, are often not as well-positioned to find alternative providers as 
are the awarding Agencies or social service providers themselves. By 
contrast, other commenters worried that the Agencies' proposed approach 
improperly imposed a burden on providers to locate alternatives. Some 
commenters likewise contended that the Joint NPRM's proposed notice 
procedure would place a unique and unfair burden on faith-based 
organizations, in particular.
    Response: The Agencies recognize that it will sometimes be 
appropriate and beneficial to include information in a beneficiary 
notice about beneficiaries' option to seek alternative providers. The 
Agencies believe, however, that the suitability and utility of 
including this information will vary across programs. For example, such 
information may be less helpful to beneficiaries where there is only 
one federally funded program in the region. In other cases, providing 
such information might impose an unreasonable burden on Agencies or 
their governmental partners. For instance, certain providers may offer 
social services on an emergency or one-off basis outside of normal 
business hours and without a fixed location, making it difficult if not 
impossible for the Agencies to respond to a prospective beneficiary's 
request for alternative provider information in a sufficiently timely 
fashion. Accordingly, the Agencies that state that beneficiary notices 
``may'' include information about how to identify alternative providers 
will retain this language to allow these Agencies greater flexibility 
in determining when it would be appropriate to include such information 
in the notice. See 6 CFR 19.12(c) (DHS); 7 CFR 16.4(c)(2) (USDA); 24 
CFR 5.109(g)(4) (HUD); 28 CFR 38.6(d) (DOJ); 38 CFR 50.3(c) (VA); 45 
CFR 87.3(m) (HHS). ED will likewise retain its language from the Joint 
NPRM, which, although phrased slightly differently, also enables ED to 
make a case-by-case determination regarding the programs to which the 
alternative provider information requirement should apply, taking into 
account the specific facts and circumstances of a particular program. 
See 34 CFR 75.712(c), 76.712(c).
    The Agencies emphasize that in neither the Joint NPRM nor this 
final rule do they require any provider, faith-based or secular, to 
refer beneficiaries to or provide notice about any other organizations. 
Instead, the regulatory

[[Page 15678]]

text authorizes the Agencies to require that the beneficiary notice 
include contact information for a Federal office, or in some instances 
a State agency or other governmental entity that might be administering 
a federally funded social service program, should a beneficiary want 
additional information about other federally funded programs in their 
area. Thus, under this rule, only governmental entities, not non-
governmental providers, will be responsible for sharing information 
about alternative providers. The Agencies believe it is also important 
to highlight that whether a faith-based organization may participate in 
a federally funded program is not dependent on the availability of a 
secular entity providing the same or similar services nearby.
    Changes: None.
    Comments: Some commenters took issue with the regulations' 
requirement that service providers receiving direct Federal financial 
assistance must notify beneficiaries and prospective beneficiaries that 
providers cannot discriminate against a beneficiary on the basis of 
religion, a religious belief, a refusal to hold a religious belief, or 
a refusal to attend or participate in a religious practice. The 
commenters asserted that the requirement is unnecessary and singles out 
and reflects animus towards faith-based providers in violation of the 
First Amendment. One commenter further suggested that the President and 
the Agencies lack legal authority to impose the underlying 
nondiscrimination conditions themselves.
    Response: The Agencies decline to eliminate their regulations' 
longstanding nondiscrimination requirements or their reinstatement of 
the beneficiary notice requirement. Contrary to the suggestions of some 
commenters, the Agencies' regulations require that all direct aid 
recipients, whether religious or secular, must give beneficiaries and 
prospective beneficiaries information about their rights and 
protections.
    In accordance with section 2(d) of Executive Order 13279, 67 FR 
77142, the Agencies' regulations have long provided that an 
organization that participates in programs funded by Federal financial 
assistance may not, in providing such services, discriminate against a 
program beneficiary or prospective program beneficiary on the basis of 
religion, a religious belief, a refusal to hold a religious belief, or 
a refusal to attend or participate in a religious practice. President 
Bush promulgated the Executive order's nondiscrimination requirement in 
2002 pursuant to, among other things, the power vested in him by the 
Constitution as the head of the executive branch, just as many other 
Presidents have exercised supervisory authority over how Executive 
officers carry out their responsibilities. See id. at 77141. The 
nondiscrimination requirement, moreover, is appropriate to, among other 
things, help guarantee the equal protection of the laws, protect 
religious free exercise, and prevent an unconstitutional establishment 
of religion. See 88 FR 2398. Exercising their existing statutory 
authorities, it is entirely permissible for the Agencies to promulgate 
regulations implementing the Executive order and the fundamental legal 
principles on which it is based. See id. at 2395-98. That is why, as 
the Joint NPRM explained, both the 2016 and 2020 Rules included such 
nondiscrimination provisions, as had prior iterations of the Agencies' 
regulations. Id. at 2398. The Agencies believe the provisions likewise 
can and should be retained in their regulations here, reflecting, as 
they do, fundamental principles embodied in a Presidential directive. 
See id.
    The Agencies also respectfully disagree that this rule's notice 
procedure--requiring an organization providing social services under a 
program supported by direct Federal financial assistance to give 
written notice of these and other protections to beneficiaries and 
prospective beneficiaries, including in some cases the right to receive 
information about alternative providers--should or must be eliminated. 
As explained in the Joint NPRM, all beneficiaries and prospective 
beneficiaries should have access to federally funded social services 
without unnecessary barriers and in a manner that is free from 
discrimination. Id. The Agencies continue to believe that the rule's 
notice procedure is critical to that goal because it helps ensure that 
beneficiaries are aware of their rights and protections, thereby 
removing certain barriers to their participation and facilitating 
access to federally funded services and programs. Id. at 2398-99. 
Indeed, in part for that reason, and as noted above, the rule applies 
the notice procedure to all direct aid recipients, whether secular or 
religious. See id. at 2399 (emphasizing that the requirement will be 
applied ``to all . . . providers'' receiving direct Federal financial 
assistance, ``whether they are faith-based or secular''). Nor have 
commenters pointed to anything else establishing that the Agencies' 
effort to protect beneficiaries' rights, or any other aspect of this 
rule, reflects an intent to discriminate against or hostility towards 
religious providers. To the contrary, as the Agencies emphasized in the 
Joint NPRM, ``it has long been Federal policy that faith-based 
organizations are eligible to participate in Agencies' grant-making 
programs on the same basis as any other organizations,'' and the 
Agencies remain committed to preventing discrimination against faith-
based organizations in the selection and regulation of service 
providers. Id. at 2401. Just as providers should be notified about 
their rights and protections, so should beneficiaries.
    Changes: None.
    Comments: Some commenters recommended that the Agencies require 
providers to give written notice to beneficiaries of programs receiving 
indirect Federal financial assistance. The commenters recognized that 
such indirect aid beneficiaries are not entitled to all of the 
protections identified in the direct-aid-beneficiary notice. For 
instance, the regulations' requirement that providers separate 
explicitly religious activities from Government-funded programming 
applies only to programs supported with direct Federal financial 
assistance. But the commenters argued that there was no good reason why 
indirect aid beneficiaries should not receive notice of their 
particular set of protections.
    Response: The Agencies agree that the rationale for adopting the 
beneficiary notice requirement--improving beneficiaries' access to 
federally funded services by informing them of their rights and 
protections, and thereby removing certain barriers arising from 
discrimination--applies equally to all beneficiaries, regardless of 
whether they are participating in programs receiving direct or indirect 
Federal financial assistance. The Agencies also note that, for most 
Agencies, their cost analysis in the proposed rule already calculated 
the annual cost of the notice requirement as if it applied to both 
direct and indirect aid programs, because data limitations made it 
impossible to differentiate direct recipients from indirect recipients 
in that context. Extending the beneficiary notice requirement to most 
indirect aid programs would, therefore, increase the expected benefits 
of the rule without increasing its expected costs, which the Agencies 
have already determined to be justified by the benefit of the notice 
requirement as proposed.
    As the Joint NPRM indicated, however, certain Agencies' estimates 
did not reflect the cost of the notice requirement for subrecipients of 
Federal financial assistance. The Agencies also note that there may be 
significant administrative difficulties in providing written notice to 
all beneficiaries in

[[Page 15679]]

certain indirect aid programs. For example, as the Agencies explained 
in the 2016 Rule, ``there are more than a quarter million stores, 
farmers' markets, direct marketing farmers, homeless meal providers, 
treatment centers, group homes, and other participants across the 
nation that are authorized Supplemental Nutrition Assistance Program 
(`SNAP') retailers.'' 81 FR 19363. If all providers receiving indirect 
aid were required to give written notice to beneficiaries, these 
retailers would always need to have notices ready to provide to any 
person using SNAP benefits. Id. The Agencies have therefore tailored 
the beneficiary notice requirement to the realities of certain indirect 
aid programs--for example, by requiring that the notice be provided by 
entities that administer the indirect Federal financial assistance, or 
by electing not to impose the beneficiary notice requirement in certain 
indirect aid programs where the administrative difficulties present 
insurmountable obstacles. These Agency-specific decisions are explained 
in the Agencies' individual preambles below.
    The Agencies recognize that programs receiving indirect Federal 
financial assistance are not subject to the requirement to separate 
explicitly religious activities from Government-funded ones and that 
this difference must be reflected in the beneficiary notices given to 
indirect aid beneficiaries. As elaborated in the Agency-specific 
preambles below, the Agencies that have indirect aid programs address 
this difference by specifying in their respective model beneficiary 
notices which protections apply only to programs supported by direct 
Federal financial assistance. It is important to note, moreover, that 
the proposed regulations of the Agencies that reinstate the beneficiary 
notice requirement already specify that the directive to separate 
explicitly religious activities applies only to programs supported by 
direct Federal financial assistance. See 6 CFR 19.4(b) (DHS) (requiring 
that explicitly religious activities be ``separate in time or 
location'' from ``activities supported by direct Federal financial 
assistance''); 7 CFR 16.4(c)(1)(iii) (USDA) (same); 24 CFR 
5.109(g)(2)(ii) (HUD) (same); 28 CFR 38.6(b)(3) (DOJ) (same); 29 CFR 
2.34(a)(3) (DOL) (same); 34 CFR 75.712(a)(3), 76.712(a)(3) (ED) (same); 
38 CFR 50.3(a)(3) (VA) (same); 45 CFR 87.3(k)(1)(iii) (HHS) (same).
    Changes: The Agencies that administer domestic social service 
programs now generally require that beneficiaries and prospective 
beneficiaries of such programs receiving indirect Federal financial 
assistance be provided with a written beneficiary notice, subject to 
certain variations elaborated in the Agency-specific preambles below. 
The regulations affected are 6 CFR 19.12(a) (DHS), 7 CFR 16.4(c) 
(USDA), 24 CFR 5.109(g) (HUD), 28 CFR 38.6(b) (DOJ), 29 CFR 2.34(c) 
(DOL), 38 CFR 50.3(a) (VA), and 45 CFR 87.3(k) (HHS).
    Comments: One commenter expressed concern about the Joint NPRM's 
statement that the Agencies might, ``as appropriate, require providers 
to include [the beneficiary] notice as part of a broader and more 
general notice of nondiscrimination on additional grounds.'' 88 FR 
2399. The commenter was particularly troubled by the phrase ``on 
additional grounds,'' which the commenter said was vague and 
potentially burdensome to providers. The commenter seemed to believe 
that the Joint NPRM's preamble text would enable the Agencies to 
require more than one notice be provided to beneficiaries--one specific 
notice regarding the protections under this rule, and another combined 
with notification of other protections.
    Response: In making these statements in the Joint NPRM preamble, 
the Agencies' intent was to relieve potential burdens on providers, not 
to create them. The Agencies will allow providers to notify 
beneficiaries of the protections in this rule as part of a broader 
nondiscrimination notice, but the Agencies will not require providers 
to do so. This is clear on the face of many of the Agencies' 
regulations. For clarity and consistency with the other Agencies, 
however, VA has amended its relevant regulation (38 CFR 50.3) to make 
it clear that providers may, but need not, combine materials for 
beneficiary notices.
    Changes: VA revises 38 CFR 50.3(a) to replace the phrase 
``including by incorporating the notice into materials that are 
otherwise provided to beneficiaries'' with the phrase ``in a manner and 
form prescribed by the VA program.''
    Comments: Several commenters suggested that the Agencies should, as 
they had previously, provide model notices to help providers comply 
with their obligation to notify beneficiaries and prospective 
beneficiaries of their rights. According to the commenters, model 
notices will help the Agencies ensure that beneficiaries do not 
encounter discrimination when accessing critical services.
    Response: The Agencies administering domestic social service 
programs agree that providing model beneficiary notices will further 
the Agencies' goal of ensuring that beneficiaries are aware of their 
rights and protections, and thereby removing certain barriers to their 
participation and facilitating access to federally funded services and 
programs. Those Agencies have accordingly all added model beneficiary 
notices to their regulations in this final rule.
    Changes: DOJ, USDA, DOL, HHS, HUD, ED, VA, and DHS have all added 
an appendix C containing model language for written notice to 
beneficiaries and prospective beneficiaries. Those model notices are 
located at 6 CFR part 19, appendix C (DHS); 7 CFR part 16, appendix C 
(USDA); 24 CFR part 5, subpart A, appendix C (HUD); 28 CFR part 38, 
appendix C (DOJ); 29 CFR part 2, subpart D, appendix C (DOL); 34 CFR 
part 75, appendix C (ED); 38 CFR part 50, appendix C (VA); and 45 CFR 
part 87, appendix C (HHS).

B. Prohibition on Using Direct Federal Financial Assistance for 
Explicitly Religious Activities

    Comments: Several commenters suggested that, with this rule, the 
Agencies should repeal their longstanding regulations prohibiting 
organizations that receive direct Federal financial assistance from 
engaging in explicitly religious activities as part of the social 
services funded with that financial assistance and requiring that 
religious activities be separated in time or location from the 
federally funded services. According to these commenters, recent 
Supreme Court cases, including primarily Carson v. Makin, 596 U.S. 767 
(2022), and Trinity Lutheran Church of Columbia, Inc. v. Comer, 582 
U.S. 449 (2017), have established that such regulations are not only no 
longer required by the Establishment Clause, but also now prohibited by 
the Free Exercise Clause.
    Response: The Agencies decline to repeal the regulatory provisions 
in question, which appropriately implement an Executive order and are 
consistent with the Supreme Court's First Amendment jurisprudence. See 
2 CFR 3474.15(d)(1) (ED); 6 CFR 19.4(a) and (b) (DHS); 7 CFR 16.2, 
16.4(b) (USDA); 22 CFR 205.1(e) (USAID); 24 CFR 5.109(e) (HUD); 28 CFR 
38.5(a) and (b) (DOJ); 29 CFR 2.33(b)(1) (DOL); 34 CFR 75.52(c)(1), 
76.52(c)(1) (ED); 38 CFR 50.2(b), 61.64(c), 62.62(c) (VA); 45 CFR 
87.3(d) (HHS).
    Executive Order 13279--which President Bush promulgated in 2002, 
and which, in amended form, remains operative today--specifies that 
Federal agencies must implement social service programs ``in accordance 
with the

[[Page 15680]]

Establishment Clause and the Free Exercise Clause of the First 
Amendment to the Constitution'' and that, ``[t]herefore, organizations 
that engage in explicitly religious activities, such as worship, 
religious instruction, and proselytization, must offer those services 
separately in time or location from any programs or services supported 
with direct Federal financial assistance.'' E.O. 13279, sec. 2(e), 67 
FR 77142, as amended by E.O. 13559, sec. 1(b), 75 FR 71320; see also 
E.O. 13279, sec. 3(b), 67 FR 77143 (requiring specified agency heads to 
ensure that all agency policies with implications for faith-based and 
community organizations are consistent with the aforementioned policy 
and the other ``fundamental principles'' articulated in section 2 of 
the order).
    The Agencies' regulations have long implemented this directive. 
Most of the Agencies have imposed such conditions since shortly after 
President Bush promulgated Executive Order 13279 in 2002, see 88 FR 
2399-2400, and all of the Agencies maintained the conditions in 
connection with the 2020 Rule, 85 FR 82041-43, 82109.
    The regulations, moreover, are consistent with the Supreme Court's 
First Amendment caselaw. As explained in the Joint NPRM, 88 FR 2401 
n.8, the Court has unanimously held--in the context of direct 
governmental aid to private organizations to perform social service 
programming or engage in social welfare activities--that although the 
Establishment Clause does not preclude religious organizations from 
receiving such funds, they may not use aid they receive directly from a 
government to advance `` `specifically religious activit[ies] in an 
otherwise substantially secular setting.' '' Bowen v. Kendrick, 487 
U.S. 589, 621 (1988) (quoting Hunt v. McNair, 413 U.S. 734, 743 
(1973)); see also Mitchell v. Helms, 530 U.S. 793, 840, 865 (2000) 
(O'Connor, J., concurring in the judgment) (controlling opinion 
explaining that the Court's decisions emphasizing religious neutrality 
``provide no precedent for the use of public funds to finance religious 
activities'' and reaffirming that the principle that ``any use of 
public funds to promote religious doctrines violates the Establishment 
Clause'' ``of course remains good law'' (quotation marks and emphasis 
omitted)). That longstanding Supreme Court doctrine informed President 
Bush's inclusion of section 2(e) in Executive Order 13279, 67 FR 77142, 
which in turn compelled the promulgation and repromulgation of the 
relevant provisions of the Agencies' regulations.
    The Supreme Court's more recent decisions have not overruled Bowen 
v. Kendrick, Mitchell v. Helms, or any of the other cases in which the 
Court has affirmed the `no religious uses of direct aid' Establishment 
Clause rule. It is true that the Court in Carson wrote that 
discrimination on the basis of a school's religious activities was no 
``less offensive to the Free Exercise Clause'' than discrimination on 
the basis of a school's religious character. 596 U.S. at 787. The 
Court, however, made that statement in the context of a ``neutral 
benefit program in which public funds flow[ed] to religious 
organizations through the independent choices of private benefit 
recipients.'' Id. at 781 (emphasis added); see also Me. Rev. Stat. Ann. 
tit. 20-a, sec. 5204(4) (2008) (providing that the State of Maine would 
``pay the tuition . . . at the public school or the approved private 
school of the parent's choice at which the student is accepted''). The 
school aid program in Carson, in other words, was a voucher-like 
program, i.e., what the Agencies' regulations here refer to as 
providing indirect aid. The Court noted that there was no Establishment 
Clause problem with respect to beneficiaries using government aid for 
religious education in such a program. 596 U.S. at 781 (citing Zelman, 
536 U.S. at 652-53).
    This rule makes clear that the Agencies' regulatory restrictions 
regarding explicitly religious activities do not apply in such indirect 
aid cases, where governmental financial assistance flows to private 
organizations wholly as a result of a genuinely independent and private 
choice of the beneficiary. See, e.g., 88 FR 2423 (citing proposed rule 
38 CFR 50.2(b), stating that ``[t]he use of indirect Federal financial 
assistance is not subject to'' VA's explicitly-religious-activity 
restrictions). Nothing in Carson, however, affects the Court's well-
established doctrine that the Establishment Clause generally prohibits 
the use of financial aid received directly from a government for 
``specifically'' or ``inherently'' religious activities, particularly 
in the context of aid to private organizations to provide social 
services to beneficiaries, as in Kendrick. Nor did the Court in Carson 
hold that statutory and regulatory restrictions on such religious uses 
of direct aid violate the Free Exercise Clause.
    Contrary to commenters' suggestions, the Court's decision in 
Trinity Lutheran does not require amendment of the Agencies' 
regulations either. Trinity Lutheran involved a program in which a 
Missouri agency provided grants directly to entities for playground 
resurfacing. Although the Court in Trinity Lutheran held that Missouri 
could not disqualify a church from eligibility for the grant on the 
basis of its religious identity, the Court did not address a separate 
condition under Missouri law mandating that the grants not be used for 
sectarian purposes. See 582 U.S. at 465 n.3. Indeed, the Court 
specifically noted that ``[t]his case involves express discrimination 
based on religious identity with respect to playground resurfacing,'' 
and the Court ``d[id] not address religious uses of funding.'' Id. The 
Court in Trinity Lutheran did not purport to overrule Establishment 
Clause precedents such as Kendrick and Mitchell, and no President has 
amended section 2(e) of Executive Order 13279 after Trinity Lutheran, 
nor did the Agencies eliminate the restriction on religious uses of 
direct aid from their regulations as part of the 2020 Rule.
    The Supreme Court has counseled that ``it is th[e] Court's 
prerogative alone to overrule one of its precedents,'' United States v. 
Hatter, 532 U.S. 557, 567 (2001) (quotation marks omitted), and has 
emphasized that its ``decisions remain binding precedent until [the 
Court] see[s] fit to reconsider them, regardless of whether subsequent 
cases have raised doubts about their continuing vitality,'' Hohn v. 
United States, 524 U.S. 236, 252-53 (1998); see also Agostini v. 
Felton, 521 U.S. 203, 237 (1997) (``We reaffirm that `[i]f a precedent 
of this Court has direct application in a case, yet appears to rest on 
reasons rejected in some other line of decisions, the Court of Appeals 
should follow the case which directly controls, leaving to this Court 
the prerogative of overruling its own decisions.' '' (quoting Rodriguez 
de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. 477, 484 (1989))). The 
Agencies must follow the Court's existing precedents rather than try to 
predict whether the Court might overturn them in a future case.
    In short, neither section 2(e) of Executive Order 13279 nor the 
Agencies' regulations implementing that extant Presidential directive 
are unconstitutional. The Agencies therefore maintain their regulations 
prohibiting organizations that receive direct Federal financial 
assistance from engaging in explicitly religious activities as part of 
the social services funded with that financial assistance and requiring 
that religious activities be separated in time or location from the 
federally funded services.
    Changes: None.

[[Page 15681]]

C. Definition of ``Indirect Federal Financial Assistance''

    Comments: Various commenters weighed in on the rule's definition of 
``indirect Federal financial assistance.'' Numerous commenters strongly 
supported the Agencies' approach to the term. A few commenters, 
however, contended that under current Supreme Court caselaw it is 
inappropriate for the Agencies to distinguish between direct and 
indirect Federal aid. Commenters also raised concerns about specific 
language in the definition, including primarily the rule's statement 
that the availability of adequate secular alternatives is a significant 
factor in determining whether a program qualifies as indirect. For 
example, one commenter asserted that Federal financial assistance may 
qualify as indirect, even where particular beneficiaries lack any 
practical secular alternatives, so long as the Government itself is not 
responsible for the lack of such alternatives. Relatedly, some 
commenters took issue with the possibility that the absence of a 
``genuine and independent private choice'' to participate in religious 
programs might require an Agency to impose some of the conditions on a 
recipient of indirect aid that would normally be associated with direct 
Federal financial assistance programs.
    Response: The Agencies decline to eliminate the rule's distinction 
between direct and indirect aid or to revise its general approach to 
defining ``indirect Federal financial assistance.'' Nevertheless, as 
elaborated below, a few of the Agencies have made some technical edits 
to their regulations to promote consistency among the Agencies' 
definitions of the term.
    As explained above in Part II.A.4 of this joint preamble, the 
Agencies' regulations have long provided that their restrictions on 
explicitly religious activities in federally funded social service 
programs apply only where the governmental aid is given to private 
organizations ``directly.'' The Joint NPRM proposed to amend the 
regulations' definition of indirect aid programs--i.e., those that are 
not subject to such conditions--to clarify that they are limited to 
cases in which a service provider receives assistance ``wholly as a 
result of'' a ``genuine and independent private choice'' of the 
beneficiary, ``not a choice of the Government.'' 88 FR 2401 (quotation 
marks omitted). As noted in the Joint NPRM, such language or its 
equivalent has appeared in at least some of the Agencies' regulations 
as far back as 2004. Id. at 2399. The rule here further provides that 
``the availability of adequate secular alternatives is a significant 
factor in determining whether a program affords'' a genuinely 
independent and private choice to beneficiaries and prospective 
beneficiaries. Id. at 2401. These amendments are designed to more 
closely track the distinction between direct and indirect aid that the 
Supreme Court has drawn in a series of cases culminating in Zelman v. 
Simmons-Harris, 536 U.S. 639 (2002). See 88 FR 2401.
    Contrary to some commenters' suggestions, the Supreme Court has not 
abandoned the distinction between direct and indirect aid that has been 
central to many of its Establishment Clause decisions. Indeed, in 
Carson, the Court specifically noted, citing Zelman, that because the 
Maine program there was ``a neutral benefit program in which public 
funds flow to religious organizations through the independent choices 
of private benefit recipients,'' it ``d[id] not offend the 
Establishment Clause.'' Carson, 142 S. Ct. at 1997. It thus remains the 
case that, for Federal financial assistance to qualify as indirect 
under the Court's jurisprudence, a service provider must receive the 
assistance as a result of a genuine and independent private choice of 
the beneficiary. See 88 FR 2401.
    The Agencies also decline to amend the rule's statement that the 
``availability of adequate secular alternatives'' is a ``significant 
factor'' in determining whether a program affords beneficiaries 
genuinely independent and private choices. The vast majority of 
commenters who weighed in on the statement agreed that the availability 
of such alternatives is relevant to the distinction between direct and 
indirect aid. That is consistent with the Supreme Court's jurisprudence 
on this subject. As the Court explained in Zelman, the Establishment 
Clause determination of whether aid is direct or indirect ``must be 
answered by evaluating all options,'' religious or secular, available 
to beneficiaries in a Government-funded social service program. 536 
U.S. at 655-56. The inquiry, in other words, is a holistic one, in 
which courts comprehensively consider the nature of and factual 
backdrop for the program in question. Moreover, contrary to the 
suggestions of one commenter, it is both permissible and administrable 
for an agency to conduct that inquiry, including by considering the 
availability of adequate secular alternatives. In fact, that is 
precisely what the Supreme Court itself did in Zelman and what lower 
courts have done in applying Zelman's distinction between direct and 
indirect aid to various factual scenarios. Therefore, it is appropriate 
for the Agencies to do likewise when taking actions that might 
implicate constitutional concerns.
    Nor do the Agencies agree that a lack of secular alternatives is 
relevant only where the Government is responsible for their absence. As 
just noted, Zelman makes clear that the ultimate question requires an 
assessment of ``all options'' available to beneficiaries. See id. at 
656. And the Agencies do not believe it is necessary for the 
regulations to address any hypothetical cases.
    As noted, some commenters also took issue with certain statements 
in the Joint NPRM preamble regarding what a governmental entity 
offering aid can or must do where beneficiaries are, as a practical 
matter, unable to make an independent choice to use the aid in a 
program that does not include specifically religious elements. See 88 
FR 2400-01. The Joint NPRM's preamble explained that if an Agency 
responsible for selecting service providers determines that a limited 
array of federally funded programs in a particular area precludes 
beneficiaries' practical ability to make a ``genuine and independent 
private choice,'' Zelman would not require the Agency to terminate the 
indirect aid program or disallow beneficiaries from redeeming their 
vouchers or certificates at religious providers; the Agency could 
instead take other appropriate steps to remedy the problem, such as 
expanding the universe of reasonably available providers to include 
secular options or requiring existing providers to observe the same 
conditions that the regulations attach to direct aid. Id. The Agencies 
need not take any action with respect to these comments because the 
regulatory text itself does not address what, if any, steps the 
Government should or must take in such circumstances. Because such 
cases may be very rare and will likely differ widely in terms of their 
facts and contexts, the Agencies do not believe that their regulations 
ought to specifically address any hypothetical remedial choices. 
Nevertheless, the Agencies continue to believe that the possibilities 
mentioned in the Joint NPRM preamble will be legally available in some 
or all such cases. For example, it is unlikely that an Agency's efforts 
to identify and recruit secular providers in order to guarantee genuine 
beneficiary choice would be subject to heightened constitutional 
scrutiny--and even if they were, that scrutiny would likely be 
satisfied because such efforts would be undertaken in order to satisfy 
the Establishment Clause's requirements and because such recruiting 
would not

[[Page 15682]]

disqualify or disfavor the participation of any religious providers.
    Further, the Agencies decline to amend the rule to treat the 
availability of secular alternatives as a necessary condition (as 
opposed to merely a significant factor) to a determination that the 
program affords beneficiaries a genuinely independent and private 
choice of providers. It may be the case that, under certain facts and 
circumstances, Zelman would require a secular choice be available for 
the governmental aid program to qualify as indirect. But indirect aid 
programs can and do vary widely, and it is possible that in some 
contexts a court could deem a beneficiary's decision to use financial 
assistance in a program that includes religious elements to be 
genuinely independent even where there are few or no secular options in 
a given area. For example, a particular beneficiary might be 
indifferent to whether a provider or a program is in some respects 
religious, or might prefer a religious provider.
    Finally, although the Agencies decline to change their overall 
approach to defining ``indirect Federal financial assistance,'' certain 
of the Agencies have made technical edits to their definitions of the 
term, so as to more closely track the language of Zelman, as discussed 
in the Joint NPRM, and to promote consistency among the nine Agencies' 
regulations. Also, previously, some Agencies referred to the plural 
``adequate secular alternatives,'' while others referred to the 
singular ``adequate secular alternative.'' To advance consistency among 
the Agencies' regulations, the Agencies have now uniformly adopted the 
plural construction. In doing so, they do not express any view as to 
whether one secular alternative could be adequate in some 
circumstances, which would depend on the specific facts at issue.
    Changes: The Agencies have made the aforementioned technical 
changes in the relevant regulations in accordance with Zelman and the 
Joint NPRM and to promote consistency among the Agencies' regulatory 
text. The regulations modified are 6 CFR 19.2 (DHS); 7 CFR 16.2 (USDA); 
24 CFR 5.109(b) (HUD); 28 CFR 38.3(c)(2) (DOJ); 29 CFR 2.31(a)(2)(ii) 
(DOL); 34 CFR 75.52(c)(3)(ii)(B) and 76.52(c)(3)(ii)(B) (ED); 38 CFR 
50.1(b)(2), 61.64(b)(2), and 62.62(b)(2) (VA); and 45 CFR 87.1(c)(2) 
(HHS).

D. Eligibility of Faith-Based Organizations and Availability of 
Accommodations

1. Religious Motives
    Comments: In the Joint NPRM, the Agencies made clear that their 
proposed regulations would preserve the Agencies' longstanding policy 
of prohibiting discrimination against an organization on the basis of 
religion. 88 FR 2402. But, rather than keeping the 2020 Rule's 
formulation of that principle, the Agencies proposed rewording their 
regulations for clarity and to state the prohibition more plainly. Id. 
In particular, the Joint NPRM expressed that the Agencies' regulations 
would provide that the Agencies would not, in their selection of 
service providers, discriminate ``on the basis of an organization's 
religious character, motives, or affiliation, or lack thereof.'' Id. 
Commenters pointed out, however, that some of the Agencies (namely, 
DOJ, DOL, HHS, HUD, VA, DHS, and USAID) had, in certain of their 
proposed regulations, retained the ``motivated or influenced by 
religious faith'' language of the 2020 Rule, rather than the 
``motives'' language set out in the Joint NPRM's preamble. The 
commenters urged those Agencies to change their regulatory text to 
consistently adopt the ``motives'' formulation prescribed in the Joint 
NPRM preamble and used elsewhere in the proposed regulations.
    Response: The Agencies agree that their regulations should 
consistently prohibit discrimination on the basis of an organization's 
``religious character, motives, or affiliation, or lack thereof,'' 
instead of preserving the religious-motivation phrasing used in the 
2020 Rule. As explained in the Joint NPRM, the ``motives'' language 
maintains the Agencies' longstanding prohibition on such 
discrimination, but ``states it more plainly'' and ``would further 
guarantee that the Agencies will not discriminate against providers on 
grounds that would violate the First Amendment.'' Id. The Agencies, 
moreover, believe there is value in ensuring that their regulations are 
consistent in describing the prohibition on discriminating against an 
organization based on its religion. Accordingly, in this final rule, 
the Agencies have uniformly adopted the ``motives'' language in all of 
the relevant regulatory provisions.
    This and the other wording changes regarding the protections the 
law affords to faith-based organizations and others do not 
substantively alter the Agencies' longstanding commitment to ensuring 
that faith-based organizations are not discriminated against in the 
selection of service providers. Instead, the changes simply address 
confusion introduced by the 2020 Rule regarding protections the law 
affords to faith-based organizations and others.
    Changes: DOJ, DOL, HHS, HUD, VA, DHS, and USAID have revised their 
regulations and associated appendices in order to align their 
regulatory text with that appearing elsewhere in the relevant 
regulations. The final regulations reflecting these revisions are 6 CFR 
19.3(b), 19.4(c), and appendix A to part 19 (DHS); 22 CFR 205.1(b) 
(USAID); 24 CFR 5.109(c) and appendix A to subpart A of part 5 (HUD); 
28 CFR 38.4(a), 38.5(d), and appendix A to part 38 (DOJ); 29 CFR 
2.32(a)(1) and appendix A to subpart D of part 2 (DOL); 38 CFR 50.2(a) 
and appendix A to part 50 (VA); and 45 CFR 87.3(a) and appendix B to 
part 87 (HHS).
2. Religious Accommodations
    Comments: In the Joint NPRM, the Agencies stated that they would 
continue to consider requests for accommodations on a case-by-case 
basis in accordance with the U.S. Constitution and other Federal law. 
88 FR 2402. Some commenters generally supported this approach, but 
urged the Agencies to provide further information about how such 
determinations would be made. For instance, one commenter requested 
that the Agencies explain how they will decide requests for 
accommodations and who will make those determinations. The commenter 
also argued that the Agencies should institute an expedited procedure 
for appealing accommodation denials, before the provider-selection 
process is completed, so as to ensure that religious organizations are 
provided appropriate accommodations and are not excluded from 
participating in the Agencies' programs. And another commenter urged 
the Agencies to make clear that their case-by-case determinations would 
consider, among other factors, the potential impacts of proposed 
accommodations on beneficiaries or other third parties.
    Response: As explained in the Joint NPRM, the Agencies remain 
committed to considering providers' requests for accommodations on a 
case-by-case basis in accordance with all Federal law, and to ensuring 
faith-based and other organizations are not dissuaded from 
participating in the Agencies' programs. Consistent with the Agencies' 
commitment to taking a case-by-case approach, the Agencies do not 
establish in this final rule precisely how or by whom such case-by-case 
determinations will be made because such details are beyond the scope 
of this rulemaking and

[[Page 15683]]

could vary depending on the particular program implicated or the facts 
and circumstances of a particular request for accommodation.
    Changes: None.
    Comments: Several commenters supported the Agencies' ongoing 
commitment to considering requests for accommodations on a case-by-case 
basis in accordance with the U.S. Constitution and Federal statutes, as 
reflected in standalone provisions of the Agencies' regulations. At the 
same time, however, the commenters suggested that the Agencies remove 
similar language from the regulations' provisions describing program 
requirements. According to the commenters, because the exemption 
language in those provisions immediately follows the constitutionally 
required prohibition on using direct governmental funding for 
explicitly religious activities, that language could be misread to 
suggest that a religious exemption could be given to that requirement. 
In the commenters' view, including such language in the program 
requirement provisions could thus engender confusion.
    Responses: The Agencies have carefully reviewed the language 
regarding accommodations included throughout this rule, and they do not 
believe it suggests, regardless of its placement, that unconstitutional 
accommodations can or should be made. The Agencies agree, however, that 
the accommodation language is clearer and easier to find if it appears 
as a standalone statement in each Agency's regulations, rather than if 
it is subsumed in more general provisions.
    Changes: The Agencies that did not already include a standalone 
provision in their proposed regulations have accordingly revised their 
regulations to do so. The provisions that have been revised or added 
are 6 CFR 19.3(c) (DHS); 7 CFR 16.3(h) (USDA); 22 CFR 205.1(c) (USAID); 
24 CFR 5.109(c) (HUD); 28 CFR 38.4(b) (DOJ); 29 CFR 2.32(e)(1) (DOL); 
38 CFR 50.2(e) (VA); and 45 CFR 87.3(b) (HHS).
    Comments: One commenter faulted the Joint NPRM for supposedly 
adopting an ``accommodation-denying position'' that could result in 
violations of the Religious Freedom Restoration Act (``RFRA''), in 
particular. The commenter pointed out, for example, that the Joint 
NPRM's discussion of Title VII did not address the impact of RFRA on 
the application of that statute, and argued that there are instances 
where RFRA compels accommodations to the requirements of 
nondiscrimination laws.
    Response: The Agencies disagree that, either in the Joint NPRM or 
this final rule, they are taking an ``accommodation-denying position.'' 
To the contrary, in both documents, the Agencies have specifically 
reaffirmed that they will continue to consider faith-based and other 
organizations' requests for accommodations on a case-by-case basis in 
accordance with the U.S. Constitution and Federal statutes. RFRA is one 
Federal law that may require the Agencies to grant such an 
accommodation in an appropriate case. Specifically, where a provider 
shows that application of a regulatory requirement ``substantially 
burden[s]'' its exercise of religion, RFRA states that the Agency may 
impose the requirement only if it demonstrates that application of the 
burden to the organization ``is in furtherance of a compelling 
governmental interest'' and ``is the least restrictive means'' of 
furthering that interest. 42 U.S.C. 2000bb-1(a) through (b).
    Changes: None.
3. Provider Notices
    Comments: The regulations of all the Agencies except USAID include 
appendices containing language for provider notices--that is, notices 
or announcements of award opportunities and notices of award or 
contracts--stating that faith-based organizations are eligible for the 
awards on the same basis as any other organization and are subject to 
relevant protections and requirements of Federal law. (While USAID's 
regulations do not include this appendix, they do require that notices 
or announcements of funding opportunities include such language. See 22 
CFR 205.1(b).) The Agencies proposed certain changes to these provider 
notice appendices in order to conform the appendices to proposed 
changes to other parts of their regulations. As some commenters pointed 
out, however, several of the Agencies' proposed provider notice 
appendices did not incorporate all of the changes described elsewhere 
in the Joint NPRM. For example, the Joint NPRM asserted that this rule 
was intended to state more clearly that Agencies would not, in 
selecting service providers, discriminate on the basis of an 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to favor or disfavor a similarly situated secular organization. 
88 FR 2402. But, in an oversight, several Agencies (USDA, DOL, HUD, VA, 
and DHS) did not fully incorporate the intended new language in their 
provider notice appendices, although they generally did so elsewhere in 
their proposed regulations. Commenters recommended that the Agencies 
revise their provider notice appendices to be consistent both with the 
remainder of the proposed regulatory text and with one another.
    One particular set of proposed changes to the provider notice 
appendices drew both support and criticism, namely, the removal of a 
list of examples of religious freedom and conscience protection laws, 
along with a sentence stating that religious accommodations may be 
sought under many of those laws. The proposal sought to clarify the 
nature of the protections for faith-based organizations by decoupling 
the rule's religious nondiscrimination protections from the question of 
accommodations. See id. Although the NPRM preamble indicated that such 
changes would be made throughout the rule, the proposed changes were 
inadvertently omitted from USDA and DOL's proposals. A commenter that 
supported the proposed changes urged USDA and DOL to join the other 
Agencies in eliminating the illustrative list of Federal laws. Some 
other commenters, by contrast, recommended that all of the Agencies 
restore the language, because, in the commenters' view, it makes clear 
which laws require an accommodation.
    Response: The Agencies agree that all of their provider notice 
appendices should be revised as necessary to reflect fully the changes 
proposed elsewhere in the rule. Doing so will help ensure that faith-
based and other organizations are accurately informed of their 
eligibility, protections, and requirements. The Agencies also agree 
that the provider notice appendices should be consistent with one 
another except where Agency-specific language is required. To 
accomplish these goals, in this final rule, the Agencies have generally 
adopted the language of the provider notice appendices in DOJ's 
proposed regulation, which most thoroughly incorporated the intended 
changes. As explained in the Joint NPRM, 88 FR 2402, these changes do 
not substantively change providers' rights, but rather make clearer 
that the Agencies will not discriminate against providers in violation 
of the U.S. Constitution or Federal statutes, and that the Agencies 
will continue to consider providers' requests for accommodations on a 
case-by-case basis in accordance with all applicable Federal law. These 
changes also avoid any unintended implications introduced by citing to 
some, but not all, statutes containing religious freedom protections.

[[Page 15684]]

    Changes:

DOJ--28 CFR part 38, appendix A: amend paragraph (c) for consistency 
with proposed 28 CFR part 38; appendix B: amend paragraph (b) for 
consistency with proposed 28 CFR part 38
Other Agencies--
DHS--6 CFR part 19, appendices A and B: revise language to match DOJ's 
revised 28 CFR part 38, appendices A and B
USDA--7 CFR part 16, appendices A and B: revise language to match DOJ's 
revised 28 CFR part 38, appendices A and B
HUD--24 CFR part 5, subpart A, appendix A: revise language to match 
DOJ's revised 28 CFR part 38, appendix A (except retain heading 
``Notice of Funding Opportunity''); add new appendix B modeled on 
revised 28 CFR part 38, appendix B
DOL--29 CFR part 2, subpart D, appendices A and B: revise language to 
match DOJ's revised 28 CFR part 38, appendices A and B
ED--34 CFR part 75, appendices A and B: revise language to match DOJ's 
revised 28 CFR part 38, appendices A and B
VA--38 CFR part 50, appendices A and B: revise language to match DOJ's 
revised 28 CFR part 38, appendices A and B
HHS--45 CFR part 87, appendices A and B: revise language to match DOJ's 
revised 28 CFR part 38, appendices A and B
4. Merit-Based Considerations in Grant-Making
    Comments: One commenter requested that the Agencies include 
language in their regulations ensuring that Agency decisions about 
awards of Federal financial assistance will be made on the basis of 
merit, and stating that such merit-based decisionmaking will include 
objective consideration of whether an organization will serve all 
beneficiaries and perform all services that are necessary to fulfill 
the program's objectives.
    Response: The Agencies agree that decisions about awards of Federal 
financial assistance must be free from political interference or the 
appearance of such interference, and must be made on the basis of 
merit, not on the basis of religion or lack thereof. The Agencies do 
not, however, adopt the commenter's suggestion that they elaborate upon 
the merit-based decisionmaking processes in their regulations. Such 
additional details are beyond the scope of this rulemaking. The 
Agencies therefore decline to make any changes to their regulations 
based on these comments.
    Changes: None.
5. Burdens on Faith-Based Grantees
    Comments: According to some commenters, certain of the rule's 
notice requirements are, but should not be, imposed exclusively on 
faith-based providers. Other commenters similarly contended that the 
regulations' requirement that a provider's explicitly religious 
activities, if any, be separated from ones supported by direct Federal 
financial assistance is unduly burdensome for religious service 
providers. And another commenter contended that the rule discriminates 
against faith-based organizations based on their religious status, due 
to certain of the rule's beneficiary protections.
    Response: Neither the Joint NPRM nor this final rule imposes any 
requirements exclusively on faith-based providers. Rather, the 
regulations apply equally to both faith-based and secular 
organizations. As explained above in Part II.B of this joint preamble, 
the Agencies likewise decline to repeal their regulatory provisions 
requiring the separation of explicitly religious activities from those 
supported by direct Federal financial assistance. That requirement 
applies to all types of providers, not just religious organizations, 
and it appropriately implements an Executive order and is consistent 
with the Supreme Court's First Amendment jurisprudence. Nor does this 
final rule discriminate against faith-based providers in any other way. 
To the contrary, the rule is designed, in significant part, to protect 
providers from discrimination based on religion.
    Changes: None.

E. Title VII

    Comments: Section 703(a) of Title VII of the Civil Rights Act of 
1964, 42 U.S.C. 2000e-2(a), generally prohibits employers from engaging 
in employment discrimination on the basis of an individual's race, 
color, religion, sex, or national origin. Another subsection of Title 
VII, however, exempts certain religious organizations with respect to a 
particular application of that prohibition. Specifically, section 
702(a) of Title VII, 42 U.S.C. 2000e-1(a), provides that ``[t]his 
subchapter shall not apply . . . to a religious corporation, 
association, educational institution, or society with respect to the 
employment of individuals of a particular religion to perform work 
connected with the carrying on by such corporation, association, 
educational institution, or society of its activities.'' Most of the 
Agencies' regulations have long provided that a religious organization 
that qualifies for that Title VII religious-employer exemption is not 
precluded from invoking it even in programs funded by Federal financial 
assistance. In the 2020 Rule, VA joined the other Agencies by adding 
such language. 88 FR 2402. Also in 2020, five of the Agencies (DOL, 
HHS, ED, VA, and USAID) added text to their regulations indicating that 
the Title VII religious-employer exemption allows a qualifying 
organization to hire persons on the basis of their ``acceptance of or 
adherence to religious tenets of the organization.'' Id. (quotation 
marks omitted). HUD did not add a similar employment-related tenets 
sentence to its regulation, but another provision in HUD's rules (24 
CFR 5.109(d)(2)) already stated that ``a faith-based organization 
participating in a HUD program or activity . . . may . . . select its . 
. . employees on the basis of their acceptance of or adherence to the 
religious tenets of the organization consistent with'' the Title VII 
religious-employer exemption.
    The Joint NPRM proposed to remove the sentence about tenets-based 
employment conditions added by the 2020 Rule from DOL, HHS, ED, VA, and 
USAID's regulations on the ground that the sentence is unnecessary and 
potentially misleading. 88 FR 2402. As the Joint NPRM explained, the 
sentence could mistakenly be read to suggest that Title VII permits 
religious organizations that qualify for the Title VII religious-
employer exemption to insist upon tenets-based employment conditions 
that would otherwise violate Title VII or the particular underlying 
funding statute in question. Id.
    Several commenters argued that the Agencies should not remove the 
tenets-based employment conditions sentence because, they said, the 
scope of the Title VII religious-employer exemption permits a 
qualifying organization to require employees to conform to religious 
tenets even where application of such a requirement would consist of 
another form of discrimination (e.g., sex discrimination) that Title 
VII prohibits. Some of those commenters also contended that the 
sentence reflects what the First Amendment requires.
    Other commenters, by contrast, urged HUD to remove the sentence in 
its regulation about tenets-based employment conditions in order to 
conform to the regulatory text of the other eight Agencies. And other 
commenters suggested that the Agencies should repeal the provisions in 
their regulations stating that qualifying organizations retain their 
Title VII religious-employer exemption with respect to federally funded 
programs, because, the commenters argued,

[[Page 15685]]

application of the exemption in such cases would violate the 
Establishment Clause.
    Response: The Agencies decline to remove the longstanding 
provisions in their regulations about the continued application of the 
Title VII religious-employer exemption for religious organizations that 
qualify for it. DOJ's Office of Legal Counsel has concluded that the 
Title VII exemption is a permissible religious accommodation for 
qualifying religious organizations even in the context of at least some 
Government-funded social service programs. See Direct Aid to Faith-
Based Organizations Under the Charitable Choice Provisions of the 
Community Solutions Act of 2001, 25 Op. O.L.C. 129, 131-33 (2001) 
(``Direct Aid to Faith-Based Organizations''); see also Memorandum for 
William P. Marshall, Deputy Counsel to the President, from Randolph D. 
Moss, Assistant Attorney General, Office of Legal Counsel, Re: 
Application of the Coreligionists Exemption in Title VII of the Civil 
Rights Act of 1964, 42 U.S.C. 2000e-1(a), to Religious Organizations 
That Would Directly Receive Substance Abuse and Mental Health Services 
Administration Funds Pursuant to Section 704 of H.R. 4923, the 
``Community Renewal and New Markets Act of 2000'', at 26-30 (Oct. 12, 
2000) (``2000 OLC Opinion''); but cf. id. at 22-25 (explaining that 
there might be as-applied situations in which a constitutional issue 
could be raised if and when an agency knowingly chooses to provide aid 
to fund employment positions for which the employer applies a religious 
test).
    While recognizing that the Title VII religious-employer exemption 
may apply, DOL, HHS, ED, VA, and USAID disagree that the language added 
to their regulations in 2020 about tenets-based employment conditions 
is necessary or clarifying, given the limiting principles on the Title 
VII exemption that courts have recognized.
    Specifically, Federal courts of appeals have long held that the 
Title VII religious-employer exemption allows a qualifying religious 
organization generally to require employees to conform their conduct to 
the organization's religious tenets. Nevertheless, as DOL recently 
explained in another rulemaking, see Rescission of Implementing Legal 
Requirements Regarding the Equal Opportunity Clause's Religious 
Exemption Rule, 88 FR 12842, 12848-54 (Mar. 1, 2023), the weight of 
Title VII case law has determined that qualifying religious employers 
may only impose such a requirement where the employment condition does 
not violate the other nondiscrimination provisions of Title VII, apart 
from the prohibition on religious discrimination. See, e.g., Kennedy v. 
St. Joseph's Ministries, Inc., 657 F.3d 189, 192 (4th Cir. 2011) (Title 
VII religious-employer exemption ``does not exempt religious 
organizations from Title VII's provisions barring discrimination on the 
basis of race, gender, or national origin''); Boyd v. Harding Acad. of 
Memphis, Inc., 88 F.3d 410, 413 (6th Cir. 1996) (the exemption ``does 
not . . . exempt'' religious institutions ``with respect to all 
discrimination'' and ``Title VII still applies'' to, for example, ``a 
religious institution charged with sex discrimination''); see also 2000 
OLC Opinion at 30-31 (explaining that Congress did not intend to afford 
qualifying religious organizations an exemption from such other forms 
of discrimination, even where the discrimination is a function of their 
sincere religious tenets); Direct Aid to Faith-Based Organizations, 25 
Op. O.L.C. at 131 n.4 (same). For example, even if a qualifying 
religious organization had a religious tenet prohibiting interracial 
marriage, it could not invoke the Title VII religious-employer 
exemption to refuse to employ an applicant with a spouse of a different 
race. Likewise, an organization that believes a husband is the head of 
a household and should provide for his family but that a woman's place 
is in the home could not refuse to hire women or offer higher benefits 
to male employees. See, e.g., EEOC v. Fremont Christian Sch., 781 F.2d 
1362 (9th Cir. 1986).
    The Agencies recognize that a few judges have recently suggested 
otherwise. See 88 FR 12852. As the Joint NPRM made clear, however, the 
applicability of the Title VII exemption in any given case will be 
``governed by the text of that statute, any other applicable laws . . . 
, and the caselaw interpreting these authorities.'' 88 FR 2402. This 
rule does not purport to alter or otherwise affect the scope of the 
statutory exemption. The Agencies' goal with respect to the tenets-
based employment condition regulatory text is simply to avoid any 
language that might be misconstrued as resolving that question against 
the weight of judicial and executive branch authority. Accordingly, as 
proposed, ED, DOL, HHS, VA, and USAID are, in this final rule, removing 
the sentence about tenets-based employment conditions that they added 
in 2020. And for the same reasons, HUD is removing language regarding 
the Title VII religious-employer exemption from its regulations.
    As noted in the Joint NPRM, the Agencies reemphasize that 
constitutional doctrines might also be implicated in some cases. See 
id. at 2402-03. For example, antidiscrimination laws, including Title 
VII, are subject to constitutional limitations as applied to certain 
decisions by some religious organizations concerning a subset of their 
employees, under what is known as the ``ministerial exception.'' See, 
e.g., Our Lady of Guadalupe Sch. v. Morrissey-Berru, 140 S. Ct. 2049 
(2020); Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 
U.S. 171 (2012). And the Agencies must be careful not to unduly 
interrogate the plausibility of a religious justification in assessing 
whether a religious-tenets claim is a pretext for some other, 
impermissible form of employment discrimination. In addition, as the 
Supreme Court recently recognized, ``how these doctrines protecting 
religious liberty interact with Title VII are questions for future 
cases.'' Bostock v. Clayton Cnty., 140 S. Ct. 1731, 1754 (2020).
    Changes: HUD has removed the phrase ``and employees'' from the 
revised version of 24 CFR 5.109(d)(2).

F. Definition of ``Federal Financial Assistance''

    Comments: In the Joint NPRM, the Agencies sought public comment on 
whether and how they should define the term ``Federal financial 
assistance'' in their regulations. 88 FR 2403-04. In particular, the 
Agencies asked whether an Agency that adopts a definition of ``Federal 
financial assistance'' in its regulations should use the definition set 
out in Executive Order 13279. Id. at 2403. The Agencies also inquired 
about the impact of provisions adopted by some Agencies in the 2020 
Rule specifying that certain forms of assistance are not ``Federal 
financial assistance,'' such that the Agencies' definitions of that 
term ``might be read to be materially different from the definition in 
Executive Order 13279.'' Id. One commenter urged the Agencies to 
consistently adopt the definition of ``Federal financial assistance'' 
set forth in Executive Order 13279, explaining that doing so would 
promote uniformity and avoid confusion. Another commenter contended 
that the term should not include indirect aid, and that the Agencies 
should specify that the term does not encompass mere nonprofit or tax-
exempt status. And another commenter argued that the request for 
comments was insufficiently specific and so the Agencies must provide a 
separate notice with

[[Page 15686]]

additional opportunity for public comment before adopting or 
reformulating a definition of ``Federal financial assistance.''
    Response: The Agencies conclude that their regulations should 
expressly adopt the definition of ``Federal financial assistance'' 
articulated in Executive Order 13279. The regulations seek to implement 
that Executive order and, as the Joint NPRM explained, the provisions 
of the Order ``at issue in this rulemaking[ ] turn on the conveyance or 
receipt of `Federal financial assistance.' '' 88 FR 2403. To ensure 
consistency and prevent misunderstandings, the Agencies are thus 
amending their regulations to uniformly adopt the definition of the 
term set forth in Executive Order 13279, which encompasses both direct 
and indirect aid. (The Agencies have explained elsewhere why they are 
declining to depart from their proposed treatment of indirect aid in 
this rulemaking. See Part II.C of the joint preamble.) Consistent with 
section 1(a) of Executive Order 13279, the Agencies will therefore all 
define ``Federal financial assistance'' to mean ``assistance that non-
Federal entities receive or administer in the form of grants, 
contracts, loans, loan guarantees, property, cooperative agreements, 
food commodities, direct appropriations, or other assistance, but does 
not include a tax credit, deduction, or exemption.'' See 67 FR 77141. 
Importantly, this definition encompasses the Agency-specific forms of 
assistance that certain Agencies expressly referenced in their prior 
definitions of the term. A tax exemption, whether or not on the basis 
of nonprofit status, however, does not qualify as Federal financial 
assistance under this definition.
    The Agencies disagree that further notice and an additional 
opportunity to comment are required. The Joint NPRM's presentation of 
this issue provided more than ``fair notice'' of the changes adopted 
here. Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 174 (2007). 
The Joint NPRM stated expressly that the Agencies were considering 
whether to adopt the definition of the term ``Federal financial 
assistance'' established in Executive Order 13279. The Joint NPRM also 
described the Agencies' prior and current approaches to defining the 
term, and specifically requested input on whether the Agencies should 
adopt a different definition than the Executive order did. 88 FR 2403-
04. It was thus entirely foreseeable that the Agencies would adopt that 
definition in this final rule. As a result, the Agencies need not 
institute a separate notice-and-comment process to adopt the definition 
of ``Federal financial assistance'' found in Executive Order 13279.
    Changes: All of the Agencies have included in their final 
regulations the definition of ``Federal financial assistance'' set 
forth in Executive Order 13279. The provisions to be modified or added 
are 6 CFR 19.2 (DHS); 7 CFR 16.2 (USDA); 22 CFR 205.1(a) (USAID); 28 
CFR 38.3(a) (DOJ); 29 CFR 2.31(a) (DOL); 34 CFR 75.52(c) and 76.52(c) 
(ED); 38 CFR 50.1(c) (VA); and 45 CFR 87.1(d) (HHS).

G. Other Issues

1. Monitoring Requirements
    Comments: Commenters suggested that, in the final rule, the 
Agencies adopt or clarify their procedures for monitoring grantees' 
compliance with these regulations. To further this goal, some 
commenters requested that the rule provide that Federal staff will be 
trained on how to oversee and enforce the regulations, and that 
grantees will be trained on their rights and responsibilities under the 
rule. Specifically, one commenter suggested that the Agencies should 
clarify how they will meet their obligations to monitor constitutional, 
statutory, and regulatory requirements. Another commenter similarly 
requested that the Agencies take additional steps to monitor and 
enforce their regulations.
    Response: These concerns were also expressed with respect to the 
2016 Rule, and the Agencies agreed with them at that time. See 81 FR 
19370. As the Agencies then explained, the Agencies must guard against 
inappropriate uses of Federal financial assistance by monitoring and 
enforcing all constitutional, statutory, and regulatory standards 
governing such assistance, particularly in light of the monitoring 
obligations in Executive Order 13279, as amended by Executive Order 
13559. Id.
    The Agencies agree with the commenters that organizations that 
receive Federal financial assistance need to be aware of these new 
regulatory requirements, and that Agencies must train appropriate 
individuals on applicable regulations and vigorously monitor and 
enforce those regulatory requirements. The specific procedures to be 
adopted, however, are beyond the scope of this rulemaking. In addition, 
those procedures will vary among the Agencies and their programs 
because each Agency has its own organizational structure, available 
resources, legal authority, and statutory enforcement requirements. 
Moreover, experience implementing these regulations and seeing them in 
operation may provide insights that aid development of appropriate 
training, monitoring, and oversight mechanisms. Consequently, the 
Agencies have decided not to prescribe a single uniform approach to 
these issues in the present rule. Instead, each Agency will adopt its 
own measures to train staff and grantees, and will monitor projects in 
a manner that is appropriate for each program and award that is subject 
to this rule. Appropriate training and oversight measures may include, 
for example, Federal staff or grantee conferences or workshops, site 
visits, monitoring phone calls, and reviews of grant documents, audits, 
and progress reports. Each Agency will devote appropriate resources to 
ensure that its program staff understand their responsibilities to 
ensure that grantees, subgrantees, and contractors that provide social 
services to beneficiaries under programs of Federal financial 
assistance comply with these final regulations.
    Changes: None.
2. Data Collection
    Comments: Several commenters suggested that the Agencies should 
implement and improve their existing data collection processes to 
understand whether the safeguards in the regulations are sufficient and 
to inform how Agencies can improve award outcomes and delivery of 
services. Commenters stated that doing this will ensure fidelity to 
constitutional principles and programmatic goals, and ultimately, to 
serving beneficiaries in the most equitable, effective, and efficient 
way.
    Response: The Agencies are committed to using data to monitor 
compliance with all award conditions, and they will comply with all 
applicable requirements regarding data collection, including 
Government-wide standards such as Office of Management and Budget 
(``OMB'') Memorandum M-14-06, Guidance for Providing and Using 
Administrative Data for Statistical Purposes. Modifying the Agencies' 
data collection processes or imposing additional requirements for such 
collection, however, is beyond the scope of this rulemaking. Moreover, 
because of the unique organizational structure and context of each 
Federal financial assistance program, mandating a single data 
collection approach would be infeasible. The Agencies thus decline to 
make any changes to their regulations in response to the comments about 
data collection.
    Changes: None.

[[Page 15687]]

3. Point of Contact for Complaints
    Comments: Commenters requested that the Agencies modify their 
regulations to include a point of contact for beneficiaries of 
federally funded social service programs should they need to report any 
complaints of discrimination. Several of these commenters provided DOJ 
and DOL's regulations as potential models because DOJ designates its 
Office for Civil Rights as the office with which beneficiaries may file 
complaints and DOL's regulations provide specific contact information 
for reporting violations. Three commenters recommended that all the 
Agencies designate their Offices for Civil Rights, or an equivalent 
entity, to receive any complaints because, in the commenters' view, 
those offices are best equipped to investigate and respond to reports 
of discrimination.
    Response: The Agencies understand the need for beneficiaries of 
Federal financial assistance to have an avenue for enforcement of their 
rights enumerated in the beneficiary notice. Because of differences in 
Agency structures, however, it is best left to each Agency to determine 
which of its offices will handle complaints. Some Agencies (HUD and VA) 
do not have an Office for Civil Rights. And other Agencies may have 
some other office better placed to receive reports of violations of 
this rule. Additionally, for federally funded social service programs 
operated by intermediaries, the intermediary may be the entity best 
positioned to receive and act on complaints of discrimination from 
beneficiaries.
    Similarly, each Agency is best poised to determine whether putting 
specific contact information for filing complaints in the Agency 
regulation text would serve the interests of beneficiaries of federally 
funded social service programs. For instance, DOL has a longstanding, 
single point of contact whose information can be placed in its 
regulation text without significant risk of becoming outdated. For 
other Agencies without a static point of contact, placing a specific 
person's contact information in regulation text is not feasible and 
could result in beneficiaries attempting to use outdated contact 
information to file complaints.
    In acknowledgement that beneficiaries of federally funded social 
service programs need clarity about what office to contact if they 
experience discrimination in violation of these regulations, the 
Agencies agree that, at minimum, either their regulatory texts or 
follow-on guidance should specify whom a beneficiary may contact if 
they experience discrimination.
    Changes: USDA amends its regulation text to specify that its Office 
of the Assistant Secretary for Civil Rights will receive reports of 
violations of this rule. DHS amends its regulation text to state that 
beneficiaries should report such violations to its Office for Civil 
Rights and Civil Liberties. The other Agencies make no changes to their 
regulatory text in the Joint NPRM. Those other Agencies, with the 
exception of USAID, have, however, agreed to include a model 
beneficiary notice as an appendix to their regulations, and the model 
notices include a space for the awarding entity to include contact 
information for the appropriate office to which beneficiaries may 
direct complaints.
4. Need for Rulemaking
    Comments: One commenter stated that the Agencies had insufficiently 
established the need for this rulemaking. According to the commenter, 
the Agencies failed to provide evidence of inconsistencies or confusion 
raised by the 2020 Rule. The commenter also contended that the Agencies 
did not explain how the 2020 Rule limited the reach of federally funded 
services and programs, or how the proposed rule would better achieve 
the Agencies' stated goal of reaching the widest possible eligible 
population, including historically marginalized communities.
    Response: The Agencies disagree that the Joint NPRM contained 
inadequate justification for the proposed changes and, furthermore, 
note that numerous commenters agreed that this rulemaking is necessary. 
For example, two commenters stated that they found the 2020 Rule 
confusing because it contained language suggesting that the Agencies 
would grant religious exemptions to providers even when the exemptions 
were not justified or required by Federal law. Another commenter agreed 
with the Agencies that the 2020 Rule's language allowing indirect aid 
providers to require beneficiaries to attend all activities that are 
fundamental to the program created a confusing tension with the 
prohibition on discriminating against beneficiaries because they refuse 
to attend or participate in religious practices. The commenter 
explained that eliminating this language is an important step to 
protect the religious freedom of beneficiaries of Government-funded 
social services. For the reasons stated in the Joint NPRM, and having 
considered these and other comments, the Agencies have determined that 
the 2020 Rule did, in fact, create confusion, thus necessitating the 
current rulemaking.
    Many commenters also agreed with the Agencies that this rulemaking 
is necessary to ensure that federally funded services and programs 
reach the widest possible eligible population, including historically 
marginalized communities. For example, one commenter stated that the 
2020 Rule removed protections for populations that are at particular 
risk of being economically insecure and are discriminated against, such 
as LGBTQI+ people, single mothers and their children, and immigrants. 
The commenter stated that strong protections are needed to ensure that 
members of these vulnerable populations are not purposefully or 
inadvertently excluded from federally funded social services. Another 
commenter provided evidence that women, people of color, LGBTQI+ 
people, people with disabilities, immigrants, people living with HIV, 
religious minorities, and other marginalized populations are 
particularly vulnerable to discrimination when seeking such services. 
These and other comments support the Agencies' conclusion that changes 
to their regulations are necessary for federally funded services and 
programs to reach the widest possible eligible population.
    For the reasons explained both in the Joint NPRM and in this final 
rule, and in light of the public comments supporting the Agencies' 
proposals, the Agencies believe that the need for this rulemaking is 
well established.
    Changes: None.
5. Executive Orders 13985 and 14058
    Comments: One commenter expressed concern that this rule 
deprioritizes the funding of faith-based groups. As the purported basis 
for that worry, the commenter referred to the Agencies' reliance on 
Executive Order 13985, Advancing Racial Equity and Support for 
Underserved Communities Through the Federal Government, 86 FR 7009 
(Jan. 20, 2021), and Executive Order 14058, Transforming Federal 
Customer Experience and Service Delivery To Rebuild Trust in 
Government, 86 FR 71357 (Dec. 13, 2021).
    Response: As indicated in the Joint NPRM, the primary goal of this 
rulemaking is to ensure full access to and comprehensive delivery of 
federally funded social services, in keeping with governing law and 
with the policies articulated in Executive Order 14015. The Joint NPRM 
also acknowledged that the rulemaking sought to advance the policies 
set out in Executive Orders

[[Page 15688]]

13985 and 14058. In neither the Joint NPRM nor this final rule, 
however, do any of the Agencies' regulations set forth any requirements 
unique to those Executive orders, and the Agencies have not 
deprioritized funding for faith-based organizations. To the contrary, 
as the Agencies emphasized in the Joint NPRM preamble, it is important 
to strengthen the ability of both faith-based and secular organizations 
to deliver services in partnership with Federal, State, and local 
governments and with other private organizations, while adhering to all 
governing law. 88 FR 2397. Indeed, ``it has long been Federal policy 
that faith-based organizations are eligible to participate in Agencies' 
grant-making programs on the same basis as any other organizations,'' 
and the Agencies remain committed to preventing discrimination against 
faith-based organizations in the selection and regulation of service 
providers. Id. at 2401.
    Changes: None.
6. Regulatory Impact Analysis
    Comments: Several commenters suggested that the Agencies had not 
adequately assessed the potential burdens of this rule on faith-based 
providers and therefore on beneficiaries who rely on those providers' 
services. In particular, one commenter urged the Agencies to analyze 
the regulations' effect on faith-based providers leaving the Agencies' 
programs or not joining them in the future; the availability of 
alternative providers to fill any gaps in service; the harms to 
beneficiaries who are unable to receive services from a provider; any 
irreparable harm associated with the loss of First Amendment and 
religious free exercise rights due to an incorrectly denied 
accommodation or lack of appeal process; and any distributional effects 
of Federal funds transferring from faith-based providers that leave the 
program under the regulations to new providers. Another commenter 
expressed concern that the regulations would likely disproportionately 
burden service providers in regions where alternatives are scarcest, 
and thus most needed, resulting in fewer service providers in those 
underserved regions and greater barriers to access for beneficiaries.
    Response: The Agencies believe that this final rule will not have 
any impact on existing faith-based providers' decisions to participate 
in federally funded social service programs or discourage new faith-
based providers from joining such programs in the future. As indicated 
in the Joint NPRM, the rule's compliance cost per covered provider is 
minimal, however figured: the ``upper bound'' estimate cited in the 
Joint NPRM was $240 per year, and the ``central estimate'' was $211.25 
per year plus a one-time cost of $17.72; the Agencies have updated the 
``central estimate'' to $223.03 plus a one-time cost of $18. See id. at 
2405-06 & tbls. 1 & 3; Part IV.A.1 of the joint preamble. All of these 
estimates are modest. The Agencies do not expect this insignificant 
cost burden to affect existing faith-based providers' participation or 
to discourage new faith-based providers from joining in the future. 
Accordingly, the Agencies do not anticipate that the rule's regulatory 
requirements will reduce the participation of faith-based providers, 
nor do they expect that the rule will have disproportionate effects in 
underserved regions. Finally, as the final rule makes clear, the 
Agencies remain committed to providing any religious accommodations 
required by applicable Federal law, including the First Amendment.
    Changes: None.
    Comments: One commenter stated that the Joint NPRM's regulatory 
impact analysis (``RIA'') failed to properly assess the benefits of 
faith-based providers and the burdens on them and ignored the economic 
as well as qualitative costs of the rule's proposed changes.
    Response: The Agencies believe that the Joint NPRM's RIA was 
appropriate and sufficient. The commenter, moreover, did not specify 
which impacts supposedly were not properly assessed or provide any data 
or analysis to allow for quantification of such impacts. The Agencies 
have appropriately assessed the potential costs, cost savings, and 
benefits, both quantitative and qualitative, of this regulatory action.
    Changes: None.
    Comments: One commenter stated that it supports the proposal to 
withdraw and replace the 2020 Rule because the 2020 Rule's mandatory 
cost-benefit analysis improperly assessed the costs and other harms to 
beneficiaries to be negligible, despite what the commenter viewed as 
ample evidence of religion-based denials of service, discrimination, 
and other harmful treatment of LGBTQI+ people, people of color, people 
of other faiths, and others by service providers.
    Response: The Agencies agree that the 2020 Rule's analysis did not 
adequately consider the costs it imposed on beneficiaries. In the 
present rulemaking, the Agencies believe that they have properly 
assessed both the costs and benefits of the regulations, and they have 
qualitatively shown the benefits to beneficiaries in several important 
ways. Specifically, the final notice requirement will improve 
beneficiaries' access to federally funded services by informing them of 
their rights and thus removing certain barriers arising from 
discrimination. Additionally, the final referral option will make it 
more likely that beneficiaries who object to receiving services from 
one provider will be able to learn about alternative providers.
    Changes: None.

III. Agency-Specific Issues ³
---------------------------------------------------------------------------

    \3\ All of the comments that were directed to DOJ or that affect 
DOJ's regulations were adequately addressed in the joint preamble 
above. DOJ accordingly does not include an Agency-specific preamble 
in this final rule.
---------------------------------------------------------------------------

A. Department of Agriculture

    In sections (1) through (4) below, USDA addresses the few USDA-
specific comments not addressed in Part II of the joint preamble. In 
section (5) below, USDA provides its specific response to comments 
discussed in Part II.A.4 of the joint preamble recommending that the 
Agencies generally require that a written notice of rights be provided 
to beneficiaries of programs receiving indirect Federal financial 
assistance. All other comments received by USDA or otherwise affecting 
USDA's regulations are addressed fully in Part II of the joint 
preamble, and USDA adopts those responses.
1. Unnecessary Definition
    Comments: Two commenters recommended that USDA delete the 
definition of the phrase ``[d]iscriminate against an organization on 
the basis of the organization's religious exercise'' found in its 
proposed rule. According to the commenters, the definition is not 
necessary, since the phrase does not appear anywhere else in USDA's 
regulations and changes elsewhere in the rule spell out the prohibition 
contained in the definition.
    Response: USDA agrees that the definition is not necessary because 
this phrase does not appear elsewhere in USDA's regulations. Moreover, 
USDA's obligation not to discriminate for or against organizations on 
the basis of enumerated religious considerations is explicitly set 
forth in 7 CFR 16.3(a) and in appendix A to 7 CFR part 16. In this 
final rule, USDA has accordingly deleted the definition in question 
from 7 CFR 16.2.
    Changes: The regulation at 7 CFR 16.2 is amended by deleting the 
definition of the phrase ``[d]iscriminate against an organization on 
the basis of the organization's religious exercise.''

[[Page 15689]]

2. Unnecessary Citations
    Comments: One commenter recommended that USDA, in its appendices A 
and B, follow the lead of other Agencies and eliminate the list of 
citations to Federal laws that provide for religious exemptions.
    Response: USDA agrees that the list of citations in its Appendices 
A and B in the proposed rule is unnecessary. USDA remains committed to 
ensuring that faith-based organizations retain their independence from 
the Government and enjoy all the religious freedom and conscience 
protections to which they are entitled under the U.S. Constitution and 
Federal statutes. The removal of the list of citations, providing 
examples of such Federal laws, will have no substantive effect. 
Moreover, this approach aligns with that of the other Agencies, so 
USDA's making this change will promote consistency among the Agencies' 
regulations.
    Changes: In this final rule, USDA amends appendices A and B to 7 
CFR part 16 by removing the illustrative citations to Federal laws.
3. Handling of Complaints
    Comments: As discussed in Part II of the joint preamble, various 
commenters urged the Agencies to designate a point of contact for 
receiving civil rights complaints. In a similar vein, one commenter 
also specifically recommended that USDA's provision on written notice 
to beneficiaries include information on where complaints of religious 
discrimination, in particular, can be filed.
    Response: USDA agrees with this recommendation, and the final rule 
provides for the filing of written complaints by beneficiaries in 
programs supported by direct Federal financial assistance from USDA, 
and also for written notice to be given to such beneficiaries on how 
and where to file complaints. Given the structure and particular 
context of the Federal financial assistance programs it administers, 
USDA agrees with commenters that beneficiaries' religious freedom 
protections would be strengthened by more clearly notifying 
beneficiaries of their right to file complaints and of how to exercise 
that right. To achieve that purpose, USDA has made revisions both in 
its regulatory text and in its model beneficiary notice. In addition, 
in the final rule, USDA has added language to the regulatory text in 7 
CFR 16.4(d) to make clear that beneficiaries and prospective 
beneficiaries in programs supported by indirect Federal financial 
assistance from USDA may file written complaints with USDA alleging 
violations of the rule's religious freedom protections. USDA's 
inclusion of the language about the right to file complaints is also 
consistent with other Agencies' regulations, as explained above in Part 
II.G.3 of the joint preamble. Further, USDA's added language on how and 
where to file complaints mirrors USDA's existing processes for filing 
program discrimination complaints.
    Changes: In this final rule, USDA amends 7 CFR 16.4(c) and appendix 
C to 7 CFR part 16 by adding language to reflect the right of 
beneficiaries in programs supported by direct Federal financial 
assistance to file complaints; adds a new 7 CFR 16.4(d) to reflect the 
right of beneficiaries in programs supported by indirect Federal 
financial assistance to file complaints; and redesignates the current 7 
CFR 16.4(d) as 7 CFR 16.4(e).
4. Consistency Between Regulatory Text and Appendices
    Comments: One commenter observed that USDA's model provider notice 
in appendix A did not match USDA's regulatory text, because the notice 
did not reflect the regulation's statement that USDA may not favor or 
disfavor religious organizations for receipt of Federal financial 
assistance.
    Response: USDA agrees that it is important to include regulatory 
language making plain that an Agency may not favor or disfavor 
religious organizations for the receipt of Federal financial 
assistance. In the final rule, USDA likewise adds language to its 
provider notice found at 7 CFR part 16, appendix A, consistent with 
USDA's regulatory text, making express that USDA may not favor or 
disfavor religious organizations for receipt of Federal financial 
assistance.
    Changes: Appendix A to 7 CFR part 16 is amended by adding explicit 
language about the prohibition on favoring or disfavoring organizations 
on the basis of religious affiliation in disbursing Federal financial 
assistance.
5. Notice to Beneficiaries of Indirect Federal Financial Assistance
    Comments: As explained in Part II.A.4 of the joint preamble, some 
comments urged the Agencies to adopt notice requirements for 
beneficiaries of indirect Federal financial assistance.
    Response: USDA funds several programs through indirect Federal 
financial assistance, including SNAP, the Special Supplemental 
Nutrition Program for Women, Infants, and Children, the Farmers Market 
Nutrition Program, the Seniors Farmers Market Nutrition Program, and 
the Rural Development Voucher Program. USDA, like the other Agencies, 
recognizes the importance of indirect aid beneficiaries being protected 
against religious and other forms of discrimination. For example, USDA 
requires that State agencies that distribute program benefits or 
services in the SNAP program provide notice of the right to be free 
from discrimination, including religious discrimination, by displaying 
And Justice for All posters in their facilities where the poster can be 
viewed by program applicants and participants. The poster includes the 
prohibition against discrimination based on ``religious creed,'' 
information on how to file a discrimination complaint, and is available 
in English, Spanish, and a number of other languages. Moreover, USDA 
has added into this final rule, at 7 CFR 16.4(d), language affirming 
that beneficiaries in USDA programs supported by indirect Federal 
financial assistance have the right to file a complaint of religious 
discrimination.
    Nevertheless, USDA has determined that its regulations should not 
require that beneficiaries of all indirect aid programs be provided a 
notice about religious nondiscrimination rights, because requiring such 
a notice would not be administratively feasible. Due to the vast number 
of participants and provider locations in USDA's indirect aid programs, 
there would be significant administrative burdens in requiring written 
notice to all beneficiaries. As explained in the 2016 Rule, ``there are 
more than a quarter million stores, farmers' markets, direct marketing 
farmers, homeless meal providers, treatment centers, group homes, and 
other participants across the nation that are authorized [SNAP] 
retailers.'' 81 FR 19363. If providers receiving indirect aid were 
required to give written notice to beneficiaries, all of these 
retailers, for example, would have to have the notices ready at all 
times to provide to any person using SNAP benefits.
    Instead of requiring that notice be provided to beneficiaries in 
all indirect aid programs, USDA intends to utilize a more flexible and 
program-specific approach to providing such notice. Based on program-
specific assessments, USDA will, when warranted, require notice in 
programs consistent with risk and programmatic experience. For example, 
USDA may require notice in programs or specific program activities if 
there is a history of findings of religious discrimination, of 
government unduly limiting provider choices, or of beneficiaries' 
choices for using indirect aid being limited for some other reason.
    For the reasons previously explained in Part II.A.4 of the joint 
preamble,

[[Page 15690]]

USDA will not revise its regulatory language to require that notice of 
rights be provided to beneficiaries in all programs supported by 
indirect USDA financial assistance. As described above, however, in 
certain circumstances, USDA may determine that providing such notice is 
appropriate and administratively feasible and require that notice of 
protections to indirect aid beneficiaries be provided.
    Changes: None.

B. Department of Labor

    In Part III.B.1 below, DOL explains additional changes it is making 
to one provision of its regulations in response to comments discussed 
above in Part II.D.1 of the joint preamble. In Part III.B.2 below, DOL 
provides its specific response to comments addressed in Part II.A.4 of 
the joint preamble recommending that the Agencies require that a 
written notice of rights be provided to beneficiaries of programs 
receiving indirect Federal financial assistance. All other comments 
received by DOL or otherwise affecting DOL's regulations are addressed 
fully in Part II of the joint preamble above, and DOL adopts those 
responses.
1. Revision and Reorganization of 29 CFR 2.32
    Comments: As discussed above, the Agencies received comments 
suggesting that they revise or reorganize the religious accommodations 
language in their program requirements provisions, as well as in the 
provisions that bar disqualification of providers based on religious 
character, motives, or affiliation, or lack thereof. These provisions 
appear in DOL's regulations at 29 CFR 2.32.
    Response: In addition to prompting the changes to 29 CFR 2.32 
described above in Part II.D.1 of the joint preamble, the suggestions 
from these commenters indicated to DOL that the organization of 29 CFR 
2.32 made the provision as a whole difficult to follow. For instance, 
some elements (such as the accommodations language noted by the 
commenters) were unintentionally repeated, and other elements that were 
similar to one another were separated into different paragraphs.
    Changes: In the final rule, DOL revises and reorganizes 29 CFR 2.32 
to make it easier to understand. The contents of the section are now 
ordered so that each paragraph addresses only one subject, as follows: 
paragraph (a) contains the prohibition on discriminating for or against 
organizations based on religious character, motives, or affiliation, or 
lack thereof; paragraph (b) sets forth requirements regarding grant 
documents, agreements, covenants, memoranda of understanding, policies, 
and regulations; paragraph (c) describes rights retained by faith-based 
organizations that are DOL social service providers; paragraph (d) 
lists restrictions on the use of Federal financial assistance; and 
paragraph (e) makes clear that accommodations for organizations will be 
considered on a case-by-case basis and explains the effect of an 
accommodation on an eligible organization's qualification to 
participate in a DOL program. These revisions are made only for clarity 
and do not alter the substance of DOL's regulations.
2. Notice to Beneficiaries of Indirect Aid
    Comments: As described in Part II.A.4 of the joint preamble, 
several commenters recommended that the Agencies require that a written 
notice of rights be provided to beneficiaries of programs receiving 
indirect Federal financial assistance.
    Response: DOL incorporates all of the reasons previously explained 
above in Part II.A.4 of the joint preamble for expanding its notice 
requirement to cover beneficiaries and prospective beneficiaries of 
indirect Federal financial assistance. DOL has determined that, in the 
context of its programs, most of which are subject to similar written 
beneficiary notice requirements regardless of whether they are funded 
by what this rule defines as direct or indirect aid, providing written 
notice to all beneficiaries and prospective beneficiaries of programs 
receiving indirect Federal financial assistance is feasible and 
appropriate.
    Changes: DOL revises 29 CFR 2.34 to require that beneficiaries and 
prospective beneficiaries of programs receiving indirect Federal 
financial assistance from DOL be provided with the written beneficiary 
notice that appears in appendix C to subpart D of 29 CFR part 2. As 
revised, 29 CFR 2.34 states that notice to these beneficiaries will be 
provided by the entity that disburses the Federal funds to the 
beneficiary's chosen provider. For example, in the case of WIOA 
programs, the Local Workforce Development Board will be responsible for 
providing the notice to beneficiaries and prospective beneficiaries of 
programs receiving indirect Federal financial assistance. DOL also adds 
subheadings to 29 CFR 2.34 to make the components of the revised 
paragraph easier to understand. Finally, DOL revises the heading of the 
written beneficiary notice to include a designation of the type of 
Federal financial assistance (direct or indirect) the program receives.

C. Department of Health and Human Services

    In Part III.C.1 below, HHS provides its Agency-specific response to 
a cross-cutting public comment identified in Part II.A.4 of the joint 
preamble, recommending that the Agencies require written notice be 
provided not only to beneficiaries of programs receiving direct Federal 
financial assistance but also to beneficiaries of indirect aid 
programs. In Part III.C.2 below, HHS provides its Agency-specific 
response to a comment recommending that DHS, HUD, and HHS remove 
language from their proposed regulations stating that faith-based 
organizations are eligible to participate in federally funded programs 
``on the same basis as any other organization and considering a 
religious accommodation.'' In Part III.C.3 below, HHS responds to a 
comment that concerns language in HHS's proposed regulation referencing 
the application of the Americans with Disabilities Act to religious 
organizations receiving Federal financial assistance. In Part III.C.4 
below, HHS responds to a comment about HHS's procedures for receiving 
complaints of alleged violations of its regulations and for otherwise 
enforcing this rule. All other comments received by HHS, or that affect 
HHS's regulations, are addressed fully in Part II of the joint 
preamble, and HHS adopts those responses.\4\
---------------------------------------------------------------------------

    \4\ HHS also corrects a technical error that appeared in the 
Joint NPRM. In the listing of agency headings, HHS's regulations at 
45 CFR part 87 are mistakenly identified with a Regulation 
Identifier Number (``RIN'') of ``0991-AC13.'' See 88 FR 2395. The 
correct RIN is ``0991-AA31.'' This correction is of no substantive 
effect.
---------------------------------------------------------------------------

1. Notice to Beneficiaries of Indirect Aid
    Comments: As described in Part II.A.4 of the joint preamble, a 
cross-cutting public comment recommended that the Agencies require 
written notice be provided not only to beneficiaries of programs 
receiving direct Federal financial assistance but also to beneficiaries 
of indirect aid programs.
    Response: For the reasons explained in Part II.A.4 of the joint 
preamble, and as elaborated here, HHS revises the beneficiary notice 
requirement that was proposed in 45 CFR 87.3(k) by removing the term 
``direct'' from the phrase ``direct Federal financial assistance.'' 
With this change, HHS's regulation will require that the notice to 
beneficiaries and prospective beneficiaries be provided in covered 
social services

[[Page 15691]]

programs whether they receive Federal funding directly or 
indirectly.\5\
---------------------------------------------------------------------------

    \5\ This final rule also includes technical corrections to the 
Applicability section at Sec.  87.2(a) of the proposed rule and 
Sec.  87.2(b) of the 2020 Rule that provide that the written notice 
to beneficiaries in Sec.  87.3(k) through (m), and the requirement 
that funding decisions be free from political interference in Sec.  
87.3(o) as redesignated, apply to discretionary and block grants 
governed by the Community Services Block Grant (``CSBG'') Charitable 
Choice regulations at 45 CFR part 1050. The sections of the rule 
that addressed those subjects applied to discretionary and block 
grants governed by the CSBG Charitable Choice regulations prior to 
the 2020 Rule, but the 2020 Rule did not revise the Applicability 
section to accurately identify those paragraphs as removed or 
redesignated. This final rule corrects those technical errors.
---------------------------------------------------------------------------

    While the change to 45 CFR 87.3(k) could potentially affect any 
future indirectly funded HHS program that Congress authorizes, HHS 
notes the impact of this change on an existing HHS program that 
explicitly authorizes indirect funding, known as the Chafee Educational 
and Training Vouchers (``ETV'') program. In the ETV program, authorized 
in section 677(i) of the Social Security Act, 42 U.S.C. 677(i), HHS 
awards grants to States, the District of Columbia, Puerto Rico, the 
U.S. Virgin Islands, and participating Tribes (known as ``pass-through 
entities'') to help young adults who have experienced foster care after 
age 14 meet their postsecondary education and training needs. By 
requiring that a beneficiary notice be provided in indirect aid 
programs, this final rule will ensure that ETV program voucher holders 
applying for or attending any educational institution that receives ETV 
vouchers are informed of prohibitions on their being discriminated 
against on the basis of religion, a religious belief, a refusal to hold 
a religious belief, or a refusal to attend or participate in a 
religious practice, as provided in 45 CFR 87.3(f) of the final rule.
    Because any indirectly funded programs that are subject to this 
rule may vary in significant respects, HHS will consider how certain 
protections identified in the beneficiary notice should apply in the 
context of each specific indirect aid program. For example, HHS may 
consider the proportion of explicitly religious programming involved in 
each program's federally funded projects in deciding whether to allow 
recipients of indirect Federal financial assistance to refrain from 
modifying their program activities to accommodate a beneficiary who 
chooses to expend the indirect aid on their organization's program. 
Pass-through entities that administer indirectly funded HHS programs 
will have the discretion to tailor the notice of beneficiary 
protections to address such matters on a program-specific basis, as 
provided in Sec.  87.3(k) as revised in this final rule, and HHS 
intends to provide pass-through entities that administer ETV program 
funds with guidance on developing that program's notice. When 
administering indirectly funded programs, HHS will work to ensure that 
beneficiaries have a genuine and independent choice of providers--for 
example, where necessary and appropriate, by making an adequate secular 
alternative reasonably available or by requiring each existing provider 
to comply with the same conditions that apply to direct aid programs. 
See 88 FR 2400-01; Part II.4.C of the joint preamble.
    The final rule also identifies protections that must be included in 
the notice when it is provided in an indirectly funded program context, 
thereby ensuring that the notice addresses cross-cutting rights that 
apply to both directly and indirectly funded services. Specifically, 
the notice must address the protections that concern nondiscrimination 
on the basis of religion in 45 CFR 87.3(f), attendance or participation 
in any explicitly religious activities in 45 CFR 87.3(k)(1)(ii), and 
complaints in 45 CFR 87.3(k)(1)(iv). The notice must also identify the 
HHS awarding entity or the pass-through entity to which any complaints 
may be directed.
    In addition, in HHS mandatory formula, block, or entitlement grant 
programs (such as the ETV program), 45 CFR 87.3(k) of the final rule 
provides that the pass-through entity that receives HHS funds, rather 
than the service provider, is obligated to ensure that beneficiaries 
and prospective beneficiaries receive the written notice of beneficiary 
protections. This clause enables the pass-through entity to identify 
the public or private sector organization that will incur the 
obligation to provide the notice. This discretion is consistent with 
the role of pass-through entities as primary administrators of HHS 
mandatory formula, block, or entitlement grant programs, and enables 
those entities to identify the public or private sector organization 
that can most efficiently and effectively provide the notice in view of 
the way in which the program is administered.
    HHS notes that while the text of 45 CFR 87.3(k)(1) requires that 
the notice of beneficiary protections in directly funded programs 
identify certain protections in a manner that is ``substantially 
similar'' to the model in its appendix A to part 87, some HHS programs 
will make changes to the model notice to ensure that social service 
providers may continue to provide explicitly religious activities that 
are lawfully part of the program services. These changes will be 
consistent with the discretion retained by HHS under 45 CFR 87.3(d), as 
redesignated by this rule. That subsection provides that ``[n]othing in 
this part restricts HHS' authority under applicable Federal law to fund 
activities, such as the provision of chaplaincy services, that can be 
directly funded by the Government consistent with the Establishment 
Clause.'' As the Agencies recognized in the 2016 Rule, there may be 
limited instances in which religious activities in some federally 
funded program contexts are not subject to certain restrictions in 
these rules, such as the requirement that explicitly religious activity 
be separate in time or location from activities supported with direct 
Federal financial assistance. 81 FR 19359-60. HHS will determine on a 
case-by-case basis whether religious activities in specific program 
contexts should be subject to this restriction. See id. For example, 
care provider facilities in the HHS-funded Unaccompanied Children 
(``UC'') Program, see 6 U.S.C. 279, may lawfully provide religious 
services to unaccompanied children to meet their obligations to the 
children receiving services in that program. HHS anticipates that in 
the UC Program and other similar program contexts, HHS will revise the 
model notice to remove any inconsistency between the care providers' 
obligation to provide an unaccompanied child with access to religious 
services of the child's choice whenever possible, and the model 
notice's provision that explicitly religious activities (including 
activities that involve overt religious content such as worship, 
religious instruction, or proselytization) be separate from activities 
supported with direct Federal financial assistance.
    Changes: HHS amends 45 CFR 87.3(k) to remove text limiting the 
beneficiary notice to directly funded social service programs, and to 
require that the pass-through entities administering mandatory formula, 
block, or entitlement grant programs ensure that the notice is 
provided. A new Sec.  87.3(k)(1) is also added to require that the 
notice in directly funded programs be substantially similar to that set 
forth in appendix A. And a new Sec.  87.3(k)(2) is added to require 
that the notice in indirectly funded programs address beneficiary 
protections identified in that section, while giving pass-through 
entities discretion to tailor certain other aspects of the requisite 
notice as appropriate.

[[Page 15692]]

2. Religious Accommodations
    Comments: As alluded to above in Part II.D.1 of the joint preamble, 
commenters requested that HHS remove language from its regulation 
stating that faith-based organizations are eligible to participate in 
Federally funded programs ``on the same basis as any other organization 
and considering a religious accommodation.'' The commenter suggested 
that HHS do so in order to promote consistency among the Agencies' 
regulations.
    Response: In this final rule, HHS deletes the clause ``and 
considering any permissible accommodation'' from 45 CFR 87.3(a). HHS 
believes that this change promotes clarity and avoids redundancy in the 
regulatory text. In addition, HHS makes this change to ensure 
consistency with other Agencies' rule texts, as recommended by the 
commenter.
    This clause was added in the 2020 Rule and retained in the Joint 
NPRM. Upon reflection, however, HHS believes the clause is now 
unnecessary because the obligation to consider religious accommodations 
consistent with applicable Federal law is already separately addressed 
in the final rule at 45 CFR 87.3(b), (c), and (g), as well as in its 
appendices B and C.
    HHS emphasizes that the removal of the clause in question is not a 
substantive change. Nor does it represent any departure from HHS's 
strong commitment to its obligations to comply with the Free Speech and 
Free Exercise Clauses of the First Amendment to the U.S. Constitution 
and with Federal laws that support and protect religious exercise and 
freedom of conscience, including RFRA. HHS remains fully committed to 
thoroughly considering any organization's assertion that an obligation 
imposed upon it conflicts with its rights under those authorities, and 
will provide any accommodations required by Federal law.
    At the same time, HHS disagrees with the recommendation that it 
rescind the clause ``on the same basis as any other organization'' from 
45 CFR 87.3(a). That clause has long been a part of HHS's regulation 
and reflects HHS's deep-seated dedication to ensuring that faith-based 
organizations are not discriminated against in HHS's selection of 
service providers. Moreover, that clause is not redundant in the full 
context of the final rule and remains consistent with other Agencies' 
final regulations.
    Changes: HHS deletes the clause ``and considering any permissible 
accommodation'' from the regulatory text that was proposed in 45 CFR 
87.3(a).
3. The Americans With Disabilities Act
    Comments: Three commenters requested that HHS strike a reference to 
the Americans with Disabilities Act (``ADA'') from HHS's proposed rule 
at 45 CFR 87.3(h) so that the clause is consistent with those of the 
other Agencies. All of the Agencies' proposed rules, including HHS's, 
include a parallel clause stating that faith-based organizations do not 
forfeit their religious exemptions under Title VII of the Civil Rights 
Act of 1964 when participating in Federal programs. HHS's clause is 
unique in including an additional reference to an exemption in the ADA. 
All three commenters recommended that HHS remove the reference to the 
ADA to promote consistency with the other Agencies. Two of the 
commenters also based their recommendation on a belief that religious 
exemptions to nondiscrimination laws should not apply to faith-based 
organizations that are federally funded social service providers.
    Response: HHS agrees that it should remove the reference to the ADA 
from HHS's employment discrimination provision, because that reference 
is inaccurate and confusing in the way it describes the ADA. HHS added 
the ADA reference in 45 CFR 87.3(h) (previously found at 45 CFR 
87.3(f)) in the 2020 Rule. That provision refers to a faith-based 
organization's right to retain its exemption from the Federal 
prohibition on employment discrimination ``on the basis of religion.'' 
The ADA preserves religious organizations' right to engage in hiring on 
the basis of religion by limiting its disability-discrimination 
provisions. But the ADA does not authorize hiring on the basis of 
religion; the Civil Rights Act of 1964 does that. Consequently, HHS 
believes its regulation would be clearer if it removed the ADA 
reference. By removing the ADA reference, HHS will also help ensure 
that its rule is consistent with the other Agencies' regulations.
    This change does not alter the substantive effect of the ADA or any 
other nondiscrimination statute. As noted above, HHS remains committed 
to ensuring that faith-based organizations are not discriminated 
against in HHS's selection of service providers, and to affording 
faith-based and other organizations accommodations from program 
requirements in accordance with Federal law.
    Changes: HHS removes the phrase ``and the Americans with 
Disabilities Act, 42 U.S.C. 12113(d)(2)'' from 45 CFR 87.3(h).
4. Complaint and Enforcement Procedures
    Comments: As discussed in Part II.G.3 of the joint preamble, 
various commenters recommended that the proposed rule be revised to 
identify a point of contact for complaints in the regulatory text. One 
commenter additionally suggested that HHS, in particular, specify its 
enforcement procedures in its regulation. The commenter also maintained 
that the HHS Office for Civil Rights (``OCR'') may not know how to 
investigate complaints and verify compliance with the regulation, and 
accordingly recommended that, in the final rule, HHS clarify how 
complaints for violations of its regulation may be filed and specify 
the procedures for enforcement as well as consequences for violations.
    Response: HHS declines to change 45 CFR 87.3(k)(4) to identify the 
process for filing complaints concerning violations of the rule and to 
make clear HHS's enforcement procedures. Supplementing the proposed 
rule language with greater detail on those topics is beyond the scope 
of this rulemaking. Doing so is also unnecessary because HHS 
enforcement procedures for violations of applicable civil rights 
statutes are already set forth elsewhere in 45 CFR part 80, and 
enforcement procedures for any other violations of this rule are set 
forth in 45 CFR part 75. Further, 45 CFR 87.3(k)(4) already makes clear 
that any complaint concerning violations of this rule may be filed with 
``either the HHS awarding entity or the pass-through entity that 
awarded funds to the organization, which must promptly report the 
complaint to the HHS awarding entity.'' The provision adds that the HHS 
awarding entity will address the complaint in consultation with HHS's 
OCR.
    This process is consistent with HHS's organizational structure and 
delegations of authority. On January 15, 2021, the Secretary delegated 
to OCR the authority to investigate allegations of violations of the 
nondiscrimination provisions in this rule. Also, the individual program 
offices that administer each grant program (``awarding entities'') have 
authority to review and enforce other kinds of potential violations of 
this rule, among other regulations and award terms and conditions that 
are applicable to the specific grant program at issue.
    The enforcement remedies that OCR and the awarding entities may 
adopt in

[[Page 15693]]

the event of any violation of these rules vary according to several 
factors, such as the facts underlying the alleged violation, any prior 
corrective action opportunities, and any other applicable program 
authorities. For example, while awarding entities that administer a 
given program may be bound by a program-specific authority that 
addresses enforcement of program requirements, most HHS programs are 
governed by HHS-wide regulations that address enforcement of program 
requirements at 45 CFR 75.371 (``Remedies for noncompliance'') and 
75.372 (``Termination''). HHS believes that integrating these 
enforcement remedies into this rule text would be unnecessary and, in 
any event, is beyond the scope of this rulemaking.
    As indicated in Part II.G.3 of the joint preamble above, all of the 
Agencies, including HHS, acknowledge that beneficiaries of federally 
funded social service programs need clarity about what office to 
contact if they experience discrimination in violation of these 
regulations. At the same time, HHS has determined that it is not 
feasible to identify a single address or phone number to which all 
complaints concerning this rule may be directed because the awarding 
entity will vary according to the program. Consequently, consistent 
with the approach of other Agencies, as described in Part II.A.4 of the 
joint preamble, HHS revises the model notice of beneficiary protections 
proposed in the Joint NPRM to require the awarding entity to identify a 
point of contact to which complaints can be directed. To help ensure 
that this information is included in notices to beneficiaries, HHS 
includes a requirement at 45 CFR 87.3(k)(1) of this final rule that the 
notice of beneficiary protections in directly funded programs be 
substantially similar to the model notice in its appendix A. As to 
indirectly funded social service programs, a new 45 CFR 87.3(k)(2) of 
this final rule requires that the notice of beneficiary protections in 
indirectly funded programs include similar contact information. That 
notice must also identify the protections regarding nondiscrimination 
on the basis of religion in 45 CFR 87.3(f), and attendance or 
participation in any explicitly religious activities in 45 CFR 
87.3(k)(1)(ii). With these changes, the notice to beneficiaries will 
serve as a resource, in both direct and indirect funding contexts, in 
which a point of contact for any complaints can be found. Finally, HHS 
notes that the name of the HHS program office that has awarded a 
project, and contact information for that office, is also typically 
made available on HHS's website.
    Changes: The regulation at 45 CFR 87.3(k)(1) is revised to require 
that the notice of beneficiary protections in directly funded programs 
adopt language that is substantially similar to that in appendix A, 
which includes a point of contact for any complaints. A new Sec.  
87.3(k)(2) is added to require that beneficiaries and prospective 
beneficiaries in indirectly funded programs receive a notice of 
protections that also includes a point of contact for complaints. 
Section 87.3(k)(4) is unchanged.

D. Department of Housing and Urban Development

    Unless specified below, all comments received by HUD are addressed 
fully in the discussion of cross-cutting issues in Part II of the joint 
preamble, and those responses are adopted by HUD. HUD here provides 
additional HUD-specific responses to comments. This Agency-specific 
discussion is organized in the same manner as the joint preamble.
1. Handling Complaints
    Comments: A commenter recommended that HUD charge its Office of 
Fair Housing and Equal Opportunity (``FHEO'') with handling complaints 
implicating this rule's beneficiary protections. The commenter 
expressed that doing so would be consistent with HUD's current practice 
for handling complaints under its HUD-wide Equal Access Rule, as well 
as complaints under the Violence Against Women Act's (``VAWA's'') 
housing protections.
    Response: HUD recipients must comply with all applicable 
programmatic requirements and Federal civil rights laws and their 
implementing regulations. Program violations will likewise be handled 
in accordance with applicable statutes and regulations. Individuals who 
believe they have experienced--or are about to experience--a program 
violation while accessing or attempting to access programs and 
activities assisted by HUD may complain to the responsible program 
office or to HUD's Center for Faith-Based and Neighborhood Partnerships 
(``CFBNP''). CFBNP has the resources and technical assistance 
experience to work with faith-based and community partners and HUD's 
program offices in ensuring equal participation of faith-based 
organizations in HUD programs and activities. Furthermore, because a 
complaint may allege violations of multiple authorities, CFBNP will 
work with FHEO when a complaint alleges discrimination that is 
potentially cognizable under the Fair Housing Act, Title VI of the 
Civil Rights Act of 1964, Section 504 of the Rehabilitation Act, VAWA, 
the Age Discrimination Act of 1975, or any of the other civil rights 
requirements enforced by FHEO. In addition, if a person believes that 
they are the victim of discrimination prohibited under a different 
Federal civil rights statute or requirement enforced by HUD other than 
those discussed in this rule, they may also file a complaint with FHEO. 
To the extent a recipient is found to have violated a program 
requirement or an applicable civil rights statute, they may be subject 
to sanctions and penalties for such violations as provided for under 
the applicable statutes or regulations.
    Changes: None.
2. Removal of the Reference to Tenets
    Comments: One commenter objected to the extension of the Title VII 
religious-employer exemption to Government-funded positions, and said 
that the 2020 Rule exacerbated this problem by suggesting that Title 
VII permits religious organizations that qualify for the Title VII 
religious-employer exemption to insist upon tenets-based employment 
conditions that would otherwise violate Title VII or the particular 
underlying funding statute in question. The commenter noted that while 
most of the Agencies proposed removing the ``tenets'' related language 
in their proposed regulations, HUD did not. The commenter urged HUD to 
likewise remove the reference to tenets-based employment conditions in 
its regulations.
    Response: For the reasons elaborated in Part II.E of the joint 
preamble, and for consistency with the other Agencies, HUD will remove 
the text on tenets-based employment conditions from its regulations as 
it is unnecessary and potentially misleading.
    Changes: HUD removes language stating that organizations may select 
their employees on the basis of their acceptance of or adherence to 
religious tenets in 24 CFR 5.109(d)(2).
3. Eligibility and Program Requirements
    Comments: One commenter supported the Agencies' proposal to remove 
the phrase ``on the same basis as any other organization and 
considering a religious accommodation'' from their regulations' 
provisions regarding organizations' eligibility for program 
participation. The commenter contended, however, that HUD had failed to 
remove that language from its

[[Page 15694]]

proposed regulation and so should do so in the final rule.
    Response: In this final rule, HUD deletes the clause ``and 
considering any permissible accommodation on a case-by-case basis in 
accordance with the Constitution and laws of the United States'' from 
24 CFR 5.109(c)(1). HUD believes that this change promotes clarity and 
avoids redundancy in the regulatory text. In addition, HUD makes this 
change to promote consistency with other Agencies' rule texts, as 
recommended by the commenter.
    HUD emphasizes that the removal of the clause in question is not a 
substantive change, nor does it represent any departure from HUD's 
strong commitment to its obligations to comply with the Free Speech and 
Free Exercise Clauses of the First Amendment to the U.S. Constitution 
and Federal laws that support and protect religious exercise and 
freedom of conscience, including RFRA. HUD remains fully committed to 
thoroughly considering any organization's assertion that an obligation 
imposed upon it conflicts with its rights under those authorities, and 
will provide such accommodations in accordance with Federal law.
    At the same time, HUD disagrees with the recommendation that it 
rescind the clause ``on the same basis as any other organization'' from 
24 CFR 5.109(c)(1). That clause has long been a part of HUD's 
regulation and reflects HUD's dedication to ensuring that faith-based 
organizations are not discriminated against in HUD's selection of 
service providers. Moreover, HUD has decided to keep that clause so 
that it remains consistent with other Agencies' final regulations.
    Changes: HUD deletes the clause ``and considering any permissible 
accommodation on a case-by-case basis in accordance with the 
Constitution and laws of the United States'' from 24 CFR 5.109(c)(1) as 
proposed.
4. Beneficiary Notice for Indirect Aid Recipients
    Comments: As described in Part II.A.4 of the joint preamble, some 
commenters recommended that the Agencies require that written notice be 
provided to beneficiaries of programs receiving indirect Federal 
financial assistance. While recognizing that those beneficiaries are 
not entitled to all of the protections identified in the notice--in 
particular, the requirement to separate explicitly religious activities 
applies only to activities supported with direct Federal financial 
assistance--the commenters asserted that beneficiaries of indirectly 
funded programs should be notified of the rights to which they are 
entitled.
    Response: HUD agrees with the other Agencies that the rationale for 
adopting the beneficiary notice requirement--improving beneficiaries' 
access to federally funded services by informing them of their rights, 
and thereby removing certain barriers arising from discrimination--
applies equally to all beneficiaries, regardless of whether they are 
participating in programs receiving direct or indirect Federal 
financial assistance. HUD provides indirect Federal financial 
assistance through various programs, including its Housing Choice 
Voucher (``HCV'') program, Project-Based Voucher (``PBV'') program, 
Section 8 Moderate Rehabilitation programs, Housing Opportunities for 
Persons with AIDS (``HOPWA'') program, Continuum of Care (``CoC'') 
program, and Emergency Solution Grants (``ESG'') program.
    Due to the structure of HUD's programs, HUD has determined that the 
indirect aid beneficiary notice will be provided by Public Housing 
Agencies (``PHAs'') for the HCV, PBV, and Section 8 Moderate 
Rehabilitation programs, by the grantees or project sponsors 
responsible for making eligibility determinations for the HOPWA 
program, and the recipients or subrecipients that are responsible for 
determining the eligibility of each family or individual for the CoC 
and ESG programs. The final rule further clarifies that the entities 
that receive indirect Federal financial assistance are not responsible 
for providing the beneficiary notice, to ensure that this requirement 
does not impose a burden that negatively affects private provider 
participation in HUD-funded programs.
    Changes: HUD revises its regulations to add 24 CFR 5.109(g)(2)(ii).
5. Model Written Notice
    Comments: A commenter suggested that HUD follow the example of DOL 
and HHS by providing a model written beneficiary notice as an appendix 
to ensure beneficiaries consistently receive adequate notice of their 
rights. The commenter opined that a model notice will not only help 
ensure beneficiary rights are respected, but also assist Federal 
awardees and minimize administrative burdens. Further, the commenter 
stated that by offering a model notice, the Agencies can help ensure 
the nondiscrimination and noncoercion requirements of the rule are 
effective in minimizing the risk that beneficiaries will encounter 
discrimination when accessing critical services.
    Response: HUD agrees with the commenter that providing a model 
beneficiary notice will ensure that beneficiaries are aware of their 
rights and that the notice will minimize the risk that beneficiaries 
will encounter discrimination. Under the final rule, the model written 
notice will ensure beneficiaries consistently receive adequate notice 
and will provide clarity for beneficiaries regarding protections for 
them. Accordingly, HUD incorporates a model beneficiary notice in this 
final rule.
    Changes: HUD adds a model beneficiary notice to accompany this 
final rule in 24 CFR part 5, appendix C.

E. Department of Education

    Unless otherwise specified, all comments received by ED are 
addressed fully in the discussion of cross-cutting issues in Part II of 
the joint preamble, and those responses are adopted by ED. ED addresses 
in this part of the preamble the ED-specific comments not fully 
addressed in Part II of this preamble. ED does not discuss in this part 
of the preamble minor or technical changes that were made to provide 
greater consistency or simplify the language in its regulations.
1. Beneficiary Protections
    Comments: One commenter recommended that ED charge its Office for 
Civil Rights (``OCR'') with responsibility for addressing complaints 
regarding compliance with the beneficiary protections set forth in this 
rule.
    Response: ED does not address in this rule which of its components 
will handle complaints regarding compliance with the rule's beneficiary 
protections because the ED components involved in addressing any 
alleged violation of the rule could vary according to multiple factors, 
such as the facts underlying the alleged violation or the existence of 
a dispute resolution system under the applicable program.
    Changes: None.
    Comments: As described in Part II.A.4 of the joint preamble, some 
commenters recommended that, in addition to requiring that the written 
notice of beneficiary rights be provided to beneficiaries of programs 
receiving direct Federal financial assistance, the Agencies should 
require that the notice be provided to beneficiaries of indirect 
Federal financial assistance.
    Response: ED declines to extend its beneficiary notice requirement 
to programs involving indirect Federal financial assistance. Currently, 
ED operates only one such program, the

[[Page 15695]]

District of Columbia Opportunity Scholarship Program authorized under 
the Scholarships for Opportunity and Results (``SOAR'') Act, which 
provides scholarships to enable students from low-income families in 
the District of Columbia to attend a participating private elementary 
or secondary school of their choice. Under this program, a student's 
family must apply and gain admission to a participating private school 
while separately applying for the scholarship. Participating private 
schools from which a student's family may choose include both religious 
and secular schools.
    The SOAR Act includes independent requirements governing religious 
discrimination and participation of religiously affiliated schools. 
Specifically, Congress prohibited a participating private school from 
discriminating against program participants or applicants on the basis 
of religion, as well as race, color, national, origin, or sex. D.C. 
Code 38-1853.08(a). ED's grantee administering the program provides a 
notice of these nondiscrimination requirements as part of the 
scholarship application that parents complete.
    Given the structure of ED's sole indirect aid program and 
considering that a notice of nondiscrimination, including religious 
nondiscrimination, is already provided to applicants for that program, 
ED believes it is unnecessary to adopt additional notice requirements 
for programs providing indirect Federal financial assistance at this 
time.
    Changes: None.
2. Eligibility of Faith-Based Organizations
    Comments: One commenter noted that, unlike most other Agencies, ED 
does not include in its provider notice appendices (appendices A and B 
to 34 CFR part 75) language indicating that an organization may not use 
direct Federal financial assistance to ``support or engage in 
explicitly religious activities.'' The commenter recommended that ED 
add this language to its appendices.
    Response: ED agrees with the commenter that inclusion of this 
language would be helpful to maintain consistency with other Agencies' 
corresponding appendices.
    Changes: ED has revised appendices A and B to 34 CFR part 75 to 
make clear that an organization may not use direct Federal financial 
assistance to ``support or engage in explicitly religious activities 
except when consistent with the Establishment Clause of the First 
Amendment and any other applicable requirements.''

F. Department of Veterans Affairs

    In this section, VA addresses the few VA-specific comments not 
addressed in the joint preamble above. All other comments received by 
VA or otherwise affecting VA's regulations are addressed fully in Part 
II of the joint preamble, and VA adopts those responses.
1. Religion or Religious Belief
    Comments: One commenter suggested that VA update two of its 
nondiscrimination provisions, 38 CFR 61.64(e) and 62.62(e), to replace 
``religion or religious belief'' with ``religion, a religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice.'' The commenter explained that the 
inclusion of this language would further strengthen VA's commitment to 
ensuring that all beneficiaries and prospective beneficiaries have 
access to federally funded services and programs without unnecessary 
barriers and free from discrimination.
    Response: VA agrees with the commenter's suggestion. VA's proposed 
regulation text at 38 CFR 50.2(d) already stated that ``[a]ny 
organization that participates in programs funded by Federal financial 
assistance from the department shall not . . . discriminate against a 
program beneficiary or prospective program beneficiary on the basis of 
religion, a religious belief, a refusal to hold a religious belief, or 
a refusal to attend or participate in a religious practice.'' In an 
oversight, however, VA used different phrasing in the proposed versions 
of 38 CFR 61.64(e) and 62.62(e). For consistency within its own 
regulations and with those of the other Agencies, VA has revised the 
text in 38 CFR 61.64(e) and 62.62(e) of this final rule to likewise use 
the phrase ``religion, a religious belief, a refusal to hold a 
religious belief, or a refusal to attend or participate in a religious 
practice.''
    Changes: VA revises 38 CFR 61.64(e) and 62.62(e) to incorporate the 
phrase ``religion, a religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious 
practice.''
2. Participation in VA Programs or Services
    Comments: The regulation at 38 CFR 50.2(e) prohibits several forms 
of discrimination against providers participating in VA programs or 
services. One commenter suggested deleting the first sentence of that 
provision, which reads as follows: ``A faith-based organization is not 
rendered ineligible by its religious exercise or affiliation to access 
and participate in Department programs.'' The commenter suggested that 
the sentence is repetitive of the substantive prohibitions stated 
elsewhere in 38 CFR 50.2(e), and urged that deleting it would avoid 
confusion and advance consistency.
    Response: VA agrees that the first sentence of 38 CFR 50.2(e) is 
repetitive of the other language in that provision guaranteeing equal 
access to VA programming for faith-based organizations and so removes 
that sentence in this final rule.
    Changes: VA revises 38 CFR 50.2(e) to remove the first sentence.

G. Department of Homeland Security

    DHS received several public comments that specifically addressed 
DHS's proposed regulatory changes. The majority of the comments 
requested that DHS revise its regulations for consistency in regulatory 
language with the other Agencies, and several commenters also suggested 
specific revisions to provide clarity and avoid confusion. DHS 
addresses these comments below. All other comments received by DHS, or 
that affect DHS's regulations, are addressed in Part II of the joint 
preamble, and DHS adopts those responses.
    Comments: One commenter recommended that DHS amend its definition 
of ``indirect Federal financial assistance'' in 6 CFR 19.2 to be 
consistent with the language used by the majority of the Agencies. 
Specifically, the commenter recommended that DHS add ``not a choice of 
the Government'' after ``genuinely independent and private choice of a 
beneficiary.''
    Response: DHS agrees that its omitting this additional phrase could 
be confusing and would hinder the goal of maximizing consistency across 
the Agencies' regulations. Accordingly, DHS amends the text of 6 CFR 
19.2 to add that phrase, and thereby to maintain consistency of 
language among the Agencies.
    Changes: DHS amends 6 CFR 19.2 by adding the phrase ``and not a 
choice of the Government'' to the definition of ``indirect Federal 
financial assistance.''
    Comments: Several commenters suggested that DHS amend 6 CFR 19.3 
and 19.4 and its appendix A to clarify DHS's regulatory language 
prohibiting discrimination against religious organizations. In 
particular, commenters suggested that DHS change the phrase ``because 
such organization is motivated or influenced by religious faith to 
provide social services'' to ``because of such organization's religious 
character, motives, or affiliation, or lack thereof,''

[[Page 15696]]

which the commenter asserts is much clearer. Finally, another commenter 
recommended that DHS amend its appendix A to add ``or lack thereof'' 
after ``religious character, motives, or affiliation'' in Sec.  19.3.
    Response: DHS agrees with the commenters that it should amend 6 CFR 
19.3 and 19.4 and its appendix A in the manner suggested. As explained 
in Part II.D.1 of the joint preamble, the suggested formulation makes 
the scope of the prohibition on discrimination clearer. This change 
will also promote consistency among the Agencies' regulations.
    Changes: DHS amends the text of 6 CFR 19.3(g)(1) and 19.4(c) and 
appendix A to 6 CFR part 19 as suggested by commenters.
    Comments: Commenters observed that DHS and a couple of other 
Agencies proposed rule text in the Joint NPRM that included a religious 
accommodations clause not found in the remaining Agencies' rule text. 
Specifically, the commenters noted that DHS proposed that 6 CFR 19.3 
state: ``Faith-based organizations are eligible, on the same basis as 
any other organization, and considering any permissible accommodation 
appropriate under the Constitution and other provisions of Federal law, 
to seek and receive direct financial assistance from DHS for social 
service programs or to participate in social service programs 
administered or financed by DHS.'' See 88 FR 2412. By contrast, other 
Agencies omitted the reference to ``any permissible accommodation'' in 
their nondiscrimination provisions. Apart from language consistency, 
the commenters also asserted that the accommodations clause in DHS's 
regulations is confusing.
    Response: DHS agrees with the commenters' suggestion and removes 
the ``any permissible accommodation'' language from its final 
regulations. That language was not intended to have any substantive 
effect, so its removal likewise effects no substantive change. DHS is 
fully committed to granting constitutionally and statutorily required 
accommodations, as it must, irrespective of whether that commitment is 
restated in this context. DHS recognizes, however, that including such 
accommodations language, in deviation from other Agencies' regulatory 
text, could invite readers to infer a substantive difference in 
meaning, contrary to DHS's regulatory intent. DHS therefore deletes the 
``any permissible accommodation'' language in this final rule.
    Changes: DHS removes the phrase ``any permissible accommodation'' 
from 6 CFR 19.3(a).

H. Agency for International Development

    Unless otherwise specified, those comments received by USAID or 
affecting USAID's regulations are addressed fully in Part II of the 
joint preamble, and USAID adopts those responses except where noted. In 
the Joint NPRM, USAID inadvertently removed its existing regulatory 
language related to accommodations without replacing it with the 
intended new language. USAID adopts the discussion of accommodations in 
Part II of the joint preamble and has updated its amendatory text 
accordingly. USAID addresses in this part of the preamble the USAID-
specific comments not addressed in the joint preamble and provides 
USAID-specific findings and certifications. USAID does not discuss in 
this part of the preamble minor or technical changes that were made to 
provide greater consistency or simplify the language in the 
regulations.
1. Beneficiary Notice Requirement
    As explained in the Joint NPRM, and in footnotes 1 and 2 of the 
joint preamble, as a result of several distinctive characteristics of 
its programs, USAID does not adopt the discussion of the cross-cutting 
comments related to the beneficiary notice requirements in Part II.A.4 
of the joint preamble. Instead, USAID addresses the comments it 
received on that topic in the following discussion.
    Comments: USAID received three comments regarding its proposal to 
refrain from adopting a written beneficiary notice requirement. One 
commenter urged USAID to require written notice to beneficiaries of 
their right to be free from religious discrimination in all relevant 
local languages, arguing that, if USAID failed to do so, beneficiaries 
of USAID-funded programs would have fewer protections than 
beneficiaries of other federally funded programs. Another commenter 
acknowledged that the unique international context in which USAID 
operates may warrant some adjustment to the beneficiary notices 
provided by other Agencies, but argued that some form of notice should 
still be required. Another commenter, by contrast, contended that while 
the beneficiary notice should be universally required by domestic 
agencies, it should not apply to USAID's programs.
    Response: At this time, USAID declines to adopt a requirement that 
all beneficiaries of USAID-funded programs receive written notice of a 
right to be free from religious discrimination. USAID is, however, 
exploring ways to effectively address current challenges associated 
with written notices in order to potentially disseminate information 
about beneficiary protections more broadly in the future.
    USAID acknowledges commenters' suggestions that the value of 
religious nondiscrimination protections for beneficiaries is 
strengthened when beneficiaries are aware that they have such 
protections. As another commenter explained, however, USAID's global 
programming means USAID operates under different circumstances than the 
eight other domestically focused Agencies. USAID funds assistance in 
more than 100 countries, many of which have multiple official or 
national languages, often in addition to countless local languages that 
are the actual primary language of USAID beneficiaries. See USAID, 
Fiscal Year 2023 Agency Financial Report at iii (Nov. 14, 2023), 
https://www.usaid.gov/sites/default/files/2023-11/USAID_2023AFR_508.pdf. USAID-funded assistance also often targets some 
of the most vulnerable populations in the world, and many of these 
communities have varying degrees of literacy, making other-than-written 
forms of communication necessary. While language and literacy obstacles 
can also affect U.S. domestic programs administered by the other 
Agencies, these issues affect USAID programs on a much wider scale and 
highlight some of the challenges that impede meaningful dissemination 
of a written beneficiary notice throughout USAID-funded programs.
    USAID does not concur with the comment that the Agency lacks 
adequate religious nondiscrimination protections for beneficiaries. 
USAID's existing regulations and award terms make explicit that an 
organization that participates in programs funded by financial 
assistance from USAID, including through an award or subaward, must 
not, in providing services, discriminate against a program beneficiary 
or prospective program beneficiary on the basis of religion, a 
religious belief, a refusal to hold a religious belief, or a refusal to 
attend or participate in a religious practice.
    Changes: None.
2. Alternative Provider Requirements
    USAID does not adopt the discussion of the cross-cutting comments 
related to the alternative provider requirements in Part II.A.4 of the 
joint preamble. Instead, USAID addresses the comments it

[[Page 15697]]

received on that topic in the following discussion.
    Comments: USAID received two comments regarding its proposal to 
refrain from adopting an alternative provider referral requirement. The 
first commenter urged USAID to adopt an alternative provider referral 
requirement akin to what the other Agencies adopted in the 2016 Rule. 
In the alternative, the commenter encouraged USAID to consider adopting 
the modified referral requirement that the rest of the domestically 
focused Agencies proposed in the Joint NPRM, under which USAID would 
attempt to identify an alternative provider if a beneficiary were to 
object to the nature of a service provider, regardless of whether that 
provider was religious or secular. The second commenter, in contrast, 
argued that USAID should not adopt an alternative provider requirement 
due to the different circumstances in which USAID operates.
    Response: USAID declines to adopt an alternative provider referral 
requirement at this time. USAID agrees with the second commenter that 
it operates under different circumstances than the other eight 
domestically focused agencies. As explained above, USAID funds 
activities in more than 100 countries, often in some of the hardest-to-
reach places on earth, where social services are often not readily 
available. Furthermore, it may be difficult to locate alternatives 
depending on the cultural and religious context of the country in which 
USAID is operating. USAID also notes that it communicates and promotes 
important religious freedom messages through separate, targeted 
programs, such as its democracy, rights, and government initiatives.
    Changes: None.
3. Appendices A and B
    Comments: USAID received one comment urging it to adopt an appendix 
A (Notice or Announcement of Award Opportunities) and an appendix B 
(Notice of Award or Contract).
    Response: USAID declines to adopt model language similar to that 
found in other Agencies' appendix A or B. USAID already includes this 
information in its notices of funding opportunities and awards through 
inclusion or incorporation by reference of USAID's standard award 
provisions.
    Changes: None.

IV. General Regulatory Certifications

A. Regulatory Planning and Review (Executive Order 12866); Improving 
Regulation and Regulatory Review (Executive Order 13563); Modernizing 
Regulatory Review (Executive Order 14094)

    Under section 6(a) of Executive Order 12866, Regulatory Planning 
and Review, 58 FR 51735 (Sept. 30, 1993), the Office of Management and 
Budget (``OMB'') Office of Information and Regulatory Affairs 
(``OIRA'') determines whether a regulatory action is significant and, 
therefore, subject to the requirements of the Executive order and 
review by OMB. Section 3(f) of Executive Order 12866, as amended by 
section 1(b) of Executive Order 14094, Modernizing Regulatory Review, 
88 FR 21879 (Apr. 6, 2023), defines a ``significant regulatory action'' 
as an action that is likely to result in a rule that may: (1) have an 
annual effect on the economy of $200 million or more, or adversely 
affect in a material way the economy, a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, territorial, or Tribal governments or 
communities; (2) create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impacts of entitlement grants, user fees, or loan 
programs, or the rights and obligations of recipients thereof; or (4) 
raise legal or policy issues for which centralized review would 
meaningfully further the President's priorities or the principles set 
forth in the Executive order. OIRA has determined that this final rule 
is a significant regulatory action under section 3(f) of Executive 
Order 12866, as amended by Executive Order 14094.
    Executive Order 13563, Improving Regulation and Regulatory Review, 
76 FR 3821 (Jan. 18, 2011), directs agencies to propose or adopt a 
regulation only upon a reasoned determination that its benefits justify 
its costs; the regulation is tailored to impose the least burden on 
society, consistent with achieving the regulatory objectives; and in 
choosing among alternative regulatory approaches, the agency has 
selected those approaches that maximize net benefits. Executive Order 
13563 recognizes that some benefits are difficult to quantify and 
provides that, where appropriate and permitted by law, agencies may 
consider and discuss qualitatively values that are difficult or 
impossible to quantify, including equity, human dignity, fairness, and 
distributive impacts.
    The Agencies are issuing this final rule upon a reasoned 
determination that its benefits justify its costs. In choosing among 
alternative regulatory approaches, the Agencies selected those 
approaches that maximize net benefits. Based on the analysis that 
follows, the Agencies believe that this final rule is consistent with 
the principles in Executive Order 13563. The Agencies also have 
determined that this regulatory action does not unduly interfere with 
State, local, or Tribal governments in the exercise of their 
governmental functions.
    In accordance with Executive Orders 12866 and 13563, the Agencies 
have assessed the potential costs, cost savings, and benefits, both 
quantitative and qualitative, of this final rule.
1. Costs
    The potential costs of this final rule are those resulting from 
implementing the beneficiary notice requirements and regulatory 
familiarization. DOL previously estimated the cost of imposing a 
similar beneficiary notice requirement, reporting an upper-bound 
estimate of $200 per organization per year (in 2013 dollars). 81 FR 
19395. This cost estimate was based on the expectation that it would 
take up to $100 in annual material costs and no more than two annual 
burden hours for a Training and Development Specialist to print, 
duplicate, and distribute notices to beneficiaries. Id.
    For this final rule, the Agencies adjusted the estimate to $251.22 
(in 2022) to produce an upper-bound estimate, and also replicated this 
methodology to generate a central estimate of the cost per organization 
per year. For the replication, the Agencies adjusted the annual 
materials cost to $125.61 (in 2022 dollars) using the consumer price 
index (``CPI'').\6\ The Agencies calculated the cost of labor by 
multiplying the estimated time burden by the hourly compensation of a 
Training and Development Specialist (SOC Code 13-1151). According to 
the Bureau of Labor Statistics (``BLS''), the mean hourly wage rate for 
a Training and Development Specialist in May 2022 was $33.59.\7\ For 
this analysis, the Agencies used a fringe benefits rate of

[[Page 15698]]

45 percent,\8\ resulting in a fully loaded hourly compensation rate for 
Training and Development Specialists of $48.71 [= $33.59 + ($33.59 x 
0.45)]. The Agencies estimated that a Training and Development 
Specialist will spend on average two hours ($97.42) printing, 
duplicating, and distributing notices to beneficiaries. The Agencies 
combined these estimates to generate a primary cost per organization of 
the beneficiary notice requirement of $223.03 [= $125.61 + $97.42]. As 
shown in Table 1, the Agencies estimated the total annual cost 
resulting from the beneficiary notice requirement by multiplying the 
number of covered providers of social service programs receiving 
Federal financial assistance by the annual compliance cost of the 
notice requirement, namely their potential central estimate of $223.03. 
All providers receiving direct Federal financial assistance, as well as 
some providers receiving indirect Federal financial assistance, are 
subject to the beneficiary notice requirement in this final rule. The 
Agencies could not, however, differentiate direct recipients from 
indirect recipients in calculating the annual cost of the notice 
requirement, and thus the cost is overstated to the extent that it 
includes indirect recipients who may not be subject to the notice 
requirement, depending on each Agency's determination under its revised 
regulations. On the other hand, for some Agencies, the number of 
providers of social service programs does not include subrecipients due 
to data limitations. This results in an underestimation of the annual 
cost of the beneficiary notice requirement. Overall, the annual cost of 
the final notice requirement is likely to be underestimated in this 
analysis, but not enough to change the determination of the Agencies 
that the benefits justify the costs.
---------------------------------------------------------------------------

    \6\ To calculate this figure, as well as the adjusted upper-
bound estimate, the Agencies used the data on annual averages of the 
CPI available at BLS, CPI Inflation Calculator, https://www.bls.gov/data/inflation_calculator.htm. The average CPI for 2013 was 
$232.957; the average CPI for 2022 was $292.613. Using this ratio, 
the materials cost of $100 in 2013 dollars became $125.61 in 2022 
dollars [= $100 x (292.613/232.957)].
    \7\ BLS, Occupational Employment and Wage Statistics, May 2022, 
https://www.bls.gov/oes/current/oes131151.htm.
    \8\ BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. Wages and salaries averaged $28.31 per 
hour worked in June 2022, while benefit costs averaged $12.72, which 
is a benefits rate of 45 percent. BLS, Employer Costs for Employee 
Compensation Archived News Releases, https://www.bls.gov/bls/news-release/ecec.htm#2022.
    \9\ Most Agencies provided their numbers of recipients of 
financial assistance, and the averages over three years (fiscal year 
(``FY'') 2019 to FY2021), where available, are presented in Table 1.
    \10\ See the discussion preceding Table 1 for the derivation of 
a $223.03 estimate.
    \11\ Average number of recipients of DOJ financial assistance 
from the Office on Violence Against Women and Office of Justice 
Programs in FY2019, FY2020, and FY2021.
    \12\ Average number of recipients of USDA financial assistance 
from the National Institute of Food and Agriculture Program, 
Community Facilities Program, Single Family Housing Preservation 
Grant Program, Multifamily Housing Programs, and nutrition 
assistance programs in FY2019, FY2020, and FY2021. All other USDA 
programs, including via State partners, States and territories of 
the United States, and Tribal organizations, are estimates for the 
current fiscal year.
    \13\ Number of recipients of DOL financial assistance under 
various programs authorized by title I of the Workforce Innovation 
and Opportunity Act in FY2019, FY2020, or FY2021.
    \14\ Average number of prime recipients of HHS financial 
assistance in affected programs in FY2019, FY2020, and FY2021.
    \15\ Average number of recipients of HUD financial assistance 
from the Community Development Block Grant Program, HOME Investment 
Partnerships, Public Housing Agency, Office of Native American 
Programs, Office of Special Needs, Multifamily Assisted Property 
Owners Program, Office of Rural Housing and Economic Development, 
and Comprehensive Housing Counseling Grant Program in FY2019, 
FY2020, and FY2021.
    \16\ Average number of recipients of ED financial assistance 
from discretionary grant programs and formula grant programs in 
FY2019, FY2020, and FY2021.

                     Table 1--Annual Cost of Final Beneficiary Notice Requirement by Agency
----------------------------------------------------------------------------------------------------------------
                                                    Number of social service
                    Agencies                      providers receiving federal   Cost per entity     Annual cost
                                                      financial assistance
                                                                      (A) \9\           (B) \10\     (C = A x B)
----------------------------------------------------------------------------------------------------------------
DOJ.............................................                  \11\ 18,152            $223.03      $4,048,441
USDA............................................                 \12\ 240,810             223.03      53,707,854
DOL.............................................                  \13\ 39,981             223.03       8,916,962
HHS.............................................                  \14\ 10,287             223.03       2,294,310
HUD.............................................                  \15\ 45,321             223.03      10,107,943
ED..............................................                  \16\ 10,941             223.03       2,440,171
VA..............................................                   \17\ 1,027             223.03         229,052
DHS.............................................                  \18\ 10,648             223.03       2,374,823
USAID...........................................                   \19\ 1,251                  0          \20\ 0
                                                 ---------------------------------------------------------------
    Total.......................................  ...........................  .................      84,119,556
----------------------------------------------------------------------------------------------------------------

    The process of regulatory familiarization, or reviewing the final 
rule to determine how it applies, will impose a one-time direct cost on 
all covered providers of social service programs in the first year. The 
Agencies calculated this cost by multiplying the estimated time to 
review the rule by the hourly compensation of a Community and Social 
Service Specialist (SOC Code 21-1099). According to the BLS, the mean 
hourly wage rate for a Community and Social Service Specialist in May 
2022 was $24.82.\21\ For this analysis, the Agencies used a fringe 
benefits rate of 45 percent,\22\ resulting in a fully loaded hourly 
compensation rate for Community and Social Service

[[Page 15699]]

Specialists of $35.99 [= $24.82 + ($24.82 x 0.45)]. The Agencies 
estimated that a Community and Social Service Specialist will spend on 
average 30 minutes reviewing the rule ($18). Table 2 shows the one-time 
regulatory familiarization cost by Agency in the first year.
---------------------------------------------------------------------------

    \17\ Average number of recipients of VA financial assistance 
from the Supportive Services for Veteran Families and Grant and Per 
Diem Programs in FY2019, FY2020, and FY2021. In addition, at the 
time of the proposed rule, VA estimated that the Staff Sergeant 
Parker Gordon Fox Suicide Prevention Grant Program would fund 90 
grantees in each of FY2022 and FY2023. The Staff Sergeant Parker 
Gordon Fox Suicide Prevention Grant Program has awarded funding to 
80 grantees in each of FY2022 and FY2023, resulting in a lower 
annual cost than estimated.
    \18\ Average number of recipients of DHS financial assistance 
from USCIS's Citizenship and Integration Grant Program and the 
Federal Emergency Management Agency's Disaster Case Management, 
Crisis Counseling Assistance and Training Program and Emergency Food 
and Shelter Program in FY2019, FY2020, and FY2021.
    \19\ Average number of prime recipients of USAID financial 
assistance in FY2019, FY2020, and FY2021.
    \20\ USAID is not adopting the beneficiary notice requirement, 
so this final rule will not result in any cost to recipients of 
financial assistance from USAID.
    \21\ BLS, Occupational Employment and Wage Statistics, May 2022, 
https://www.bls.gov/oes/current/oes211099.htm.
    \22\ BLS, Employer Costs for Employee Compensation, https://www.bls.gov/ncs/data.htm. Wages and salaries averaged $26.22 per 
hour worked in 2020, while benefit costs averaged $11.99, which is a 
benefits rate of 46 percent.

                           Table 2--One-Time Regulatory Familiarization Cost by Agency
----------------------------------------------------------------------------------------------------------------
                                                    Number of social service                        Cost in the
                    Agencies                               providers            Cost per entity     first year
                                                                          (A)                (B)     (C = A x B)
----------------------------------------------------------------------------------------------------------------
DOJ.............................................                       18,152                $18        $326,736
USDA............................................                      240,810                 18       4,334,580
DOL.............................................                       39,981                 18         719,658
HHS.............................................                       10,287                 18         185,166
HUD.............................................                       45,321                 18         815,778
ED..............................................                       10,941                 18         196,938
VA..............................................                        1,027                 18          18,486
DHS.............................................                       10,648                 18         191,664
USAID...........................................                        1,251                 18          22,518
                                                 ---------------------------------------------------------------
    Total.......................................  ...........................  .................       6,811,524
----------------------------------------------------------------------------------------------------------------

    Table 3 shows the total annualized cost at a seven percent and a 
three percent discounting for the final beneficiary notice requirement 
and the one-time regulatory familiarization cost. For example, the 
annualized cost for DOL-regulated entities is $9,018,626 at a seven 
percent discounting. The total annualized cost for all nine Agencies is 
$85,081,821 at a seven percent discounting. This total cost estimate is 
likely to be understated because some subrecipients are not included in 
the analysis, but not enough to change the determination of the 
Agencies that the benefits of the beneficiary notice requirement 
justify its costs.

                          Table 3--Total Cost of Final Beneficiary Notice Requirement and Regulatory Familiarization by Agency
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Annual cost of final                               Total annualized cost  Total annualized cost
                       Agencies                           beneficiary notice      The one-time regulatory       at a 7 percent         at a 3 percent
                                                             requirement           familiarization cost          discounting            discounting
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOJ..................................................               $4,048,078                    $326,736             $4,094,597             $4,086,381
USDA.................................................               53,703,038                   4,334,580             54,320,185             54,211,183
DOL..................................................                8,916,163                     719,658              9,018,626              9,000,529
HHS..................................................                2,294,104                     185,166              2,320,467              2,315,811
HUD..................................................               10,107,036                     815,778             10,223,185             10,202,670
ED...................................................                2,439,952                     196,938              2,467,992              2,463,040
VA...................................................                  229,031                      18,486                231,663                231,198
DHS..................................................                2,374,610                     191,664              2,401,899              2,397,079
USAID................................................                        0                      22,518                  3,206                  2,640
                                                      --------------------------------------------------------------------------------------------------
    Total............................................  .......................  ..........................             85,081,821             84,910,532
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Cost Savings
    The final beneficiary notice requirement could provide some cost 
savings to beneficiaries who may be able to receive free information 
about alternative providers in their area and therefore may no longer 
need to investigate alternative providers on their own. While the 
Agencies cannot quantify this cost savings with a reasonable degree of 
confidence, the Agencies expect this cost savings to be insignificant 
because the number of beneficiaries who incur costs to identify 
alternative providers is likely very small.
3. Benefits
    As noted above, section 1(c) of Executive Order 13563 recognizes 
that some benefits and costs are difficult to quantify and provides 
that, where appropriate and permitted by law, agencies may consider and 
discuss qualitative values that are difficult or impossible to 
quantify, including equity, human dignity, and distributive impacts. 76 
FR 3821. The Agencies recognize a non-quantified benefit to social 
service providers in the form of increased clarity, consistency, and 
fairness that will result from imposing uniform notice requirements on 
faith-based and secular organizations alike, in accordance with the 
longstanding Federal policy that faith-based organizations are eligible 
to participate in grant-making programs on the same basis as other 
organizations. The final rule may also benefit providers in that it 
would provide information, where the Agencies determine appropriate, 
that could ultimately connect them with beneficiaries who are in need 
of their services. Additionally, in situations in which beneficiaries 
lack true private choice, the final rule will benefit faith-based 
organizations by enabling them to continue operating indirect aid 
programs, consistent with Executive Order 14015's recognition that 
faith-based organizations are essential to the delivery of social 
services.
    The final rule will also benefit beneficiaries in several important 
ways. Specifically, the final beneficiary notice requirement will 
result both in tangible benefits for beneficiaries, as the reduction of 
certain barriers due to discrimination improves access to federally 
funded services, and in unquantifiable dignitary benefits associated 
with avoiding discrimination. Additionally, the final referral option 
will make it easier for

[[Page 15700]]

beneficiaries who object to receiving services from one provider to 
learn about alternative providers. And, where such alternatives are 
unavailable as a practical matter, the final rule will allow an Agency 
to ensure that beneficiaries are not effectively required to 
participate in religious activities in order to receive the benefits of 
federally funded programs. Finally, the final rule will benefit all 
beneficiaries, including those who would freely choose faith-based 
providers, by expanding the universe of providers reasonably available 
to them.

B. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act of 1980 (``RFA''), 5 U.S.C. 601 et 
seq., as amended by the Small Business Regulatory Enforcement Fairness 
Act of 1996, Public Law 104-121, tit. II, 110 Stat. 847, 857, requires 
Federal agencies engaged in rulemaking to assess the impact of their 
proposals on small entities, consider alternatives to minimize that 
impact, and solicit public comment on their analyses. The RFA requires 
the assessment of the impact of a regulation on a wide range of small 
entities, including small businesses, not-for-profit organizations, and 
small governmental jurisdictions. Agencies must perform a review to 
determine whether a rule will have a significant economic impact on a 
substantial number of small entities. 5 U.S.C. 603, 604.
    The Agencies believe that the ``central estimate'' cost of $241.03 
per provider in the first year is far less than one percent of the 
annual revenue of even the smallest providers of social services. 
Therefore, the Agencies certify that this final rule will not have a 
significant economic impact on a substantial number of small entities.

C. Civil Justice Reform (Executive Order 12988)

    Executive Order 12988, Civil Justice Reform, 61 FR 4729 (Feb. 5, 
1996), provides that agencies shall draft regulations that meet 
applicable standards to avoid drafting errors and ambiguity, minimize 
litigation, provide clear legal standards for affecting conduct, and 
promote simplification and burden reduction. This final rule meets the 
applicable standards set forth in sections 3(a) and 3(b)(2) of 
Executive Order 12988, 61 FR 4731-32.

D. Consultation and Coordination With Indian Tribal Governments 
(Executive Order 13175)

    The Agencies have reviewed this final rule in accordance with 
Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments, 65 FR 67249 (Nov. 6, 2000). Tribal sovereignty and self-
governance will not be affected by this final rule, consistent with 
existing protections for Indian Tribes under Federal law, including the 
Indian Civil Rights Act. As nothing in this rule affects the existing 
prerogatives and authority of Indian Tribes, no interagency 
consultation with Indian Tribes was conducted regarding the rule. The 
Agencies may, however, conduct Agency-specific Tribal consultations 
should the implementation of an Agency's particular program merit 
further Tribal consultation or coordination.

E. Federalism

    Section 6 of Executive Order 13132, Federalism, 64 FR 43255, 43257-
58 (Aug. 4, 1999), requires Federal agencies to consult with State 
entities when a regulation or policy will have a substantial direct 
effect on the States, the relationship between the National Government 
and the States, or the distribution of power and responsibilities among 
the various levels of government within the meaning of the Executive 
order. Section 3(b) of the Executive order further provides that 
Federal agencies may implement a regulation limiting the policymaking 
discretion of the States only if constitutional or statutory authority 
permits the regulation and the regulation is appropriate in light of 
the presence of a problem of national significance. Id. at 43256. The 
final rule does not have a substantial direct effect on the States, the 
relationship between the National Government and the States, or the 
distribution of power and responsibilities among the various levels of 
government, within the meaning of Executive Order 13132. Furthermore, 
relevant constitutional and statutory authority supports the final 
rule, and it is appropriate in light of the presence of a problem of 
national significance.

F. Paperwork Reduction Act

    This final rule does not contain any new or revised ``collection[s] 
of information'' as defined by the Paperwork Reduction Act of 1995 
(``PRA''), 44 U.S.C. 3502(3). The Agencies have determined in 
consultation with OIRA that the requirement to provide written notice 
to beneficiaries of certain nondiscrimination protections is not a 
collection of information subject to the PRA because the Federal 
Government has provided or will provide the information that a provider 
must use. See 5 CFR 1320.3(c)(2).

G. Unfunded Mandates Reform Act

    Section 202(a) of the Unfunded Mandates Reform Act of 1995 
(``UMRA''), 2 U.S.C. 1532(a), requires that a Federal agency determine 
whether a regulation proposes a Federal mandate that may result in the 
expenditure by State, local, or Tribal governments, in the aggregate, 
or by the private sector, of $100 million or more in a single year 
(adjusted annually for inflation). The inflation-adjusted value of $100 
million in 1995 was approximately $178 million in 2021 based on the CPI 
for All Urban Consumers.\23\ If a Federal mandate would result in 
expenditures in excess of the threshold, UMRA requires the agency to 
prepare a written statement containing, among other things, a 
qualitative and quantitative assessment of the anticipated costs and 
benefits of the Federal mandate. 2 U.S.C. 1532(a). The Agencies have 
reviewed this final rule in accordance with UMRA and determined that 
the total cost to implement the rule in any one year will not meet or 
exceed the threshold. The final rule does not include any Federal 
mandate that may result in increased expenditure by State, local, and 
Tribal governments in the aggregate of more than the threshold, or 
increased expenditures by the private sector of more than the 
threshold.\24\ Accordingly, UMRA does not require any further action.
---------------------------------------------------------------------------

    \23\ The Agencies again derived this figure from the data on 
annual averages of the CPI available at BLS, CPI Inflation 
Calculator, https://www.bls.gov/data/inflation_calculator.htm. The 
average CPI for 1995 was $152.40; the average CPI for 2021 was 
$270.97. Using this ratio, $100 million in 1995 dollars became $178 
million in 2021 dollars [= $100,000,000 x (270.970/152.40)].
    \24\ See also 2 U.S.C. 1503 (excluding from UMRA's ambit any 
provision in a proposed or final regulation that, among other 
things, enforces constitutional rights of individuals; establishes 
or enforces any statutory rights that prohibit discrimination on the 
basis of race, color, religion, sex, national origin, age, handicap, 
or disability; or provides for emergency assistance or relief at the 
request of any State, local, or Tribal government or any official of 
a State, local, or Tribal government).
---------------------------------------------------------------------------

H. Assessment of Educational Impact

    In the Joint NPRM, the Secretary of Education requested comments on 
whether the proposed regulations would require transmission of 
information that any other agency or authority of the United States 
gathers or makes available. Based on the responses to the Joint NPRM 
and the Agencies' review, the Agencies have determined that these final 
regulations do not require transmission of information that any other 
agency or authority of the United States gathers or makes available.

[[Page 15701]]

List of Subjects

2 CFR Part 3474

    Accounting, Administrative practice and procedure, Adult education, 
Aged, Agriculture, American Samoa, Bilingual education, Blind, Business 
and industry, Civil rights, Colleges and universities, Communications, 
Community development, Community facilities, Copyright, Credit, 
Cultural exchange programs, Educational facilities, Educational 
research, Education, Education of disadvantaged, Education of 
individuals with disabilities, Educational study programs, Electric 
power, Electric power rates, Electric utilities, Elementary and 
secondary education, Energy conservation, Equal educational 
opportunity, Federally affected areas, Government contracts, Grant 
programs, Grants administration, Guam, Home improvement, Homeless, 
Hospitals, Housing, Human research subjects, Indians, Indians--
education, Infants and children, Insurance, Intergovernmental 
relations, International organizations, Inventions and patents, Loan 
programs, Manpower training programs, Migrant labor, Mortgage 
insurance, Nonprofit organizations, Northern Mariana Islands, Pacific 
Islands Trust Territories, Privacy, Renewable energy, Reporting and 
recordkeeping requirements, Rural areas, Scholarships and fellowships, 
School construction, Schools, Science and technology, Securities, Small 
businesses, State and local governments, Student aid, Teachers, 
Telecommunications, Telephone, Urban areas, Veterans, Virgin Islands, 
Vocational education, Vocational rehabilitation, Waste treatment and 
disposal, Water pollution control, Water resources, Water supply, 
Watersheds, Women.

6 CFR Part 19

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

7 CFR Part 16

    Administrative practice and procedure, Grant programs.

22 CFR Part 205

    Foreign aid, Grant programs, Nonprofit organizations.

24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Crime, 
Government contracts, Grant programs--housing and community 
development, Individuals with disabilities, Intergovernmental 
relations, Loan programs--housing and community development, Low and 
moderate income housing, Mortgage insurance, Penalties, Pets, Public 
housing, Rent subsidies, Reporting and recordkeeping requirements, 
Social security, Unemployment compensation, Wages.

28 CFR Part 38

    Administrative practice and procedure, Grant programs, Reporting 
and recordkeeping requirements.

29 CFR Part 2

    Administrative practice and procedure, Grant programs, Religious 
discrimination, Reporting and recordkeeping requirements.

34 CFR Part 75

    Accounting, Copyright, Education, Grant programs--education, 
Indemnity payments, Inventions and patents, Private schools, Reporting 
and recordkeeping requirements, Youth organizations.

34 CFR Part 76

    Accounting, Administrative practice and procedure, American Samoa, 
Education, Grant programs--education, Guam, Northern Mariana Islands, 
Pacific Islands Trust Territory, Prisons, Private schools, Reporting 
and recordkeeping requirements, Virgin Islands, Youth organizations.

38 CFR Part 50

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Day care, Dental health, Drug abuse, Government contracts, Grant 
programs--health, Grant programs--veterans, Health care, Health 
facilities, Health professions, Health records, Homeless, Mental health 
programs, Per diem program, Reporting and recordkeeping requirements, 
Travel and transportation expenses, Veterans.

38 CFR Part 61

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Day care, Dental health, Drug abuse, Government contracts, Grant 
programs--health, Grant programs--veterans, Health care, Health 
facilities, Health professions, Health records, Homeless, Mental health 
programs, Per diem program, Reporting and recordkeeping requirements, 
Travel and transportation expenses, Veterans.

38 CFR Part 62

    Administrative practice and procedure, Day care, Disability 
benefits, Government contracts, Grant programs--health, Grant 
programs--housing and community development, Grant programs--Veterans, 
Health care, Homeless, Housing, Indians--lands, Individuals with 
disabilities, Low and moderate income housing, Manpower training 
programs, Medicaid, Medicare, Public assistance programs, Public 
housing, Relocation assistance, Rent subsidies, Reporting and 
recordkeeping requirements, Rural areas, Social security, Supplemental 
Security Income (SSI), Travel and transportation expenses, Unemployment 
compensation.

45 CFR Part 87

    Administrative practice and procedure, Grant programs--social 
programs, Nonprofit organizations, Public assistance programs.

DEPARTMENT OF EDUCATION

    For the reasons set forth in the preamble, the Secretary of 
Education amends part 3474 of title 2 of the CFR and parts 75 and 76 of 
title 34 of the CFR, respectively, as follows:

Title 2--Grants and Agreements

PART 3474--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, 
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS

0
1. Revise the authority citation for part 3474 to read as follows:

    Authority:  20 U.S.C. 1221e-3, 3474; 42 U.S.C. 2000bb et seq.; 
E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 
FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 13831, 83 FR 20715, 3 CFR, 
2018 Comp., p. 806; and 2 CFR part 200, unless otherwise noted.


0
2. Amend Sec.  3474.15 by:
0
a. Revising paragraph (b).
0
b. Removing note 1 to paragraph (e)(1).
0
c. Revising paragraph (f).
0
d. In paragraph (g), removing the second sentence.
    The revisions read as follows:


Sec.  3474.15  Contracting with faith-based organizations and 
nondiscrimination.

* * * * *
    (b)(1) A faith-based organization is eligible to contract with 
grantees and subgrantees, including States, on the same basis as any 
other private organization.
    (2)(i) In selecting providers of goods and services, grantees and 
subgrantees, including States--
    (A) May not discriminate for or against a private organization on 
the basis of the organization's religious character, motives, or 
affiliation, or lack

[[Page 15702]]

thereof, or on the basis of conduct that would not be considered 
grounds to favor or disfavor a similarly situated secular organization; 
and
    (B) Must ensure that the award of contracts is free from political 
interference, or even the appearance of such interference, and is done 
on the basis of merit, not on the basis of religion or religious 
belief, or lack thereof.
    (ii) Notices or announcements of award opportunities and notices of 
award or contracts must include language substantially similar to that 
in appendices A and B, respectively, to 34 CFR part 75.
    (3) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by a grantee or 
subgrantee in administering Federal financial services from the 
Department may require faith-based organizations to provide assurances 
or notices if they are not required of non-faith-based organizations. 
Any restrictions on the use of grant funds must apply equally to faith-
based and non-faith-based organizations. All organizations that 
participate in Department programs or services, including organizations 
with religious character, motives, or affiliation, must carry out 
eligible activities in accordance with all program requirements, 
including those prohibiting the use of direct Federal financial 
assistance to engage in explicitly religious activities, subject to any 
accommodations that are granted to organizations on a case-by-case 
basis in accordance with the Constitution and laws of the United 
States, including Federal civil rights laws.
    (4) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by a grantee or 
subgrantee may disqualify faith-based organizations from participating 
in Department-funded programs or services on the basis of the 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to disqualify a similarly situated secular organization.
    (5) Nothing in this section may be construed to preclude the 
Department from making an accommodation with respect to one or more 
program requirements on a case-by-case basis in accordance with the 
Constitution and laws of the United States, including Federal civil 
rights laws.
    (6) Neither a State nor the Department may disqualify an 
organization from participating in any Department program for which it 
is otherwise eligible on the basis of the organization's indication 
that it may request an accommodation with respect to one or more 
program requirements, unless the organization has made clear that the 
accommodation is necessary to its participation and the Department has 
determined that it would deny the accommodation.
* * * * *
    (f) A private organization that contracts with a grantee or 
subgrantee, including a State, may not discriminate against a 
beneficiary or prospective beneficiary in the provision of program 
goods or services, or in outreach activities related to such goods or 
services, on the basis of religion or religious belief, a refusal to 
hold a religious belief, or a refusal to attend or participate in a 
religious practice. However, an organization that participates in a 
program funded by indirect Federal financial assistance need not modify 
its program activities to accommodate a beneficiary who chooses to 
expend the indirect aid on the organization's program.
* * * * *

Title 34--Education

PART 75--DIRECT GRANT PROGRAMS

0
3. Revise the authority citation for part 75 to read as follows:

    Authority: 20 U.S.C. 1221e-3 and 3474; E.O. 13279, 67 FR 77141, 
3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 71319, 3 CFR, 2010 
Comp., p. 273; and E.O. 13831, 83 FR 20715, 3 CFR, 2018 Comp., p. 
806, unless otherwise noted.


Sec.  75.51  [Amended]

0
4. Amend Sec.  75.51 by:
0
a. In paragraph (b)(3), adding ``or'' at the end of the paragraph.
0
b. In paragraph (b)(4), removing ``; or'' and adding, in its place, a 
period.
0
c. Removing paragraph (b)(5).

0
5. Amend Sec.  75.52 by:
0
a. Revising paragraphs (a), (c)(3) introductory text, (c)(3)(ii)(B), 
and (c)(3)(iii).
0
b. Removing paragraph (c)(3)(vi) and note 1 to paragraph (d)(1).
0
c. In paragraph (d)(2)(iv), removing the words ``and employees.''
0
d. Revising paragraph (e).
0
e. In paragraph (g), removing the second sentence.
    The revisions read as follows:


Sec.  75.52  Eligibility of faith-based organizations for a grant and 
nondiscrimination against those organizations.

    (a)(1) A faith-based organization is eligible to apply for and to 
receive a grant under a program of the Department on the same basis as 
any other private organization.
    (2)(i) In the selection of grantees, the Department--
    (A) May not discriminate for or against a private organization on 
the basis of the organization's religious character, motives, or 
affiliation, or lack thereof, or on the basis of conduct that would not 
be considered grounds to favor or disfavor a similarly situated secular 
organization; and
    (B) Must ensure that all decisions about grant awards are free from 
political interference, or even the appearance of such interference, 
and are made on the basis of merit, not on the basis of religion or 
religious belief, or the lack thereof.
    (ii) Notices or announcements of award opportunities and notices of 
award or contracts must include language substantially similar to that 
in appendices A and B, respectively, to this part.
    (3) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by the Department may 
require faith-based organizations to provide assurances or notices if 
they are not required of non-faith-based organizations. Any 
restrictions on the use of grant funds must apply equally to faith-
based and non-faith-based organizations. All organizations that receive 
grants under a Department program, including organizations with 
religious character, motives, or affiliation, must carry out eligible 
activities in accordance with all program requirements, including those 
prohibiting the use of direct Federal financial assistance to engage in 
explicitly religious activities, subject to any accommodations that are 
granted to organizations on a case-by-case basis in accordance with the 
Constitution and laws of the United States, including Federal civil 
rights laws.
    (4) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by the Department may 
disqualify faith-based organizations from applying for or receiving 
grants under a Department program on the basis of the organization's 
religious character, motives, or affiliation, or lack thereof, or on 
the basis of conduct that would not be considered grounds to disqualify 
a similarly situated secular organization.
    (5) Nothing in this section may be construed to preclude the 
Department from making an accommodation, including for religious 
exercise, with respect to one or more program

[[Page 15703]]

requirements on a case-by-case basis in accordance with the 
Constitution and laws of the United States, including Federal civil 
rights laws.
    (6) The Department may not disqualify an organization from 
participating in any Department program for which it is eligible on the 
basis of the organization's indication that it may request an 
accommodation with respect to one or more program requirements, unless 
the organization has made clear that the accommodation is necessary to 
its participation and the Department has determined that it would deny 
the accommodation.
* * * * *
    (c) * * *
    (3) For purposes of 2 CFR 3474.15, this section, Sec. Sec.  75.712 
and 75.714, and appendices A and B to this part, the following 
definitions apply:
    (ii) * * *
    (B) The organization receives the assistance wholly as the result 
of the genuine and independent private choice of the beneficiary, not a 
choice of the Government. The availability of adequate secular 
alternatives is a significant factor in determining whether a program 
affords a genuinely independent and private choice.
    (iii) Federal financial assistance means assistance that non-
Federal entities receive or administer in the form of grants, 
contracts, loans, loan guarantees, property, cooperative agreements, 
food commodities, direct appropriations, or other assistance, but does 
not include a tax credit, deduction, or exemption.
* * * * *
    (e) An organization that receives any Federal financial assistance 
under a program of the Department shall not discriminate against a 
beneficiary or prospective beneficiary in the provision of program 
services, or in outreach activities related to such services, on the 
basis of religion or religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious practice. 
However, an organization that participates in a program funded by 
indirect Federal financial assistance need not modify its program 
activities to accommodate a beneficiary who chooses to expend the 
indirect aid on the organization's program.
* * * * *

0
6. Add Sec.  75.712 to read as follows:


Sec.  75.712  Beneficiary protections: Written notice.

    (a) An organization providing social services to beneficiaries 
under a Department program supported by direct Federal financial 
assistance must give written notice to a beneficiary or prospective 
beneficiary of certain protections. Such notice must be given in the 
manner and form prescribed by the Department. This notice must state 
that--
    (1) The organization may not discriminate against a beneficiary or 
prospective beneficiary on the basis of religion, a religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice;
    (2) The organization may not require a beneficiary or prospective 
beneficiary to attend or participate in any explicitly religious 
activities that are offered by the organization, and any participation 
by a beneficiary in such activities must be purely voluntary;
    (3) The organization must separate in time or location any 
privately funded explicitly religious activities from activities 
supported by direct Federal financial assistance; and
    (4) A beneficiary or prospective beneficiary may report an 
organization's violation of these protections, including any denials of 
services or benefits by an organization, by contacting or filing a 
written complaint with the Department.
    (b) The written notice described in paragraph (a) of this section 
must be given to a prospective beneficiary prior to the time they 
enroll in the program or receive services from the program. When the 
nature of the service provided or exigent circumstances make it 
impracticable to provide such written notice in advance of the actual 
service, an organization must provide the notice at the earliest 
available opportunity.
    (c) The Department may determine that the notice described in 
paragraph (a) of this section must inform each beneficiary or 
prospective beneficiary of the option to seek information from the 
Department as to whether there are any other federally funded 
organizations in their area that provide the services available under 
the applicable program.
    (d) The notice that an organization uses to notify beneficiaries or 
prospective beneficiaries of the rights under paragraphs (a) through 
(c) of this section must include language substantially similar to that 
in appendix C to this part.

0
7. Revise appendix A to part 75 to read as follows:

Appendix A to Part 75--Notice or Announcement of Award Opportunities

    (a) Faith-based organizations may apply for this award on the 
same basis as any other private organization, as set forth at, and 
subject to the protections and requirements of, this part and any 
applicable constitutional and statutory requirements, including 42 
U.S.C. 2000bb et seq. The Department will not, in the selection of 
grantees, discriminate for or against an organization on the basis 
of the organization's religious character, motives, or affiliation, 
or lack thereof, or on the basis of conduct that would not be 
considered grounds to favor or disfavor a similarly situated secular 
organization.
    (b) A faith-based organization that participates in this program 
will retain its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (c) A faith-based organization may not use direct Federal 
financial assistance from the Department to support or engage in any 
explicitly religious activities except when consistent with the 
Establishment Clause of the First Amendment and any other applicable 
requirements. Such an organization also may not, in providing 
services funded by the Department, or in outreach activities related 
to such services, discriminate against a program beneficiary or 
prospective program beneficiary on the basis of religion, a 
religious belief, a refusal to hold a religious belief, or a refusal 
to attend or participate in a religious practice.


0
8. Revise appendix B to part 75 to read as follows:

Appendix B to Part 75--Notice of Award or Contract

    (a) A faith-based organization that participates in this program 
retains its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (b) A faith-based organization may not use direct Federal 
financial assistance from the Department to support or engage in any 
explicitly religious activities except when consistent with the 
Establishment Clause of the First Amendment and any other applicable 
requirements. Such an organization also may not, in providing 
services funded by the Department, or in outreach activities related 
to such services, discriminate against a program beneficiary or 
prospective program beneficiary on the basis of religion, a 
religious belief, a refusal to hold a religious belief, or a refusal 
to attend or participate in a religious practice.


0
9. Add appendix C to part 75 to read as follows:

Appendix C to Part 75--Written Notice of Beneficiary Protections

    Name of Organization:
    Name of Program:
    Contact Information for Program Staff: [provide name, phone 
number, and email address, if appropriate]
    Because this program is supported in whole or in part by 
financial assistance from the U.S. Department of Education, we are 
required to provide you the following information:
    (1) We may not discriminate against you on the basis of 
religion, a religious belief, a refusal to hold a religious belief, 
or a refusal to attend or participate in a religious practice.

[[Page 15704]]

    (2) We may not require you to attend or participate in any 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) that may be offered by our organization, and any 
participation by you in such activities must be purely voluntary.
    (3) We must separate in time or location any privately funded 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) from activities supported with direct Federal 
financial assistance.
    (4) You may report violations of these protections, including 
any denials of services or benefits by an organization, by 
contacting or filing a written complaint with the U.S. Department of 
Education at [insert applicable contact information].
    [When required by the Department, the notice must also state:] 
(5) If you would like information about whether there are any other 
federally funded organizations that provide the services available 
under this program in your area, please contact the awarding agency.
    This written notice must be given to you before you enroll in 
the program or receive services from the program, unless the nature 
of the service provided or exigent circumstances make it 
impracticable to provide such notice before we provide the actual 
service. In such an instance, this notice must be given to you at 
the earliest available opportunity.

PART 76--STATE-ADMINISTERED PROGRAMS

0
10. Revise the authority citation for part 76 to read as follows:

    Authority: 20 U.S.C. 1221e-3 and 3474; E.O. 13279, 67 FR 77141, 
3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 71319, 3 CFR, 2010 
Comp., p. 273; and E.O. 13831, 83 FR 20715, 3 CFR, 2018 Comp., p. 
806, unless otherwise noted.


0
11. Amend Sec.  76.52 by:
0
a. Revising paragraphs (a), (c)(3) introductory text, (c)(3)(ii)(B), 
and (c)(3)(iii).
0
b. Removing paragraph (c)(3)(vi) and note 1 to paragraph (d)(1).
0
c. In paragraph (d)(2)(iv), removing the words ``and employees.''
0
d. Revising paragraph (e).
0
e. In paragraph (g), removing the second sentence.
    The revisions read as follows:


Sec.  76.52  Eligibility of faith-based organizations for a subgrant 
and nondiscrimination against those organizations.

    (a)(1) A faith-based organization is eligible to apply for and to 
receive a subgrant under a program of the Department on the same basis 
as any other private organization.
    (2)(i) In the selection of subgrantees, States--
    (A) May not discriminate for or against a private organization on 
the basis of the organization's religious character, motives, or 
affiliation, or lack thereof, or on the basis of conduct that would not 
be considered grounds to favor or disfavor a similarly situated secular 
organization; and
    (B) Must ensure that all decisions about subgrants are free from 
political interference, or even the appearance of such interference, 
and are made on the basis of merit, not on the basis of religion or 
religious belief, or a lack thereof.
    (ii) Notices or announcements of award opportunities and notices of 
award or contracts must include language substantially similar to that 
in appendices A and B, respectively, to 34 CFR part 75.
    (3) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by States in 
administering a Department program may require faith-based 
organizations to provide assurances or notices if they are not required 
of non-faith-based organizations. Any restrictions on the use of 
subgrant funds must apply equally to faith-based and non-faith-based 
organizations. All organizations that receive a subgrant from a State 
under a State-Administered Formula Grant program of the Department, 
including organizations with religious character, motives, or 
affiliation, must carry out eligible activities in accordance with all 
program requirements, including those prohibiting the use of direct 
Federal financial assistance to engage in explicitly religious 
activities, subject to any accommodations that are granted to 
organizations on a case-by-case basis in accordance with the 
Constitution and laws of the United States, including Federal civil 
rights laws.
    (4) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by States may 
disqualify faith-based organizations from applying for or receiving 
subgrants under a State-Administered Formula Grant program of the 
Department on the basis of the organization's religious character, 
motives, or affiliation, or lack thereof, or on the basis of conduct 
that would not be considered grounds to disqualify a similarly situated 
secular organization.
    (5) Nothing in this section may be construed to preclude the 
Department from making an accommodation, including for religious 
exercise, with respect to one or more program requirements on a case-
by-case basis in accordance with the Constitution and laws of the 
United States, including Federal civil rights laws.
    (6) Neither a State nor the Department may disqualify an 
organization from participating in any Department program for which it 
is eligible on the basis of the organization's indication that it may 
request an accommodation with respect to one or more program 
requirements, unless the organization has made clear that the 
accommodation is necessary to its participation and the Department has 
determined that it would deny the accommodation.
* * * * *
    (c) * * *
    (3) For purposes of 2 CFR 3474.15, this section, and Sec. Sec.  
76.712 and 76.714, the following definitions apply:
    (ii) * * *
    (B) The organization receives the assistance wholly as the result 
of the genuine and independent private choice of the beneficiary, not a 
choice of the Government. The availability of adequate secular 
alternatives is a significant factor in determining whether a program 
affords a genuinely independent and private choice.
    (iii) Federal financial assistance means assistance that non-
Federal entities receive or administer in the form of grants, 
contracts, loans, loan guarantees, property, cooperative agreements, 
food commodities, direct appropriations, or other assistance, but does 
not include a tax credit, deduction, or exemption.
* * * * *
    (e) An organization that receives any Federal financial assistance 
under a program of the Department shall not discriminate against a 
beneficiary or prospective beneficiary in the provision of program 
services, or in outreach activities related to such services, on the 
basis of religion or religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious practice. 
However, an organization that participates in a program funded by 
indirect Federal financial assistance need not modify its program 
activities to accommodate a beneficiary who chooses to expend the 
indirect aid on the organization's program.
* * * * *

0
12. Add Sec.  76.712 to read as follows:


Sec.  76.712  Beneficiary protections: Written notice.

    (a) An organization providing social services to beneficiaries 
under a Department program supported by direct Federal financial 
assistance must give written notice to a beneficiary or prospective 
beneficiary of certain

[[Page 15705]]

protections. Such notice must be given in the manner and form 
prescribed by the Department. This notice must state that--
    (1) The organization may not discriminate against a beneficiary or 
prospective beneficiary on the basis of religion, a religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice;
    (2) The organization may not require a beneficiary or prospective 
beneficiary to attend or participate in any explicitly religious 
activities that are offered by the organization, and any participation 
by a beneficiary in such activities must be purely voluntary;
    (3) The organization must separate in time or location any 
privately funded explicitly religious activities from activities 
supported by direct Federal financial assistance; and
    (4) A beneficiary or prospective beneficiary may report an 
organization's violation of these protections, including any denials of 
services or benefits by an organization, by contacting or filing a 
written complaint with the Department.
    (b) The written notice described in paragraph (a) of this section 
must be given to a prospective beneficiary prior to the time they 
enroll in the program or receive services from the program. When the 
nature of the service provided or exigent circumstances make it 
impracticable to provide such written notice in advance of the actual 
service, an organization must provide the notice at the earliest 
available opportunity.
    (c) The Department may determine that the notice described in 
paragraph (a) of this section must inform each beneficiary or 
prospective beneficiary of the option to seek information from the 
Department, or a State agency or other entity administering the 
applicable program, as to whether there are any other federally funded 
organizations in their area that provide the services available under 
the applicable program.
    (d) The notice that an organization uses to notify beneficiaries or 
prospective beneficiaries of the rights under paragraphs (a) through 
(c) of this section must include language substantially similar to that 
in appendix C to 34 CFR part 75.

DEPARTMENT OF HOMELAND SECURITY

    For the reasons set forth in the preamble, DHS amends part 19 of 
title 6 of the CFR as follows:

Title 6--Domestic Security

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

0
13. Revise the authority citation for part 19 to read as follows:

    Authority:  5 U.S.C. 301; 6 U.S.C. 101 et seq.; 8 U.S.C. 1101 et 
seq.; 42 U.S.C. 5164, 5183, 5189d; 42 U.S.C. 2000bb et seq.; 42 
U.S.C. 11331 et seq.; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 
258; E.O. 13403, 71 FR 28543, 3 CFR, 2006 Comp., p. 228; E.O. 13498, 
74 FR 6533, 3 CFR, 2009 Comp., p. 219; and E.O. 13559, 75 FR 71319, 
3 CFR, 2010 Comp., p. 273.


0
14. Revise Sec.  19.1 to read as follows:


Sec.  19.1  Purpose.

    It is the policy of the Department of Homeland Security (DHS) to 
ensure the equal treatment of faith-based and other organizations in 
social service programs administered or supported by DHS or its 
component agencies, enabling those organizations to participate in 
providing important social services to beneficiaries. The equal 
treatment policies and requirements contained in this part are 
generally applicable to faith-based and other organizations 
participating or seeking to participate in any such programs. More 
specific policies and requirements regarding the participation of 
faith-based and other organizations in individual programs may be 
provided in the statutes, regulations, or guidance governing those 
programs, such as regulations in title 44 of the Code of Federal 
Regulations. DHS or its components may issue policy guidance and 
reference materials at a future time with respect to the applicability 
of this policy and this part to particular programs.

0
15. Amend Sec.  19.2 by:
0
a. Adding a definition of ``Federal financial assistance'' in 
alphabetical order.
0
b. Removing the definition of ``Financial assistance''.
0
c. In the definition of ``Indirect Federal financial assistance or 
Federal financial assistance provided indirectly'', revising paragraph 
(2).
0
d. Revising the definition of ``Intermediary''.
    The addition and revisions read as follows:


Sec.  19.2  Definitions.

* * * * *
    Federal financial assistance means assistance that non-Federal 
entities receive or administer in the form of grants, contracts, loans, 
loan guarantees, property, cooperative agreements, food commodities, 
direct appropriations, or other assistance, but does not include a tax 
credit, deduction, or exemption.
* * * * *
    Indirect Federal financial assistance or Federal financial 
assistance provided indirectly * * *
    (2) The organization receives the assistance wholly as a result of 
a genuinely independent and private choice of the beneficiary, not a 
choice of the Government. The availability of adequate secular 
alternatives is a significant factor in determining whether a program 
affords true private choice.
    Intermediary means an entity, including a non-governmental 
organization, acting under a contract, grant, or other agreement with 
the Federal Government or with a State or local government, that 
accepts Federal financial assistance and distributes that assistance to 
other organizations that, in turn, provide government-funded social 
services. If an intermediary, acting under a contract, grant, or other 
agreement with the Federal Government or with a State or local 
government that is administering a program supported by Federal 
financial assistance, is given the authority under the contract, grant, 
or agreement to select non-governmental organizations to provide 
services supported by the Federal Government, the intermediary must 
ensure compliance with the provisions of this part by the recipient of 
a contract, grant, or agreement. If the intermediary is a non-
governmental organization, it retains all other rights of a non-
governmental organization under the program's statutory and regulatory 
provisions.
* * * * *

0
16. Revise Sec.  19.3 to read as follows:


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

    (a) Faith-based organizations are eligible on the same basis as any 
other organization to seek and receive direct financial assistance from 
DHS for social service programs or to participate in social service 
programs administered or financed by DHS.
    (b) Neither DHS, nor a State or local government, nor any other 
entity that administers any social service program supported by direct 
financial assistance from DHS, shall discriminate for or against an 
organization on the basis of the organization's religious character, 
motives, or affiliation, or lack thereof, or on the basis of conduct 
that would not be considered grounds to favor or disfavor a similarly 
situated secular organization.

[[Page 15706]]

    (c) Nothing in this part shall be construed to preclude DHS from 
making an accommodation, including for religious exercise, with respect 
to one or more program requirements on a case-by-case basis in 
accordance with the Constitution and laws of the United States.
    (d) DHS shall not disqualify an organization from participating in 
any DHS program for which it is otherwise eligible on the basis of the 
organization's indication that it may request an accommodation with 
respect to one or more program requirements, unless the organization 
has made clear that the accommodation is necessary to its participation 
and DHS has determined that it would deny the accommodation.
    (e) Decisions about awards of Federal financial assistance must be 
free from political interference, or even the appearance of such 
interference, and must be made on the basis of merit, not on the basis 
of religion or religious belief or lack thereof, or on the basis of 
religious or political affiliation.
    (f) All organizations that participate in DHS social service 
programs, including faith-based organizations, must carry out eligible 
activities in accordance with all program requirements, including those 
prohibiting the use of direct financial assistance from DHS to engage 
in explicitly religious activities, subject to any accommodations that 
are granted to organizations on a case-by-case basis in accordance with 
the Constitution and laws of the United States.
    (g) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by DHS or an 
intermediary in administering financial assistance from DHS shall 
disqualify a faith-based organization from participating in DHS's 
social service programs:
    (1) On the basis of such organization's religious character, 
motives, or affiliation, or lack thereof; or
    (2) On the basis of conduct that would not be considered grounds to 
disqualify a similarly situated secular organization.
    (h) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation used by DHS or an intermediary in 
administering financial assistance from DHS shall require faith-based 
organizations to provide assurances or notices where they are not 
required of non-faith-based organizations. Any restrictions on the use 
of grant funds shall apply equally to faith-based and non-faith-based 
organizations.

0
17. Amend Sec.  19.4 by revising paragraph (c) and adding paragraph (f) 
to read as follows:


Sec.  19.4  Explicitly religious activities.

* * * * *
    (c) All organizations that participate in DHS social service 
programs, including faith-based organizations, must carry out eligible 
activities in accordance with all program requirements, and in 
accordance with all other applicable requirements governing the conduct 
of DHS-funded activities, including those prohibiting the use of direct 
financial assistance from DHS to engage in explicitly religious 
activities, subject to any accommodations that are granted to 
organizations on a case-by-case basis in accordance with the 
Constitution and laws of the United States. No grant document, 
agreement, covenant, memorandum of understanding, policy, or regulation 
that is used by DHS or a State or local government in administering 
financial assistance from DHS shall disqualify a faith-based 
organization from participating in DHS's social service programs 
because of such organization's religious character, motives, or 
affiliation, or lack thereof, or on the basis of conduct that would not 
be considered grounds to disqualify a similarly situated secular 
organization.
* * * * *
    (f) To the extent that any provision of this part is declared 
invalid by a court of competent jurisdiction, the Department intends 
for all other provisions that are capable of operating in the absence 
of the specific provision that has been invalidated to remain in 
effect.

0
18. Revise Sec.  19.5 to read as follows:


Sec.  19.5  Nondiscrimination requirements.

    An organization that receives financial assistance from DHS for a 
social service program shall not, in providing services or in outreach 
activities related to such services, favor or discriminate against a 
beneficiary of said program or activity on the basis of religion, a 
religious belief, a refusal to hold a religious belief, or a refusal to 
attend or participate in a religious practice. Organizations that favor 
or discriminate against a beneficiary will be subject to applicable 
sanctions and penalties, as established by the requirements of the 
particular DHS social service program or activity. However, an 
organization that participates in a program funded by indirect 
financial assistance need not modify its program activities to 
accommodate a beneficiary who chooses to expend the indirect aid on the 
organization's program.

0
19. Amend Sec.  19.6 by revising paragraph (e) to read as follows:


Sec.  19.6  How to prove nonprofit status.

* * * * *
    (e) Evidence that the DHS awarding agency determines to be 
sufficient to establish that the entity would otherwise qualify as a 
nonprofit organization.

0
20. Amend Sec.  19.9 by revising paragraph (b) to read as follows:


Sec.  19.9  Exemption from Title VII employment discrimination 
requirements.

* * * * *
    (b) Where a DHS program contains independent statutory or 
regulatory provisions that impose nondiscrimination requirements on all 
grantees, those provisions are not waived or mitigated by this part. In 
this case, grantees should consult with the appropriate DHS program 
office to determine the scope of any applicable requirements.

0
21. Add Sec.  19.12 to read as follows:


Sec.  19.12  Notifications to beneficiaries and applicants.

    (a) Organizations providing social services to beneficiaries under 
a program supported by direct Federal financial assistance from DHS 
must give written notice to beneficiaries and prospective beneficiaries 
of certain protections. Such notice must be given in a manner and form 
prescribed by DHS's Office for Civil Rights and Civil Liberties, 
including by incorporating the notice into materials that are otherwise 
provided to beneficiaries. This written notice shall include language 
substantially similar to that in appendix C to this part.
    (b) The written notice described in paragraph (a) of this section 
must be given to prospective beneficiaries prior to the time the 
prospective beneficiary enrolls in the program or receives services 
from the program. When the nature of the service provided or exigent 
circumstances make it impracticable to provide such written notice in 
advance of the actual service, organizations must advise beneficiaries 
of their protections at the earliest available opportunity.
    (c) DHS may determine that the notice described in paragraph (a) of 
this section must inform each beneficiary or prospective beneficiary of 
the option to seek information from DHS, or a State agency or other 
entity administering the program, as to whether there are any other 
federally funded organizations in the area that provide the services 
available under the applicable program.
    (d) Notices or announcements of award opportunities and notices of 
award or contracts shall include language substantially similar to that 
in

[[Page 15707]]

appendices A and B, respectively, to this part.

0
22. Revise appendix A to part 19 to read as follows:

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

    (a) Faith-based organizations may apply for this award on the 
same basis as any other organization, as set forth at, and subject 
to the protections and requirements of, this part and any applicable 
constitutional and statutory requirements, including 42 U.S.C. 
2000bb et seq. DHS will not, in the selection of recipients, 
discriminate for or against an organization on the basis of the 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to favor or disfavor a similarly situated secular 
organization.
    (b) A faith-based organization that participates in this program 
will retain its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (c) A faith-based organization may not use direct Federal 
financial assistance from DHS to support or engage in any explicitly 
religious activities except where consistent with the Establishment 
Clause of the First Amendment and any other applicable requirements. 
An organization receiving Federal financial assistance also may not, 
in providing services funded by DHS, or in outreach activities 
related to such services, discriminate against a program beneficiary 
or prospective program beneficiary on the basis of religion, a 
religious belief, a refusal to hold a religious belief, or a refusal 
to attend or participate in a religious practice.


0
23. Revise appendix B to part 19 to read as follows:

Appendix B to Part 19--Notice of Award or Contract

    (a) A faith-based organization that participates in this program 
retains its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (b) A faith-based organization may not use direct Federal 
financial assistance from DHS to support or engage in any explicitly 
religious activities except where consistent with the Establishment 
Clause of the First Amendment and any other applicable requirements. 
An organization receiving Federal financial assistance also may not, 
in providing services funded by DHS, or in outreach activities 
related to such services, discriminate against a program beneficiary 
or prospective program beneficiary on the basis of religion, a 
religious belief, a refusal to hold a religious belief, or a refusal 
to attend or participate in a religious practice.


0
24. Add appendix C to part 19 to read as follows:

Appendix C to Part 19--Written Notice of Beneficiary Protections

    Name of Organization:
    Name of Program:
    Contact Information for Program Staff: [provide name, phone 
number, and email address, if appropriate]
    Because this program is supported in whole or in part by 
financial assistance from the Federal Government, we are required to 
let you know that:
    (1) We may not discriminate against you on the basis of 
religion, a religious belief, a refusal to hold a religious belief, 
or a refusal to attend or participate in a religious practice;
    (2) We may not require you to attend or participate in any 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) that may be offered by our organization, and any 
participation by you in such activities must be purely voluntary;
    (3) We must separate in time or location any privately funded 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) from activities supported with direct Federal 
financial assistance;
    (4) You may report violations of these protections, including 
any denials of services or benefits by an organization, by 
contacting or filing a written complaint with the Department of 
Homeland Security's Office for Civil Rights and Civil Liberties, 
[address]; and
    [When required by DHS, the notice must also state:] (5) If you 
would like to seek information about whether there are any other 
federally funded organizations that provide these kinds of services 
in your area, please use the contact information set forth above.
    This written notice must be given to you before you enroll in 
the program or receive services from the program, unless the nature 
of the service provided or exigent circumstances make it 
impracticable to provide such notice before we provide the actual 
service. In such an instance, this notice must be given to you at 
the earliest available opportunity.

DEPARTMENT OF AGRICULTURE

    For the reasons set forth in the preamble, USDA amends part 16 of 
title 7 of the CFR as follows:

Title 7--Agriculture

PART 16--EQUAL OPPORTUNITY FOR FAITH-BASED ORGANIZATIONS

0
25. Revise the authority citation for part 16 to read as follows:

    Authority: 5 U.S.C. 301; 42 U.S.C. 2000bb et seq.; E.O. 13279, 
67 FR 77141, 3 CFR, 2002 Comp., p. 258; E.O. 13280, 67 FR 77145, 3 
CFR, 2002 Comp., p. 262; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., 
p. 273; E.O. 13831, 83 FR 20715, 3 CFR, 2018 Comp., p. 806; E.O. 
14015, 86 FR 10007, 3 CFR, 2021 Comp., p. 517.


0
26. Revise Sec.  16.1 to read as follows:


Sec.  16.1  Purpose and applicability.

    (a) The purpose of this part is to set forth Department of 
Agriculture (USDA) policy regarding equal opportunity for faith-based 
organizations to participate in USDA assistance programs for which 
other private organizations are eligible.
    (b) Except as otherwise specifically provided in this part, the 
policy outlined in this part applies to all recipients and 
subrecipients of USDA assistance to which 2 CFR part 400 applies, and 
to recipients and subrecipients of Commodity Credit Corporation 
assistance that is administered by agencies of USDA.

0
27. Amend Sec.  16.2 by:
0
a. Removing the definition of ``Discriminate against an organization on 
the basis of the organization's religious exercise.''
0
b. Revising the definitions of ``Federal financial assistance'' and 
``Indirect Federal financial assistance or Federal financial assistance 
provided indirectly.''
    The revisions read as follows:


Sec.  16.2  Definitions.

* * * * *
    Federal financial assistance means assistance that non-Federal 
entities receive or administer in the form of grants, contracts, loans, 
loan guarantees, property, cooperative agreements, food commodities, 
direct appropriations, or other assistance, but does not include a tax 
credit, deduction, or exemption. Federal financial assistance may be 
direct or indirect.
    Indirect Federal financial assistance or Federal financial 
assistance provided indirectly refers to situations where the service 
provider receives the assistance wholly as a result of a genuine and 
independent private choice of the beneficiary, not a choice of the 
Government, and the cost of that service is paid through a voucher, 
certificate, or other similar means of Government-funded payment. The 
availability of adequate secular alternatives is a significant factor 
in determining whether a program affords a genuine and independent 
private choice.
* * * * *

0
28. Amend Sec.  16.3 by:
0
a. Revising the section heading and paragraph (a).
0
b. In paragraph (b) introductory text, removing ``or religious'' 
wherever it appears.
0
c. Revising paragraphs (c), (d), and (f).
0
d. Adding paragraph (h).
    The revisions and addition read as follows:


Sec.  16.3  Faith-based organizations and Federal financial assistance.

    (a) A faith-based organization is eligible, on the same basis as 
any other organization, to access and participate

[[Page 15708]]

in any USDA assistance programs for which it is otherwise eligible. 
Neither the USDA awarding agency nor any State or local government or 
other intermediary receiving funds under any USDA awarding agency 
program or service shall, in the selection of service providers, 
discriminate for or against an organization on the basis of the 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to favor or disfavor a similarly situated secular organization. 
Decisions about awards of USDA direct assistance or USDA indirect 
assistance must also be free from political interference, or even the 
appearance of such interference, and must be made on the basis of 
merit, not on the basis of religion or religious belief, or lack 
thereof. Notices or announcements of award opportunities and notices of 
award or contracts shall include language substantially similar to that 
in appendices A and B to this part.
* * * * *
    (c) A faith-based organization's exemption from the Federal 
prohibition on employment discrimination on the basis of religion, set 
forth in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 
2000e-1, is not forfeited when an organization participates in a USDA 
assistance program.
    (d) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by a USDA awarding 
agency or a State or local government in administering Federal 
financial assistance from the USDA awarding agency shall require faith-
based organizations to provide assurances or notices where they are not 
required of non-faith-based organizations.
    (1) Any restrictions on the use of grant funds shall apply equally 
to faith-based organizations and non-faith-based organizations.
    (2) All organizations that participate in USDA awarding agency 
programs or services, including organizations with religious character, 
motives, or affiliation, must carry out eligible activities in 
accordance with all program requirements and other applicable 
requirements governing the conduct of USDA awarding agency-funded 
activities, including those prohibiting the use of direct financial 
assistance to engage in explicitly religious activities, subject to any 
accommodations that are granted to organizations on a case-by-case 
basis in accordance with the Constitution and laws of the United 
States.
    (3) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by the USDA awarding 
agency or a State or local government in administering financial 
assistance from the USDA awarding agency shall disqualify faith-based 
organizations from participating in the USDA awarding agency's programs 
or services on the basis of the organizations' religious character, 
motives, or affiliation, or lack thereof, or on the basis of conduct 
that would not be considered grounds to disqualify a similarly situated 
secular organization.
* * * * *
    (f) USDA direct financial assistance may be used for the 
acquisition, construction, or rehabilitation of structures to the 
extent authorized by the applicable program statutes and regulations. 
USDA direct assistance may not be used for the acquisition, 
construction, or rehabilitation of structures to the extent that those 
structures are used by the USDA funding recipients for explicitly 
religious activities. Where a structure is used for both eligible and 
ineligible purposes, USDA direct financial assistance may not exceed 
the cost of those portions of the acquisition, construction, or 
rehabilitation that are attributable to eligible activities in 
accordance with the cost accounting requirements applicable to USDA 
funds. Sanctuaries, chapels, or other rooms that an organization 
receiving direct assistance from USDA uses as its principal place of 
worship, however, are ineligible for USDA-funded improvements. 
Disposition of real property after the term of the grant or any change 
in use of the property during the term of the grant is subject to 
government-wide regulations governing real property disposition (see 2 
CFR part 400).
    (1) Any use of USDA direct financial assistance for equipment, 
supplies, labor, indirect costs, and the like shall be prorated between 
the USDA program or activity and any ineligible purposes by the faith-
based organization in accordance with applicable laws, regulations, and 
guidance.
    (2) Nothing in this section shall be construed to prevent the 
residents of housing who are receiving USDA direct assistance funds 
from engaging in religious exercise within such housing.
* * * * *
    (h) Nothing in this part shall be construed to preclude a USDA 
awarding agency or any State or local government or other intermediary 
from accommodating religion or making an accommodation for religious 
exercise with respect to one or more program requirements on a case-by-
case basis in accordance with the Constitution and laws of the United 
States. A USDA awarding agency, State or local government, or other 
intermediary shall not disqualify an organization from participating in 
any USDA assistance program for which it is eligible on the basis of 
the organization's indication that it may request an accommodation with 
respect to one or more program requirements, unless the organization 
has made clear that the accommodation is necessary to its participation 
and the USDA awarding agency, State or local government, or other 
intermediary has determined that it would deny the accommodation.

0
29. Amend Sec.  16.4 by:
0
a. Revising paragraph (a).
0
b. Redesignating paragraph (c) as paragraph (e).
0
c. Adding new paragraphs (c) and (d).
0
d. Revising newly redesignated paragraph (e).
    The revisions and additions read as follows:


Sec.  16.4  Responsibilities of participating organizations.

    (a) Any organization that receives direct or indirect Federal 
financial assistance shall not, with respect to services supported in 
whole or in part with Federal financial assistance, or in their 
outreach activities related to such services, discriminate against a 
current or prospective program beneficiary on the basis of religion, 
religious belief, a refusal to hold a religious belief, or a refusal to 
attend or participate in a religious practice. However, an organization 
that participates in a program funded by indirect financial assistance 
need not modify its program activities to accommodate a beneficiary who 
chooses to expend the indirect aid on the organization's program.
* * * * *
    (c)(1) All organizations that receive USDA direct assistance under 
any domestic USDA program must give written notice to all beneficiaries 
and prospective beneficiaries of certain protections in a manner and 
form prescribed by USDA. The required language for this written notice 
to beneficiaries is set forth in appendix C to this part. This notice 
must include the following information:
    (i) The organization may not discriminate against beneficiaries or 
prospective beneficiaries on the basis of religion, a religious belief, 
a refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice;
    (ii) The organization may not require beneficiaries or prospective

[[Page 15709]]

beneficiaries to attend or participate in any explicitly religious 
activities that are offered by the organization, and any participation 
by beneficiaries or prospective beneficiaries in such activities must 
be purely voluntary;
    (iii) The organization must separate in time or location any 
privately funded explicitly religious activities from activities 
supported by direct Federal financial assistance; and
    (iv) Beneficiaries or prospective beneficiaries may report 
violations of these protections (including denials of services or 
benefits) by an organization by contacting or filing a written 
complaint with USDA's Office of the Assistant Secretary for Civil 
Rights.
    (2) The USDA awarding agency may determine that this written notice 
must also inform beneficiaries and prospective beneficiaries about how 
to obtain information from the awarding agency about other federally 
funded service providers in their area that provide the services 
available under the applicable program.
    (3) This written notice must be given to beneficiaries prior to the 
time they enroll in the program or receive services from the program. 
When the nature of the service provided or exigent circumstances make 
it impracticable to provide such written notice in advance of the 
actual service, service providers must advise beneficiaries of their 
protections at the earliest available opportunity.
    (d) A beneficiary or prospective beneficiary in a program supported 
by indirect Federal financial assistance may report an organization's 
violation of the religious protections in this part, including any 
denials of services or benefits by an organization, by contacting or 
filing a written complaint with USDA's Office of the Assistant 
Secretary for Civil Rights.
    (e) Nothing in paragraphs (a) through (c) of this section shall be 
construed to prevent faith-based organizations that receive USDA 
assistance under the Richard B. Russell National School Lunch Act, 42 
U.S.C. 1751 et seq., the Child Nutrition Act of 1966, 42 U.S.C. 1771 et 
seq., or USDA international school feeding programs from considering 
religion in their admissions practices or from imposing religious 
attendance or curricular requirements at their schools.

0
30. Add Sec.  16.6 to read as follows:


Sec.  16.6  Compliance.

    USDA agencies will monitor compliance with this part in the course 
of regular oversight of USDA programs.

0
31. Revise appendix A to part 16 to read as follows:

Appendix A to Part 16--Notice or Announcement of Award Opportunities

    (a) Faith-based organizations may apply for this award on the 
same basis as any other organization, as set forth at, and subject 
to the protections and requirements of, this part and any applicable 
constitutional and statutory requirements, including 42 U.S.C. 
2000bb et seq. USDA will not, in the selection of recipients, 
discriminate for or against an organization on the basis of the 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to favor or disfavor a similarly situated secular 
organization.
    (b) A faith-based organization that participates in this program 
will retain its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law. Religious accommodations may 
also be sought under many of these religious freedom and conscience 
protection laws.
    (c) A faith-based organization may not use direct Federal 
financial assistance from USDA to support or engage in any 
explicitly religious activities except when consistent with the 
Establishment Clause of the First Amendment and any other applicable 
requirements. An organization receiving Federal financial assistance 
also may not, in providing services funded by USDA, or in their 
outreach activities related to such services, discriminate against a 
program beneficiary or prospective program beneficiary on the basis 
of religion, a religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious 
practice.


0
32. Revise appendix B to part 16 to read as follows:

Appendix B to Part 16--Notice of Award or Contract

    (a) A faith-based organization that participates in this program 
retains its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law. Religious accommodations may 
also be sought under many of these religious freedom and conscience 
protection laws.
    (b) A faith-based organization may not use direct Federal 
financial assistance from USDA to support or engage in any 
explicitly religious activities except when consistent with the 
Establishment Clause of the First Amendment and any other applicable 
requirements. An organization receiving Federal financial assistance 
also may not, in providing services funded by USDA, or in their 
outreach activities related to such services, discriminate against a 
program beneficiary or prospective program beneficiary on the basis 
of religion, a religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious 
practice.


0
33. Add appendix C to part 16 to read as follows:

Appendix C to Part 16--Written Notice of Beneficiary Protections

    Name of Organization:
    Name of Program:
    Contact Information for Program Staff: [provide name, phone 
number, and email address, if appropriate]
    Because this program is supported in whole or in part by 
financial assistance from the Federal Government, we are required to 
let you know that:
    (1) We may not discriminate against you on the basis of 
religion, a religious belief, a refusal to hold a religious belief, 
or a refusal to attend or participate in a religious practice;
    (2) We may not require you to attend or participate in any 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) that are offered by our organization, and any 
participation by you in such activities must be purely voluntary;
    (3) We must separate in time or location any privately funded 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) from activities supported with direct Federal 
financial assistance; and
    (4) You may report violations of these protections, including 
any denials of services or benefits by an organization, by 
contacting or filing a written complaint with the U.S. Department of 
Agriculture, Office of the Assistant Secretary for Civil Rights, 
Executive Director, Center for Civil Rights Enforcement, 1400 
Independence Avenue SW, Washington, DC 20250-9410, or by email to 
[email protected].
    [When required by the Department, the notice must also state:] 
(5) If you would like to seek information about whether there are 
any other federally funded organizations that provide these kinds of 
services in your area, please contact [insert appropriate point of 
contact].
    This written notice must be given to you before you enroll in 
the program or receive services from the program, unless the nature 
of the service provided or exigent circumstances make it 
impracticable to provide such notice before we provide the actual 
service. In such an instance, this notice must be given to you at 
the earliest available opportunity.

AGENCY FOR INTERNATIONAL DEVELOPMENT

    For the reasons set forth in the preamble, USAID amends part 205 of 
title 22 of the CFR as follows:

Title 22--Foreign Relations

PART 205--PARTICIPATION BY RELIGIOUS ORGANIZATIONS IN USAID 
PROGRAMS

0
34. The authority citation for part 205 continues to read as follows:

    Authority: 22 U.S.C. 2381(a).


0
35. Revise Sec.  205.1 to read as follows:

[[Page 15710]]

Sec.  205.1  Grants and cooperative agreements.

    (a) As used in this section, the term ``award'' has the definition 
in 2 CFR 700.1 and the term ``Federal financial assistance'' has the 
definition in Executive Order 13279 (signed by President Bush on 
December 12, 2002). As used in this section, the following terms have 
the definitions in 2 CFR 200.1: ``pass-through entity,'' ``recipient,'' 
``subaward,'' and ``subrecipient'' as modified by 2 CFR 700.3 to apply 
to both nonprofit and for-profit entities.
    (b) Faith-based organizations are eligible on the same basis as any 
other organization to receive any U.S. Agency for International 
Development (USAID) award for which they are otherwise eligible. In the 
selection of recipients by USAID and subrecipients by pass-through 
entities, neither USAID nor pass-through entities shall discriminate 
for, or against, an organization on the basis of the organization's 
religious character, motives, or affiliation, or lack thereof, or on 
the basis of conduct that would not be considered grounds to favor or 
disfavor a similarly situated secular organization. Notices or 
announcements of award opportunities shall include language to indicate 
that faith-based organizations are eligible on the same basis as any 
other organization and subject to the protections and requirements of 
Federal law.
    (c) Nothing in this part shall be construed to preclude USAID from 
making an accommodation, including for religious exercise, with respect 
to one or more award requirements on a case-by-case basis in accordance 
with the Constitution and laws of the United States.
    (d) USAID shall not disqualify an organization from participating 
in any USAID award for which it is eligible on the basis of the 
organization's indication that it may request an accommodation with 
respect to one or more award requirements, unless the organization has 
made clear that the accommodation is necessary to its participation and 
USAID has determined that it would deny the accommodation.
    (e) Organizations that receive direct Federal financial assistance 
from USAID under any USAID award or subaward may not engage in 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) as part of the programs or services directly funded 
with direct Federal financial assistance from USAID. If an organization 
conducts such activities, the activities must be offered separately, in 
time or location, from the programs or services funded with direct 
Federal financial assistance from USAID, and participation must be 
voluntary for beneficiaries of the programs or services funded with 
such assistance. Nothing in this part restricts USAID's authority under 
applicable Federal law to fund activities, such as the provision of 
chaplaincy services, that can be directly funded by the Government 
consistent with the Establishment Clause.
    (f) A faith-based organization that applies for, or participates 
in, USAID-funded awards or subawards will retain its autonomy, 
religious character, and independence, and may continue to carry out 
its mission consistent with religious freedom protections in Federal 
law, including the definition, development, practice, and expression of 
its religious beliefs, provided that it does not use direct Federal 
financial assistance from USAID to support or engage in any explicitly 
religious activities (including activities that involve overt religious 
content such as worship, religious instruction, or proselytization), or 
in any other manner prohibited by law. Among other things, a faith-
based organization that receives Federal financial assistance from 
USAID may use space in its facilities, without concealing, altering, or 
removing religious art, icons, scriptures, or other religious symbols. 
In addition, a faith-based organization that receives Federal financial 
assistance from USAID retains its authority over its internal 
governance, and it may retain religious terms in its organization's 
name, select its board members on a religious basis, and include 
religious references in its organization's mission statement and other 
governing documents.
    (g) USAID must implement its awards in accordance with the 
Establishment Clause. Nothing in this part shall be construed as 
authorizing the use of USAID funds for activities that are not 
permitted by Establishment Clause jurisprudence or otherwise by law. 
USAID will consult with the U.S. Department of Justice if, in 
implementing a specific program involving overseas acquisition, 
rehabilitation, or construction of structures used for explicitly 
religious activities, there is any question about whether such funding 
is consistent with the Establishment Clause. USAID will describe any 
program implemented after such consultation on its website.
    (h) An organization that receives a USAID-funded award or subaward 
shall not, in providing services or outreach activities related to such 
services, discriminate against a program beneficiary or potential 
program beneficiary on the basis of religion, a religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice.
    (i) No grant document, contract, agreement, covenant, memorandum of 
understanding, policy, or regulation used by USAID shall require faith-
based organizations to provide assurances or notices where the Agency 
does not require them of secular organizations. Any restrictions on the 
use of award or subaward funds shall apply equally to faith-based and 
secular organizations. All organizations that receive USAID awards and 
subawards, including faith-based organizations, must carry out eligible 
activities in accordance with all award requirements and other 
applicable requirements that govern the conduct of USAID-funded 
activities, including those that prohibit the use of direct Federal 
financial assistance from USAID to engage in explicitly religious 
activities. No grant document, contract, agreement, covenant, 
memorandum of understanding, policy, or regulation used by USAID shall 
disqualify faith-based organizations from receiving USAID awards on the 
basis of the organization's religious character, motives, or 
affiliation, or lack thereof.
    (j) A religious organization does not forfeit its exemption from 
the Federal prohibition on employment discrimination on the basis of 
religion, set forth in section 702(a) of the Civil Rights Act of 1964, 
42 U.S.C. 2000e-1, when the organization receives Federal financial 
assistance from USAID.
    (k) If a USAID award requires an organization to be a ``nonprofit 
organization'' in order to be eligible for funding, the individual 
solicitation will specifically indicate the requirement for nonprofit 
status in the eligibility section of the solicitation. Potential 
applicants should consult with the appropriate USAID program office to 
determine the scope of any applicable requirements. In USAID awards in 
which an applicant must show that it is a nonprofit organization, other 
than programs which are limited to registered Private and Voluntary 
Organizations, the applicant may do so by any of the following means:
    (1) Proof that the Internal Revenue Service currently recognizes 
the applicant as an organization to which contributions are tax 
deductible under section 501(c)(3) of the Internal Revenue Code;
    (2) A statement from a state taxing body or the State secretary of 
state certifying that:
    (i) The organization is a nonprofit organization operating within 
the State; and

[[Page 15711]]

    (ii) No part of its net earnings may lawfully benefit any private 
shareholder or individual;
    (3) A certified copy of the applicant's certificate of 
incorporation or similar document that clearly establishes the 
nonprofit status of the applicant; or
    (4) Any item described in paragraphs (k)(1) through (3) of this 
section if that item applies to a State or national parent 
organization, together with a statement by the State or national parent 
organization that the applicant is a local nonprofit affiliate.
    (l) Decisions about awards of USAID Federal financial assistance 
must be free from political interference, or even the appearance of 
such interference, and must be made on the basis of merit, not on the 
basis of religion or religious belief, or lack thereof.
    (m) Nothing in this part shall be construed as authorizing the use 
of USAID funds for the acquisition, construction, or rehabilitation of 
religious structures inside the United States.
    (n) The Secretary of State may waive the requirements of this 
section in whole or in part, on a case-by-case basis, where the 
Secretary determines that such waiver is necessary to further the 
national security or foreign policy interests of the United States.
    (o) Nothing in this section shall be construed in such a way as to 
advantage, or disadvantage, faith-based organizations affiliated with 
historic or well-established religions or sects in comparison with 
other religions or sects.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    For the reasons set forth in the preamble, HUD amends part 5 of 
title 24 of the CFR as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

0
36. Revise the authority citation for part 5 to read as follows:

    Authority: 12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437f, 
1437n, 3535(d); 42 U.S.C. 2000bb et seq.; 34 U.S.C. 12471 et seq.; 
Sec. 327, Pub. L. 109-115, 119 Stat. 2396; E.O. 13279, 67 FR 77141, 
3 CFR, 2002 Comp., p. 258; E.O. 13559, 75 FR 71319, 3 CFR, 2010 
Comp., p. 273; E.O. 14015, 86 FR 10007, 3 CFR, 2021 Comp., p. 517.


0
37. Amend Sec.  5.109 by:
0
a. In paragraph (a), removing the words ``Executive Order 13831, 
entitled ``Establishment of a White House Faith and Opportunity 
Initiative,'' '' and adding, in their place, the words ``Executive 
Order 14015, entitled ``Establishment of the White House Office of 
Faith-Based and Neighborhood Partnerships,'' ''.
0
b. In paragraph (b), revising the definition of ``Indirect Federal 
financial assistance''.
0
c. Removing the introductory text of paragraph (c).
0
d. Revising paragraphs (c)(1) through (3).
0
e. In paragraph (c)(4), removing the word ``availability'' and adding, 
in its place, the word ``opportunity''.
0
f. Revising paragraphs (d)(1) and (2), (g), and (h).
0
g. In paragraph (l)(3), adding an ``or'' at the end of the paragraph.
0
h. In paragraph (l)(4), removing ``; or'' and adding, in its place, a 
period.
0
i. Removing paragraph (l)(5).
    The revisions read as follows:


Sec.  5.109  Equal participation of faith-based organizations in HUD 
programs and activities.

* * * * *
    (b) * * *
    Indirect Federal financial assistance means Federal financial 
assistance provided when the choice of the provider is placed in the 
hands of the beneficiary, and the cost of that service is paid through 
a voucher, certificate, or other similar means of Government-funded 
payment. Federal financial assistance provided to an organization is 
considered indirect when the Government program through which the 
beneficiary receives the voucher, certificate, or other similar means 
of Government-funded payment is neutral toward religion meaning that it 
is available to providers without regard to the religious or non-
religious nature of the institution and there are no program incentives 
that deliberately skew for or against religious or secular providers; 
and the organization receives the assistance wholly as a result of a 
genuine and independent private choice of the beneficiary, not a choice 
of the Government. The availability of adequate secular alternatives is 
a significant factor in determining whether a program affords true 
private choice.
* * * * *
    (c) Equal participation of faith-based organizations in HUD 
programs and activities.(1) Faith-based organizations are eligible, on 
the same basis as any other organization, to participate in any HUD 
program or activity for which they are otherwise eligible. Neither the 
Federal Government, nor a State, Tribal, or local government, nor any 
other entity that administers any HUD program or activity, shall 
discriminate for or against an organization on the basis of the 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to favor or disfavor a similarly situated secular organization.
    (2) Nothing in this section shall be construed to preclude HUD from 
making an accommodation, including for religious exercise, with respect 
to one or more program requirements on a case-by-case basis in 
accordance with the Constitution and laws of the United States.
    (3) HUD shall not disqualify an organization from participating in 
any HUD program for which it is eligible on the basis of the 
organization's indication that it may request an accommodation with 
respect to one or more program requirements, unless the organization 
has made clear that the accommodation is necessary to its participation 
and, in accordance with the Constitution and laws of the United States, 
HUD has determined that it would deny the accommodation.
* * * * *
    (d) * * *
    (1) A faith-based organization that applies for, or participates 
in, a HUD program or activity supported with Federal financial 
assistance retains its autonomy, right of expression, religious 
character, authority over its governance, and independence, and may 
continue to carry out its mission, including the definition, 
development, practice, and expression of its religious beliefs; 
provided that, it does not use direct Federal financial assistance, 
whether received through a prime award or sub-award, to support or 
engage in any explicitly religious activities, including activities 
that involve overt religious content such as worship, religious 
instruction, or proselytization.
    (2) A faith-based organization that receives direct Federal 
financial assistance may use space (including a sanctuary, chapel, 
prayer hall, or other space) in its facilities (including a temple, 
synagogue, church, mosque, or other place of worship) to carry out 
activities under a HUD program without concealing, altering, or 
removing religious art, icons, scriptures, or other religious symbols. 
In addition, a faith-based organization participating in a HUD program 
or activity retains its authority over its internal governance, and may 
retain religious terms in its organization's name, select its board 
members on the basis of their acceptance of or adherence to the 
religious tenets of the organization consistent with paragraph (i) of 
this section, and include religious references

[[Page 15712]]

in its organization's mission statements and other governing documents.
* * * * *
    (g) Nondiscrimination and beneficiary notice requirements--(1) 
Nondiscrimination. Any organization that receives Federal financial 
assistance under a HUD program or activity shall not, in providing 
services supported in whole or in part with Federal financial 
assistance, or in their outreach activities related to such services, 
discriminate against a beneficiary or prospective beneficiary on the 
basis of religion, a religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious practice. 
However, an organization that participates in a program funded by 
indirect Federal financial assistance need not modify its program or 
activities to accommodate a beneficiary who chooses to expend the 
indirect aid on the organization's program.
    (2) Beneficiary notice. (i) An organization providing services 
under a program supported by direct Federal financial assistance from 
HUD, or an entity that administers indirect Federal financial 
assistance from HUD, must give written notice to beneficiaries and 
prospective beneficiaries of certain protections in a manner and form 
prescribed by HUD, including by incorporating the notice into materials 
that are otherwise provided to beneficiaries. The required language for 
this written notice to beneficiaries is set forth in appendix C to this 
subpart.
    (ii) For the Housing Choice Voucher (HCV), Project-Based Voucher 
(PBV), and Section 8 Moderate Rehabilitation programs, the respective 
recipient (i.e., Public Housing Agency) is required to provide the 
written beneficiary notice. For the Housing Opportunities for Persons 
with AIDS (HOPWA) program, the grantee or project sponsor that is 
responsible for making eligibility determinations is required to 
provide the written beneficiary notice. For the Continuum of Care (CoC) 
and Emergency Solutions Grants (ESG) programs, the recipient or 
subrecipient that is responsible for determining the eligibility of 
each family or individual is required to provide the written 
beneficiary notice. The participating or prospective providers 
(landlords) are not responsible for providing the written beneficiary 
notice for indirect aid recipients. The notice must include the 
following information:
    (A) Nondiscrimination requirements of paragraph (g)(1) of this 
section;
    (B) Notification that a beneficiary or prospective beneficiary may 
report an organization's violation of these protections, including any 
denials of services or benefits by an organization, by contacting or 
filing a written complaint with the Center for Faith-Based and 
Neighborhood Partnerships or the intermediary that awarded funds to the 
organization; and
    (C) For direct Federal financial assistance only, prohibitions with 
respect to explicitly religious activities as set forth in paragraph 
(e) of this section.
    (3) Notice timing. The written notice described in paragraph (g)(2) 
of this section must be given to a prospective beneficiary prior to the 
time the prospective beneficiary enrolls in the program or receives 
services from the program. When the nature of the service provided or 
exigent circumstances make it impracticable to provide such written 
notice in advance of the actual service, an organization must advise 
beneficiaries of their protections at the earliest available 
opportunity.
    (4) Alternative option information. HUD may determine that the 
notice described in paragraph (g)(2) of this section must inform each 
beneficiary or prospective beneficiary about how to obtain information 
from HUD, or a State agency or other entity administering the 
applicable program, about other federally funded service providers in 
their area that provide the services available under the applicable 
program.
    (h) No additional assurances from faith-based organizations. A 
faith-based organization is not rendered ineligible by its religious 
nature to access and participate in HUD programs. Absent regulatory or 
statutory authority, no notice of funding opportunity, grant agreement, 
cooperative agreement, covenant, memorandum of understanding, policy, 
or regulation that is used by HUD or a recipient or intermediary in 
administering Federal financial assistance from HUD shall require 
otherwise eligible faith-based organizations to provide assurances or 
notices where they are not required of similarly situated secular 
organizations. All organizations that participate in HUD programs or 
activities, including organizations with religious character, motives, 
or affiliation, must carry out eligible activities in accordance with 
all program requirements, including those prohibiting the use of direct 
financial assistance to engage in explicitly religious activities, 
subject to any accommodations that are granted to organizations on a 
case-by-case basis in accordance with the Constitution and laws of the 
United States. No notice of funding opportunity, grant agreement, 
cooperative agreement, covenant, memorandum of understanding, policy, 
or regulation that is used by HUD or a recipient or intermediary in 
administering financial assistance from HUD shall disqualify otherwise 
eligible faith-based organizations from participating in HUD's programs 
or activities on the basis of the organization's religious character, 
motives, or affiliation, or lack thereof, or on the basis of conduct 
that would not be considered grounds to disqualify a similarly situated 
secular organization.
* * * * *

0
38. Revise appendix A to subpart A of part 5 to read as follows:

Appendix A to Subpart A of Part 5--Notice of Funding Opportunity

    (a) Faith-based organizations may apply for this award on the 
same basis as any other organization, as set forth at Sec.  5.109, 
and subject to the protections and requirements of any applicable 
constitutional and statutory requirements, including 42 U.S.C. 
2000bb et seq. HUD will not, in the selection of recipients, 
discriminate for or against an organization on the basis of the 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to favor or disfavor a similarly situated secular 
organization.
    (b) A faith-based organization that participates in this program 
will retain its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (c) A faith-based organization may not use direct financial 
assistance from HUD to support or engage in any explicitly religious 
activities except where consistent with the Establishment Clause of 
the First Amendment and any other applicable requirements. Such an 
organization also may not, in providing services funded by HUD, or 
in their outreach activities related to such services, discriminate 
against a program beneficiary or prospective program beneficiary on 
the basis of religion, a religious belief, a refusal to hold a 
religious belief, or a refusal to attend or participate in a 
religious practice.


0
39. Add appendix B to subpart A of part 5 to read as follows:

Appendix B to Subpart A of Part 5--Notice of Award or Contract

    (a) A faith-based organization that participates in this program 
retains its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (b) A faith-based organization may not use direct Federal 
financial assistance from HUD to support or engage in any explicitly 
religious activities except when consistent with the Establishment 
Clause of the First Amendment and any other applicable requirements. 
An organization receiving

[[Page 15713]]

Federal financial assistance also may not, in providing services 
funded by HUD, or in their outreach activities related to such 
services, discriminate against a program beneficiary or prospective 
program beneficiary on the basis of religion, a religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice.


0
40. Add appendix C to subpart A of part 5 to read as follows:

Appendix C to Subpart A of Part 5--Department of Housing and Urban 
Development Model Written Notice of Beneficiary Rights

    Name of Organization:
    Name of Program:
    Contact Information for Program Staff: [provide name, phone 
number, and email address, if appropriate]
    Because this program is supported in whole or in part by 
financial assistance from the Federal Government, we are required to 
let you know that:
    (1) We may not discriminate against you on the basis of 
religion, a religious belief, a refusal to hold a religious belief, 
or a refusal to attend or participate in a religious practice;
    (2) We may not require you to attend or participate in any 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) that are offered by our organization, and any 
participation by you in such activities must be purely voluntary;
    (3) We must separate in time or location any privately funded 
explicitly religious activities from activities (including 
activities that involve overt religious content such as worship, 
religious instruction, or proselytization) from activities supported 
with direct Federal financial assistance;
    (4) You may report an organization's violations of these 
protections, including any denial of services or benefits by an 
organization, by contacting or filing a written complaint with HUD's 
Center for Faith-Based and Neighborhood Partnership, 451 7th Street 
SW, Washington, DC 20410, or by email to [email protected]; and
    (5) If you would like to seek information about whether there 
are any other federally funded organizations that provide these 
kinds of services in your area, please use the contact information 
set forth above.
    This written notice must be given to you before you enroll in 
the program or receive services from the program, unless the nature 
of the service provided or exigent circumstances make it 
impracticable to provide such notice before we provide the actual 
service. In such an instance, this notice must be given to you at 
the earliest available opportunity.

DEPARTMENT OF JUSTICE

    For the reasons set forth in the preamble, the Attorney General 
amends part 38 of title 28 of the CFR as follows:

Title 28--Judicial Administration

PART 38--PARTNERSHIPS WITH FAITH-BASED AND OTHER NEIGHBORHOOD 
ORGANIZATIONS

0
41. Revise the authority citation for part 38 to read as follows:

    Authority: 28 U.S.C. 509; 5 U.S.C. 301; E.O. 13279, 67 FR 77141, 
3 CFR, 2002 Comp., p. 258; 18 U.S.C. 4001, 4042, 5040; 21 U.S.C. 
871; 25 U.S.C. 3681; Pub. L. 107-273, 116 Stat. 1758; Pub. L. 109-
162, 119 Stat. 2960; 34 U.S.C. 10152, 10154, 10172, 10221, 10382, 
10388, 10444, 10446, 10448, 10473, 10614, 10631, 11111, 11182, 
20110, 20125; E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; 
E.O. 13831, 83 FR 20715, 3 CFR, 2018 Comp., p. 806; 42 U.S.C. 2000bb 
et seq.; E.O. 14015, 86 FR 10007, 3 CFR, 2021 Comp., p. 517.


0
42. Revise Sec.  38.1 to read as follows:


Sec.  38.1  Purpose.

    The purpose of this part is to implement Executive Order 13279, 
Executive Order 13559, and Executive Order 14015.

0
43. Amend Sec.  38.3 by:
0
a. Redesignating paragraphs (a) through (g) as paragraphs (b) through 
(h).
0
b. Adding a new paragraph (a).
0
c. Revising newly redesignated paragraphs (b), (c)(2), (e), and (g).
    The addition and revisions read as follows:


Sec.  38.3  Definitions.

* * * * *
    (a) ``Federal financial assistance'' means assistance that non-
Federal entities receive or administer in the form of grants, 
contracts, loans, loan guarantees, property, cooperative agreements, 
food commodities, direct appropriations, or other assistance, but does 
not include a tax credit, deduction, or exemption.
    (b) ``Direct Federal financial assistance'' or ``Federal financial 
assistance provided directly'' refers to situations in which the 
Government or an intermediary (under this part) selects the provider 
and either purchases services from that provider (e.g., via a contract) 
or awards funds to that provider to carry out a service (e.g., via a 
grant or cooperative agreement). This includes recipients of subawards 
that receive Federal financial assistance through State administering 
agencies or State-administered programs. In general, Federal financial 
assistance shall be treated as direct, unless it meets the definition 
of ``indirect Federal financial assistance'' or ``Federal financial 
assistance provided indirectly.''
    (c) * * *
    (2) The service provider receives the assistance wholly as a result 
of a genuine and independent private choice of the beneficiary, not a 
choice of the Government. The availability of adequate secular 
alternatives is a significant factor in determining whether a program 
affords a genuinely independent and private choice.
* * * * *
    (e) ``Department program'' refers to a discretionary, formula, or 
block grant program administered by or from the Department.
* * * * *
    (g) The ``Office for Civil Rights'' refers to the Office for Civil 
Rights of the Department's Office of Justice Programs.
* * * * *

0
44. Revise Sec.  38.4 to read as follows:


Sec.  38.4  Policy.

    (a) Faith-based organizations are eligible, on the same basis as 
any other organization, to participate in any Department program for 
which they are otherwise eligible. Neither the Department nor any State 
or local government receiving funds under any Department program shall, 
in the selection of service providers, discriminate for or against an 
organization on the basis of the organization's religious character, 
motives, or affiliation, or lack thereof, or on the basis of conduct 
that would not be considered grounds to favor or disfavor a similarly 
situated secular organization.
    (b) Nothing in this part shall be construed to preclude the 
Department from making an accommodation, including for religious 
exercise, with respect to one or more program requirements on a case-
by-case basis in accordance with the Constitution and laws of the 
United States.
    (c) The Department shall not disqualify an organization from 
participating in any Department program for which it is eligible on the 
basis of the organization's indication that it may request an 
accommodation with respect to one or more program requirements, unless 
the organization has made clear that the accommodation is necessary to 
its participation and the Department has determined that it would deny 
the accommodation.
    (d) Decisions about awards of Federal financial assistance must be 
free from political interference or even the appearance of such 
interference and must be made on the basis of merit, not on the basis 
of religion or a religious belief, or lack thereof.

0
45. Amend Sec.  38.5 by:
0
a. Revising paragraphs (c) through (f).
0
b. In paragraph (g)(3), adding the word ``or'' at the end of the 
paragraph.

[[Page 15714]]

0
c. In paragraph (g)(4), removing ``; or'' and adding, in its place, a 
period.
0
d. Removing paragraph (g)(5).
    The revisions read as follows:


Sec.  38.5  Responsibilities.

* * * * *
    (c) Any organization that participates in programs funded by 
Federal financial assistance from the Department shall not, in 
providing services supported in whole or in part with Federal financial 
assistance, or in their outreach activities related to such services, 
discriminate against a program beneficiary or prospective program 
beneficiary on the basis of religion, a religious belief, a refusal to 
hold a religious belief, or a refusal to attend or participate in a 
religious practice. However, an organization that receives indirect 
Federal financial assistance need not modify its program activities to 
accommodate a beneficiary who chooses to expend the indirect aid on the 
organization's program.
    (d) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that the Department or a State or 
local government uses in administering Federal financial assistance 
from the Department shall require faith-based or religious 
organizations to provide assurances or notices where they are not 
required of non-faith-based organizations. Any restrictions on the use 
of grant funds shall apply equally to faith-based and non-faith-based 
organizations. All organizations, including religious ones, that 
participate in Department programs must carry out all eligible 
activities in accordance with all program requirements, including those 
prohibiting the use of direct Federal financial assistance from the 
Department to engage in explicitly religious activities, subject to any 
accommodations that are granted to organizations on a case-by-case 
basis in accordance with the Constitution and laws of the United 
States. No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by the Department or 
a State or local government in administering Federal financial 
assistance from the Department shall disqualify faith-based or 
religious organizations from participating in the Department's programs 
on the basis of the organization's religious character, motives, or 
affiliation, or lack thereof, or on the basis of conduct that would not 
be considered grounds to disqualify a similarly situated secular 
organization.
    (e) A faith-based organization's exemption from the Federal 
prohibition on employment discrimination on the basis of religion, set 
forth in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 
2000e-1(a), is not forfeited when the organization receives direct or 
indirect Federal financial assistance from the Department. Some 
Department programs, however, contain independent statutory provisions 
requiring that all grantees agree not to discriminate in employment on 
the basis of religion. Grantees receiving Federal financial assistance 
from such programs should consult with the appropriate Department 
program office to determine the scope of any applicable requirements.
    (f) If an intermediary, acting under a contract, grant, or other 
agreement with the Federal Government or with a State or local 
government that is administering a program supported by Federal 
financial assistance, is given the authority under the contract, grant, 
or agreement to select organizations to provide services funded by the 
Federal Government, the intermediary must ensure the compliance of the 
recipient of a contract, grant, or agreement with the provisions of 
Executive Order 13279, as amended by Executive Order 13559, and any 
implementing rules or guidance. If the intermediary is a 
nongovernmental organization, it retains all other rights of a 
nongovernmental organization under the program's statutory and 
regulatory provisions.
* * * * *

0
46. Revise Sec.  38.6 to read as follows:


Sec.  38.6  Procedures.

    (a) If a State or local government voluntarily contributes its own 
funds to supplement activities carried out under the applicable 
programs, the State or local government has the option to separate out 
the Federal funds or commingle them. If the funds are commingled, the 
provisions of this section shall apply to all of the commingled funds 
in the same manner, and to the same extent, as the provisions apply to 
the Federal funds.
    (b) An organization providing social services under a program of 
the Department supported by Federal financial assistance must give 
written notice to beneficiaries and prospective beneficiaries of 
certain protections in a manner and form prescribed by the Office for 
Civil Rights, including by incorporating the notice into materials that 
are otherwise provided to beneficiaries. This written notice shall 
include language substantially similar to that in appendix C to this 
part. The notice must include the following information:
    (1) The organization may not discriminate against a beneficiary or 
prospective beneficiary on the basis of religion, a religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice;
    (2) The organization may not require a beneficiary or prospective 
beneficiary to attend or participate in any explicitly religious 
activities that are offered by the organization, and any participation 
by a beneficiary in such activities must be purely voluntary;
    (3) The organization must separate in time or location any 
privately funded explicitly religious activities from activities 
supported by direct Federal financial assistance; and
    (4) A beneficiary or prospective beneficiary may report an 
organization's violation of these protections, including any denials of 
services or benefits by an organization, by contacting or filing a 
written complaint with the Office for Civil Rights or the intermediary 
that awarded funds to the organization.
    (c) The written notice described in paragraph (b) of this section 
must be given to a prospective beneficiary prior to the time the 
prospective beneficiary enrolls in the program or receives services 
from the program. When the nature of the service provided or exigent 
circumstances make it impracticable to provide such written notice in 
advance of the actual service, an organization must advise 
beneficiaries of their protections at the earliest available 
opportunity.
    (d) The Department may determine that the notice described in 
paragraph (b) of this section must inform each beneficiary or 
prospective beneficiary of the option to seek information from the 
Department, or a State agency or other entity administering the 
applicable program, as to whether there are any other federally funded 
organizations in their area that provide the kind of services available 
under the applicable program.
    (e) Notices or announcements of award opportunities and notices of 
award or contracts shall include language substantially similar to that 
in appendices A and B, respectively, to this part.

0
47. Revise appendix A to part 38 to read as follows:

Appendix A to Part 38--Notice or Announcement of Award Opportunities

    (a) Faith-based organizations may apply for this award on the 
same basis as any other organization, as set forth at, and subject 
to the protections and requirements of, this part and any applicable 
constitutional and statutory requirements, including 42 U.S.C.

[[Page 15715]]

2000bb et seq. The Department of Justice will not, in the selection 
of recipients, discriminate for or against an organization on the 
basis of the organization's religious character, motives, or 
affiliation, or lack thereof, or on the basis of conduct that would 
not be considered grounds to favor or disfavor a similarly situated 
secular organization.
    (b) A faith-based organization that participates in this program 
will retain its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (c) An organization may not use direct Federal financial 
assistance from the Department of Justice to support or engage in 
any explicitly religious activities except when consistent with the 
Establishment Clause of the First Amendment and any other applicable 
requirements. An organization receiving Federal financial assistance 
also may not, in providing services funded by the Department of 
Justice, or in their outreach activities related to such services, 
discriminate against a program beneficiary or prospective program 
beneficiary on the basis of religion, a religious belief, a refusal 
to hold a religious belief, or a refusal to attend or participate in 
a religious practice.


0
48. Revise appendix B to part 38 to read as follows:

Appendix B to Part 38--Notice of Award or Contract

    (a) A faith-based organization that participates in this program 
retains its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (b) An organization may not use direct Federal financial 
assistance from the Department of Justice to support or engage in 
any explicitly religious activities except when consistent with the 
Establishment Clause of the First Amendment and any other applicable 
requirements. An organization receiving Federal financial assistance 
also may not, in providing services funded by the Department of 
Justice, or in their outreach activities related to such services, 
discriminate against a program beneficiary or prospective program 
beneficiary on the basis of religion, a religious belief, a refusal 
to hold a religious belief, or a refusal to attend or participate in 
a religious practice.


0
49. Add appendix C to part 38 to read as follows:

Appendix C to Part 38--Written Notice of Beneficiary Protections

    Name of Organization:
    Name of Program:
    Contact Information for Program Staff: [provide name, phone 
number, and email address, if appropriate]
    Because this program is supported in whole or in part by 
financial assistance from the Federal Government, we are required to 
let you know that:
    (1) We may not discriminate against you on the basis of 
religion, a religious belief, a refusal to hold a religious belief, 
or a refusal to attend or participate in a religious practice;
    (2) We may not require you to attend or participate in any 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) that may be offered by our organization, and any 
participation by you in such activities must be purely voluntary;
    (3) We must separate in time or location any privately funded 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) from activities supported with direct Federal 
financial assistance;
    (4) You may report violations of these protections, including 
any denials of services or benefits by an organization, by 
contacting or filing a written complaint with the Department of 
Justice's Office for Civil Rights, 810 7th Street NW, Washington, DC 
20531, or by email to [email protected]; and
    [When required by the Department, the notice must also state:] 
(5) If you would like to seek information about whether there are 
any other federally funded organizations that provide these kinds of 
services in your area, please use the contact information for the 
Department's Office for Civil Rights set forth above.
    We are required to give this written notice to you before you 
enroll in the program or receive services from the program, unless 
the nature of the service provided or exigent circumstances make it 
impracticable for us to provide such notice before we provide the 
actual service. In such an instance, we must give this notice to you 
at the earliest available opportunity.

DEPARTMENT OF LABOR

    For the reasons set forth in the preamble, DOL amends part 2 of 
title 29 of the CFR as follows:

Title 29--Labor

PART 2--GENERAL REGULATIONS

0
50. Revise the authority citation for part 2 to read as follows:

    Authority: 5 U.S.C. 301; E.O. 13198, 66 FR 8497, 3 CFR, 2001 
Comp., p. 750; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; 
E.O. 13559, 75 FR 71319, 3 CFR, 2010 Comp., p. 273; E.O. 14015, 86 
FR 10007, 3 CFR, 2021 Comp., p. 517.


0
51. Revise the heading for subpart D to read as follows:

Subpart D--Equal Treatment in Department of Labor Programs for 
Faith-Based and Community Organizations; Protection of Religious 
Liberty of Department of Labor Social Service Providers and 
Beneficiaries

0
52. Amend Sec.  2.31 by revising paragraph (a) and the second sentence 
of paragraph (d) to read as follows:


Sec.  2.31  Definitions.

* * * * *
    (a) The term Federal financial assistance means assistance that 
non-Federal entities receive or administer in the form of grants, 
contracts, loans, loan guarantees, property, cooperative agreements, 
food commodities, direct appropriations, or other assistance, but does 
not include a tax credit, a deduction, or an exemption. Federal 
financial assistance may be direct or indirect.
    (1) The term direct Federal financial assistance or Federal 
financial assistance provided directly means that the Government or a 
DOL social service intermediary provider under this part selects the 
provider and either purchases services from that provider (e.g., via a 
contract) or awards funds to that provider to carry out a service 
(e.g., via a grant or cooperative agreement). In general, Federal 
financial assistance shall be treated as direct, unless it meets the 
definition of indirect Federal financial assistance or Federal 
financial assistance provided indirectly.
    (2) The term indirect Federal financial assistance or Federal 
financial assistance provided indirectly means that the choice of the 
service provider is placed in the hands of the beneficiary, and the 
cost of that service is paid through a voucher, certificate, or other 
similar means of Government-funded payment. Federal financial 
assistance provided to an organization is indirect when:
    (i) The Government program through which the beneficiary receives 
the voucher, certificate, or other similar means of Government-funded 
payment is neutral toward religion; and
    (ii) The organization receives the assistance wholly as a result of 
a genuine and independent private choice of the beneficiary, not a 
choice of the Government. The availability of adequate secular 
alternatives is a significant factor in determining whether a program 
affords a genuinely independent and private choice.
    (3) The recipient of sub-awards received through programs 
administered by States or other intermediaries that are themselves 
recipients of Federal financial assistance (e.g., local areas that 
receive within-state allocations to provide workforce services under 
title I of the Workforce Innovation and Opportunity Act) are not 
considered recipients of indirect Federal financial assistance or 
recipients of Federal financial assistance provided indirectly as those 
terms are used in Executive Order 13559. These recipients of sub-

[[Page 15716]]

awards are considered recipients of direct Federal financial 
assistance.
* * * * *
    (d) * * * Such programs include, but are not limited to, the one-
stop delivery system, Job Corps, and other programs supported through 
the Workforce Innovation and Opportunity Act.
* * * * *

0
53. Revise Sec.  2.32 to read as follows:


Sec.  2.32  Equal participation of faith-based organizations.

    (a)(1) Faith-based organizations are eligible, on the same basis as 
any other organization, to seek DOL support or participate in DOL 
programs for which they are otherwise eligible. DOL and DOL social 
service intermediary providers, as well as State and local governments 
administering DOL support, must not discriminate for or against an 
organization on the basis of the organization's religious character, 
motives, or affiliation, or lack thereof, or on the basis of conduct 
that would not be considered grounds to favor or disfavor a similarly 
situated secular organization.
    (2) Notices and announcements of award opportunities, and notices 
of awards and contracts, shall include language substantially similar 
to that in appendices A and B to this subpart, respectively.
    (b)(1) A grant document, contract or other agreement, covenant, 
memorandum of understanding, policy, or regulation that is used by DOL, 
a State or local government administering DOL support, or a DOL social 
service intermediary provider must not require faith-based 
organizations to provide assurances or notices where they are not 
required of non-faith-based organizations.
    (2) No grant document, contract or other agreement, covenant, 
memorandum of understanding, policy, or regulation that is used by DOL, 
a State or local government, or a DOL social service intermediary 
provider in administering a DOL social service program shall disqualify 
faith-based or religious organizations from receiving DOL support or 
participating in DOL programs on the basis of the organization's 
religious character, motives, or affiliation, or lack thereof, or on 
the basis of conduct that would not be considered grounds to disqualify 
a similarly situated secular organization.
    (c)(1) A faith-based organization that is a DOL social service 
provider retains its autonomy; right of expression; religious 
character; and independence from Federal, State, and local governments 
and must be permitted to continue to carry out its mission, including 
the definition, development, practice, and expression of its religious 
beliefs, provided that it does not use direct Federal financial 
assistance, whether received through a prime award or sub-award, to 
support or engage in any explicitly religious activities (including 
activities that involve overt religious content such as worship, 
religious instruction, or proselytization).
    (2) Among other things, a faith-based organization must be 
permitted to:
    (i) Use its facilities to provide DOL-supported social services 
without concealing, removing, or altering religious art, icons, 
scriptures, or other religious symbols from those facilities; and
    (ii) Retain its authority over its internal governance, including 
retaining religious terms in its name, selecting its board members on 
the basis of their acceptance of or adherence to the religious 
requirements or standards of the organization, and including religious 
references in its mission statements and other governing documents.
    (d)(1) Any restrictions on the use of financial assistance under a 
grant shall apply equally to faith-based and non-faith-based 
organizations.
    (2) All organizations, including religious ones, that are DOL 
social service providers must carry out DOL-supported activities in 
accordance with all program requirements, including those prohibiting 
the use of direct Federal financial assistance for explicitly religious 
activities (including worship, religious instruction, or 
proselytization).
    (e)(1) Nothing in this subpart shall be construed to preclude DOL 
from making an accommodation, including for religious exercise, with 
respect to one or more program requirements on a case-by-case basis in 
accordance with the Constitution and laws of the United States, 
including Federal civil rights laws.
    (2) DOL shall not disqualify an organization from participating in 
any DOL program for which it is eligible on the basis of the 
organization's indication that it may request an accommodation with 
respect to one or more program requirements, unless the organization 
has made clear that the accommodation is necessary to its participation 
and DOL has determined that it would deny the accommodation.

0
54. Amend Sec.  2.33 by revising the section heading, the first two 
sentences of paragraph (a), and paragraphs (b)(1) and (c) to read as 
follows:


Sec.  2.33  Responsibilities of DOL, DOL social service providers, and 
State and local governments administering DOL support.

    (a) Any organization that participates in a program funded by 
Federal financial assistance shall not, in providing services supported 
in whole or in part with Federal financial assistance, or in conducting 
outreach activities related to such services, discriminate against a 
current or prospective program beneficiary on the basis of religion, a 
religious belief, a refusal to hold a religious belief, or a refusal to 
attend or participate in a religious practice. However, an organization 
that participates in a program funded by indirect Federal financial 
assistance need not modify its program activities to accommodate a 
beneficiary who chooses to expend the indirect aid on the 
organization's program. * * *
    (b)(1) Organizations that receive direct Federal financial 
assistance may not engage in explicitly religious activities (including 
activities that involve overt religious content such as worship, 
religious instruction, or proselytization) as part of the programs or 
services funded with direct Federal financial assistance. If an 
organization conducts such explicitly religious activities, the 
activities must be offered separately, in time or location, from the 
programs or services funded with direct Federal financial assistance, 
and participation must be voluntary for beneficiaries of the programs 
and services funded with such assistance.
* * * * *
    (c) If a DOL social service intermediary provider, acting under a 
contract, grant, or other agreement with the Federal Government or with 
a State or local government that is administering a program supported 
by Federal financial assistance, is given the authority under the 
contract, grant, or agreement to select non-governmental organizations 
to provide services funded by the Federal Government, the DOL social 
service intermediary provider must ensure the recipient's compliance 
with the provisions of Executive Order 13279, as amended by Executive 
Order 13559, and any implementing rules or guidance. If the DOL social 
service intermediary provider is a non-governmental organization, it 
retains all other rights of a non-governmental organization under the 
program's statutory and regulatory provisions.

0
55. Add Sec.  2.34 to read as follows:


Sec.  2.34  Written notice to beneficiaries.

    (a) Notice to beneficiaries of programs supported by direct Federal 
financial assistance. Organizations providing

[[Page 15717]]

social services to beneficiaries under programs supported by direct 
Federal financial assistance from DOL must give the written notice 
described in paragraph (c) of this section to beneficiaries and 
prospective beneficiaries.
    (b) Notice to beneficiaries of programs supported by indirect 
Federal financial assistance. The entity responsible for disbursing 
Federal funds as part of a program of indirect Federal financial 
assistance administered by DOL must give the written notice described 
in paragraph (c) of this section to beneficiaries and prospective 
beneficiaries.
    (c) Contents of the notice. The required language for the written 
notice to beneficiaries and prospective beneficiaries is set forth in 
appendix C to this subpart. The notice includes the following:
    (1) The organization may not discriminate against beneficiaries or 
prospective beneficiaries on the basis of religion, a religious belief, 
a refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice;
    (2) The organization may not require beneficiaries or prospective 
beneficiaries to attend or participate in any explicitly religious 
activities that are offered by the organization, and any participation 
by beneficiaries in such activities must be purely voluntary;
    (3) The organization must separate in time or location any 
privately funded explicitly religious activities from activities 
supported by direct Federal financial assistance;
    (4) Beneficiaries and prospective beneficiaries may report an 
organization's violation of these protections, including any denials of 
services or benefits by an organization, by contacting or filing a 
written complaint with DOL's Civil Rights Center, 200 Constitution 
Avenue NW, Room N-4123, Washington, DC 20210, or by email to 
[email protected]; and
    (5) Beneficiaries and potential beneficiaries may seek information 
about whether there are any other federally funded organizations that 
provide these kinds of services in their area by calling DOL's US2-JOBS 
helpline toll-free at 1-877-US2-JOBS (1-877-872-5627) or TTY 1-877-889-
5627.
    (d) Timing. The written notice set forth in appendix C to this 
subpart must be given to prospective beneficiaries before they enroll 
in the program or receive services from the program. The written notice 
may be incorporated into materials that are otherwise provided to 
prospective beneficiaries. When the nature of the service provided or 
exigent circumstances make it impracticable to provide such written 
notice in advance of the actual service, organizations must advise 
beneficiaries of their protections at the earliest available 
opportunity.

0
56. Revise Sec.  2.37 to read as follows:


Sec.  2.37  Effect of DOL support on Title VII employment 
nondiscrimination requirements and on other existing statutes.

    A religious organization's exemption from the Federal prohibition 
on employment discrimination on the basis of religion, set forth in 
section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is 
not forfeited when the organization receives direct or indirect Federal 
financial assistance from DOL. Some DOL programs, however, were 
established through Federal statutes containing independent statutory 
provisions requiring that recipients refrain from discriminating on the 
basis of religion. In this case, to determine the scope of any 
applicable requirements, recipients and potential recipients should 
consult with the appropriate DOL program office or with the Civil 
Rights Center, U.S. Department of Labor, 200 Constitution Avenue NW, 
Room N-4123, Washington, DC 20210, (202) 693-6500. If you are deaf, 
hard of hearing, or have a speech disability, please dial 7-1-1 to 
reach the number in the preceding sentence through telecommunications 
relay services.

0
57. Amend Sec.  2.38 by:
0
a. Revising paragraphs (b)(3) and (4).
0
b. Removing paragraph (b)(5).
    The revisions read as follows:


Sec.  2.38  Status of nonprofit organizations.

* * * * *
    (b) * * *
    (3) A certified copy of the applicant's certificate of 
incorporation or similar document that clearly establishes the 
nonprofit status of the applicant; or
    (4) Any item described in paragraphs (b)(1) through (3) of this 
section, if that item applies to a State or national parent 
organization, together with a statement by the State or national parent 
organization that the applicant is a local nonprofit affiliate of the 
organization.

0
58. Add appendix A to subpart D to read as follows:

Appendix A to Subpart D of Part 2--Notice or Announcement of Award 
Opportunities

    (a) Faith-based organizations may apply for this award on the 
same basis as any other organization, subject to the protections and 
requirements of this subpart and any applicable constitutional and 
statutory requirements, including 42 U.S.C. 2000bb et seq. DOL will 
not, in the selection of recipients, discriminate for or against an 
organization on the basis of the organization's religious character, 
motives, or affiliation, or lack thereof, or on the basis of conduct 
that would not be considered grounds to favor or disfavor a 
similarly situated secular organization.
    (b) A faith-based organization that participates in this program 
will retain its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (c) A faith-based organization may not use direct Federal 
financial assistance to support or engage in any explicitly 
religious activities except where consistent with the Establishment 
Clause of the First Amendment and any other applicable requirements. 
An organization receiving Federal financial assistance also may not, 
in providing services funded by DOL, or in conducting outreach 
activities related to such services, discriminate against a program 
beneficiary or prospective program beneficiary on the basis of 
religion, a religious belief, a refusal to hold a religious belief, 
or a refusal to attend or participate in a religious practice.


0
59. Add appendix B to subpart D to read as follows:

Appendix B to Subpart D of Part 2--Notice of Award or Contract

    (a) A faith-based organization that participates in this program 
retains its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (b) A faith-based organization may not use direct Federal 
financial assistance to support or engage in any explicitly 
religious activities except where consistent with the Establishment 
Clause of the First Amendment and any other applicable requirements. 
An organization receiving Federal financial assistance also may not, 
in providing services funded by DOL, or in conducting outreach 
activities related to such services, discriminate against a program 
beneficiary or prospective program beneficiary on the basis of 
religion, a religious belief, a refusal to hold a religious belief, 
or a refusal to attend or participate in a religious practice.


0
60. Add appendix C to subpart D to read as follows:

Appendix C to Subpart D of Part 2--Written Notice of Beneficiary 
Protections

    Name of Organization:
    Name of Program:
    Type of Federal Financial Assistance: [specify DIRECT Federal 
financial assistance or INDIRECT Federal financial assistance]
    Contact Information for Program Staff: [provide name, phone 
number, and email address, if appropriate]
    Because this program is supported in whole or in part by 
financial assistance from

[[Page 15718]]

the Federal Government, we are required to let you know that:
    (1) We may not discriminate against you on the basis of 
religion, a religious belief, a refusal to hold a religious belief, 
or a refusal to attend or participate in a religious practice;
    (2) We may not require you to attend or participate in any 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) that are offered by our organization, and any 
participation by you in such activities must be purely voluntary;
    (3) We must separate in time or location any privately funded 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) from activities supported with direct Federal 
financial assistance;
    (4) You may report violations of these protections, including 
any denials of services or benefits by an organization, by 
contacting or filing a written complaint with the U.S. Department of 
Labor's Civil Rights Center, 200 Constitution Avenue NW, Room N-
4123, Washington, DC 20210, or by email to 
[email protected]; and
    (5) If you would like to seek information about whether there 
are any other federally funded organizations that provide these 
kinds of services in your area, please call toll-free 1-877-US2-JOBS 
(1-877-872-5627) or TTY 1-877-889-5627.
    This written notice must be given to you before you enroll in 
the program or receive services from the program, unless the nature 
of the service provided or exigent circumstances make it 
impracticable to provide such notice before we provide the actual 
service. In such an instance, this notice must be given to you at 
the earliest available opportunity.

Appendix A to Part 2 [Removed]

0
61. Remove appendix A to part 2.

Appendix B to Part 2 [Removed]

0
62. Remove appendix B to part 2.

DEPARTMENT OF VETERANS AFFAIRS

    For the reasons set forth in the preamble, VA amends 38 CFR parts 
50, 61, and 62 as follows:

Title 38--Pensions, Bonuses, and Veterans' Relief

PART 50--EQUAL TREATMENT OF FAITH-BASED ORGANIZATIONS

0
63. The authority citation for part 50 continues to read as follows:

    Authority:  38 U.S.C. 501 and as noted in specific sections.


0
64. Amend Sec.  50.1 by revising paragraphs (b)(2) and (c) to read as 
follows:


Sec.  50.1  Definitions.

* * * * *
    (b) * * *
    (2) The organization receives the assistance wholly as a result of 
a genuine and independent private choice of the beneficiary, not a 
choice of the Government. The availability of adequate secular 
alternatives is a significant factor in determining whether a program 
affords a genuine and independent private choice.
    (c) Federal financial assistance means assistance that non-Federal 
entities receive or administer in the form of grants, contracts, loans, 
loan guarantees, property, cooperative agreements, food commodities, 
direct appropriations, or other assistance, but does not include a tax 
credit, deduction, or exemption.
* * * * *

0
65. Revise Sec.  50.2 to read as follows:


Sec.  50.2  Faith-based organizations and Federal financial assistance.

    (a) Faith-based organizations are eligible, on the same basis as 
any other organization, to participate in any VA program or service for 
which they are otherwise eligible. Neither the VA program nor any State 
or local government or other pass-through entity receiving funds under 
any VA program shall, in the selection of service providers, 
discriminate for or against an organization on the basis of the 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to favor or disfavor a similarly situated secular organization.
    (b) Organizations that receive direct Federal financial assistance 
from a VA program may not engage in any explicitly religious activities 
(including activities that involve overt religious content such as 
worship, religious instruction, or proselytization) as part of the 
programs or services funded with direct Federal financial assistance 
from the VA program, or in any other manner prohibited by law. If an 
organization conducts such activities, the activities must be offered 
separately, in time or location, from the programs or services funded 
with direct Federal financial assistance from the VA program, and 
participation must be voluntary for beneficiaries of the programs or 
services funded with such assistance. The use of indirect Federal 
financial assistance is not subject to this restriction. Nothing in 
this part restricts VA's authority under applicable Federal law to fund 
activities, such as the provision of chaplaincy services, that can be 
directly funded by the Government consistent with the Establishment 
Clause.
    (c) A faith-based organization that participates in programs or 
services funded by a VA program will retain its autonomy; right of 
expression; religious character; and independence from Federal, State, 
and local governments, and may continue to carry out its mission, 
including the definition, development, practice, and expression of its 
religious beliefs. A faith-based organization that receives direct 
Federal financial assistance may use space in its facilities to provide 
programs or services funded with financial assistance from the VA 
program without concealing, removing, or altering religious art, icons, 
scriptures, or other religious symbols. In addition, a faith-based 
organization that receives Federal financial assistance from a VA 
program does not lose the protections of law. Such a faith-based 
organization retains its authority over its internal governance, and it 
may retain religious terms in its name, select its board members on the 
basis of their acceptance of or adherence to the religious tenets of 
the organization, and include religious references in its mission 
statements and other governing documents.
    (d) Any organization that participates in programs funded by 
Federal financial assistance from the VA shall not, in providing 
services supported in whole or in part with Federal financial 
assistance, or in their outreach activities related to such services, 
discriminate against a program beneficiary or prospective program 
beneficiary on the basis of religion, a religious belief, a refusal to 
hold a religious belief, or a refusal to attend or participate in a 
religious practice. However, an organization receiving indirect Federal 
financial assistance need not modify its program activities to 
accommodate a beneficiary who chooses to expend the indirect aid on the 
organization's program.
    (e) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation that is used by a VA program or a 
State or local government in administering Federal financial assistance 
from any VA program shall require faith-based organizations to provide 
assurances or notices where they are not required of non-faith-based 
organizations. Any restrictions on the use of grant funds shall apply 
equally to faith-based and non-faith-based organizations. All 
organizations that participate in VA programs or services, including 
faith-based ones, must carry out eligible activities in accordance with 
all program requirements, including those prohibiting the use of direct 
financial assistance to engage in explicitly religious activities, 
subject to any accommodations that are granted on a case-by-case basis 
in accordance with

[[Page 15719]]

the Constitution and laws of the United States. No grant document, 
agreement, covenant, memorandum of understanding, policy, or regulation 
that is used by VA or a State or local government in administering 
financial assistance from VA shall disqualify faith-based organizations 
from participating in the VA programs or services on the basis of the 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to disqualify a similarly situated secular organization.
    (f) Nothing in this part shall be construed to preclude VA from 
making an accommodation, including for religious exercise, with respect 
to one or more program requirements on a case-by-case basis in 
accordance with the Constitution and laws of the United States.
    (g) VA shall not disqualify an organization from participating in 
any VA program for which it is eligible on the basis of the 
organization's indication that it may request an accommodation with 
respect to one or more program requirements, unless the organization 
has made clear that the accommodation is necessary to its participation 
and VA has determined that it would deny the accommodation.
    (h) A faith-based organization's exemption from the Federal 
prohibition on employment discrimination on the basis of religion, set 
forth in section 702(a) of the Civil Rights Act of 1964 (42 U.S.C. 
2000e-1), is not forfeited when the organization receives direct or 
indirect Federal financial assistance from a VA program. Some VA 
programs, however, contain independent statutory provisions affecting a 
recipient's ability to discriminate on the basis of religion in 
employment. In this case, recipients should consult with the 
appropriate VA program office if they have questions about the scope of 
any applicable requirements.
    (i) In general, VA programs do not require that a recipient, 
including a faith-based organization, obtain tax-exempt status under 
section 501(c)(3) of the Internal Revenue Code to be eligible for 
funding under VA programs. Some grant programs, however, do require an 
organization to be a nonprofit organization in order to be eligible for 
funding. Funding announcements and other grant application 
solicitations that require organizations to have nonprofit status will 
specifically so indicate in the eligibility section of the 
solicitation. In addition, any solicitation that requires an 
organization to maintain tax-exempt status will expressly state the 
statutory authority for requiring such status. Recipients should 
consult with the appropriate VA program office to determine the scope 
of any applicable requirements. In VA programs in which an applicant 
must show that it is a nonprofit organization, the applicant may do so 
by any of the following means:
    (1) Proof that the Internal Revenue Service currently recognizes 
the applicant as an organization to which contributions are tax 
deductible under section 501(c)(3) of the Internal Revenue Code;
    (2) A statement from a State or other governmental taxing body or 
the State secretary of State certifying that:
    (i) The organization is a nonprofit organization operating within 
the State; and
    (ii) No part of its net earnings may benefit any private 
shareholder or individual;
    (3) A certified copy of the applicant's certificate of 
incorporation or similar document that clearly establishes the 
nonprofit status of the applicant; or
    (4) Any item described in paragraphs (i)(1) through (3) of this 
section if that item applies to a State or national parent 
organization, together with a statement by the State or parent 
organization that the applicant is a local nonprofit affiliate.
    (j) If a recipient contributes its own funds in excess of those 
funds required by a matching or grant agreement to supplement VA 
program-supported activities, the recipient has the option to segregate 
those additional funds or commingle them with the Federal award funds. 
If the funds are commingled, the provision of this part shall apply to 
all of the commingled funds in the same manner, and to the same extent, 
as the provisions apply to the Federal funds. With respect to the 
matching funds, the provisions of this part apply irrespective of 
whether such funds are commingled with Federal funds or segregated.
    (k) Decisions about awards of Federal financial assistance must be 
made on the basis of merit, not on the basis of the religious 
affiliation, or lack thereof, of a recipient organization, and must be 
free from political interference or even the appearance of such 
interference.
    (l) Neither VA nor any State or local government or other pass-
through entity receiving funds under any VA program or service shall 
construe these provisions in such a way as to advantage or disadvantage 
faith-based organizations affiliated with historic or well-established 
religions or sects in comparison with other religions or sects.
    (m) If a pass-through entity, acting under a contract, grant, or 
other agreement with the Federal Government or with a State or local 
government that is administering a program supported by Federal 
financial assistance, is given the authority under the contract, grant, 
or agreement to select non-governmental organizations to provide 
services funded by the Federal Government, the pass-through entity must 
ensure compliance by the subrecipient with the provisions of this part 
and any implementing regulations or guidance. If the pass-through 
entity is a non-governmental organization, it retains all other rights 
of a non-governmental organization under the program's statutory and 
regulatory provisions.

0
66. Add Sec.  50.3 to read as follows:


Sec.  50.3  Notice requirements.

    (a) An organization providing social services under a program of VA 
supported by Federal financial assistance must give written notice to 
beneficiaries and prospective beneficiaries of certain protections in a 
manner and form prescribed by the VA program. The language for this 
written notice to beneficiaries must be substantially similar to the 
text set forth in appendix C to this part. Specifically, the notice 
must include the following:
    (1) The organization may not discriminate against a beneficiary or 
prospective beneficiary on the basis of religion, a religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice;
    (2) The organization may not require a beneficiary or prospective 
beneficiary to attend or participate in any explicitly religious 
activities that are offered by the organization, and any participation 
by a beneficiary in such activities must be purely voluntary;
    (3) The organization must separate in time or location any 
privately funded explicitly religious activities from activities 
supported by direct Federal financial assistance; and
    (4) A beneficiary or prospective beneficiary may report an 
organization's violation of these protections, including any denials of 
services or benefits by an organization, by contacting or filing a 
written complaint with the VA program or the intermediary that awarded 
funds to the organization.
    (b) The written notice described in paragraph (a) of this section 
must be given to a prospective beneficiary prior to the time the 
prospective beneficiary enrolls in the program or receives services 
from the program. When the nature of the service provided or exigent 
circumstances make it impracticable to provide such written notice in 
advance of the actual service, an organization

[[Page 15720]]

must advise beneficiaries of their protections at the earliest 
available opportunity.
    (c) VA may determine that the notice described in paragraph (a) of 
this section must inform each beneficiary or prospective beneficiary of 
the option to seek information from VA, or another entity administering 
the program, as to whether there are any other federally funded 
organizations in their area that provide the services available under 
the applicable program.
    (d) Notices or announcements of award opportunities and notices of 
award or contracts shall include language substantially similar to that 
in appendices A and B, respectively, to this part.

0
67. Revise appendix A to part 50 to read as follows:

Appendix A to Part 50--Notice or Announcement of Award Opportunities

    (a) Faith-based organizations may apply for this award on the 
same basis as any other organization, as set forth at, and subject 
to the protections and requirements of, this part and any applicable 
constitutional and statutory requirements, including 42 U.S.C. 
2000bb et seq. VA will not, in the selection of recipients, 
discriminate for or against an organization on the basis of the 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to favor or disfavor a similarly situated secular 
organization.
    (b) A faith-based organization that participates in this program 
will retain its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (c) A faith-based organization may not use direct financial 
assistance from VA to support or engage in any explicitly religious 
activities except where consistent with the Establishment Clause of 
the First Amendment and any other applicable requirements. An 
organization receiving Federal financial assistance also may not, in 
providing services funded by VA, or in their outreach activities 
related to such services, discriminate against a program beneficiary 
or prospective program beneficiary on the basis of religion, a 
religious belief, a refusal to hold a religious belief, or a refusal 
to attend or participate in a religious practice.


0
68. Revise appendix B to part 50 to read as follows:

Appendix B to Part 50--Notice of Award or Contract

    (a) A faith-based organization that participates in this program 
retains its independence from the Government and may continue to 
carry out its mission consistent with religious freedom and 
conscience protections in Federal law.
    (b) A faith-based organization may not use direct Federal 
financial assistance from VA to support or engage in any explicitly 
religious activities except when consistent with the Establishment 
Clause and any other applicable requirements. An organization 
receiving Federal financial assistance also may not, in providing 
services funded by VA, or in their outreach activities related to 
such services, discriminate against a program beneficiary or 
prospective program beneficiary on the basis of religion, a 
religious belief, a refusal to hold a religious belief, or a refusal 
to attend or participate in a religious practice.


0
69. Add appendix C to part 50 to read as follows:

Appendix C to Part 50--Written Notice of Beneficiary Protections

    Name of Organization:
    Name of Program:
    Contact Information for VA Grant Program Office (name, phone 
number, and email address, if appropriate):
    Because this program is supported in whole or in part by 
financial assistance from the Federal Government, we are required to 
let you know that:
    (1) We may not discriminate against you on the basis of 
religion, a religious belief, a refusal to hold a religious belief, 
or a refusal to attend or participate in a religious practice;
    (2) We may not require you to attend or participate in any 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) that may be offered by our organization, and any 
participation by you in such activities must be purely voluntary;
    (3) We must separate in time or location any privately funded 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction, or 
proselytization) from activities supported with direct Federal 
financial assistance;
    (4) You may report violations of these protections, including 
any denials of services or benefits by an organization, by 
contacting or filing a written complaint with the grant program 
office using the contact information set forth above; and
    [When required by VA, the notice must also state:] (5) If you 
would like to seek information about whether there are any other 
federally funded organizations that provide these kinds of services 
in your area, please use the contact information set forth above.
    This written notice must be given to you before you enroll in 
the program or receive services from the program, unless the nature 
of the service provided or exigent circumstances make it 
impracticable to provide such notice before we provide the actual 
service. In such an instance, this notice must be given to you at 
the earliest available opportunity.

PART 61--VA HOMELESS PROVIDERS GRANT AND PER DIEM PROGRAM

0
70. The authority citation for part 61 continues to read as follows:

    Authority: 38 U.S.C. 501, 2001, 2002, 2011, 2012, 2013, 2061, 
2064.


0
71. Amend Sec.  61.64 by revising paragraphs (b)(2), (e), and (g) to 
read as follows:


Sec.  61.64  Faith-based organizations.

* * * * *
    (b) * * *
    (2) For purposes of this section, ``indirect Federal financial 
assistance'' means Federal financial assistance in which a service 
provider receives program funds through a voucher, certificate, 
agreement, or other form of disbursement, wholly as a result of the 
genuinely independent and private choice of a beneficiary, not a choice 
of the Government. The availability of adequate secular alternatives is 
a significant factor in determining whether a program affords true 
private choice. ``Direct Federal financial assistance'' means Federal 
financial assistance received by an entity selected by the Government 
or a pass-through entity as defined in 38 CFR 50.1(d) to provide or 
carry out a service (e.g., by contract, grant, or cooperative 
agreement). References to ``financial assistance'' will be deemed to be 
references to direct Federal financial assistance, unless the 
referenced assistance meets the definition of ``indirect Federal 
financial assistance'' in this paragraph (b)(2).
* * * * *
    (e) An organization that participates in a VA program under this 
part shall not, in providing direct program assistance, discriminate 
against a program beneficiary or prospective program beneficiary 
regarding housing, supportive services, or technical assistance, on the 
basis of religion, a religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious practice.
* * * * *
    (g) To the extent otherwise permitted by Federal law, the 
restrictions on explicitly religious activities set forth in this 
section do not apply where VA funds are provided to faith-based 
organizations through indirect assistance wholly as a result of a 
genuinely independent and private choice of a beneficiary, provided the 
faith-based organizations otherwise satisfy the requirements of this 
part. A faith-based organization may receive such funds as the result 
of a beneficiary's genuine and independent choice if, for example, a 
beneficiary redeems a voucher, coupon, or certificate, allowing the 
beneficiary to direct where funds are to be paid, or a similar funding 
mechanism provided to

[[Page 15721]]

that beneficiary and designed to give that beneficiary a choice among 
providers.

PART 62--SUPPORTIVE SERVICES FOR VETERAN FAMILIES PROGRAM

0
72. The authority citation for part 62 continues to read as follows:

    Authority: 38 U.S.C. 501, 2044, and as noted in specific 
sections.


0
73. Amend Sec.  62.62 by revising paragraphs (b)(2), (e), and (g) to 
read as follows:


Sec.  62.62  Faith-based organizations.

* * * * *
    (b) * * *
    (2) For purposes of this section, ``indirect Federal financial 
assistance'' means Federal financial assistance in which a service 
provider receives program funds through a voucher, certificate, 
agreement, or other form of disbursement, wholly as a result of the 
genuinely independent and private choice of a beneficiary, not a choice 
of the Government. The availability of adequate secular alternatives is 
a significant factor in determining whether a program affords true 
private choice. ``Direct Federal financial assistance'' means Federal 
financial assistance received by an entity selected by the Government 
or a pass-through entity as defined in 38 CFR 50.1(d) to provide or 
carry out a service (e.g., by contract, grant, or cooperative 
agreement). References to ``financial assistance'' will be deemed to be 
references to direct Federal financial assistance, unless the 
referenced assistance meets the definition of ``indirect Federal 
financial assistance'' in this paragraph (b)(2).
* * * * *
    (e) An organization that participates in a VA program under this 
part shall not, in providing direct program assistance, discriminate 
against a program beneficiary or prospective program beneficiary 
regarding housing, supportive services, or technical assistance, on the 
basis of religion, a religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious practice.
* * * * *
    (g) To the extent otherwise permitted by Federal law, the 
restrictions on explicitly religious activities set forth in this 
section do not apply where VA funds are provided to faith-based 
organizations through indirect assistance wholly as a result of a 
genuinely independent and private choice of a beneficiary, provided the 
faith-based organizations otherwise satisfy the requirements of this 
part. A faith-based organization may receive such funds as the result 
of a beneficiary's genuine and independent choice if, for example, a 
beneficiary redeems a voucher, coupon, or certificate, allowing the 
beneficiary to direct where funds are to be paid, or a similar funding 
mechanism provided to that beneficiary and designed to give that 
beneficiary a choice among providers.

DEPARTMENT OF HEALTH AND HUMAN SERVICES

    For the reasons set forth in the preamble, HHS amends part 87 of 
title 45 of the CFR as follows:

Title 45--Public Welfare

PART 87--EQUAL TREATMENT FOR FAITH-BASED ORGANIZATIONS

0
74. The authority citation for part 87 continues to read as follows:

    Authority: 5 U.S.C. 301; 42 U.S.C. 2000bb et seq.


0
75. Amend Sec.  87.1 by revising paragraphs (c) and (d) to read as 
follows:


Sec.  87.1  Definitions.

* * * * *
    (c) Indirect Federal financial assistance or Federal financial 
assistance provided indirectly means Federal financial assistance 
received by a service provider when the service provider is paid for 
services rendered by means of a voucher, certificate, or other means of 
Government-funded payment provided to a beneficiary who is able to make 
a choice of a service provider, and:
    (1) The Government program through which the beneficiary receives 
the voucher, certificate, or other similar means of Government-funded 
payment is neutral toward religion; and
    (2) The service provider receives the assistance wholly as a result 
of a genuine and independent private choice of the beneficiary, not a 
choice of the Government. The availability of adequate secular 
alternatives is a significant factor in determining whether a program 
affords true private choice.
    (d) Federal financial assistance means assistance that non-Federal 
entities receive or administer in the form of grants, contracts, loans, 
loan guarantees, property, cooperative agreements, food commodities, 
direct appropriations, or other assistance, but does not include a tax 
credit, deduction, or exemption. Federal financial assistance may be 
direct or indirect.
* * * * *

0
76. Amend Sec.  87.2 by revising paragraphs (a) and (b) to read as 
follows:


Sec.  87.2  Applicability.

* * * * *
    (a) Discretionary grants. This part is not applicable to the 
discretionary grant programs that are governed by the Substance Abuse 
and Mental Health Services Administration (SAMHSA) Charitable Choice 
regulations found at 42 CFR part 54a. This part is also not applicable 
to discretionary grant programs that are governed by the Community 
Services Block Grant (CSBG) Charitable Choice regulations at 45 CFR 
part 1050, with the exception of Sec. Sec.  87.1 and 87.3(k) through 
(m) and (o), which do apply to such CSBG discretionary grants. 
Discretionary grants authorized by the Child Care and Development Block 
Grant Act are also not governed by this part.
    (b) Formula and block grants. This part does not apply to non-
discretionary and block grant programs governed by the SAMHSA 
Charitable Choice regulations found at 42 CFR part 54, or the Temporary 
Assistance for Needy Families (TANF) Charitable Choice regulations at 
45 CFR part 260. Block grants governed by the CSBG Charitable Choice 
regulations at 45 CFR part 1050 are not subject to this part, with the 
exception of Sec. Sec.  87.1 and 87.3(k) through (m) and (o), which do 
apply to such CSBG block grants. This part is not applicable to Child 
Care and Development Block Grants governed by 45 CFR part 98.

0
77. Amend Sec.  87.3 by:
0
a. Revising paragraph (a).
0
b. Redesignating paragraphs (b) through (h) and (i) through (k) as 
paragraphs (d) through (j) and (o) through (q), respectively.
0
c. Adding new paragraphs (b) and (c).
0
d. Removing note 1 following newly redesignated paragraph (e).
0
e. Revising newly redesignated paragraphs (f) through (h) and (i)(3) 
and (4).
0
f. Removing newly redesignated paragraph (i)(5).
0
g. Adding a new paragraph (k) and paragraphs (l) through (n).
    The revisions and additions read as follows:


Sec.  87.3  Faith-based organizations and Federal financial assistance.

    (a) Faith-based organizations are eligible, on the same basis as 
any other organization, to participate in any HHS awarding agency 
program or service for which they are otherwise eligible. Neither the 
HHS awarding agency nor any State or local government or other pass-
through entity receiving funds

[[Page 15722]]

under any HHS awarding agency program or service shall, in the 
selection of service providers, discriminate for or against an 
organization on the basis of the organization's religious character, 
motives, or affiliation, or lack thereof, or on the basis of conduct 
that would not be considered grounds to favor or disfavor a similarly 
situated secular organization.
    (b) Nothing in this part shall be construed to preclude HHS from 
making an accommodation, including for religious exercise, with respect 
to one or more program requirements on a case-by-case basis in 
accordance with the Constitution and laws of the United States.
    (c) HHS shall not disqualify an organization from participating in 
any HHS program for which it is eligible on the basis of the 
organization's indication that it may request an accommodation with 
respect to one or more program requirements, unless the organization 
has made clear that the accommodation is necessary to its participation 
and HHS has determined that it would deny the accommodation.
* * * * *
    (f) An organization, whether faith-based or not, that receives 
Federal financial assistance from HHS shall not, in providing services 
supported in whole or in part with Federal financial assistance, or in 
their outreach activities related to such services, discriminate 
against a program beneficiary or prospective program beneficiary on the 
basis of religion, a religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious practice. 
However, a faith-based organization receiving indirect Federal 
financial assistance need not modify any religious components or 
integration with respect to its program activities to accommodate a 
beneficiary who chooses to expend the indirect aid on the 
organization's program.
    (g) No grant document, agreement, covenant, memorandum of 
understanding, policy, or regulation used by an HHS awarding agency or 
a State or local government in administering Federal financial 
assistance from the HHS awarding agency shall require faith-based 
organizations to provide assurances or notices where they are not 
required of non-faith-based organizations. Any restrictions on the use 
of grant funds shall apply equally to faith-based and non-faith-based 
organizations. All organizations, whether faith-based or not, that 
participate in HHS awarding agency programs or services must carry out 
eligible activities in accordance with all program requirements, 
including those prohibiting the use of direct Federal financial 
assistance to engage in explicitly religious activities, subject to any 
accommodations that HHS grants to organizations on a case-by-case basis 
in accordance with the Constitution and laws of the United States. No 
grant document, agreement, covenant, memorandum of understanding, 
policy, or regulation used by an HHS awarding agency or a State or 
local government in administering Federal financial assistance from the 
HHS awarding agency shall disqualify faith-based organizations from 
participating in the HHS awarding agency's programs or services on the 
basis of the organization's religious character, motives, or 
affiliation, or lack thereof, or on the basis of conduct that would not 
be considered grounds to disqualify a similarly situated secular 
organization.
    (h) A faith-based organization's exemption from the Federal 
prohibition on employment discrimination on the basis of religion, set 
forth in the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is not 
forfeited when the faith-based organization receives direct or indirect 
Federal financial assistance from an HHS awarding agency. Some HHS 
awarding agency programs, however, contain independent statutory 
provisions requiring that all grantees agree not to discriminate in 
employment on the basis of religion. In this case, grantees should 
consult with the appropriate HHS awarding agency program office to 
determine the scope of any applicable requirements.
    (i) * * *
    (3) A certified copy of the applicant's certificate of 
incorporation or similar document that clearly establishes the 
nonprofit status of the applicant; or
    (4) Any item described in paragraphs (i)(1) through (3) of this 
section, if that item applies to a State or national parent 
organization, together with a statement by the State or parent 
organization that the applicant is a local nonprofit affiliate.
* * * * *
    (k) An organization providing social services under a discretionary 
grant program of HHS that is supported by Federal financial assistance 
must give written notice to beneficiaries and prospective beneficiaries 
of certain protections. A pass-through entity administering social 
service programs under a mandatory formula, block or entitlement grant 
of HHS that is supported by Federal financial assistance shall ensure 
that beneficiaries and prospective beneficiaries receive written notice 
of certain protections.
    (1) The written notice to beneficiaries and prospective 
beneficiaries of directly funded social services shall include language 
substantially similar to that found in appendix A to this part. The 
notice must include the following information:
    (i) The organization may not discriminate against a beneficiary or 
prospective beneficiary on the basis of religion, a religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice;
    (ii) The organization may not require a beneficiary or prospective 
beneficiary to attend or participate in any explicitly religious 
activities that are offered by the organization, and any participation 
by a beneficiary in such activities must be purely voluntary;
    (iii) The organization must separate in time or location any 
privately funded explicitly religious activities from activities 
supported by direct Federal financial assistance; and
    (iv) A beneficiary or prospective beneficiary may report an 
organization's violation of these protections, including any denials of 
services or benefits by an organization, by contacting or filing a 
written complaint with either the HHS awarding entity or the pass-
through entity that awarded funds to the organization, which must 
promptly report the complaint to the HHS awarding entity. The HHS 
awarding entity will address the complaint in consultation with the HHS 
Office for Civil Rights.
    (2) The written notice to beneficiaries of indirectly funded social 
services must identify the protections in paragraphs (f) and (k)(1)(ii) 
and (iv) of this section; it must also provide the contact information 
of the HHS awarding entity or the pass-through entity that administers 
the program.
    (l) The written notice described in paragraph (k) of this section 
must be given to a prospective beneficiary prior to the time the 
prospective beneficiary enrolls in the program or receives services 
from the program. When the nature of the service provided or exigent 
circumstances make it impracticable to provide such written notice in 
advance of the actual service, an organization must advise 
beneficiaries of their protections and provide the notice at the 
earliest available opportunity.
    (m) The written notice described in paragraph (k) of this section 
must be given in a manner prescribed by the HHS awarding agency in 
consultation with the HHS Office for Civil Rights, such as by 
incorporating the notice into materials that are otherwise provided to 
beneficiaries. The HHS awarding

[[Page 15723]]

agency, in consultation with the HHS Office for Civil Rights, may 
determine that the notice must inform each beneficiary or prospective 
beneficiary of the option to seek information from the HHS awarding 
agency, or another entity administering the applicable program, about 
other federally funded organizations in their area, if any, that 
provide the services available under the applicable program.
    (n) Notices or announcements of award opportunities and notices of 
award or contracts shall include language substantially similar to that 
in appendices B and C to this part.
* * * * *

0
78. Revise Sec.  87.4 to read as follows:


Sec.  87.4  Severability.

    To the extent that any provision of this part is declared invalid 
by a court of competent jurisdiction, the Department intends for all 
other provisions that are capable of operating in the absence of the 
specific provision that has been invalidated to remain in effect.

Appendices A and B to Part 87 [Redesignated as Appendices B and C to 
Part 87]

0
79. Redesignate appendices A and B to part 87 as appendices B and C to 
part 87, respectively.

0
80. Add a new appendix A to part 87 to read as follows:

Appendix A to Part 87--Direct Aid Programs: Written Notice of 
Beneficiary Protections

    Name of Organization:
    Name of Program:
    Contact Information for Program Staff: [provide name, phone 
number, and email address, if appropriate]
    Because this program is supported in whole or in part by 
financial assistance from the Federal Government, we are required to 
let you know that--
    (1) We may not discriminate against you on the basis of 
religion, a religious belief, a refusal to hold a religious belief, 
or a refusal to attend or participate in a religious practice;
    (2) We may not require you to attend or participate in any 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction or 
proselytization) that may be offered by our organization, and any 
participation by you in such activities must be purely voluntary;
    (3) We must separate in time or location any privately funded 
explicitly religious activities (including activities that involve 
overt religious content such as worship, religious instruction or 
proselytization) from activities supported with direct Federal 
financial assistance;
    (4) You may report violations of these protections, including 
any denials of services or benefits by an organization, by 
contacting or filing a written complaint with [identify the HHS 
awarding entity, or the pass-through entity that awarded funds to 
your organization, and the phone number and physical street and/or 
email address of the identified office]. The HHS awarding entity 
will address the complaint in consultation with the HHS Office for 
Civil Rights;
    [When required by the HHS awarding agency, the notice must also 
state:] (5) If you would like to seek information about whether 
there are any other federally funded organizations that provide 
these kinds of services in your area, please use the contact 
information set forth above.
    We must give you this notice before you enroll in or receive 
services from the program, unless the nature of the service provided 
or exigent circumstances make advanced notice impracticable. In that 
case, this notice must be given to you at the earliest available 
opportunity.


0
81. Revise newly redesignated appendix B to part 87 to read as follows:

Appendix B to Part 87--Notice or Announcement of Award Opportunities

    (a) Faith-based organizations may apply for this award on the 
same basis as any other organization, as set forth at, and subject 
to the protections and requirements of, this part and any applicable 
constitutional and statutory requirements, including 42 U.S.C. 
2000bb et seq. HHS will not, in the selection of recipients, 
discriminate for or against an organization on the basis of the 
organization's religious character, motives, or affiliation, or lack 
thereof, or on the basis of conduct that would not be considered 
grounds to favor or disfavor a similarly situated secular 
organization.
    (b) A faith-based organization that participates in this program 
will retain its independence from the Government and may continue to 
carry out its mission consistent with religious freedom, 
nondiscrimination, and conscience protections in Federal law.
    (c) A faith-based organization may not use direct Federal 
financial assistance from HHS to support or engage in any explicitly 
religious activities (including activities that involve overt 
religious content such as worship, religious instruction, or 
proselytization) except when consistent with the Establishment 
Clause of the First Amendment and any other applicable requirements. 
Such an organization also may not, in providing services funded by 
HHS, or in their outreach activities related to such services, 
discriminate against a program beneficiary or prospective program 
beneficiary on the basis of religion, a religious belief, a refusal 
to hold a religious belief, or a refusal to attend or participate in 
a religious practice.


0
82. Revise newly redesignated appendix C to part 87 to read as follows:

Appendix C to Part 87--Notice of Award or Contract

    (a) A faith-based organization that participates in this program 
retains its independence from the Government and may continue to 
carry out its mission consistent with religious freedom, 
nondiscrimination, and conscience protections in Federal law.
    (b) A faith-based organization may not use direct Federal 
financial assistance from HHS to support or engage in any explicitly 
religious activities (including activities that involve overt 
religious content such as worship, religious instruction, or 
proselytization) except when consistent with the Establishment 
Clause of the First Amendment and any other applicable requirements. 
Such an organization also may not, in providing services funded by 
the Department, or in their outreach activities related to such 
services, discriminate against a program beneficiary or prospective 
program beneficiary on the basis of religion, a religious belief, a 
refusal to hold a religious belief, or a refusal to attend or 
participate in a religious practice.

Miguel A. Cardona,
Secretary, U.S. Department of Education.
Alejandro N. Mayorkas,
Secretary, U.S. Department of Homeland Security.
    Dated: February 21, 2024.
Thomas J. Vilsack,
Secretary, U.S. Department of Agriculture.
Colleen R. Allen,
Assistant Administrator, Bureau for Management, U.S. Agency for 
International Development.
Marcia L. Fudge,
Secretary, U.S. Department of Housing and Urban Development.
    Dated: February 12, 2024.
Merrick B. Garland,
Attorney General, U.S. Department of Justice.
Julie A. Su,
Acting Secretary, U.S. Department of Labor.
Denis McDonough,
Secretary, U.S. Department of Veterans Affairs.
Xavier Becerra,
Secretary, U.S. Department of Health and Human Services.
[FR Doc. 2024-03869 Filed 3-1-24; 8:45 am]
BILLING CODE P

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