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Rule2024-03869

Partnerships With Faith-Based and Neighborhood Organizations

Primary source

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Published

March 4, 2024

Effective

April 3, 2024

Issuing agencies

Education DepartmentHomeland Security DepartmentAgriculture DepartmentAgency for International DevelopmentHousing and Urban Development DepartmentJustice DepartmentLabor DepartmentVeterans Affairs DepartmentHealth and Human Services Department

Abstract

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.

Full Text

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<title>Federal Register, Volume 89 Issue 43 (Monday, March 4, 2024)</title>
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[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 [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-03869]

[[Page 15669]]

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

[[Page 15671]]

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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,
<a href="/cdn-cgi/l/email-protection#3554465e7a7667755a5f451b4046515a5f1b525a43">[email&#160;protected]</a>.
Department of Agriculture: Samantha Joseph, Director, Center for
Faith-Based and Neighborhood Partnerships, <a href="/cdn-cgi/l/email-protection#b3d0d6ddc7d6c1f3c6c0d7d29dd4dcc5">[email&#160;protected]</a>.
Department of Labor: Elena S. Goldstein, Deputy Solicitor of Labor,
Office of the Solicitor of Labor, 202-878-9471,
<a href="/cdn-cgi/l/email-protection#a8cfc7c4ccdbdccdc1c686cdc4cdc6c9e8ccc7c486cfc7de">[email&#160;protected]</a>.
Department of Health and Human Services: Que English, Director,
Center for Faith-Based and Neighborhood Partnerships, 202-260-6501,
<a href="/cdn-cgi/l/email-protection#2757465553494255544f4e5754674f4f5409404851">[email&#160;protected]</a>.
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,
<a href="/cdn-cgi/l/email-protection#2b6e6f5b4a595f454e59586b4e4f054c445d">[email&#160;protected]</a>.
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, <a href="/cdn-cgi/l/email-protection#83e2f5eae4ede6e2f6e7c3f6f0e2eae7ade4ecf5">[email&#160;protected]</a>.

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:
<bullet> 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).
<bullet> 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).
<bullet> 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).
<bullet> 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).
<bullet> 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:
<bullet> 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;
<bullet> 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;
<bullet> 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;
<bullet> 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;
<bullet> 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;
<bullet> 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
<bullet> 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:
<bullet> 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;
<bullet> 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;
<bullet> 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;
<bullet> adding a provision allowing providers receiving indirect
Federal financial assistance to require beneficiaries to attend ``all
activities that are fundamental to the program'';
<bullet> adding a definition of the term ``religious exercise'';
<bullet> 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;
<bullet> 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;
<bullet> 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
<bullet> 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:
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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), <a href="https://www.uscis.gov/citizenship-resource-center/civic-integration/fiscal-year-2023-citizenship-and-integration-grant-program">https://www.uscis.gov/citizenship-resource-center/civic-integration/fiscal-year-2023-citizenship-and-integration-grant-program</a>.
The program assists nonprofit organizations in providing citizenship
instruction and application assistance to LPRs.
<bullet> 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.
<bullet> 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\
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\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.
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<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> 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]]

<bullet> 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:
<bullet> 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.
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\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.
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[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.
<bullet> 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.
<bullet> 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.
<bullet> 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.
<bullet> The Agencies adopt their proposed language regarding
organizations' requests for accommodations.
<bullet> 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.
<bullet> 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),
<a href="https://www.usaid.gov/sites/default/files/2023-11/USAID_2023AFR_508.pdf">https://www.usaid.gov/sites/default/files/2023-11/USAID_2023AFR_508.pdf</a>. 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

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