Rule2024-08880
Health and Human Services Grants Regulation
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 3, 2024
Effective
June 3, 2024
Issuing agencies
Health and Human Services Department
Abstract
The Department of Health and Human Services (HHS or the Department) is issuing this final rule to repromulgate and revise certain regulatory provisions of the HHS, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, previously set forth in a final rule published in the Federal Register on December 12, 2016 (2016 Rule).
Full Text
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<title>Federal Register, Volume 89 Issue 87 (Friday, May 3, 2024)</title>
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[Federal Register Volume 89, Number 87 (Friday, May 3, 2024)]
[Rules and Regulations]
[Pages 36684-36705]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-08880]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of the Secretary
45 CFR Parts 75
RIN 0945-AA19
Health and Human Services Grants Regulation
AGENCY: Department of Health and Human Services (HHS); Office for Civil
Rights (OCR) and the Office of the Assistant Secretary for Financial
Resources (ASFR).
ACTION: Final rule.
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SUMMARY: The Department of Health and Human Services (HHS or the
Department) is issuing this final rule to repromulgate and revise
certain regulatory provisions of the HHS, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for HHS Awards,
previously set forth in a final rule published in the Federal Register
on December 12, 2016 (2016 Rule).
DATES: This rule is effective on June 3, 2024.
FOR FURTHER INFORMATION CONTACT:
Office for Civil Rights: David Hyams, Supervisory Policy Advisor;
Gabriela Weigel, Policy Advisor, HHS Office for Civil Rights at (202)
240-3110, or via email at <a href="/cdn-cgi/l/email-protection#254d4d564a46574257444b5156654d4d560b424a53"><span class="__cf_email__" data-cfemail="701818031f13021702111e0403301818035e171f06">[email protected]</span></a>.
Office of the Assistant Secretary for Financial Resources: Johanna
Nestor, Director for Grants Policy, Oversight, and Evaluation, Office
of Grants at (202) 260-6118, or via email at <a href="/cdn-cgi/l/email-protection#5d3a2f3c33292d3231343e242f382c1d35352e733a322b"><span class="__cf_email__" data-cfemail="284f5a49465c584744414b515a4d596840405b064f475e">[email protected]</span></a>.
Assistance to Individuals With Disabilities in Reviewing the
Rulemaking Record: Upon request, the Department will provide an
accommodation or auxiliary aid to an individual with a disability who
needs assistance to review the comments or other documents in the
public rulemaking record for the final rule. To schedule an appointment
for this type of accommodation or auxiliary aid, please call (202) 795-
7830 or (800) 537-7697 (TDD) for assistance or email
<a href="/cdn-cgi/l/email-protection#422a2a312d21302530232c3631022a2a316c252d34"><span class="__cf_email__" data-cfemail="c8a0a0bba7abbaafbaa9a6bcbb88a0a0bbe6afa7be">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This Federal Register document is also
available from the Federal Register online database through <a href="http://www.govinfo.gov">http://www.govinfo.gov</a>, a service of the U.S. Government Publishing Office.
Table of Contents
I. Background
A. Regulatory History
B. Overview of the Final Rule
II. Provisions of the Proposed Rule and Analysis and Responses to
Public Comments
A. General Comments
B. Comments Regarding Provisions of the Proposed Rule
C. Comments Received in Response to E.O. 13175 Tribal
Consultation
III. Executive Order 12866 and Related Executive Orders on
Regulatory Review
A. Executive Order 12866 Determination
B. Costs of the Final Rule
C. Analysis of Regulatory Alternatives to the Final Rule
D. Regulatory Flexibility Act--Final Small Entity Analysis
E. Executive Order 13132 on Federalism
F. Executive Order 12250 on Leadership and Coordination of
Nondiscrimination
G. Paperwork Reduction Act
I. Background
A. Regulatory History
On December 26, 2013, the Office of Management and Budget (OMB)
issued the Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards
[[Page 36685]]
(UAR or uniform regulations) that ``set standard requirements for
financial management of Federal awards across the entire federal
government.'' See 78 FR 78590 (Dec. 26, 2013). On December 19, 2014,
OMB and other Federal award-making agencies, including the Department,
issued an interim final rule to implement the UAR. 79 FR 75867 (Dec.
19, 2014). On July 13, 2016, the Department issued a Notice of Proposed
Rulemaking (2016 NPRM) proposing changes to its adoption of the 2014
UAR Interim Final Rule. See 81 FR 45270 (July 13, 2016). On December
12, 2016, the Department finalized the 2016 NPRM and the final rule
went into effect on January 11, 2017 (2016 Rule). See 81 FR 89393.\1\
On November 19, 2019, the Department issued a Notice of Nonenforcement,
which stated that the Department would not enforce the regulatory
provisions adopted or amended by the 2016 Rule. See 84 FR 63809 (Nov.
19, 2019). On the same day, the Department issued an NPRM proposing to
``repromulgate some of the provisions of the [2016] Final Rule, not to
repromulgate others, and to replace or modify certain provisions that
were included in the Final Rule with other provisions.'' 84 FR 63831
(2019 NPRM). On January 12, 2021, HHS repromulgated portions of and
issued amendments to the 2016 Rule. 86 FR 2257 (2021 Rule) (Jan. 12,
2021). That rule was vacated in part and remanded back to the
Department \2\ after the Department noted in litigation that it had
``reviewed only a small fraction of the non-duplicative comments, did
not employ a sampling methodology likely to produce an adequate sample
of the comment received, and did not explain its use of sampling in the
final rule.'' \3\
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\1\ The 2016 Rule also made a technical change not set forth in
the Proposed Rule, amending Sec. 75.110(a) by removing ``75.355''
and adding, in its place, ``75.335.''
\2\ See Order, Facing Foster Care et al. v. HHS, No. 21-cv-00308
(D.D.C. June 29, 2022), ECF No. 44 (vacating ``those portions of the
. . . regulation entitled Health and Human Services Grants
Regulation, 86 FR 2,257 (Jan. 12, 2021), that amend 45 CFR
75.101(f), 75.300(c), and 75.300(d)'' and remanding to HHS). Because
they were not subject to the order of vacatur, certain provisions
previously adopted in the 2021 Rule remain in effect. These
provisions are: 45 CFR 75.305, 75.365, 75.414, and 75.477.
\3\ Mot. to Remand with Vacatur, Facing Foster Care et al. v.
HHS, No. 21-cv-00308 (D.D.C. June 17, 2022), ECF No. 41 (granted by
Order, Facing Foster Care et al. v. HHS, No. 21-cv-00308 (D.D.C.
June 29,2022), ECF No. 44).
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On July 13, 2023, the Department published the NPRM associated with
this rulemaking (2023 NPRM or Proposed Rule). See 88 FR 44750 (July 13,
2023). The Department invited comment from all interested parties. The
comment period for the Proposed Rule ended on September 11, 2023, and
the Department received 8,294 comments. A wide range of individuals and
organizations submitted comments, including private citizens, health
care workers and institutions, faith-based organizations, patient
advocacy groups, civil rights organizations, and professional
associations. The comments covered a variety of issues and points of
view responding to the Department's requests for comments, all of which
the Department reviewed and analyzed. The overwhelming majority of
comments were individual comments associated with form letter campaigns
from various groups and individuals. Numerous commenters, including
civil rights organizations, faith-based organizations, health
organizations, legal associations, and individual commenters, supported
the Proposed Rule as written. Numerous other commenters, including
certain faith-based providers, legal associations, and individual
commenters, expressed opposition to the Proposed Rule for a variety of
reasons.
B. Overview of the Final Rule
This preamble is divided into multiple sections. Section II
describes changes to the regulation and contains two subparts. Subpart
A sets forth general comments the Department received regarding the
Proposed Rule and the responses to our request for comment on the
likely impact of the Proposed Rule as compared to the 2016 Rule.
Subpart B sets forth the final rule's regulatory provisions and our
responses to comments received. Subpart C discusses the Department's
comments received in Response to E.O. 13175 Tribal Consultation.
Section III sets forth the Department's compliance with Executive Order
12866 and related Executive Orders on regulatory review.
Based upon comments received, the Department has made some changes
to the Proposed Rule.
The Department has revised Sec. 75.300(e) to clarify that the
provision is interpretive and does not impose any new substantive
obligations on entities outside the Department.
The Department has revised Sec. 75.300(f) to also apply to grant
applicants. Section 75.300(f) also is revised to provide recipients,
applicants, and the public with (1) a general timetable under which the
Department will acknowledge and begin to evaluate requests for
assurances of religious freedom and conscience exemptions; (2) a
temporary exemption during the pendency of the Department's review of
such requests; (3) a list of conscience laws that may be applied to the
Sec. 75.300(f) process; (4) information about how the Department will
consider these requests under the legal standards of applicable Federal
religious freedom or conscience laws; (5) notice that adjudications are
to be made by both ASFR and OCR; and (6) details about the
administrative appeal process for applicants and recipients that
receive adverse determinations.
The Department is finalizing the other provisions of the rule as
proposed.
II. Provisions of the Proposed Rule and Analysis and Responses to
Public Comments
A. General Comments
In the 2023 NPRM, the Department sought comment on the likely
impact of the Proposed Rule as compared to the 2016 Rule. The comments
and our responses regarding our request, and other general comments
regarding the rule, are set forth below.
Comment: A large city requested that HHS widely promote the
protections set forth in the Proposed Rule such that grant recipients
and those served by HHS programs and services are made aware that
discrimination based on actual or perceived sexual orientation, gender
identity, or gender expression will be prohibited. A State Department
of Health expressed support for ``purposeful implementation'' of the
rule's nondiscrimination protections and requested that they be
diligently and efficiently enforced.
Response: The Department appreciates these commenters' suggestions
on promotion and implementation. This final rule clarifies that, in the
identified statutes that HHS administers that prohibit discrimination
on the basis of sex, HHS interprets the prohibition against
discrimination on the basis of sex to include discrimination on the
basis of sexual orientation, gender identity, and sex characteristics.
This interpretation is consistent with Bostock v. Clayton County, 590
U.S. 644 (2020), and other Federal court precedent applying Bostock's
reasoning that sex discrimination includes discrimination based on
sexual orientation and gender identity.\4\ And as OCR noted in the
Proposed Rule, 88 FR 44753, Bostock's reasoning applies with equal
force to claims alleging discrimination on the basis of sex
characteristics, which is
[[Page 36686]]
inherently sex-based. When the rule is finalized, HHS intends to
provide grant recipients and the public at large information about the
rule and raise awareness of the protections provided by the statutes
addressed in the rule, for example, through stakeholder meetings,
webinars, and other outreach.
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\4\ See, e.g., Grimm v. Gloucester Cnty. Sch. Bd., 972 F.3d 586,
616-17 (4th Cir. 2020), as amended (Aug. 28, 2020), reh'g en banc
denied, 976 F. 3d 399 (4th Cir. 2020), cert. denied, No. 20-1163
(June 28, 2021); Doe v. Snyder, 28 F.4th 103, 113-14 (9th Cir.
2022); Grabowski v. Arizona Bd. of Regents, 69 F.4th 1110, 1113 (9th
Cir. 2023).
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Comment: Numerous commenters expressed overall support for the
rule, including the Proposed Rule's reaffirmation of nondiscrimination
protections and its effect on access to services and care. A coalition
of 11 advocacy groups stated that, while grant programs are subject to
generally applicable statutes that bar discrimination on the basis of
race, color, national origin, disability, and age, the Proposed Rule
would further prevent harms because of its protections against
discrimination on the bases of religion and sex in grant programs.
Another commenter lauded the Proposed Rule, specifically, the retention
of language from the partially vacated 2021 Rule regarding Federal
statutory prohibitions against discrimination and the application of
Supreme Court decisions in award administration.
Numerous commenters expressed support for the rule because, in
their view, it would positively impact access to Federal programs and
services for lesbian, gay, bisexual, transgender, queer, and intersex
(LGBTQI+) people. Several commenters praised the Proposed Rule's focus
on nondiscrimination protections and access to care, especially for
LGBTQI+ community members amidst what commenters described as a rise in
anti-LGBTQI+ discrimination and increasing barriers to health care.
Some commenters stated that the Proposed Rule would help protect
against discrimination based on sexual orientation and gender identity
in HHS-funded health programs. Another commenter opined that the rule
would help protect and support the needs of LGBTQI+ individuals by
protecting them from harmful discrimination and barriers to accessing
needed service.
Response: The Department appreciates the commenters' support. To be
clear, the final rule clarifies the Department's interpretation of
existing statutory provisions that prohibit discrimination based on sex
within the enumerated statutes in Sec. 75.300(e). The Department
offers this prospective interpretation in the interest of transparency
and good governance so that the public is aware of the Department's
position. See Attorney General's Manual on the Administrative Procedure
Act 30 n.3 (1947). The Department is committed to ensuring access to
its programs and compliance with all applicable Federal laws, including
laws related to nondiscrimination, religious freedom, and conscience.
Comment: Many commenters in support of the rule included research
and studies relating to the LGBTQI+ community as well as referencing
their experiences with health and human services programs. Several of
these commenters outlined specific concerns, including, among other
things, that: LGBTQI+ individuals report ``fair or poor'' general
physical health; are more likely than their non-LGBTQI+ peers to
experience symptoms of anxiety and depression; and that a substantial
percentage of LGBTQI+ people experience serious health conditions,
including those that are life-threatening.\5\ Commenters and the
studies they cited attributed these disparities to pervasive
discrimination against LGBTQI+ people, lack of access to care, and lack
of access to providers knowledgeable about providing services to
LGBTQI+ individuals. Some commenters discussed additional barriers to
quality care and supportive services. A few commenters reported that
discrimination, or fear of such discrimination, is a prevalent barrier
to seeking health care for members of the LGBTQI+ community.
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\5\ Some of studies cited by commenters did not address the
whole LGBTQI+ population--for example, some studies referenced
outcomes only for the ``LGBT'' or ``LGBTQ'' populations as opposed
to the broader LGBTQI+ population.
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Several commenters cited studies and reports about the experiences
of transgender people specifically. They included studies about high
rates of intimate partner violence and suicidality, disproportionately
high rates of HIV+ diagnoses, and disparities in housing and rates of
poverty among transgender people, which commenters and many of the
studies attributed to pervasive stigma and discrimination against
transgender people. One of these commenters stated that victims of
violence who are LGBTQI+ should not have to experience discrimination
in government-funded services.
Some commenters specifically addressed discrimination experienced
by LGBTQI+ individuals participating in HHS programs. A coalition of 11
advocacy groups stated that LGBTQI+ people experience discrimination
while accessing services under Title IV-B and IV-E of the Social
Security Act (e.g., family support and foster care/adoption services)
and services provided to older adults under the Older Americans Act
(e.g., Meals on Wheels). One organization commented that state laws
targeting the LGBTQI+ community have worsened disparities. A coalition
of 65 advocacy groups stated that LGBTQI+ youth are often subjected to
discriminatory behavior while in congregate care settings.
Response: The Department acknowledges that discrimination against
LGBTQI+ individuals remains pervasive, especially for individuals who
experience discrimination on multiple bases, such as gender identity
and race.\6\ The Department's interpretation set forth in Sec.
75.300(e) of this rule is notably limited to the scope of HHS awards
and grant programs related to the statutes set forth in that section.
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\6\ See the Department's proposed rule regarding Section 1557 of
the Affordable Care Act (42 U.S.C. 18116), Nondiscrimination in
Health Programs and Activities, 87 FR 47824, 47870 (Aug. 4, 2022).
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We note that Sec. 75.300(e) does not include the Title IV-E Foster
Care Program, which, along with applicable laws and regulations, bars
discrimination on the basis of race, color, national origin,
disability, and age. The Administration for Children and Families (ACF)
has published a Proposed Rule concerning Title IV and foster care, 88
FR 66752 (Sept. 28, 2023); the comment period closed on November 27,
2023.
Comment: A commenter stated that several of these statutes protect
against discrimination on the basis of religion and asserted that HHS
should add additional provisions to protect religious grantees,
parents, and participants.
Response: The Department appreciates the commenter's suggestion but
declines to add additional language to the final rule. The Department
is committed to fully upholding federal laws that guarantee freedom of
religion and freedom of conscience. Section 75.300(c) confirms that it
is against public policy of the Department for otherwise eligible
persons to be discriminated against in the administration of HHS
programs, activities, projects, assistance, and services, to the extent
doing so is prohibited by Federal statute. This includes laws that
prohibit religious discrimination against beneficiaries, including
provisions of the statutes listed in Sec. 75.300(e) that prohibit
discrimination on the basis of religion,\7\
[[Page 36687]]
and other religious freedom and conscience laws.\8\ In addition, Sec.
75.300(f) addresses an applicant's or recipient's ability to avail
itself of religious freedom and conscience protections, including a
process by which any entity can notify the Department of its view that
it is exempt from, or entitled to a modified application of, the
nondiscrimination requirements of the 13 statutes listed in Sec.
75.300(e) due to the application of Federal religious freedom or
conscience law.
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\7\ See, 8 U.S.C. 1522(a)(5), Authorization for programs for
domestic resettlement of and assistance to refugees; 42 U.S.C.
290cc-33(a)(2), Projects for Assistance in Transition from
Homelessness; 42 U.S.C. 290ff-1(e)(2), Children with Serious
Emotional Disturbances; 42 U.S.C. 300w-7(a)(2), Preventive Health
Services Block Grant; 42 U.S.C. 300x-57(a)(2), Substance Abuse
Treatment and Prevention Block Grant and Community Mental Health
Services Block Grant; 42 U.S.C. 708(a)(2), Maternal and Child Health
Block Grant; 42 U.S.C. 5151(a), Disaster relief; 42 U.S.C. 9849(a),
Head Start; and 42 U.S.C. 10406(c)(2)(B)(i), Family Violence
Prevention and Services.
\8\ See, e.g., U.S. Const. Amend. I; 42 U.S.C. 2000bb et seq.
(RFRA); 45 CFR part 88.3 (listing statutes).
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Comment: A coalition of 11 civil rights organizations, citing
Maddonna v. United States Department of Health & Human Services, No.
6:19-CV-3551-JD, 2023 WL 7395911 (D.S.C. Sept. 29, 2023), expressed
their concerns regarding religious discrimination in government-funded
services. The coalition provided examples of individuals who alleged
facing religious discrimination in health and human services programs,
including an agency that refused to provide a Jewish family foster-
parent training and home study approval allegedly because of their
religious beliefs, and a nonreligious man whom a State agency committed
to various religious facilities to treat substance-use disorder, whose
complaints the Department allegedly declined to investigate.\9\
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\9\ The coalition cited to OCR Transaction Numbers DO-21-453070
and DO-21-430481.
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Response: The Department appreciates the comments. The Department
appreciates the comments. In Maddonna, a plaintiff sued a foster care
child placement agency, along with various federal and state
defendants, alleging that they had been excluded from participation in
South Carolina's foster care program on the basis of their religion.
The court in Madonna ultimately dismissed the claims against the
Department. The Department is committed to protecting access to health
care and human services and preventing discrimination in accordance
with the Constitution and applicable Federal laws, including those
involving religious discrimination.
The Department is committed to protecting access to health care and
human services and preventing discrimination in accordance with
applicable Federal laws, including those involving religious
discrimination. As discussed above, the Department's interpretation set
forth in Sec. 75.300(e) is limited to the scope of HHS awards
authorized by the statutes listed, which prohibit discrimination on the
basis of sex. This list does not include Title IV-E; however, ACF has
separately published a Proposed Rule concerning Title IV and foster
care. 88 FR 66752.
Comment: A religious policy organization stated their view that
``forcing'' an alternate definition of sex would result in certain
organizations no longer seeking HHS grants either because of their
belief they would not qualify due to their sincerely held convictions
or because of concern they would be opening themselves up to a legal
battle. As an example, the commenter observed that certain States
sought waivers from enforcement of the nondiscrimination requirements
of the 2016 Rule, which similarly interpreted ``sex'' to include
``sexual orientation'' and ``gender identity.'' This organization
stated its view that the 2016 Rule had worse implications for faith-
based organizations than the Proposed Rule, but that the Proposed Rule
was still inadequate to address religious freedom and conscience
concerns.
Response: The Department appreciates the comment and acknowledges
that waivers of enforcement were granted in connection with the 2016
Rule. The Department disagrees, however, that it is ``forcing'' an
alternative definition of ``sex.'' As the Supreme Court noted in
Bostock, nothing in its approach turned on the definition of ``sex''
alone, including parties' debate over whether ``sex'' was limited to
the notion that it only refers to distinctions between male and female.
The Court therefore proceeded on the narrow assumption for argument's
sake that ``sex'' signifies ``biological distinctions between male and
female'' and still reached its conclusion. Bostock, 590 U.S. at 655.
The Department highlights as well that this final rule allows for a
religious freedom and conscience exemption process which is outlined in
Sec. 75.300(f) for applicants and recipients that have religious or
conscience concerns or objections.
Comment: A religious policy organization advocated that HHS and the
Department of Education refrain from finalization of rules that aim to
interpret and apply Title IX of the Education Amendments of 1972 until
courts are able to resolve the outstanding challenges involving Bostock
based on what they view as overlap of underlying provisions within
these rulemakings.
Response: This rule does not interpret or apply Title IX, as it
solely addresses the statutes referenced in Sec. 75.300(e). To the
extent the rules raise similar questions, or would benefit from
consistency in certain areas, those concerns have been identified and
addressed through interagency review processes prior to the rule's
finalization.
Comment: A religious legal advocacy organization stated that HHS
should disclose the process by which it reviewed comments, including
the methodology and estimates used to review and respond to comments,
in light of HHS's identified failure in 2020 to appropriately review
comments and disclose the process used for that review, citing Motion
for Remand with Vacatur, Facing Foster Care in Alaska v. U.S. Health &
Human Services, No. 1:21-cv-00308 (D.D.C. June 17, 2022), ECF No. 41
(granted by Order, (D.D.C. June 29, 2022), ECF No. 44).
Response: The Department appreciates the commenter's suggestion. We
received over 8,000 submissions during the public comment period. OCR
has reviewed all non-duplicative comments it received. Under the
relevant legal standards and the Administrative Procedure Act (APA),
OCR has identified, considered, and responded to all the significant
issues raised by commenters. OCR staff's ability to read, consider, and
respond to comments on this rule were not hampered by time or funding
constraints.
B. Comments Regarding Provisions of the Proposed Rule
1. Section 75.300(c)
In the 2023 NPRM, the Department proposed to repromulgate Sec.
75.300(c) from the 2021 Rule with a slight edit to reference ``HHS
programs, activities, projects, assistance, and services'' as opposed
to just ``HHS programs and services.'' This edited provision reads:
``It is a public policy requirement of HHS that no person otherwise
eligible will be excluded from participation in, denied the benefits
of, or subjected to discrimination in the administration of HHS
programs, activities, projects, assistance, and services, to the extent
doing so is prohibited by federal statute.''
The comments and our responses regarding Sec. 75.300(c) are set
forth below.
Comment: Some commenters expressed general support for Sec.
75.300(c). One commenter expressed support for the provision as
explicitly aligning Federal regulations with the Supreme Court
decisions in United States v. Windsor, 570 U.S. 744 (2013),
[[Page 36688]]
Obergefell v. Hodges, 576 U.S. 644 (2015), and Bostock, 590 U.S. 644.
Another commenter concluded that this section would help prevent what
the commenter viewed as the harm caused by approaches similar to those
allegedly caused by the 2019 waiver sent by ACF to South Carolina
approving the state's waiver request from the nondiscrimination
requirements in paragraph (c). See 88 FR 44750, 44752.\10\
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\10\ For the original correspondence, See Letter from Joo Yeun
Chang to Governor Henry McMaster (Nov. 18, 2021), <a href="https://www.acf.hhs.gov/sites/default/files/documents/withdrawal-of-exception-from-part-75.300-south-carolina-11-18-2021.pdf">https://www.acf.hhs.gov/sites/default/files/documents/withdrawal-of-exception-from-part-75.300-south-carolina-11-18-2021.pdf</a>; Letter
from Joo Yeun Chang to Governor Henry McMaster (Nov. 18, 2021),
<a href="https://governor.sc.gov/sites/governor/files/Documents/newsroom/HHS%20Response%20Letter%20to%20McMaster.pdf">https://governor.sc.gov/sites/governor/files/Documents/newsroom/HHS%20Response%20Letter%20to%20McMaster.pdf</a>.
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Response: While this rule's text does not cite Windsor or
Obergefell, the Department follows all Supreme Court precedent as noted
in Sec. 75.300(d) and appreciates the commenters' support for the
section. HHS is committed to respecting all applicable Federal laws and
relevant precedent.
Comment: A group of commenters proposed removing Sec. 75.300(c)
altogether since Sec. 75.300(a) makes it unnecessary for HHS to
declare something contrary to ``public policy'' if it already
contravenes Federal statute. The commenter further stated that if the
Department removes Sec. 75.300(c), it can also remove Sec. 75.101(f),
which clarifies the inapplicability of Sec. 75.300(c) to the Temporary
Assistance for Needy Families Program (Title IV-A of the Social
Security Act, 42 U.S.C. 601-619) (TANF).
Response: The Department thanks commenters for the suggestions but,
other than not adding language from former Sec. 75.101(f), declines to
accept the recommendations. The Department maintains that the final
rule language best articulates HHS's position, provides additional
regulatory clarity to the public and regulated community, and furthers
the efficient and equitable administration of HHS grants. The Proposed
Rule stated that the Department is proposing not to reinstate former
Sec. 75.101(f). 88 FR 44753. This final rule likewise is not
reinstating former Sec. 75.101(f).
Comment: Some commenters recommended that HHS use additional
statutory authorities to establish regulatory nondiscrimination
requirements across key programs and clarify interactions with other
civil rights laws.
Response: The Department declines to add additional statutory
authorities as described. The Department acknowledges the importance of
accounting for simultaneous discrimination on multiple or overlapping
prohibited bases, and the regulation at Sec. 75.300(c) includes a
broad nondiscrimination prohibition that is grounded in the range of
prohibitions provided by Federal statute.'' The Department is committed
to ensuring consistent enforcement of these protections.
Summary of Regulatory Changes to Sec. 75.300(c)
For the reasons set forth in the Proposed Rule and considering the
comments received, we are finalizing Sec. 75.300(c) as proposed,
without modification.
2. Section 75.300(d)
In the 2023 NPRM, the Department proposed to repromulgate Sec.
75.300(d) from the partially vacated 2021 Rule. It provided, ``HHS will
follow all applicable Supreme Court decisions in administering its
award programs.''
The comments and our responses regarding Sec. 75.300(d) are set
forth below.
Comment: Some commenters opposed Sec. 75.300(d), reasoning that it
would be ``unnecessary'' and ``pernicious'' to state that HHS must
follow the decisions of the Supreme Court. The commenters recommended
that HHS remove this section from the Proposed Rule and instead explain
how it will apply past court decisions to new disputes with grant
recipients raising different but related questions or apply Federal
circuit court decisions.
Response: The Department appreciates the commenters' views, but
declines their recommendation. The Department is required to comply
with Supreme Court precedent; Section 75.300(d) reflects that.
Summary of Regulatory Changes to Sec. 75.300(d)
For the reasons set forth in the Proposed Rule and considering the
comments received, we are finalizing Sec. 75.300(d) as proposed,
without modification.
3. Section 75.300(e)
In the 2023 NPRM, the Department proposed to add Sec. 75.300(e),
which clarifies that, in the identified statutes that HHS administers
that prohibit discrimination on the basis of sex, HHS interprets the
prohibition against discrimination on the basis of sex to include: (1)
discrimination on the basis of sexual orientation; and (2)
discrimination on the basis of gender identity. This interpretation is
consistent with Bostock v. Clayton County, 590 U.S. 644 (2020), and
other Federal court precedent applying Bostock's reasoning that sex
discrimination includes discrimination based on sexual orientation and
gender identity.\11\ Proposed Sec. 75.300(e) referenced 13 statutes
HHS administers that prohibit discrimination on the basis of sex.\12\
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\11\ See, e.g., Grimm v. Gloucester Cnty. Sch. Bd., 972 F.3d
586, 616-17 (4th Cir. 2020), as amended (Aug. 28, 2020), reh'g en
banc denied, 976 F. 3d 399 (4th Cir. 2020), cert. denied, No. 20-
1163 (June 28, 2021); Doe v. Snyder, 28 F.4th 103, 113-14 (9th Cir.
2022); Grabowski v. Arizona Bd. of Regents, 69 F.4th 1110, 1113 (9th
Cir. 2023).
\12\ The thirteen statutes are: 8 U.S.C. 1522. Authorization for
programs for domestic resettlement of and assistance to refugees; 42
U.S.C. 290cc-33. Projects for Assistance in Transition from
Homelessness; 42 U.S.C. 290ff-1. Children with Serious Emotional
Disturbances; 42 U.S.C. 295m. Title VII Health Workforce Programs;
42 U.S.C. 296g. Nursing Workforce Development; 42 U.S.C. 300w-7.
Preventive Health and Health Services Block Grant; 42 U.S.C. 300x-
57. Substance Use Prevention, Treatment, and Recovery Services Block
Grant; Community Mental Health Services Block Grant; 42 U.S.C. 708.
Maternal and Child Health Block grant; 42 U.S.C. 5151. Disaster
relief; 42 U.S.C. 8625. Low Income Home Energy Assistance Program;
42 U.S.C. 9849. Head Start; 42 U.S.C. 9918. Community Services Block
Grant Program; 42 U.S.C. 10406. Family Violence Prevention and
Services.
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The Department also sought comment on: (1) whether the Department
administers other statutes prohibiting sex discrimination that are not
set forth in proposed Sec. 75.300(e) or whether the Department should
include language or guidance in Sec. 75.300(e) to cover current or
future laws that prohibit sex discrimination that are not set forth
above; and (2) whether there is anything about any of the statutes
referenced in proposed Sec. 75.300(e), such as their language,
legislative history, or purpose, that would provide a legal basis for
distinguishing them from Bostock's interpretation of Title VII of the
Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), that sex
discrimination includes discrimination on the basis of sexual
orientation and gender identity.
The comments and our responses regarding Sec. 75.300(e) are set
forth below.
Comment: Many commenters expressed strong support for proposed
Sec. 75.300(e) because it highlights existing statutory
nondiscrimination provisions and expressly codifies a critical
interpretation of discrimination on the basis of sex. Many commenters
opined that Sec. 75.300(e) is both consistent with the Supreme Court's
ruling in Bostock and an appropriate application of the decision. One
legal institute that focuses on sexual orientation and gender identity
issues expressed support for Sec. 75.300(e), stating that it has been
longstanding practice to look to Title VII case law to interpret
analogous
[[Page 36689]]
provisions in other nondiscrimination laws, and that there is no
language in any of the 13 statutes that suggests that HHS or the courts
should not look to Title VII case law.
Response: The Department agrees that the final rule is consistent
with Bostock and that Title VII case law is relevant to the analysis of
the statutes listed in Sec. 75.300(e).
Comment: Many commenters recommended that HHS expressly codify the
prohibition of discrimination on the basis of sex characteristics,
including intersex traits, in the regulatory text of Sec. 75.300(e).
Response: As the Department explained in the NPRM, the Department
agrees that sex discrimination covers discrimination on the basis of
sex stereotypes, which can include stereotypes regarding sex
characteristics and intersex traits, consistent with longstanding
Supreme Court precedent. 88 FR 44750, n.11 (July 13, 2023) see Price
Waterhouse v. Hopkins, 490 U.S. 228, 251 (1989). Moreover, like gender
identity and sexual orientation, intersex traits are ``inextricably
bound up with'' sex, Bostock, 590 U.S. at 660-661, and ``cannot be
stated without referencing sex,'' Grimm v. Gloucester Cty. Sch. Bd.,
972 F.3d 586, 608 (4th Cir. 2020) (quoting Whitaker v. Kenosha Unified
Sch. Dist. No. 1 Bd. of Educ., 858 F.3d 1034, 1051 (7th Cir. 2017)).
Further, interpreting sex discrimination prohibitions to encompass
discrimination based on sex characteristics is consistent with
applicable statutory text and existing interpretations by HHS and other
agencies.\13\ The Department agrees that the final rule protects
against discrimination based on sex characteristics, but does not
believe it is necessary to specify this in regulatory text.
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\13\ See, e.g., Notice of Proposed Rulemaking, Nondiscrimination
in Health Programs and Activities, 87 FR 47824 (August 4, 2022);
Notice of Proposed Rulemaking, Nondiscrimination on the Basis of Sex
in Education Programs or Activities Receiving Federal Financial
Assistance, 87 FR 41390 (July 12, 2022); U.S. Dept. of Justice,
Title IX Legal Manual, https://www.justice.gov/crt/title-
ix#:~:text=The%20reasoning%20in,assigned%20at%20birth.%E2%80%9D.
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Comment: A commenter requested that HHS further expand Sec.
75.300(e) to explicitly include ``gender expression'' and provided a
revised version of the paragraph including language stating that
discrimination is prohibited based on ``actual or perceived'' status.
Response: The final rule clarifies the Department's interpretation
of nondiscrimination protections on the basis of sex in certain
programs and is consistent with current law. The Department agrees that
sex discrimination covers discrimination on the basis of sex
stereotypes, which can include stereotypes regarding gender expression,
as well as discrimination against an individual based on perceived
status. The Department does not believe it is necessary to specify this
in regulatory text.
Comment: A coalition of patient advocacy groups argued that the
nondiscrimination requirements in the final rule should address both
Department-wide and program-specific statutory prohibitions on sex
discrimination, including references to health programs and activities
covered by Section 1557 of the Affordable Care Act (42 U.S.C. 18116). A
different coalition of advocacy groups urged HHS to exercise the
general rulemaking authority under Section 1102(a) of the Social
Security Act, 42 U.S.C. 1302(a), to promulgate nondiscrimination
protections, including those that would address Titles IV-B and IV-E as
well as the provision of child welfare services. The commenters
reasoned that the broadest and most widely applicable nondiscrimination
protections would minimize discrimination against vulnerable
populations and other barriers to program access. One commenter
recommended that HHS ensure all current and future statutes prohibiting
sex discrimination are encompassed by the present rulemaking to ensure
that the proposed rule's nondiscrimination requirements cover all HHS-
funded programs and services.
Response: The Department appreciates commenters' request that this
rule address Department-wide and program-specific statutory
prohibitions on sex discrimination. However, as noted in the Proposed
Rule, the Department identified the statutes listed in proposed Sec.
75.300(e) because they contain specific prohibitions on sex
discrimination included within program statutes, and none contain any
indicia suggesting they should be construed differently than Title VII.
88 FR 44754. This was to ground the Proposed Rule's interpretation in
existing statutory authority.
The Department has rulemaking authority under Section 1102(a) of
the Social Security Act, 42 U.S.C. 1302(a), but declines at this time
to add substantive provisions to what is otherwise an interpretive
rule. In addition, the Department is unable to anticipate the way
future statutes prohibiting sex discrimination may be drafted or
edited, and therefore declines to include reference to such future
statutes in this final rule. The Department therefore has determined at
this time additional changes are not necessary.
Comment: Numerous commenters, including two separate coalitions of
advocacy groups, requested that additional statutes be considered for
inclusion in Sec. 75.300(e). Specifically, these commenters asked that
HHS consider four statutes in this rulemaking: (1) Title IX; (2)
Section 1557; (3) Section 632 of the Community Economic Development Act
of 1981, 42 U.S.C. 9821 (CEDA); and (4) the Violence Against Women Act,
34 U.S.C. 12291 (VAWA).
Response: The Department appreciates comments responding to our
request regarding other statutes prohibiting sex discrimination that
the Department administers. The Department is addressing Section 1557,
which prohibits discrimination on the basis of sex in certain health
programs and activities, under a separate rulemaking.\14\ The
Department also has a separate regulation that addresses the
nondiscrimination provisions of Title IX.\15\ The Department therefore
declines to address those statutes' nondiscrimination provisions in
this rule.
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\14\ 87 FR 47824 (Aug. 4, 2022).
\15\ 45 CFR part 86.
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The Department agrees that CEDA could potentially warrant inclusion
in Sec. 75.300(e) because it authorizes Department programs and
services, it prohibits sex discrimination,\16\ and there is nothing in
the text, history, or case law that suggests it should be interpreted
differently than Bostock. However, the CED program has not been funded
or active since 1998, as its funding stream authorization was
repealed.\17\ Accordingly, the Department will not add CEDA to the
statutes listed in Sec. 75.300(e) at this time.
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\16\ See CEDA, 42 U.S.C. 9821(a) (``The Secretary shall not
provide financial assistance for any program, project, or activity
under this subchapter unless the grant or contract with respect
thereto specifically provides that no person with responsibilities
in the operation thereof will discriminate with respect to any such
program, project, or activity because of . . . sex . . . .'') and
(b) (``No person in the United States shall on the ground of sex be
excluded from participation in, be denied the benefits of, be
subjected to discrimination under, or be denied employment in
connection with any program or activity receiving assistance under
this subchapter.'').
\17\ See Community Opportunities, Accountability, and Training
and Educational Services Act of 1998, Public Law 105-285, sec.
202(b)(1)) (``(1) SOURCE OF FUNDS.--Section 614 of the Community
Economic Development Act of 1981 (42 U.S.C. 9803) is repealed.'').
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As for VAWA, the statute itself expressly prohibits discrimination
on the basis of sexual orientation and
[[Page 36690]]
gender identity.\18\ Therefore, VAWA's protections based on sexual
orientation and gender identity apply to all HHS VAWA programs and
grants operated, and the statute's inclusion in this rule is
unnecessary.
---------------------------------------------------------------------------
\18\ 42 U.S.C. 12291(13)(a).
---------------------------------------------------------------------------
Comment: A national campaign of form comments expressed concern
that the Proposed Rule's prohibition against grant recipients
discriminating on the basis of sex ``sidesteps'' State legislatures.
Response: The final rule simply states how the Department will
apply precedent and existing obligations and does not implicate
federalism concerns. The statutes identified in Sec. 75.300(e) have
long contained prohibitions against discrimination on the basis of sex.
And the Supreme Court's decision in Bostock, not this final rule,
determined that Title VII's prohibition on sex discrimination
necessarily included a prohibition on discrimination on the basis of
sexual orientation and gender identity. This rule, in turn, applies
Bostock's reasoning with respect to the statutes enumerated in Sec.
75.300(e). As explained in the Proposed Rule, none of the 13 statutes
referenced in Sec. 75.300(e) contain any indicia--such as statute-
specific definitions, or any other criteria--to suggest that the
statutes' general prohibitions on sex discrimination should be
construed differently than Title VII's sex discrimination prohibition.
See 88 FR at 44754. This rule, therefore, makes clear that the
Department interprets the identified statutes' prohibitions on sex
discrimination to include prohibitions on sexual orientation and gender
identity discrimination. The rule does not dictate, however, the
outcomes in particular matters and it does not direct the outcome of
any complaint of discrimination asserted under the identified statutes.
Comment: Some commenters opined that HHS lacks the authority to
finalize the Proposed Rule under 5 U.S.C. 301, sometimes referred to as
the ``Housekeeping Statute.'' One commenter stated that HHS should not
insert ``significant changes'' into an ASFR regulation because the
Housekeeping Statute authorizes the regulation of the operation of
HHS--not actors outside the HHS Secretary's authority. Another
commenter stated that the 2016 Rule was not constitutionally or
statutorily authorized, and urged HHS to rescind the 2016 Rule, arguing
that although the Housekeeping Statute authorizes the heads of agencies
to regulate ``the government of [their] department'' and to ``regulate
[their] own affairs,'' it does not mention protected classes or allow
HHS to regulate externally.
Response: The Department recognizes that the Housekeeping Statute
is ``a grant of authority to the agency to regulate its own affairs . .
. authorizing what the [Administrative Procedure Act] terms `rules of
agency organization, procedure or practice' as opposed to `substantive
rules.' '' Chrysler Corp. v. Brown, 441 U.S. 281, 309-10 (1979). The
Department's clarification in this final rule with regard to the
meaning of discrimination on the basis of sex is consistent with the
Department's authority under 5 U.S.C. 301 to regulate its own affairs
in how it interprets existing statutes that already contain such
prohibitions and is consistent with Supreme Court jurisprudence. For
the avoidance of doubt, the Department has added language to Sec.
75.300(e) clarifying that the provision is interpretive and does not
impose any substantive obligations on entities outside the Department.
In other words, Sec. 75.300(e) expresses the Department's current
interpretation of the listed statutes; a member of the public will,
upon proper request, be accorded a fair opportunity to seek
modification, rescission, or waiver of Sec. 75.300(e).
Comment: Several commenters asked HHS to remove Sec. 75.300(e),
asserting that the Department relied upon a misinterpretation of
Bostock and that the Department otherwise does not have the authority
to ``redefine'' the term ``sex.'' Relying on Sec. 75.300(c)'s
explanation that discrimination in HHS programs is prohibited ``to the
extent doing so is prohibited by federal law,'' one commenter asserted
that Sec. 75.300(c) is inconsistent with the relevant statutes because
the statutes and legislative history do not mention sexual orientation
or gender identity. Some commenters expressed opposition to HHS's
interpretation of Bostock in the Proposed Rule and suggested that
Bostock's holding is actually about the specific meaning of the
``because of'' language of Title VII, specific to employment. In their
view, that ``because of'' language is not contained in other statutes;
accordingly, they argue, Bostock does not apply to those statutes and
is limited to Title VII only.
Several commenters opined that the statutes listed in proposed
Sec. 75.300(e) lack a textual basis for HHS to ``redefine'' sex to
include gender identity or sexual orientation. Prohibitions against sex
discrimination, in the commenters' view, should refer to a ``binary,
biological'' definition. Other commenters flagged examples of statutes
that specifically refer to one sex including: the Refugee Resettlement
Programs, 8 U.S.C. 1522(a)(1)(A); the Title VII Health Workforce
Programs, 42 U.S.C. 295m(i); the definition in the Maternal and Child
Health Block Grant statute of an eligible family, 42 U.S.C.
711(l)(2)(a); and the Head Start program. See 42 U.S.C.
9840(a)(5)(A)(iii) & (d)(3), 9840a(c)(1) & (i)(2)(G), 9852b(d)(2)(C).
Commenters also argued that 42 U.S.C. 10406 of the Family Violence
Prevention and Services Act (FVPSA) be removed from the list of
programs in the final rule's Sec. 75.300(e) because, in their view,
the word ``sex'' in the context of that statute is used in the
statute.''
Response: The Department appreciates the comments but disagrees
with the commenters' views. Bostock and ensuing case law provide a
compelling reason to interpret other similar statutory provisions which
use the same or similar nondiscrimination language as Title VII's
prohibition against sex discrimination to include discrimination based
on sexual orientation and gender identity, absent indicia to the
contrary.
Further, given the similarity in nondiscrimination language between
Title VII and Title IX, many Federal courts that have addressed the
issue have interpreted Title IX consistent with Bostock's
reasoning.\19\ Additionally, there is a significant amount of case law,
pre-and post-Bostock, that affirms protections on the basis of either
sexual orientation or gender identity, or both, pursuant to a variety
of other statutes that prohibit discrimination on the basis of ``sex.''
\20\ As noted in the Proposed
[[Page 36691]]
Rule, none of the listed statutes in the rule contain any indicia--such
as statute-specific definitions, case law, or any other criteria--to
suggest that these prohibitions on sex discrimination should be
construed differently than how the Supreme Court construed Title VII's
sex discrimination prohibition in Bostock. The language prohibiting sex
discrimination in statutes listed in Sec. 75.300(e) is substantially
similar to Title VII's sex discrimination prohibition, and so the
Department interprets them similarly. In addition, while these laws may
have exceptions or other provisions that affect how they apply to
particular facts and circumstances, that does not change the fact that
their general prohibition on ``sex discrimination'' should be
understood consistent with the reasoning of Bostock. See Bostock, 590
U.S. at 681 (``Whether other policies and practices might or might not
qualify as unlawful discrimination or find justifications under other
provisions of Title VII are questions for future cases, not these.'').
---------------------------------------------------------------------------
\19\ See e.g., Grabowski v. Arizona Bd. of Regents, 69 F.4th
1110, 1116 (9th Cir. 2023); Doe v. Snyder, 28 F.4th 103, 113-14 (9th
Cir. 2022); Grimm v. Gloucester Cnty. Sch. Bd., 972 F.3d 586, 616
(4th Cir. 2020); cf. Adams v. School Bd. of St. Johns Cnty, 57 F.4th
791, 811-15 (11th Cir. 2022) (en banc).
\20\ See, e.g., Whitaker By Whitaker v. Kenosha Unified Sch.
Dist. No. 1 Bd. of Educ., 858 F.3d 1034 (7th Cir. 2017) (Title IX);
Smith v. Cty. of Salem, Ohio, 378 F.3d 566 (6th Cir. 2004) (Title
VII); Rosa v. Park W. Bank & Trust Co., 214 F.3d 213 (1st Cir. 2000)
(Equal Credit Opportunity Act); Schroer v. Billington, 577 F. Supp.
2d 293 (D.D.C. 2008) (Title VII); Boyden v. Conlin, 341 F. Supp. 3d
979 (W.D. Wis. 2018) (Section 1557 and Title VII); Flack v. Wis.
Dep't of Health Servs., 395 F. Supp. 3d 1001, 1014 (W.D. Wis. 2019)
(Section 1557 and Equal Protection Clause); Prescott v. Rady
Children's Hosp. San Diego, 265 F. Supp. 3d 1090, 1098-100 (S.D.
Cal. 2017) (Section 1557); Tovar v. Essential Health, 342 F. Supp.
3d 947, 957 (D. Minn. 2018) (Section 1557). See also Doe v. Snyder,
28 F.4th 103, 113-14 (9th Cir. 2022); Grimm v. Gloucester Cnty. Sch.
Bd., 972 F.3d 586, 616 (4th Cir. 2020), as amended (Aug. 28, 2020),
cert. denied, 141 S. Ct. 2878 (Mem) (2020); Kadel v. Folwell, No.
1:19-cv-00272, 2022 WL 2106270, at *28-*29 (M.D.N.C. June 10, 2022);
Scott v. St. Louis Univ. Hosp., No. 4:21-cv-01270-AGF, 2022 WL
1211092, at *6 (E.D. Mo. Apr. 25, 2022); C.P. by & through Pritchard
v. Blue Cross Blue Shield of Ill., No. 3:20-cv-06145-RJB, 2021 WL
1758896, at *4 (W.D. Wash. May 4, 2021); Koenke v. Saint Joseph's
Univ., No. CV 19-4731, 2021 WL 75778, at *2 (E.D. Pa. Jan. 8, 2021);
Doe v. Univ. of Scranton, No. 3:19-cv-01486, 2020 WL 5993766, at *11
n.61 (M.D. Pa. Oct. 9, 2020); Maxon v. Seminary, No. 2:19-cv-9969,
2020 WL 6305460 (C.D. Cal. Oct. 7, 2020); B.P.J. v. W. Va. State Bd.
of Educ., No. 2:21-cv-00316, 2021 WL 3081883, at *7 (S.D.W. Va. July
21, 2021); Clark Cnty. Sch. Dist. v. Bryan, 478 P.3d 344, 354 (Nev.
2020). At least one court has held that it would be a misapplication
of Bostock to interpret the definition of ``sex discrimination''
under Section 1557 and Title IX to include gender identity and
sexual orientation. Neese v. Becerra, No. 2:21-CV-163-Z, 2022 WL
16902425 (N.D. Tex. Nov. 10, 2022). The Department appealed that
decision to the U.S. Court of Appeals for the Fifth Circuit and oral
argument was held on January 8, 2024. The Department is not applying
the challenged interpretation to members of the Neese class pending
the appeal.
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Additionally, the Department disagrees that Bostock's holding was
only about the term ``because of.'' Indeed, in Bostock itself, the
Court used both ``on the basis of'' and ``because of'' throughout the
decision to describe the unlawful discrimination at issue. See, e.g.,
Bostock, 590 U.S. at 654 (``on the basis of sex.''); id. at 658
(``because of sex''). As noted in the Proposed Rule, the 13 listed
statutes contain minor variations in the language used to prohibit sex
discrimination, sometimes within the same statute, but the Department
does not believe any of the variations can be reasonably understood to
distinguish the various statutes from Bostock's reasoning. See 88 FR
44754.\21\
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\21\ Nevertheless, 42 U.S.C. 9849(a) actually uses the phrase
``because of.'' See 42 U.S.C. 9849(a) (``The Secretary shall not
provide financial assistance for any program, project, or activity
under this subchapter unless the grant or contract with respect
thereto specifically provides that no person with responsibilities
in the operation thereof will discriminate with respect to any such
program, project, or activity because of race, creed, color,
national origin, sex, political affiliation, or beliefs.'')
(emphasis added).
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With regard to the commenters' providing statutes that explicitly
reference women and men to support the argument that sex should be
limited to a ``binary, biological'' understanding, we find this
unpersuasive. As the Supreme Court noted in Bostock, nothing in its
approach turned on the parties' debate over whether ``sex'' was limited
to the notion that it only refers to distinctions between male and
female, and so the Court proceeded on the narrow assumption for
argument's sake that ``sex'' signifies ``biological distinctions
between male and female.'' Bostock, 590 U.S. at 655. Nonetheless the
Court held that the plain language of the statute included
discrimination based on sexual orientation and gender identity.
Finally, with regard to the FVPSA, 42 U.S.C. 10406(c)(2)(B)(i) explains
that entities may ``tak[e] into consideration that individual's sex in
those certain instances'' such as ``bona fide occupational
qualifications'' or ``programmatic factors.'' The Department will apply
the FVPSA faithfully, including this provision.
Comment: A group of commenters expressed their view that the
Proposed Rule constitutes a ``unilateral inflation'' of power by the
Department that invokes the ``major questions doctrine'' and requires
Congressional approval. West Virginia v. Environmental Protection
Agency, 142 S. Ct. 2587 (2022) and Biden v. Nebraska, 143 S. Ct. 2355
(2023). The group expressed concerns about the scope of the types of
providers the rule would impact. The group also asserted that the
Department is claiming to interpret Title VII through the Proposed
Rule, despite Title VII being enforced by the Equal Employment
Opportunity Commission (EEOC). One commenter argued that HHS's
responsibility to comply with Supreme Court decisions includes
following the major questions doctrine and upholding universal
religious freedom rights.
Response: The Department appreciates the commenters' concerns but
disagrees that this rule is beyond the Department's authority or that
it is interpreting Title VII in lieu of the EEOC. The Department
recognizes that, under the major questions doctrine, explicit
Congressional authorization is required in ``extraordinary cases'' when
the ``history and breadth of the authority that [the agency] has
asserted'' and the ``economic and political significance'' of that
assertion provide a ``reason to hesitate before concluding that
Congress'' meant to confer such authority. W. Virginia v. Env't Prot.
Agency, 597 U.S. 697, 721 (2022) (quoting Food & Drug Admin. v. Brown &
Williamson Tobacco Corp., 529 U.S. 120, 159 (2000)). A majority of
major-question cases apply to agency action that has not been clearly
authorized by the text of the statute.
Here, Sec. 75.300(e) is interpretive of the 13 statutes listed,
each of which authorize programs administered by the Department. In
Bostock, the Court interpreted language contained in--and at the heart
of--the Title VII statute. 590 U.S. at 659 (observing that from ``the
ordinary public meaning of the statute's language at the time of the
law's adoption, a straightforward rule emerges: [a]n employer violates
Title VII when it intentionally fires an individual employee based in
part on sex''). The Court states that ``it is impossible to
discriminate'' against a person based on sexual orientation or gender
identity ``without discriminating against that individual based on
sex.'' Id.
Because HHS is interpreting language nearly identical to that
interpreted in Bostock, the major questions doctrine does not apply to
HHS's interpretation of the statutes identified in this rule. The
Department therefore disagrees with the commenters who opined that this
rule represents agency action in violation of Biden v. Nebraska, 143 S.
Ct. 2355 (2023) or W. Virginia v. Env't Prot. Agency, 597 U.S. 697
(2022). To the contrary, HHS is relying upon all relevant statutory
text and applicable case law in this interpretive rule. However, for
clarity, the Department has revised Sec. 75.300(e) in this final rule
to make clear that this provision is interpretive and does not impose
substantive obligations on entities outside the Department.
Comment: A group of commenters argued that Sec. 75.300(e) would
compel faith-based organizations in receipt of HHS funding to violate
their religious identity and tenets. Another group of commenters opined
that if a program required a religious organization to provide
referrals for care that violate the religious organization's ethical
standards, it would discriminate against religious providers and would
be inconsistent with Trinity Lutheran Church of Columbia v. Comer, 582
U.S. 449 (2017). A group of religious organizations recommended that,
absent Sec. 75.300(e)'s removal, Sec. 75.300(f) should be altered to
explicitly state that incidental harms to third parties cannot curtail
a request for religious exemption if the government action at issue is
a
[[Page 36692]]
burden on the claimant's religion. Two organizations stated that
challenges could arise in shelters for unaccompanied migrant children
(UC) and unaccompanied refugee minors (URMs) to accommodate gender-
nonconforming individuals.
One commenter asserted that the Proposed Rule would require
religious organizations to place UCs and URMs with same-sex couples as
foster parents because that program is funded in part by grants issued
under 8 U.S.C. 1522, 45 CFR part 400, authorization for programs for
domestic resettlement of and assistance to refugees, and cited Marouf
v. Azar, No. 18-cv-00378 (D.D.C. Jul. 7, 2023). More generally, several
commenters argued that the rule would force faith-based providers to
provide procedures with which they disagree due to religious beliefs,
and raised constitutional issues, alleging that the Proposed Rule would
result in disparate impact on religious entities in violation of the
Equal Protection Clause.
Response: The Department disagrees that this rule discriminates
against religious entities in violation of the Equal Protection Clause.
Rather, this final rule clarifies HHS's interpretation of
discrimination based on sex in the listed statutes, consistent with
Federal law. Furthermore, Sec. 75.300(f) provides a new administrative
process not previously provided for in either the 2016 Rule or the
partially vacated 2021 Rule.\22\ Under Sec. 75.300(f), the Department
will address any request for an assurance of a religious freedom- or
conscience-based exemption on a case-by-case basis. This new process is
designed to ensure that protections are appropriately applied and that
recipients have the opportunity to request assurance of exemptions
consistent with their religious tenets. The process set forth in Sec.
75.300(f) clarifies legal obligations, demonstrates the Department's
concerted effort to approach its enforcement responsibilities under
Federal antidiscrimination laws while respecting applicable Federal
religious freedom and conscience laws, and maintains transparency about
the Department's enforcement mechanisms.
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\22\ The religious freedom and conscience exemption process here
complements the exemption process set forth in Section 1557 (Sec.
92.301), and the Department's 2024 Conscience Rule, Safeguarding the
Rights of Conscience as Protected by Federal Statutes, 89 FR 2078
(2024).
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With regard to the consideration of third-party harms \23\ raised
by commenters, the Religious Freedom Restoration Act of 1993 (RFRA), 42
U.S.C. 2000bb et seq., provides that the Federal government may not
substantially burden a person's exercise of religion unless it can
demonstrate that the ``application of the burden to the person--(1) is
in furtherance of a compelling governmental interest; and (2) is the
least restrictive means of furthering that compelling governmental
interest.'' 42 U.S.C. 2000bb-1(b). In determining whether the
government action is the least restrictive means of furthering a
compelling governmental interest, the Department will take into
consideration any harms to third parties that may result from providing
an exemption under RFRA.
---------------------------------------------------------------------------
\23\ See Cutter v. Wilkinson, 544 U.S. 709, 720 (2005) (In
addressing religious accommodation requests, ``courts must take
adequate account of the burdens a requested accommodation may impose
on nonbeneficiaries.'').
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In response to commenters' concerns regarding the application of
this rule to religious providers in the context of UCs, URMs, and
foster care because of this rule's application to 8 U.S.C. 1522 the
Department notes that 8 U.S.C. 1522 applies only to URMs and not UCs or
foster care. Additionally, the Department notes the process at Sec.
75.300(f) is available to religious providers to request an assurance
of an exemption from the application of the nondiscrimination
requirements addressed in this rule to their programs under applicable
Federal religious freedom and conscience laws.
Comment: Some commenters stated that, in their view, the Proposed
Rule would affect women's access to services where an entity has been
required, based on this rule, to expand its services to include a new
population on top of the population they already serve. Some commenters
discussed their belief that the rule would require specific programs to
expand the services provided, alleging that programs like Head Start
and the Community Mental Health and Maternal/Child Health Block Grants
would be required to affirm LGBTQI+ children, which would require
providing correspondingly affirming health care.
Response: The Department appreciates these comments, but they do
not accurately characterize requirements related to women, children,
and health care. The final rule clarifies HHS's interpretation of
discrimination based on sex in the listed statutes, consistent with
Federal law. The Department is not setting standards of care for the
practice of medicine in this rule, nor is it requiring providers to
provide any specific services.
Comment: Numerous commenters raised concerns that the Proposed Rule
affects parental rights related to curricula taught to children and
decisions about medical care.
Response: The Department appreciates the fundamental role that
parents play in raising their children. The final rule clarifies HHS's
interpretation of discrimination based on sex in the listed statutes,
consistent with Federal law. The rule does not set standards for
parental involvement and nothing in this rule derogates parental
rights. The rule also does not opine on the authority of parents to
choose when and how to educate their children about certain matters, or
to choose when and what health care to provide their children.
Comment: A commenter expressed concern that the Proposed Rule does
not clarify the extent of its nondiscrimination requirements, nor does
it adequately establish what services recipients must provide or how
they must operate under the Proposed Rule.
Response: The Department appreciates these comments. The Department
is committed to working with recipients to ensure compliance with their
particular programs' nondiscrimination requirements. The Department
disagrees that the rule's approach would leave applicants with
uncertainty about their antidiscrimination obligations. As discussed
above, the concept that discrimination on the basis of sex includes
discrimination on the basis of sexual orientation and gender identity
is not new, and there exists a wide body of case law on its application
in numerous circumstances. This rule memorializes the Department's
interpretation as applied to 13 statutes. Indeed, many Federal courts
have long interpreted Title VII's prohibition on sex-based
discrimination to encompass discrimination based on gender
identity.\24\
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\24\ See, e.g., Barnes v. City of Cincinnati, 401 F.3d 729, 738
(6th Cir. 2005); Schroer v. Billington, 577 F. Supp. 2d 293, 308
(D.D.C. 2008); Roberts v. Clark Cnty. Sch. Dist., 215 F. Supp. 3d
1001, 1014 (D. Nev. 2016).
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It is true, however, that the Bostock Court noted it did not
address the issue of how ``doctrines protecting religious liberty
interact with Title VII,'' leaving those questions ``for future cases .
. .'' \25\ The Department will apply the law on these issues as it
develops.
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\25\ On this matter, the Bostock Court said that how doctrines
protecting religious liberty--including Title VII's religious
exemption, the First Amendment's religion clauses, and the Religious
Freedom Restoration Act--interact with Title VII ``are questions for
future cases. . . .'' 590 U.S. 644, 682 (2020).
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Comment: A few commenters expressed concern that HHS grant
recipients would now be required, in their view, to use participants'
preferred
[[Page 36693]]
pronouns or adopt, according to these commenters, a ``false'' view of
sex with which individuals may disagree, potentially burdening their
speech and expressive association.
Response: This rule does not require grant recipients to adopt any
particular views, and neither requires nor authorizes the restriction
of any rights protected by the First Amendment or any other
Constitutional provision. To reiterate, Sec. 75.300(e) does not impose
any substantive requirements on entities outside the Department.
Rather, the final rule clarifies HHS's interpretation of discrimination
based on sex in the listed statutes and interprets those statutes'
prohibitions consistent with Federal law. This regulation neither
addresses specific conduct constituting discrimination under any
particular statute nor dictates any of the outcomes of any claim of
discrimination. Whether discrimination has occurred is a fact-specific
inquiry.\26\
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\26\ For example, according to guidance from the U.S. Equal
Employment Opportunity Commission (EEOC), ``although accidental
misuse of a transgender employee's name and pronouns does not
violate Title VII, intentionally and repeatedly using the wrong name
and pronouns to refer to a transgender employee could contribute to
an unlawful hostile work environment.'' EEOC, Sexual Orientation and
Gender Identity (SOGI) Discrimination, <a href="https://www.eeoc.gov/sexual-orientation-and-gender-identity-sogi-discrimination">https://www.eeoc.gov/sexual-orientation-and-gender-identity-sogi-discrimination</a>.
---------------------------------------------------------------------------
Comment: Several commenters discussed that at least five of the
statutes referenced in Sec. 75.300(e) prohibit sex discrimination by
incorporating prohibitions in Title IX, which the commenters state
provide for broad carveouts and exceptions for religious entities. 42
U.S.C. 290cc-33(a)(1), 300w-7(a)(1), 300x-57(a)(1), 708(a)(1),
10406(c)(2)(A).
Response: While each of the five statutes referenced by commenters
mentions Title IX in a rule of construction, they also each contain a
separate, standalone prohibition against discrimination on the basis of
sex. 42 U.S.C. 290cc-33(a)(2), 300w-7(a)(2), 300x-57(a)(2), 708(a)(2),
10406(c)(2)(B)(i). These provisions are not reliant on Title IX. They
are separate authorities that prohibit sex discrimination outright, and
the Department disagrees that the statutory exemptions and exceptions
from Title IX should be read into them.
The final rule has no effect on a covered entity's \27\ or
applicant's ability to maintain, seek, claim, or assert a religious
exemption under Title IX. The Department remains committed to applying
Title IX's religious exception for the education programs and
activities of entities controlled by religious organizations under
Title IX. And applicants or recipients that do not have an education
program or activity that qualifies under the Title IX religious
exception are able to claim assurances of a religious freedom exemption
to the requirements of this regulation under this final rule's new
administrative process outlined in Sec. 75.300(f). Nothing in this
rule invalidates or limits the existing rights, remedies, procedures,
or legal standards available under Federal religious freedom and
conscience laws.
---------------------------------------------------------------------------
\27\ Here, as in the NPRM, e.g., 88 FR 44758, ``covered entity''
is used interchangeably with ``recipient,'' and is distinct from any
defined terms in other rules, including ``covered entity'' as
defined in Section 1557.
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Comment: Some organizations raised issues with compliance and the
impact of instituting nondiscrimination requirements related to sexual
orientation and gender identity in educational settings, particularly
as applied to sex-segregated facilities or programs. Other commenters
stated that the Bostock decision did not create a presumption that sex
nondiscrimination statutes prohibit sexual orientation and gender
identity discrimination in the context of single-sex spaces.
Response: The final rule clarifies HHS's interpretation of
discrimination based on sex in the listed statutes, consistent with
Federal law. To the extent warranted, the Department will provide
guidance for grantees with questions about compliance with their
nondiscrimination obligations. And if program recipients have a
religious freedom or conscience objection to the nondiscrimination
obligations addressed in this rule, the Department has set forth an
administrative process at Sec. 75.300(f). Accordingly, the Department
declines to make additional revisions in response to these comments.
Comment: Two commenters asserted that the statutes in the Proposed
Rule are exercises of Congress's Spending Clause authority and
therefore are subject to the Pennhurst ``clear statement rule,'' which
provides that Congress cannot impose conditions on the grant of Federal
funding without providing a clear statement as to what these conditions
would entail.
Response: In Pennhurst State School and Hospital v. Halderman, the
Supreme Court held that ``if Congress intends to impose a condition on
the grant of federal moneys, it must do so unambiguously . . . ,
enabl[ing] the States to exercise their choice knowingly, cognizant of
the consequences of their participation.'' 451 U.S. 1, 17 (1981). In
Bostock, the Supreme Court relied on the plain meaning of Title VII to
hold that discrimination because of sex includes discrimination because
of sexual orientation and gender identity. HHS is relying on the same
plain meaning of the 13 statutes listed in Sec. 75.300(e). As noted in
the Proposed Rule, the statutes listed in proposed Sec. 75.300(e) were
identified because they contain prohibitions on sex discrimination
similar to that in Title VII; none contain any indicia suggesting they
should be construed differently than Title VII; and the Department is
unaware of any reported case law with regard to these statutes that
requires a contrary construction. 88 FR 44754. Indeed, since Bostock,
three Federal courts of appeal have held that the plain language of
statutes such as Title IX's prohibition on sex discrimination must be
read similarly to Title VII's prohibition.\28\ Thus, like Title VII,
these 13 statutes unambiguously prohibit recipients from discriminating
on the basis of sexual orientation or gender identity. The Department's
interpretation in this final rule therefore does not affect the States'
knowing choice in accepting Federal funds here. Recipients of Federal
funds in the relevant grant programs are clearly on notice that they
must comply with the antidiscrimination provisions of the 13 listed
statutes. Even if one accepted the argument that the ``application of
[the condition] might be unclear in [some] contexts,'' that would not
render the condition unenforceable under the Spending Clause. Bennett
v. Ky. Dep't of Educ., 470 U.S. 656, 665-66, 673 (1985). Unlike
Pennhurst, in which the Federal law at issue was unclear as to whether
the states incurred any obligations at all by accepting Federal funds,
the 13 listed statutes clearly condition receipt of funds on complying
with the statutes' prohibition on sex discrimination. See 8 U.S.C.
1522; 42 U.S.C. 290cc-33; 42 U.S.C. 290ff-1; 42 U.S.C. 295m; 42 U.S.C.
296g; 42 U.S.C. 300w-7; 42 U.S.C. 300x-57; 42 U.S.C. 708; 42 U.S.C.
5151; 42 U.S.C. 8625; 42 U.S.C. 9849; 42 U.S.C. 9918; 42 U.S.C. 10406.
---------------------------------------------------------------------------
\28\ See A.C. by M.C. v. Metro. Sch. Dist. of Martinsville, 75
F.4th 760, 769 (7th Cir. 2023); Grabowski v. Arizona Bd. of Regents,
69 F.4th 1110, 1116-17 (9th Cir. 2023); Doe v. Snyder, 28 F.4th 103,
113-14 (9th Cir. 2022); Grimm v. Gloucester Cnty. Sch. Bd., 972 F.3d
586, 616 (4th Cir. 2020), as amended (Aug. 28, 2020), cert. denied,
141 S. Ct. 2878 (Mem) (2020).
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Summary of Regulatory Changes to Sec. 75.300(e)
For the reasons set forth in the Proposed Rule and considering the
comments received, we are adding text to Sec. 75.300(e) that states
the provision is
[[Page 36694]]
interpretive and does not impose any substantive obligations on
entities outside the Department.
4. Section 75.300(f)
In the 2023 NPRM, the Department proposed to add Sec.
75.300(f)(1), which provided that a recipient may, at any time, raise
with the Department the recipient's belief that the application of a
specific nondiscrimination provision or provisions addressed in this
regulation as applied to the recipient would violate Federal religious
freedom protections.
Section 75.300(f)(2) proposed that once the awarding agency,
working jointly with ASFR or OCR (in the course of investigating a
civil rights complaint or compliance review), receives a notification
from a recipient seeking a religious exemption, the awarding agency,
working jointly with either ASFR or OCR, would promptly consider the
recipient's view that they are entitled to an exemption in responding
to any complaints, or determining whether to proceed with any
investigation or enforcement activity regarding that recipient's
compliance with the relevant nondiscrimination provisions, or in
responding to a claim raised by the recipient in the first instance, in
legal consultation with the Office of the General Counsel. Any relevant
ongoing investigation or enforcement activity regarding the recipient
would be held in abeyance until a determination has been made.
Section 75.300(f)(3) proposed that, in determining whether a
recipient is wholly or partially exempt from the application of the
specific provision or provisions raised in its notification, the
awarding agency, working jointly with ASFR or OCR, in consultation with
the Office of the General Counsel, must assess whether there is a
sufficient, concrete factual basis for making a determination and apply
the applicable legal standards of the religious freedom statute at
issue.
Section 75.300(f)(3) also proposed that, upon making a
determination regarding whether a particular recipient is exempt from--
or subject to a modified requirement under--a specific provision
addressed in this part, the awarding agency, working with ASFR or OCR,
will communicate that determination to the recipient in writing, noting
that that determination does not otherwise limit the application of any
other Federal law to the recipient.
Section 75.300(f)(4) proposed that the awarding agency, working
jointly with ASFR and OCR, may determine at any time whether a
recipient is wholly or partially exempt from certain provisions
addressed in this part under Federal religious freedom laws, either
after a complaint is made against the recipient or when the recipient
seeks an exemption before any complaint is filed (provided the
Department has a sufficient, concrete factual basis for determining
whether the recipient is entitled to an exemption).
The comments and our responses regarding Sec. 75.300(f) are set
forth below.
Comment: A commenter expressed support for Sec. 75.300(f) because
it calls for written notification to a grantee explaining the ``scope,
applicable issues, duration, and all other relevant terms of any
[granted] exemption.'' The commenter reasoned that such a notification
would minimize potential risks to LGBTQI+ individuals by restricting
grantees from taking action beyond what a granted exemption allows. The
commenter also asked, however, that the Department codify a requirement
that this written notification be made available to the public as well
as the grantee. One commenter said any determination letters from OCR
granting an exemption should be made public within 10 days by posting
on the Department's website.
Response: The Department thanks the commenters. The Department
declines to revise Sec. 75.300(f) to require publication of exemptions
granted under this provision, consistent with Title IX regulations that
do not impose a similar notification requirement for exemptions granted
consistent with that statute or its implementing regulations.\29\ The
Department notes that nothing in this rule prevents applicants or
recipients from independently disclosing any such exemptions they have
received to the general public or individuals participating or seeking
to participate in their programs, and we encourage applicants or
recipients to do so. We recognize that individuals are not always aware
that the recipients of Federal funding that administer the programs in
which they participate may have religious freedom- or conscience-based
exemptions, and the Department remains committed to working with
recipients, applicants, and the public to improve transparency,
clarity, and access to HHS funded programs and activities through
implementation of this rule. HHS is also subject to FOIA, and
information may be released to a requestor or made available for public
inspection consistent with the agency's obligations under that statute
and its implementing regulations.
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\29\ See e.g., 45 CFR 86.12; see also 85 FR 59916, 59951-2
(September 23, 2020) (Dep't of Educ. rulemaking).
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Comment: A commenter expressed concern with the notification
procedure in proposed Sec. 75.300(f), because the process, in their
view, would not function as a substitute for automatic exemptions
authorized under the Constitution, RFRA, Title IX, and other statutes.
Some commenters expressed concern that Sec. 75.300(f) offers
recipients no assurance in the form of either substance or process.
Some commenters said that the exemption process in Sec. 75.300(f) may
discourage otherwise eligible entities from applying for or receiving
certain Federal grant funds because the process is unclear,
unpredictable, and unreliable. One commenter opined that the existence
of Sec. 75.300(f) demonstrates that the rule is rewriting the
underlying terms of grants in a way that will have substantial impacts
on recipients.
A commenter expressed concern that the Department's view is that
RFRA requires no affirmative agency compliance or enforcement beyond
what a court orders. The commenter cited to a November 2021 Federal
Register notice that withdrew a prior Delegation of Authority, which
had centralized authority for implementation and compliance of RFRA
within the Department with OCR. See 86 FR 67067 (Nov. 24, 2021)
(withdrawing 83 FR 2804 (Jan. 19, 2018). The commenter continued that
with this understanding, the Proposed Rule would result in religious
providers having to undergo extensive enforcement proceedings and
litigation to resolve their religious freedom concerns.
A commenter asked that the Department establish some objective
criteria for a religious safe harbor because proposed Sec. 75.300(f)
provides little guidance on how Federal religious freedom laws would be
applied. Another commenter similarly stated that additional clarity is
needed because at least three of the 13 statutes in the Proposed Rule
require applicants to make affirmative representations about their
compliance with the relevant law's nondiscrimination provisions, namely
42 U.S.C. 295m; 42 U.S.C. 296g; and 42 U.S.C. 9849.
Response: The Department disagrees with commenters that it views
RFRA as requiring no agency compliance. The new Sec. 75.300(f)
administrative process demonstrates the Department's concerted effort
to balance its enforcement responsibilities under Federal
antidiscrimination laws while respecting applicable Federal religious
freedom and conscience laws, including
[[Page 36695]]
RFRA. Section 75.300(f) provides an administrative process, not
provided for in either the 2016 Rule or the partially vacated 2021
Rule, under which grant applicants and recipients may either rely on
the protections of Federal religious freedom or conscience law or seek
assurance of an exemption directly from the Department under such laws.
Section 75.300(f) sets forth a detailed administrative process to
submit exemption assurance requests, and the standards governing the
relevant Federal religious freedom and conscience laws speak for
themselves. To provide added predictability to grant applicants and
recipients, they are afforded an automatic, temporary exemption under
Sec. 75.300(f)(2) until the Department adjudicates their request. For
additional clarity, the Department is adding the following clause to
Sec. 75.300(f)(2), which states that a temporary exemption will take
effect upon the submission of the request. The exemption shall be
limited to the particular application of the specific provision(s)
identified in the notification to the Department. The exemption
includes conduct that occurred during the pendency of any
administrative investigation and enforcement that is covered by the
temporary exemption.
Finally, the Department disagrees that the inclusion of Sec.
75.300(f) indicates any grant terms are being rewritten. The
Department's inclusion of Sec. 75.300(f) ensures that the Department
consistently applies both Bostock and other relevant case law and
complies with its obligations under applicable Federal religious
freedom and conscience law.
Comment: Some comments raised concerns regarding privacy
protections for organizations seeking an exemption under Sec.
75.300(f), and others cited the need for more privacy protections for
such organizations. A commenter speculated that, without such
protections, such religious organizations may become targets of
individuals with anti-religious animus.
Response: The Department will apply all applicable privacy laws in
handling the information it receives from entities regarding requests
for exemptions, will not target or retaliate against an entity that
seeks an exemption under Sec. 75.300(f), and will handle according to
the applicable provisions of the of the Privacy Act of 1974. As noted
above, the Department does not require publication of exemptions
granted to applicants or recipients under this provision, though
applicants or recipients may independently and voluntarily disclose any
such exemptions they have received the public and participating or
seeking to participate in their programs. As noted above, HHS is
subject to the FOIA; thus, information may be requested pursuant to
that statute.
Comment: Some commenters stated that Sec. 75.300(f) does not
explain what happens if a request for an exemption is submitted, but
the factual record is not fully developed when the Department makes its
assessment per Sec. 75.300(f)(3). These commenters also expressed
concern that Sec. 75.300(f)(3) does not explain what facts would
assist in HHS's assessment.
A group of commenters opined that Sec. 75.300(f) should be
clarified by citing the proposition that, under RFRA, the Government
must show ``application of the burden to the person is in furtherance
of a compelling governmental interest.''
Another group of commenters requested that the Department include
in the text of the regulation a requirement that it conduct an
Establishment Clause analysis of any proposed exemptions. They stated
that such an analysis is a constitutionally required step that previous
Administrations have omitted and that the Establishment Clause commands
that ``an accommodation must be measured so that it does not override
other significant interests,'' ``impose unjustified burdens on
other[s],'' or have a ``detrimental effect on any third party.'' Cutter
v. Wilkinson, 544 U.S. 709, 720, 722, 726 (2005); see also Thornton v.
Caldor, 472 U.S. 703, 709-10 (1985); Burwell v. Hobby Lobby Stores, 573
U.S. 682 (2014); Texas Monthly v. Bullock, 489 U.S. 1, 18 n.8 (1989)
(Brennan, J., plurality op.).).
A coalition of legal advocacy groups and religious groups
recommended that the Department expressly adopt a case-by-case approach
to granting exemptions under the final rule, reasoning that issuance of
blanket exemptions or exemptions for hypothetical burdens should be
minimized.
Response: As stated above, the Department will follow all relevant
legal authorities, including Supreme Court precedent, in administering
Sec. 75.300(f) and the final rule. The Department affirms, consistent
with the preamble of the Proposed Rule, that it will evaluate each
situation on a case-by-case basis to determine whether a recipient--or,
as of this final rule, applicant--is wholly exempt from the application
of, or entitled to a modification of the application of, certain
provisions addressed in this part, under an applicable Federal
religious freedom or conscience law. When HHS makes a case-by-case
determination, this refers to the evaluation of the exemption request
as a whole--which may be requesting assurance of an exemption from a
category of services. An entity will not be required to submit an
exemption assurance request for each time it seeks to offer a service
if an exemption already applies. Such a case-by-case analysis also
mitigates concerns that the Department will always evaluate the facts
in a particular direction and negatively affect third parties as raised
in the comment. In making such determinations, the Department will
faithfully apply the legal standards set forth in the particular
Federal religious freedom or conscience law at issue. The Department
declines the commenter's recommendation to articulate the legal
standards in RFRA in the regulatory text of Sec. 75.300(f) as
unnecessary.
However, to address commenters' concerns, the Department has
revised Sec. 75.300(f)(1) to state that a recipient or applicant may
rely on applicable Federal religious freedom and conscience
protections. In other words, a recipient or applicant is not required
to seek an exemption assurance from the Department, although it may do
so if it wishes. Revised Sec. 75.300(f)(1) also states that, where
such protections apply, the application of a particular provision(s) of
the statute at issue to the specific contexts, procedures, or services
at hand shall not be required. When a recipient acts based upon its
good faith reliance that it is exempt from providing a particular
service due to the application of relevant religious freedom and
conscience protections (e.g., RFRA), even if the recipient had not
affirmatively sought a written exemption assurance under Sec.
75.300(f)(2), HHS will not seek backward-looking relief against that
recipient. But if the Department determines, after an investigation,
that the recipient does not satisfy the legal requirements for an
exception, it will seek forward-looking relief as appropriate under the
facts.
If the applicant or recipient wishes to receive an assurance from
the Department regarding an exemption under any applicable religious
freedom and conscience laws, it may do so under Sec. 75.300(f)(2)
either prior to, or during the course of, an investigation.
It is important to note that Federal religious freedom and
conscience laws often differ in significant ways, and the facts that
would assist the Department in its assessment of such claims would be
consistent with the applicable legal authorities set forth in this
revision to Sec. 75.300(f)(2). For example conscience
[[Page 36696]]
laws frequently are tied to federal funding, while RFRA provides that
the Federal government may not substantially burden a person's exercise
of religion unless it can demonstrate that the ``application of the
burden to the person--(1) is in furtherance of a compelling
governmental interest; and (2) is the least restrictive means of
furthering that compelling governmental interest.'' 42 U.S.C. 2000bb-
1(b). In determining whether the government action is the least
restrictive means of furthering a compelling governmental interest, the
Department will take into consideration any harms to third parties that
may result from providing an exemption under RFRA. The Department will
apply the RFRA standard in determining whether and to what extent an
applicant or recipient is exempt from the application of any provision
addressed in this final rule under that law. The Department will
consider the harms that an applicant or recipient's request for an
assurance of an exemption may have on third parties if and when that
harm is relevant when considering whether to grant an assurance under a
particular Federal religious freedom or conscience law.
Given this framework for addressing third party harms, the
Department notes that it remains committed to fully complying with the
First Amendment, including the Free Exercise and Establishment Clause,
but declines to add language relating to third party harms to the final
rule.
However, for the sake of additional clarity, the Department is
revising proposed Sec. 75.300(f)(1), now Sec. 75.300(f)(2), to
explain that at any time, a grant applicant or recipient may notify the
HHS awarding agency, ASFR, or OCR that it views itself as exempt from,
or requires modified application of, certain provisions addressed in
this rule because of the application of the Church, Coats-Snowe, and
Weldon Amendments, the generally applicable requirements of the RFRA,
the First Amendment, and other applicable Federal laws.
Comment: A coalition of legal advocacy groups and religious groups
requested that HHS require that an awarding agency work with both ASFR
and OCR in reviewing, considering, and deciding whether to grant a
religious exemption or modification to the provisions of the relevant
statute.
Response: The Department thanks commenters for the request and
agrees that the awarding agency should work with both ASFR and OCR in
reviewing, considering, and deciding requests for assurances of
exemption. Accordingly, the Department is revising Sec. 75.300(f) to
replace ``or'' with ``and'' as the conjunction between ASFR and OCR
where relevant in Sec. 75.300(f).
Comment: Several commenters stated that the Department should
explicitly state that the notification procedure in Sec. 75.300(f) is
optional and clarify that a recipient will not be prejudiced if they do
not seek an exemption under this provision.
Additionally, a couple of commenters requested that the Department
clarify in Sec. 75.300(f) who will make the final determination on
religious freedom- or conscience-based exemption requests and clarify
on what basis the determination is to be made.
Response: The Department appreciates the commenters' concerns and
suggestions. To start, when a recipient acts based upon its good faith
reliance that it is exempt from providing a particular service due to
the application of relevant religious freedom and conscience
protections (e.g., RFRA), even if the recipient had not affirmatively
sought a written exemption under Sec. 75.300(f)(2), the Department
will not seek backward-looking relief against that recipient. Nothing
in Sec. 75.300(f) requires a grant applicant or recipient to seek an
exemption under this process prior to an investigation, though they may
do so if they so choose. Nor will an applicant or recipient be
prejudiced if they do not seek an exemption under this provision;
recipients may make exemption requests during an investigation or
administrative enforcement proceedings as well.
In addition, the Department is adding Sec. 75.300(f)(5) to the
final rule to state that if an applicant or recipient receives an
adverse determination of its exemption request, the entity may appeal
the Department's determination under 45 CFR part 81. Section
75.300(f)(5) also provides the temporary exemption provided to the
applicant or recipient expires upon a final decision under 45 CFR part
81. The Department is also adding Sec. 75.300(f)(6) to the final rule,
which explains that a determination of an exemption is not final for
purposes of judicial review until after a final determination under 45
CFR part 81. This mirrors the process for appeals in the Section 1557
Final Rule.\30\
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\30\ See FINAL 1557 CITE Sec. 92.302(g).
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Finally, it is the awarding agency, working jointly with ASFR and
OCR, in legal consultation with the Office of the General Counsel, that
will make the final determination on whether to grant the request, and
will do so consistent with applicable Federal law. Applicants or
recipients who have been denied an exemption under Sec. 75.300(f) may
raise their request before an administrative hearing examiner from the
Department, as provided for under 45 CFR part 81. The temporary
exemption would run through consideration of the administrative appeal.
Comment: A group of commenters suggested that Sec. 75.300(f)
expressly mention the ``church autonomy doctrine'' as a basis for an
exemption.
Response: Section 75.300(f) provides for exemptions based on
applicable Federal religious freedom and conscience laws, including the
First Amendment. Given that the church autonomy doctrine is rooted in
the religion clauses of the First Amendment,\31\ its inclusion here is
implied and it need not be explicitly mentioned in the regulatory text.
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\31\ See, e.g., Belya v. Kapral, 45 F. 4th 621, 628 (2d Cir.
2022) (``We use the term `church autonomy doctrine' to refer
generally to the First Amendment's prohibition of civil court
interference in religious disputes.''); see also Our Lady of
Guadalupe Sch. v. Morrissey-Berru, 140 S. Ct. 2049, 2061 (2020)
(describing ``the general principle of church autonomy'' as
religious organizations' ``independence in matters of faith and
doctrine and in closely linked matters of internal government'').
---------------------------------------------------------------------------
Comment: A couple of commenters expressed concern that the Proposed
Rule's religious exemption provisions at Sec. 75.300(f) would be
duplicative of the provisions put forth in HHS's recent rulemaking on
Section 1557 of the Affordable Care Act.
Response: The Department appreciates the comment and views the
similarities in the processes in both this rule and the Proposed Rule
with the Section 1557 rulemaking \32\ as appropriate to the extent that
RFRA and the other Federal religious freedom and conscience statutes
would function similarly in this context as in Section 1557. However,
the entities that receive grants from the Department may or may not be
subject to Section 1557 by virtue of not being or operating health
programs or activities, and thus, it is necessary for both rules to
contain religious exemption provisions.
---------------------------------------------------------------------------
\32\ 87 FR 47824 (Aug. 4, 2022).
---------------------------------------------------------------------------
Comment: A group of commenters stated that the financial exemption
provided by 45 CFR 75.102(b) should also apply to those with religious
objections to the operation of proposed Sec. 75.300(e). The commenters
asserted that the Proposed Rule acknowledged the secular exemption in
45 CFR 75.102 but sought to discourage its application based on
historical use. 88 FR 44755 n.26. The commenters stated that it would
violate the Free Exercise Clause to make exemptions available for
secular reasons under 45 CFR 75.102(b)
[[Page 36697]]
but not have similar exemptions available for religious reasons unless
strict scrutiny is satisfied, citing both Fulton v. Philadelphia, 141
S. Ct. 1868 (2021),) and Tandon v. Newsom, 141 S. Ct. 1294 (2021) (per
curiam), for this proposition.
Response: The Department disagrees with commenters' claim. Unlike
the government regulations at issue in Fulton and Tandon, under Sec.
75.300(f), entities have numerous avenues to seek religious exemptions,
including an assurance of exemption under the Church, Coats-Snowe, and
Weldon Amendments, the generally applicable requirements of the RFRA,
the First Amendment, and other applicable Federal laws. The Department
therefore declines to apply 45 CFR 75.102(b), which has historically
been used to address requests for financial and administrative
exemptions, to provide exemptions. Instead, the Department directs
recipients and applicants with religious objections to the process laid
out under Sec. 75.300(f).
Comment: A group of commenters stated that they approved of the
fact that Sec. 75.300(f) could be invoked even if there is no active
complaint pending against the recipient. The group further stated that
the Department should also provide prospective recipients of grants
from the Department a procedure whereby they could seek a preclearance
exemption. Relatedly, the commenter urged the Department to ensure that
nothing in the electronic grant application process would require a
religious applicant to affirm nondiscriminatory conduct in a manner
that would be at odds with RFRA or the First Amendment.
Response: As we stated in the NPRM, the Department is fully
committed to respecting religious freedom laws, including RFRA and the
First Amendment, when applying the nondiscrimination requirements
addressed in this rule. The final rule allows for a religious exemption
process in Sec. 75.300(f). Further, because the nondiscrimination
provisions being interpreted by this rule to apply based on receipt of
certain Federal funds, we decline to allow for a general preclearance
process, not associated with a specific funding application, from
prospective grantees. However, an applicant may submit a request for
assurance of an exemption concurrently with its grant proposal, which
will be reviewed on a case-by-case basis. Neither the submission nor
adjudication of a grant applicant's or recipient's request for
assurance of a religious exemption will have any bearing on the
awarding agency's determination of award unless the organization has
made clear that the exemption is necessary to its participation and HHS
has determined that it would deny the request.
Summary of Regulatory Changes to Sec. 75.300(f)
For the reasons set forth in the Proposed Rule and considering the
comments received, we are finalizing the provisions as proposed in
Sec. 75.300(f), with the following modifications.
We are adding a new Sec. 75.300(f)(1) to provide notice that an
applicant or recipient may rely on Federal protections for religious
freedom and conscience. We are revising proposed Sec. 75.300(f)(1),
now Sec. 75.300(f)(2), to state that applicants, in addition to
recipients, are allowed to submit requests for assurances of exemption,
to provide a non-exhaustive list of conscience laws that may be applied
to the Sec. 75.300(f) process, and to notify recipients, applicants,
and the public about the type of information the notification must
include. We are also revising proposed Sec. 75.300(f)(2), now Sec.
75.300(f)(3), to provide a temporary exemption during the pendency of
the Department's review of the request and a general timetable under
which the Department will acknowledge and begin to evaluate requests
for assurances of exemption; proposed Sec. 75.300(f)(3), now Sec.
75.300(f)(4), to provide that the awarding agency, ASFR, or OCR will
inform the applicant or recipient in writing of the determination
regarding the assurance of exemption request and that any such
determination does not otherwise limit the application of any other
provision of the relevant statute to the applicant or recipient or to
other contexts, procedures, or services; and proposed Sec.
75.300(f)(4), now Sec. 75.300(f)(5), to provide details about the
administrative appeal process for recipients and applicants receiving
adverse determinations. Finally, in a new subparagraph Sec.
75.300(f)(6), the Department notes that for purposes of judicial
review, determinations made under Sec. 75.300(f) are not final until
after a final decision under 45 CFR part 81.
5. Section 75.300(g)
Comment: One commenter stated that, in their view, the proposed
severability clause in Sec. 75.300(g) makes clear that HHS will not
apply any RFRA ruling beyond the parties protected in a case to
similarly situated entities. The commenter viewed the proposed rule as
therefore forcing objecting religious providers to each undergo years
of enforcement proceedings followed by years of litigation.
Response: Section 75.300(g) ensures that, even if a court were to
strike down some provision of this final rule, other portions of this
rule not found to be unlawful would remain in effect. Contrary to the
comment, Sec. 75.300(g) states that any provision held to be invalid
or unenforceable as applied to any person or circumstance, will not
affect the application of the provision to other persons not similarly
situated or to other, dissimilar circumstances. The language of Sec.
75.300(g) is standard in severability clauses and indicates here that
the provisions of this rule are able to operate independently of each
other.
Summary of Regulatory Changes to Sec. 75.300(g)
For the reasons set forth in the Proposed Rule and considering the
comments received, we are finalizing the provision as proposed in Sec.
75.300(g).
C. Comments Received in Response to E.O. 13175 Tribal Consultation
The Department conducted a Tribal Consultation on December 19,
2023, with 27 participants. The Department received 10 comments from
tribal entities following the consultation.
Comment: Several Federally recognized Indian Tribes asked the
Department to clarify that Tribal health programs exclusively
benefiting American Indian and Alaska Native (AI/AN) people do not
violate the discrimination provisions in the proposed Sec. 75.300(c).
The tribes said that Sec. 75.300(c) should include an exemption
modeled after Title VI's implementing regulation at 45 CFR 80.3(d),
which states that for Indian Health and Cuban Refugee Services, it will
not be considered discrimination if an individual is excluded from
benefits because those benefits are limited by Federal law to
individuals of a particular race, color, or national origin.
Response: The Department recognizes the unique relationship between
the United States and Federally recognized tribal entities.\33\ The
regulation at 45 CFR 80.3(d) provides that an individual shall not be
deemed subjected to discrimination by reason of their exclusion from
benefits limited by Federal law--such as the Indian Health Service--to
individuals of a different race, color, or national origin. Because of
the unique relationship between the United States and Federally
recognized tribal entities, Federal government
[[Page 36698]]
preferences based on an individual's membership or eligibility in a
Federally recognized tribal entity are political classifications and
are not race-based.\34\ Preferences based upon the unique relationship
between the United States and Federally recognized tribal entities are
distinct from the forms of discrimination prohibited by Federal civil
rights laws, which aim to protect all individuals on the basis of race,
color, or national origin (including AI/AN individuals, regardless of
political affiliation).\35\ The Department respects this unique
relationship and the resulting benefits that are conferred by the
Federal government on the basis of political classification, which
remain distinct from racial classification and therefore distinct from
race nondiscrimination prohibitions referenced in Sec. 75.300(c). It
is unnecessary, however, to change the regulatory text of Sec.
75.300(c) to reflect that ongoing commitment, and the Department
declines to do so here.
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\33\ Indian Entities Recognized by and Eligible to Receive
Services from the United States Bureau of Indian Affairs, 8 FR 2112
(Jan. 12, 2023).
\34\ See Morton v. Mancari, 417 U.S. 535, 553 & n.24 (1974).
\35\ See Morton v. Mancari, 417 U.S. 535, 550 (1974) (``[a]
provision aimed at furthering Indian self-government by according an
employment preference within the [Bureau of Indian Affairs] for
qualified members of the governed group can readily co-exist with a
general rule prohibiting employment discrimination on the basis of
race.'').
---------------------------------------------------------------------------
Comment: One commenter from a Federally recognized Indian tribe
requested clarity on whether the rule impacts Indian Health Service
(IHS) Compact funding and if the IHS Compact funding stream is included
in the list of statutes under Sec. 75.300(e).
Response: The IHS Compact funding stream under Title IV of the
Indian Self-Determination Education Assistance Act (ISDEAA) (25 U.S.C.
5381 et seq.; 42 CFR 137 et seq.) is not included in the list of 13
statutes in Sec. 75.300(e). Regarding grants related to the 13
statutes listed in Sec. 75.300(e), the Department notes that Tribes
and Tribal organizations that compact with IHS to assume full funding
and control over IHS Programs, Services, Functions and Activities
(PSFA) can ``add'' statutorily mandated grants to their funding
agreement once those grants have been awarded. See 42 CFR 137.60.
However, the statutes listed in Sec. 75.300(e) are not grants that can
be added to a Tribe's ISDEAA funding agreement with IHS.
III. Executive Order 12866 and Related Executive Orders on Regulatory
Review
A. Executive Order 12866 Determination
The Department has examined the impacts of the final rule under
Executive Order 12866, Executive Order 13563, the Regulatory
Flexibility Act (5 U.S.C. 601-612), the Small Business Regulatory
Enforcement Fairness Act of 1995 (also known as the Congressional
Review Act, 5 U.S.C. 801 et seq.), and the Unfunded Mandates Reform Act
of 1995 (Pub. L. 104-4) (UMRA). Executive Orders 12866 and 13563 direct
us to assess all costs and benefits of available regulatory
alternatives and, when regulation is necessary, to select regulatory
approaches that maximize net benefits (including potential economic,
environmental, public health and safety, and other advantages;
distributive impacts; and equity). The final rule states that: (1)
grant recipients may not discriminate to the extent prohibited by
Federal statute; and (2) HHS complies with applicable Supreme Court
decisions. The rule likewise clarifies the Department's interpretation
of nondiscrimination protections on the basis of sex in 13 statutes
consistent with Supreme Court precedent. This rulemaking has been
determined to be significant for the purposes of E.O. 12866 as amended
by E.O. 14094 and, therefore, has been accordingly reviewed by the OMB.
Pursuant to Subtitle E of the Small Business Regulatory Enforcement
Fairness Act of 1996 (also known as the Congressional Review Act, 5
U.S.C. 801 et seq.), OMB's Office of Information and Regulatory Affairs
has determined that this final rule does not meet the criteria set
forth in 5 U.S.C. 804(2). The UMRA (section 202(a)) requires HHS to
prepare a written statement, which includes an assessment of
anticipated costs and benefits, before proposing ``any rule that
includes any Federal mandate that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100,000,000 or more (adjusted annually for
inflation) in any one year.'' The current threshold after adjustment
for inflation is $183 million, using the most current (2023) Implicit
Price Deflator for the Gross Domestic Product. The final rule would not
result in an expenditure in any year that meets or exceeds this amount.
1. Public Comments
The Department requested comment on the analysis of the impact of
the Proposed Rule on small entities, and the assumptions that underlie
that analysis. The Department received public comments on the likely
impacts of the Proposed Rule, including its likely impacts as compared
to the 2016 Rule. Below is a summary of the comments received and our
response:
Comment: HHS received comments discussing the need for additional
economic analysis of the effect of the Proposed Rule in addition to
Information Collection Requests (ICRs) and other information gathering
methods before the rule is enacted, including requests for information,
regional roundtables, task forces, regulatory reviews of each grant
statute, or a survey of all the relevant populations.
A number of commenters expressed concerns that familiarization
costs and the effects on religious entities were not adequately
captured and requested that these costs be considered as well as the
impact overall it would have on the health care system.
Another commenter urged HHS to perform a family policy assessment
in addition to stating its policy of reading and responding to
comments.
Response: For the analysis of the final rule, HHS has included
legal and other familiarization costs and has expanded the RIA to
include costs specifically associated with assurance of religious
freedom and conscience exemptions requests. Taking those into
consideration, the Department concludes that the final rule would
result in annualized costs over a five-year time horizon of
approximately $4.0 million or $3.8 million annualized, discounted at 7
percent and 3 percent respectively.
Through the analysis, the Department has determined that the
additional costs associated with the final rule will not have a
significant impact on organizations' ability to administer the grants
they receive, and therefore will not put additional strain on their
ability to operate effectively.
The Department received no additional evidence or data from
commenters about changes in the number or composition of grantees since
the 2016 Rule.
Section 654 of the Treasury and General Government Appropriations
Act of 1999 requires Federal agencies to determine whether a policy or
regulation may negatively affect family well-being. If the agency
determines a policy or regulation negatively affects family well-being,
then the agency must prepare an impact assessment addressing seven
criteria specified in the law. HHS maintains that it is not necessary
to prepare a family policymaking assessment (see Pub. L. 105-277) for
this rule, because it will not have a negative impact on the autonomy
or integrity of the family as an institution, or family well-being
within the meaning of the legislation.
The Department considers the opportunity for grant recipients and
applicants to raise recipient-specific and applicant-specific concerns
to be a benefit of the final rule. For the
[[Page 36699]]
purposes of the RIA, we do not attribute any litigation costs to the
final rule.
2. Summary of Costs and Benefits
This analysis quantifies several categories of costs to covered
entities and to the Department under the final rule. Specifically, the
Department quantifies costs associated with covered entities becoming
familiar with the rule provisions and making a determination of
applicability as well as costs associated with drafting and submitting
assurance of exemption requests. HHS also quantifies the anticipated
costs to adjudicate the assurance of exemption requests from covered
entities. Our analysis addresses the uncertainty in quantifying the
number of entities that will submit exemption requests. For the primary
estimate, the Department reports cost estimates of approximately $16.47
million using a 7 percent discount rate, and a cost estimate of
approximately $17.41 million using a 3 percent discount rate. All cost
estimates are in 2022 dollars. The Department concludes that the final
rule would result in annualized costs over a five-year time horizon of
approximately $4.0 million or $3.8 million, discounted at 7 percent and
3 percent respectively. In addition to these quantified cost estimates,
the main analysis includes a discussion of the potential unquantified
benefits associated with the rule. Table 1 below shows the estimated
annualized costs of the final rule.
Table 1--Annualized Costs of the Final Rule
[$Millions, 2022 dollars]
----------------------------------------------------------------------------------------------------------------
Discount rate
Primary estimate Low estimate High estimate Year dollars (percent) Period covered
----------------------------------------------------------------------------------------------------------------
$4.02........................... $2.91 $5.67 2022 7 2024-2028
3.80............................ 2.75 5.34 2022 3 2024-2028
----------------------------------------------------------------------------------------------------------------
3. Baseline
To quantify the costs associated with this rule, the Department has
attempted to estimate whether the number and composition of recipients
changed in response to the prior two rulemakings and how those costs
will impact this rule. The 2016 Rule has never been enforced; the
Department issued the Notice of Nonenforcement in 2019; and the 2021
Rule never went into effect. Because of this, HHS does not have any
data with regard to whether the number and composition of recipients
changed in response to prior rulemakings, as there was no change in the
enforcement of these rules which would impact those grants. However,
the Department understands that its recipients generally fall into one
of the following three categories in how they have been impacted by the
prior two rulemakings.
The first category includes recipients that adopted the
nondiscrimination practices prior to the 2016 Rule, whether voluntarily
or as a result of State and/or local law. Their observance of
nondiscrimination requirements is not the result of the 2016 Rule and
thus, these recipients are not impacted by this rule. The second
category includes recipients that had not adopted nondiscrimination
practices prior to the 2016 Rule, but that complied since the 2016
Rule, including after the 2019 Notice of Nonenforcement was issued and
until now. However, because the 2016 Rule did not contain any
procedural enforcement mechanisms such as an assurance of compliance or
adoption of a grievance process, it is difficult to quantity the costs,
if any, incurred by this second category of recipients. These
recipients would likely continue to follow such nondiscrimination
practices voluntarily or because of new or newly enforced State and/or
local laws, given that they could have declined to comply with the 2016
Rule requirements after the 2019 Notice of Nonenforcement issued, and
yet have continued to comply with those requirements notwithstanding
that notice. Thus, these recipients are similarly situated to the first
category of recipients insofar as they are not impacted by whether or
not the 2016 Rule is in effect. The third category includes recipients
that had not followed, and continue to not follow, the 2016 Rule.
However, their practice was likely not impacted by the 2016 Rule, as
the rule was not enforced. In 2019, the Department issued the Notice of
Nonenforcement which applied to all recipients covered by the 2016
Rule, which is still in effect to date. As such, these recipients could
not have relied upon the relevant provisions of the 2021 Rule, either,
since that rule was partially vacated and never went into effect. Since
this final rule removes the 2016 Rule's requirements, and adds a
religious and conscience exemption process, the Department expects that
these grantees will continue their current practice.
4. Covered Entities
The final rule specifically addresses the application of Federal
religious freedom and conscience protections for grant applicants and
recipients and states that an applicant or recipient may raise with the
Department their belief that the application of a specific provision or
provisions of the grants' requirements as explained in Section 75.300
as applied to the applicant or recipient violate Federal religious
freedom or conscience protections. The final rule also states that an
applicant or recipient may seek an assurance of exemption based upon
the application of a Federal religious freedom or conscience law and
the Department would assess whether there is a significant concrete
factual basis prior to making any determination. To estimate the
population of covered entities, the Department uses historical
information on the number of grantees for HHS programs as well as data
on the number of religious hospitals. Based on information in the
Department's Tracking Accountability in Government Grant Spending
(TAGGS) system, the Department estimates that there was a total of
144,817 grantees in 2023.\36\ The Department acknowledges that it
issues many grants on an annual basis, and many recipients receive
multiple grants. There were an estimated 707 active religious hospitals
as of 2020.\37\
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\36\ U.S. Dep't of Health and Human Servs. Tracking
Accountability in Gov't Grants Sys. (TAGGS), Grants by Recipient
Class, <a href="https://taggs.hhs.gov/ReportsGrants/GrantsByRecipClass">https://taggs.hhs.gov/ReportsGrants/GrantsByRecipClass</a>.
\37\ Total Catholic (577) + Non-Profit Church (130), Table 5:
Short-Term Acute Care Hospitals by Category: 2001-2020; Tess Solomon
et al., Bigger and Bigger The Growth of Catholic Health Systems,
<a href="https://www.communitycatalyst.org/wp-content/uploads/2022/11/2020-Cath-Hosp-Report-2020-31.pdf">https://www.communitycatalyst.org/wp-content/uploads/2022/11/2020-Cath-Hosp-Report-2020-31.pdf</a>.
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The Department does not have information on the number of grantees
that will seek an assurance of exemption; therefore, it acknowledges
the uncertainty with the number of grantees that will submit requests
for assurance of exemption under the block grant programs. Because of
the uncertainty, the Department estimates a range of covered entities
will be
[[Page 36700]]
impacted by the final rule. For the low population estimate, the
Department assumes all 707 religious hospitals will request assurances
of religious exemptions and receive funding under the block grants.
This is likely an overestimate, as most hospitals do not receive
funding under the 13 statutes at issue. Nevertheless, for the primary
estimate, the Department assumes that 2% of the total population of
TAGGS grantees, including religious freedom requests and those made on
the basis of conscience, along with all 707 religious hospitals will
request exemptions. For the high population estimate, the Department
assumes 5% of the total population of TAGGS grantees along with all 707
religious hospitals will request exemption requests. To estimate the
number of grantees in future years of the analysis, the final rule
estimates the growth rate for the population of grantees by calculating
a compound annual growth rate of 6.10% for the decade from 2013 to
2023.\38\ The grantee annual growth rate is then applied to the total
number of existing grantees each year during the five-year period of
analysis, beginning in 2023. To account for costs to covered entities
after the final rule is promulgated, the Department assumes only new
entities will incur costs associated with the rule after the first year
of implementation. After the first year, new entities are considered
the source of associated costs, and the same percentage of religious
exemptions (2%) is applied for new entities each year. Table 2 below
shows the estimated population of grantees based on the annual growth
rate (6.10%), and the estimated number of new grantees per year.
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\38\ The compound annual growth rate (CAGR) uses the number of
grantees between 2013-2023 and is calculated as ((144,817 / 80,124)
[supcaret] (1 / 10))-1 = 6.10%. Grantee data is collected from HHS's
Tracking and Accountability in Government Grants System (TAGGS).
U.S. Dep't of Health and Human Servs. Tracking Accountability in
Gov't Grants Sys. (TAGGS) supra note 36.
Table 2--Covered Entities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual entities Annual entities
Year Entities + growth New entities (2%) (5%)
a = n * (1 + 6.10%) by1 ay1 byn ayn-ayn-1 c = b * 2% d = b * 5%
[supcaret] (ayn-ayn-1)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2024....................................................... 153,647 153,647 3,780 8,389
2025....................................................... 163,016 9,369 187 468
2026....................................................... 172,956 9,940 199 497
2027....................................................... 183,503 10,546 211 527
2028....................................................... 194,692 11,189 224 559
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Values may not multiply due to rounding.
B. Costs of the Final Rule
In this section, the Department discusses the incremental costs of
the final rule, which excludes ongoing costs attributable to prior
rulemaking. The Department identifies potential costs associated with
grantees becoming familiar with this rule along with submitting
exemption requests, and follows the analytic approach contained in its
analysis. The Department considered additional potential sources of
costs that would be attributable to the final rule and found that Parts
(c)-(e) of the rule clarify for all covered grants what is already
required by law; and therefore, do not constitute incremental costs
associated with this final rule. Below are descriptions of the
quantified costs associated with the final rule.
1. Familiarization
The Department anticipates that all covered entities will incur
costs to familiarize themselves with the final rule. Depending on the
grantee, the task of familiarization could potentially fall to the
following occupation categories: (1) lawyers (23-1011), with a $65.26
median hourly wage; (2) general and operations managers (11-1021), with
a $47.16 median hourly wage; (3) grantee social and community service
managers (11-9151), with a $35.69 median hourly wage; (4) medical and
health services managers (11-9111), with a $50.40 median hourly wage;
or (5) compliance officers (13-1041), with a $34.47 median hourly wage.
Across all grantees, the Department adopts a pre-tax hourly wage that
is the average across the median hourly wage rates for these 5
categories, or $46.60 per hour.\39\ To compute the value of time for
on-the-job-activities, the Department adopts a fully loaded wage rate
that accounts for wages, benefits, and other indirect costs of labor
that is equal to 200% of the pre-tax wage rate, or $93.20 per hour.\40\
Accordingly, the Department estimates that it would take a typical
grantee approximately 0.68 hours to become familiar with the proposed
provisions.\41\ In Year 1, there are an estimated total of 153,647
grantees.\42\
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\39\ The average hourly wage is calculated as ($65.26 + $47.16 +
$35.69 + $50.40 + $34.47) / 5 = $46.60.
\40\ Jennifer R. Baxter et al., Valuing Time in U.S. Department
of Health and Human Services Regulatory Impact Analyses: Conceptual
Framework and Best Practices, (June 2017), <a href="https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//176806/VOT.pdf">https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//176806/VOT.pdf</a>.
\41\ According to the Department, reviewers read at the average
speed of approximately 200 to 250 words per minute. (source: Lisa A.
Robinson et al., Guidelines for Regulatory Impact Analysis, (2016),
at 26 Table 4.1, <a href="https://aspe.hhs.gov/sites/default/files/private/pdf/242926/HHS_RIAGuidance.pdf">https://aspe.hhs.gov/sites/default/files/private/pdf/242926/HHS_RIAGuidance.pdf</a>.) For this analysis the Department
estimates the hour burden associated with rule familiarization by
dividing the length of the NPRM (9,659 words) by an average reading
rate (238 words per minute). The familiarization hour burden is
calculated as 9,659 / 238 / 60 = 0.68 hours. (Source: Marc
Brysbaert, How many words do we read per minute?, (2019), <a href="https://osf.io/preprints/psyarxiv/xynwg/">https://osf.io/preprints/psyarxiv/xynwg/</a>.)
\42\ Year 1 grantee population is estimated as the 2023 TAGGS
grantee population, plus the annual grantee growth. The Department
calculates the estimated Year 1 grantee population as 144,817 * (1 +
6,10%) = 153,647. Values may not multiply due to rounding. TAGGS
accessed in: October 2023.
---------------------------------------------------------------------------
In Year 2 through Year 5, the Department also assumes that new
grantees will incur a similar familiarization cost in the year they
enter the market. To calculate the cost to covered entities to
familiarize themselves with the final rule, the Department multiplies
the total number of grantees per year (see Table 3) by the estimated
familiarization hour burden (0.68 hours) and by the average loaded wage
for the grantee's accountable individual responsible for rule
familiarization ($93.20). In Year 1, the Department estimates the cost
associated with grantee rule familiarization to be approximately
$9,686,014. Over the five-year period of analysis, the total cost to
covered entities associated with rule familiarization is estimated to
be $12,273,485.
[[Page 36701]]
Table 3--Familiarization Costs
[2022 dollars]
----------------------------------------------------------------------------------------------------------------
Year New entities Hour burden Wage Total cost
a b c d = a x b x c
----------------------------------------------------------------------------------------------------------------
2024................................ 153,647 0.68 93.20 $9,686,014
2025................................ 9,369 590,618
2026................................ 9,940 626,631
2027................................ 10,546 664,841
2028................................ 11,189 705,380
---------------------------------------------------------------------------
Total........................... ................. 12,273,485
----------------------------------------------------------------------------------------------------------------
Note: Values may not multiply due to rounding.
2. Exemption Assurance Requests
The final rule describes a process for applicants and recipients
notifying an awarding agency that they are seeking assurance of a
religious freedom- or conscience-based exemption, and for HHS to
promptly consider the applicant's or recipient's views that they are
entitled to an exemption. The Department has identified costs related
to covered entities submitting a request for assurance of an exemption
based on Federal religious freedom and conscience laws. The Department
estimates this potential cost associated with such requests as the
opportunity cost of time spent by covered entities to (a) assess the
need for an exemption; (b) write the exemption assurance request; and
(c) submit the request. To estimate the opportunity cost of time spent
drafting and submitting such requests, the Department assumes that one
(1) employee will spend two (2) hours assessing the need for an
exemption and three (3) hours writing and submitting the exemption
assurance request for a total of five (5) hours.\43\ The Department
further assumes that legal personnel, including lawyers and legal
assistants, would perform these functions. The mean hourly wage for
these occupations is $65.26 per hour for each employee, which the
Department doubles to account for overhead and other costs.\44\ To
compute the value of time for on-the-job activities, the Department
adopts a fully loaded wage rate that accounts for wages benefits and
other indirect costs of labor that is equal to 200% of the pre-tax wage
rate or a fully loaded wage of $130.52.\45\ The Department calculates
the cost per exemption assurance request for covered entities as the
hour burden to determine applicability as well as drafting and
submitting the exemption assurance request (5 hours) multiplied by the
loaded wage for legal personnel involved in the request process
($130.52). The total cost per covered entity to draft and submit such a
request is estimated to be $652.60.\46\
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\43\ Based on internal OCR estimates.
\44\ U.S. Bureau of Labor Statistics, Occupational Employment
and Wages, May 2022, 23-1011 Lawyers. <a href="https://www.bls.gov/oes/current/oes231011.htm">https://www.bls.gov/oes/current/oes231011.htm</a>.
\45\ Jennifer R. Baxter et al., Valuing Time in U.S. Department
of Health and Human Services Regulatory Impact Analyses: Conceptual
Framework and Best Practices, (June 2017), <a href="https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//176806/VOT.pdf">https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//176806/VOT.pdf</a>.
\46\ Total costs per exemption request are calculated as $130.52
x 5 hours = $652.60 per exemption request.
---------------------------------------------------------------------------
Our cost estimate reflects a wide range of uncertainty in the
number of exemption assurance requests the Department will receive. In
the primary scenario, OCR adopts a central estimate of the number of
such requests of 2 percent of all covered entities plus all 707
religious hospitals, which is estimated to be 3,780 requests in Year 1,
covering all areas addressed under the statute and regulations.\47\ In
Year 1, the primary estimate of the total number of anticipated
grantees seeking exemption assurance requests (3,780) is multiplied by
the cost per request ($652.60) for a total cost of $2,466,794, with the
range of estimates between $461,388 and $5,474,903 using the low and
high population estimates respectively. In Years 2 through 5, the
Department assumes that 2 percent of all new grantees will submit an
exemption assurance request in the year they enter the market. Over the
five-year period of analysis, the Department estimates that the primary
estimate of total costs associated with covered entities drafting and
submitting such requests to be $3,002,508, with the range of estimates
between $461,388 and $6,814,187 using the low and high population
estimates respectively.
---------------------------------------------------------------------------
\47\ Total exemption requests calculated as 707 + (153,647 x
.02) = 3,780 exemption requests.
---------------------------------------------------------------------------
In conjunction with covered entities drafting and submitting
exemption assurance requests, the Department will incur costs
associated with adjudicating such requests received from covered
entities. The awarding agency, working jointly with ASFR and OCR, and
in legal consultation with the Office of the General Counsel, will be
responsible for reviewing the request and making a determination of
applicability as well as suitability for the exemption. The Department
assumes that personnel involved in adjudicating these requests received
from covered entities will be a single (1) Step 1 GS-14 employee with a
loaded wage of $126.86 per hour.\48\ The Department also assumes it
takes five hours to complete the review and adjudicate exemption
assurance requests.\49\ To calculate the costs associated with the
adjudication of such requests, the Department multiplies the estimated
number of requests received per year by the hour burden to adjudicate
the request (5 hours) and by the loaded wage for the reviewer
($126.86). In Year 1, the primary estimate of costs associated with
adjudicating exemption assurance requests is estimated to be
$2,397,621, with a range of estimates between $448,450 and $5,321,378
using the low and high population estimates respectively. In Years 2
through 5, the Department anticipates it will receive exemption
assurance requests from new covered entities that will require the same
adjudication process. Over the five-year period of analysis, the
primary estimate of total costs to HHS associated with adjudicating
such requests received from covered entities is estimated to be
$2,918,312, with a range of estimates between $448,450 and $6,623,105
using the low and high population estimates respectively.
---------------------------------------------------------------------------
\48\ U.S. Off. of Pers. Mgmt., Salary Table 2023-DCB, For the
Locality Pay Area of Washington-Baltimore-Arlington, DC-MD-VA-WV-PA,
(Jan. 2023), <a href="https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2023/DCB_h.pdf">https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2023/DCB_h.pdf</a>. The loaded wage for
GS-14 Step 1 personnel is calculated as $63.43 x 200% = $126.86.
\49\ Based on internal OCR estimates.
---------------------------------------------------------------------------
To estimate the total cost of the exemption assurance request
provision, the Department sums the estimated total
[[Page 36702]]
costs for covered entities to draft and submit such a request with the
estimated total costs to adjudicate it. In Year 1, the primary estimate
of total costs associated with exemption assurance requests are
estimated to be $4,864,415, with a range of estimates between $909,838
and $10,796,281 using the low and high population estimates
respectively. Over the five-year period of analysis, the primary
estimate of total costs associated with such requests are estimated to
be $5,920,820, with a range of estimates between $909,838 and
$13,437,292 using the low and high population estimates respectively.
Table 4 below shows the estimated total costs associated with
exemption assurance requests using the low, primary, and high
population range.
Table 4--Exemption Assurance Requests With Population Sensitivity
[2022 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Primary High
Year -----------------------------------------------------------------------------------------------
Entities Total cost Entities Total cost Entities Total cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
2024.................................................... 707 $909,838 3,780 $4,864,415 8,389 $10,796,281
2025.................................................... 0 0 187 241,136 468 602,839
2026.................................................... 0 0 199 255,839 497 639,598
2027.................................................... 0 0 211 271,439 527 678,598
2028.................................................... 0 0 224 287,991 559 719,977
-----------------------------------------------------------------------------------------------
Total............................................... 707 909,838 4,601 5,920,820 10,442 13,437,292
--------------------------------------------------------------------------------------------------------------------------------------------------------
3. Total Quantified Costs
In the first year under the final rule for the primary population
estimate, these costs include $9.69 million in familiarization and
$4.86 million for covered entities to submit and review exemption
assurance requests and HHS to adjudicate the requests for a total cost
of $14.55 million. Both familiarization and these requests have costs
associated with the number of new grantees in the market and submitting
the requests. Total costs for the final rule are estimated to be $18.19
undiscounted and $17.41 or $16.47 when discounting at the 3 percent and
7 percent respectively. Table 5 below presents the total annual costs
anticipated under the final rule for which cost estimates have been
developed.
Table 5--Estimate of Total Annual Costs
[$ Millions, 2022 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Exemption Undiscounted 3% Discounted 7% Discounted
Year Familiarization requests total costs costs costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
2024..................................................... $9.69 $4.86 $14.55 $14.13 $13.60
2025..................................................... 0.59 0.24 0.83 0.78 0.73
2026..................................................... 0.63 0.26 0.88 0.81 0.72
2027..................................................... 0.66 0.27 0.94 0.83 0.71
2028..................................................... 0.71 0.29 0.99 0.86 0.71
----------------------------------------------------------------------------------------------
Total Cost........................................... 12.27 5.92 18.19 17. 41 16.47
----------------------------------------------------------------------------------------------
Annualized....................................... ................. ................. ................. 3.80 4.02
--------------------------------------------------------------------------------------------------------------------------------------------------------
4. Discussion of Benefits
The benefits of the rule help ensure that HHS grants programs will
be administered fairly and consistently with Supreme Court precedent.
Section 75.300(c) makes compliance simpler and more predictable for
Federal grant recipients. Likewise, Sec. 75.300(d) notes that HHS will
comply with Supreme Court decisions, which also simplifies compliance
for Federal grant recipients. Section 75.300(e) clarifies that the
Department interprets the prohibition of discrimination on the basis of
sex in 13 listed statutes to include discrimination based on sexual
orientation and gender identity, consistent with Bostock v. Clayton
County, 590 U.S. 644 (2020), which provides additional clarity to the
public regarding the Department's interpretation and helps facilitate
the efficient and equitable administration of HHS grants. Finally,
Sec. 75.300(f) states that the Department will comply with all Federal
religious freedom and conscience laws, including RFRA and the First
Amendment, which will assist the Department in fulfilling that
commitment by providing the opportunity for recipients and applicants
to raise concerns with HHS and for those concerns to be evaluated on a
case-by-case basis. The Department notes that there are other non-
quantifiable benefits associated with this rule, such as protecting
conscience rights; the free exercise of religion and moral convictions;
allowing for more diverse and inclusive health care and service
providers and professionals; improving provider-patient/recipient-
beneficiary relationships that facilitate improved quality of care and
services; and increased equity, fairness, nondiscrimination, and access
to care and services. These benefits for the fair and nondiscriminatory
enforcement of the programs covered by this rule are not quantified.
5. Comparison of Costs and Benefits
In summary, the Department expects the benefits of clarity will
simplify compliance and ensure fair and nondiscriminatory
administration of covered programs under this rule. Costs associated
with implementing this administrative change include costs for some
covered entities who may seek an exemption.
[[Page 36703]]
C. Analysis of Regulatory Alternatives to the Final Rule
The Department carefully considered several alternatives but
rejected them for the reasons explained below. Total undiscounted costs
associated with the final rule are estimated to be $18.2 million. The
first alternative considered assumes HHS takes no action and makes no
change from the 2016 rule; therefore, when compared to the final rule,
it results in a total cost savings of $17.4 million or $16.5 million
when using the three percent and seven percent discount rates,
respectively. HHS concluded that this first alternative would
potentially lead to legal challenges, in part over the scope of the
Department's authority under 5 U.S.C. 301.
The second alternative considered maintains the text of the 2016
Rule, but also promulgates a regulatory exemption for faith-based
organizations as provided under proposed Sec. 75.300(f). This
alternative could address the religious exemption issues raised by the
2016 Rule's application to certain faith-based organizations that
participate in, or seek to participate in, Department-funded programs
or activities. As discussed earlier, total undiscounted costs for the
familiarization provision are estimated to be $12.3 million. When
compared to the final rule, the second alternative results in a cost
savings of $11.7 million or $11.1 million when using the three percent
and seven percent discount rates respectively; however, the provisions
of the 2016 Rule would be subject to the same legal challenges under 5
U.S.C. 301.
The third alternative considered enumerates the Department's
interpretation of applicable nondiscrimination provisions and the
programs as well as recipients/subrecipients to which the
nondiscrimination provisions would apply, as set forth in Sec.
75.300(e), without including a religious freedom and conscience
exemption process. This results in total costs of $12.3 million
associated with only including familiarization costs, or a cost savings
when compared to the preferred alternative by $5.76 million or $5.4
million using the three percent and seven percent discount rates,
respectively. However, given the applicability of Federal religious
freedom and conscience laws, a process by which such applicants and
recipients can submit requests for assurance of a religious freedom- or
conscience-based exemption that are evaluated on a case-by-case basis
helps ensure that the Department complies with its legal obligations.
The Department has not quantified the potential benefits associated
with the various policy alternatives. Table 6 reports the present value
of total costs as well as annualized costs of these policy
alternatives, adopting a three percent and seven percent discount rate.
Table 7 reports the difference between the total cost of the
alternatives compared to the provisions of the final rule, using the
same accounting methods and discount rates.
Table 6--Total Cost of Policy Alternatives Considered
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Present Value
Annualized
----------------------------------------------------------------------------------------------------------------
Accounting method discount rate................. 3% 7% 3% 7%
Final Rule...................................... $17.4 $16.5 $3.8 $4.0
Alternative 1: No change from 2016 Rule......... $0 $0 $0 $0
Alternative 2: 2016 Rule with religious $5.7 $5.4 $1.2 $1.3
exemption......................................
Alternative 3: New nondiscrimination provisions $11.7 $11.1 $2.6 $2.7
without religious exemption....................
----------------------------------------------------------------------------------------------------------------
Table 7--Comparison of Alternatives to Final Rule
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Present Value
Annualized
----------------------------------------------------------------------------------------------------------------
Accounting method discount rate................. 3% 7% 3% 7%
Alternative 1: No change from 2016 Rule......... -$17.4 -$16.5 -$3.8 -$4.0
Alternative 2: 2016 Rule with religious -$11.7 -$11.1 -$2.6 -$2.7
exemption......................................
Alternative 3: New nondiscrimination provisions -$5.7 -$5.4 -$1.2 -$1.3
without religious exemption....................
----------------------------------------------------------------------------------------------------------------
D. Regulatory Flexibility Act--Final Small Entity Analysis
The Department has examined the economic implications of this final
rule as required by the Regulatory Flexibility Act, 5 U.S.C. 601-612
(RFA). The RFA requires an agency to describe the impact of a proposed
rulemaking on small entities by providing an initial regulatory
flexibility analysis unless the agency expects that the Proposed Rule
will not have a significant impact on a substantial number of small
entities, provides a factual basis for this determination, and proposes
to certify the statement. 5 U.S.C. 603(a), 605(b). If an agency must
provide a final regulatory flexibility analysis, this analysis must
address the consideration of regulatory options that would lessen the
economic effect of the rule on small entities. For purposes of the RFA,
small entities include small businesses, nonprofit organizations, and
small governmental jurisdictions. HHS generally considers a rule to
have a significant impact on a substantial number of small entities if
it has at least a three percent impact on revenue on at least five
percent of small entities. As discussed, the final rule would:
<bullet> Explain applicable Federal statutory nondiscrimination
provisions.
<bullet> Provide that HHS complies with applicable Supreme Court
decisions in administering its grant programs.
Affected small entities include all small entities which may apply
for HHS grants; these small entities operate in a wide range of
sections involved in the delivery of health and human services. Grant
recipients are required to comply with applicable Federal statutory
nondiscrimination provisions by operation of such laws and pursuant to
45 CFR 75.300(a); HHS is required to comply with applicable Supreme
Court decisions. Thus, there would be no additional economic impact
associated with Sec. Sec. 75.300(c)-(e). The Department anticipates
that this rulemaking would primarily serve to provide information to
the public. The Department anticipates that this information will allow
affected entities to better deploy resources in line with established
requirements for HHS grant recipients. As a result, HHS has determined,
and the Secretary proposes to certify, that this final rule, will not
have a
[[Page 36704]]
significant impact on the operations of a substantial number of small
entities.
E. Executive Order 13132 on Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a rule that imposes substantial
direct requirement costs on State and local governments or has
Federalism implications. The Department has determined that this rule
does not impose such costs or have any Federalism implications.
F. Executive Order 12250 on Leadership and Coordination of
Nondiscrimination
Pursuant to Executive Order 12250, the Department of Justice has
the responsibility to ``review . . . proposed rules . . . of the
Executive agencies'' implementing nondiscrimination statutes that
prohibit discrimination in programs and activities that receive Federal
financial assistance ``in order to identify those which are inadequate,
unclear or unnecessarily inconsistent.'' Exec. Order 12250 (reprinted
at 45 Fed. Reg 72995 (Nov. 5, 1990); 28 CFR 0.51.The Department of
Justice has reviewed and approved this final rule.
G. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3506; 5 CFR 1320 appendix A.1), the Department has reviewed this rule
and has determined that there are no new collections of information
contained therein.
List of Subjects in 45 CFR Part 75
Administrative practice and procedure, Civil Rights, Cost
principles, Grant programs, Grant programs--health, Grant programs--
social programs, Grants Administration, Hospitals, Nonprofit
Organizations reporting and recordkeeping requirements, and State and
local governments.
Dated: April 22, 2024.
Xavier Becerra,
Secretary, Department of Health and Human Services.
For the reasons set forth in the preamble, the Department revises
45 CFR part 75 to read as follows:
PART 75--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR HHS AWARDS
0
1. The authority citation for 45 CFR part 75 continues to read as
follows:
Authority: 5 U.S.C. 301, 2 CFR part 200.
0
2. Amend Sec. 75.300 by revising paragraphs (c) and (d), and adding
paragraphs (e), (f), and (g) to read as follows:
Sec. 75.300 Statutory and national policy requirements.
* * * * *
(c) It is a public policy requirement of HHS that no person
otherwise eligible will be excluded from participation in, denied the
benefits of, or otherwise subjected to discrimination in the
administration of HHS programs, activities, projects, assistance, and
services, to the extent doing so is prohibited by Federal statute.
(d) HHS will follow all applicable Supreme Court decisions in
administering its award programs.
(e) In the statutes listed in paragraphs (e)(1) through (13) of
this section that HHS administers which prohibit discrimination on the
basis of sex, the Department interprets those provisions to include a
prohibition against discrimination on the basis of sexual orientation
and gender identity, consistent with the Supreme Court's decision in
Bostock v. Clayton County, 590 U.S. 644 (2020), and other Federal court
precedent applying Bostock's reasoning that sex discrimination includes
discrimination based on sexual orientation and gender identity. This
provision is interpretive and does not impose any substantive
obligations on entities outside the Department. This paragraph (e)
interprets the following HHS authorities that prohibit discrimination
on the basis of sex:
(1) 8 U.S.C. 1522. Authorization for programs for domestic
resettlement of and assistance to refugees.
(2) 42 U.S.C. 290cc-33. Projects for Assistance in Transition from
Homelessness.
(3) 42 U.S.C. 290ff-1. Children with Serious Emotional
Disturbances.
(4) 42 U.S.C. 295m. Title VII Health Workforce Programs.
(5) 42 U.S.C. 296g. Nursing Workforce Development.
(6) 42 U.S.C. 300w-7. Preventive Health Services Block Grant.
(7) 42 U.S.C. 300x-57. Substance Use Prevention, Treatment, and
Recovery Services Block Grant; Community Mental Health Services Block
Grant.
(8) 42 U.S.C. 708. Maternal and Child Health Block Grant.
(9) 42 U.S.C. 5151. Disaster relief.
(10) 42 U.S.C. 8625. Low Income Home Energy Assistance Program.
(11) 42 U.S.C. 9849. Head Start.
(12) 42 U.S.C. 9918. Community Services Block Grant Program.
(13) 42 U.S.C. 10406. Family Violence Prevention and Services.
(f)(1) A grant applicant or recipient may rely on applicable
Federal protections for religious freedom and conscience, and
application of a particular provision(s) of this section to specific
contexts, procedures, or services shall not be required where such
protections apply.
(2) A grant applicant or recipient that seeks assurance consistent
with paragraph (f)(1) of this section regarding the application of
particular provision(s) of this part to specific contexts, procedures,
or services may do so by submitting a notification in writing to the
HHS awarding agency, the Office of the Assistant Secretary for
Financial Resources (ASFR), or the Office for Civil Rights (OCR).
Notification may be provided by the grant applicant or recipient at any
time, including before an investigation is initiated or during the
pendency of an investigation. The notification must include:
(i) The particular provision(s) of this section from which the
applicant or recipient asserts they are exempt under Federal religious
freedom or conscience protections;
(ii) The legal basis supporting the applicant's or recipient's
exemption should include the standards governing the applicable Federal
religious freedom and conscience protections, such as the provisions in
the relevant statute from which the applicant or recipient is
requesting an exemption; the Church, Coats-Snowe, and Weldon
Amendments; the generally applicable requirements of the Religious
Freedom Restoration Act (RFRA); and
(iii) The factual basis supporting the applicant's or recipient's
exemption, including identification of the conflict between the
applicant's or recipient's religious or conscience beliefs and the
requirements of this section, which may include the specific contexts,
procedures, or services that the applicant or recipient asserts will
violate their religious or conscience beliefs overall or based on an
individual matter related to a particular grant.
(3) A temporary exemption from administrative investigation and
enforcement will take effect upon the applicant's or recipient's
submission of the notification--regardless of whether the assurance is
sought before or during an investigation. The temporary exemption is
limited to the application of the particular provision(s) of the
relevant statute as applied to the specific contexts, procedures, or
services identified in the notification to the HHS awarding agency,
ASFR, or OCR.
(i) If the notification is received before an investigation is
initiated, within 30
[[Page 36705]]
days of receiving the notification, OCR, ASFR, or the HHS awarding
agency must provide the applicant or recipient with email confirmation
acknowledging receipt of the notification. The HHS awarding agency,
working jointly with ASFR and OCR, will then work expeditiously to
reach a determination of applicant's or recipient's notification
request.
(ii) If the notification is received during the pendency of an
investigation, the temporary exemption will exempt conduct as applied
to the specific contexts, procedures, or services identified in the
notification during the pendency of the HHS awarding agency's review
and determination, working jointly with ASFR and OCR, regarding the
notification request. The notification shall further serve as a defense
to the relevant investigation or enforcement activity regarding the
applicant or recipient until the final determination of the applicant's
or recipient's exemption assurance request or the conclusion of the
investigation.
(4) If the HHS awarding agency, working jointly with ASFR and OCR,
makes a determination to provide assurance of the applicant's or
recipient's exemption from the application of the relevant statutory
provision(s) or that modified application of certain provision(s) is
required, the HHS awarding agency, ASFR, or OCR, will provide the
applicant or recipient the determination in writing, and if granted,
the applicant or recipient will be considered exempt from OCR's
administrative investigation and enforcement with regard to the
application of that provision(s) as applied to the specific contexts,
procedures, or services provided. The determination does not otherwise
limit the application of any other provision of the relevant statute to
the applicant or recipient or to other contexts, procedures, or
services.
(5) An applicant or recipient subject to an adverse determination
of its request for an exemption assurance may appeal the Department's
determination under the administrative procedures set forth at 45 CFR
part 81. The temporary exemption provided for in paragraph (f)(3) of
this section will expire upon a final decision under 45 CFR part 81.
(6) A determination under paragraph (f) of this section is not
final for purposes of judicial review until after a final decision
under 45 CFR part 81.
(g) Any provision of this section held to be invalid or
unenforceable by its terms, or as applied to any person or
circumstance, shall be severable from this section and shall not affect
the remainder thereof or the application of the provision to other
persons not similarly situated or to other, dissimilar circumstances.
[FR Doc. 2024-08880 Filed 4-30-24; 4:15 pm]
BILLING CODE 4153-01-P
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